Legislature(2003 - 2004)
05/09/2003 02:00 PM Senate JUD
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ALASKA STATE LEGISLATURE
SENATE JUDICIARY STANDING COMMITTEE
May 9, 2003
2:00 p.m.
MEMBERS PRESENT
Senator Ralph Seekins, Chair
Senator Scott Ogan, Vice Chair
Senator Gene Therriault
Senator Hollis French
MEMBERS ABSENT
Senator Johnny Ellis
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 214(JUD)
"An Act relating to the recovery of punitive damages against an
employer who is determined to be vicariously liable for the act
or omission of an employee; and providing for an effective
date."
MOVED SCS CSHB 214(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 224
"An Act relating to a tobacco product manufacturer's compliance
with certain statutory requirements regarding cigarette sales;
and providing for an effective date."
MOVED HB 224 OUT OF COMMITTEE
SENATE BILL NO. 203
"An Act relating to certain administrative hearings; and
establishing the office of administrative hearings and relating
to that office."
HEARD AND HELD
SENATE BILL NO. 2
"An Act relating to recovery of civil damages from the parents
or legal guardian of a minor; and providing for an effective
date."
MOVED CSSB 2(JUD) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 3
Proposing amendments to the Constitution of the State of Alaska
relating to an appropriation limit and a spending limit.
HEARD AND HELD
PREVIOUS ACTION
HB 214 - See Labor and Commerce minutes dated 4/29/03 and
5/1/03. See Judiciary minutes dated 5/6/03 and 5/8/03.
HB 224 - See Judiciary minutes dated 5/6/03.
SB 203 - See State Affairs minutes dated 5/6/03.
SB 2 - See HESS minutes dated 2/24/03 and Judiciary minutes
dated 3/17/03 and 3/19/03.
SJR 3 - See Judiciary minutes dated 3/19/03.
WITNESS REGISTER
Ms. Sara Nielson
Staff to Representative Samuels
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Comment on HB 214.
Mr. Ben Brown
Alaska State Chamber of Commerce
Juneau, AK 99801
POSITION STATEMENT: Supported HB 214.
Mr. Mike Barnhill
Assistant Attorney General
Commercial Section
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Supported HB 224.
Mr. Dave Stancliff
Regulation Review Committee
c/o Senator Therriault
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on SB 203.
Mr. Andy Hemenway
Hearing Officer
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Commented on SB 203.
Senator Fred Dyson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 2.
Mr. Larry Wigit
Executive Director of Public Affairs
Anchorage School District
Anchorage, AK 99513
POSITION STATEMENT: Commented on SB 2.
ACTION NARRATIVE
TAPE 03-43, SIDE A
HB 214-PUNITIVE DAMAGES AGAINST EMPLOYERS
VICE CHAIR SCOTT OGAN called the Senate Judiciary Standing
Committee meeting to order at 2:00 p.m. Present were Senators
French and Therriault. The first order of business to come
before the committee was HB 214, version Q.
MS. SARA NIELSON, staff to Representative Samuels, offered an
proposed amendment that has language from the VECO case to
define a managerial agent.
SENATOR FRENCH said he worked with the sponsor on this language
and moved to adopt amendment 1. There were no objections and it
was so ordered.
MR. BEN BROWN, Alaska State Chamber of Commerce, supported HB
214. "It's not fair for employers to be saddled with punitive
damages for actions of their employees that are completely
outside the scope of employment...."
2:04 - 2:05 p.m. - at ease
SENATOR THERRIAULT moved to pass SCSHB 214(JUD) from committee
with individual recommendations and the two attached fiscal
notes. There were no objections and it was so ordered.
2:06 - 2:07 p.m. - at ease
HB 224-CIGARETTE SALES REQUIREMENTS
VICE CHAIR OGAN announced HB 224 to be up for consideration.
MR. MIKE BARNHILL, Assistant Attorney General, said this is a
bill that enhances the state's ability to enforce its non-
participating manufacturer escrow requirements protecting the
revenue stream the state gets under the Master Settlement
Agreement.
SENATOR THERRIAULT moved to pass HB 224 from committee with
attached fiscal notes with individual recommendations. There
were no objections and it was so ordered.
2:10 - 2:11 p.m. - at ease
SB 203-OFFICE OF ADMINISTRATIVE HEARINGS
VICE CHAIR OGAN announced SB 203 to be up for consideration.
MR. DAVE STANCLIFF, Regulation Review Committee, said the basic
goals of SB 203 are to set up a model that will grow and provide
more efficient and fair hearings for those who require
adjudications in the state administrative process.
Secondly, it sets up standards and protections for hearing
officers statewide. Since the officers work for the agencies
that promulgate and enforce the regulations, a more independent
approach is in order and this bill provides protection to
hearing officers from agency influence from both inside and
outside the central model - and influence from the legislature.
