Legislature(1993 - 1994)

03/12/1994 10:00 AM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  ACTION NARRATIVE                                                             
                                                                               
  The House Judiciary Standing Committee was called to order                   
  at 10:12 a.m. on March 12, 1994.  A quorum was present.                      
  Chairman Porter announced that the committee would continue                  
  its consideration of HB 292.                                                 
                                                                               
  TAPE 94-39, SIDE A                                                           
  Number 000                                                                   
                                                                               
  CHAIRMAN PORTER:  "We are continuing with the consideration                  
  of HB 292, with the amendments being offered by Rep.                         
  Nordlund.  For identification, Representative, I've started                  
  -- the next one that we would be on would be Amendment 28.                   
  I've just gone through your amendments sequentially from                     
  there, finishing with 38.                                                    
                                                                               
  REP. NORDLUND:  "I may not offer all of them."                               
                                                                               
  CHAIRMAN PORTER:  "Okay.  We can renumber."                                  
                                                                               
  REP. NORDLUND presented Amendment 28, which deals with the                   
  section on punitive damages.  Rep. Nordlund stated that the                  
  amendment might be characterized "as a lower level standard,                 
  by which somebody could be awarded punitive damages; not                     
  only where it would be malicious or conscious acts, but also                 
  by `clear and convincing evidence of gross negligence or                     
  reckless misconduct.'  The reason for that is that there are                 
  probably situations in which you would want to have punitive                 
  damages awarded, in which acts are not consciously done, but                 
  they are done with reckless disregard to public health or                    
  the welfare of individuals."  Rep. Nordlund concluded that                   
  "...this would seek to make sure that we have that added                     
  protection for the public."                                                  
                                                                               
  Number 074                                                                   
                                                                               
  CHAIRMAN PORTER:  "During the discussion on this section in                  
  the previous committee, as Rep. Green will remember, the                     
  original wording of this phrase was `evidence of malice and                  
  conscious acts showing deliberate disregard.'  The concern                   
  there was that this was too high a standard, and the                         
  adjustment towards seeking a high standard, which one would                  
  expect in punitive damages, but not unreasonably                             
  restrictive, was to make it `or'.  Malice or conscious                       
  deliberate acts, and that was amended to do that.  I think I                 
  would not be in favor of the amendment to then say, `or                      
  clear and convincing evidence of gross or reckless                           
  misconduct,' because, to me, it would add too many                           
  qualifications, as to be confusing to the court as to which                  
  standard you're under.   And, it would, if understood,                       
  reduce the level that punitive damages would be awarded."                    
                                                                               
  Number 108                                                                   
                                                                               
  REP. NORDLUND cited an example he had invoked at an earlier                  
  hearing, the crash of the EXXON VALDEZ, which "was not an                    
  act of malice or a conscious act, but was certainly                          
  negligent, probably grossly negligent; and I think that                      
  those are the kinds of situations in which you want to make                  
  sure that corporations and other businesses that operate in                  
  this state, make sure that they need to take reasonable care                 
  in the way they conduct their business.  You want to be able                 
  to use punitive damages in a way to punish wrongdoing                        
  corporations and other businesses.  Punitive damages are                     
  seldom awarded in this state.  The whole section on punitive                 
  damages, in my opinion, is fixing something that isn't                       
  necessarily a problem."                                                      
                                                                               
  Referring to a memorandum from the Department of Law, REP.                   
  NORDLUND quoted, "`This section appears to limit to reckless                 
  indifference to the rights of others as a basis for punitive                 
  damages.'  I am seeking to make sure that standard continues                 
  to apply."                                                                   
                                                                               
  Number 137                                                                   
                                                                               
  CHAIRMAN PORTER:  "I think `conscious acts showing                           
  deliberate disregard to another person' is certainly                         
  depicting that standard.  I'm not familiar with the EXXON                    
  VALDEZ case, whether there was or was not punitive damages.                  
  It seems to me there was an awful lot of cost associated to                  
  that, that had to be paid, as we're still trying to decide                   
  how to distribute here in the legislature, but I don't think                 
  I have any concern that the EXXON VALDEZ situation met with                  
  appropriate compensation from the offender."                                 
                                                                               
  Number 153                                                                   
                                                                               
  DANIELLA LOPER, Committee Counsel, House Judiciary                           
  Committee: "That language on the definition of punitive                      
  damages was taken directly out of the two latest state                       
  Supreme Court decisions."                                                    
                                                                               
  CHAIRMAN PORTER:  "And, again, the compromise having already                 
  been made that, instead of saying, `malice and conscious                     
  acts,' malice or conscious acts."  He requested that Rep.                    
  Nordlund proceed to offer the amendment.                                     
                                                                               
  Number 160                                                                   
                                                                               
  REP. NORDLUND offered Amendment 28.                                          
                                                                               
  CHAIRMAN PORTER objected to Amendment 28.                                    
                                                                               
  CHAIRMAN PORTER:  "We have, then, a motion and the objection                 
  on Amendment 28.  Is there further discussion?"                              
                                                                               
  Number 170                                                                   
                                                                               
  REP. GREEN asked counsel to clarify the scope of the term                    
  `deliberate disregard.'  He asked, "If my actions are such                   
  that I show deliberate disregard, would that cover a grossly                 
  negligent act?"                                                              
                                                                               
  Number 187                                                                   
                                                                               
  CHAIRMAN PORTER:  "As regards for another?  Because of my                    
  background I relate everything to criminal statutes.  For                    
  example, in a criminal setting, if I say, `I am going to                     
  shoot you,' and go, BANG, then I have met the elements of                    
  first degree murder; I intentionally shot you.  But if I                     
  come in here with an automatic weapon and go, BBRRRPPPTTT,                   
  it would be very difficult to establish that I intentionally                 
  killed someone who died as a result of that action - but it                  
  is well established that the natural, probable result of                     
  that action is such that it isn't necessary to prove [the                    
  intention], it's presumed.  And when you show deliberate                     
  disregard for the safety of another person, that's gross                     
  negligence."                                                                 
                                                                               
  REP. GREEN explored Chairman Porter's analogy and said, "I                   
  think your analogy is good.  So, if this in effect does                      
  cover the concerns of Rep. Nordlund..."                                      
                                                                               
  Number 216                                                                   
                                                                               
  MS. LOPER:  "The standard is a little bit higher than gross                  
  negligence.  It's going to include gross negligence, but                     
  it's a little bit higher."  She offered an example of a                      
  person going into a theatre who screams "Fire!" and then                     
  injuries or deaths are sustained by people fleeing the                       
  building to illustrate her point.                                            
                                                                               
  Number 267                                                                   
                                                                               
  REP. NORDLUND:  "It's not hard to imagine situations in                      
  which a person could be negligent, or grossly negligent,                     
  which I guess it is up to a court to determine - that is not                 
  a conscious act.  You can be negligent without consciously                   
  being negligent.  In fact, negligence, to me, in some ways                   
  defines the fact that you were somewhat unaware that you are                 
  causing harm, but you should have taken reasonable care so                   
  as to prevent that harm from happening.  I'm not an                          
  attorney.  I wish I could better explain the difference                      
  between a `conscious act' and a `negligent act,' but I see                   
  them as two different things."                                               
                                                                               
  Number 242                                                                   
                                                                               
  REP. JAMES:  "I see them as two different things, too, and                   
  that's why I don't want it in here.  I really like it better                 
  the way it is, because I think it does cover the intent of                   
  the law for punitive damages."                                               
                                                                               
  Number 248                                                                   
                                                                               
  MS. LOPER:  "The Alaska Supreme Court has always had a                       
  history of making sure that the punitive damages are                         
  extremely strict.  It's a very strict standard as opposed to                 
  a lot of the states in the Lower `48.  And so... this                        
  definition is taken directly out of the cases, because                       
  punitive damages... [are] held to the highest degree, and so                 
  the standard in Alaska is held to be very strict."                           
                                                                               
  Number 267                                                                   
                                                                               
  REP. NORDLUND:  "One point on that point.  This is a scaling                 
  back, at least the way I read it in the Department of Law's                  
  memo, it is a scaling back from the current standard; the                    
  current standard does take into account `reckless                            
  indifference to the rights of others,' and so you're                         
  limiting that possibility here by adopting `malice or                        
  conscious acts.'  It's tightening the standard.  Just so we                  
  know what we're doing here.  I think that's the intent, and                  
  I disagree with the intent."                                                 
                                                                               
  CHAIRMAN PORTER called for a roll call vote on Amendment 28.                 
  Reps. Green, Kott and James and Porter voted "No"; Reps.                     
  Nordlund and Davidson voted "Yeah" and Rep. Phillips chose                   
  to pass.  Amendment 28 therefore was not adopted by the                      
  committee.                                                                   
                                                                               
  Number 288                                                                   
                                                                               
  REP. NORDLUND withdrew Amendment 29.  He said, "My intent                    
  here was to deal with the long discussion we had yesterday                   
  about tightening down health care provider areas, and I                      
  think that the amendment we previously adopted did that, so                  
  I withdraw this amendment."                                                  
                                                                               
  Number 304                                                                   
                                                                               
  REP. NORDLUND reviewed Amendment 30, referring the committee                 
  to page 16, line 4, in the section requiring the Division of                 
  Insurance to compile a report.  Amendment 30 would                           
  specifically require the Division of Insurance to report on                  
  the effects of HB 292 on insurance rates.  He noted that the                 
  amendment had not been drafted as he wished it to read.  As                  
  drafted, the amendment required information solely on                        
  reductions in insurance rates.  Rep. Nordlund wished to know                 
  of any effect of the legislation on insurance rates.                         
                                                                               
  CHAIRMAN PORTER and REP. NORDLUND discussed the possibility                  
  of changing the wording of the amendment to read, "...and                    
  determine if the enactment of this Act has an effect on                      
  insurance rates in the state."                                               
                                                                               
  Number 340                                                                   
                                                                               
  REP. JAMES:  "Are we putting an emphasis on that, then?  Or,                 
  are we going to be getting other information from the                        
  insurance that's important..."                                               
                                                                               
  CHAIRMAN PORTER:  "We'd be getting other information..."                     
                                                                               
  REP. JAMES:  "Because [there is] other information that                      
  actually is even more important to me than the insurance                     
  rates."                                                                      
                                                                               
  REP. NORDLUND:  "I'm not eliminating the other information,                  
  just adding.  I think that was probably what was implied                     
  here, that in this report you'd be looking at the effect on                  
  insurance rates, but I think we should directly ask the                      
  division to do that."                                                        
                                                                               
  REP. JAMES stated that her intent in supporting HB 292 was                   
  not primarily reduced insurance rates, but rather her hope                   
  for (a) an increase in availability of insurance; (b) a                      
  decrease in litigation; and (c) increased economic activity.                 
  She said, "So, the information that I would want to get                      
  would be all those kinds of things, not just necessarily                     
  reduction in insurance..."                                                   
                                                                               
  Number 356                                                                   
                                                                               
  REP. KOTT and other committee members discussed the language                 
  and placement of the amendment, "My understanding of this                    
  amendment is that we are going to tag on to the end of                       
  Amendment 2, which deleted lines 1 through 4, and added a                    
  new -- really, it reads somewhat clumsy."                                    
                                                                               
  CHAIRMAN PORTER:  "I would say, for the record, and most                     
  certainly, I could not imagine that their report would not                   
  try to reflect a response to that question and to the                        
  questions that Rep. James asked.  Most certainly, one of the                 
  goals of this legislation is reduction of insurance                          
  rates..."                                                                    
                                                                               
  Number 388                                                                   
                                                                               
  REP. NORDLUND:  "I maintain my desire to offer the amendment                 
  because I think that, certainly, the driving force behind                    
  this legislation is that insurance rates are too high,                       
  supposedly, and this will help bring them down."                             
                                                                               
  CHAIRMAN PORTER:  "I don't have any problem with it, it's                    
  just a matter of the form, of saying one thing and then not                  
  adding all the others..."                                                    
                                                                               
  Number 394                                                                   
                                                                               
  REP. PHILLIPS:  "I realize that this whole issue is a major                  
  issue, but I also question, and I'd like some analysis, of                   
  other major issues that we put before the public, where we                   
  put a clause similar to this; whether the enactment of this                  
  Act has an effect on insurance rates.  This is a major                       
  issue.  But, in my recollection, this isn't normal - that we                 
  pass a piece of major legislation and then come back with a                  
  statement like this for response."                                           
                                                                               
  Number 405                                                                   
                                                                               
  CHAIRMAN PORTER:  "Well, rather than take up the time to try                 
  to rewrite the other amendment, I'll say on the record that                  
  this most certainly is one of the things that we're going to                 
  be expecting from the Division of Insurance, along with the                  
  things Rep. James stated - availability of insurance, effect                 
  on the economy, new businesses, those kinds of things."                      
                                                                               
  REP. DAVIDSON:  "In light of our conversation yesterday, and                 
  the couple of amendments that we passed, I think it should                   
  be added that those expectations will not be known,                          
  probably, until the next millennium."                                        
                                                                               
  CHAIRMAN PORTER remarked that that could be and then asked                   
  if there was further discussion on Amendment 30.                             
                                                                               
  REP. NORDLUND moved Amendment 30.                                            
                                                                               
  Number 430                                                                   
                                                                               
  CHAIRMAN PORTER:  "I'll object, for the reasons stated."                     
  Chairman Porter called for a roll call vote on Amendment 30.                 
  Reps. Davidson and Nordlund voted "Yeah"; Reps. Green, Kott,                 
  Phillips and Porter voted "No" and Rep. James did not vote.                  
  Amendment 30 was therefore not adopted by the committee.                     
                                                                               
  Number 437                                                                   
                                                                               
  REP. NORDLUND offered Amendment 31.                                          
                                                                               
  CHAIRMAN PORTER objected "for purposes of discussion, at                     
  least until we figure out what it is."                                       
                                                                               
  REP. NORDLUND:  "This deals with the section of the bill I                   
  think is a good one, that allows for increases in inflation                  
  on periodic payments.  I am simply helping the court decide                  
  how to determine what inflation is based on, the CPI.  It's                  
  the standard language used throughout the statutes, when we                  
  try to compensate for inflationary effects."                                 
                                                                               
  CHAIRMAN PORTER asked for clarification regarding the CPI.                   
                                                                               
  REP. NORDLUND responded that "there is really only one CPI                   
  available for the state of Alaska, and it's tied to                          
  Anchorage."                                                                  
                                                                               
