Legislature(1993 - 1994)
04/30/1994 11:45 AM Senate JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE April 30, 1994 11:45 a.m. MEMBERS PRESENT Senator Robin Taylor, Chairman Senator Rick Halford, Vice-Chairman Senator George Jacko Senator Suzanne Little MEMBERS ABSENT Senator Dave Donley COMMITTEE CALENDAR CONFIRMATION HEARINGS - Robert E. Congdon, Violent Crimes Compensation Board - Dr. Laurie E. Dahms, Violent Crimes Compensation Board SENATE BILL NO. 362 "An Act relating to insurance, to the licensing, accreditation, examination, regulation, and solvency of persons engaged in the insurance business, including insurers, nonadmitted insurers, purchasing groups, risk retention groups, and United States branches of alien insurers; relating to the management of and the filing of reports by persons licensed or otherwise doing business under the insurance code; amending Alaska Rule of Civil Procedure 45; and providing for an effective date." CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 420(STA)(efd am) "An Act relating to limited liability companies; and providing for an effective date." HOUSE BILL NO. 445 am "An Act relating to administrative or court revocation of a driver's license resulting from operation of a motor vehicle, commercial motor vehicle, or aircraft; relating to chemical testing of a person's breath, urine, or blood if the person is involved in a motor vehicle accident that causes death or serious physical injury; relating to definitions applicable to commercial motor vehicle laws; relating to chemical testing of a person's breath, urine, or blood without the person's consent; and relating to the use in a civil or criminal action of the refusal of a person to submit to a chemical test." CS FOR HOUSE JOINT RESOLUTION NO. 43(FIN) Proposing an amendment to the Constitution of the State of Alaska relating to the rights of crime victims. CS FOR HOUSE BILL NO. 362(HES) am "An Act relating to the statute of limitations for actions brought upon a child support judgment; and establishing the crime of aiding the nonpayment of child support." CS FOR HOUSE BILL NO. 367(JUD) am "An Act relating to limitations on outdoor advertising signs, displays, and devices and penalties for violations related to outdoor advertising." CS FOR HOUSE BILL NO. 214(JUD) "An Act allowing the parent or legal guardian of a minor to disclose information about the minor to certain state officials and state employees; prohibiting further disclosure of the information to unauthorized persons; amending Alaska Child in Need of Aid Rule 22; and providing for an effective date." CS FOR HOUSE BILL NO. 277(JUD) "An Act relating to public employers defending and indemnifying public employees and former public employees with respect to claims arising out of conduct that is within the scope of employment." CS FOR HOUSE BILL NO. 334(FIN) am "An Act relating to criminal sentencing; relating to the availability for good time credit for offenders convicted of certain first degree murders; relating to definite 30- to 99-year terms of imprisonment for offenders convicted of an unclassified or class A felony that is a homicide, assault, kidnapping, sexual offense, or robbery and who have at least two prior most serious felony convictions; relating to parole, good time credit, pardon, commutation of sentence, modification or reduction of sentence, reprieve, furlough, and service of sentence at a correctional restitution center for offenders with at least three most serious felony convictions; defining `most serious felony' as an unclassified or class A felony offense that is a homicide, assault, kidnapping, sexual offense, or robbery or an attempt or conspiracy to commit, or criminal solicitation of, an unclassified or class A felony that is a homicide, assault, kidnapping, sexual offense, or robbery; and amending Alaska Rule of Criminal Procedure 35." HOUSE BILL NO. 316 "An Act adopting the Uniform Statutory Rule Against Perpetuities; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 362 - See Labor & Commerce minutes dated 3/29/94 and 3/31/94. See Judiciary minutes dated 4/11/94. HB 420 - No previous action to record. HB 445 - See Judiciary minutes dated 3/28/94. HJR 43 - See Judiciary minutes dated 11/16/93 and State Affairs minutes dated 3/9/94, 3/21/94, 3/23/94, and 3/28/94. Also see Judiciary minutes dated 4/26/94. HB 362 - See Judiciary minutes dated 4/25/94. HB 367 - See Judiciary minutes dated 4/25/94. HB 214 - See Health, Education & Social Services minutes dated 1/19/94. HB 277 - See State Affairs minutes dated 4/13/94. See Labor & Commerce minutes dated 4/26/94 and 4/28/94. HB 334 - No previous action to record. HB 316 - No previous action to record. WITNESS REGISTER Robert E. Congdon 7300 South Park Drive Anchorage, AK 99516 Dr. Laurie E. Dahms P.O. Box 876029 Wasilla, AK 99687 Bob Manley 324 East Cook Anchorage, AK 99501 POSITION STATEMENT: Supports HB 420 Representative Brian Porter State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of HJR 43 & HB 277 