It also establishes a higher standard of conduct for the
process.
In effect, a model is created and outside that model, people
have a more independent status.
Last, the bill establishes a time limit for people who have been
caught up in the adjudication process for years. He said they
have worked extensively with administration, legislators and
organizations.
VICE-CHAIR OGAN said that all three powers are under one branch
of government - the power to carry forth the laws, investigate,
prosecute and adjudicate.
MR. STANCLIFF commented that judges are sworn to uphold the
administrative law until they are given the independent
standards of conduct that due process calls for.
CHAIR SEEKINS arrived at 2:13 p.m.
SENATOR THERRIAULT asked Mr. Stancliff to go over the
amendments.
MR. STANCLIFF passed the amendments out to the committee and
stated that at every step of the way they worked with the
administration in consideration of any changes in the amendments
and that they had been extremely productive and cooperative.
The first amendment on page 3, line 15, is a housekeeping
amendment; amendment 2 on page 8, line 1, is substantive.
Currently, a hearing officer has 90 days after the date the case
is assigned to prepare a proposed decision. However, they
realized that if the agency didn't cooperate with the hearing
officer, he might not get the material needed to even get the
hearing going within 90 days so it was changed to 120 days.
However, they deleted line 7 on page 8, which says:
If the proposed decision is not timely issued, the
agency decision that is subject to the hearing is the
final agency decision and a party requesting the
hearing may appeal straight to Superior Court.
It sounds good in principal, but it doesn't work well in
practice for two reasons. The first reason is, if the hearing
isn't even conducted, all of a sudden the only record the
petitioner has to build their case on is a bad record or none at
all. The administration asked for the leeway to trust that the
new model would work properly and to delete that type of hammer.
On page 8, line 21, it says the hearing officer will have 120
days and then submits the hearing to the commissioner or agency.
The commissioner would have 30 days to decide whether to take
action or not. That bar has been raised so that when the
commissioner takes action, they have to very explicitly say why
and make it a matter of the public record - something that isn't
necessarily occurring now. Also, currently, if the commissioner
remands the case back to the agency, it doesn't say how long it
can stay there, which has been a problem. So, he fixed a time of
60 days starting from the time the hearing officer hears and
proposes the decision. Within that 60 days, the commissioner has
up to 30 of them to decide what to do or to do nothing; and if
it's remanded back, there's an additional 30 days for the agency
to complete and issue a final decision. That puts the total
clock under this amendment at 182 days.
MR. STANCLIFF said he contacted Judge Belcher in Colorado, a
nationally recognized expert, on what he felt was the outside
time his central panel ever had to use and he answered 180 days.
"So, we're in line with a model that is working very well
nationally and the administration has every option and
flexibility within this model to speed parts of it up..."
The new model has a requirement to keep good records, but they
accidentally asked them to keep records of not only what they
do, but records of whatever the agency does, too. This is not
only duplicative, but it's going to make them into record
keepers rather than processors and adjudicators. Amendment 3
clarifies that.
SENATOR THERRIAULT moved to adopt the three amendments, S.2, S.3
and S.4, as one amendment. There were no objections and it was
so ordered.
23-LS0903\S.2
Cook
12/11/03
A M E N D M E N T 1
OFFERED IN THE SENATE
TO: CSSB 203(STA)
Page 3, line 15, following "year":
Insert "the results of the survey along with"
23-LS0903\S.3
Cook
12/11/03
A M E N D M E N T 2
OFFERED IN THE SENATE
TO: CSSB 203(STA)
Page 8, line 1:
Delete "immediately"
Insert ", within two working days,"
Page 8, lines 4 - 5:
Delete "within 90 days after the date a case is assigned
for hearing"
Insert "within 120 days after the date the agency received
the request for a hearing"
Page 8, lines 7 - 10:
Delete "If the proposed decision is not timely issued, the
agency decision that is the subject of the hearing is the final
agency decision and the party requesting the hearing may appeal
from that decision to the superior court or as otherwise
provided by law for appeals of final agency decisions."
Insert "The hearing officer shall immediately submit the
proposed decision to the agency."
Page 8, line 21, following "proceedings;":
Insert "the hearing officer shall complete the additional
work on the case and return it to the agency within 60 days
after the date the original proposed decision of the hearing
officer was submitted to the agency by the hearing officer;"
23-LS0903\S.4
Cook
12/11/03
A M E N D M E N T 3
OFFERED IN THE SENATE
TO: CSSB 203(STA)
Page 9, lines 24 and 25:
Delete all material.
Insert "acquire and organize records relating to
administrative hearings of the office. The records must include
information,"
Page 9, line 28, following "records.":
Insert "The records shall be made available to the public."