  Number 453                                                                   
                                                                               
  CHAIRMAN PORTER said he could not think of any other logical                 
  way of computing inflation rates and removed his objection                   
  to Amendment 31.  There being no further discussion or                       
  objection, Amendment 31 was adopted by the committee.                        
                                                                               
  Number 468                                                                   
                                                                               
  REP. NORDLUND presented Amendment 32.  He said, "This is the                 
  section that deals with periodic payments.  It leaves it                     
  permissive for the court to order periodic payments.                         
  Instead of saying `the court shall, at the request of a                      
  party, order periodic payments,' `the court... may order                     
  periodic payments.'  The intent here is that it may be the                   
  best judgment of the court that in some cases you don't want                 
  to have periodic payments just because one of the parties                    
  requests it.  It gives the court that authority to decide.                   
  We've been over this a lot."                                                 
                                                                               
  Number 491                                                                   
                                                                               
  CHAIRMAN PORTER:  "I would go along with you if it were the                  
  court's money that were being spent, but it's not the                        
  court's money, it's the defendant's money; and, as long as                   
  there's protection for the victim, or the plaintiff, I think                 
  fair's fair and either party should be able to have the                      
  choice, so I would maintain the objection."                                  
                                                                               
  REP. JAMES:  "This is the one that I have a problem with."                   
                                                                               
  CHAIRMAN PORTER:  "Oh, we've labored hard over this."                        
                                                                               
  REP. JAMES:  "We've labored hard."                                           
                                                                               
  Number 500                                                                   
                                                                               
  CHAIRMAN PORTER:  "Let me tell something else about periodic                 
  payments that didn't come up, as a matter of fact, that I                    
  just got from a guy who runs a business that does this sort                  
  of thing.  According to him, and I have no reason to                         
  disbelieve him, but I admit readily that I don't have the                    
  study that he's repeating - in national and local [levels],                  
  in the period of two months to five years after the award of                 
  lump sum payment;  at two months, two point five out of ten                  
  people have expended all of those funds; at five years, nine                 
  out of ten have expended all of those funds.  We're not our                  
  brother's keeper, but...                                                     
                                                                               
  "Additionally, there's an advantage to a plaintiff to take                   
  periodic payments because of a tax break.  The adjustment                    
  that we've just defined on being able to get an inflation                    
  built into your periodic payments, is not taxable.  That                     
  increase comes at a time when it is at that rate the value                   
  of that money, so it is not taxable.  If you get a lump sum                  
  payment, and put it in the bank, you immediately start                       
  paying taxes on the interest.  So there's all kinds of good                  
  reasons, and we've debated it, and I don't know that I'm                     
  going to change Jeannette's mind, but..."                                    
                                                                               
  REP. NORDLUND:  "All kinds of good reasons to leave it up                    
  the court to decide."                                                        
                                                                               
  CHAIRMAN PORTER:  "I'll maintain the objection.  Could we                    
  have a roll call vote, please?"                                              
                                                                               
  A roll call vote was taken.  Reps. Davidson, Nordlund and                    
  James voted "Yeah" and Reps. Phillips, Green, Kott and                       
  Porter voted "No".  Amendment 33 therefore was not adopted                   
  by the committee.                                                            
                                                                               
  Number 533                                                                   
                                                                               
  REP. NORDLUND withdrew Amendment 33, saying, "I have a very                  
  similar amendment that I could offer in its place right now,                 
  or, I think it's at the end of your pack, we could do it                     
  then."                                                                       
                                                                               
  CHAIRMAN PORTER invited discussion on Amendment 34.                          
                                                                               
  REP. PHILLIPS:  "We have Amendment 22, that follows damage,                  
  already adopted."                                                            
                                                                               
  REP. NORDLUND:  "I'd like to offer Amendment 34, and I'll                    
  explain the difference."                                                     
                                                                               
  CHAIRMAN PORTER:  "I'll object.  Go ahead."                                  
                                                                               
  Number 535                                                                   
                                                                               
  REP. NORDLUND presented Amendment 34, which increased the                    
  liability of design professionals beyond the strictures of                   
  intentional or reckless disregard and required these                         
  professionals `...to follow applicable design plans or                       
  specifications or building codes.'  Under the terms of the                   
  amendment the statute of repose would not relieve design                     
  professionals of these obligations.  Rep. Nordlund remarked,                 
  "I think that design professionals have an obligation to                     
  follow, you know, the plans, and codes and specifications on                 
  a project, and if they don't, I don't think they should be                   
  immune from liability after six years."                                      
                                                                               
  Number 556                                                                   
                                                                               
  REP. PHILLIPS:  "Basically, the only difference I see                        
  between the amendment we adopted and this, is the difference                 
  in the wording `intentional or reckless disregard' versus                    
  `failure to follow.'  It seems to me like those would be                     
  pretty much the same, would mean pretty much the same                        
  thing."                                                                      
                                                                               
  Number 563                                                                   
                                                                               
  CHAIRMAN PORTER:  "Well, it's a different standard.  The one                 
  that we passed is a standard of gross negligence, and the                    
  one that he is offering is simple negligence, which is just                  
  oversight, really.  I would say, again, that the provision                   
  that we made was made with the spirit of recognition that                    
  some degree of compromises should be made; but there are, I                  
  believe, 40 states with statutes of repose that don't have                   
  these kinds of qualifications that we've already put on.  I                  
  don't think this is an unusual situation."                                   
                                                                               
  REP. PHILLIPS:  "At some point in time a change order on a                   
  construction project could come in, changing the original                    
  design plan, and if something happened you could have -- the                 
  change order could be approved -- you could have somebody                    
  sue because they didn't follow the original plan."                           
                                                                               
  REP. NORDLUND:  "It doesn't say `original', it says                          
  `applicable', and I think, if there has been a change order,                 
  that's applicable."                                                          
                                                                               
  Number 582                                                                   
                                                                               
  REP. JAMES:  "My objection to the amendment is to just allow                 
  it to say `failure to follow'...because that brings in too                   
  many small things that I don't think might be applicable.  I                 
  think that if the problem is sufficient enough to be                         
  implementing great damage, that it would fall under                          
  `intentional or reckless disregard.'  `Failure to follow'                    
  could be something that was very insignificant, but if they                  
  found that, then they could have some damages.  And I think                  
  it might not necessarily relate to the damages.  So, I think                 
  that `failure to follow' is too loose, and I prefer the way                  
  it's been.  I think that will take care of the problems."                    
                                                                               
  Number 596                                                                   
                                                                               
  REP. NORDLUND:  "One more comment, and that is, that if                      
  there are damages, and somebody is going to have to pay, and                 
  if the architect or whatever didn't follow the plans, I                      
  think that should be the person who would have to pay.  Now,                 
  without that, either the injured party has to pay, or                        
  somebody else gets sued, or the state has to pay, or                         
  somebody, but not the person who is responsible for not                      
  following the plans.  That's the party who's most directly                   
  responsible for the failure of the billing, and that should                  
  be the person who pays."                                                     
                                                                               
  Number 603                                                                   
                                                                               
  REP. JAMES:  "I guess the point I wanted to make is that                     
  there are a lot of things that could be not followed                         
  specifically according to the plan and or building codes,                    
  that was not a problem and didn't create the problem, that                   
  the problem was from something totally different.  And, in                   
  knowing how it works when you have attorneys working on a                    
  case, they look until they can find some little deficiency,                  
  and they build their case on that deficiency.  And I think                   
  they might be building their case on a deficiency which                      
  doesn't relate to the problem."                                              
                                                                               
  Number 614                                                                   
                                                                               
  REP. DAVIDSON contested the implication that juries and                      
  courts would fail to challenge irrelevant accusations and he                 
  expressed greater faith in the judicial process.                             
                                                                               
  Number 622                                                                   
                                                                               
  REP. JAMES:  "If the problem that caused the problem was                     
  sufficient to cause the problem then I think it would fall                   
  under intentional disregard.  That's my point.  In other                     
  words, if the flaw in the construction or the design or the                  
  building code was a flaw that was sufficient to cause this                   
  collapse or damage or whatever it is, then I think that that                 
  would fall under intentional or reckless disregard.  I think                 
  that saying `failure to follow applicable design plans'                      
  opens up a whole new problem:  that because something                        
  happened, and they found something like this, then they                      
  could say, `Well, it says right here, failure to follow -                    
  and they failed to follow.'"  Rep. James concluded that the                  
  language already adopted by the committee in the prior                       
  version of the amendment was sufficient to "cover all of the                 
  damages."                                                                    
                                                                               
  Number 639                                                                   
                                                                               
  REP. NORDLUND:  "If you've designed a building, and you have                 
  a certain number of columns supporting a beam, for instance,                 
  and it wasn't adequate, and the roof fell in, it's going to                  
  be difficult to prove that that contractor or that architect                 
  did that intentionally.  But it certainly didn't follow the                  
  code, or it may not have followed the building plans.  I                     
  don't know how a court would determine that the architect                    
  did that intentionally, or recklessly."                                      
                                                                               
  REP. JAMES:  "You mean the contractor?  Well, you would                      
  expect the contractor to follow what the design plan was,                    
  and if he didn't [indisc.]..."                                               
                                                                               
  REP. NORDLUND:  "But how do you prove that it was done                       
  intentionally?  That's my question."                                         
                                                                               
  Number 652                                                                   
                                                                               
  MS. LOPER and CHAIRMAN PORTER briefly reviewed the language                  
  in Amendment 22 and standards for gross negligence.                          
                                                                               
  Number 657                                                                   
                                                                               
  REP. GREEN:  "Is what Rep. James was concerned about                         
  essentially the difference between the plethora of                           
  litigation that could come from simple negligence, is that                   
  kind of then set aside in a gross negligence case?  Neither                  
  one is intent, but, I am trying to get at the fact that                      
  there are a number of people who objected to the use of                      
  gross negligence in favor of simple negligence.  For my poor                 
  brain, can you kind of give an overview as to the degree of                  
  difference?"                                                                 
                                                                               
  MS. LOPER:  "I don't know a lot about the construction                       
  industry, but I can imagine it would go something like this:                 
  on the simple negligence - well, there's no such thing as                    
  simple negligence.  On a negligence case..."                                 
                                                                               
  REP. GREEN interjected a request for an example with which                   
  Ms. Loper was familiar.                                                      
                                                                               
  MS. LOPER:  "All right.  If the architect... puts together                   
  the design plan and then hands it to the construction                        
  industry or a construction agent, and then he's the one that                 
  goes through and builds the house; well, if the architect or                 
  the engineer said, `The door needs to go here' or `a pipe                    
  needs to go here' and the person who was building the house                  
  put it in the wrong place, did not follow the plans, that                    
  would be gross negligence."                                                  
                                                                               
  REP. GREEN:  "And then simple negligence in that similar                     
  type situation would be...?"                                                 
                                                                               
  MS. LOPER:  "Something that is less than reckless disregard                  
  of a specific [indisc.]"                                                     
                                                                               
  CHAIRMAN PORTER:  "If there was a typographical error in the                 
  specs and he didn't catch it?"                                               
                                                                               
  MS. LOPER:  "Yes... it would be very, very..."                               
                                                                               
  CHAIRMAN PORTER:  "That's negligent.  Because he's a                         
  professional..."                                                             
                                                                               
  REP. GREEN:  "But not simple negligence, right?"                             
                                                                               
  CHAIRMAN PORTER:  "I don't know if there is simple                           
  negligence; there's negligence, gross negligence and                         
  intentional negligence."                                                     
                                                                               
  REP. GREEN: "Okay, thank you."                                               
                                                                               
  CHAIRMAN PORTER called for a roll call vote on Amendment 34.                 
                                                                               
  A roll call vote was taken by the committee.  Reps. Nordlund                 
  and Davidson voted "Yeah" and Reps. Kott, Phillips, Green,                   
  James and Porter voted "No".  Amendment 34 was therefore not                 
  adopted by the committee.                                                    
                                                                               
  Number 699                                                                   
                                                                               
  REP. NORDLUND offered Amendment 35.                                          
                                                                               
  CHAIRMAN PORTER objected to Amendment 35.                                    
                                                                               
  REP. NORDLUND discussed Amendment 35.  He noted that the                     
  absence of page or number noted on the amendment under                       
  discussion was because it pertained to another, previously                   
  adopted amendment.  He said, "If I remember, there are                       
  certain exceptions that you allowed, in the previous                         
  amendment, to the $500,000 limit that goes up to $750,000                    
  for situations where you have quadriplegics and serious                      
  injuries.  I'm just making the policy call that the $750,000                 
  is too low.  I think it should be $1 million."                               
                                                                               
  CHAIRMAN PORTER:  "Keeping in mind that the cap that we're                   
  establishing here is not the total compensation for a                        
  paraplegic or a quadriplegic or whatever.  This is just for                  
  the noneconomic pain and suffering...  Right now there are,                  
  I believe, 15 bills before the U.S. Congress dealing with                    
  this topic, and I'm told 13 of them have a cap on                            
  noneconomic damages in these kinds of cases of $250,000 with                 
  no exceptions.  So, I don't think we're being too stiff by                   
  expanding the already in place $500,000 cap to $750,000."                    
                                                                               
  Number 730                                                                   
                                                                               
  REP. DAVIDSON asked if the figure would include loss of                      
  consortium.                                                                  
                                                                               
  CHAIRMAN PORTER responded, "We may be providing something                    
  that they don't.  Yes, this is loss of consortium."                          
                                                                               
  REP. DAVIDSON:  "I mean, talking about, the bills you were                   
  talking about in Congress."                                                  
                                                                               
  CHAIRMAN PORTER:  "I don't know.  Loss of consortium, we're                  
  bringing in, I think, because of a court case, here."                        
                                                                               
  MS. LOPER:  "It would be considered, yes, in noneconomic                     
  damages."                                                                    
                                                                               
  REP. GREEN:  "Your question was whether the other bills in                   
  Congress..."                                                                 
                                                                               
  REP. DAVIDSON:  "Right, and we don't know.  So we don't know                 
  whether the loss of consortium is high or low in this                        
  instance."                                                                   
                                                                               
  CHAIRMAN PORTER:  "It may be that loss of consortium isn't                   
  even covered by those bills.  We're specifically covering                    
  it."                                                                         
                                                                               
  REP. DAVIDSON:  "But why do we want to put a $750,000 cap on                 
  it?"                                                                         
                                                                               
  [UNIDENTIFIED VOICE]:  "It has to stop someplace."                           
                                                                               
