Legislature(2005 - 2006)BUTROVICH 205

02/08/2006 08:30 AM Senate JUDICIARY

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          SB 10-PARENTAL LIABILITY FOR CHILD'S DAMAGE                                                                       
[At  the  beginning  of  this meeting  of  the  Senate  Judiciary                                                               
Standing Committee,  the computer running the  recording software                                                               
suddenly rebooted. This  caused the recording of  the first seven                                                               
minutes of  the meeting  to be  lost. A  backup recording  can be                                                               
found  by  following the  link  provided  below. The  minutes  do                                                               
reflect the meeting in its entirety.]                                                                                           
CHAIR RALPH SEEKINS announced SB 10 to be up for consideration.                                                                 
SENATOR  GRETCHEN GUESS,  sponsor,  moved to  adopt CSSB  10(JUD)                                                               
version \O as the working  document before the committee. Hearing                                                               
no objections, the motion carried.  She said during the last bill                                                               
hearing the committee made the  decision to hold the state liable                                                               
in the  same manner  the bill  holds parents  liable for  acts of                                                               
vandalism committed by their children.  The key problem phrase is                                                               
"state's custody," which has brought  about some concern from the                                                               
Department of Law. She said her  intent was that the state should                                                               
be held  liable only once  parental rights have  been terminated.                                                               
She  advised  the  committee that  she  brought  three  different                                                               
amendments for  members to consider  and would introduce  them at                                                               
the proper time.                                                                                                                
Senator Gene Therriault joined the committee.                                                                                   
ANNE  CARPENETI, Assistant  Attorney General,  Department of  Law                                                               
(DOL), advised the  committee that the State of  Alaska does have                                                               
concerns regarding SB 10, which  would hold the state responsible                                                               
for  children in  its custody  in  the same  manner that  parents                                                               
would  be held  responsible for  children in  their custody.  She                                                               
explained that the state is not  in the same position as a parent                                                               
since the state  takes custody of children  who commit delinquent                                                               
acts  and  also  children  who have  suffered  long-term  abusive                                                               
The state  takes custody of  children due to many  instances and,                                                               
she  maintained, these  children are  in  no way  similar to  the                                                               
average child  who is  under parental  care. The  state generally                                                               
focuses on putting  children in the least  restrictive setting in                                                               
order to help them recover from  whatever has brought them to the                                                               
state's custody. The concern is that  if the state is held liable                                                               
for acts of  the children somewhere somebody will  be thinking in                                                               
terms of liability.                                                                                                             
TONY  NEWMAN,  Program  Officer,  Division  of  Juvenile  Justice                                                               
(DJJ), said the  impact of the state's liability  would be mostly                                                               
of personal liability, which is  an issue with the torts section.                                                               
He offered to answer questions.                                                                                                 
8:48:21 AM                                                                                                                    
GAIL  VOITLANDER, Chief  Assistant  Attorney  General, Torts  and                                                               
Worker's Compensation Section, Civil  Division, Department of Law                                                               
(DOL), advised  the committee the  division has  serious concerns                                                               
about the  scope of liability that  SB 10 would impose  under the                                                               
sponsor's current and proposed amendments. She said:                                                                            
     The  policy   conflict  has   to  deal   with  statutes                                                                    
     affecting  children who  are adjudicated  delinquent as                                                                    
     well as  those having  to do with  children in  need of                                                                    
     aide. The law is looking  toward placement in the least                                                                    
     restrictive setting in  order to further rehabilitation                                                                    
     for those  who are adjudicated delinquents  and to help                                                                    
     best rehabilitate children who are  in need of aide who                                                                    
     have been  removed from oftentimes  incredibly damaging                                                                    
     atmospheres at home.                                                                                                       
MS. VOITLANDER  continued the term  "state's custody"  includes a                                                               
number of  situations, such as  children who have  been initially                                                               
removed  from  their  home  under  federal law  and  have  to  be                                                               
returned  to the  home under  a trial  setting with  supervision.                                                               
Although they are  in state's custody, they are also  in the day-                                                               
to-day custody  of the parents. They  may also be in  the custody                                                               
of relatives  or in  foster care, both  of which  are technically                                                               
under state's  custody. They  may be children  in group  homes or                                                               
private institutions or in a  state facility. The term includes a                                                               
wide variety of situations.                                                                                                     
There  are  approximately  2,500 children  currently  in  state's                                                               
custody. As  currently written, the  bill would expose  the state                                                               
to potential liability up to  $15,000 in property damage for each                                                               
of the 2,500 children.                                                                                                          
8:52:02 AM                                                                                                                    
In  addition  to the  state  responding  directly to  third-party                                                               
