HOUSE JUDICIARY STANDING COMMITTEE April 8, 1994 1:15 p.m. MEMBERS PRESENT Rep. Brian Porter, Chairman Rep. Jeannette James, Vice-Chair (1:40) Rep. Pete Kott Rep. Gail Phillips Rep. Joe Green Rep. Cliff Davidson Rep. Jim Nordlund (1:45) MEMBERS ABSENT None COMMITTEE CALENDAR HB 360: "An Act relating to civil liability for guest passengers on an aircraft or watercraft; and providing for an effective date." HEARD AND MOVED OUT OF COMMITTEE AS AMENDED, WITH INDIVIDUAL RECOMMENDATIONS AND ZERO FISCAL NOTE. HJR 60: Relating to an amendment to the Constitution of the United States prohibiting federal courts from ordering a state or a political subdivision of a state to increase or impose taxes. HEARD AND MOVED OUT OF COMMITTEE SB 321: "An Act relating to the taking of a legible set of fingerprints when a person is arrested, upon initial appearance or arraignment, upon the conviction of the person, and when the person is received at a correctional facility, and providing that the set of fingerprints shall be provided to the Department of Public Safety; relating to criminal and crime records and information; requiring the reporting of information concerning homicides and suspected homicides to the Department of Public Safety for analysis; requiring the Department of Public Safety to participate in the Federal Bureau of Investigation, Violent Criminals Apprehension Program." HEARD AND HELD HB 362: "An Act relating to the statute of limitations for actions brought upon a child support judgment; and establishing the crime of aiding the nonpayment of child support." HEARD AND MOVED OUT OF COMMITTEE WITH INDIVIDUAL RECOMMENDATIONS AND ZERO FISCAL NOTE WITNESS REGISTER REP. CON BUNDE, Sponsor, HB 360 Alaska State Legislature Room 112, State Capitol Juneau, AK 99801-1182 Phone: 465-4843 POSITION STATEMENT: Testified in support of HB 360. MIKE SCHNEIDER Alaska Academy of Trial Lawyers 540 L Street, Suite 206 Anchorage, AK 99501 Phone: 258-4040 POSITION STATEMENT: Testified via teleconference from Anchorage with analysis and recommendations concerning of HB 360. JOHN GEORGE, Lobbyist National Association of Independent Insurers 9515 Moraine Way Juneau, AK 99801 Phone: 789-0172 POSITION STATEMENT: Testified in regard to HB 360. DEAN J. GUANELI, Chief Legal Services Section Assistant Attorney General Criminal Division, Department of Law P.O. Box 110300 Juneau, AK 99811-0300 Phone: 465-3428 POSITION STATEMENT: Testified in regard to HB 321. REP. AL VEZEY, Sponsor, HJR 60 Alaska State Legislature Room 102, State Capitol Juneau, Alaska 99801-11182 Phone: 465-3719 POSITION STATEMENT: Testified in support of HJR 60. DANIELLA LOPER, Committee Counsel House Judiciary Committee Alaska State Legislature Capitol Building, Room 118 Juneau, Alaska 99811 Telephone: 465-6841 POSITION STATEMENT: Testified regarding HJR 60 and HB 362 MARY GAY, Director Child Support Enforcement Division 550 W. 7th Street, Suite 312 Anchorage, AK 99501-3556 Phone: 269-6800 POSITION STATEMENT: Testified in support of HB 362. PHILLIP PETRIE, Operations Manager Child Support Enforcement Division 550 W. 7th Street Anchorage, AK 99501-3556 Phone: 269-6800 POSITION STATEMENT: Testified in support of HB 362. PREVIOUS ACTION BILL: HB 360 SHORT TITLE: AIRCRAFT/WATERCRAFT GUEST PASSENGER LAW SPONSOR(S): REPRESENTATIVE(S) BUNDE JRN-DATE JRN-PG ACTION 01/11/94 2032 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/94 2032 (H) LABOR & COMMERCE, JUDICIARY 03/24/94 (H) L&C AT 03:00 PM CAPITOL 17 03/24/94 (H) MINUTE(L&C) 03/28/94 2994 (H) L&C RPT CS(L&C) 2DP 2NR 03/28/94 2994 (H) DP: PORTER, MULDER 03/28/94 2994 (H) NR: HUDSON, SITTON 03/28/94 2994 (H) -ZERO FISCAL NOTE (LAW) 3/28/94 04/08/94 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HJR 60 SHORT TITLE: AMEND US CONSTIT. TO LIMIT FED. COURTS SPONSOR(S): STATE AFFAIRS JRN-DATE JRN-PG ACTION 02/28/94 2550 (H) READ THE FIRST TIME/REFERRAL(S) 02/28/94 2550 (H) STATE AFFAIRS, JUDICIARY 03/08/94 (H) STA AT 08:00 AM CAPITOL 102 03/08/94 (H) MINUTE(STA) 03/09/94 2671 (H) STA RPT 6DP 03/09/94 2671 (H) DP:VEZEY,KOTT,SANDERS,G.DAVIS 03/09/94 2671 (H) DP:OLBERG, B.DAVIS 03/09/94 2671 (H) -ZERO FISCAL NOTE (GOV) 3/9/94 04/08/94 3215 (H) JUD RPT 3DP 3NR 04/08/94 3215 (H) DP: KOTT, JAMES, PORTER 04/08/94 3215 (H) NR: GREEN, NORDLUND, DAVIDSON 04/08/94 3215 (H) -PREVIOUS ZERO FISCAL NOTE (GOV) 3/9/94 04/08/94 (H) JUD AT 01:00 PM CAPITOL 120 BILL: SB 321 SHORT TITLE: FINGERPRINTING AND CRIME RECORDS SPONSOR(S): SENATOR(S)HALFORD,Phillips,Kerttula,Taylor, Pearce,Donley,Leman,Little,Miller,Sharp JRN-DATE JRN-PG ACTION 02/14/94 2832 (S) READ THE FIRST TIME/REFERRAL(S) 02/14/94 2832 (S) JUD, FIN 03/02/94 (S) JUD AT 01:30 PM BELTZ ROOM 211 03/02/94 (S) MINUTE(JUD) 03/07/94 3087 (S) JUD RPT CS 4DP NEW TITLE 03/07/94 3088 (S) ZERO FNS TO SB & CS PUBLISHED (DPS-2) 03/15/94 (S) FIN AT 08:30 AM SENATE FIN 518 03/15/94 (S) MINUTE(FIN) 03/16/94 3240 (S) FIN RPT CS 5DP 1NR NEW TITLE 03/16/94 3241 (S) PREVIOUS ZERO FNS APPLY (DPS-2) 03/16/94 (S) RLS AT 00:00 AM FAHRENKAMP ROOM 203 03/16/94 (S) MINUTE(RLS) 03/16/94 (S) FIN AT 09:00 AM SENATE FIN 518 03/21/94 3293 (S) ZERO FISCAL NOTE PUBLISHED (CORR) 03/22/94 3317 (S) RULES TO CALENDAR 4CAL 1NR 3/22/94 03/22/94 3319 (S) READ THE SECOND TIME 03/22/94 3320 (S) COSPONSOR(S): KERTTULA, TAYLOR, PEARCE, 03/22/94 3320 (S) DONLEY, LEMAN, LITTLE, MILLER, SHARP 03/22/94 3320 (S) FIN CS ADOPTED UNAN CONSENT 03/22/94 3320 (S) ADVANCED TO THIRD READING UNAN CONSENT 03/22/94 3320 (S) READ THE THIRD TIME CSSB 321(FIN) 03/22/94 3321 (S) PASSED Y20 N- 03/22/94 3324 (S) TRANSMITTED TO (H) 03/23/94 2924 (H) READ THE FIRST TIME/REFERRAL(S) 03/23/94 2924 (H) FINANCE 03/25/94 2980 (H) FIN REFERRAL WAIVED 03/25/94 2980 (H) JUD REFERRAL ADDED 03/28/94 (H) JUD AT 01:00 PM CAPITOL 120 04/08/94 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 362 SHORT TITLE: CHILD SUPPORT:CRIMINAL/CIVIL REMEDIES SPONSOR(S): REPRESENTATIVE(S) MARTIN,B.Davis JRN-DATE JRN-PG ACTION 01/11/94 2033 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/94 2033 (H) HES, JUDICIARY 01/13/94 2056 (H) COSPONSOR(S): B. DAVIS 02/22/94 (H) HES AT 03:00 PM CAPITOL 106 02/22/94 (H) MINUTE(HES) 03/25/94 (H) HES AT 03:00 PM CAPITOL 106 03/25/94 (H) MINUTE(HES) 03/28/94 2994 (H) HES RPT CS(HES) NEW TITLE 4DP 3NR 2AM 03/28/94 