  Number 740                                                                   
                                                                               
  CHAIRMAN PORTER:  "So that there will be some finality to                    
  the assessment of how much it's going to provide insurance                   
  for these kinds of exposures."                                               
                                                                               
  Number 744                                                                   
                                                                               
  REP. DAVIDSON:  "I thought a long time about this, and if I                  
  were to lose my partner in life, the money really wouldn't                   
  mean that much, but the loss, with our three children, would                 
  mean a heck of a lot.  And also, I don't think that this sum                 
  is in fact so great.  If you think about what your wife is                   
  worth to you, you can't do it terms of money.  But you can                   
  certainly search your soul to know that, if you're trying to                 
  deal with your children or your grandchildren... I'm going                   
  to support this change, because I think that compared to                     
  what we've talked about with these other states... I don't                   
  think $1 million is so great a sum for such a loss.  It's an                 
  immeasurable loss."                                                          
                                                                               
  Number 761                                                                   
                                                                               
  REP. GREEN:  "Well, we agonized over this, as you recall,                    
  certainly, in Labor & Commerce, to some degree... I                          
  sympathize with you, and I asked the question there, and                     
  I'll repeat it here:  You indicated that that loss is                        
  immeasurable.  And I agree.  It truly is.  If I were to lose                 
  my mate, there isn't any amount of money in the world that I                 
  would accept for that.  Now, that sounds like a grandiose                    
  speech, but I truly mean that.  But that's maybe because I'm                 
  not starving.  Money doesn't mean as much as having her with                 
  me.                                                                          
                                                                               
  "But would, given the fact that she were taken from me, or                   
  our children, would it be worth $250,000 more or $2-1/2                      
  million more?  Or $5 million more?  There is some degree out                 
  there, perhaps, when somebody is just so overwhelmed by the                  
  amount of money that they may say, `Well, yeah, now I'll                     
  sell out for that much money.'  I think, in the real world,                  
  that when we're talking about a large sum of money, a                        
  quarter of a million dollars, we've already upped it a                       
  quarter of a million dollars, and I think there would end up                 
  being a ratcheting that is going now beyond the loss, and                    
  it's going almost into the greed.  `I am hurting, I won't                    
  hurt as much if I get a little bit more money.'  I really                    
  fail to see that.  After really coming from a position where                 
  you were, and I think the chairman can relate to this in my                  
  own moving, is that there comes a point where you just say,                  
  `Okay, we'll give some amount, but it's got to be a rational                 
  amount' because after that you're no longer serving the                      
  loss, you're serving the greed.  I think somewhere in this                   
  range that we're between, $500,000 and $750,000, is probably                 
  the reasonable point."                                                       
                                                                               
  Number 788                                                                   
                                                                               
  REP. JAMES suggested that the measure of the cost of                         
  negligence should be more specifically a function of the                     
  actual liability of defendants and represent "the extent of                  
  their infraction."  She added that everyone is affected by                   
  the size of caps imposed and noted that very large caps may                  
  create problems for more individuals than simply the                         
  defendants.                                                                  
                                                                               
  REP. JAMES remarked, "I think there's some inherent risk in                  
  living," and reflected on the need to place outside limits                   
  on the costs imposed, not only on the defendant, but on                      
  society at large for a dereliction of duties; for, she said,                 
  referring to someone who has sustained the loss of a loved                   
  one, "there's absolutely no money, absolutely no money, that                 
  you can give that person to replace the death of a loved                     
  one.  None."                                                                 
                                                                               
  Number 811                                                                   
                                                                               
  REP. DAVIDSON responded to Rep. Green's remark concerning                    
  the `greed factor.'  In those cases, he said, "I think we're                 
  not talking about human beings... we're talking about a                      
  different, lowly kind of life."                                              
                                                                               
  In response to Rep. James' comments on dereliction of duty,                  
  REP. DAVIDSON cited a situation with which he was closely                    
  familiar wherein a mother of three had been so severely                      
  incapacitated by an injury that her family had been forced                   
  apart.  "Her husband had to divorce her, because they could                  
  not afford the doctor bills.  The legal case just didn't                     
  make it - there were some mistakes made.  So you have a                      
  situation where the three children have now gone their                       
  separate ways, a couple of whom have been traumatized by                     
  what happened to their mother; the individual is living with                 
  her mother, because she is a ward of the state... the 80-                    
  plus years old mother is taking care of this person, and                     
  there is not sufficient money... available under that                        
  state's program to care for this person.  I think it would                   
  be nice if that person could afford to go get some therapy,                  
  to see if maybe that 55 year old person could get out of                     
  diapers.  And so,  dereliction of duty?"                                     
                                                                               
  Number 835                                                                   
                                                                               
  REP. GREEN observed that sometimes situations did not come                   
  out they way they should.  He stated, "Inherent risk with                    
  life?  It wasn't that individual's fault that she ended up                   
  like that.  So I'm going to vote for $1 million, and I would                 
  hope that you guys could find it in your own hearts to do                    
  so, as well."                                                                
                                                                               
  Number 844                                                                   
                                                                               
  REP. NORDLUND:  "This has been a really interesting                          
  discussion amongst us all.  Nobody is intending, I don't                     
  think, intentionally to try to take away the just damages                    
  due to people.  But this is exactly the kind of discussion                   
  that should take place in a jury, in a normal trial                          
  situation.  Except that a jury is looking at the facts of a                  
  particular case:  particular individuals, particular                         
  damages, and then should render a judgment.  I raised this                   
  to $1 million because I think it's a mild improvement.                       
                                                                               
  "I basically don't really believe in the caps at all.  For                   
  one thing, $1 million would rarely be awarded, given the                     
  evidence of the past history of the kinds of damages that                    
  are awarded."                                                                
                                                                               
  Furthermore, REP. NORDLUND said, for the legislature to                      
  speak arbitrarily concerning future cases would be                           
  "fundamentally wrong.  We have to let our peers decide on                    
  the merits of a particular case and come up with what they                   
  think are the just damages."                                                 
                                                                               
  Number 858                                                                   
                                                                               
  REP. DAVIDSON:  "If this bill were to become law, how long                   
  do we hold on to that $1 million cap?  The next 20 years?                    
  25 years?  We don't make positive changes for individuals                    
  very easily around here.  I say, leave it to the jury                        
  system, leave it to the courts, and let's stop trying to                     
  nit-pick our way through fantasy numbers that are supposed                   
  to, somehow, do justice.  Because I don't think they do."                    
                                                                               
  CHAIRMAN PORTER:  "I think there hasn't been one point of                    
  view spoken on this amendment that's incorrect.  We're just                  
  going to have to make a policy decision, that's what it is.                  
  So, could we have a roll call vote please?"                                  
                                                                               
  A roll call vote was taken by the committee on Amendment 35.                 
  Reps. Nordlund and Davidson voted "Yeah" and Reps. Phillips,                 
  Green, Kott, James and Porter voted "No".  Amendment 35 was                  
  therefore not adopted by the committee.                                      
                                                                               
  Number 875                                                                   
                                                                               
  REP. NORDLUND moved Amendment 36 and CHAIRMAN PORTER                         
  objected to this amendment.                                                  
                                                                               
  REP. NORDLUND reviewed Amendment 36.  He stated, "This is                    
  the section of the bill that deals with reducing damages by                  
  future taxes that would be paid on those damages.  What the                  
  amendment does is deletes, takes that automatic deduction                    
  out of the bill and replaces it with language that allows                    
  the jury to consider what the future taxes would be.  Again,                 
  the Congress has decided that damage awards are not taxable,                 
  and I certainly believe that the intent of that was to allow                 
  that to go to the beneficiary or, in this case, the                          
  plaintiff, or the person who was injured.  By adopting the                   
  language that we have in the bill, you're passing that                       
  benefit on to the wrongdoer.  My amendment is basically a                    
  compromise..." [Abrupt end to tape; some text lost.]                         
                                                                               
  TAPE 94-39, SIDE B                                                           
  Number 000                                                                   
                                                                               
  REP. NORDLUND:  "...But it just seems to me that the jury                    
  should just be made aware of the fact that they'll not be                    
  taxed on it.  With that information in mind, they might                      
  decide to reduce the award.  And that it shouldn't be                        
  automatically reduced.  There's some real problems, too,                     
  incidentally, in trying to anticipate what the future tax                    
  liability is going to be of the individual, years down the                   
  road, and to set it statically at what the taxes are being                   
  paid at the time the judgment is made.  I think it's                         
  cumbersome to try to do that, and I think that if you just                   
  allow the jury to take that into consideration, it's a                       
  neater way of handling it."                                                  
                                                                               
  Number 025                                                                   
                                                                               
  REP. GREEN:  "I think, in effect, the way that it's worded                   
  now does take a compromise effect in that it says it will be                 
  the tax rates in effect on the date of the injury.  Except                   
  for the recent - and I'm talking about under the Reagan -                    
  years, income taxes generally slide up.  And so, future                      
  earnings would be taxed.  In future years it would appear                    
  that they would be taxed higher than they would be if it                     
  happened now.  So, in effect, that does go in a direction                    
  that you're talking about; that there is a compromise                        
  already built in to this."                                                   
                                                                               
  CHAIRMAN PORTER:  "I'd like to think that taxes are going                    
  down, but I doubt it."                                                       
                                                                               
  Number 042                                                                   
                                                                               
  REP. NORDLUND:  "It's not just the tax rates, though, but                    
  it's the individual taxpayer's liability with whatever their                 
  exemptions would be, their standard deductions... my taxes                   
  have changed every year, based on particular circumstances.                  
  It's not hard to imagine that in the future somebody's tax                   
  burden would go down for some reason, and yet they'd still                   
  be having these benefits taken out based on an earlier rate.                 
  It's just hard to anticipate what somebody's tax burden is                   
  going to be 25 years from now."                                              
                                                                               
  Number 058                                                                   
                                                                               
  REP. JAMES:  "This time I agree with Rep. Nordlund, and let                  
  me tell you why it is that I do that.  And I agree that the                  
  fact that these awards are not taxable is an intent to be a                  
  benefit to the receiver of these funds are opposed to the                    
  person who is paying them.  But there's other benefits.  And                 
  just allowing them to consider it, in determining what the                   
  economic damages are, that it is indicated that your gross                   
  income is your benefit, even though some of it is taxable,                   
  there is payments off of your gross income that go for FICA                  
  and so forth that you do end up with getting some benefit                    
  for.  Maybe some other state taxes that you may or may not                   
  get a benefit for.  But to say that the economic damages                     
  will be reduced by the amount of federal and state income                    
  tax that would have been paid on those earnings, I think,                    
  according to what Rep. Nordlund..., I agree that there's no                  
  way to actually calculate that.  I think it would be fair to                 
  let the jury consider that.  And not say that `they shall                    
  reduce' the economic damages by that amount."                                
                                                                               
  Number 093                                                                   
                                                                               
  CHAIRMAN PORTER:  "In putting this in the bill, it, to me,                   
  was an equity issue that I think makes sense.  The idea is                   
  to make a person whole, not to make them rich.  If you're                    
  giving them money that they would have had to pay in taxes,                  
  you'll be giving them something that they wouldn't have had                  
  in the first place.  And, again, this is on the economic                     
  damages, not in the other kinds of areas that they could get                 
  compensation.  Economic damages are supposed to replace, not                 
  enhance, the economic losses - in wages in this case - that                  
  you would have received.  And I would agree with Rep. Green                  
  that, to me, wording it the way we worded it, is the best                    
  possible break for the plaintiff in terms of what his tax                    
  consequences would be.  25 years from now I don't know what                  
  to imagine, what we're going to be paying, but - I think                     
  that the table has shifted in the plaintiff's benefit and                    
  the way that we're saying that it should be done.  I think                   
  it provides the court with some specificity instead of a big                 
  harangue about how they are going to establish this, make                    
  this decision, and seeks to make the person pay what is                      
  really due, and allow the plaintiff to receive what he has                   
  actually earned."                                                            
                                                                               
  Number 130                                                                   
                                                                               
  REP. JAMES:  "This is some of the same argument that I had                   
  before on how much - the economic damages are - is to be                     
  paid by the person who created the infraction, and it                        
  depends on who he did the damage to, it would be a different                 
  amount of the same period of economic damages, and I                         
  understand that, but it just seems to me that the only                       
  reason that the federal government made this money be not                    
  taxable is to help the person who is in this situation, not                  
  necessarily to help the person that has to pay.  And I think                 
  this does make it be helping the person who has to pay and                   
  not the person that is getting it.  And I think it would be                  
  very difficult to figure out what that person's taxes would                  
  be, on that amount."                                                         
                                                                               
  Number 177                                                                   
                                                                               
  CHAIRMAN PORTER:  "Well, I certainly don't know what the                     
  history of the federal determination was, but, I would like                  
  to think that it was made looking at the issue of from the                   
  point of view that I think I'm looking at, and that is, that                 
  we're not going to tax it, so it doesn't have to be paid, it                 
  doesn't have to be received, we're just going to take it out                 
  of this thing altogether.  So, I don't know.  Is there any                   
  further discussion?"                                                         
                                                                               
  REP. NORDLUND:  "Again, this is just allowing the jury to                    
  take that into consideration.  It's not necessarily giving a                 
  benefit to either the plaintiff or the defendant."                           
                                                                               
  REP. DAVIDSON:  "Why are we trying to do so much of the                      
  jury's work here?"                                                           
                                                                               
  CHAIRMAN PORTER:  "So we don't have to pay so much for the                   
  court budget.  I'm not being facetious when I say that.  One                 
  of the issues involved in this is the effect of all this on                  
  the court, when we set up a scenario that's going to cause                   
  an awful lot of extra litigation.  I think we should try to                  
  avoid that.  Could we have a roll call vote, please?"                        
                                                                               
  A roll call vote was taken on Amendment 36.  Reps. Davidson,                 
  Nordlund and James voted "Yeah" and Reps. Green, Kott,                       
  Phillips and Porter voted "No".  Amendment 36 was therefore                  
  not adopted by the committee.                                                
                                                                               
  Number 194                                                                   
                                                                               
  REP. NORDLUND moved Amendment 37.                                            
                                                                               
  CHAIRMAN PORTER objected.                                                    
                                                                               
