Legislature(2007 - 2008)CAPITOL 120
04/02/2007 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB158 | |
| HB151 | |
| HB182 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 158 | TELECONFERENCED | |
| + | HB 182 | TELECONFERENCED | |
| + | HB 151 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
April 2, 2007
1:11 p.m.
MEMBERS PRESENT
Representative Jay Ramras, Chair
Representative Nancy Dahlstrom, Vice Chair
Representative John Coghill
Representative Bob Lynn
Representative Ralph Samuels
Representative Max Gruenberg
Representative Lindsey Holmes
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 158
"An Act providing for the licensing and regulation of private
investigators and private investigator agencies; and providing
for an effective date."
- MOVED CSHB 158(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 151
"An Act requiring an indemnification and hold harmless provision
in professional services contracts of state agencies, quasi-
public agencies, municipalities, and political subdivisions."
- HEARD AND HELD
HOUSE BILL NO. 182
"An Act making the offering of certain promotional checks an
unfair or deceptive act or practice."
- MOVED CSHB 182(JUD) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 158
SHORT TITLE: PRIVATE INVESTIGATORS/AGENCIES
SPONSOR(S): REPRESENTATIVE(S) ROSES
02/28/07 (H) READ THE FIRST TIME - REFERRALS
02/28/07 (H) JUD, FIN
04/02/07 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 151
SHORT TITLE: INDEMNITY CLAUSE IN PUBLIC CONTRACTS
SPONSOR(S): REPRESENTATIVE(S) JOHNSON BY REQUEST
02/22/07 (H) READ THE FIRST TIME - REFERRALS
02/22/07 (H) STA, JUD
03/20/07 (H) STA AT 8:00 AM CAPITOL 106
03/20/07 (H) Heard & Held
03/20/07 (H) MINUTE(STA)
03/24/07 (H) STA AT 10:00 AM CAPITOL 106
03/24/07 (H) Moved CSHB 151(STA) Out of Committee
03/24/07 (H) MINUTE(STA)
03/26/07 (H) STA RPT CS(STA) NT 6DP
03/26/07 (H) DP: JOHANSEN, JOHNSON, COGHILL, DOLL,
GRUENBERG, LYNN
04/02/07 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 182
SHORT TITLE: OFFERING PROMOTIONAL CHECKS
SPONSOR(S): REPRESENTATIVE(S) LYNN
03/07/07 (H) READ THE FIRST TIME - REFERRALS
03/07/07 (H) L&C, JUD
03/19/07 (H) L&C AT 3:00 PM CAPITOL 17
03/19/07 (H) Moved Out of Committee
03/19/07 (H) MINUTE(L&C)
03/21/07 (H) L&C RPT 7DP
03/21/07 (H) DP: GARDNER, LEDOUX, BUCH, NEUMAN,
GATTO, RAMRAS, OLSON
04/02/07 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
REPRESENTATIVE BOB ROSES
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 158.
TIM MARTINSON, Staff
to Representative Bob Roses
Juneau, Alaska
POSITION STATEMENT: Presented HB 158 on behalf of the sponsor,
Representative Roses, and responded to questions.
HILLIARD H. "TRES" LEWIS, III, Private Investigator
Mendenhall Investigations, Inc.
Juneau, Alaska
POSITION STATEMENT: Provided comments and responded to
questions during discussion of HB 158.
RALPH TAYLOR, Secretary
Alaska Investigators' Association, Inc. (AIA)
Nome, Alaska
POSITION STATEMENT: Provided comments regarding the educational
requirements of HB 158.
KATHRYN MONFREDA, Chief
Criminal Records and Identification Bureau
Division of Statewide Services
Department of Public Safety (DPS)
Anchorage, Alaska
POSITION STATEMENT: Responded to questions during discussion of
HB 158.
ANDY KLAMSER, Member
Board of Directors
Alaska Investigators' Association, Inc. (AIA)
Homer, Alaska
POSITION STATEMENT: During discussion of HB 158, provided
comments and said he supports the bill and urges its passage.
JOSEPH E. AUSTIN, Member
Board of Directors
Alaska Investigators' Association, Inc. (AIA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 158.
DENISE MARIE PETTY, Owner
DC Recovery & Investigations;
President
Alaska Investigators' Association, Inc. (AIA)
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 158.