claims,  the  potential  amendment  labeled  24-LS0115\O.1  would                                                               
allow the following  situation: There could be  payments that are                                                               
made by insurance companies on  behalf of the insured parents who                                                               
then would  attempt to recoup  the monies  that they paid  on the                                                               
homeowner's  policy  from  the  state.  The  potential  amendment                                                               
labeled 24-LS0115\O.2 would  affect up to 250  children and would                                                               
still  create issues  of insurers  seeking to  recoup the  monies                                                               
they have paid from the state.                                                                                                  
The potential  amendment labeled  24-LS0115\O.3 would  remove the                                                               
amendment imposed  on the bill the  week prior and take  the bill                                                               
back  to status  quo  in terms  of the  state,  which means  that                                                               
victims of  property damage  look to  the children,  the parents,                                                               
and their insurance for compensation.                                                                                           
8:55:46 AM                                                                                                                    
The  fiscal  impact  to  the  state,  even  with  a  conservative                                                               
estimate  that only  five to  ten percent  of the  children would                                                               
generate a  claim, would still  mean very serious money  that the                                                               
state  would be  liable for.  Concerns over  the previous  fiscal                                                               
note submitted  by the DOL have  been addressed and the  note was                                                               
corrected. The previous fiscal note  was operating on the premise                                                               
that the state was being  made liable for restitution in juvenile                                                               
adjudication   cases  for   crimes  against   persons  and   that                                                               
conflicted with  certain state's  immunities and  put the  DOL in                                                               
conflict  situations. Since  that  was never  the  intent of  the                                                               
sponsor, the department submitted a replacement fiscal note.                                                                    
8:58:19 AM                                                                                                                    
MS. VOITLANDER offered to answer questions.                                                                                     
SENATOR  GUESS  clarified in  the  case  of  a child  in  state's                                                               
custody  with parental  rights intact,  the  parents would  still                                                               
have liability. It  is not the case that if  parental rights have                                                               
been terminated that  the parents would have a  liability. In the                                                               
case   of  property   damage,  if   parental  rights   have  been                                                               
terminated, the  $15,000 cannot be  recouped from the  parents or                                                               
the juvenile for equal protection reasons.                                                                                      
The potential amendment labeled  24-LS0115\O.1 would clean up the                                                               
previous amendment  to the bill. The  potential amendment labeled                                                               
24-LS0115\O.2   reflects   the   state's   liability   but   only                                                               
termination of  parental rights. The potential  amendment labeled                                                               
24-LS0115\O.3 would remove all the state liability.                                                                             
SENATOR  GUESS  said those  are  the  three potential  amendments                                                               
before the committee  and she and Senator Dyson  trust the Senate                                                               
Judiciary Committee to make a good decision.                                                                                    
9:00:48 AM                                                                                                                    
CHAIR SEEKINS recognized that the  state prefers to put minors in                                                               
the  least restrictive  setting but  he questioned  the potential                                                               
impact to  society. Counselors  have suggested  that is  the best                                                               
way for the  child to head toward normalcy. On  the other hand, a                                                               
problematic  child  could  cause  considerable  damage  to  other                                                               
people or  property. He  said it  appears that in  the case  of a                                                               
runaway child  there would  be no responsibility  on the  part of                                                               
the parents.                                                                                                                    
9:02:47 AM                                                                                                                    
SENATOR GUESS  advised the committee  that the  runaway situation                                                               
was  language that  was worked  out four  years ago  with Senator                                                               
Dyson  in  the  Senate  Health,  Education  and  Social  Services                                                               
Standing Committee.  The bill sponsors  made the decision  not to                                                               
change it. It  was a policy call at that  time by the Legislature                                                               
to not hold parents liable for runaway children.                                                                                
MR. NEWMAN  said he thought  it would be constructive  to provide                                                               
the committee  with a  description of the  types of  damages that                                                               
occur for  children in state's  custody. In fiscal year  2005 the                                                               
Office   of   Children's  Services   (OCS)   and   the  DJJ   had                                                               
approximately 2,500 juveniles in  state's custody. Twenty-four of                                                               
those  children caused  approximately  $21,000  worth of  damages                                                               
while in state's  custody; $10,000 of which was  done in juvenile                                                               
facilities  and  $11,000 was  done  on  the  outside by  the  OCS                                                               
placement  kids.  Not  one  individual bit  of  damage  was  over                                                               
$5,000. Most of  them were in the hundreds of  dollars range. The                                                               
state typically  paid for the  damages and the youth  was brought                                                               
to court  and ordered  to pay the  restitution. In  addition, the                                                               
juveniles  are routinely  required  to work  off  the damages  in                                                               
community service.                                                                                                              
MR.  NEWMAN expressed  concern  over  the bill  and  said if  the                                                               
juvenile  were  held  responsible  for restitution  and  s/he  is                                                               
