Legislature(2003 - 2004)

04/04/2003 08:35 AM House FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                         April 4, 2003                                                                                          
                           8:35 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Paul Seaton, Chair                                                                                               
Representative Peggy Wilson, Vice Chair                                                                                         
Representative Dan Ogg                                                                                                          
Representative Ralph Samuels                                                                                                    
Representative Ethan Berkowitz                                                                                                  
Representative David Guttenberg                                                                                                 
MEMBERS ABSENT                                                                                                                
Representative Cheryll Heinze                                                                                                   
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 130                                                                                                              
"An Act  relating to  the award of  damages, costs,  and attorney                                                               
fees  in an  action  against a  seafood  processor under  certain                                                               
state laws that prohibit unfair  trade practices, monopolies, and                                                               
restraints  of trade;  stating legislative  intent regarding  the                                                               
appropriation and  use of  money obtained by  the state  from the                                                               
operation  of this  Act; amending  Rules 54,  58, and  82, Alaska                                                               
Rules of Civil Procedure; and providing for an effective date."                                                                 
     - MOVED CSHB 130(FSH) OUT OF COMMITTEE                                                                                     
HOUSE CONCURRENT RESOLUTION NO. 10                                                                                              
Relating to restoration of riparian  habitat that is vital to the                                                               
fisheries resources of the state.                                                                                               
     - MOVED HCR 10 OUT OF COMMITTEE                                                                                            
PREVIOUS ACTION                                                                                                               
BILL: HB 130                                                                                                                  
SHORT TITLE:UNFAIR TRADE PRACTICES; ANTITRUST                                                                                   
SPONSOR(S): REPRESENTATIVE(S)WEYHRAUCH                                                                                          
Jrn-Date   Jrn-Page                     Action                                                                                  
02/26/03     0305       (H)        READ THE FIRST TIME -                                                                        
02/26/03     0305       (H)        FSH, JUD, FIN                                                                                
04/04/03                (H)        FSH AT 8:30 AM CAPITOL 124                                                                   
BILL: HCR 10                                                                                                                  
SHORT TITLE:RESTORATION OF RIPARIAN HABITAT                                                                                     
SPONSOR(S): REPRESENTATIVE(S)WOLF                                                                                               
Jrn-Date   Jrn-Page                     Action                                                                                  
02/28/03     0338       (H)        READ THE FIRST TIME -                                                                        
02/28/03     0338       (H)        FSH, RES                                                                                     
03/17/03     0565       (H)        COSPONSOR(S): FOSTER                                                                         
03/19/03     0593       (H)        COSPONSOR(S): LYNN, MEYER                                                                    
03/26/03     0652       (H)        COSPONSOR(S): HEINZE,                                                                        
04/02/03     0749       (H)        COSPONSOR(S): MORGAN                                                                         
04/04/03     0798       (H)        COSPONSOR(S): WILSON                                                                         
04/04/03                (H)        FSH AT 8:30 AM CAPITOL 124                                                                   
WITNESS REGISTER                                                                                                              
REPRESENTATIVE BRUCE WEYHRAUCH                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented the sponsor statement for HB 130.                                                                 
CATIE BURSCH, Bristol Bay setnetter                                                                                             
Homer, Alaska                                                                                                                   
POSITION STATEMENT:  Testified on behalf of herself that she                                                                    
would support HB 130 if the amount was changed to 5 percent and                                                                 
was specified towards funding the marketing of wild salmon.                                                                     
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General                                                                             
Fair Business Practices Section                                                                                                 
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided information relating to HB 130.                                                                   
REPRESENTATIVE KELLY WOLF                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented the sponsor statement for HCR 10.                                                                
ACTION NARRATIVE                                                                                                              
TAPE 03-23, SIDE A                                                                                                            
Number 0001                                                                                                                     
CHAIR  PAUL   SEATON  called  the  House   Special  Committee  on                                                             
Fisheries meeting to order at  8:35 a.m.  Representatives Seaton,                                                               
Wilson, Ogg, Samuels, and Guttenberg  were present at the call to                                                               
order.   Representative Berkowitz arrived  as the meeting  was in                                                               
HB 130-UNFAIR TRADE PRACTICES; ANTITRUST                                                                                      
[Contains discussion pertaining to HB 131]                                                                                      
CHAIR SEATON announced that the  first order of business would be                                                               