RICK URION, Director
Juneau Office
Division of Corporations, Business, and Professional Licensing
Department of Commerce, Community, & Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: Responded to questions during discussion of
HB 158.
REPRESENTATIVE CRAIG JOHNSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as the sponsor by request,
presented HB 151 and responded to questions.
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General
Commercial/Fair Business Section
Civil Division (Anchorage)
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Provided comments and responded to
questions during discussion of HB 182.
ACTION NARRATIVE
CHAIR JAY RAMRAS called the House Judiciary Standing Committee
meeting to order at 1:11:51 PM. Representatives Samuels, Lynn,
Dahlstrom, and Ramras were present at the call to order.
Representatives Holmes, Gruenberg, and Coghill arrived as the
meeting was in progress.
HB 158 - PRIVATE INVESTIGATORS/AGENCIES
1:12:06 PM
CHAIR RAMRAS announced that the first order of business would be
HOUSE BILL NO. 158, "An Act providing for the licensing and
regulation of private investigators and private investigator
agencies; and providing for an effective date."
1:12:14 PM
REPRESENTATIVE DAHLSTROM moved to adopt the proposed committee
substitute (CS) for HB 158, Version 25-LS0442\E, Bullard,
3/14/07, as the work draft. There being no objection, Version E
was before the committee.
1:12:31 PM
REPRESENTATIVE BOB ROSES, Alaska State Legislature, sponsor,
relayed that his staff would present HB 158, and that various
witnesses would be testifying on the different aspects of the
bill.
1:14:19 PM
TIM MARTINSON, Staff to Representative Bob Roses, Alaska State
Legislature, said on behalf of Representative Roses, sponsor,
that HB 158 would enact statewide licensing and regulation of
private investigators and private investigative agencies, none
of which are currently regulated by the state; currently, one
can simply claim to be an investigator and obtain a business
license without any experience in the field of investigation.
The primary goal of HB 158 is that of protecting the consumer;
currently those claiming to be investigators are not required to
maintain errors and omissions insurance, and this leaves
consumers with little or no recourse in the event that those
they've hired are incompetent or [guilty] of misconduct.
MR. MARTINSON pointed out that investigators that conduct
business in states without licensing standards and requirements
are placed at serious disadvantage because many insurance
companies and law firms will not hire investigators who are not
both licensed and insured. This means, for example, that out-
of-state licensed investigators unfamiliar with Alaska law would
be hired to conduct investigations in Alaska. He offered that
licensing investigators as set out via HB 158 will ensure that
only investigators with insurance, good moral character, and
sufficient education and experience will be conducting private
investigations in the state.
1:16:23 PM
HILLIARD H. "TRES" LEWIS, III, Private Investigator, Mendenhall
Investigations, Inc., relayed that he has 20-plus years of
experience in the field of private investigation, and that he
and the other private investigators that will be providing
testimony are all members of the Alaska Investigators'
Association, Inc. (AIA), and have been looking at licensing
issues for several years. He explained that a number of
problems have occurred in the past when those that have
represented themselves as private investigators haven't really
been qualified to act as such. For example, one person who'd
just graduated from high school simply acquired a business
license and then hired himself out as a private investigator
even though he didn't know anything about being a private
investigator; that person eventually contacted Mr. Lewis to
obtain help, and Mr. Lewis was able to assist that person before
any of the parties were injured.
MR. LEWIS went on to explain that when he began his career as a
private investigator, he was mentored by an attorney for three
and a half years, and most of the work he did at that time was
done for that attorney. He mentioned that HB 158 provides that
someone seeking a career as a private investigator can obtain
the necessary education by going to work for an established
private investigator or a law enforcement agency or via college
courses specific to investigative work.
1:18:49 PM
REPRESENTATIVE DAHLSTROM offered her understanding that HB 158
has not been introduced to address a specific instance or
problem.
MR. MARTINSON concurred.
REPRESENTATIVE DAHLSTROM asked how many investigators belong to
the AIA.
MR. LEWIS said there are approximately 50 members.
REPRESENTATIVE DAHLSTROM asked what the AIA's membership
requirements are, and what ongoing education members go through.
