HB 58 CIVIL ACTIONS/ATTY FEES/INSURANCE Testimony was heard from JEFF BUSH. HB 58 was HELD for further consideration. HB 75 APPROPRIATIONS: OPERATING BUDGET HB 76 APPROPRIATION: MENTAL HEALTH PROGRAM SENATOR PARNELL, Chair of the Information Technology Subcommittee, testified on behalf of the subcommittee's recommendations. Also testifying were SHARON BARTON, KAREN MORGAN, WENDY REDMAN, and MARYLOU BURTON. SENATOR PARNELL MOVED to incorporate the recommendations into HB 75. SENATOR ADAMS objected. The MOTION CARRIED on a vote of 6 to 1. CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 58(FIN) am "An Act relating to civil actions; relating to independent counsel provided under an insurance policy; relating to attorney fees; amending Rules 16.1, 41, 49, 58, 68, 72.1, 82, and 95, Alaska Rules of Civil Procedure; amending Rule 702, Alaska Rules of Evidence; and amending Rule 511, Alaska Rules of Appellate Procedure." SENATOR PHILLIPS brought up a letter from Bruce Cain requesting a teleconference on the bill. He reiterated the request. COCHAIR SHARP indicated that an attempt had been made to teleconference but the operators were unavailable for the evening meeting. JEFFREY BUSH, Deputy Commissioner, Department of Commerce and Economic Development, represented the administration concerning HB 58, the tort reform bill. He was optimistic that the negotiations going on between the interested parties regarding the issues would result in a compromise. He pointed out that the governor introduced similar legislation developed by the task force on civil justice reform and to the extent that HB 58 was consistent, they supported it. He expressed some disappointment that the task force proposals received little attention by the legislature. The task force approach was that the problem was primarily one of the cost of the system to the parties involved. As much as sixty percent of damages paid are eaten up by the system in court costs, attorney fees, expert witnesses, et cetera. There were two ways to save money, either to cut costs in the litigation process or cut off a person's right to recover. The task force decided the second option was inappropriate and unfair. They wanted to make sure people's rights were retained and to save money in the process by settling cases more quickly and to insure a higher percentage of the money went to the deserving victim rather than the attorneys and witnesses. He believed HB 58 was faulty in that regard. It contained provisions that had been unanimously rejected by the task force because they were not deemed to be fair to the litigants. End SFC-97 #87, Side 1, Begin Side 2 In response to a question from SENATOR ADAMS, MR. BUSH discussed the task force requirements to get a recommendation or proposal to move forward. SENATOR ADAMS inquired which were the high points of the task force that were missing in HB 58. MR. BUSH responded that the most significant missing pieces dealt with the process of litigation. There had been a proposed pilot program for alternative dispute resolution in an effort to achieve quick resolution before they went to trial. Another recommendation was that the District Court jurisdiction be raised from $50 thousand to $100 thousand and have an expedited process that required the litigants to go to trial within one year. According to the sponsor, the reasons they were not included in HB 58 was because the court system said they would cost too much money. He disagreed with the court system analysis. In response to a question from SENATOR PHILLIPS, MR. BUSH stated that of the 21 members of the task force, 9 held law degrees. COCHAIR SHARP announced that HB 58 would be HELD for further consideration. He called for a brief recess and turned the gavel over to COCHAIR PEARCE.