2995 (H) DP: BUNDE, TOOHEY, B.DAVIS, BRICE 03/28/94 2995 (H) NR: G.DAVIS, OLBERG, NICHOLIA 03/28/94 2995 (H) AM: KOTT, VEZEY 03/28/94 2995 (H) -ZERO FISCAL NOTE (REV) 3/28/94 04/08/94 (H) JUD AT 01:00 PM CAPITOL 120 ACTION NARRATIVE The House Judiciary Standing Committee was called to order at 1:30 p.m. on April 8, 1994. A quorum was present. Chairman Brian Porter announced that the committee would begin with HB 360. TAPE 94-58, SIDE A Number 000 Chairman Porter welcomed the sponsor of HB 360, Rep. Con Bunde. HB 360 - AIRCRAFT/WATERCRAFT GUEST PASSENGER LAW Number 031 REP. CON BUNDE: "This bill concerns the liability and the presumed shared liability in travelling in Alaska on both light aircraft or by small boat, that limits the civil liability that an owner or an operator of an aircraft or a watercraft would have for injuries to passengers when these aircraft or watercraft are not paid forms of transportation. This limited liability does not, however, cover gross negligence or reckless or intentional misconduct. It's simply an attempt to encourage folks to be able to take passengers along and share their recreational opportunities without jeopardizing their entire estate over what could be I guess called `Act of God' accidents. Though, certainly, as I have indicated, it does not disallow recovery for gross negligence or intentional misconduct." Number 064 REP. JIM NORDLUND requested a definition of compensation in this context; would it include, say, a token payment contributed up front for gas? REP. BUNDE replied that such a contribution would not be compensation, that is, would not be paying for transportation; rather, it would be sharing in expenses. REP. NORDLUND wondered if a definition of a token payment might be arrived at and concluded that would be up to the court. REP. BUNDE responded that, while he was not a lawyer, he would interpret it as there being no profit involved. REP. NORDLUND: "Okay." CHAIRMAN PORTER: "And there might not be anyway...but no intention of a profit." Chairman Porter invited the next person to testify. Number 094 MIKE SCHNEIDER, Alaska Academy of Trial Lawyers, testified via teleconference in Anchorage with regard to HB 360. "Looking at this bill, I think you have a clear choice between attempting to encourage people to take passengers in their vehicles for free versus encouraging people to operate aircraft and watercraft safely, and I would encourage the latter, not the former. I would discourage support for this bill. "The rest of my comments, though, are going to assume that this bill is going to move forward, and they are going to be directed to how I think this bill could be improved to address concerns of the very constituency that I assume Rep. Bunde is interested in dealing with. I happen to operate watercraft very occasionally, and aircraft, regularly. Under this bill I cannot, because nobody makes a market for this kind of coverage. There is no nonfault based coverage out there for anything except possibly medical expenses. I can't protect my family, and I can't protect my guest passengers, even if I want to, under this bill, if you pass it the way it is. "If you amend it such that I can be liable but only up to the extent of available insurance coverage, then I still get the immunity that Rep. Bunde is interested in. In other words, I don't subject my entire estate or any part of my estate to liability, I only subject my insurance carrier to exposure to the extent of that which I contracted for and paid a premium for. And then I can protect my family and my friends at least up to some minimal limit. And at the same time by this bill the balance of my estate will be protected. So if you pass this bill the way it is, not only are you discouraging people from being as careful as they possibly can when operating dangerous vehicles, but you're absolutely eliminating the ability of aircraft and watercraft operators to go out and protect their passengers, whom some of us would sure like to protect. "My other concern is, I think people should appreciate that this bill may be a trap for the unwary." Number 174 MR. JOHN GEORGE, lobbyist, National Association of Independent Insurers, testified regarding HB 360. Mr. George said he felt Mr. Schneider offered "an interesting idea, sort of a voluntary liability system...." He said he did not foresee objections to such a system. Mr. George discussed the overt and more subtle pressures on boat and plane owners from people wishing to just come along, or catch a ride... "And," Mr. George remarked, "you're just crazy to take someone along if you don't have specific insurance to cover that. Because in airplanes and boats, the potential for a serious accident is always there. Hypothermia and hitting the ground from 5,000 feet generally are fairly serious events. And so, you just can't take the chance. So you either have to go out and buy insurance - and then the question is, how much do I buy? If I buy $100,000 and they sue me for $500,000, I'm still $400,000 in the hole." MR. GEORGE concluded, "I think Mr. Schneider has an interesting and innovative idea, and I think we would have no objection to that concept... where, if you want to buy the coverage, you certainly can, but if you fail to, or you only buy, say, $25,000 worth, then that's the amount that you're exposed to. So you can protect your passengers if you deem that appropriate. If you don't, then tell them you don't have any and they take their own risk." REP. NORDLUND said he had prepared an amendment after speaking the previous day with Mr. Schneider and was prepared to pass it out when amendments were being entertained. REP. BUNDE: "I think Mike presents a reasonable alternative to all-or-nothing, and I believe the amendment would strengthen the bill." CHAIRMAN PORTER: "If there are no further questions, let's hear the amendment. For the purposes of identification let's mark this Amendment #1." Number 237 REP. NORDLUND: "Mr. Chairman, I move Amendment #1." CHAIRMAN PORTER: "Amendment #1 has been moved. Discussion?" REP. NORDLUND presented his amendment, which imposed a limit on the liability of private individuals with regard to accidents that might occur on their planes or boats. If the individual chose to buy insurance to cover guests or family