MR. LEWIS explained that the AIA is an organization of peers;
that it holds annual conferences with "world famous" speakers
addressing specific topics including but not limited to homicide
investigations, polygraphs, and computer forensics; that several
state agencies allow their investigators to attend the AIA's
conferences, and members of the AIA are allowed to go to "pieces
and parts of their conferences"; that private investigator
organizations in other states offer additional educational
opportunities; and that to join the AIA, prospective members
fill out an application, submit to a [criminal] background
check, and pay membership dues. He remarked that without the
backing of a state statute, the AIA is unable to do more for,
and require more of, its members and other private investigators
in Alaska.
MR. LEWIS, in response to a question, relayed that under
[Version E], licensing will occur through the Division of
Corporations, Business, and Professional Licensing - which is
located within the Department of Commerce, Community, & Economic
Development (DCCED) - and licensees will not be governed by a
board.
REPRESENTATIVE DAHLSTROM asked whether those provisions of the
bill have been discussed with the commissioner of the Department
of Public Safety (DPS).
MR. MARTINSON said [he] has spoken with the DPS and the DPS has
indicated that it intends to remain neutral on the bill. He
mentioned that the reason for choosing not to have a governing
board was to decrease the fiscal note.
REPRESENTATIVE DAHLSTROM asked whether private investigators
would be governed by an existing board if they are instead
licensed under the DPS.
REPRESENTATIVE COGHILL surmised that that wouldn't be the case,
and that the DPS wouldn't have purview over private
investigators because "this is a professional practices area."
REPRESENTATIVE SAMUELS asked whether HB 158 contains provisions
for revoking licenses.
1:25:24 PM
MR. LEWIS offered his understanding that under the bill, if
someone filed a complaint against a licensed private
investigator, the division would investigate the complaint and
then suspend the license if the complaint is found to be valid.
With regard to the question of who should license private
investigators, he opined that there would be an inherent
conflict of interest were the DPS to license private
investigators; "I could give you a long list of troopers who
respect me but ... don't like me because ... my job is to show
where they have not successfully investigated or properly
conducted the investigations in criminal cases." This is one
reason why it's preferred that licensing be conducted by the
division, he added.
MR. LEWIS, in response to a comment, pointed out that the
division already employs its own investigators and thus it is
familiar with what criteria ought to be met by those applying
for licensure.
1:28:44 PM
RALPH TAYLOR, Secretary, Alaska Investigators' Association, Inc.
(AIA), relayed that he would be speaking to the bill's education
requirements. Education is imperative in any profession,
regardless of whether that profession is seeking to improve
itself or maintain a professional image, and standards in
training and education go hand-in-hand with high ethical
standards - without education requirements, there will be no
ethical requirements. He therefore requested that the committee
support HB 158 and provide educational standards and licensing
requirements for Alaska's private investigators.
1:30:14 PM
KATHRYN MONFREDA, Chief, Criminal Records and Identification
Bureau, Division of Statewide Services, Department of Public
Safety (DPS), relayed that she could answer questions regarding
the background check provisions of HB 158.
REPRESENTATIVE GRUENBERG indicated that members have received a
memorandum from Joan Kasson, Department of Public Safety,
regarding a suggestion to insert a new paragraph (15) into AS
12.62.400 that would read, "licensure as a private investigator
or private investigator agency under AS 08.85."; he asked Ms.
Monfreda whether she supports this proposed amendment."
MS. MONFREDA said she does support it and was the one who had
recommended it because it will ensure that national fingerprint-
based background checks can be conducted. In response to
another question, she said she can't speak to the pros or cons
of licensing private investigators, but surmised that the bill
will have very little impact on her section of the division. On
the issue of whether the DPS should review applications, she
said that she has received no direction regarding whether she
should speak to that issue.
MR. MARTINSON, in response to a question, offered his
understanding that the indeterminate fiscal note provided by the
Division of Alaska State Troopers is outdated [since Version E
no longer provides for the establishment of a governing board].
1:32:55 PM
ANDY KLAMSER, Member, Board of Directors, Alaska Investigators'
Association, Inc. (AIA), offered information regarding his
experience in the field of law enforcement and as a private
investigator, adding that his own private investigator firm
primarily handles jobs for law firms and insurance companies.
He said that there are considerably more people operating as
private investigators than belong to the AIA. On the issue of
reciprocity, he said that many of the other 42 states that
regulate private investigators provide reciprocity for
investigators from states that also license their investigators;
currently, without the passage of HB 158, Alaska's investigators
are not able to operate in those other states. He referenced
Alaska's laws pertaining to victim protection and witness
protection - particularly as they relate to sexual assault and
sexual abuse of a minor crimes - and federal laws pertaining to
identity theft and consumer privacy protection, and opined that
it is important for anyone in Alaska working in the private
investigator field to have a knowledge of those laws and abide
by them. In conclusion, he said he supports [HB 158] and urged
its passage.