Margo Knuth, Assistant Attorney General Department of Law P.O. Box 110300 Juneau, AK 99811-0300 POSITION STATEMENT: Testified in support of HJR 43 Jayne Andreen, Executive Director Council on Domestic Violence & Sexual Assault P.O. Box 111200 Juneau, AK 99811-1200 POSITION STATEMENT: Testified in support of HJR 43 Phil Petri Child Support Enforcement Division Department of Revenue 550 W. 7th, Suite 312 Anchorage, AK 99501-3556 POSITION STATEMENT: Testified in support of HB 362 David Kamrath, Staff to Representative Harley Olberg State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on HB 367 Eleanor Roser, Staff to Representative Ramona Barnes State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on HB 214 Jeff Bush 175 S. Franklin St., Suite 318 Juneau, AK 99801 POSITION STATEMENT: Testified in support of HB 277 Representative Con Bunde State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of HB 334 Tim Benintendi, Staff to Representative Carl Moses State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on HB 316 Art Peterson 350 N. Franklin St. Juneau, AK 99801 POSITION STATEMENT: Supports HB 316 ACTION NARRATIVE TAPE 94-44, SIDE A Number 001 CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to order at 11:45 a.m. The first order of business to come before the committee was a confirmation hearing on Governor appointees to the Violent Crimes Compensation Board, Robert E. Congdon and Dr. Laurie E. Dahms. ROBERT CONGDON, addressing the committee from Anchorage via the teleconference network, stated he has served a term on the board and this would be a reappointment. He said it is a necessary job trying to do something for victims, it is a lot of work, but he enjoys doing it. He expressed his willingness to serve again as a member on the Violent Crimes Compensation Board. Number 029 There being no questions from committee members, SENATOR TAYLOR stated a letter would be sent to Senate President Halford stating that the committee has held a confirmation hearing on Mr. Congdon's appointment to the Violent Crimes Compensation Board and that there were no stated objections to that appointment. DR. LAURIE DAHMS, testifying from Anchorage, stated she started serving on the Violent Crimes Compensation Board in September 1993, and she has found it an interesting board to work on. Her background as a family practice physician gives her a fairly broad based medical background to sort through the variety of different claims that come in to the board, and, with that broad medical background, she has been able to give that technical assistance to the board. She expressed her appreciation at being given the opportunity to serve on the board. SENATOR JACKO moved that a letter be sent to Senate President Halford stating that the committee has held a confirmation hearing on the appointment of Dr. Laurie Dahms to the Violent Crimes Compensation and there were no stated objections to her appointment. Hearing no objection, it was so ordered. SENATOR TAYLOR brought SB 362 (OMNIBUS INSURANCE REFORM) before the he committee, noting that at a previous hearing on the bill the insurance commissioner assured that the committee that most of the legislation consists of technical changes. SENATOR JACKO moved that SB 362 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 142 SENATOR TAYLOR brought CSSSHB 420(STA)(efd am) (LIMITED LIABILITY COMPANIES) before the committee as the next order of business. BOB MANLEY, testifying from Anchorage via the teleconference network, stated his support for HB 420. He noted he is chairman of the Working Group on Limited Liabilities Companies, made up of members of the tax and business law section of the Alaska Bar Association and members of the Alaska Society of CPA's. Mr. Manley said limited liability companies is a new business form that provides operational and federal income tax and estate tax advantages to Alaska businesses. He pointed out that 38 states have passed limited liability company legislation, and it is anticipated that all 50 states will have such legislation within the next two years. Mr. Manley urged passage of the legislation this session because he believes it is important for attracting capital for investments from outside to Alaska. Number 191 SENATOR LITTLE said it was her understanding that limited liability companies can have some additional tax advantages that are more advantageous than S corporations. MR. MANLEY said the only difference between an S corporation and a C corporation is for income tax purposes. Basically, the investors in a C corporation are subject to double taxation. A limited liability company gives true partnership tax treatment which gives a lot more tax flexibility and a lot more operational flexibility. Number 230 SENATOR JACKO asked how this form of business structure fits within the international marketplace, and would it be available as a joint venture form to go together with an offshore fishing company from a foreign country. MR. MANLEY answered that it would be available so that