members he would not be liable for civil damages exceeding the amount of insurance he had voluntarily purchased. CHAIRMAN PORTER: "Mike, are you still on the line? I'm a little confused. I thought that I heard you say that there was not insurance available." MR. SCHNEIDER explained that if HB 360 were to be passed as is, without Rep. Nordlund's amendment, there would be no appropriate insurance available to these boat or plane owners, because with the exception of medical insurance, coverage was fault-based. "But," he said, "with the amendment, I could still go buy my identical policy that gives me $200,000 a seat, inadequate though it may be; I could provide my passengers with that much protection and my estate would be immune from anything beyond that." CHAIRMAN PORTER: "Any further discussion on Amendment #1? Is there objection? Seeing none, Amendment #1 is adopted. What is the wish of the committee?" REP. JEANNETTE JAMES: "I would move that we pass out the Labor and Commerce committee substitute, as amended, which will then be the Judiciary CS, with zero fiscal note and individual recommendations." CHAIRMAN PORTER: "We have a motion to move, as amended, the bill with individual recommendation and zero fiscal note. Is there discussion? Objection? The bill is moved." REP. BUNDE thanked the committee. There was a brief discussion on how long it would take to prepare the CS and transmit the bill to the next committee; Chairman Porter assured Rep. Bunde this would be accomplished as soon as possible. Number 345 The next bill to have been considered was HJR 60; however, the sponsor, Rep. Vezey, was not yet present to present his testimony. The committee continued with SB 321. CSSB 321 - FINGERPRINTING AND CRIME RECORDS CHAIRMAN PORTER: "The next bill to be considered, and we'll be considering this, not moving it, is CS for SB 321." Rep. James asked if a similar bill had not already been passed. Chairman Porter acknowledged this and recognized DEAN J. GUANELI, DEPARTMENT OF LAW, to speak on SB 321 and its origins, but first he presented some background himself. CHAIRMAN PORTER: "Let me see if I can track why we're hearing this bill, for the information of the committee. Dean, if I am misspeaking, or this doesn't sound correct to you, let me know. The bill that we heard had part of this bill in it, and part of this bill was not in it. This bill basically contains two sections: (1) addressing the fingerprint part of the criminal records bill that we heard; (2) participation by the state in a VICAP (Violent Criminals Apprehension Program) program which I'm sure Dean will tell us about. The portion that we are in effect rehearing was deleted from the bill that we sent to the Senate for some reason. Consequently, this bill with the new section and the other bill as it now remains if both passed would meet and surpass the goals of the original bill we have heard." REP. NORDLUND: "It would surpass? It wouldn't be equal to the original bill?" CHAIRMAN PORTER: "It would be more than the bill that we heard originally because within this is this participation in the VICAP program which isn't in that other bill and wasn't in that other bill. Was that fair?" DEAN J. GUANELI, Chief, Legal Services Section, Assistant Attorney General, testified regarding CS HB 321. He said, "Almost. The bill that passed the House, I think it was close to unanimously, if not unanimously, is working its way through the Senate and it still is intact. The fingerprint provision (is) in this bill, because of Senator Halford's fear that the APSIN bill would not make it all the way through the Senate, and it was his feeling, and I agree, that kind of the linch pin of that whole program is the mandatory fingerprinting provision. And so he said, `Well, I'll throw that into this bill, as well, so that we can make sure that if nothing else happens, at least the mandatory fingerprinting provision will get through.' "I believe that the House bill has a good chance of making it through the Senate. And, if it does, then we will have the fingerprinting provision in that, as well. But that's the reason why you have it in here. The fingerprinting provision was stripped out of the Senate's version of the APSIN bill, which I think is still working its way through the Senate. I know it's a little confusing, but that's the situation. "In any event, the other portion of this bill makes the state law enforcement agencies a participant in what's known as the VICAP program: it's the Violent Criminals Apprehension Program in conjunction with the FBI. What that does is, it collects information about solved and even unsolved murders in states. The FBI compiles that information and they keep track of serial killers in that way. They've found it very helpful in tracking these people as they move through the states and trying to put together little pieces of investigations - an agency in one state will do an investigation, an agency in another state will do an investigation, and the FBI will sort of meld those together, find out that there are similarities and try to apprehend the person before he kills again. So, this requires, then, the police agencies in Alaska to submit reports to the FBI, and if the FBI says, `Yes, that's the report we're interested in,' then some additional information goes to the FBI that then can help us solve, perhaps, some unsolved killings. That's what the second part of the bill does. So I hope that that answers the questions about this procedurally and substantively." CHAIRMAN PORTER: "Is there anyone else that wishes to testify on SB 321? Any other questions for Dean? Seeing none, what is the wish of the committee?" REP. JAMES: "I thought we don't want to do this." CHAIRMAN PORTER: "I'm sorry, that's right. We're going to hold the bill for right now. Are there any other questions about the bill before we put it away?" REP. CLIFF DAVIDSON: "Are we waiting for something on the bill?" CHAIRMAN PORTER: "Yes." REP. DAVIDSON: "Politics?" CHAIRMAN PORTER: "Politics." REP. NORDLUND: "Somebody wants to kill the other bill in the Senate, is basically what we're saying here, and this one is hedging our bets; at least, providing for the important part of the other bill." CHAIRMAN PORTER: "Fair enough." REP. NORDLUND: "You couldn't