01/25/1994 01:35 PM Senate L&C

 SENATOR KELLY introduced SB 184 (VOLUNTEERS AND EMPLOYEES OF                  
 NONPROFITS) and invited the sponsor, SENATOR STEVE FRANK, to review           
 his bill.                                                                     
                                                                               
 SENATOR FRANK gave some past history on the bill and made the                 
 committee aware the original bill proposed to make volunteers and             
 employees of non-profit corporations in Alaska immune to civil                
 liability for damages incurred while they were working on the job.            
 He explained subsequent work on the bill has produced a proposed              
 committee substitute to eliminate "employees" from personal                   
 liability, and he referred to Subsection (b) on page 1 of the                 
 proposed committee substitute for SB 184.                                     
                                                                               
 SENATOR KELLY called the committee's attention to the language on             
 page 2, line 11, Subsection (d) which reads:  "This section does              
 not preclude liability for civil damages as a result of gross                 
 negligence, recklessness, or intentional misconduct."  He asked for           
 a motion to adopt the committee substitute.                                   
                                                                               
 SENATOR RIEGER questioned the comparison of the original bill to              
 committee substitute change on page 2, lines 5 through 10, and                
 expressed some discomfort to extending immunity to the corporation.           
 He used AHFC as an example of a non-profit corporation which might            
 benefit from the provision.                                                   
                                                                               
 Number 053                                                                    
                                                                               
 SENATOR FRANK was not sure the AHFC was a good example of a non-              
 profit corporation as far as the compensation of the board, and he            
 couldn't think of anyone volunteering at AHFC.                                
                                                                               
 SENATOR RIEGER asked for clarification of the changes in question,            
 and SENATOR FRANK asked the bill drafter, MIKE FORD, to answer                
 questions.                                                                    
                                                                               
 MR. FORD drew attention to the change in the title of the proposed            
 committee substitute for SB 184, which he explained was because of            
 Subsection (c) on page 2.  He also explained the new provision                
 would extend immunity to corporations and the amount of damages               
 that could be recovered to the amount of the insurance.  MR. FORD             
 opined SENATOR RIEGER was correct.                                            
                                                                               
 SENATOR KELLY questioned whether this had been done on purpose.               
 His aide, JOSH FINK, said it was an amendment before the committee            
 last session.  He explained the issue was raised as a result of a             
 letter from the Office of ATTORNEY GENERAL COLE in a letter dated             
 April 28, 1993, and placed in the bill packets.  MR. FINK reviewed            
 the points in the letter concerning the liability of the non-profit           
 corporations as compared to the volunteers.                                   
                                                                               
 SENATOR KELLY questioned MR. FORD whether Subsection (c) only                 
 restricts the liability of the corporation concerning the                     
 volunteer.                                                                    
                                                                               
 MR. FORD answered it was damages resulting from an act or omission            
 of a volunteer that would impact the corporation.                             
                                                                               
 SENATOR FRANK posed a scenario where a volunteer commits simple               
 negligence and the non-profit corporation was sued, and the damages           
 were limited to $500 thousand.  MR. FORD said he was correct.                 
                                                                               
 Number 096                                                                    
                                                                               
 SENATOR SALO asked if the $500 thousand was in statute as a                   
 required amount of insurance.  SENATOR FRANK said she was basically           
 correct, and MR. FORD said it was a floor, but it could be more.              
                                                                               
 SENATOR KELLY clarified a non-profit corporation would not get                
 immunity for their volunteers unless they had insurance in the                
 amount of $200 thousand, and MR. FORD confirmed the corporation               
 would need liability insurance.                                               
                                                                               
 MR. FORD suggested another wrinkle in which non-profit corporations           
 could be exempt from the insurance requirement if they have                   
 operating costs of less than $100 thousand, and they are also                 
 exempt under federal law.  He described a situation in which a non-           
 profit is not insured, but would be immune.                                   
                                                                               
 SENATOR KELLY led a short discussion on these provisions with                 
 committee members and suggested it was the small non-profits that             
 have more dependence on the volunteers.  He said it would solve the           
 problem of exempting the non-profit corporation, AHFC.                        
                                                                               
 SENATOR LINCOLN questioned whether all small corporations would be            
 immune if there was gross negligence or recklessness.                         
                                                                               
 SENATOR SALO asked MR. FORD for a legal difference between the                
 terms, "simple negligence" and "gross negligence."  MR. FORD spoke            
 of extensive review by the courts, and concluded it is a matter of            
 degree in the conduct.  He gave an example of the meaning.                    
                                                                               
 SENATOR SHARP wanted assurance it wold not exempt any non-profit              
 corporations for actions by any person receiving compensation - for           
 volunteers only.  MR. FORD said he was correct.                               
                                                                               
 SENATOR KELLY asked for a motion on the committee substitute.                 
                                                                               
 Number 149                                                                    
                                                                               
 SENATOR SHARP moved to adopt CS FOR SENATE BILL NO. 184(L&C).                 
 Without objections, so ordered.                                               
                                                                               
 SENATOR SHARP moved to pass CS FOR SENATE BILL NO. 184(L&C)                   
 (VOLUNTEERS AND EMPLOYEES OF NONPROFITS) from committee with                  
 individual recommendations and a zero fiscal note.  Without                   
 objections, so ordered.