HOUSE BILL  NO. 130, "An  Act relating  to the award  of damages,                                                               
costs,  and  attorney  fees  in   an  action  against  a  seafood                                                               
processor  under certain  state laws  that prohibit  unfair trade                                                               
practices,   monopolies,  and   restraints   of  trade;   stating                                                               
legislative intent  regarding the appropriation and  use of money                                                               
obtained by  the state from  the operation of this  Act; amending                                                               
Rules  54, 58,  and  82,  Alaska Rules  of  Civil Procedure;  and                                                               
providing  for  an effective  date."  [In  committee packets  was                                                               
Version I, labeled 23-LS0484\I, Bannister, 4/3/03.]                                                                             
Number 0189                                                                                                                     
REPRESENTATIVE   BRUCE  WEYHRAUCH,   Alaska  State   Legislature,                                                               
speaking as the sponsor of HB  130, testified that the bill takes                                                               
into  consideration short-term  concerns  as  well as  addressing                                                               
longer-range effective public  policy.  He said  that although HB
130 was  intended to  be a  companion bill to  HB 131,  the bills                                                               
need to be looked at and  considered separately.  He informed the                                                               
committee  that HB  131 would  appropriate $40  million from  the                                                               
general  fund to  ASMI [Alaska  Seafood Marketing  Institute] for                                                               
the  purpose of  marketing wild  salmon,  whereas HB  130 is  the                                                               
mechanism that provides financing to ASMI.                                                                                      
Number 0289                                                                                                                     
REPRESENTATIVE WEYHRAUCH told the  committee that the Alaska tort                                                               
reform statute,  used as a  model for HB  130, was passed  by the                                                               
legislature in 1997, and requires that  50 percent of an award of                                                               
punitive damages be paid to the  State of Alaska, to be deposited                                                               
in the general fund.                                                                                                            
Number 0346                                                                                                                     
REPRESENTATIVE WEYHRAUCH said that the  mechanism in HB 130 would                                                               
require 15  percent or $40  million - whichever  is less -  to be                                                               
paid to the  general fund, anytime damages are  awarded under the                                                               
state  antitrust  statute;  the state's  antitrust  statutes  are                                                               
based on  the federal antitrust  statutes under the  Sherman Act.                                                               
Under Alaskan antitrust  statute, if a party  alleges damages for                                                               
collusion, monopoly, or unfair trade  practices and if they prove                                                               
their complaint,  then they  would get  those damages;  under the                                                               
antitrust statute, damages are automatically treble, he said.                                                                   
Number 0450                                                                                                                     
REPRESENTATIVE WEYHRAUCH explained that  the punitive damages are                                                               
built into  the antitrust statute  in the form of  treble damages                                                               
for  any  party  aggrieved  under  those  unfair  trade  practice                                                               
statutes;   the    statutes   also    address   "prevailing-party                                                               
litigation"  and the  fees that  are involved.   He  informed the                                                               
committee that  there is  no jury decision  on how  much punitive                                                               
damages should  be awarded; the  damages are  already calculated.                                                               
There's  a  treble damage  award  under  the antitrust  statutes,                                                               
which are the same statutes referred to  in HB 130.  He said that                                                               
this  is different  from  the  tort statute  or  the tort  reform                                                               
statute, which requires  a punitive damage claim.   That punitive                                                               
damage  claim is  determined by  a  judge as  to whether  there's                                                               
clear  and  convincing evidence  of  outrageous  conduct, and  if                                                               
there is,  then there's a  trial in which the  defendant's wealth                                                               
is brought in and a jury  or the "definer of fact" determines how                                                               
much punitive damages should be awarded.                                                                                        
Number 0520                                                                                                                     
REPRESENTATIVE   WEYHRAUCH  spoke   to  the   proposed  committee                                                               
substitute (CS), saying that the  intent language pertains to any                                                               
funds under  Section 1; that  is, any funds obtained  through the                                                               
mechanism of HB 130 would go to  ASMI.  He said that because [the                                                               
State of]  Alaska cannot  dedicate funds,  this action  of intent                                                               
indicates to  the legislature that  a political act will  have to                                                               
be taken  later - by the  legislature - to appropriate  any funds                                                               
received  in  this  manner.     The  language  doesn't  bind  the                                                               
legislature;  it's  just  a signal  of  intent.    Representative                                                               
Weyhrauch  stated  that the  intent  is  to market  wild  salmon,                                                               
stressing that  Alaska has a  significant problem  with marketing                                                               
wild salmon  in light of  the $65-to-$80 million  budget utilized                                                               