CHAIR RAMRAS asked what is currently done in situations
involving [an incompetent, fraudulent, or dangerous private
investigator].
MR. LEWIS reiterated that currently the public has no recourse
other than to seek assistance from "the district attorney's
office" regarding a fraud investigation.
1:36:16 PM
JOSEPH E. AUSTIN, Member, Board of Directors, Alaska
Investigators' Association, Inc. (AIA), relayed that he supports
HB 158. He mentioned that he'd recently conducted some research
and found that the state has issued 165 "private investigator"
business licenses, that 40 of those were issued to out of state
firms, and that of the 40 advertisements under the heading of
private detectives and private investigators in the yellow pages
of the phone book only 11 were placed by entities that are
actually licensed. Furthermore, a criminal background check on
several persons currently holding a business license in this
field showed that some have been found guilty of the crimes of
sexual assault, registered sex offender out of compliance,
hindering prosecution, domestic violence assault, theft, and
commercial bribery; a criminal background check on some persons
whose business license in this field has expired have been found
guilty of sex crimes and failing to register as a sex offender.
He mentioned that under HB 158, such people would not be granted
licensure. He asked the committee for its support in passing HB
158, and mentioned that information he's provided to the
committee contains further specific instances of wrongdoing by
those holding a business license and claiming to be a private
investigator.
REPRESENTATIVE COGHILL asked whether municipalities provide
licensing.
MR. AUSTIN said that in the Municipality of Anchorage (MOA), one
is merely required to obtain a business license, submit a copy
of a criminal background check, and pay the licensing fee.
REPRESENTATIVE COGHILL asked whether the bill will provide
private investigators with new authority.
MR. LEWIS said no, and explained that the permissible activities
listed in the bill are merely aspects of current practice with
one exception: at the national level there are database
companies that provide information only to licensed private
investigators, and, under the bill, Alaska's private
investigators will be able to access that information as well,
whereas now they can't because they are not licensed.
1:40:54 PM
DENISE MARIE PETTY, Owner, DC Recovery & Investigations;
President, Alaska Investigators' Association, Inc. (AIA), said
that HB 158 is supported wholeheartedly because it will
institute standards and accountability for people who are
performing investigative services for insurance companies,
attorneys, and private individuals. Without standards and
accountability, some holding themselves out to be private
investigators have the ability to cause great harm. The bill
proposes to institute standards regarding continuing education,
background checks, and reciprocity. The ultimate goal of the
bill is to protect the consumer; under the bill, the consumer
will have the ability to check and verify the credentials of
those holding themselves out as private investigators, and the
bonding and insurance requirements will allow the consumer to
recover damages.
MS. PETTY said she has great concerns with possibly losing
access to information simply because the state lacks licensure
for this industry - losing access to information will impact the
ability of private investigators to serve their clients - and
with individuals holding themselves out to be private
investigators not being of good moral character or honest, or
who are sex offenders or commit other crimes. In conclusion,
she said that she and the AIA support HB 158.
REPRESENTATIVE COGHILL asked whether the state's stalking laws
impact the industry.
MS. PETTY indicated that those laws do not impact her industry
because one must first notice he/she is being investigated and
then feel threatened, and a good private investigator will not
act in such a way as to get noticed to begin with; a good
private investigator will not violate a person's rights.
MR. LEWIS explained that most of the time when doing
surveillance, a private investigator is instructed specifically
to not let the subject know he/she is being investigated, and
would therefore cease his/her surveillance efforts if it
appeared as though the subject was going to learn that he/she
was the subject of an investigation. A private investigator
could be arrested for harassment or stalking, just like anyone
else, if he/she gets carried away with his/her investigation.
In response to another question, he opined that the bill will
not embolden private investigators to take chances, particularly
given that those hiring a private investigator will not want
him/her to take such chances.
CHAIR RAMRAS noted that Version E doesn't contain any bonding
requirements.
MR. MARTINSON explained that they were removed because Version E
contains a requirement that private investigators purchase
errors and omissions insurance of $100,000, and it was felt that
such insurance makes it easier for a disgruntled client to file
a claim and get his/her money back.