MR. STANCLIFF noted a letter from the Disability Law Center of
Alaska that brought to their attention that federal law requires
that a state educational agency or a local education agency
conduct the hearings under their particular statutes having to
do with children with disabilities as it applies to education.
However, they said they would be willing to work with him to see
if by keeping them in this bill, they rub up against the federal
statute. He said they would work with the AG's office to correct
that if it is a problem.
SENATOR FRENCH asked what happens when the hearing officer
doesn't return the decision within a specified time. Could they
go to court?
MR. STANCLIFF responded that the amendment they just adopted
removes the provision to go to court.
SENATOR FRENCH asked if there was any time frame for them to get
through before being able to go to court.
MR. STANCLIFF answered there is not.
SENATOR FRENCH asked whether PFD disputes are in this act or
whether they stand alone.
MR. ANDY HEMENWAY, Department of Administration Hearing Officer,
answered the PFD hearings will not be under this act.
SENATOR FRENCH asked about fishery laws and regulations.
MR. STANCLIFF said they will not be in administrative hearings.
The RCA is not included and neither are oil and gas taxation
issues. The idea is if the model works well, it could eventually
evolve to be the total clearing house.
Only one category of taxation relates to oil and gas, the oil
and gas property tax on page 5, lines 12 & 13, of the CS, which
are presently being heard by a hearing officer within the
Department of Revenue.
There are two types of issues that arise under that
statute. One type is whether or not the property in
question is in fact taxable property for purposes of
those statutes. Those questions would go to this
central panel [by a hearing officer in the Department
of Revenue].
The other question that arises under those provisions
of law is how much is the property worth, what is the
amount of the tax. Those issues under current practice
are decided by the State Assessment Review Board,
which is essentially a collection of...municipal
assessors, basically....Those cases are now being
conducted by that board, not by hearing officers.
They're not delegated out and under the current
legislation...they would continue to be conducted by
the State Assessment Review Board.
SENATOR FRENCH asked if he knew how long it takes to get through
the system now.
MR. STANCLIFF replied they provided a full report that lists
every hearing function and how long they have taken previously.
He said that the new officers would not be classified employees,
but they would be partially exempt and have the same guidance
that Division of Election employees have under AS 39. However,
they cannot be summarily removed.
SENATOR FRENCH asked if this sets a 90-day drop-dead period for
resolving the hearings.
MR. STANCLIFF replied no longer and that the amendment they just
adopted gives 120 days to the hearing officer to produce a
product and 180 days total from the time someone requests a
hearing that the agency has to provide a final decision.
SENATOR FRENCH asked if any hearing bodies were consistently
exceeding that period of time.
MR. STANCLIFF said there is a list in excess of 50 - 100 cases
that won't even get heard for a year or more. He said there are
horror stories, but this bill is not targeting those.
SENATOR FRENCH asked if someone that has a grievance and goes
into a hearing officer, but has nothing happen in 180 days is
automatically shunted off to court.
MR. STANCLIFF replied there is no automatic shunt, but a case
could be made with a competent attorney to the courts that the
deadline was exceeded.
MR. HEMENWAY added that there is some concern about the
consequence of having the ability to go straight into court with
a "half baked" record.
The intent is that the chief hearing officer would
create internal guidelines to govern how long will it
take to process cases from each different agency so
you can establish appropriate time frames for any type
of case that might come along and that those will be
included in the performance evaluation for the hearing
officers. The intent here is...to make the consequence
appropriately considered in the personnel process for
the hearing officer since they are the ones charged
with getting the work done in a timely manner.
CHAIR SEEKINS said he would hold the bill for further testimony
in future meetings.
SB 2-PARENT LIABILITY FOR DAMAGE BY CHILD
CHAIR SEEKINS announced SB 2 to be up for consideration.
2:40 p.m.
SENATOR DYSON, sponsor of SB 2, said his school district asked
that the legislature remove the liability limit on parents - the
present one is $10,000 - to allow them to recover more damages.
SENATOR OGAN moved to adopt version W of SB 2, as the working
document.
SENATOR FRENCH objected for purposes of discussion.
SENATOR DYSON said that SB 2 clears up the fact that legal
guardians are not held liable if they accept the responsibility
of being legal guardian for a child that is not their own.
Adoptive parents of hard-to-place children are also not held
liable. Foster parents are not held responsible currently for
acts incurred by the kids.
SENATOR OGAN said the district could sue the student of the
parent, but invariably they go after the parent because of the
perception that they have deeper pockets. They have tried to get
the child to reimburse the parents with use of his Permanent
Fund Dividend, but couldn't find a good mechanism for attaching
the present or future wealth of a child. Even good parents can
have bad kids who could do enough damage to something that the
parents could become impoverished for life. When the kid is 18,
they get their record washed clean according to Alaska law, but
the parent has possibly been ruined.