an offshore company could form a joint venture with an Alaskan corporation, and they would act as a limited liability company. He said offshore companies are obligated right now to pay taxes, so it shouldn't make any difference in terms of Alaska corporate income tax. Number 270 There being no further questions on HB 420, SENATOR TAYLOR asked for the pleasure of the committee. SENATOR JACKO moved that CSSSHB 420(STA)(efd am) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 285 SENATOR TAYLOR brought HB 445 am (DWI LAWS) before the committee as as the next order of business. He pointed out that a Senate bill had moved out of committee earlier which encompassed a provision that the third-time DWI offender would be a felony conviction, a forfeiture and seizure of vehicle provision, as well as adding antibuse as an alternative that the court may use. He directed attention to a proposed Judiciary SCS, which would make HB 445 identical to the Senate bill. SENATOR LITTLE moved that SCS HB 445(JUD) be adopted. Hearing no objection, the motion carried. SENATOR JACKO moved that SCS HB 445(JUD) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 315 SENATOR TAYLOR introduced CSHJR 43(FIN) (RIGHTS OF CRIME VICTIMS; CRIMINAL ADMIN) as the next order of business. REPRESENTATIVE BRIAN PORTER, prime sponsor of HJR 43, directed attention to a Judiciary SCS, which, he said, was the result of a concern raised by Senator Donley at a previous hearing on the legislation. SENATOR HALFORD moved that SCS CSHJR 43(JUD) be adopted. Hearing no objection, the motion carried. Number 321 SENATOR LITTLE asked if this amendment to the Constitution will change the juvenile justice system as well. REPRESENTATIVE PORTER answered that the Section 12 change from excessive punishment to criminal administration is meant to address that question. Criminal administration is a term of art that only refers to adult criminal prosecution, so this would not be affecting the juvenile justice system. SENATOR LITTLE said that addressed her concern because her preference is to have a priority to rehabilitate or reform juveniles, whereas this order is more acceptable for adults. SENATOR TAYLOR noted that was also Senator Donley's concern, and he had recommended inserting the word "criminal" and to remove the word "penal" on lines 5 and 7. Number 340 MARGO KNUTH, Department of Law, voiced her approval of the Judiciary SCS. Number 347 JAYNE ANDREEN, Executive Director, Council on Domestic Violence and Sexual Assault, stated the Council's support for HJR 43. She stressed the importance as a state to include victims in their need to have access to information and participation in the process. Number 360 SENATOR TAYLOR stated HJR 43 would be held until the next meeting of the committee so that Senator Donley could look at the changes made in the Judiciary SCS. Number 370 SENATOR TAYLOR brought CSHB 362(HES) am (CHILD SUPPORT: CRIMINAL/CIVIL REMEDIES) before the committee. He directed attention to a proposed Judiciary SCS, which addresses Senator Donley's concern that families be able to at least show the court that they have made a reasonable effort to restrain their child, and that that could be utilized as a defense against suit. PHIL PETRI, Child Support Enforcement Division, Department of Revenue, explained that the primary purpose of the first part of the bill is to change the statute of limitations, and the second part relates to aiding and abetting an individual in not paying their child support. He urged passage of the Judiciary SCS, stating that the division vitally needs the change to the statute of limitations, and the aiding and abetting portion will be a helpful tool to try to increase collections. Number 386 SENATOR TAYLOR pointed out that in the Judiciary SCS the word "person" was changed to "obligor." There being no further testimony on HB 362, SENATOR TAYLOR stated he would entertain a motion on the committee substitute. SENATOR LITTLE moved that SCS CSHB 362(JUD) be adopted. Hearing no objection, the motion carried. SENATOR LITTLE moved that SCS CSHB 362(JUD) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 410 SENATOR TAYLOR brought CSHB 367(JUD) am (PROHIBITED HIGHWAY ADVERTISING) before the committee as the next order of business. DAVID KAMRATH, staff to Representative Harley Olberg, requested that the committee rescind its previous action in changing the size of the sign from 8 x 12 to 4 x 8. He pointed out that the federal regulation allows up to 650 square feet, so he thinks that 96 square feet is being conservative. Number 420 SENATOR LITTLE voiced concern about what the state's highways are going to be look like if the bill passes because each of the businesses can have up to four signs. She added that she does not think the change made by the committee it its committee substitute is unreasonable. Number 435 SENATOR HALFORD moved that on page 2, line 26 of the proposed Judiciary SCS, change the size of the back to 8 x 12. SENATOR LITTLE objected. The roll was taken with the