  Number 200                                                                   
                                                                               
  REP. NORDLUND presented Amendment 37.  He said, "The heart                   
  of the amendment deals with deleting materials, deleting                     
  Section 26, and everything else is a conforming to that.                     
  What Section 26 is, is the infamous Rule 82 section of the                   
  bill, and it just simply deletes the - as I understand it,                   
  this does not delete all of Rule 82, but just Rule 82 as it                  
  pertains to tort [indisc.]."                                                 
                                                                               
  Number 217                                                                   
                                                                               
  CHAIRMAN PORTER:  "Rule 82 is being offered for being                        
  deleted because - we have in the bill, a section that deals                  
  with specious litigation.  Rule 82 is the rule that                          
  originally provided just that attorney's fees would be                       
  awarded to the prevailing party of the suit.  It was then                    
  messed with a little bit and now has a laundry list of                       
  things that can be considered when determining how much and                  
  who prevailed, to the extent that the past chief justice                     
  wrote an opinion that I totally agree with that said this is                 
  going to cause more litigation than it's going to stop.                      
  With all that in mind, and considering that we have in the                   
  bill something that gets at an inducement to avoid                           
  unnecessary litigation, I would support leaving the deletion                 
  of Rule 82 in."                                                              
                                                                               
  Number 247                                                                   
                                                                               
  REP. NORDLUND:  "I would draw the committee's attention to a                 
  rare letter from the Supreme Court that was addressed to us                  
  on this issue of Rule 82.  Very seldom, it says in the                       
  beginning of the letter, `Very seldom does the Supreme Court                 
  take a policy position on issues...' Actually, Mr.                           
  Christensen who wrote the letter is here, but I'll just say,                 
  just a few short words from the letter:                                      
                                                                               
       `First, Rule 82 discourages unfounded lawsuits by                       
       plaintiffs.  Second, Rule 82 gives plaintiffs a                         
       personal stake in a lawsuit.  Third, Rule 82 makes it                   
       more likely that insurance companies will settle before                 
       the hiring of lawyers or the filing of lawsuits.                        
       Fourth, Rule 82 allows plaintiffs with small cases to                   
       bring them.  Fifth, Rule 82 discourages marginal                        
       appeals by the losing party.'                                           
                                                                               
  "Their final point is that `Rule 82 is simply a matter of                    
  fairness.'  I would think that we would put great stock in a                 
  letter like this from the Supreme Court, when they rarely                    
  make recommendations.  I think that they obviously feel that                 
  it works very well in our court system to have Rule 82.  For                 
  the very reasons I mentioned, I would strongly encourage                     
  that we delete this section of the bill."                                    
                                                                               
  Number 270                                                                   
                                                                               
  CHAIRMAN PORTER:  "I don't disagree that that was the intent                 
  of Rule 82.  I guess what I'm saying is that it has gone                     
  past that, and we have things in this bill that also                         
  provide, and I think with a better target than the shotgun                   
  of Rule 82, inducements to settle because of the offers that                 
  we've made, and, on the ability of the court to give an                      
  immediate hearing to someone who believes that they are                      
  being prosecuted maliciously or speciously, with unfounded                   
  litigation.  The Supreme Court does not totally support that                 
  memo because, as I say, when Rule 82 was recently changed by                 
  the Supreme Court, there was a dissent by Justice                            
  Rabbinowitz to change.  I guess it's kind of like any                        
  situation dealing with judges, or dealing with Supreme Court                 
  decisions, it's rare that you've got a five - zero reading,                  
  or, whatever, and when it comes down to it, it's a policy                    
  call."                                                                       
                                                                               
  REP. NORDLUND:  "I wonder, since Chris Christensen has been                  
  sitting through all these meetings, if you might ask him if                  
  he does have anything to say.  If he doesn't, that's fine."                  
                                                                               
  CHAIRMAN PORTER invited Mr. Christensen to speak.                            
                                                                               
  Number 309                                                                   
                                                                               
  CHRIS CHRISTENSEN, General Counsel, Alaska Judicial Branch,                  
  briefly addressed the committee.  He said, "If I were going                  
  to make remarks, it would be to restate the statements in                    
  the letter.  I won't waste the committee's time by doing                     
  that.  I guess I would like to say that the court is                         
  unanimous in its support of this letter.  Justice                            
  Rabbinowitz' dissent was not to Rule 82 itself, it was just                  
  some amendments to Rule 82 that were made last year.                         
  Amendments which, essentially, have the effect of making the                 
  rule even fairer for defendants.  Other than that, I would                   
  be happy to answer any questions.  I realize that the intent                 
  of parts of the bill, as you indicated, are to match some of                 
  the perceived benefits which the court sees in Rule 82.  I                   
  think that most of the benefits of Rule 82, while there are                  
  some benefits in the bill which attempt to deal with the                     
  same problems that Rule 82 does, I think that most of the                    
  benefits of Rule 82 are not met by the specific provisions                   
  of the legislation.  I guess, just at a very basic level,                    
  the court believes that Rule 82 is about fairness.  One                      
  person should be in a lawsuit, and the other person                          
  shouldn't.  Someone wins and someone loses.  Someone was                     
  right and somebody was wrong.  And Rule 82 simply is about                   
  fairness.  It says that the person who wins, the person who                  
  should not have been involved in this whole thing, should be                 
  getting some compensation for the amount that they were                      
  forced to pay out."                                                          
                                                                               
  Number 343                                                                   
                                                                               
  REP. DAVIDSON:  "It seems somewhat - I was going to say,                     
  incredible, but I don't want to get sensational, here - but                  
  I don't understand how after we hear how unanimous Supreme                   
  Court feeling is about this, why we would want to second                     
  guess that august body?  Because I'm sure that they know                     
  more about Rule 82 than I would ever want to know in my                      
  lifetime.  So, I'm going to take that as a lead, and I'm                     
  going to support this amendment, because I think it makes                    
  sense to follow the recommendations of our state's highest                   
  court and its members."                                                      
                                                                               
  Number 366                                                                   
                                                                               
  CHAIRMAN PORTER:  "I'll try to be nice when I say                            
  generically that to follow that logic, one would have to say                 
  that you agree with every majority decision that that august                 
  body has ever produced, and I'll just suffice it to say that                 
  I don't.  Consequently, I'm not persuaded because they have                  
  a position to buy it."                                                       
                                                                               
  Number 370                                                                   
                                                                               
  REP. DAVIDSON:  "I'm not asking you to buy every decision,                   
  or every recommendation, I'm only asking for this one."                      
                                                                               
  CHAIRMAN PORTER:  "I see.  Can we have a roll call vote,                     
  please?"                                                                     
                                                                               
  A roll call vote was taken on Amendment 37.  Reps. Nordlund                  
  and Davidson voted "Yeah" and Reps. Green, Kott, Phillips,                   
  James and Porter voted "No".  Amendment 37 was therefore not                 
  adopted by the committee.                                                    
                                                                               
  Number 430                                                                   
                                                                               
  The committee took up discussion of Amendment 26, which had                  
  been on hold.                                                                
                                                                               
  CHAIRMAN PORTER:  "Page 2, line 15.  The discussion came                     
  down to Rep. Nordlund's position that there were a few                       
  limited circumstances where adequate compensation wasn't                     
  going to be paid, and my point of view was that that was not                 
  an appropriate thing to say because that isn't what we're                    
  implying.  Any further discussion on Amendment 26?  Can we                   
  have a roll call vote, please?"                                              
                                                                               
  A roll call vote was taken on Amendment 26.  Reps. Davidson                  
  and Nordlund voted "Yeah" and Reps. Phillips, Green, Kott,                   
  James and Porter voted "No".  Amendment 26 was therefore not                 
  adopted by the committee.                                                    
                                                                               
  Number 441                                                                   
                                                                               
  The committee took up discussion of Amendment 24, which had                  
  also been on hold.                                                           
                                                                               
  CHAIRMAN PORTER:  "Page 8, line 5.  I believe Ms. Loper                      
  looked this up for us.  Daniella?"                                           
                                                                               
  Number 460                                                                   
                                                                               
  MS. LOPER:  "The question on the amendment yesterday was                     
  about, what if the municipality becomes insolvent?  What                     
  happens to the plaintiff?  It sets out in Alaska Statute                     
  29.06.050 and 29.06.520, that if something like that does                    
  happen, that the state will succeed and pay up upon this."                   
                                                                               
  CHAIRMAN PORTER:  "This amendment was suggested by the                       
  Department of Law.  Further discussion on 24?"                               
                                                                               
  Number 475                                                                   
                                                                               
  REP. JAMES:  "This has nothing to do with this amendment,                    
  specifically, but it does have to do with this thing that                    
  comes in right after `or' on this amendment; an authorized                   
  insurer may not have required a security.  And I'd like to                   
  have a definition of authorized insurer, as to why they're                   
  so special."                                                                 
                                                                               
  CHAIRMAN PORTER requested that the committee conclude                        
  discussion of Amendment 24 and said that the committee would                 
  return to Rep. James' question.                                              
                                                                               
  Number 488                                                                   
                                                                               
  REP. GREEN:  "If this happens, and it could, certainly, that                 
  a municipality is unable to perform and excluded here                        
  without any security - the state comes in, as we just heard                  
  - is there any kind of a delay in that?  Is this an                          
  automatic thing, that just takes up from where the clock                     
  started?  Or is this stretched way out so that the plaintiff                 
  may be at jeopardy for some length of time before the state                  
  kicks in?  And I certainly wouldn't want that to happen.  I                  
  know there's no guarantee, but I'm just wondering what - has                 
  it happened, do we have any kind of a track record?"                         
                                                                               
  Number 507                                                                   
                                                                               
  CHAIRMAN PORTER:  "I don't think that there's ever been a                    
  municipality that went bankrupt in the state of Alaska."                     
                                                                               
  Number 521                                                                   
                                                                               
  REP. GREEN:  "Do we have any knowledge of - because there                    
  have been some municipalities in other parts of the                          
  country?"                                                                    
                                                                               
  REP. JAMES:  "There have been municipalities that have tried                 
  to disenfranchise their municipal standing."                                 
                                                                               
  REP. GREEN:  "In order to get away from an obligation?"                      
                                                                               
  REP. JAMES:  "Either that, or to accept a different type of                  
  government [indisc.]."                                                       
                                                                               
  CHAIRMAN PORTER noted that statutes currently provided for                   
  an insurance pool among political entities such as                           
  municipalities.  "And they have done so, and very                            
  successfully; there is an insurance pool for municipalities.                 
  Generally for the smaller ones.   The Municipality of                        
  Anchorage is self-insured... most do.  The pooling of the                    
  insurance available for the smaller communities is also -                    
  somewhat speaks to the ability to meet their obligations."                   
                                                                               
  Number 521                                                                   
                                                                               
  REP. GREEN:  "And to that point, Mr. Chairman, the concern I                 
  have is that one of the first things that happens in an                      
  economically troubled entity, individual, whatever, is that                  
  payments to something like that generally are the first to                   
  go.  If the insurance from this pool lapses, then is this                    
  municipality, that ends up being a litigant, excluded then,                  
  because of lack of payments?  I may be making a mountain out                 
  of a molehill, but I'm just concerned that we don't require                  
  any kind of protection guaranteed from perhaps a shaky                       
  entity."                                                                     
                                                                               
  Number 531                                                                   
                                                                               
  REP. JAMES:  "Well, I guess that I share some of Rep.                        
  Green's concerns.  The City of Fairbanks is not in my                        
  district, but the City of Fairbanks has been woefully close                  
  to having to file bankruptcy in the last few years.  And                     
  their finances are not getting any better.  I know that if                   
  they were to file a bankruptcy it probably would not be a                    
  liquidation, it would probably be some kind of plan to get                   
  out of their dilemmas.  They also don't have a very good                     
  history of not getting themselves into lawsuits and problems                 
  with people.  Particularly in employment and doing good                      
  employment practices.  They've had a rash of these things,                   
  and a lot of those were pretty expensive.  I guess that if I                 
  were injured and I were filing a suit against the City of                    
  Fairbanks and I was on periodic payments because the court                   
  said they had to do it that way, or because it says that we                  
  `shall' do this, I wouldn't feel very comfortable about                      
  getting periodic payments from the City of Fairbanks without                 
  some kind of a guarantee.  And so, for that reason, and who                  
  knows...  There's another thing, I think, and I don't mean                   
  to be a real pessimist in this issue, but we're facing an                    
  economic downturn in this state that is very, very real.                     
  And any time you come in to an economic downturn, even in                    
  your personal life, you find that reducing your spending is                  
  extremely difficult.  And we don't even know what the                        
  circumstances that will be created or the results of that                    
  would be.  So I don't feel real comfortable with having a                    
  municipality in here, and I don't see any reason why they                    
  shouldn't be able to either pay or put up security for a                     
  periodic payment.  So, I guess, I would feel okay if the                     
  state was in there, but I feel uncomfortable about the                       
  municipality.  I feel equally uncomfortable with authorized                  
  insurer.  Because they can go bankrupt as well."                             
                                                                               
  Number 570                                                                   
                                                                               
  CHAIRMAN PORTER:  "Would the, speaking to this amendment,                    
  would the committee be comfortable with the removing of                      
  `municipality'?"                                                             
                                                                               
  REP. JAMES:  "Yes, I would."                                                 
                                                                               
  Number 570                                                                   
                                                                               
  REP. DAVIDSON:  "I certainly concur in a large part of the                   
  remarks by Rep. James, although I tend to have more                          
  municipal confidence because we do have a sales tax in                       
  Kodiak, but, Mr. Chairman, the pooling that you talked about                 
  - are you talking about the Alaska Municipal League                          
  pooling?"                                                                    
                                                                               
  CHAIRMAN PORTER said yes.                                                    
                                                                               
  REP. DAVIDSON:  "Well, I have some entities in my own                        
  constituency, or my own district, that cannot afford to make                 
  those payments.  And, of course, we're looking at a                          
  recommendation to cut revenue sharing and municipal                          
  assistance by a full 50 percent and the letters are coming                   
  in and that person or that entity that's not able to pay                     
  now, I think will be multiplied manyfold by the end of this                  
  fiscal year, if we continue in the path we're on.  So, I                     
  would be most comfortable to take out `municipality'."                       
                                                                               
  CHAIRMAN PORTER:  "I will look at a friendly amendment..."                   
                                                                               
  [UNIDENTIFIED VOICE - PHILLIPS?]:  "So moved, Mr. Chairman,                  
  to remove municipality."  There was no objection.                            
                                                                               