1:47:01 PM
MR. LEWIS, in response to a question, said that in addition to
working for insurance companies he has also been employed by a
number of individual attorneys, and has done investigative work
on a number of major criminal felonies. He mentioned that he
has not done any "domestic cases" in over 15 years - ever since
Alaska became a "no fault" divorce state. He opined that it's
not really appropriate for an investigator to do that type of
work when he/she could instead simply advise the individual that
Alaska is a "no fault" divorce state and so finding out that
his/her spouse is cheating won't do him/her any good in the
court room. He mentioned that when he investigates workers'
compensation cases he is usually employed by the insurance
company. He also relayed that he's sought former property
owners in land title cases, and has found adoptees and heirs to
estates.
MR. LEWIS, in response to a question, assured the committee that
private investigators are not allowed to do things that law
enforcement personnel are prohibited from doing, and that
private investigators will not be granted extra rights by the
bill; a private investigator can look through someone's trash,
but can not get a wiretap nor petition a court for a wiretap.
Furthermore, confidentiality is assumed with the title, "private
investigator" and most private investigators would be out of
business if they violated that confidentiality.
MR. LEWIS, in response to further questions, said that a private
investigator has no additional authority to arrest people other
than that of a regular citizen to make a citizen's arrest,
though he has transported two individuals to jail at the request
of the individuals' attorneys when those individuals violated
the conditions of their release.
REPRESENTATIVE GRUENBERG expressed favor with Version E. He
opined, however, that rather than simply referencing AS
08.85.150 along with some other specific informational items,
proposed AS 08.85.600 should specifically list all of the
informational items outlined in proposed AS 08.85.150 that ought
to be kept confidential. He suggested that that be done before
the bill gets to the House floor.
1:55:16 PM
RICK URION, Director, Juneau Office, Division of Corporations,
Business, and Professional Licensing, Department of Commerce,
Community, & Economic Development (DCCED), explained that the
administration is taking a neutral stance on the bill. He went
on to say: "As you know, we license people for public
protection and public safety, and we don't think unlicensed
activity by investigators rises to the level of needing ...
licensure at this time." Should the legislature decide to move
forward with the bill, however, the division will do as
directed, he relayed, and mentioned that licensing a category of
people without also having a corresponding board can be done and
already occurs. With regard to Representative Gruenberg's
comments, he explained that the aforementioned provisions
pertain to what the DCCED keeps confidential. In response to a
question, he listed some other categories of people that the
DCCED licenses without there being a corresponding board.
MR. URION, in response to a comment, said that it may come down
to a judgment call regarding who the division chooses to
license. There is a very fine line between protecting the
public and protecting the profession, and some professions, he
opined, cross that line by setting standards for admission that
are overly restrictive.
1:59:19 PM
CHAIR RAMRAS asked whether the bill would exclude someone with
many years of experience as a private investigator simply
because he/she doesn't meet the educational criteria outlined in
the bill. He also asked whether currently practicing private
investigators that've been found guilty of domestic violence
crimes or other crimes will be excluded from receiving a license
under the bill.
MR. LEWIS explained that the bill contains a provision that
would permit those that are currently practicing to obtain
licensure. He then recapped some of the qualifications outlined
in proposed AS 08.85.130 and AS 08.85.140 pertaining to
education and prior experience, and opined that there will be
multiple avenues by which one can enter into the occupation.
MR. URION pointed out that if there truly is a problem with
those that are currently holding themselves out to be private
investigators, then allowing those that are currently practicing
to be "grandfathered" in will not solve the alleged problem.
REPRESENTATIVE DAHLSTROM expressed concern that people who are
convicted sex offenders would be allowed to be grandfathered in.
MR. LEWIS offered that under the transitional provisions of the
bill, in order to be grandfathered in, one must still meet the
criteria outlined in AS 08.85.110, or he/she [won't] qualify
regardless of how many hours of experience he/she has.
MR. MARTINSON concurred, and, in response to a further question,
mentioned that proposed AS 08.85.110(2) says: "may not have
been convicted of a felony in any jurisdiction in the 10 years
preceding license application".
CHAIR RAMRAS asked why a threshold of 10 years was chosen.
MR. LEWIS indicated that a similar threshold already applies to
process servers.
