Legislature(2003 - 2004)
02/20/2003 08:02 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 18-PARENTAL LIABILITY FOR CHILD'S DAMAGE Number 2410 CHAIR WEYHRAUCH announced that the next order of business was HOUSE BILL NO. 18, "An Act relating to the liability of parents and legal guardians of minors who destroy property." Number 2430 REPRESENTATIVE KEVIN MEYER, Alaska State Legislature, as sponsor of HB 18, told the committee that the proposed legislation would remove the cap of up to $10,000 for intentional damages caused by a child to corporations, schools, villages, churches, and charitable organizations. He said, "$10,000 just isn't very much. It's not uncommon for a child to be able to go out on a weekend and cause up to $100,000 in damage to school property." He stated that the money [that schools spend to repair damages] should go into the classroom to buy computers and to reduce classroom size, for example. He noted that the Anchorage School District suffered almost $750,000 in damages last year. It is an ongoing and increasing problem, he said. REPRESENTATIVE MEYER stated that at one time the cap was set at $2,000. In 1995 the cap was raised to $10,000. He pointed out to Chair Weyhrauch that the amount to which [HB 18] would raise the cap has been "left open." He referred to information [included in the committee packet] that lists the varying amounts of caps in other states in the nation. Number 2532 REPRESENTATIVE MEYER stated his belief that removing the cap will have the following effects: to give school districts more money for teaching; to make parents more aware of what their kids are doing, where they are doing it, and who they are doing it with; and to impress upon children that they will pay for foolish acts. For example, Representative Meyer stated that if his own daughter ever [was involved in vandalism] he would [withhold] her permanent dividend for a few years and make her go to work and reimburse him. REPRESENTATIVE MEYER urged the committee to pass HB 18 and offered to answer questions. He noted that [the issue] is a priority for the Anchorage School District, therefore they will be able to testify much better than himself. Number 1590 CHAIR WEYHRAUCH stated that it is a fundamental policy discussion taking place regarding whether to have a cap at all. Number 2668 CAROL COMEAU, Superintendent, Anchorage School District, on behalf of the school board and the community, expressed appreciation to Representative Meyer for sponsoring HB 18. She reminded the committee that [the Anchorage School District] suffered a lot of vandalism last year, which peaked the need to eliminate the cap on vandalism caused by juveniles. She said that the district is now finding that the courts are reluctant to assess damages, even to [$10,000] level if the juvenile does not have the ability to pay, "or their parents do not have an ability to pay past the age of nineteen." MS. COMEAU said there is concern about the message being sent to young people when there are very few consequences for vandalism. She said she thinks that most people in the community share Representative Meyer's aforementioned comments. "Students should have an obligation and it may extend into their adult life that they have to repay damages for vandalism to public property," she said. MS. COMEAU mentioned other acts of vandalism at Dimond High School and Chugiak Elementary School. She urged eliminating any cap, thereby allowing the courts to impose judgments based upon the situation, the damage caused, and the attitudes of the students and parents toward working off the damages and restitution. Number 2804 REPRESENTATIVE SEATON referred to page 1, line 14, to page 2, line 15, and read, "without regard to legal custody but with due consideration for the actual care and custody...". He asked Representative Meyer to clarify that. REPRESENTATIVE MEYER said he would defer the question to his staff. Number 2845 REPRESENTATIVE GRUENBERG offered the following explanation: Generally, if the parents are divorced and custody is awarded, there are two types of custody. There's legal custody and physical custody. Legal custody is a decision as to who will make decisions for the child, generally, decisions involving health, education, religious upbringing, that sort of thing. And the physical custody is where the kid lives and with whom the child spends their time. And it's usually some form of a divided physical custody. So, what this means is that, in determining who is responsible among the parents - apportioning the damages between the parents up to the limit at the present time - the court shall do it, regardless of who has legal custody, in the sense [of] who can make the decisions for education and this sort of a thing. But, the court shall consider where the child is living and the amount of control particularly the absent parent has. Let's give an example. Let's say that the parents are divorced, and one of the parents moves to another part of the state, or even to a different state, ... and they have joint legal custody. The parent that actually has the child may be the only parent that has any practical control over the child when the vandalism occurs, and the court would then take that into consideration in determining who was responsible between the parents for the damages. Number 2929 REPRESENTATIVE SEATON asked, for example, if a father does not have physical custody during the time that a child commits vandalism, is that father "off the hook"? REPRESENTATIVE