following result: Senators Taylor, Halford and Jacko voted "Yea" and Senator Little voted "Nay." The Chairman stated the motion carried, and because this was the only change orignally made, there was no Judiciary SCS before the committee. SENATOR HALFORD moved that CSHB 367(JUD) am be passed out of committee with individual recommendations. SENATOR LITTLE objected. The roll was taken with the following result: Senators Halford, Taylor and Jacko voted "Yea" and Senator Little voted "Nay." The Chairman stated CSHB 367(JUD) am would move out of committee with individual recommendations. Number 465 SENATOR TAYLOR brought CSHB 214(JUD) (DISCLOSURE OF MINOR'S RECORDS DS BY PARENT) before the committee as the next order of business. ELEANOR ROSER, staff to Representative Ramona Barnes, explained that the legislation was introduced by the Legislative Council at the suggestion of the Ombudsman. It will bring the Legislature and some other agencies into the confidentiality laws, allowing a constituent to go to a legislator or agency to present a grievance. Number 515 SENATOR HALFORD moved that CSHB 214(JUD) be passed out of committee with a "do pass" recommendation. Hearing no objection, it was so ordered. Number 525 SENATOR TAYLOR introduced CSHB 277(JUD) (INDEMNIFICATION OF PUBLIC C EMPLOYEES) as the next order of business. REPRESENTATIVE BRIAN PORTER, prime sponsor of HB 277, spoke to a problem brought to his attention by an individual and a group from a utility company in Anchorage that is owned by the city. One of the managers of the utility company tried to purchase a house and found that on his credit rating was a lawsuit that was filed against the utility. Because the municipality had a policy but not a law that provided that he would be indemnified, the individual had difficulty in obtaining credit sufficient enough to purchase the house because of the lawsuit. HB 277 codifies state policy and the policy of the Municipality of Anchorage, as well as many other municipalities, that the municipality will indemnify the actions or omissions of an employee who was nothing more than negligent when performing within the scope of his duty as an employee and as an employee during that period of time. It would not indemnify a person for gross negligence and it would not indemnify an individual against punitive damages. Number 565 SENATOR TAYLOR questioned that if, in fact, there was negligence on the part of the employee, does the employee also bear some responsibility. He said this will set in statute a policy that we are going to absolve our employees of their responsibility because we are going to indemnify them. REPRESENTATIVE PORTER agreed that the bill, in effect, is codifying common law as well as common policy for the state and the majority of the municipalities. He related that the Alaska Municipal League does not ever endorse any statute proposal that is a "mandate" on municipalities or boroughs, but they have submitted a letter of no objection to HB 277. He also pointed out that the bill contains a provision that the employer may reserve their right to dispute their obligation to indemnify or defend. Further, the bill excludes the university and school districts because this is already provided in statute to its employees. TAPE 94-44 Number 015 SENATOR HALFORD asked if in the case of a little municipality with no assets, is this indemnifying the individual who represented that municipality, or is this just guaranteeing a defense. REPRESENTATIVE PORTER responded that this would be indemnifying the individual, and within that is the somewhat presumed interest to defend if that is the position that the municipality or the public employer is in. SENATOR TAYLOR added that it appears to him that the legislation only impacts the relationship between the employer and the employee, and the victim would still have the right to go after either or both. SENATOR HALFORD observed that if the victim sues both the employer and employee, if the employer has got the money, he pays; if the employee has got the money, he pays; and if the city goes bankrupt the victim still recovers, but the person who can't recover is the employee against his own employer because the employer (the city) is bankrupt. Number 075 JEFF BUSH, a Juneau attorney, said this issue is something that he is intimately familiar with due to some litigation that he has been involved in during the last four to five months. In Haines, the borough was sued for action that the borough school board took and the individual assembly members were also sued as individuals. By the time the case was dismissed, the makeup of the assembly had entirely switched, politically speaking, and, therefore, it became a political issue on whether or not these people were going to be reimbursed for their attorneys fees. Mr. Bush said the legislation would essentially say that it is at least the responsibility of the borough to indemnify these people provided they did not act with gross negligence or wilful conduct. He added that