  CHAIRMAN PORTER:  "We now have in front of us Amendment 24,                  
  as amended by the deletion of `a municipality.'  Further                     
  discussion on Amendment 24?  Is there objection?"  There                     
  being no further discussion or objection, Amendment 24 as                    
  amended was adopted by the committee.                                        
                                                                               
  Number 616                                                                   
                                                                               
  REP. NORDLUND moved Amendment 38.                                            
                                                                               
  CHAIRMAN PORTER objected to Amendment 38.                                    
                                                                               
  REP. NORDLUND:  "This gets back to the hospital part of the                  
  bill again.  If this legislation passes the way it recently                  
  reads, we will allow certain health care providers,                          
  primarily physicians - basically the hospitals will not be                   
  responsible for any malpractice that may be have been                        
  committed while they were operating in the hospital as long                  
  as they are acting as an independent contractor.  I stated                   
  earlier that that does leave the public exposed in some                      
  cases because 25% of the doctors in this state do not have                   
  insurance.  Rep. Phillips asked me to get some verification                  
  of that and I've gotten this from the Alaska State Medical                   
  Association.  This is based on a survey that they did, I                     
  guess in 1990; these percentages might have changed.  In any                 
  case, it does show you the size of the problem in Alaska.                    
  If we don't adopt this amendment and the bill passes the way                 
  it is, we will be in a situation in which neither the                        
  hospital nor the doctors will have malpractice insurance,                    
  and, other than going after the doctor's personal assets,                    
  there is no protection for a victim of malpractice.  So,                     
  what my amendment does is simply require that physicians                     
  operating as health care providers - I'm not sure if the                     
  language is going to comport with what we have adopted -                     
  but, the intent, at least, is to require that they have a $1                 
  million worth of malpractice insurance, so as to provide                     
  that protection to the public."                                              
                                                                               
  REP. GREEN:  "I wonder if the $1 million was arrived at                      
  prior to review of the proposal that we have now.  What I'm                  
  getting at is, what would the maker of the amendment be                      
  amenable to?  To a lesser amount of money because of the                     
  caps that we're imposing through tort reform?  For example,                  
  half that amount?"                                                           
                                                                               
  REP. NORDLUND:  "The $1 million is arbitrary, admittedly.                    
  However, the exposure could be much greater if you consider                  
  economic and noneconomic damages.  All compensatory damages                  
  could be more than the $500,000 cap.  When you add up the                    
  economic damages, it could go beyond that.  And in certain                   
  limited instances, very limited instances, even punitive                     
  damages, so..."                                                              
                                                                               
  Number 657                                                                   
                                                                               
  REP. JAMES:  "I think this is a given, probably to the fact                  
  of making the doctors have the insurance or they don't                       
  operate in the hospital.  But it doesn't force the hospital                  
  to do that.  I have a tendency to support this amendment, is                 
  the reason I am saying that.  I would hope that this tort                    
  reform would make it so that doctors could be able to afford                 
  to have a $1 million worth of malpractice insurance, which                   
  currently they can't.  So, if that's the intent of this tort                 
  reform, and we're passing this in tort reform, then we                       
  shouldn't be fearful about putting this particular amendment                 
  in, because it would say that they won't be able to operate                  
  at the hospital because, if they don't, the hospital kicks                   
  in.  And so I think that that does cover a gap in where                      
  people may or may not be covered, and may not understand                     
  that they're covered.  So, unless someone can give me some                   
  really good reasons why I shouldn't support this amendment,                  
  I guess I have a tendency to say, I think it is a good                       
  amendment."                                                                  
                                                                               
  Number 675                                                                   
                                                                               
  CHAIRMAN PORTER:  "Well, let me endeavor to do so.  The                      
  adjustment that we're making in terms of coverage that                       
  addresses the Jackson B. Powers case is addressing the                       
  situation where the court in its infinite wisdom decided                     
  that emergency room physicians should be covered by the                      
  hospital.  That's the only thing we're changing.  Right now,                 
  doctors are not required, unless the hospital has that                       
  policy, to have insurance.  If we said this we would be                      
  making a giant leap of insurance reform, or whatever you                     
  want to call it, which we really haven't had an awful lot of                 
  testimony on or consideration.  The statistics, as Rep.                      
  James points out, very correctly, indicate a need for this                   
  bill.  That's exactly one of the problems that we're trying                  
  to address.  Especially, the 56 percent of Bush physicians                   
  that don't have insurance.  As we've stated, the effect on                   
  insurance rates of this legislation is going to be several                   
  years out.  And then, it's iffy on whether or not we've                      
  dotted all our i's and crossed all our t's.  I think we                      
  would be doing a disservice to physicians, and especially to                 
  medical service in the Bush, if we put this in, and for the                  
  short term, created a situation that further exacerbates the                 
  ability of a physician to get insurance, or to afford                        
  insurance.  So I would not support the amendment."                           
                                                                               
  Number 702                                                                   
                                                                               
  REP. NORDLUND:  "As I understand it, and I am sorry I don't                  
  have any documentation of this, but, there are two hospitals                 
  in the entire country that do not require their physicians                   
  to have medical malpractice insurance:  Alaska Regional and                  
  Providence Hospital in Anchorage.  This would apply to those                 
  two hospitals.  It would not affect anything else."                          
                                                                               
  Number 708                                                                   
                                                                               
  REP. JAMES:  "Just as an example.  I worked in a doctor's                    
  office for a couple of years when I was in Washington State.                 
  In order to be a member of the Washington Medical                            
  Association you had to have malpractice insurance.  I don't                  
  know what the rules are now, that's more than 20 years ago,                  
  but I think that any professional - let's talk about the                     
  design professionals.  What would happen if they didn't have                 
  insurance for the six year period - would the public be                      
  protected?  I don't think so.  So, I think there is a little                 
  glitch in what we've got right now, as to whether or not the                 
  general public is being protected.  I would think that the                   
  malpractice insurance with this passing of this tort reform                  
  would be more reasonable and that doctor's could afford to                   
  do it."                                                                      
                                                                               
  Number 725                                                                   
                                                                               
  REP. GREEN:  "I concur.  The fact [is] that we have taken a                  
  giant step, I think, in the right direction, to prevent the                  
  frivolous or the ridiculous lawsuits by the tort reform                      
  package.  On the other hand, if that's at the expense of a                   
  loophole where there could be a certain number of physicians                 
  operating that aren't covered, and it would be to the                        
  detriment, unbeknownst to the person who was treated, that                   
  there was not a requirement from the hospital - I don't                      
  think this is an unreasonable request.  The only concern I                   
  have is that if you make it too pricey, you haven't                          
  accomplished what you wanted to.  And so, that's why I would                 
  like to offer to the maker of the amendment, a reduced                       
  amount, still adequate enough to protect, so..."                             
                                                                               
  CHAIRMAN PORTER:  "We have a possible amendment we're                        
  working on here, so, let's see how we're doing."                             
                                                                               
  REP. GREEN:  "This is an amendment to your amendment?"                       
                                                                               
  REP. NORDLUND:  "Yes."                                                       
                                                                               
  CHAIRMAN PORTER:  "In having this amendment previously, and                  
  doing some discussion, if the health care provider, were a                   
  health care provider by contract, and if the hospital had                    
  the ability to decide the level of coverage, my objections                   
  to this would be removed."                                                   
                                                                               
  [UNIDENTIFIED VOICE - JAMES?]:  "Okay, so that the coverage                  
  would be by the hospital?"                                                   
                                                                               
  CHAIRMAN PORTER:  "Yes."                                                     
                                                                               
  REP. JAMES:  "How would you work that?"                                      
                                                                               
  CHAIRMAN PORTER:  "Scratch `of at least $1 million' and put                  
  in `decided by hospital' - `to be determined by the                          
  hospital'."  An unidentified voice pointed out that the                      
  amount could be much bigger.  Chairman Porter acknowledged                   
  this.                                                                        
                                                                               
  Number 735                                                                   
                                                                               
  REP. NORDLUND:  "The two parts of your amendment - the one                   
  you would say `the health care provider by contract' - the                   
  intent there is, are those, independent contractors?  Okay,                  
  that would be fine.  I would consider that a friendly                        
  amendment.  I would not agree, however, to allowing the                      
  hospital to decide the level of coverage."                                   
                                                                               
  CHAIRMAN PORTER:  "One of the reasons that I think that                      
  would be appropriate is that there are different levels of                   
  insurance premiums based on different specialties within the                 
  field of medicine.  One of the problems in the Bush that                     
  we're really trying to get at with this is the cost of                       
  insurance for obstetrics, for example.  There are doctors in                 
  the Bush who are remaining in the Bush but just not                          
  performing that service because they can't afford that                       
  coverage."                                                                   
                                                                               
  REP. JAMES:  "Do they have hospitals there?"                                 
                                                                               
  CHAIRMAN PORTER: "No, no, no, this is just their own                         
  malpractice for their clinics or their own offices."                         
                                                                               
  REP. JAMES:  "This has only to do with hospitals."                           
                                                                               
  CHAIRMAN PORTER:  "Well, I recognize that.  But, I'm using                   
  that as an example to show that the same thing may be in a                   
  hospital where the doctor is involved in obstetrics as                       
  opposed to [indiscernible due to noise]."                                    
                                                                               
  Number 762                                                                   
                                                                               
  REP. NORDLUND:  "Let me tell you the practical and political                 
  problem with allowing the hospitals to decide.  You're into                  
  the same problem right now - Fairbanks Memorial has been in                  
  battle with their own medical community up there, trying to                  
  get them to have - basically, finally forced the doctors to                  
  have to have insurance.  What's happening in Anchorage is                    
  that you've got a large enough group of doctors who                          
  basically are very influential within the power structures                   
  in those two hospitals, that have been manipulating it to                    
  the point that hospitals aren't requiring them to have                       
  insurance.  Those same political forces will be at play in                   
  deciding the level of coverage, and that level of coverage                   
  could come back as $1 or $3 or something ridiculous like                     
  that.  I don't think that allowing the hospitals under that                  
  kind of a situation - allowing the hospitals to set the                      
  level of coverage affords enough protection."                                
                                                                               
  Number 793                                                                   
                                                                               
  REP. GREEN:  "On that point, then, what would happen,                        
  Daniella, if a situation were to come up where the hospital                  
  required a very nominal amount, and the doctor is a new                      
  doctor that hasn't accumulated his fortune; would the                        
  hospital, then, because they are the ones who determine the                  
  rate, or the amount of coverage, would they in turn pick up                  
  the liability?  Or is there a loophole, here, still?"                        
                                                                               
  CHAIRMAN PORTER:  "We have provided that independent                         
  contractors are not within the scope of responsibility of                    
  the institution or facility."                                                
                                                                               
  REP. GREEN:  "That's true, but now there's a tie here,                       
  because now you're going back, and it seems to me there's a,                 
  thin though it may be, an umbilical cord because the amount                  
  of coverage I as a doctor might need has been determined by                  
  this institution."                                                           
                                                                               
  Number 805                                                                   
                                                                               
  MS. LOPER:  "A health care provider is by contract, and                      
  obviously there are contracts that are established between                   
  the independent contractor that works for them, and this has                 
  been going for quite some time.  I don't think I've ever                     
  seen a hospital ask a contractor to be covered by $3                         
  insurance coverage.  I imagine that in their contract they                   
  go in and explain exactly what kind of coverage.  So, on                     
  just a legal issue, just because this is here, does not                      
  affect liability.  That's decided completely on something                    
  else, and that is, by the bill, and Jackson B. Powers."                      
                                                                               
  Number 817                                                                   
                                                                               
  REP. JAMES:  "Speaking to the `determined by the hospital,'                  
  I guess that I wouldn't be fearful that that would be too                    
  low.  I might be fearful that it might be too high.  And I                   
  would be more - if we don't like $1 million - I would rather                 
  change that to some other number.  I'm not familiar with                     
  what the costs and what the ability is for physicians to get                 
  malpractice now.  I know that it's been tough to get and the                 
  prices are very high and I don't know what those numbers                     
  are.  I don't want to impose something on a physician that                   
  would make them not be able to be a physician if they're a                   
  new one, or whatever.  So I might be willing to take a                       
  lesser amount.  But I feel, that putting it in as the                        
  hospital making the decision, I guess the hospital could                     
  say, `You can't do it unless you have $2 million in                          
  insurance' or something like that, and I don't know that I                   
  would like to have that be subjected to the hospital.  Now                   
  they could say, `You can't do it if you don't have some.'  I                 
  think they could still do this, without us even putting it                   
  in here.  The hospital could make that determination.  If we                 
  don't put this in there, that's what's going to happen."                     
                                                                               
  CHAIRMAN PORTER:  "No.  We cannot tell a hospital that they                  
  can't make a policy to exceed what we've said is a minimum.                  
  They could not - if we, for example, said that you have to                   
  have at least a $1 million coverage, and we passed that into                 
  law, they could say, `You've got to have $5 million.'  They                  
  couldn't say, `You only have to have $500,000.'"                             
                                                                               
  REP. JAMES:  "I understand that.  My point is, that if we                    
  don't put this amendment in there, the way it stands without                 
  it is, the hospital can say, `You can't operate here without                 
  $5 million worth of coverage.'                                               
                                                                               
  CHAIRMAN PORTER:  "As they can now."                                         
                                                                               
  REP. JAMES:  "And they still could, after we get this in                     
  here.  What it does do is force the hospital to make them                    
  have some insurance, when we've already taken the hospital                   
  out of the responsibility of that."                                          
                                                                               
  CHAIRMAN PORTER:  "And that is precisely what I'm saying.                    
  Perhaps $1 million is not required.  So what I'm saying is,                  
  that right now they have the ability to place any                            
  requirement they want.  I'm saying we ought to leave it at                   
  that, and require it for contract doctors."                                  
                                                                               
  Number 850                                                                   
                                                                               
  REP. GREEN:  "And I think that's why the maker of the motion                 
  has made it.  Because in at least the [examples] he cites,                   
  their determination has been zero.  Is it in the public's                    
  best interest to have it that low?  Where it is, I don't                     
  know, and that's why I suggest that maybe half - it ties to                  
  other portions of this tort reform bill, and I don't think                   
  prohibitive, $500,000 certainly shouldn't be prohibitive for                 
  a physician."                                                                
                                                                               
  CHAIRMAN PORTER:  "If adding by contract to health care                      
  provider is a friendly amendment..."                                         
                                                                               