GRUENBERG responded that [the language in the proposed legislation] would give the judge the discretion to consider that factor; it's not an absolute rule. Number 2989 REPRESENTATIVE HOLM asked about [unemancipated minors]. TAPE 03-11, SIDE B Number 2990 REPRESENTATIVE HOLM offered the following example: A child runs away from home, gets into a program, such as the Family Focus program in Fairbanks, Alaska, where "the troopers say that you cannot have any control over your child in that program, you have no contact with that program." At that point in time, the child commits an act of vandalism, he proposed. He asked how the language of the proposed legislation would address that. Number 2946 REPRESENTATIVE MEYER replied that it is his understanding that [the parent of that child] would not be responsible for that child's actions, if the parent had turned over the child to the state's custody, or the state took custody of the child. Number 2925 REPRESENTATIVE GRUENBERG, in confirmation of Representative Meyer's reply, referred to a portion of AS 34.50.020, subsection (b), which reads as follows [original punctuation provided]: (b) A state agency or its agents, including a person working in or responsible for the operation of a foster, receiving, or detention home, or children's institution, is not liable for the acts of unemancipated minors in its charge or custody. A state agency or an agent of a state agency, including a nonprofit corporation that designates shelters for runaways under AS 47.10.392 - 47.10.399 and employees of or volunteers with that corporation, is not liable for the acts of a minor sheltered in a shelter for runaways, as defined in AS 47.10.399. Number 2850 REPRESENTATIVE LYNN, notwithstanding the aforementioned statute, asked why the state would not be responsible, if it has claimed it can better care for a child. He stated that it did not make sense, because the state is then acting [in loco parentis]. Number 2837 REPRESENTATIVE GRUENBERG stated that that was a decision that a previous legislature made, and if the current legislature would like to revisit the issue, it could consider a "partial appellate." CHAIR WEYHRAUCH noted that that addresses only the cap, not the liability of the state in [subsection] (b), which is another fundamental policy issue that would have to be taken up by the committee in a separate bill or as an amendment to HB 18. REPRESENTATIVE LYNN interjected, "I want to make that observation." Number 2811 REPRESENTATIVE MEYER concurred that the purpose of the bill is solely to change the cap. He said that there are other complications involved that, perhaps, should be looked at. He noted that Representative Lynn has a bill similar to HB 18 and, after speaking to Representative Meyer, agreed jointly that HB 18 would be "the vehicle on the house side." Senator Fred Dyson also has a similar bill, which will be [heard by the Senate.] Number 2783 CHAIR WEYHRAUCH referred to a page included in the committee packet, and noted that Florida allows what he said looks like a case-by-case review of damage claims, with some absolution of parents or guardians, depending on the circumstances. He said, "We all know about the child, even with good parents, who cannot be controlled at all." He said it appeared that Florida might allow an exception to making the parent responsible for that child's damages and, instead, "set it on the child where it belongs - a tougher love approach." REPRESENTATIVE MEYER said that "we" are open to suggestions to improve the existing law. CHAIR WEYHRAUCH stated that another concern is that a cap may be necessary in order to protect a destitute family from being bankrupted by the actions of a child. REPRESENTATIVE MEYER, in response to a query by Chair Weyhrauch, reiterated that the cap of $10,000 was set in 1995. He said that he thinks some states may have "an automatic inflation kicker" that allows the cap to be raised periodically to match inflation. He suggested that that plan might help the legislature to avoid having to address this issue every five years. CHAIR WEYHRAUCH referred to the article included in the committee packet about the two teenagers who ran amuck on a tractor through a school. He said, "It's the worst-case scenario you're playing to in this kind of thing." Number 2750 REPRESENTATIVE BERKOWITZ referred to existing statutory language [AS 34.50.020(a)], which says in part [beginning at page 1, line 12, of the bill]: However, for purposes of this subsection, recovery in damages shall be apportioned by the court between the parents or between the parents and legal guardian, or both, without regard to legal custody but with due consideration for the actual care and custody of the minor provided by the parents or legal guardian. REPRESENTATIVE BERKOWITZ said that there is no mention of accountability or responsibility "for the juvenile." He asked if the juvenile is excluded from responsibility. REPRESENTATIVE MEYER stated that it is his understanding that it is up to the courts and sometimes [the courts] do hold the juveniles responsible. Number 2645 REPRESENTATIVE GRUENBERG said, "No, the juvenile is responsible. This is only in addition to the juvenile. That doesn't permit double recovery." REPRESENTATIVE BERKOWITZ asked where in statute that is written. REPRESENTATIVE GRUENBERG responded that he did not have the title of the statute, but that it deals with "people other than the juvenile." He said, "The juvenile is [as] responsible as any other