say that, but I can say that." HJR 60 - AMEND US CONSTIT. TO LIMIT FED. COURTS CHAIRMAN PORTER invited Rep. Vezey to present HJR 60. Number 485 REP. AL VEZEY: (Background noises impair sound.) "HJR 60 is a response to a move that is being coordinated by the representatives in Missouri to initiate a constitutional amendment that would provide a ban on the federal courts mandating that state and local governments impose taxes to enforce court orders, and things of that nature. There are two means of amending the United States Constitution, and this is requesting that the Congress propose to the states ratification of an amendment to the U.S. Constitution that would prohibit the courts from imposing taxes upon political subdivisions of the United States." Number 501 REP. DAVIDSON: "Rep. Vezey, are there instances in Alaskan state history where in fact a federal court has mandated such a tax issue? Where are other examples of such -- Could you put some example language into our focus here so that we can understand exactly where some of this has occurred in the past?" Number 512 REP. VEZEY: "In the State of Alaska the courts have never ordered the state to impose a tax. The federal government has mandated many, many things upon the State of Alaska which have come out of the state's general revenues. We have never been in a position of having to impose a tax to fund those mandates." REP. DAVIDSON: "So, may I ask you right there, at that point --This would cover, any federal mandates that would result in the necessity of the state coming up with more revenue?" Number 521 REP. VEZEY: "In my opinion the answer to that is yes. You're talking a little gray area there. The federal government says, do something, other states have told the federal government we don't have the money, courts have ordered the states to impose a property tax or a sales tax or an income tax. States have been mandated to impose taxes to carry out federal mandates." Number 527 REP. DAVIDSON: "Examples of those?" REP. VEZEY: "I don't have the specific cases. I happen to know one of the biggest ones is in Kansas City, Missouri." REP. NORDLUND: "Rep. Vezey, in the resolve it says that the court basically can't order a political subdivision to increase or impose taxes. I understand that there are mandates that we are compelled to do that, as a result, sometimes make us, or other states, increase taxes. But that's not what the resolution says. I've never heard of a situation where any court has ordered a state to impose a tax." REP. VEZEY: "They have." REP. NORDLUND: "They have?" REP. VEZEY: "That's why this initiative is from Missouri, one of the most blatant cases occurred in Kansas City, Missouri." Number 530 REP. NORDLUND: "Now, how would that affect possible bond ratings for the state? When we give our full faith and credit to make payment on those bonds? The reason why those bonds are guaranteed to the bondholders is that, if all else fails, the state is willing to raise a tax to pay off bondholders. And if we didn't have that, it would seem to me, if we weren't compelled to do that, it seems to me that it would make the cost of bonds go up and it would be - (indiscernible - interrupted by Rep. Vezey.) REP. VEZEY: "I fail to see how that question is germane to this matter that is before us. The federal government has never, to my knowledge, entered into a state dead issue. It's the full faith and credit of the state of Alaska that we bond on, not the full faith and credit of the United States government." Number 554 CHAIRMAN PORTER: "I think the jurisdiction for these cases would be in state court." REP. JAMES: "Well, I wanted to make a statement about this resolution, because it certainly is something that I've been very aware of for a long time. And that is the separation of powers. And I know in other cases there have been a lot of times, and not necessarily in federal courts, where I see the courts making rules that really are interfering with the other powers of the government. And I don't know how much more clearly we need to put that in the constitution. I would think that we would already have that protection. But I know that it's not there, because federal courts seem to be supreme." REP. VEZEY: "Well, the Supreme Court of the United States has said that the federal courts have the authority to do this." REP. JAMES: "So I really support this resolution, because it does get to the heart of what I think is one of our problems." REP. NORDLUND: "But in this state we don't have a problem, at least, we don't have a problem yet, in this state. I'm not sure if Rep. James is talking about another situation, but, at least in this state, no federal court has ordered us to impose taxes." REP. JAMES: "That is true. They haven't. And we want to be sure they don't. And I think that we have an obligation to our sister states, if one state is offended, I think it's something that we could be subject to, that we have an obligation to find some support for our sister states." Number 579 REP. JOE GREEN: "What was the situation in Kansas City?" REP. VEZEY: "It's been several years since I read that case. I didn't read the case, just read the news around it, but the federal court ordered the unified municipality of Kansas City, Missouri, to impose a property tax to fund a charter school system for the minority students in a certain part of the city or a certain political subdivision of that municipality, or something. The subject was, creating a school for minority groups in what would typically be called more of a ghetto area, to act as a magnet to draw other people into it. It was a big social experiment. And the city of Missouri was ordered to fund it." Number 599 REP. GREEN: "This was not a contractual thing, this was a civil rights issue that had come down from the feds?" REP. VEZEY: "I don't remember. I didn't even read the case. What authority the court used to do this, I don't know. But it was a brought to the Supreme Court, and it was upheld that the courts had the right to do that. It was under the courts' general authority over civil rights, yes." REP. GREEN: "That's what I was getting at. It wasn't enforcement of any kind of any kind of a contract, then. It was a mandate from the federal government - " REP. VEZEY: "To