REPRESENTATIVE DAHLSTROM opined that for certain crimes, a
person shouldn't be allowed to become a private investigator
just because 10 years have passed since the person was
convicted.
MR. MARTINSON relayed that proposed AS 08.85.110(3) says:
may not have been convicted of a crime of dishonesty
or sexual misconduct, as defined by the department in
any jurisdiction that the department determines
(A) directly relates to the applicant's capacity
to perform the duties of a private investigator; and
(B) provides grounds for denying licensure under
this chapter to protect the citizens of the state;
REPRESENTATIVE SAMUELS surmised that proposed AS 08.85.110(2)
pertains to felony convictions, and that proposed AS
08.85.110(3) pertains to sexual misconduct convictions.
CHAIR RAMRAS relayed that he will be offering an amendment to
remove the 10-year threshold; this will result in those who've
been convicted of a felony being excluded altogether.
REPRESENTATIVE GRUENBERG noted that proposed AS 08.85.110(3)
doesn't contain a time limit; regardless of when the conviction
occurred, the person would be excluded.
2:08:18 PM
REPRESENTATIVE GRUENBERG turned attention to proposed AS
08.85.750, which says:
Immunity for complainants. An action may not be
brought against a person for damages resulting from a
complaint filed in good faith with the department
about a person licensed a holding or certificate under
this chapter.
REPRESENTATIVE GRUENBERG asked whether the bill should require
that there be some reasonable basis in fact for filing a
complaint.
MR. LEWIS indicated that he's not aware of any situations that
would warrant such a requirement.
2:11:44 PM
CHAIR RAMRAS, after ascertaining that no one else wished to
testify, closed public testimony on HB 158.
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 1, as
amended to fit Version E, whereupon it then read [original
punctuation provided]:
Page 13, following line 16:
Insert a new bill section to read:
"*Sec. 3. AS 12.62.400 is amended by adding a new
paragraph to read:
(15) licensure as a private investigator or
private investigator agency under AS 08.85."
Renumber the following bill sections accordingly.
CHAIR RAMRAS asked whether there were any objections. There
being none, Amendment 1 was adopted.
2:12:21 PM
CHAIR RAMRAS made a motion to adopt Conceptual Amendment 2, to
delete from page 2, line 16-17, the words, "in any jurisdiction
in the 10 years preceding license application"; under Conceptual
Amendment 2, he clarified, proposed AS 08.85.110(2) would read:
"may not have been convicted of a felony;".
REPRESENTATIVE HOLMES suggested instead leaving in the words,
"in any jurisdiction" to clarify that it would also apply to
felony convictions that occur outside of Alaska.
CHAIR RAMRAS [made a motion to amend] Conceptual Amendment 2,
such that proposed AS 08.85.110(2) would then read: "may not
have been convicted of a felony in any jurisdiction;".
MR. LEWIS, in response to a question, said he knows of at least
two investigators with 20-plus years of experience that would
not be able to obtain licensure under Amendment 2 if it were
amended in that fashion.
CHAIR RAMRAS surmised that perhaps a 20-year threshold would
address that concern.
MR. LEWIS concurred.
CHAIR RAMRAS altered the motion to amend Conceptual Amendment 2
such that "10" on page 2, line 17, would be changed to "20".
There being no objection, Amendment 2 was amended.
REPRESENTATIVE COGHILL objected, and raised a question about the
statute of limitations.
REPRESENTATIVE GRUENBERG pointed out that a statute of
limitations pertains to whether a person can be prosecuted,
whereas proposed AS 08.85.110(2) pertains to a licensure
restriction on someone who has already been convicted.
REPRESENTATIVE HOLMES and REPRESENTATIVE COGHILL removed their
objections.
CHAIR RAMRAS announced that Conceptual Amendment 2, as amended,
was adopted.
2:16:32 PM
REPRESENTATIVE DAHLSTROM moved to report the proposed CS for HB
158, Version 25-LS0442\E, Bullard, 3/14/07, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes.
REPRESENTATIVE GRUENBERG interjected to disclose that the law
firm for which Mr. Lewis works, and perhaps Mr. Lewis himself,
has done work for him and his family.
CHAIR RAMRAS, noting that there were no objections to the
motion, stated that CSHB 158(JUD) was reported from the House
Judiciary Standing Committee.