tort-feasor. This allows responsibility to be assessed against a third party - the parent. That's the whole purpose of the statute." Number 2583 VICKI HORODYSKI testified as follows: At first glance, this bill looks like a bill which will force parents to provide adequate supervision and guidance for their children. However, there's another side to this issue, which does not immediately come to mind. Why would any family or couple willingly risk their financial security by taking a child or sibling group [who may be involved in] high-risk juvenile delinquency, including property damage. Many families do accept such children into their homes through guardianship and adoption. These families work diligently towards helping their children grow into the most successful, responsible adults that they can be. That journey is not necessarily smooth. I'm a foster and adoptive parent who takes only children with fetal alcohol spectrum disorders. I volunteer as a coordinator of our local FAS [fetal alcohol syndrome] parent support group, and, as a surrogate parent, I am an educational advocate for children in state custody. I'm also a parent navigator with the Fairbanks FAS diagnostic team. This puts me in contact with many children and families who are facing a variety of situations. In particular, I am working with an adolescent who is being considered for adoption by a very knowledgeable, competent family who wants to add one more child to their family of seven, of which three have fetal alcohol syndrome. My fear is that this family may reconsider their decision to add one more high-risk child to their family. As an adolescent, it's a miracle that a family is even considering adopting him. If they change their minds because of financial risk to their family, there will be no other opportunity for him. Number 2471 CHAIR WEYHRAUCH asked Ms. Horodyski if people who take in an FAS child or serve as foster parents have a contractual arrangement with the agency through which they get the child to allow them "indemnification for damages." MS. HORODYSKI answered, "I know we're not responsible. I don't recall signing that type of a contract." CHAIR WEYHRAUCH posed the following question: Would that give you some comfort, if you were taking these high risk kids and knowing that they're going to act outside the bounds of what you may or may not consider normal or acceptable behavior, in some case, where the state, or the agency ... through which you obtained the child would indemnify and defend you, in exchange for you taking that? CHAIR WEYHRAUCH clarified that his question applied to Ms. Horodyski as either a foster parent or an adoptive parent. MS. HORODYSKI answered, "As an adoptive parent, yes." She clarified that it is already the case that a foster parent is not responsible. She added, "When you're talking about really high risk kids, a lot of times they've already done a lot of damage, and families try to help them make changes so that that doesn't continue." Number 2384 REPRESENTATIVE GRUENBERG stated that he has a conflict of interest on [HB 18] and asked that he be allowed to abstain from voting on it. REPRESENTATIVE BERKOWITZ objected. CHAIR WEYHRAUCH asked Representative Gruenberg to "continue to participate in this discussion." REPRESENTATIVE GRUENBERG said that he thinks that it is hard to place some children. Throwing up roadblocks or requiring indemnification would make it impossible to place them, as [Ms. Horodyski] stated. CHAIR WEYHRAUCH asked Ms. Horodyski, if the state would indemnify her for damage caused by the child, would that give her comfort? MS. HORODYSKI said yes. In response to a follow-up question by Chair Weyhrauch, she concurred that, if there was a policy decision to indemnify her for the acts of "these kids," it would "smooth the way for you to want to enter into these arrangements." REPRESENTATIVE GRUENBERG clarified, "I meant the opposite. I mean, certainly, they'd like to be let off the hook. I don't know that any state would want to be on the hook for (indisc.)." Number 2261 REPRESENTATIVE SEATON asked, "Are we going to find that we are actually stimulating emancipation of minors. Because that's what it sounds like, that as soon as they're emancipated, you're out from under this hook." Number 2170 REPRESENTATIVE LYNN commended [Ms. Horodyski] and others like her who take in children with fetal alcohol syndrome and high- risk children into their homes. CARL ROSE, Executive Director, Association of Alaska School Boards (AASB), stated that [AASB] would like to see the cap removed. He offered the following anecdote: A juvenile broke into a "pop" machine and, to remove the evidence, he set the school on fire. That [took place at] Mountain Village [School] and the damage totaled $7 million. Mr. Rose told the committee that, at the time, he was employed as a president of an insurance company that was insuring schools. He said, "That entire loss was picked up with a $10,000 deductible." MR. ROSE stated that the school districts are the indemnification; they take insurance, pay the deductible, and assume the cost. He said that there is no remuneration - that money comes from instructional dollars. In the worst-case scenario, he said, the numbers could be alarming. He mentioned a resolution adopted by AASB, which he said he would make available to Representative Meyer. MR. ROSE mentioned policy implications. He said, "When we start to look at the unintended consequence of simply removing the cap, that becomes a problem." He