enforce a federal policy." CHAIRMAN PORTER: "I see no one else signed up to testify on this bill. Is there anyone else that wishes to give testimony on HJR 60?" Number 610 REP. PETE KOTT: "I certainly support this measure. I don't think we ought to wait on the sidelines and have some negative action come about taking some form of preemptive strike. I do have a question to the sponsor that was probably overlooked during the first hearing on this in State Affairs on the resolve clause. We're asking legislators of all the states to join us to secure ratification of the proposed amendment. And that's what's going to happen. We're going to have to have an amendment before the states. The question I guess I have, which I'm not sure we really addressed in State Affairs, has there been an amendment proposed by a member of Congress? REP. VEZEY: "To my knowledge, the answer to that is no. But that is not to say there hasn't been one buried in some committee somewhere." DANIELLA LOPER, Committee Counsel, said that she believed an amendment had been drafted by one state which was asking other states to follow suit. REP. VEZEY: "Well, there are, I believe, 26 states have already done this, is the information I have. The states cannot propose amendments to the Constitution. Three- quarters of the states can call for constitutional convention, which current constitutional law implies there will be no limit on the subject matter before the convention; or a majority of Congress can propose for ratification by, I believe, it's three-quarters of the states, a constitutional amendment. And this is merely a petition to Congress to ask Congress to propose for ratification to the states, for a constitutional amendment." MS. LOPER: "The two major areas that this bill looks at are the funding of education and the funding of prisons." CHAIRMAN PORTER: "This bill?" MS. LOPER replied affirmatively. REP. VEZEY: "I would characterize it as broader than that. You could say that, but I would characterize it as broader." Number 644 REP. DAVIDSON petitioned the committee to engage the expertise of constitutional scholars before moving forward a resolution which could potentially affect the Constitution of the United States. Rep. Davidson expressed appreciation for the intent of the resolution but encouraged committee members to be more fully informed before acting on the resolution. He asked if Rep. Vezey would be gathering any further expertise to present a fuller picture of the legislation. Number 677 CHAIRMAN PORTER: "While I understand that this is no small area of consideration, I think a general understanding, at least on my part, has been obtained from listening to Rep. Vezey explain what it is that we're asking to be done here, is, as with 26 other states, we are asking the Congress to initiate an amendment covering this subject that would then be subject to a requirement of a three-quarters state ratification. So this, our action today, is not going to cause anything to happen tomorrow, believe me, and it is a long process, and nothing would happen in any event in terms of affecting the Constitution until the next phase, for this state, which would be consideration of the ratification of an actual proposed amendment. So this is just kind of sending a letter to our delegation saying, hey, how about considering this? I'm comfortable this is isn't going to cause anything to happen that we're not in control of." Number 691 REP. DAVIDSON: "I guess that's fine, I guess I'm uncomfortable with it because of the lack of information available." CHAIRMAN PORTER: "Sure. Rep. Kott?" Number 703 REP. KOTT: "I think you've pretty much clarified the intent of the resolution. We're doing nothing more than asking Congress to take some action to pass a proposal that would amend the United States Constitution, and I think we all know that it's pretty tough to amend the U.S. Constitution. In each congressional session there are over 1,000 proposals. But none of them make it out of one house or the other. They just kind of die in Congress. And I think when you look at the ones that have made it out, it does take a very lengthy period of time; the average time span for a constitutional amendment to be ratified is three and a half years. It can take as long as seven years, which is generally the considered time limitation; once the seven years runs to the end there then the amendment basically dies, and that's what happened with the last one dealing with the Equal Rights Amendment. Just to understand the intent of it, I think you can recognize that there is potential violation with the Separation of Powers Act, and certainly with the concept of Federalism. And the courts, perhaps, have gone way overboard since Madison's days in 1801. How do you overturn a court decision? This is one of the ways." REP. DAVIDSON: "Well, my feeling is still, even a constitutional journey starts with the first step, and if this is the first step, but it's the wrong step, then I'm uncomfortable with it." Rep. Davidson reiterated his request for more factual testimony from a legal expert, particularly on constitutional law. CHAIRMAN PORTER: "Any further discussion?" Number 720 REP. JAMES: "I'd move this resolution out of the committee with individual recommendations and zero fiscal note, as attached." CHAIRMAN PORTER: "We have a motion to move. Is there objection?" REP. DAVIDSON presented objection. REP. NORDLUND: "I'd like to comment that I do support the intent of the resolution. I don't think any of us would want to get into a situation where we would have the court system taking over legislative powers of taxation. But I kind of think that it's a little bit of a Chicken Little situation here, frankly. Is there really that much of a problem? I don't think so. And I'm concerned that it might just be an opportunity to take shots at the federal court. And maybe they deserve it in some cases, but -- I support the resolution, but I just, frankly, don't think there's probably that much need for it." REP. DAVIDSON: "I think, in addition, we heard the comment that the courts have gone overboard. Perhaps so, in some areas. But maybe not in others. It's one of these debatable kinds of things. So, I would maintain my objection at this point until we have more