HB 151 - INDEMNITY CLAUSE IN PUBLIC CONTRACTS
2:17:17 PM
CHAIR RAMRAS announced that the next order of business would be
HOUSE BILL NO. 151, "An Act requiring an indemnification and
hold harmless provision in professional services contracts of
state agencies, quasi-public agencies, municipalities, and
political subdivisions." [Before the committee was CSHB
151(STA); included in members' packets was a proposed committee
substitute (CS) for HB 151, Version 25-LS0479\L, Bannister,
3/28/07.]
2:18:53 PM
REPRESENTATIVE CRAIG JOHNSON, Alaska State Legislature, sponsor
by request, explained that HB 151 will require that uniform
indemnification and hold harmless provisions be included in
professional services contracts for all public agencies within
the state. He suggested that the proposed changes are sound
public policy and will constitute fair business practices
between the public and private sector. House Bill 151 will
ensure accountability for all parties involved in professional
services contracts, will prevent one party from being absolved
of its own negligence, and will save the state money.
Currently, in some contracts that are signed by the state -
specifically those relayed to construction and engineering - the
designer is required to hold state agencies harmless regardless
of who is responsible for a negligent act.
REPRESENTATIVE JOHNSON, in response to comments, relayed that he
sponsored HB 151 at the request of the [Alaska Professional
Design Council (APDC)]. He explained that HB 151 pertains to
state contracts, not contracts between private individuals; HB
151 will apply the language currently being used by the
Department of Transportation & Public Facilities (DOT&PF) to all
[construction-related professional services contracts of state
agencies, quasi-public agencies, municipalities, and political
subdivisions]. In response to further comments, he expressed a
desire to see those responsible for mistakes being held
accountable for those mistakes, and suggested that this will be
accomplished via HB 151.
CHAIR RAMRAS suggested that it is the nature of those in the
construction industry to try and absolve themselves of blame
when things go wrong. He observed that none of those expressing
an interest in testifying on the bill are contractors, and that
only architects and engineers have written letters of support.
REPRESENTATIVE JOHNSON indicated that he's had several
conversations with people in various aspects of the construction
industry and has not been made aware of any problems with the
bill. Currently, one can't even buy insurance that will allow
one to indemnify someone else, so every time someone bids on a
state contract, he/she is putting his/her company at stake. He
attempted to assure the committee that HB 151 won't circumvent
the courts but will instead hold the appropriate party
accountable for its actions. Presently, some of the best
engineers and designers either don't bid on a contract because
they're required to indemnify the other parties or they "bid
their project up considerably" to cover the potential cost. He
concluded by suggesting that people who are not responsible for
an error shouldn't be held accountable for that error.
2:26:48 PM
REPRESENTATIVE HOLMES referred to the definition of "consultant"
found on page 2, line 24, and asked whether the provisions of
the bill would apply to sub-consultants.
REPRESENTATIVE JOHNSON offered his understanding that contract
law says that the contractor is the responsible party and the
subcontractors are then responsible to that contractor. Again,
the bill addresses contracts between state agencies and private
companies. In response to another question, he indicated that
the contractor would be responsible for any problems caused by
the subcontractors.
REPRESENTATIVE DAHLSTROM offered her understanding that
subcontractors must obtain "their own bonding" - it would not be
the responsibility of the main contractor.
REPRESENTATIVE JOHNSON said he would assume that that's always
the case, and that a prudent contractor would ensure that the
subcontractors were properly bonded. He characterized the
current situation in which a designer or an engineer is forced
to indemnify the state agency regardless of who is at fault as
unfair.
CHAIR RAMRAS referred to a construction project involving
private entities wherein the roof leaks but the contractor built
it to the specifications of the designer. After reading a
portion of one letter of support from a designer, he again noted
that members' packets don't contain any letters of support from
contractors.
REPRESENTATIVE JOHNSON suggested that in the aforementioned
situation the designer is at fault.
CHAIR RAMRAS argued, though, that that designer isn't accepting
any of the liability.
REPRESENTATIVE JOHNSON surmised that in that situation, the
parties will have to go to court. He again pointed out that the
bill doesn't pertain to contracts between private individuals.
REPRESENTATIVE SAMUELS surmised that currently the liability is
different for a university project than it is for a DOT&PF
project.
REPRESENTATIVE JOHNSON concurred.
2:36:25 PM
REPRESENTATIVE GRUENBERG moved to adopt the proposed committee
substitute (CS) for HB 151, Version 25-LS0479\L, Bannister,
3/28/07, as the work draft.
