HB 58 CIVIL ACTIONS/ATTY FEES/INSURANCE Vice-Chair Phillips took testimony via statewide teleconference between 5:00 P.M. and 7:30 P.M. After a brief recess, COCHAIR SHARP reconvened the meeting to take up amendments. SENATOR TORGERSON MOVED Amendment an Amendment to Amendment #1. Without objection, the Amendment to Amendment #1 was ADOPTED. There was no further objection, and Amendment #1 was ADOPTED. SENATOR TORGERSON MOVED Amendment #2. COCHAIR SHARP objected. Amendment #2 FAILED by a 3 to 4 vote. SENATOR ADAMS did not offer Amendment #3. Amendment #4 was not offered. SENATOR DONLEY MOVED Amendment #5. Objection was heard. Amendment #5 FAILED by a 2 to 5 vote. SENATOR DONLEY MOVED Amendment #6. SENATOR DONLEY MOVED an Amendment to Amendment #6. SENATOR TORGERSON objected. SENATOR DONLEY MOVED to amend the Amendment to Amendment #6. Without objection, it was ADOPTED. There being no further objection, Amendment offer Amendment #7. SENATOR DONLEY MOVED Amendment #8. COCHAIR PEARCE objected. SENATOR DONLEY withdrew Amendment #8 without objection. SENATOR ADAMS MOVED Amendment #9. COCHAIR PEARCE objected. Amendment #9 FAILED by a 2 to 5 vote. SENATOR ADAMS MOVED Amendment a 2 to 5 vote. SENATOR ADAMS MOVED Amendment #11. SENATOR TORGERSON objected. Amendment #11 FAILED by a 2 to 5 vote. SENATOR ADAMS MOVED Amendment #12. Objection was heard. Amendment #12 FAILED by a 2 to 5 vote. SENATOR ADAMS MOVED Amendment #13. COCHAIR PEARCE objected. Amendment #13 FAILED by a 2 to 5 vote. SENATOR ADAMS MOVED Amendment #14. COCHAIR PEARCE objected. Amendment #14 FAILED by a 1 to 6 vote. SENATOR ADAMS MOVED Amendment #15. SENATOR TORGERSON objected. Amendment #15 FAILED by a 2 to 5 vote. SENATOR ADAMS MOVED Amendment #16. SENATOR PARNELL objected. Amendment #16 failed by a 2 to 4 vote. SENATOR ADAMS did not offer Amendment #17. SENATOR ADAMS MOVED Amendment #18. COCHAIR PEARCE objected. Amendment #18 FAILED by a 1 to 6 vote. SENATOR PARNELL MOVED Amendment #19. SENATOR TORGERSON objected. Amendment #19 was ADOPTED by a 6 to 1 vote. SENATOR PARNELL MOVED Amendment #20. COCHAIR SHARP objected then withdrew his objection. Without further objection, Amendment #20 was ADOPTED. SENATOR TORGERSON MOVED SCSCSSSHB 58(FIN) from committee with individual recommendations. SENATOR ADAMS objected. By a vote of 6 to 1, SCSCSSSHB 58(FIN) was REPORTED OUT with previous zero fiscal notes from the Department of Law and the Department of Commerce and Economic Development, fiscal notes from the Judicial Council (26.5) and the Court System (19.4) and a new zero fiscal note from the Department of Administration. 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." VICE-CHAIR PHILLIPS announced that teleconferenced testimony would be limited to two minutes per person. He invited Representative Porter, Sponsor of HB 58, to address the committee. REPRESENTATIVE PORTER kept his remarks brief, stating it was more relevant to say what the bill did not do as opposed to what it did. It did not limit economic damage recovery. The three avenues of request for recovery for a person who had been injured or had property damage were economic damages, non-economic damages and punitive damages. He provided additional detail and gave examples. He pointed out that non-economic damages were capped at $300 thousand but could go to $500 thousand in exceptional cases and punitive damages were capped at three times compensatory damages or $300 thousand, whichever was greater up to $600 thousand and four times compensatory damages in extreme cases. REPRESENTATIVE PORTER stated that the bill did not affect Workers Compensation cases and then concluded his introduction. The presence of Senators Donley and Parnell was noted. SENATOR ADAMS stated that the legislation did not allow for fair and just compensation for Alaskans because it did not favor the injured party, but instead favored businesses. He continued by stating that the belief that insurance rates would go down as a result was a myth. REPRESENTATIVE PORTER spoke to the issue of insurance rates, pointing out that they were regulated by the state and companies are asked to justify their rates based on experience in paying claims. The inability to lower rates immediately was because current cases had to be tried and compensated under existing law, which could take up to ten years. VICE-CHAIR PHILLIPS called for statewide teleconference testimony next. The following individuals testified. Valdez: JAMES CULLEY, CEO, Valdez Community Hospital: Support MIKE LOPEZ, Fisherman: Oppose Ketchikan: DAVID JOHNSON, M.D., Alaska State Medical Association: Support Cordova: CHERI SHAW, Cordova District Fishermen United: Oppose COLLETTE PETIT: Oppose AMY BROCKERT, Eyak Village Corporation: Oppose JACK HOPKINS: Oppose CHRISTINE HONKOLA: Oppose ROSS MULLINS: Oppose LINDEN O'TOOLE: Oppose DENNY WEATHERS: Oppose ROXY ESTES: Oppose Kenai: JOHN SIVELY, Kenai Central Labor Council: Oppose ROBERT COWAN: Oppose End SFC-97 #99, Side 1, Begin Side 2 PHIL SQUIRES: Oppose SUSAN ROSS: Oppose HUGH TORDOFF: Oppose Mat-Su: ROBERT MARTINSON: Oppose DAVID GLEASON: Oppose Sitka: JANET LEEKLEY KISARAUSKAS: Support Kodiak: CHRIS BERNS: Oppose The presence of Senator Donley was noted. Anchorage: KAREN COWART, Alaska Alliance: Support COLIN MAYNARD, Professional Design Council: Support STEPHEN CONN: Oppose FRANK DILLON; Alaska Trucking: Support DICK CATTANACH: Support MONTY MONGTOMERY, Associated General Contractors: Support KEVIN MORFORD: Oppose RANDY RUEDRICH: Support LES GARA, AKPIRG Board Member: Oppose AL TAMAGNI: Support STEVE BORELL, Executive Director; Alaska Miners Assn.: Support Fairbanks: RICHARD HARRIS, Geologist: Support The following individuals testified in person in Juneau. JIM JORDAN, Executive Director, Alaska Medical Association: Support CYNTHIA BROOKE, M.D., Anchorage: Support End SFC-97 #99, Side 2 Begin SFC-97 #100, Side 1 KEVIN SMITH, Risk Manager, Alaska Municipal League: Support CHRISTY TENGS FOWLER, Haines: Support The presence of Cochair Sharp, Senators Torgerson and Parnell was noted. PAMELA LA BOLLE, Alaska State Chamber of Commerce: Support MICHAEL LESMEIER, State Farm Insurance: Support After a brief recess, COCHAIR SHARP reconvened the meeting to take up amendments. SENATOR TORGERSON MOVED Amendment #1. He explained that the amendment clarified that the legislation would not affect existing litigation taken in the Exxon Valdez case. SENATOR ADAMS objected. SENATOR TORGERSON MOVED an Amendment to Amendment #1 relating to maritime law. Without objection, the Amendment to Amendment #1 was ADOPTED. COCHAIR SHARP asked for comments from the bill sponsor. REPRESENTATIVE PORTER welcomed the amendment and had no problem with it. There was no further objection, and Amendment #1 was ADOPTED. SENATOR TORGERSON MOVED Amendment #2. COCHAIR SHARP objected. SENATOR TORGERSON explained the amendment. REPRESENTATIVE PORTER spoke in opposition, as did SENATOR DONLEY. End SFC-97 #100, Side 1, Begin Side 2 A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Phillips, Torgerson, Adams OPPOSED: Donley, Parnell, Sharp, Pearce Amendment #2 FAILED by a 3 to 4 vote. SENATOR ADAMS did not offer Amendment #3. Amendment #4 was not offered because it was identical to Amendment #1 which had been adopted. SENATOR DONLEY MOVED Amendment #5 and explained that the amendment related to limited immunity for emergency room doctors. Objection was heard. REPRESENTATIVE PORTER spoke to the amendment. Although he philosophically agreed, he opposed the amendment. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Donley, Adams OPPOSED: Torgerson, Parnell, Phillips, Pearce, Sharp. Amendment #5 FAILED by a 2 to 5 vote. SENATOR DONLEY MOVED Amendment #6. SENATOR DONLEY MOVED an Amendment to Amendment #6. SENATOR TORGERSON objected. SENATOR DONLEY explained that the amendment related to posting notice of limited liability. There was lengthy discussion, with support expressed by SENATORS ADAMS and TORGERSON. SENATOR DONLEY MOVED to amend the Amendment to Amendment #6. Without objection, it was ADOPTED. There being no further objection, Amendment #6, as amended, was ADOPTED. SENATOR DONLEY did not offer Amendment #7. SENATOR DONLEY MOVED Amendment #8. COCHAIR PEARCE objected. SENATOR DONLEY explained the amendment. There was lengthy discussion between SENATOR DONLEY, COCHAIRS PEARCE and SHARP and REPRESENTATIVE PORTER concerning the effect of the amendment. SENATOR DONLEY withdrew Amendment #8 without objection. SENATOR ADAMS MOVED Amendment #9 which repealed the statute of repose. COCHAIR PEARCE objected. REPRESENTATIVE PORTER spoke to the amendment and discussion continued. End SFC-97 #100, Side 2 Begin SFC-97 #101, Side 1 A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Adams, Donley OPPOSED: Torgerson, Parnell, Phillips, Pearce, Sharp Amendment #9 FAILED by a 2 to 5 vote. SENATOR ADAMS offered Amendment #9B and explained that it was a one word change. COCHAIR SHARP declared the amendment out of order. SENATOR ADAMS MOVED Amendment #10, explained that it changed the term "hazardous waste" to "hazardous substance" and gave examples. COCHAIR PEARCE objected. REPRESENTATIVE PORTER spoke to the amendment and concluded that "hazardous waste" was inclusive and didn't need to be changed. A roll call vote was taken on the MOTION to adopt Amendment #10. IN FAVOR: Adams, Donley OPPOSED: Parnell, Phillips, Torgerson, Pearce, Sharp Amendment #10 FAILED by a 2 to 5 vote. SENATOR ADAMS MOVED Amendment #11. SENATOR TORGERSON objected. SENATOR ADAMS explained that the amendment deleted the new caps on non-economic damages. A roll call vote was taken on the MOTION to adopt Amendment #11. IN FAVOR: Donley, Adams OPPOSED: Phillips, Torgerson, Parnell, Pearce, Sharp Amendment #11 FAILED by a 2 to 5 vote. SENATOR ADAMS MOVED Amendment #12. Objection was heard. SENATOR ADAMS explained that the amendment changed "and" to "or" concerning the standards for higher punitive damages. REPRESENTATIVE PORTER spoke in opposition to the amendment. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Adams OPPOSED: Phillips, Donley, Torgerson, Parnell, Pearce, Sharp Amendment #12 FAILED by a 1 to 6 vote. SENATOR ADAMS MOVED Amendment #13. COCHAIR PEARCE objected. SENATOR ADAMS explained that the amendment deleted the section related to collateral benefits. Some discussion was had between SENATORS DONLEY, ADAMS and REPRESENTATIVE PORTER . A roll call vote was taken on the MOTION to adopt Amendment #13. IN FAVOR: Donley, Adams OPPOSED: Torgerson, Parnell, Phillips, Pearce, Sharp Amendment #13 FAILED by a 2 to 5 vote. SENATOR ADAMS MOVED Amendment #14. COCHAIR PEARCE objected. SENATOR ADAMS explained that the amendment cleared up language related to expert witness qualifications of the bill. A roll call vote was taken on the MOTION to adopt Amendment #14. IN FAVOR: Adams OPPOSED: Donley, Torgerson, Parnell, Phillips, Pearce, Sharp Amendment #14 FAILED by a 1 to 6 vote. SENATOR ADAMS MOVED Amendment #15. SENATOR TORGERSON objected. SENATOR ADAMS explained the amendment. A roll call vote was taken on the MOTION to adopt Amendment #15. IN FAVOR: Adams, Donley OPPOSED: Parnell, Phillips, Torgerson, Sharp, Pearce Amendment #15 FAILED by a 2 to 5 vote. SENATOR ADAMS MOVED Amendment #16. SENATOR PARNELL objected. SENATOR ADAMS described the amendment concerning offers of settlement prior to litigation. REPRESENTATIVE PORTER commented on the amendment, stating it would not be prudent. Additional discussion was had between he, SENATORS ADAMS, DONLEY and PARNELL. A roll call vote was taken on the MOTION to adopt Amendment #16. IN FAVOR: Adams, Donley OPPOSED: Phillips, Torgerson, Parnell, Sharp Amendment #16 failed by a 2 to 4 vote. SENATOR ADAMS did not offer Amendment #17, but did provide a brief description. SENATOR ADAMS MOVED Amendment #18. COCHAIR PEARCE objected. SENATOR ADAMS explained that the amendment would set up a pilot program for alternative dispute resolution to help streamline the justice system. REPRESENTATIVE PORTER spoke against the amendment. A roll call vote was taken on the MOTION to adopt Amendment #18. IN FAVOR: Adams OPPOSED: Phillips, Donley, Torgerson, Parnell, Pearce, Sharp Amendment #18 FAILED by a 1 to 6 vote. SENATOR PARNELL MOVED Amendment #19. SENATOR TORGERSON objected. SENATOR PARNELL explained that the amendment deleted periodic payments of a settlement. REPRESENTATIVE PORTER opposed the amendment. A roll call vote was taken on the MOTION to adopt Amendment #19. IN FAVOR: Donley, Parnell, Adams, Phillips, Pearce, Sharp OPPOSED: Torgerson Amendment #19 was ADOPTED by a 6 to 1 vote. SENATOR PARNELL MOVED Amendment #20. COCHAIR SHARP objected for the purpose of discussion. SENATOR PARNELL explained the amendment which related to reckless conduct. End SFC-97 # 101, Side 1, Begin Side 2 COCHAIR SHARP withdrew his objection. Without further objection, Amendment #20 was ADOPTED. COCHAIR SHARP announced there were no further amendments and requested the pleasure of the committee. SENATOR TORGERSON MOVED SCSCSSSHB 58(FIN) from committee with individual recommendations. SENATOR ADAMS objected. A roll call vote was taken on the MOTION to report the bill from committee. IN FAVOR: Parnell, Phillips, Donley, Torgerson, Pearce, Sharp OPPOSED: Adams By a vote of 6 to 1, SCSCSSSHB 58(FIN) was REPORTED OUT with previous zero fiscal notes from the Department of Law and the Department of Commerce and Economic Development, fiscal notes from the Judicial Council (26.5) and the Court System (19.4) and a new zero fiscal note from the Department of Administration.