by Chile,  New Zealand, Scotland,  Norway, and  Newfoundland, for                                                               
example, which raise  farmed salmon.  Alaska's  efforts to market                                                               
wild  salmon   are  miniscule   compared  with   those  worldwide                                                               
marketing efforts;  there are salmon fishermen  losing their jobs                                                               
and businesses, he emphasized.                                                                                                  
Number 0605                                                                                                                     
REPRESENTATIVE  WEYHRAUCH  said  that  there  must  be  marketing                                                               
efforts  that   match  the   worldwide  competition   for  salmon                                                               
products.   He explained  that the proposed  CS differs  from the                                                               
original  bill  in  that,  rather   than  targeting  the  seafood                                                               
processing   industry,  the   bill  and   its  provisions   apply                                                               
universally, to all persons and entities.                                                                                       
Number 0702                                                                                                                     
REPRESENTATIVE  WEYHRAUCH  said   that  in  retrospect,  removing                                                               
Section 1 would remove the  intent language that has monies going                                                               
to  ASMI;  if the  bill  were  introduced  as such,  there  would                                                               
probably be no  reason for referral to this  committee because it                                                               
would go  to the House  Judiciary Standing Committee and  then on                                                               
to  a  House Finance  Committee  referral.   But,  he  continued,                                                               
Section 1  remains, indicating that the  [House Special Committee                                                               
on Fisheries]  will make  a policy decision  as to  whether there                                                               
will be funding to market the state's wild salmon.                                                                              
Number 0768                                                                                                                     
REPRESENTATIVE  WILSON referenced  the  award  being tripled  and                                                               
asked  if the  15 percent  was, in  fact, only  5 percent  of the                                                               
original award.                                                                                                                 
REPRESENTATIVE WEYHRAUCH said that if  there was a $50 award that                                                               
was trebled  to $150,  15 percent  of that  award or  $40 million                                                               
would be taken, whichever amount was less.                                                                                      
Number 0830                                                                                                                     
REPRESENTATIVE  OGG  asked how  many  antitrust  suits have  been                                                               
filed in Alaska under the state statutes in the last 20 years.                                                                  
REPRESENTATIVE WEYHRAUCH  replied that plenty of  antitrust suits                                                               
have been  filed.  He said  that [Alaska Judicial Council]  - the                                                               
organization associated  with the  court system that  keeps track                                                               
of settlements and  outcomes of cases - has  only kept statistics                                                               
for the past five  or six years.  He stated that it  is up to the                                                               
parties to report  such information to the court  system and that                                                               
he hasn't found  a centralized database indicating  the number of                                                               
cases that have been filed  alleging antitrust, although he knows                                                               
that a lot  of cases do get  filed.  He suggested  that there are                                                               
probably a handful of cases that  eventually go to trial and that                                                               
have been reported under these statutes.                                                                                        
REPRESENTATIVE OGG inquired as to the specific amount involved.                                                                 
REPRESENTATIVE WEYHRAUCH responded that  the amount was dependent                                                               
upon the  allegations and the  complaint.   He said, "I  have not                                                               
seen  the statistics,  and  they haven't  been  keeping them  for                                                               
twenty years."                                                                                                                  
REPRESENTATIVE OGG  replied that gathering the  exact information                                                               
for five or seven years - or  for whatever amount of time - would                                                               
be helpful  to the committee.   He then  inquired as to  how many                                                               
antitrust suits are currently in process.                                                                                       
REPRESENTATIVE WEYHRAUCH  responded that  until a case  is either                                                               
dismissed or  settled, the number  of cases that are  in progress                                                               
is unknown.   He mentioned the  one case that has  received a lot                                                               
of  publicity  is  the  Bristol   Bay  antitrust  [class  action]                                                               
lawsuit, but said that no other  case gets reported as heavily as                                                               
that one.   He added that there  may be plenty of  cases, "but we                                                               
don't know about them."                                                                                                         
REPRESENTATIVE OGG said he thought  there would be records in the                                                               
courts  of  cases  that  have  been  filed  under  the  antitrust                                                               
REPRESENTATIVE WEYHRAUCH  said the  database in the  court system                                                               
provides the name of the party and  the case number.  He told the                                                               
committee that  until the case  is reported as either  settled or                                                               
dismissed -  and then reported  to the [Alaska  Judicial Council]                                                               