  Number 862                                                                   
                                                                               
  REP. NORDLUND:  "I have been rethinking that, now.  I just                   
  want to make sure of the intent.  If you are intending to -                  
  I want to get into a situation where we can require those                    
  physicians or whoever are on contract to have insurance.                     
  Setting aside the level, I want to make sure that this would                 
  require that.  When you say `by contract' - you can't force                  
  people into a contract by the law.  I want to make sure that                 
  this is not the effect of the amendment.  We just can't do                   
  it.  We can't say that `the hospital shall contract with a                   
  doctor for [malpractice] insurance.'  But if you're trying                   
  to say that those people who are independent contractors                     
  shall have coverage, then I agree with it.  I don't think it                 
  says it.  In fact, health care provider has already been                     
  defined.  So I don't think we need to say `by contact.'                      
  Health care provider is, by definition, those independent                    
  contractors through our circuitous definition."                              
                                                                               
  CHAIRMAN PORTER:  "We would have to say `health care                         
  provider as defined in,' because we've got..."                               
                                                                               
  REP. NORDLUND:  "Okay, `health care provider as defined in,'                 
  that would be fine, that would be better than by contract."                  
                                                                               
  REP. JAMES:  "I believe that one of the things that we're                    
  trying to do in here is to not require..." [Cut off by end                   
  of tape.]                                                                    
                                                                               
                                                                               
  TAPE 94-40, SIDE A                                                           
  Number 000                                                                   
                                                                               
  REP. NORDLUND:  "...[W]e already know the hospitals are not                  
  going to be responsible, because of what we adopted here,                    
  so..."                                                                       
                                                                               
  Number 005                                                                   
                                                                               
  CHAIRMAN PORTER:  "What I'm saying is, that we're talking                    
  about institutions all over this state, and not just the two                 
  in our home town.  And I don't want to say that the clinic                   
  in Bethel has to have nobody in it that doesn't have $1                      
  million worth of insurance.  I think that clinic should be                   
  able to say what they think they can afford.  And if they                    
  can't afford any at all, maybe that's what they're going to                  
  allow.  Because they are going to have to serve us.  So I                    
  recognize the anomaly, really, in Anchorage, but, this is a                  
  state-wide policy, and I don't want to annihilate the Bush,                  
  or Homer, or anybody else, just because we're trying to get                  
  at two institutions in Anchorage.  Let's put it this way.                    
  If we have `health care provider as defined in,' and we're                   
  talking about in the section..."                                             
                                                                               
  REP. NORDLUND:  "Then I would consider that a friendly                       
  amendment."                                                                  
                                                                               
  CHAIRMAN PORTER:  "And that is the independent contractor -                  
  doctor."                                                                     
                                                                               
  REP. NORDLUND:  "Right.  The people that that hospital is                    
  [indisc. - not? now?] responsible for."                                      
                                                                               
  Number 041                                                                   
                                                                               
  CHAIRMAN PORTER:  "Okay.  Let me suggest that I will offer                   
  an amendment to the amendment that would strike `of at least                 
  $1 million' and replace `to be determined by the.'  What are                 
  we calling them?  Medical facilities?"                                       
                                                                               
  REP. JAMES interjected a request to pause "and see what                      
  18.21.030 does.  It says `hospital has the meaning given in                  
  AS 18.21.030'."                                                              
                                                                               
  CHAIRMAN PORTER:  "I'm changing `hospital.' I'm not going to                 
  say hospital, I'm going to say whatever we're calling it --                  
  No, it says hospitals here, doesn't it."  [Assenting voices                  
  from committee.]  Okay, so we can use `hospitals'."                          
                                                                               
  REP. JAMES:  "I need to have that definition.  Because I                     
  don't think that necessarily means clinics in the Bush."                     
                                                                               
  REP. PHILLIPS:  "Before we do go on to passing this                          
  amendment, I want us to identify that section there."                        
                                                                               
  CHAIRMAN PORTER:  "Okay.  That would be page 14, lines 14-                   
  15... health care providers was number 19."                                  
                                                                               
  Number 101                                                                   
                                                                               
  REP. NORDLUND:  "I've got the definition of hospital if you                  
  want me to read it."                                                         
                                                                               
  CHAIRMAN PORTER asked him to do so.                                          
                                                                               
  REP. NORDLUND:  "`Hospital means an institution or                           
  establishment, public or private, devoted permanently to                     
  providing diagnosis, treatment or care over a continuous                     
  period of 24 hours each day for two or more nonrelated                       
  individuals suffering from an illness, physical or mental                    
  disease, injury or deformity, or any other condition for                     
  which the medical or surgical services would be                              
  appropriate'."                                                               
                                                                               
  CHAIRMAN PORTER:  "This wouldn't be a traditional clinic,                    
  but it would be any facility that has two or more people in                  
  it spending the night.  And that's a lot of small                            
  facilities."                                                                 
                                                                               
  REP. JAMES:  "There are.  There's even, up on the slope, we                  
  have some of those that meet that criteria, that have                        
  overnight."                                                                  
                                                                               
  CHAIRMAN PORTER:  "So we would be affecting an awful lot of                  
  small facilities."                                                           
                                                                               
  REP. GREEN:  "But we're affecting the doctors, rather than                   
  the facility."                                                               
                                                                               
  CHAIRMAN PORTER:  "No, we're affecting the ability of the                    
  facility to get a doctor to perform services there."                         
                                                                               
  REP. GREEN:  "That's right.  But it's not the facility that                  
  has to pay the premiums."                                                    
                                                                               
  CHAIRMAN PORTER:  "But if we say that they have to demand a                  
  $1 million worth of insurance for a doctor to practice in                    
  their facility, they may not get any doctors."                               
                                                                               
  REP. JAMES:  "I'll buy that."                                                
                                                                               
  REP. GREEN:  "And the [indisc.] is, they may have none, and                  
  so you still have this uninsured potential."                                 
                                                                               
  CHAIRMAN PORTER:  "So, in answer to `as defined in' will                     
  be..."                                                                       
                                                                               
  REP. PHILLIPS:  "Section 27 (c) (1)?"                                        
                                                                               
  CHAIRMAN PORTER:  "Well, 09.65.096.  Section 27, paragraph                   
  (c), number (1), yes."                                                       
                                                                               
  REP. PHILLIPS repeated this information at the request of                    
  Ms. Loper, saying, "We need to identify in this amendment                    
  the section.  So, it would be Section 27 (c) (1)."                           
                                                                               
  CHAIRMAN PORTER:  "So, that's what we'd be defining.  And                    
  I'm offering the amendment to the amendment which would                      
  replace `of at least $1 million' to read `coverage to be                     
  determined by the hospital'."                                                
                                                                               
  REP. NORDLUND:  "I object to the amendment to the                            
  amendment."                                                                  
                                                                               
  CHAIRMAN PORTER:  "Can we have a roll call vote on the                       
  amendment to the amendment?"                                                 
                                                                               
  A roll call vote was taken on the amendment to Amendment 38.                 
  Reps. Phillips, James and Porter voted "Yeah"; Reps.                         
  Nordlund, Green and Kott voted "No" and Rep. Davidson did                    
  not vote.  The amendment to Amendment 38 was therefore not                   
  adopted by the committee.                                                    
                                                                               
  CHAIRMAN PORTER noted that they now had before them the                      
  amendment as amended by the friendly amendment.                              
                                                                               
  REP. JAMES:  "Since that one didn't pass, I have a little                    
  problem now with the things that we've been talking about."                  
                                                                               
  REP. PHILLIPS:  "Yes.  You're not going to be able to put a                  
  $1 million policy on a clinic or facility in the Bush                        
  anywhere."                                                                   
                                                                               
  REP. JAMES:  "The insurance probably isn't even available."                  
                                                                               
  CHAIRMAN PORTER:  "My recommendation to the committee would                  
  be to not support the amendment and leave it the way it is."                 
                                                                               
  REP. NORDLUND:  "I would think it would be better to have                    
  your language in it as to have no amendment at all."                         
                                                                               
  REP. JAMES:  "I agree with that."                                            
                                                                               
  REP. NORDLUND:  "If the whole amendment is going to go down,                 
  I would reconsider my vote on your amendment."                               
                                                                               
  Number 198                                                                   
                                                                               
  REP. GREEN:  "Well, in order to overcome my concern that                     
  we've still got a loophole, could there be something in that                 
  portion where we're talking about at least $1 million per                    
  occurrence to reduce that to a more palatable amount, of                     
  something to the effect to read like this `of at least                       
  $500,000 or the maximum amount of insurance obtainable,                      
  whichever is less'."                                                         
                                                                               
  CHAIRMAN PORTER:  "Rep. Green, we have had no information                    
  put before this committee about what is appropriate rates,                   
  appropriate coverage.  I really feel ill-equipped to be                      
  making these kinds of decisions.  This isn't an insurance                    
  reform bill, it's a tort reform bill."                                       
                                                                               
  Number 213                                                                   
                                                                               
  REP. PHILLIPS:  "We talk about the difference between urban                  
  and rural, but there are very great differences in the rural                 
  areas also.  We could be looking at the hospital in Homer                    
  vs. the hospital in Seldovia, and you're talking about a                     
  tremendous amounts of differences between those two."                        
                                                                               
  REP. GREEN:  "That's why I offered the latitude."                            
                                                                               
  REP. PHILLIPS:  "Yes, but in Seldovia you would never find                   
  anybody that could - it's just the $500,000, even would                      
  be..."                                                                       
                                                                               
  REP. GREEN:  "Or the `maximum obtainable'."                                  
                                                                               
  CHAIRMAN PORTER:  "It may well be that an [indisc.]                          
  situation would not be able to be addressed because of this.                 
  We're talking about many, many areas that have one doctor."                  
                                                                               
  REP. NORDLUND:  "Well, I'm not sure, Mr. Chairman, how to                    
  count the votes here."                                                       
                                                                               
  REP. PHILLIPS:  "We could move to rescind our action, first,                 
  in failing to adopt."                                                        
                                                                               
  REP. NORDLUND moved to rescind the committee's action in                     
  failing to adopt the amendment to Amendment 38.                              
                                                                               
  CHAIRMAN PORTER:  "We've got a motion to rescind our motion                  
  to reject the amendment to the amendment.  Is there                          
  discussion?  Is there objection?  We have rescinded our                      
  motion.  We have in front of us the amendment to the                         
  amendment, which, again, on Amendment 38, U59, would                         
  replace, on the second line of the verbiage `of at least $1                  
  million' with `to be determined by the hospital'."                           
                                                                               
  Number 248                                                                   
                                                                               
  REP. JAMES offered a comment.  "I think this is probably the                 
  most fair way to do it.  And actually, what we're doing, by                  
  putting this `if' in here, previously we have said that the                  
  hospital is not going to cover these physicians that are                     
  independent contractors.  And what we're putting in here,                    
  `if they have malpractice insurance as determined by the                     
  hospital,' which means that if they don't, then the hospital                 
  has to cover them.  Is that correct?  Isn't that the way                     
  this wording will do this?"                                                  
                                                                               
  CHAIRMAN PORTER replied in the negative.                                     
                                                                               
  REP. JAMES:  "Then I better read some more here."                            
                                                                               
  REP. GREEN:  "If they decide you don't need any, this                        
  sentence says you don't need any."                                           
                                                                               
  CHAIRMAN PORTER:  "And that's exactly the latitude that I                    
  think we ought to be providing."                                             
                                                                               
  REP. GREEN:  "I think that's a mistake."                                     
                                                                               
  Number 260                                                                   
                                                                               
  REP. JAMES:  "Okay, but it says that you have to look at it.                 
  It says you have to make a conscious decision as to                          
  whether... In our bill here the hospital is not responsible                  
  for the liability of these people.  That is established in                   
  this tort reform.  And then we're saying that they're not                    
  responsible for these people if these people have                            
  malpractice insurance.  If we put this in here, then that                    
  means the hospital is making a choice as to whether they                     
  want to cover them with their responsibility or whether the                  
  hospital..."                                                                 
                                                                               
  CHAIRMAN PORTER:  "No."                                                      
                                                                               
  REP. NORDLUND:  "The level is all they're deciding.  Isn't                   
  that correct, Mr. Chairman?  They're deciding the level of                   
  the insurance, not whether or not they have to have it or                    
  not."                                                                        
                                                                               
  Number 270                                                                   
                                                                               
  REP. JAMES:  "I understand that.  But if we don't pass this                  
  amendment, then there are some people that there's not a                     
  decision by the hospital.  They're just not covering these                   
  doctors.  If these doctors don't have any insurance the                      
  patients are just - out to lunch."                                           
                                                                               
  Number 275                                                                   
                                                                               
  CHAIRMAN PORTER:  "No... they have to post, in the facility,                 
  that these independent contractors are not covered by their                  
  insurance, so that there's notification, and the patient                     
  then knows that, if they are concerned about this, they                      
  better ask their doctor whether they have insurance.  And if                 
  they're concerned about that, then get one that's got                        
  insurance."                                                                  
                                                                               
  REP. JAMES:  "Just don't be sick."                                           
                                                                               
  CHAIRMAN PORTER:  "No, that isn't it."                                       
                                                                               
  REP. GREEN:  "But that's what would happen if there was only                 
  one doctor in the Bush like you're talking about.  [Indisc.]                 
  get another doctor, and he's not covered, so they take their                 
  risk.  And I don't think that's right."                                      
                                                                               
  CHAIRMAN PORTER:  "Well, there's inherent risk in living,                    
  but I think I'd rather have an uninsured doctor than no                      
  doctor if I had a problem.  In some areas of the Bush,                       
  that's exactly what they're facing."                                         
                                                                               
  [Off the record discussion amongst members.]                                 
                                                                               
  CHAIRMAN PORTER:  "Okay, let's go back on the record.  Rep.                  
  James?"                                                                      
                                                                               
  Number 288                                                                   
                                                                               
  REP. JAMES:  "Leaving out the `determined by the hospital,'                  
  leaving that completely out, just the first part of this                     
  amendment, which would fit into here, it says, `The hospital                 
  is not liable to civil damages as a result of an act or                      
  omission by a health care provider who is not an employee or                 
  actual agent of the hospital if the health care provider is                  
  insured under a policy of malpractice insurance in an amount                 
  to be determined by the hospital'."  So, in other words,                     
  what this is saying - the main amendment here, what this                     
  main amendment is saying - is that the hospital is either                    
  going to cover them, or the doctors are going to cover                       
  themselves, at the request of the hospital."                                 
                                                                               
  CHAIRMAN PORTER:  "That is correct."                                         
                                                                               
