SENATOR KELLY introduced SB 184 (VOLUNTEERS AND EMPLOYEES OF NONPROFITS) and invited the sponsor, SENATOR STEVE FRANK, to review his bill. SENATOR FRANK gave some past history on the bill and made the committee aware the original bill proposed to make volunteers and employees of non-profit corporations in Alaska immune to civil liability for damages incurred while they were working on the job. He explained subsequent work on the bill has produced a proposed committee substitute to eliminate "employees" from personal liability, and he referred to Subsection (b) on page 1 of the proposed committee substitute for SB 184. SENATOR KELLY called the committee's attention to the language on page 2, line 11, Subsection (d) which reads: "This section does not preclude liability for civil damages as a result of gross negligence, recklessness, or intentional misconduct." He asked for a motion to adopt the committee substitute. SENATOR RIEGER questioned the comparison of the original bill to committee substitute change on page 2, lines 5 through 10, and expressed some discomfort to extending immunity to the corporation. He used AHFC as an example of a non-profit corporation which might benefit from the provision. Number 053 SENATOR FRANK was not sure the AHFC was a good example of a non- profit corporation as far as the compensation of the board, and he couldn't think of anyone volunteering at AHFC. SENATOR RIEGER asked for clarification of the changes in question, and SENATOR FRANK asked the bill drafter, MIKE FORD, to answer questions. MR. FORD drew attention to the change in the title of the proposed committee substitute for SB 184, which he explained was because of Subsection (c) on page 2. He also explained the new provision would extend immunity to corporations and the amount of damages that could be recovered to the amount of the insurance. MR. FORD opined SENATOR RIEGER was correct. SENATOR KELLY questioned whether this had been done on purpose. His aide, JOSH FINK, said it was an amendment before the committee last session. He explained the issue was raised as a result of a letter from the Office of ATTORNEY GENERAL COLE in a letter dated April 28, 1993, and placed in the bill packets. MR. FINK reviewed the points in the letter concerning the liability of the non-profit corporations as compared to the volunteers. SENATOR KELLY questioned MR. FORD whether Subsection (c) only restricts the liability of the corporation concerning the volunteer. MR. FORD answered it was damages resulting from an act or omission of a volunteer that would impact the corporation. SENATOR FRANK posed a scenario where a volunteer commits simple negligence and the non-profit corporation was sued, and the damages were limited to $500 thousand. MR. FORD said he was correct. Number 096 SENATOR SALO asked if the $500 thousand was in statute as a required amount of insurance. SENATOR FRANK said she was basically correct, and MR. FORD said it was a floor, but it could be more. SENATOR KELLY clarified a non-profit corporation would not get immunity for their volunteers unless they had insurance in the amount of $200 thousand, and MR. FORD confirmed the corporation would need liability insurance. MR. FORD suggested another wrinkle in which non-profit corporations could be exempt from the insurance requirement if they have operating costs of less than $100 thousand, and they are also exempt under federal law. He described a situation in which a non- profit is not insured, but would be immune. SENATOR KELLY led a short discussion on these provisions with committee members and suggested it was the small non-profits that have more dependence on the volunteers. He said it would solve the problem of exempting the non-profit corporation, AHFC. SENATOR LINCOLN questioned whether all small corporations would be immune if there was gross negligence or recklessness. SENATOR SALO asked MR. FORD for a legal difference between the terms, "simple negligence" and "gross negligence." MR. FORD spoke of extensive review by the courts, and concluded it is a matter of degree in the conduct. He gave an example of the meaning. SENATOR SHARP wanted assurance it wold not exempt any non-profit corporations for actions by any person receiving compensation - for volunteers only. MR. FORD said he was correct. SENATOR KELLY asked for a motion on the committee substitute. Number 149 SENATOR SHARP moved to adopt CS FOR SENATE BILL NO. 184(L&C). Without objections, so ordered. SENATOR SHARP moved to pass CS FOR SENATE BILL NO. 184(L&C) (VOLUNTEERS AND EMPLOYEES OF NONPROFITS) from committee with individual recommendations and a zero fiscal note. Without objections, so ordered.