or to  the State  of Alaska  court system -  it is  not recorded;                                                               
it's in a centralized database.                                                                                                 
Number 1045                                                                                                                     
CHAIR  SEATON referred  to  page 2,  line 2,  AS  45.50.471 -  AS                                                               
45.50.561, commenting  that the analysis in  the committee packet                                                               
refers  to  AS  45.50.576,  which is  a  different  section,  and                                                               
therefore lies outside of those parameters.                                                                                     
REPRESENTATIVE WEYHRAUCH  responded that the  reference pertained                                                               
to  [Sec.  45.50.539] and  also  that  Section 3  [AS  45.50.576]                                                               
referenced  a  new  statute  that   repeated  the  amount  to  be                                                               
CHAIR SEATON  then asked if  page 2, line  2, was similar  to [AS                                                               
REPRESENTATIVE WEYHRAUCH confirmed that this was so.                                                                            
Number 1175                                                                                                                     
REPRESENTATIVE  GUTTENBERG said  that a  troubling aspect  of the                                                               
bill was that  of limiting the antitrust cases to  fisheries.  He                                                               
gave  the example  of people  in Fairbanks  reviewing gas-pricing                                                               
cases; if  those prevailed or  if there were some  findings, then                                                               
those monies would then  go to ASMI.  In looking  at HB 131, with                                                               
a central  deposit of $40  million, he asked  if this was  a one-                                                               
time  grant or,  as  an ongoing  program, would  be  funded on  a                                                               
yearly basis.                                                                                                                   
REPRESENTATIVE  WEYHRAUCH   said  he  saw  this   as  a  one-time                                                               
appropriation.    He  said that  the  legislature  and  political                                                               
pressure would need to be  "brought to bear" to determine whether                                                               
the legislature  would even initially  pass HB 131.   He repeated                                                               
that  the legislature  would have  no  obligation to  appropriate                                                               
money to ASMI under this bill,  the companion bill, or any future                                                               
bill.  It  would be up to the lobbying  efforts of the commercial                                                               
fishing  industry to  say, "The  legislature made  a deal  and it                                                               
intended to  appropriate this money out."   If there were  oil or                                                               
gas interests in a district that  required a portion of the funds                                                               
received under  this mechanism,  then that  rationalization would                                                               
be applied  to obtain a  portion of  the money.   The legislature                                                               
would not be bound by this intent language at all.                                                                              
REPRESENTATIVE  WILSON  suggested  that   since  this  was  being                                                               
referred to  Judiciary, the decision  that currently needs  to be                                                               
made is whether  the money would go  to ASMI, and if  so, to then                                                               
pass  the  bill and  allow  the  next  committee of  referral  to                                                               
address the bill in more detail.                                                                                                
REPRESENTATIVE WEYHRAUCH explained that  the bill was referred to                                                               
this  committee   because  seafood  processors   were  originally                                                               
targeted, although  that has since  been deleted in  the proposed                                                               
CS.  The  referral was also due to the  intent language; it's the                                                               
policy  decision  of  the  committee  to  determine  whether  the                                                               
intention is for [the  money] to go to ASMI or not.   He said his                                                               
feeling is  that money  isn't found  and that  industry generates                                                               
money, or else "we have to tax."                                                                                                
Number 1350                                                                                                                     
CHAIR SEATON  asked if the  retroactivity clause on page  3 [line                                                               
2] included the Bristol Bay lawsuit.                                                                                            
REPRESENTATIVE WEYHRAUCH  confirmed that this would  be included,                                                               
adding that this policy decision also needs to be made.                                                                         
Number 1415                                                                                                                     
CATIE BURSCH,  Bristol Bay setnetter,  said she  was representing                                                               
herself and  commended Representative Weyhrauch for  taking steps                                                               
to  help the  wild  salmon  industry in  Alaska.    She said  her                                                               
understanding was that  ASMI markets all Alaskan  seafood and she                                                               
doesn't think  that ASMI could  target its money  specifically to                                                               
just salmon.   She said her  other concern was that  although the                                                               
intent was to  market wild salmon, funds might be  used for other                                                               
things such  as fish farming,  should it become legal  in Alaska,                                                               
since  there was  nothing in  place to  stop something  like that                                                               
from happening.                                                                                                                 
Number 1609                                                                                                                     
MS. BURSCH  objected to  a perception of  the Bristol  Bay price-                                                               
fixing suit  as "hitting the  lottery," resulting in  the state's                                                               