SENATOR DYSON said he thinks he is exaggerating, because no one
gets ruined for life by incurring debt. That's what bankruptcy
laws are set up for. If you don't let the parent reimburse to
the extent that they are able, then you say to the rest of the
people in the community that they get the responsibility for
paying for the damage a kid they had no control over did.
SENATOR OGAN said he understands what he is trying to do, but an
unlimited amount is too much.
SENATOR DYSON responded the version coming over from the House
has a limit of $15,000.
CHAIR SEEKINS asked if he knows if any schools carried vandalism
insurance and what deductible they have.
MR. LARRY WIGIT, Executive Director, Public Affairs, Anchorage
School District, said they are self-insured which means that it
would come out of their operating budget.
CHAIR SEEKINS asked if they have a reserve set aside for this
type of thing.
MR. WIGIT replied that they are required by law to keep a
minimum amount of money for maintenance. Depending on the issue,
several million dollars would be available.
SENATOR OGAN asked if there was a reason they don't have
insurance.
MR. WIGIT replied that even if they did have insurance, the
premiums would come from monies that could be used for other
purposes.
TAPE 03-43, SIDE B
SENATOR DYSON said he is willing to work with Senators Seekins
and Ogan on their concerns, one of which is the lack of
accountability for kids within the school system.
MR. WIGIT said that they have some insurance, but [indisc].
SENATOR FRENCH asked if there are legal steps a child can take
to become emancipated.
SENATOR DYSON replied a child could go to court and apply to be
emancipated.
CHAIR SEEKINS said he supports the concept in the bill, but at
the same time, he worries about what we're doing as a state to
support parents who want to keep kids from doing those kinds of
things.
SENATOR DYSON said he agrees with Senators Seekins and Ogan, but
he hopes they will not hold up action on this bill while they
await their solution.
CHAIR SEEKINS said he would not want to make liability
limitless. He asked if it was improper under current law to put
a dollar judgment on a minor and do they have the authority to
change that. He thought that if a minor child could be held
responsible for murder then they could be held responsible for
paying back part of a debt they incur.
SENATOR FRENCH moved a conceptual amendment to reinsert language
on page 1, line 14, and page 2, line 1 "not to exceed $25,000".
There was no objection and it was so ordered.
SENATOR OGAN moved to pass CSSB 2(JUD), version W, from
committee with the fiscal note and asked for unanimous consent.
There was no objection and it was so ordered.
SJR 3-CONST AM: APPROPRIATION/SPENDING LIMIT
CHAIR SEEKINS announced SJR 3 to be up for consideration.
SENATOR DYSON, sponsor of SJR 3, said he served six years on the
Anchorage Assembly and saw a tax cap limit there work very
effectively. It allowed the tax revenues to expand as the
population and CPI expanded and allowed for voter approved
projects. The bill before them doesn't limit taxes; it limits
spending. It limits it to something like the same sort of thing
- the growth, inflation and the things that are outside a
general fund budget.
He received a proposed committee substitute from the
administration, version D, that significantly expands the list
of items that are not under the cap, but he wants the committee
to confine itself to discussing the appropriateness of a
constitutional cap and then send it on to Finance to hash out
the items.
CHAIR SEEKINS said he finds that there are 16 other states,
including Alaska, that already have an ineffectual
constitutional spending limit.
SENATOR OGAN said one loophole to get around a vote of the
people is through lease purchase options, which the Legislature
did previously with courthouses. He thinks there should be a
definition of a lease purchase, although he isn't sure this is
where it should be.
He is also concerned that the four percent per year is a little
high and wants some spreadsheets on what that would amount to
every year.
SENATOR DYSON said the D version outlines (instead of four
percent) an average of the CPI and population growth, which ends
up being, with a 2.5 percent population growth and a four
percent CPI, an expansion of 3.25 percent.
SENATOR FRENCH asked what effect it would have had on state
spending if this had been in place at the time of the state
constitution.
CHAIR SEEKINS said he is concerned about what they could do
constitutionally.
SENATOR DYSON argued that we have had a constitutional spending
limit in place since 1981 and it hasn't been challenged, but the
question is whether it's appropriate. His preference is that
they pass something like the A version and let the Finance
Committee deal with suggestions from the administration in the D
version.
SENATOR OGAN said he doesn't see language that repeals the other
constitutional spending limit, which hasn't been challenged.
SENATOR FRENCH pointed out that it's in the A version.
SENATOR OGAN said the existing spending limit is ignored. He
wonders whether future Legislatures will ignore it, if this is
put into law.
CHAIR SEEKINS said he would hold the bill for further
information and discussion. There being no further business to
come before the committee, he adjourned the meeting at 3:20 p.m.
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