information. And, again, I appreciate the intent here." REP. JAMES: "Just one comment that I would have, on that point. That is, that I believe very strongly in a government of the people. And I believe that the power of taxation is the power of the people, either by their own vote or by the vote of those people who they've authorized to vote for them. And that would be their local people that have opted to let them charge taxes. And I don't think anyone else has the right to do that. And so that's why I support this resolution." Number 750 CHAIRMAN PORTER: "Objection is maintained. May we have a roll call vote please?" A roll call vote was taken by the committee. Representatives Green, Kott, Nordlund, James, Phillips and Porter voted "Yea"; Representative Davidson voted "Nay". HJR 60 was therefore moved out of committee. HB 362 - CHILD SUPPORT:CRIMINAL/CIVIL REMEDIES CHAIRMAN PORTER introduced discussion of HB 362, welcoming first Phillip Petrie. Number 765 PHILLIP PETRIE, Operations Manager, Child Support Enforcement Division, introduced himself and MARY GAY, Director, Child Support Enforcement Division, both of whom were present to testify with regard to HB 362. MARY GAY, Director, Child Support Enforcement Division, presented testimony in support of HB 362. "The Child Support Enforcement Division supports and requests that you pass CS HB 362 because this legislation would allow the division to overcome recent court decisions regarding the statute of limitations in child support cases. The current statute of limitations is ten years. Without this legislation it would require that the division send several thousand cases to law to obtain judgments on the cases in order to protect the arrears for the children and for the state of Alaska. Also, the other section of the legislation concerning the aiding and abetting in the nonpayment of child support; this is one of the areas that is most difficult to collect on. And it's because of the intentional transfer of assets to avoid the payment of child support." Number 778 REP. JAMES: "I feel very strongly about people who do fraudulent things to get out of any kind of an obligation. I feel very strongly about that. On the flip side of that, though, I have a lot of sympathy for some child support cases where a second family is put in jeopardy to protect the first family. Not that I think people should walk away from their obligation, but I've seen some efforts by the Child Support Enforcement, not only in this state but in other states, that I believe have - because the law is on their side, they don't take anything into consideration. Now, I understand what this is, Phil, and maybe you can answer for me; is this to hold a second person liable for giving someone else the freedom to do that? Say, for instance, is this if someone were married a second time, and he put all of his assets in his second wife's name? And then he doesn't work someplace, so he doesn't have to pay child support? Is that the kind of thing that was happening?" MR. PETRIE: "You're absolutely correct." REP. JAMES: "Does this, then, does this affect anyone else who wouldn't be doing that, in a negative way?" Number 800 MR. PETRIE: "No, ma'am, it does not. It is specifically designed to affect those individuals - and it's not just someone who would marry someone, but friends and relatives; that is, we have demonstrated cases that we're preparing now for court, where someone either forms corporations, businesses or transfers all their assets. There has to be (1) a support order in place prior, because they have to know that they have an obligation to pay; and (2) they have to intentionally do it. And that's exactly what it's designed to do. And there are many instances of transfers of fishing permits to brothers and other relatives, and then that person fishes, and the money still goes to the obligor, but technically, we can't hold the brother responsible for the payments. "The same way with forming a corporation or a company. Current spouses in one particular case formed a major trucking company driving these long haul double-trailer trucks for construction and gravel. They do not have CDLs or commercial drivers licenses. The business makes money. It has contracts. But when you send a withholding order to the business they say that their husbands are not employed. Obviously, the husbands are doing the driving and they are doing the maintenance on the vehicles. That's the type of case we're looking for." REP. JAMES: "Mr. Chairman, if I might follow up just on that issue. My next question is: That's fraud, no matter who they owe the money to. Why should we just do this for child support? Isn't there already a provision in the law when there's fraud and there's a debt? And there's a judgement? That you can find these people guilty of fraud?" Number 816 MR. PETRIE: "There are general provisions for defrauding anyone, but you have to usually show that you have a contract; you have to show that you have something to build (a case around), and that there's an action under the law. The AGs tell us that we don't have that clearly, in the current statutes in the law, and that child support -- I don't know of any other area where someone has had a judgement, say, because they've owed something to a private person, and then they started a new business that that private person has charged them with fraud. We've run this particular legislation by the Attorney General's office that we work with in Anchorage, and they feel it is a valuable asset because of the nature of how people transfer those assets. Probably the only other place that I would know that something like this takes place regularly is in the drug industry, and they have the asset seizure and the forfeiture provisions of the federal statute. You don't have anything similar, and I'm not asking for anything similar, in state statute. But it's a laundering of money and assets." Number 829 REP. JAMES: "I guess that what it generally does in all other issues, it becomes a matter of economics, as to whether or not it is worth taking that to court to find out whether or not they're fraudulent and that sort of thing. And I'm wondering about the economics in this. Is this going to close the gap of the amount of money that it's going