receiving money.   She said, if the prices were  fixed, then that                                                               
money had  been worked for and  should have been paid  years ago.                                                               
Ms. Bursch  said she  wondered whether the  state should  be more                                                               
vigilant regarding  price fixing in order  to protect industries.                                                               
She also expressed concern over  the large increase of money that                                                               
ASMI would  receive, saying  that the  organization might  not be                                                               
prepared to handle  that amount of money,  and inefficiencies may                                                               
be the result.  She concluded by  saying that if the amount was 5                                                               
percent  and could  be  targeted  specifically towards  marketing                                                               
wild salmon, she would be in support  of HB 130.  She stated that                                                               
it  was important  to protect  the  wild salmon  industry in  the                                                               
future and to keep the fish farms out of Alaska.                                                                                
Number 1757                                                                                                                     
CLYDE  (ED)  SNIFFEN,  JR.,   Assistant  Attorney  General,  Fair                                                               
Business   Practices   Section,   Civil   Division   (Anchorage),                                                               
Department  of  Law,  said  he   was  primarily  responsible  for                                                               
enforcing  Alaska's consumer  protection and  antitrust statutes.                                                               
He referred  to treble damages  and clarified that  those damages                                                               
are not regularly  awarded in antitrust suits.   The statute only                                                               
allows  an award  of treble  damages if  one can  prove that  the                                                               
conduct  by the  violator was  willful.   He  explained that  the                                                               
willfulness requirement  is fairly onerous  and it must  be shown                                                               
that someone acted intentionally or  willfully to violate the law                                                               
before treble  damages are awarded.   He noted that  this feature                                                               
in  the antitrust  statute is  very different  from the  punitive                                                               
damages tort reform that Representative Weyhrauch spoke about.                                                                  
Number 1838                                                                                                                     
MR. SNIFFEN  said that  another portion of  the bill  that causes                                                               
concern to the  state is that the state itself  would be included                                                               
within these  provisions.  He  said that Alaska joins  with other                                                               
states   as   well   as  pharmaceutical   companies,   automobile                                                               
manufacturers,  and  others  who   are  sued  for  violations  of                                                               
antitrust  statute.    Sometimes  these result  in  judgments  or                                                               
settlements and the money is  designated for use towards consumer                                                               
protection,  education, and  enforcement.   He suggested  that it                                                               
would be  desirable to carve those  types of actions out  of this                                                               
bill  so that  when the  state is  actually bringing  the action,                                                               
monies recovered  by the  state would  not be  subject to  the 15                                                               
percent, or $40 million, disgorgement to ASMI.                                                                                  
Number 1884                                                                                                                     
MR.  SNIFFEN  said  that he  doubted  the  constitutionality  and                                                               
enforceability  of the  retroactivity  provisions of  HB 130  and                                                               
stated that it would be tricky  to use this vehicle for recovery,                                                               
if there is  one, in the Bristol  Bay lawsuit.  In  response to a                                                               
question from Chair  Seaton, he confirmed that the  15 percent or                                                               
$40 million would  apply for any judgment, whether  or not treble                                                               
damages were awarded.                                                                                                           
REPRESENTATIVE  OGG  repeated  the questions  he  had  previously                                                               
asked of Representative  Weyhrauch as to the  number of antitrust                                                               
lawsuits that have been filed over the past 20 years.                                                                           
MR. SNIFFEN  reported that he  had been  in his position  for the                                                               
past  three years  and  during  that time,  the  state had  filed                                                               
approximately eight  antitrust suits,  most of which  were multi-                                                               
state litigation  claims.  He said  he didn't know if  his office                                                               
had filed  more than approximately  one dozen  antitrust lawsuits                                                               
in  the past  20 years,  but  he does  know that  in the  private                                                               
sector, he suspects  that there are a fair number  of suits filed                                                               
that have antitrust  allegations contained within them.   He said                                                               
that this bill  doesn't have a mechanism  that requires reporting                                                               
of those specific  cases, other than the current  court system of                                                               
tracking  settlements.   He said  that perhaps  there could  be a                                                               
different way of tracking these cases, in the future.                                                                           
REPRESENTATIVE  OGG asked  what the  total amount  of the  awards                                                               
might be.                                                                                                                       
Number 2065                                                                                                                     
MR.  SNIFFEN  replied  that in  a  fairly  recent  pharmaceutical                                                               