  REP. NORDLUND:  "That is the intent."                                        
                                                                               
  REP. JAMES:  "So that the gap is closed."                                    
                                                                               
  CHAIRMAN PORTER:  "Unless the facility recognizes that a                     
  doctor doesn't have his own insurance and requires him to                    
  have none."                                                                  
                                                                               
  REP. JAMES:  "The way I read it, he has to have some, or                     
  else the hospital's liable."                                                 
                                                                               
  Number 363                                                                   
                                                                               
  CHAIRMAN PORTER:  "I am going to step back and say this.  I                  
  am really nervous about getting into this area at all.  I am                 
  not aware of enough facts in this area to be writing law on                  
  it, to tell you the truth.  And I know what the situation is                 
  now.  And, while there's differences of opinion on whether                   
  it's good, bad or indifferent, I don't have enough, with the                 
  information that we've been receiving during testimony on                    
  this bill, to make a decision on how to change it.  So I'm                   
  just going to, I just can't support the amendment at all."                   
                                                                               
  Number 378                                                                   
                                                                               
  REP. NORDLUND:  "I recognize the difficulty in setting an                    
  amount at $1 million, or whatever.  Not only because of the                  
  problems that it represents in rural Alaska, but because of                  
  the different exposure liability that the different                          
  specialties have, and a range of problems, that arbitrarily                  
  setting an amount at $1 million - I agree.  I don't really                   
  know exactly if that's the right level or not.  So if we                     
  allow the hospital to set that amount, as you suggested,                     
  while it doesn't offer a great deal of protection, at least                  
  it's better than not having this at all.  I think this is,                   
  at least, if nothing else, a statement to the hospitals that                 
  they should consider - that everybody has to have some level                 
  of insurance, and if it's a big problem, they can set it so                  
  low as to be affordable for anybody, anywhere.  But I think                  
  it's important to proceed with the amendment."                               
                                                                               
  REP. JAMES:  "The way I understand the situation, and I                      
  agree with you that we're getting into an issue area of                      
  insurance we haven't had the testimony on... I don't really                  
  know.  I have the same concerns that you do.  But my biggest                 
  concern is, that the way I understand it now, is if a doctor                 
  is operating in a hospital, and that doctor doesn't have                     
  malpractice insurance, and then there is a problem, that the                 
  hospital's insurance could be held liable, or the hospital                   
  could be held liable for having a doctor operating without                   
  any ability to pay for his problems.  Whether they have                      
  insurance or not.  I believe that's the way it is now.  And                  
  that what we're doing now is saying that the hospital is not                 
  responsible for these doctors that are independent                           
  contractors."                                                                
                                                                               
  Number 413                                                                   
                                                                               
  CHAIRMAN PORTER:  "No, that's not my understanding.  The                     
  case that we're - as I believe the law is now, is just the                   
  opposite of that.  Independent contractors are recognized as                 
  independent contractors, with the single exception in the                    
  case that we're trying to deal with here, and that's the                     
  Jackson Powers case, which said that, one court said that,                   
  an emergency room doctor would be an employee rather than an                 
  independent contractor.  So, we're not changing the ball                     
  field, here.  We're just addressing one little area and                      
  trying to level it up, saying that an emergency room doctor                  
  is just the same as a doctor in surgery; a doctor is a                       
  doctor, and it's an independent contractor, and should be                    
  looked at that way.  I am comfortable going that far.  I am                  
  not comfortable getting into insurance areas and required                    
  insurance and all that kind of stuff.  So, as I say, I would                 
  rather not, I would rather err by allowing status quo than I                 
  would by stepping on something that I don't know what I'm                    
  stepping on.  So I am really going to back away from this                    
  amendment, totally."                                                         
                                                                               
  Number 430                                                                   
                                                                               
  REP. NORDLUND:  "I understand Jackson Powers, and I                          
  understand the problem that's there, but the wording in this                 
  bill goes beyond that.  You can read it, on page 13, line                    
  27:  `A hospital is not liable for civil damages as a result                 
  of an omission by these independent contractors.'"                           
                                                                               
  CHAIRMAN PORTER:  "They're not now."                                         
                                                                               
  REP. NORDLUND:  "They're not now?"                                           
                                                                               
  CHAIRMAN PORTER:  "No.  With the exception of Jackson                        
  Powers, which brought in the emergency room doctor - which,                  
  to me, should be up to the hospital.  If they want to hire                   
  him as an employee, that's fine.  They can do that and then                  
  he's covered by them.  If they want to make him an                           
  independent contractor, that's fine.  They've got to post it                 
  -- I mean, we're doing things in terms of notifying people,                  
  that aren't available now.  But, to get, then, the other                     
  step, into the insurance..."                                                 
                                                                               
  REP. NORDLUND:  "I see what I read here, and it says that                    
  hospitals aren't liable for those physicians, and that a lot                 
  of those physicians are going bare.  I think we're doing one                 
  two-step here that's not in the best public interest."                       
                                                                               
  Number 452                                                                   
                                                                               
  CHAIRMAN PORTER:  "Well, I'm going to withdraw my amendment                  
  to the amendment.  If somebody else wants to make it, they                   
  can."                                                                        
                                                                               
  Number 460                                                                   
                                                                               
  REP. JAMES:  "I really would like to get some more                           
  information on this, and maybe you have it to provide to me.                 
  I was not of the opinion that hospitals could not be held                    
  liable for a doctor operating in their hospital without                      
  ability to pay, financial responsibility for their actions."                 
                                                                               
  Number 462                                                                   
                                                                               
  REP. PHILLIPS:  "That's why some hospitals have made the                     
  policy, have made independent policies in their own                          
  hospitals;  independent requirements, what they require of                   
  their doctors.  That is up to the hospital facility."                        
                                                                               
  REP. JAMES:  "I understand that.  But we're putting it in                    
  law that they're not responsible for a certain amount of                     
  people that they're now responsible for if those people are                  
  not financially responsible."                                                
                                                                               
  CHAIRMAN PORTER:  "They're not now responsible."                             
                                                                               
  REP. PHILLIPS:  "They're not now responsible."                               
                                                                               
  REP. JAMES:  "Are you saying they are not now responsible?"                  
                                                                               
  CHAIRMAN PORTER  "I am saying they are not now responsible."                 
                                                                               
  REP. JAMES:  "So we're not changing this law in this tort                    
  law?"                                                                        
                                                                               
  CHAIRMAN PORTER:  "Only as it affects the emergency room                     
  doctor.  And that's only if you think Jackson B. Powers is                   
  the law of the land."                                                        
                                                                               
  Number 472                                                                   
                                                                               
  REP. DAVIDSON:  "I think we're on to a hot pistol here.  We                  
  don't have the experts in this room to tell us, really, what                 
  it is that we should be thinking about on this bill.  I                      
  would highly recommend that we hold this amendment until we                  
  get some expertise in here because seven laymen, trying to                   
  get into a situation between doctors, hospitals and lawyers,                 
  just doesn't cut it.  I would ask that we either move on or                  
  finish up and try to get the people in here who know about                   
  this issue, so that we can at least, as the public policy-                   
  makers, make some kind of educated guess as to how this                      
  thing should work out.  I am not comfortable, with all due                   
  respect to my beloved colleagues, I just don't think we have                 
  the information."                                                            
                                                                               
  REP. PHILLIPS:  "Let's call for the question on the                          
  unamended amendment."                                                        
                                                                               
  REP. DAVIDSON:  "Objection."                                                 
                                                                               
  CHAIRMAN PORTER:  "Okay, the question has been called.  We                   
  have in front of us Amendment 38."                                           
                                                                               
  REP. DAVIDSON:  "Again, I just ask, why can we not at least                  
  try to get the information before we send this bill off to                   
  the next committee of referral, so we at least understand it                 
  ourselves?"                                                                  
                                                                               
  CHAIRMAN PORTER:  "By not passing the amendment, which is                    
  what my advice to the committee is, we will be avoiding the                  
  area that we feel uncomfortable getting into."                               
                                                                               
  REP. DAVIDSON:  "We're sitting here as a Judiciary                           
  Committee.  This obviously has a lot to do with our                          
  jurisdiction as a committee.  And yet, we're trying to avoid                 
  our task?"                                                                   
                                                                               
  Number 507                                                                   
                                                                               
  CHAIRMAN PORTER:  "I don't think we're avoiding anything, I                  
  think we're being very prudent.  This is not a mandatory                     
  insurance bill.  It's a tort reform bill.  If somebody wants                 
  to take that one up next year, I'll be happy to give them                    
  all the support they need."                                                  
                                                                               
  REP. NORDLUND:  "If members of the committee feel                            
  uncomfortable with the amendment, I can understand; then I                   
  feel uncomfortable with Section 27 altogether.  And, since                   
  that is a change in the existing law, maybe we should not do                 
  the amendment and not do Section 27 and we're at the status                  
  quo."                                                                        
                                                                               
  CHAIRMAN PORTER:  "We have in front of us Amendment 38.  Is                  
  there further discussion?  There is objection.  Roll call                    
  vote, please?"                                                               
                                                                               
  A roll call vote on Amendment 38 was taken.  Reps. Davidson                  
  and Nordlund voted "Yeah" and Reps. Phillips, Green, Kott,                   
  James and Porter voted "No".  Amendment 38 was therefore not                 
  adopted by the committee.                                                    
                                                                               
  REP. DAVIDSON:  "In view of the fact that we're not getting                  
  the information we need, I would move to delete Section 27                   
  from the bill.  I offer that as an amendment."                               
                                                                               
  REP. PHILLIPS:  "Objection."                                                 
                                                                               
  CHAIRMAN PORTER:  "Discussion?  Objection is maintained.                     
  May we have a roll call vote, please, on the unnumbered                      
  amendment to remove Section 27?"                                             
                                                                               
  A roll call vote was taken on the unnumbered amendment                       
  [Amendment 39] to remove Section 27.  Reps. Davidson and                     
  Nordlund voted "Yeah" and Reps. Phillips, Green, Kott, James                 
  and Porter voted "No".  The unnumbered amendment [Amendment                  
  39] to remove Section 27 was therefore not adopted by the                    
  committee.                                                                   
                                                                               
  CHAIRMAN PORTER:  "We have in front of us what we will call                  
  Amendment 40."                                                               
                                                                               
  Number 560                                                                   
                                                                               
  REP. NORDLUND:  "I move Amendment 40 - that's U60."                          
                                                                               
  CHAIRMAN PORTER objected.                                                    
                                                                               
  REP. NORDLUND presented Amendment 40, regarding the number                   
  of years cited in the statute of repose.  He said,  "This                    
  goes back to the statute of repose.  Simple change.  Six is                  
  an arbitrary number, and 15 years, I guess, is an arbitrary                  
  number.  After the AG's opinion came out, I feel that                        
  offering this amendment is like arranging deck chairs on the                 
  TITANIC, because I think the whole section is going to go                    
  down.  The reason I stated 15 is because, as you know, HB
  160, the statute of repose dealing exclusively with                          
  architects or design professionals, left the House at 10                     
  years; it was amended in the Senate to 15; it's back to the                  
  House for a concurrence.  There could be major problems in                   
  us passing one statute of repose that says 15 - which is                     
  about to pass, or maybe it will, I don't know, we'll see -                   
  and this bill, which establishes six.  It's an                               
  inconsistency."                                                              
                                                                               
  Number 572                                                                   
                                                                               
  REP. PHILLIPS:  "A clarification on Rep. Nordlund's                          
  statement.  HB 160 is back to us for nonconcurrence, not                     
  concurrence."                                                                
                                                                               
  Number 580                                                                   
                                                                               
  REP. NORDLUND:  "If it goes to conference, the choice is                     
  between 10 and 15.  My point remains, that there will be an                  
  inconsistency between the six that's required in this law                    
  and the 15 or the 10 that's adopted on 160.  Somewhere along                 
  the line this is going to have to be rectified and I am                      
  suggesting that we do it here.  I'd be glad to change it to                  
  10.  In terms of the policy, I think six years is too short                  
  a time.  I think that the constitutional problems that are                   
  pointed out in the AG's memo might be somewhat alleviated by                 
  extending it somewhat, by not making such a short period of                  
  time."                                                                       
                                                                               
  Number 590                                                                   
                                                                               
  CHAIRMAN PORTER:  "Do you remember the information provided                  
  in the back of the folder that showed what the other states                  
  are doing?  Six really looks to me like an average of the                    
  other states.  I won't get into the Alice in Wonderland                      
  decision, but I think it's been, it was obvious by its                       
  absence of consideration with the other 49 states, and the                   
  constitutionality, it obviously exists there.  I would say                   
  that undoubtedly there will be some marrying of 160 and 292                  
  at some point, but I don't think I want to do it here.  So I                 
  would recommend against supporting Amendment 40."                            
                                                                               
  Number 601                                                                   
                                                                               
  REP. GREEN:  "I would oppose Rep. Nordlund's 15 years, but                   
  if Rep. Nordlund would accept a friendly amendment to 10, I                  
  can see some merit, since it did pass the House in 160 at                    
  10, a compromise.  There may actually be some merit in this                  
  whole program.  If we maintain six, as you said, Mr.                         
  Chairman, somewhere along the way, the same place 160 got                    
  changed, this may also be changed.  But I certainly would                    
  oppose 15."                                                                  
                                                                               
  Number 610                                                                   
                                                                               
  REP. JAMES:  "If this was only relating to buildings, I                      
  think I might agree.  But this relates to a lot more than                    
  buildings."                                                                  
                                                                               
  CHAIRMAN PORTER:  "That's a fact.  Rep. Davidson, quickly."                  
                                                                               
  REP. DAVIDSON:  "Well, okay, you're in a hurry.  Go ahead."                  
                                                                               
  CHAIRMAN PORTER:  "We had this bill before, and this                         
  committee has had a lot of discussion on this point."                        
                                                                               
  REP. DAVIDSON:  "It's a tough bill.  It has far reaching                     
  effects.  So I'm not in a hurry."                                            
                                                                               
  CHAIRMAN PORTER:  "I don't think we've demonstrated a rush."                 
                                                                               
  REP. NORDLUND:  "For the information of the committee, if                    
  Rep. Green or anybody else wants to amend it to 10, I would                  
  consider that a friendly amendment."                                         
                                                                               
  REP. GREEN:  "Oh, I'm not offering an amendment."                            
                                                                               
  REP. DAVIDSON moved to amend Amendment 40 by deleting the                    
  insertion of `15' and inserting `10.'                                        
                                                                               