this is not an uncommon situation. What makes it uncommon is the fact that the borough is hesitant to do so after the fact. He noted that individual state employees get sued frequently, and the state, as a general practice, has always picked up the tab on their legal fees with a clarification that if there is punitive damages assessed against the individual or intentional conduct, then they are going to have to pay. Number 135 SENATOR HALFORD asked if an employee can be fired for simple negligence. REPRESENTATIVE PORTER responded that an employee can be fired for negligence in performing their job, but the bill would not allow an individual being terminated so as to avoid the indemnification that they otherwise are by law or policy required to provide. SENATOR HALFORD asked if language could be added to the bill that specifically says the employer may fire the employee if they are found liable for the negligence of the employee, although they still have to defend the employee. REPRESENTATIVE PORTER answered that he couldn't see any reason why not, but he questioned if it should be qualified to the extent of not conflicting with a prior union agreement. SENATOR LITTLE said she would be in favor of something like that if it was intentional and gross negligence, but for simple negligence she is reluctant to provide that ability to the employer. SENATOR JACKO commented that if that language were put in, it would be an incentive for both the employer and employee for a settlement versus a judgement. After further discussion, SENATOR TAYLOR stated an amendment relating to Senator Halford's suggestion that an employee may be fired for simple negligence would be drafted and before the committee for its consideration the following Monday. SENATOR LITTLE stated her opposition to the amendment. Number 266 SENATOR TAYLOR brought CSHB 334(FIN) am (SENTENCING;3RD SERIOUS FELONY OFFENDER) before the committee. REPRESENTATIVE CON BUNDE, prime sponsor of HB 334, pointed out that fiscal impact will not incur by passage of this legislation for a period of 12 to 15 years because those current people who would commit a third felony will already be incarcerated for 12 to 15 years. He added that the fiscal impact and the amount it is diminished is an imponderable when it comes to how much of a deterrent it will be with the possibility of a long-term sentence facing a career criminal. Number 300 SENATOR LITTLE referred to the fiscal note from the Department of Corrections. She said if the incarcerents currently in the system already have two or three of these eligible offenses against them, the effects would be coming much more rapidly than the fiscal note would imply. PATTY SWENSON, staff to Representative Bunde confirmed that the felonies do accumulate and there are people in prison now with some felonies, but she thinks the Department of Corrections feels that they will be in prison long enough so that there will be no immediate fiscal impact. Number 329 SENATOR TAYLOR commented that when the same legislation was signed into law in California, Governor Pete Wilson said it would mean that they would need to build additional facilities over the next several years for 82,000 additional prisoners. REPRESENTATIVE BUNDE responded that California's population base is different than Alaska's population base, and this proposed legislation is written much more tightly and relates only to crimes against people. Number 370 SENATOR LITTLE said she was generally supportive of the legislation, but is very concerned about the impacts to the Department of Corrections and other departments by passing such a bill. She asked Representative Bunde if he is personally willing to financially support those systems that are going to be impacted by imposition of this legislation. REPRESENTATIVE BUNDE answered that he would. Number 390 SENATOR HALFORD moved that CSHB 334(FIN) am be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 395 SENATOR TAYLOR brought HB 316 RULE (AGAINST PERPETUITIES) before the committee as the final order of business. TIM BENINTENDI, staff to Representative Carl Moses, explained this law deals with issues relating to the inheritance of property and identifying persons who may eventually have an interest in that property. It is also designed to prevent unreasonably long lasting restrictions on the disposal of property. Alaska's current statute was last updated in 1983, and passage of HB 316 will simplify the administration of estates and trusts, as well as reducing perpetuity litigation. Number 435 ART PETERSON, a Uniform Law Commissioner for the State of Alaska, stated his support for HB 316. He said the legislation offers the "third generation" of statutory attempts to improve the common law of rule. Alaska has on the books the "second generation" version, and it has created its own kinds of problems. Number 530 SENATOR JACKO moved that HB 316 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business to come before the committee, the meeting was adjourned at 1:10 p.m.