price-fixing  case that  involved  the state,  about $300,000  in                                                               
damages  was recovered.   In  a different  case filed  against an                                                               
auto manufacturer several years  ago, $0.5 million was recovered.                                                               
In three pending antitrust lawsuits,  currently in various stages                                                               
of settlement involving  national companies, pharmaceuticals, and                                                               
patent  issues,  the expected  recovery  is  in the  $200,000-to-                                                               
$400,000  range.   He summarized  that in  the past  three years,                                                               
recovery in antitrust cases has approximated $700,000.                                                                          
Number 2120                                                                                                                     
REPRESENTATIVE BERKOWITZ noted that most  of the larger cases are                                                               
class action  [suits]; he referenced  the language, "if  a person                                                               
receives  an award,  the court  shall require  15 percent  or $40                                                               
million,"  and  asked   how  a  class  action   relates  to  that                                                               
provision.   He said if there  is a very large  class action, the                                                               
aggregate amount  that the state  could collect would  exceed $40                                                               
MR. SNIFFEN  replied that this  would depend upon  the definition                                                               
of  "person" in the bill.   For example, if "person" included the                                                               
State of  Alaska, then whatever  damages were recovered  would be                                                               
subject to  the 15 percent or  the $40 million payout.   He said,                                                               
"Most of the cases we bring,  we bring in a parens patriae action                                                               
on behalf of  consumers in Alaska; ... there  are also additional                                                               
private plaintiffs  who have put  together classes of  people who                                                               
opt  out  of   the  state's  representation  and   choose  to  be                                                               
represented by private  parties."  He said that  he suspects that                                                               
those persons would  be subject to this rule,  individually.  Mr.                                                               
Sniffen  said  that "persons"  could  be  defined to  mean  every                                                               
individual person,  regardless whether  he/she was  (indisc.) ...                                                               
received an award of damages.                                                                                                   
Number 2205                                                                                                                     
REPRESENTATIVE SAMUELS  asked if  the 15  percent applied  to any                                                               
judgment or applied only if the triple damages were awarded.                                                                    
REPRESENTATIVE  WEYHRAUCH  responded  that  it  is  an  award  of                                                               
CHAIR SEATON said the main  question before the committee was the                                                               
intent language  and that  at least  from the  attorney general's                                                               
opinion, it sounded like this would  not apply to the Bristol Bay                                                               
REPRESENTATIVE WEYHRAUCH  said he  had previously  indicated that                                                               
he wanted  to work  with Representative  Ogg, in  House Judiciary                                                               
Standing  Committee, on  the  retroactive  effective date,  since                                                               
that was an  expressed concern.  He said this  was a legal issue,                                                               
and that although  legislators could discuss it,  it would remain                                                               
unclear until receiving the judge's opinion.                                                                                    
Number 2309                                                                                                                     
REPRESENTATIVE SAMUELS  mentioned that  he didn't think  the bill                                                               
should  be  moved  out  of committee  with  the  intent  language                                                               
specifying that all of the money  would be going to ASMI; he said                                                               
that he had  difficulty with the intent language  in the proposed                                                               
REPRESENTATIVE  WEYHRAUCH  pointed out  that  this  was the  same                                                               
language that was in the original bill.                                                                                         
REPRESENTATIVE  SAMUELS  said  the   original  bill  was  tighter                                                               
regarding the  seafood processors  and that  in the  proposed CS,                                                               
the gate had "been opened up."                                                                                                  
CHAIR  SEATON   asked  if   Representative  Samuels   was  having                                                               
difficulty  with the  specification  that 15  percent of  damages                                                               
from, for example, pharmaceutical-  or car-related lawsuits would                                                               
be going towards ASMI.                                                                                                          
REPRESENTATIVE SAMUELS  confirmed that  he was  having difficulty                                                               
with this.                                                                                                                      
Number 2377                                                                                                                     
REPRESENTATIVE   WILSON  asked   for  further   clarification  of                                                               
Representative Samuels' concern.                                                                                                
Number 2384                                                                                                                     
REPRESENTATIVE  WEYHRAUCH explained  his  understanding that  the                                                               
intent of the  original bill had indicated that if  there were to                                                               
be treble damages  against a seafood processor, if  harm had been                                                               
done,  then monies  would go  to the  general fund  and then,  in                                                               