incarcerated,  it would  take longer  for the  restitution to  be                                                               
repaid overall.                                                                                                                 
9:06:22 AM                                                                                                                    
SENATOR GUESS  responded the  victim, in this  case the  State of                                                               
Alaska, would  always have the  ability to waive  restitution and                                                               
come up with an alternative plan.  Under SB 10, instead of having                                                               
the state  or the court make  that judgment, the victim  would be                                                               
allowed to  waive restitution. The  DJJ would not change  the way                                                               
it handles cases.                                                                                                               
MR. NEWMAN  wondered what  the process  would be  in the  case of                                                               
when the state is both the  victim and the prosecutor. He said it                                                               
would set up a conflict.                                                                                                        
9:07:39 AM                                                                                                                    
SENATOR FRENCH noted  Mr. Newman informed the  committee that one                                                               
percent  of the  children  in state's  custody  caused damage  in                                                               
fiscal year 2005 yet Ms.  Voitlander testified that the vandalism                                                               
rate was 10 percent. He asked Ms. Voitlander to respond.                                                                        
9:09:02 AM                                                                                                                    
MS. VOITLANDER responded  Mr. Newman was speaking  about one very                                                               
small  component  of  the  exposure  that SB  10  makes.  He  was                                                               
confining his  numbers to DJJ kids  in a youth facility  and only                                                               
the claims that are brought  informally by a foster parent. There                                                               
is  a  regulation  that  caps the  property  damage  that  foster                                                               
parents  can   request  at  $5,000  and   that  includes  several                                                               
limitations.  For  example  if the  homeowner  has  an  insurance                                                               
policy they  must file a  claim with them. Under  regulations the                                                               
homeowner  has  to  get  the property  damage  covered  by  their                                                               
Mr. Newman's numbers also do  not reflect third-party claims such                                                               
as claims by a school district  or a neighbor. His $21,000 number                                                               
is reflective  of the very narrow  group of those locked  down in                                                               
DJJ custody  and those in state  custody through OCS in  a foster                                                               
home where  the juvenile did  damage to  the foster home  and the                                                               
foster parent  has asked the state  to pay restitution up  to the                                                               
$5,000  regulation. The  difference  is that  exposure for  third                                                               
party  claims  would create  a  far  greater liability  than  Mr.                                                               
Newman's $21,000 number.                                                                                                        
9:12:43 AM                                                                                                                    
SENATOR  FRENCH asked  Ms. Voitlander  how she  came up  with her                                                               
vandalism  rate  estimate  for the  2,500  juveniles  in  state's                                                               
MS. VOITLANDER said  it was a conservative estimate  based on Ms.                                                               
Carpeneti's  previous testimony.  Juvenile delinquents  and child                                                               
in need of  aide (CINA) children tend to  have serious behavioral                                                               
SENATOR FRENCH  said he could  appreciate that they  were talking                                                               
about a population at risk  but he remained speculative about the                                                               
data that she was citing.                                                                                                       
MS. VOITLANDER  responded she was  making a rough  estimate based                                                               
on  familiarity  with  the  population   and  working  with  risk                                                               
9:15:34 AM                                                                                                                    
CHAIR SEEKINS  expressed concern over the  differing estimates of                                                               
potential liability  and said  he has  not previously  been aware                                                               
that there is as high a potential as Ms. Voitlander suggests.                                                                   
MS.  VOITLANDER responded  most of  the losses  are traditionally                                                               
covered  by insurance,  such  as car  insurance  when a  juvenile                                                               
steals a  car or  homeowner insurance when  a juvenile  damages a                                                               
home. State  claims managers  would be able  to testify  to those                                                               
9:17:39 AM                                                                                                                    
CHAIR SEEKINS asked for discussion among the committee members.                                                                 
SENATOR  HUGGINS  expressed  concern  that  the  state  could  be                                                               
vulnerable for exploitation.                                                                                                    
CHAIR  SEEKINS asked  Ms. Carpeneti  whether  foster parents  are                                                               
required  to  obtain  and  maintain a  liability  policy  on  the                                                               
actions of a foster child.                                                                                                      
MS. CARPENETI said she did not know.                                                                                            
MS.  VOITLANDER  responded  that  OCS  has  not  required  foster                                                               
parents  to  have  a  homeowner policy  nor  a  liability  policy                                                               
because it  is already  difficult to  recruit foster  parents and                                                               
they  don't always  own  homes. Homeowners  are  required by  the                                                               
mortgage company  to hold  a homeowners policy  and many  of them                                                               
cover  not  only  the  asset   but  also  general  liability  and                                                               
negligent acts that result in personal injury.                                                                                  
9:22:32 AM                                                                                                                    
CHAIR  SEEKINS said  the intent  of the  bill is  to find  a good                                                               
balance for the liability.                                                                                                      