REPRESENTATIVE COGHILL objected for the purpose of discussion.
REPRESENTATIVE JOHNSON explained that Version L defines
"construction" to mean the process of building, altering,
repairing, maintaining, improving, demolishing, planning, and
designing a public highway, a structure, a building, a utility,
infrastructure, or another public improvement to real property,
but does not mean the routine operation of a public improvement.
REPRESENTATIVE GRUENBERG noted that the definition of
"professional services" in AS 36.30.990 - which is referenced on
page 2, line 26, of Version L - does not include contractors; AS
36.30.990(19) says:
(19) "professional services" means professional,
technical, or consultant's services that are
predominantly intellectual in character, result in the
production of a report or the completion of a task,
and include analysis, evaluation, prediction,
planning, or recommendation;
REPRESENTATIVE JOHNSON said that those listed in that definition
are the ones who are currently required to hold harmless
everyone down the line regardless of fault. In response to a
question, he indicated that the bill is meant to indemnify the
designer against a contractor's [mistake].
REPRESENTATIVE GRUENBERG surmised that the goal is to have
liability apportioned fairly between the parties.
CHAIR RAMRAS and REPRESENTATIVE JOHNSON concurred.
CHAIR RAMRAS asked that people in the construction industry be
contacted to determine their view on HB 151.
REPRESENTATIVE JOHNSON agreed to do so, and indicated that he
wants everyone to be liable for their own errors and omissions.
In response to a question, he offered his understanding that
currently the bill will only apply to architects and engineers.
2:44:11 PM
CHAIR RAMRAS referred to the University of Alaska museum, and
said he is questioning whether the bill will unfairly shift the
burden of liability to contractors.
REPRESENTATIVE COGHILL removed his objection to the adoption of
Version L as the work draft.
CHAIR RAMRAS stated that Version L was before the committee.
[HB 151, Version L, was held over.]
HB 182 - OFFERING PROMOTIONAL CHECKS
2:46:35 PM
CHAIR RAMRAS announced that the final order of business would be
HOUSE BILL NO. 182, "An Act making the offering of certain
promotional checks an unfair or deceptive act or practice."
2:46:42 PM
REPRESENTATIVE DAHLSTROM moved to adopt the proposed committee
substitute (CS) for HB 182, Version 25-LS0650\M, Bannister,
3/22/07, as the work draft. There being no objection, Version M
was before the committee.
REPRESENTATIVE LYNN, speaking as the sponsor, said HB 182
pertains to [promotional] checks, usually written for no more
than $3 or $4, but which are actually contracts that go into
effect once the checks are cashed. For example, last year, the
Department of Law (DOL) settled a lawsuit against a California-
based company that had sent Alaskans what appeared to be small
rebates but which were in fact contracts for advertising
services valued at $179. House Bill 182 will prohibit the use
of such checks, which, he relayed, the consumer protection
section of the DOL considers to be a classic example of an
unfair, deceptive act or practice as defined in state law.
Passage of HB 182 will allow the DOL to take enforcement action
on such practices, and companies that violate this proposed law
will be subject to a civil penalty of between $1,000 and $25,000
per violation.
2:52:08 PM
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General,
Commercial/Fair Business Section, Civil Division (Anchorage),
Department of Law (DOL), said that the DOL is pleased that the
sponsor has introduced the bill, which he characterized as good
legislation. He mentioned that the DOL does have examples of
consumers in Alaska who have been harmed by the aforementioned
practice.
REPRESENTATIVE GRUENBERG asked whether the word "check" - as
used on page 1, line 5 - is broad enough.
MR. SNIFFEN offered his belief that it is, particularly for
enforcement purposes, and that everyone understands what that
term means, though he acknowledged that the term "negotiable
instrument" could be used in its stead. In response to comments
and another question, he opined that the current language of
Version M - which his office drafted - is sufficient as is.
CHAIR RAMRAS, after ascertaining that no one else wished to
testify, closed public testimony on HB 182.
2:54:56 PM
REPRESENTATIVE DAHLSTROM moved to report the proposed CS for HB
182, Version 25-LS0650\M, Bannister, 3/22/07, out of committee
with individual recommendations and the accompanying zero fiscal
note. There being no objection, CSHB 182(JUD) was reported from
the House Judiciary Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 2:55 p.m.
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