to cost to do that so that it will be financially feasible to do this? Or is this opening up something that's just going to spend more money to get less?" Number 837 MR. PETRIE: "It narrows the ability to litigate and to avoid the allegation that they did that. Currently, we could take them to court, and we could fight for years to try to get the money under the general fraud statute, but this particularly sets out standards. It says, if you do this, and you know this, then this is the statute we can charge you under. And it would make it clear, and we believe would cut costs, and it would substantially increase collections." Number 844 REP. JAMES: "I am concerned any time that we take the rights away from someone without having due process for them. In other words, it could be assumed that maybe they're doing this, and maybe there's some legal reason why they're not? Is that ever a case?" MS. GAY: "They have to have due process, because it will go through court." MR. PETRIE: "It's a criminal charge, so they have the due process in court. And if it's a felony, it would go before a grand jury; if it's a misdemeanor, it would be brought before the court. So that the due process issue is clearly there for them to argue that it was an innocent misrepresentation, or they didn't know." Number 850 MS. GAY: "Also, in most cases, if you started to bring the action, people, if they realized the penalty involved, would probably come to a settlement, and we wouldn't have to have the expense. And I also believe that this legislation, when one or two cases occur, will send a message to society: That this type of activity is going to be met with penalty. And they will refrain from doing so." REP. JAMES: "I like that position." Number 860 CHAIRMAN PORTER: "I might add that you might want to look at and perhaps even track it down in the Senate and support the Uniform Fraudulent Transfers Act. It came through this committee, and as a matter of fact it was sponsored by this committee. It would cover assets that were transferred in order to evade your obligation also. Which will give you the right to go after them even though that boat was transferred to the brother. It has a reasonable standard for establishing that that was the cause of the transfer." Number 866 REP. JAMES: "I remember that bill going through here, and that was one of the things I was talking about in the first place. Because I'd like to have the law be tight enough that it's not just child support, but it's all these other areas that would preclude people from doing these fraudulent transfers. That was my first point." MR. PETRIE: "I admit, Mr. Chairman, and Rep. James, I was unaware that that bill was moving through the House." CHAIRMAN PORTER: "It's out of the House." MS. LOPER: "It's in Senate Labor & Commerce, and - " (Side A of tape ends abruptly.) TAPE 94-58, SIDE B Number 000 (Text at beginning of Side B cut off.) CHAIRMAN PORTER: "...evidence to support that this was a transfer to get out of this obligation is in the action of the transfer itself; in other words, if there were not adequate compensation passed, or received, or any of those kinds of considerations that made it a dubious market value transfer, then the burden shifts to him to prove that he wasn't doing it in order to get out of that obligation." Number 023 REP. NORDLUND: "I definitely support the bill, but I would note that it creates a new class of crime, some of which is a Class B, Class A, and even a Class C; Class A and B misdemeanors and Class C felony, and I don't see any fiscal note here from the Department of Corrections. If there's any utility in this I assume that there are people that it would actually be enforced upon, and that there would be an impact on the Department of Corrections, and there should be a fiscal note here." Number 040 MR. PETRIE: "Our experience, at least, in the last five to six years, is that we're not getting incarceration, and even in criminal nonsupport cases, that our primary aim is to recover the money, and not to incarcerate people, and we wouldn't use this against people that don't have the assets to pay. If there is any incarceration, it's been for very short periods of time, and usually within that short period of time they come up with the money or a substantial part of the money. Most recently, in 1992, two men spent four days in jail over a weekend until they could come up with the money, $10,000 and $10,400 each, (before each) could come out. And it was a matter of arranging the financing. I don't anticipate realistically that even under the Class A felony that any judge in the state would sentence someone to a period of incarceration. It also tracks with current federal legislation called the Family Support Recovery Act, which makes it a felony not to pay child support in the amount of $5,000, a federal felony. One of the things that that did, it said states have to exhaust all remedies first, and this would keep us out of going into the federal court quite as quickly. First offense is a federal misdemeanor. "But this really, as Mary Gay stated, places pressure on someone that has the assets, to come up with the money to pay the child support. It's within the realm of possibility that a judge could sentence someone, but it's highly doubtful. And in all the cases that I've dealt with in the past three years, one sentence was 120 days; they suspended 110; he never served ten days; we sent it back, and the judge imposed the ten days. So. It really is not a real burden, I don't believe, on the Department of Corrections. You're probably looking at maybe 10 to 20 of these cases prosecuted a year, and we're hoping that the deterrent value will even not necessitate that." Number 091 REP. NORDLUND: "I just want to point out though, that we're talking about the person who aids in the nonpayment of child support, not the person who actually didn't pay the support, who could be put in jail here, so if you were talking about the individual who actually was supposed to be making the child support payments, obviously it would be counter- productive if they were in jail, because they wouldn't even have the opportunity to make money to pay the child support. This applies to folks who aid - not the obligors themselves." Number 114 