SENATOR HUGGINS asked for clarification  over who would be liable                                                               
in the case of the foster parent.                                                                                               
SENATOR GUESS explained  it would depend on whether  the case was                                                               
adjudicated in criminal court or  went through civil court. Under                                                               
24-LS0115\O.1  it  would  be the  state's  liability.  Under  24-                                                               
LS0115\O.2 it would be the  responsibility of the natural parents                                                               
if the parental rights were not terminated.                                                                                     
SENATOR FRENCH posed  a hypothetical situation of  a child living                                                               
in  a  foster  home  and  burns   down  a  house.  The  child  is                                                               
responsible  for   the  first  $5,000,  the   natural  parent  is                                                               
responsible for  the next  $15,000 and  the child  is responsible                                                               
for the rest.                                                                                                                   
SENATOR GUESS  said that would  be the case  under 24-LS0115\O.2.                                                               
The logic is  that in the situation where families  are trying to                                                               
get   back   together,   the  parent   would   still   have   the                                                               
responsibility even if that child had been taken away.                                                                          
9:26:13 AM                                                                                                                    
SENATOR HUGGINS  said he was  struggling with holding  the parent                                                               
responsible when the child is out of their direct control.                                                                      
MS.  VOITLANDER referred  the committee  to  AS 34.50.020(a)  and                                                               
     Damages  for   which  parents  are  liable   should  be                                                                    
     apportioned  by  the  court  without  regard  to  legal                                                                    
     custody but with due consideration  for the actual care                                                                    
     and custody  provided by the  parent. That is  a factor                                                                    
     that the court considers.                                                                                                  
For example, she continued, there  could be a situation where the                                                               
parents  are  in  the  process  of divorce  and  one  parent  has                                                               
physical care  and custody of  the teenager and the  other parent                                                               
resides elsewhere.  While that parent still  has parental rights,                                                               
they do not have day-to-day  custody and the court would consider                                                               
that fact.                                                                                                                      
9:28:21 AM                                                                                                                    
SENATOR  FRENCH  said nevertheless  the  parents  would still  be                                                               
liable for $15,000 worth of the damages.                                                                                        
MS. VOITLANDER  asserted the  court would take  all of  that into                                                               
account and determine whether either parent was liable.                                                                         
9:29:39 AM                                                                                                                    
BRAD THOMPSON, Director, Division  of Risk Management, Department                                                               
of Administration (DOA), informed  the committee that the statute                                                               
was revised in  1995 to clarify that the actual  care and custody                                                               
of the  minor was  required for  the parent  to be  held strictly                                                               
liable. Thus  far the state has  no claim history because  of the                                                               
protection of the third party  claim. In the administrative code,                                                               
there  is  a  method  for  the  foster  parent  to  come  to  the                                                               
Department   of   Health   and   Social   Services   (DHSS)   for                                                               
reimbursement.  Mr. Thompson  read from  the administrative  code                                                               
and said, "Modest  damages and lost costs are normal  in the care                                                               
of children  and are included  in the standard rate,  however the                                                               
division will  in its  discretion reimburse  a foster  parent for                                                               
damages  and loss  up to  $5,000 under  [certain] circumstances."                                                               
The agency  has been making that  remedy to the foster  parent as                                                               
an  additional  benefit to  them  because  of the  services  they                                                               
9:32:10 AM                                                                                                                    
SENATOR FRENCH clarified  that remedy is for when  a foster child                                                               
damages the  property of the  foster parent. He asked  the remedy                                                               
for when a foster child damages a neighbor's property.                                                                          
MR.  THOMPSON replied  there is  no  remedy. As  proposed in  the                                                               
bill, the state would be  responsible for damages for some things                                                               
that  currently  are  protected  by   insurance.  He  said  in  a                                                               
situation where  a group of  juveniles cause property  damage and                                                               
one  of them  is in  state's custody,  that is  the one  that the                                                               
insurer would go after to recover the damages.                                                                                  
9:34:03 AM                                                                                                                    
CHAIR SEEKINS asked  Mr. Thompson his experience  on losses where                                                               
claims are made.                                                                                                                
MR. THOMPSON  said the  state has had  notices of  incidences but                                                               
due to the existing statute they  do not have to respond to them.                                                               
The  agency  did   recently  pay  the  $5,000   limit  under  the                                                               
administrative code on  an incident of vandalism  to an uninsured                                                               
CHAIR SEEKINS announced a brief recess at 9:35:05 AM.                                                                         
9:47:34 AM                                                                                                                    
CHAIR SEEKINS announced that the  committee would continue on the                                                               
bill the following day. He held SB 10 in committee.                                                                             

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