SB 2-PARENT LIABILITY FOR DAMAGE BY CHILD SENATOR DYSON, sponsor of SB 2, informed members he introduced this legislation at the request of several school districts and the Alaska Association of School Boards (AASB). It removes the liability limit of $10,000 for acts of vandalism. He said he originally viewed this legislation as a simple matter, but as he began "stumbling around in the legal woods," he stepped on several other issues he was unaware of. TAPE 03-9, SIDE B    SENATOR DYSON informed members that if version S of SB 2 were adopted, it would be used as a partial revisor's bill to eliminate some of the ambiguities in the law. It would also establish that a court should pursue the minor that did damage before pursuing the parent. It also clarifies that foster parents, subsidized legal guardians, and subsidized adoptive parents are not held liable for the actions of the behaviorally challenged children for which they have accepted responsibility. He asked that the committee adopt version S as the working document. SENATOR THERRIAULT moved to adopt version S of SB 2 as the working document. There being no objection, it was so ordered. SENATOR DYSON explained the changes in version S as follows: · Section 1 deletes the $10,000 limit on parental liability in existing law · Section 2(c) exempts the legal guardian from liability SENATOR DYSON said that provision created a lot of discussion. He misspoke at the first hearing when he said legal guardians would not be liable for the actions of a child who was actually a ward of the state. Subsequently he found two cases that are contradictory. Section 2(c) will set that matter straight in statute. The Division of Family and Youth Services (DFYS) does not have insurance, but the state does have risk management insurance to provide protection. He continued explaining the changes in version S. · Section 3 clarifies that legal guardians are held harmless. Subsection (b) specifies that parents who adopt a hard to place child are also held harmless. Most of those adoptions are subsidized because the children are likely to end up in an institution or group home if the adoptive parents do not get help. · Subsection (d)(2) is new and clarifies that action may be taken against the child. SENATOR DYSON said that since he introduced the bill, he has received a number of calls asking him why the law will go after the parent and not the child who did the damage. The Division of Legal Services told him that one could go after the child and the child's assets, including dividends, until the debt is satisfied. He said he is very pleased with the latest version of the bill as it accomplishes several things that need to be addressed and provides a clear trail for holding people accountable. SENATOR THERRIAULT asked if this language ties the exemption for the legal guardian to state placed children only or whether a family member who acts as a legal guardian, such as an uncle, would be exempt. MR. BRAD THOMPSON, Director of Risk Management, Department of Administration (DOA), said that Senator Therriault's question is answered in existing statute, AS 13.26.070. It reads, "A guardian is not liable to third persons by reason of the parental relationship for acts of the ward." That is the law Senator Dyson is trying to correct because it conflicts with AS 34. He does not believe it is restricted to guardians through the state's activity. SENATOR FRENCH said Senator Therriault's question brings up the most interesting policy call this legislation makes, that being that it exempts guardians trying to "do good," such as grandparents. SENATOR ELLIS said he understands denying a student loan to a child involved in a bad act until the debt is made good, but he asked for an explanation of how a child's assets would be attached. SENATOR DYSON said he assumes that is within the court's purview to decide what is appropriate. He expects it would most often apply to a teenage minor who might own a car. SENATOR ELLIS asked if the child would be required to pay back 100 percent of the debt owed before benefiting from a student loan or any other state benefit. SENATOR DYSON replied it is best to leave those decisions to the court. SENATOR THERRIAULT said he worked on the original statutory language and at that time he heard from quite a few parents who said that the state wouldn't let them control their children, but the state would hand them the bill for damage done by the children. Those parents cautioned they would use section 2 of the statute so that when the children went to a movie, the parents would call the police and report them as runaways. He asked if Senator Dyson has heard similar comments. SENATOR DYSON said he hasn't but a similar bill is working its way through the House. In testimony before the House committees, people have said that the first recourse is to a homeowner's policy, and if the $10,000 limit is removed, some homeowners' policies may increase. He also heard from parents who said the state would not protect them when their children are abusive, but wants to take everything they own if their children do damage elsewhere. SENATOR FRENCH noted that a judge might not read the recovery against the minor provision to mean that the entire judgment must be put on the minor so the court would have to collect from the parents. He questioned whether the bill should contain a provision that says the liability is joint and severable. That way, the court would proceed against both in tandem, and if the minor has easily recoverable assets, those would be taken first. The committee took a brief at-ease. 2:40 p.m.  SENATOR ELLIS asked if the committee has information on the largest dollar amount of an act of youth-induced vandalism. SENATOR DYSON said he received some information from his school district and believes the amount was between $300,000 and $400,000. SENATOR ELLIS said he participated in discussions about the original legislation when the amount was increased from $2,000 to $10,000. This proposal is to have no limit. He said he agrees with Senator Dyson that he resents paying for other people's children who are out of control, but he encouraged members to seriously consider the consequences of changing the liability limit amount from $10,000 to no limit. SENATOR DYSON told members the House version of the bill contains a $25,000 limit and he believes this issue would be dealt with in conference committee. He said all that parents have is classic bankruptcy protection that allows them to keep equity in their home. CHAIR SEEKINS said he hates to see any family come to that, but he hates to burden the public with the activities of an unsupervised child. He said this bill would provide an incentive for parents to know whom their children are with and where they are. SB 2 was held in committee.