MS. GAY: "The person that aids in doing something like that does it for a benefit, for them, usually. For themselves, or for the person who is close to them. I believe that this legislation is like drunk-driving laws. We have very stiff drunk-driving laws these days, and it does deter individuals from driving while intoxicated. And I should hope that this legislation would do the same thing; deter individuals from taking part in activities like this. And that obligors would pay their child support." REP. NORDLUND: "I am completely in support of the intent of the bill." Number 130 REP. KOTT: "I am going to air my same concerns as I did in an earlier committee. Basically, in conjunction with what Rep. Nordlund has already brought out. And that is, under this provision here, aiding and abetting, we have a Class C felony situation that's there, even though the crime for nonpayment of support is a Class A misdemeanor. So we have placed a higher degree or a higher penalty if you're aiding and abetting. And a situation that comes to mind to me would be, somebody comes knocking on the door, a woman answers the door, there's some questions about where her husband's at or what he's doing, and (the person at the door) identifies himself, and she is reluctant to give him the information. Her husband has an ex-wife and some children that he's supposed to be supporting. They are compelling her to provide the information, even though, if this were in court - now, the court wouldn't have a wife testify against her husband. Yet this is more of an administrative matter, and we're allowing it to occur here, with a potential penalty of it being a felony, and losing all the rights associated with felony activities." Number 155 MR. PETRIE: "I believe the courts do require a wife to testify if that wife is also engaged in a criminal act with the husband. I'm sure, maybe someone from the Department of Law can clarify, but I've been in law enforcement 28 years, and there are instances --it's true that a wife can't be compelled to testify about a husband's criminal act, but if that wife is involved in criminal activity, then she can be. But it's not even a compelling thing in this nature. We build a case by going back and researching property records, researching business records, researching bank account records, and we can identify a trail of transfers of when someone transfers the assets. You can clearly show that they owe child support because they have a court administrative order and the obligation. It's not as simple as just going up and knocking on the door and asking where your husband is. We have to build a case that the grand jury in a felony case would accept, or that the courts would accept or that the courts would accept even in a misdemeanor case, to show that we can prove the intentional and willful acts of that individual. And I do believe a wife or any relative could be held under those circumstances, to come in and testify or provide the information, if they are a part of the criminal enterprise. I'm loosely terming it, but it's a term that you use, it's a criminal enterprise, when someone gets together to evade a law. So, I don't believe that's a real concern, and I think that the AG's office would have brought it to our attention at the time, because they clearly understand that we're talking about current spouses, friends and relatives when we proposed this legislation or when this legislation was drafted." Number 194 REP. KOTT: "I would be a little bit concerned whether or not they would in fact be guilty by association, or would be a party to the criminal act, until such time as they failed to provide the information. Are they innocent until proven guilty or are they guilty by association to the husband, who has failed to render payment?" Number 202 MR. PETRIE: "No, it's not guilty by association. It they're operating a business, and the business is making money, and we send a withholding order to the business that says, we understand that John Jones, your husband, works for your business and they send us back what we call an answer to inquiries, that by statute is supposed to be truthful, and they sign, and it's notarized, and they say, John Jones doesn't work for me, never has worked for me, yet we can prove through circumstances that that's his only means of support; for instance, the people with the CDLs and the trucks, it's not comprehensible, that these particular people -- We can show that the husbands are the ones that are driving the trucks, maintaining the trucks, yet the business and all of the bank records and in this particular case the husbands are even signing the wife's names to checks, that are going through the business accounts. So, that's the kind of effort that you have to put into to prove this case. I believe the court would just...dismiss a case if we brought it to it on a basis of association merely because someone was married to an obligor that owed child support." Number 227 MS. GAY: "Rep. Kott, I'd also like to mention that the division has many court actions, and a limited amount of funds for the Department of Law, and that we do not frivolously bring suits. We make sure that everything is covered before we initiate an action, and only in the most severe cases do we initiate that action." Number 238 REP. NORDLUND: "I just wanted to make one other comment that mitigates against my concern that there not being a fiscal note here from Corrections, and that is that to the extent the Child Support Enforcement Division is able to collect payments, will have a direct impact on the payments we make for AFDC and other forms of welfare payments." Rep. Nordlund further observed that it would be difficult to predict the effect, but an effect there would be. CHAIRMAN PORTER: "That's quite true. We're always conscious of things that might cost money but we never take any money away from those agencies that we've saved a little for, so...with that in mind, what is the wish of the committee?" REP. NORDLUND: "I would move that we pass out HB 362 with individual recommendations and a zero fiscal note." CHAIRMAN PORTER: "Is there discussion? Is there objection? Seeing none, the bill is moved. Thank you." ADJOURNMENT The House Judiciary Standing Committee adjourned at 2:30 p.m.