prevailed upon the committee and the legislature to "take a look at what we're dealing with here," for example, vandalism that can be demoralizing and puts the tax payers at risk of picking up the bill. In the previously mentioned case of the Mountain Village School, a $7 million loss affected all the members of the [insurance] pool, by increasing their rates for insurance dramatically. MR. ROSE concluded as follows: To be able to take advantage of the uniqueness of the circumstance and to not create unintended consequences, that's an area of policy that you folks will have to deal with. Our interest is simply to remove the $10,000 cap, because we think it's inadequate. We'd like to recover the actual cost, and somewhere in between there there's a solution. CHAIR WEYHRAUCH told Mr. Rose that it would be very useful to receive the resolution and any other supporting information from his agency. Number 1955 REPRESENTATIVE BERKOWITZ told Mr. Rose that he raised an interesting point. The proposed legislation is an effort to solve a school district problem through one approach. He noted that Mr. Rose had raised the issue of insurance and insurance pooling. He asked if there is another way of, perhaps, combining different approaches to solve the problem. He asked if something could be done with insurance pooling. MR. ROSE replied that that might be a possibility; however, he noted that there are only two active insurance pools in the state: the Alaska Municipal League Joint Insurance Association (AML/JIA), and the Alaska Public Entity Insurance Company (APEI). He mentioned the commercial market. He said that "we" are getting into a highly competitive area and there will be some "proprietary interest." He questioned if that's where [the legislature] wants to go in regard to legislation, but said he thinks it's an issue that needs to be addressed. He stated that, in the extreme cases, there are costs involved "that are assumed, not only by tax payers, but by the actual consumers of insurance across the state." MR. ROSE said, "Vandalism can become a very expensive thing. If you're just talking about graffiti, it's still expensive. But if you're talking about major losses that result from this, that takes us into a whole 'nother arena." He reiterated that [AASB] would like to see the cap lifted, but does not want to see any unintended consequences. REPRESENTATIVE BERKOWITZ noted that conflict exists, on the one hand, regarding the previously stated examples of "commercial interest with insurance." Furthermore, he stated, there are constitutional questions "on the other side," in regard to requiring accountability for the actions of a third party for unspecified conduct. He suggested that perhaps there might be an option to explore, a middle ground, third option. Number 1830 REPRESENTATIVE SEATON referred to the $7 million in damages at the Mountain Village School. He asked if that money realistically could have been recovered from the parents of the child responsible. MR. ROSE answered that his recollection is that that child was taken away by juvenile services. He stated that he does not think there was any attempt to get any remuneration, because the loss was so extreme. He said he thinks the case has been raised that when people don't have the money, there is no recourse other than to put them in debt for the rest of their lives. He stated that AASB's issue is that, when there is damage done to schools, it wants to be able to cover some of those costs when available. He mentioned "no-fault" insurance and car insurance. He posed, "When people who are not insured get in an accident, what recourse do you have if they have nothing?" Number 1753 REPRESENTATIVE GRUENBERG stated that people can purchase "uninsured" or "underinsured" motorist coverage. He asked if school districts are insured "for this type of loss." MR. ROSE answered yes; it is required by law that school districts carry insurance. The limits of coverage and the actual premiums that are paid are contingent on deductibles. Some school districts choose to take a large deductible to keep rates down, while others take a smaller deductible. He said, "You need a case, maybe even the deductible could be -- that might be what you go after." He clarified that all school districts carry both property and liability insurance. REPRESENTATIVE GRUENBERG noted that parents hold policies if they can afford to. He indicated insurance rates "going up." He said that the question is, "Whose pool do you want to have going up?" The only other issue, he stated, is the amount of the deductible. He noted that, based upon the previously stated testimony of Mr. Rose, there was no attempt to "go after" the $10,000 [deductible]. MR. ROSE responded that it appeared in that case that there was no money to be recovered. Number 1635 REPRESENTATIVE BERKOWITZ focused on the "school district component," because he said that it is "the anecdote that's driving this legislation, which is always problematic." He asked how many times the cap has been a barrier to recovery. Specifically, he asked how many times damages have fallen below or above $10,000. He wondered if it would be possible just to raise the limit somewhat, instead of having no cap at all. MR. ROSE said that he did not have that information, but could try to get it. CHAIR WEYHRAUCH said that "we'll" work with the sponsor, as well, to address some of these questions. [HB 18 was heard and held.]
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