  REP. PHILLIPS objected and moved another amendment inserting                 
  `8' instead of `10.'                                                         
                                                                               
  CHAIRMAN PORTER:  "I don't think we can do that.  I think                    
  we've got to finish the `10.'  Would the maker of the `10'                   
  consider `8' a friendly amendment?"                                          
                                                                               
  REP. DAVIDSON:  "Unfriendly."                                                
                                                                               
  CHAIRMAN PORTER:  "Okay.  We're going to have a motion on                    
  the amendment to amend to `10.'  Roll call vote, please?"                    
                                                                               
  A roll call vote was taken on the amendment to amend to `10'                 
  the statute of repose figure in Amendment 40.  Reps. Green,                  
  Nordlund and Davidson voted "Yeah" and Reps. Kott, Phillips,                 
  James and Porter voted "No".  The amendment to amend to `10'                 
  the statute of repose figure in Amendment 40 was therefore                   
  not adopted by the committee.                                                
                                                                               
  A roll call vote was taken on Amendment 40.  Reps. Nordlund                  
  and Davidson voted "Yeah" and Reps. Phillips, Green, Kott,                   
  James and Porter voted "No".  Amendment 40 was therefore not                 
  adopted by the committee.                                                    
                                                                               
  REP. NORDLUND moved his final amendment, Amendment 41.                       
  CHAIRMAN PORTER offered objection.                                           
                                                                               
  REP. NORDLUND:  "This amendment deals with the section in                    
  which economic damages are limited to $10,000 for people who                 
  have died and do not have any dependants.  I think that the                  
  section is drawn too narrowly in who it defines as                           
  dependants.  What my amendment would do is simply state that                 
  that limitation would not apply if there are beneficiaries                   
  indicated in a will."                                                        
                                                                               
  REP. PHILLIPS:  "Why did they use the word `devisee' instead                 
  of `designee'?"                                                              
                                                                               
  REP. NORDLUND:  "I don't know."                                              
                                                                               
  CHAIRMAN PORTER:  "I don't know what a `devisee' is.                         
                                                                               
  Committee members discussed the term `devisee.'                              
                                                                               
  MS. LOPER explained that it referred to the drafter's                        
  choice, like `designee' and confirmed Rep. Nordlund's belief                 
  that it could mean `beneficiary.'                                            
                                                                               
  CHAIRMAN PORTER:  "If I understand the amendment, we're                      
  saying that economic damages should not go to a                              
  nondependant.  We're saying that dependants are spouse,                      
  minor child or other dependant."                                             
                                                                               
  REP. JAMES:  "What about provision for a girlfriend or                       
  boyfriend?"                                                                  
                                                                               
  CHAIRMAN PORTER:  "I guess, you could have `girlfriend' or                   
  `boyfriend' if they were the designee in a will."                            
                                                                               
  Number 656                                                                   
                                                                               
  REP. NORDLUND:  "Sure.  Or anybody else.  If the person was                  
  thoughtful enough to want to will something to them after                    
  they died, they would probably want this benefit to go to                    
  them just as much as they would to a dependant.  I think the                 
  dependants here are too narrowly drawn.  You wouldn't want                   
  to limit it exclusively to just dependants."                                 
                                                                               
  Number 681                                                                   
                                                                               
  CHAIRMAN PORTER:  "I would speak against the amendment.  I                   
  think that's exactly what we're trying to do, is limit it                    
  exclusively to dependants, because otherwise there isn't any                 
  rationale for somebody to get money for something that they                  
  wouldn't have received anyway.  That's the whole idea of                     
  this."                                                                       
                                                                               
  Number 698                                                                   
                                                                               
  REP. DAVIDSON:  "How about the situation where, say, a                       
  nephew or a niece would be living with an aunt or an uncle                   
  or somebody like that, where he wasn't a legal dependant,                    
  but -I suppose it would be too cold-hearted to maybe afford                  
  that person $10,000 if he were a minor."                                     
                                                                               
  CHAIRMAN PORTER:  "He would get $10,000.  He has a claim on                  
  $10,000.  We're saying we're not going to give him more, for                 
  economic losses.  He can have noneconomic losses, he can                     
  have [inaud. - voices crossing over]."                                       
                                                                               
  Number 710                                                                   
                                                                               
  REP. DAVIDSON:  "We can sit here and make all the laws we                    
  want, but most of the laws will never consider all the                       
  perspectives that we're trying to cover.  And there will                     
  always be exceptions that are very unfair from the work that                 
  we craft in the end.  That's why I would support this                        
  amendment.  I think there are extenuating circumstances.                     
  Humans get in the weirdest of situations.  I think this is a                 
  little acknowledgment of that."                                              
                                                                               
  CHAIRMAN PORTER:  "I appreciate that, but I think we've got                  
  it covered by saying `dependants'."                                          
                                                                               
  Number 717                                                                   
                                                                               
  REP. NORDLUND:  "In most cases, the people designated in the                 
  will are going to be the very people you're talking about                    
  here.  But in some cases, maybe not.  Again, if that person                  
  thought that there should be benefit from their estate, even                 
  though they're not listed as a dependant, I think that these                 
  benefits should go, there shouldn't be the $10,000                           
  limitation."                                                                 
                                                                               
  CHAIRMAN PORTER:  "Further discussion?  Objection.  Roll                     
  call vote, please."                                                          
                                                                               
  A roll call vote on Amendment 41 was taken.  Reps. Nordlund,                 
  Davidson and James voted "Yeah" and Reps. Kott, Phillips,                    
  Green and Porter voted "No".  Amendment 41 was therefore not                 
  adopted by the committee.                                                    
                                                                               
  Number 728                                                                   
                                                                               
  REP. PHILLIPS:  "On this amendment, I'd like to state for                    
  the record, if we could send the message to drafting,                        
  particularly Mike Ford, that the word `devisee' means                        
  nothing to me.  Absolutely nothing.  And if he means                         
  `designee' it would be real nice if he used that word                        
  instead.  It's a word that we all understand."                               
                                                                               
  Committee members further discussed word `devisee.'                          
                                                                               
  CHAIRMAN PORTER:  "There is one more amendment.  We will                     
  call that Amendment 42.  It's a single page by Rep.                          
  Davidson.  Rep. Davidson?"                                                   
                                                                               
  Number 755                                                                   
                                                                               
  REP. DAVIDSON:  "This amendment, page 8, line 25, addresses                  
  the problem of choice.  I know that if you have a job and                    
  you have insurance and you're pretty well taken care of, you                 
  probably don't have any need for this amendment.  But it's,                  
  I think, significant that this is the last amendment that                    
  we're doing, because these are the people at the bottom of                   
  the ladder, generally.  They are people who are either                       
  dependant on public health or just don't have the means even                 
  to access the system.  So, all it does is attempt to level                   
  the playing field so that people do have a pretty decent                     
  chance of choosing their own future medical costs, if they                   
  get into a situation where that's necessary, and which                       
  involves, of course, the quality of care.  A specific                        
  situation might be even where a child, getting hurt in a                     
  school, and the school district's insurance would be forced                  
  to pay for future medical costs - or, say, special education                 
  costs.  By having this thing in here, then, that means that                  
  that person would not have the opportunity to go get maybe a                 
  private rehabilitation cost.  So, that's the spirit in which                 
  I offer this amendment, and would ask for your support, and                  
  move the amendment..."                                                       
                                                                               
  REP. PHILLIPS:  "Objection."                                                 
                                                                               
  Number 762                                                                   
                                                                               
  CHAIRMAN PORTER:  "Amendment 42 is moved and objected.  Rep.                 
  Davidson, as I understand the effect of this amendment, what                 
  we're saying in the collateral benefits is that, again, we                   
  want to consider that a plaintiff that gets an award, gets                   
  all of their award, but not all and again their award.  And                  
  we're saying that they should be, from a total claim, they                   
  should deduct the collateral benefits.  Things that they've                  
  already received or, in this case, what you want to remove,                  
  or that they reasonably expect to receive.  If, for example,                 
  turning it around, I guess, and looking at somebody trying                   
  to be devious - if somebody were to, if this were not here,                  
  and somebody had an insurance policy that provided coverage                  
  and provided for medical expenses, you could double-dip from                 
  the extent of having that policy in place, that's going to                   
  be paying on into the future, and say that I'm going to have                 
  these costs, and so I should get that money now.  Well, I                    
  think in the spirit of collateral benefits, you should                       
  consider what you've already received, and what you                          
  reasonably have an expectation of receiving."                                
                                                                               
  Number 780                                                                   
                                                                               
  REP. DAVIDSON:  "I guess I don't see it quite that way, Mr.                  
  Chairman.  Everybody should have the opportunity if it's                     
  possible to choose the absolute best medical care or                         
  rehabilitation experts that they can afford.  And I see that                 
  happening by deleting this part of the bill.  Otherwise, I                   
  think, saying to someone who can reasonably expect services                  
  from, say, the Indian Health Service, is going to be stuck                   
  with whatever level of quality of care that that particular                  
  organization has."                                                           
                                                                               
  Number 791                                                                   
                                                                               
  REP. NORDLUND:  "When we're talking about reasonable                         
  probability of receiving, there's no guarantee, obviously,                   
  that those benefits will be received; and yet, the award                     
  could be less.  I guess my problem is, what about in those                   
  situations where you probably will receive future benefits,                  
  what if those future benefits don't actually come in?"                       
                                                                               
  CHAIRMAN PORTER:  "I would say that you probably would have                  
  an entree back to your judgment."                                            
                                                                               
  REP. NORDLUND:  "I would hope so, although I don't know that                 
  that's the case.  There's no guarantee of that in this                       
  language."                                                                   
                                                                               
  Number 799                                                                   
                                                                               
  There being no further discussion on Amendment 42, a roll                    
  call vote was taken by the committee.  Reps. Davidson and                    
  Nordlund voted "Yeah" and Reps. Phillips, Green, Kott, James                 
  and Porter voted "No".  Amendment 42 was therefore not                       
  adopted by the committee.                                                    
                                                                               
  CHAIRMAN PORTER:  "I believe we have no more amendments.                     
  What is the wish of the committee?"                                          
                                                                               
  REP. JAMES:  "I would be willing to move this out of                         
  committee now except that we've made so many changes to it,                  
  I'd like to see the final draft, if we could do that without                 
  having a lot of discussion again."                                           
                                                                               
  CHAIRMAN PORTER:  "I would really like to move it, Rep.                      
  James.  I think we will certainly have the ability to,                       
  because it is scheduled to go from here to Finance.  I don't                 
  know if we're going to be required to go to Finance, or not,                 
  in all honesty, but I don't have any problems that what                      
  we've done is going to be adequately reflected in the CS."                   
                                                                               
  Number 822                                                                   
                                                                               
  REP. DAVIDSON:  "I would concur with the concerns of Rep.                    
  James.  We have made a lot of changes to a very, very                        
  important bill that affects a lot of people for a long time                  
  to come.  I haven't made every single meeting on this bill,                  
  but I think probably 75 to 80 percent of them.  I haven't                    
  had the level of expertise or exposure to that level of                      
  expertise that I am comfortable with in such a bill, but I,                  
  too, would like to see what the final product is.  There is                  
  a companion bill in the other body.  There are 60 days,                      
  almost, left, in this legislative session, so I think                        
  there's plenty of time.  So, I don't know what the hurry is,                 
  but I would prefer to have at least one more look at it.  I                  
  know oftentimes you get the final product after it's left                    
  your committee, and it's sometimes, a mistake has been made,                 
  and you wish that you had not let it go so quickly."                         
                                                                               
  Number 841                                                                   
                                                                               
  CHAIRMAN PORTER:  "Speaking to that, there certainly will be                 
  the ability, if we... we will get the final product Monday                   
  or Tuesday, I presume.  If that product contains anything                    
  that is not what we did, we most certainly will, I will seek                 
  to amend it on the floor, if that's what's required.  But I                  
  do feel a sense of urgency considering the deadlines that we                 
  have on getting our bills and rules and those kinds of                       
  things."                                                                     
                                                                               
  REP. JAMES:  "Then I'll move the bill, out of committee,                     
  with individual recommendations."                                            
                                                                               
  Number 850                                                                   
                                                                               
  REP. DAVIDSON:  "There is not a rule that hasn't been broken                 
  in this area, or in this body, or in this whole process at                   
  one time or another.  So I think that most time frames are                   
  just to encourage things, rather than say, `This is the way                  
  it is.'  I know you haven't been through a final session of                  
  a legislature, but things can get whiz-bang very quickly                     
  around here, so, I would only offer these comments to allay                  
  your fears that time is short."                                              
                                                                               
  CHAIRMAN PORTER:  "I appreciate that, but I'm one of those                   
  guys that, if there's a rule, I try to meet it.  Further                     
  discussion?"                                                                 
                                                                               
  REP. PHILLIPS:  "Do you think we'd have the final draft by                   
  Monday or Tuesday?"                                                          
                                                                               
  Number 860                                                                   
                                                                               
  CHAIRMAN PORTER:  "I would guess Tuesday.  This is Saturday.                 
  As I say, I will certainly, if any of you, which we will                     
  have adequate time to be looking at the CS, when it's                        
  determined whether it's going to Finance or not, or                          
  whatever; if there are any mistakes that we've made, I mean,                 
  that come out in that CS, compared to what we did, I'll                      
  either bring it back here, or whatever."                                     
                                                                               
  REP. NORDLUND:  "If we think the whole bill is a mistake,                    
  does that...?"                                                               
                                                                               
  CHAIRMAN PORTER:  "Anything that we did."                                    
  Number 870                                                                   
                                                                               
  REP. PHILLIPS:  "On that point, if there are inconsistencies                 
  in the CS, I'd rather it come back to this committee before                  
  we send it to Finance."                                                      
                                                                               
  Number 873                                                                   
                                                                               
  CHAIRMAN PORTER:  "We can do that.  Further discussion?  Is                  
  there objection to the motion?"  There being objection, a                    
  roll call vote on the motion to move HB 292 out of the House                 
  Judiciary Committee was taken by the committee.  Reps. Kott,                 
  Phillips, Green (as conditioned), James and Porter voted                     
  "Yeah" and Reps. Nordlund and Davidson voted "No".  HB 292                   
  as amended was therefore moved out of the House Judiciary                    
  Standing Committee.                                                          
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting of the House Judiciary Standing Committee was                    
  adjourned at 12:45 p.m.                                                      

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