turn, would  be appropriated  to ASMI.   The proposed  CS removes                                                               
the  seafood processor  as the  specific party  in the  antitrust                                                               
case.  He  said he thought that Representative  Samuels wanted to                                                               
remove the specific appropriation to  ASMI so that money could be                                                               
applicable to any program.                                                                                                      
REPRESENTATIVE  SAMUELS confirmed  that this  was the  case.   He                                                               
asked, if a pharmaceutical company  or the oil industry was being                                                               
sued, why that money would necessarily go to ASMI.                                                                              
REPRESENTATIVE  WILSON  asked  if  the  language  would  be  less                                                               
objectionable if it focused on the seafood industry.                                                                            
REPRESENTATIVE SAMUELS noted that in  the original bill there was                                                               
a connection, but  that the proposed CS is basically  a tort bill                                                               
and has nothing to do with the fishing industry.                                                                                
REPRESENTATIVE WILSON asked  if the desire was to  tighten up the                                                               
bill  so that  it pertained  to the  seafood industry  or if  the                                                               
desire was that it "never go to ASMI."                                                                                          
Number 2468                                                                                                                     
REPRESENTATIVE SAMUELS [offered  Amendment 1].  He  said he would                                                               
like to delete [page 1, lines 9-11].                                                                                            
REPRESENTATIVE SAMUELS  explained that he'd also  like to discuss                                                               
in the House Judiciary Standing Committee  what to do with the 15                                                               
percent  going  to the  state.    He  commented  on the  lack  of                                                               
connection regarding  punitive damages,  brought up  the question                                                               
of what  to pick as the  recipient of the funds,  and asked, "Why                                                               
pick ASMI?"                                                                                                                     
Number 2500                                                                                                                     
REPRESENTATIVE  BERKOWITZ  commented  that these  treble  damages                                                               
were  properly characterized  as punitive  damages and  that with                                                               
these kinds  of damages,  the underlying  theory is  that there's                                                               
been an injury  to the state or  to the people of the  state.  He                                                               
said  he thought  there was  a  very strong  argument, since  the                                                               
state would  have been injured,  that the  state ought to  be the                                                               
beneficiary.   He said, "But  it seems to  me that the  theory is                                                               
that  if  the  state  is   injured,  the  state  should  recover,                                                               
particularly in the area where it  was injured."  He offered that                                                               
the problem seemed to be a  "lack of nexus, as some lawyers might                                                               
CHAIR  SEATON  questioned  whether testimony  from  the  attorney                                                               
general indicated that this didn't  apply only to treble damages,                                                               
but would apply to any damages.                                                                                                 
REPRESENTATIVE  BERKOWITZ  agreed that  in  Section  2 there  was                                                               
applicability to all damages; he  said this issue was problematic                                                               
and that  he expected  it would be  addressed in  House Judiciary                                                               
Standing  Committee because  it's  conceivable  that damages  are                                                               
acquired that are  not the full extent of damages  and would then                                                               
be required to (indisc.).                                                                                                       
Number 2560                                                                                                                     
CHAIR  SEATON  pointed out  that  the  committee was  looking  at                                                               
whether  the desire  was to  focus HB  130 on  "having a  lawsuit                                                               
against  a  seafood  processor" or  to  remove  that  legislative                                                               
intent, which would  mean that the bill would have  nothing to do                                                               
with fisheries.                                                                                                                 
REPRESENTATIVE WEYHRAUCH referred to this  as being a policy call                                                               
and highlighted the issue as follows:                                                                                           
     Number one,  do you  want to  adopt the  original bill,                                                                    
     which has as its formula  for collecting damages - only                                                                    
     against   seafood   processors    -   in   which   case                                                                    
     Representative  Samuels  would   leave  in  Section  1?                                                                    
     That's the first issue.   If you adopt the proposed CS,                                                                    
     which removes  seafood processors as a  target, then do                                                                    
     you also remove Section 1,  which is the intent to have                                                                    
     the  money  appropriated to  ASMI,  and  then have  the                                                                    
     appropriation debate take place  in a separate context?                                                                    
     This is only  a financing, a funding  mechanism for the                                                                    
     state.   The policy  question is, do  you want  to keep                                                                    
     seafood  processors in  the bill,  and therefore  [the]                                                                    
     legislative  intent,  or  do  you  want  to  adopt  the                                                                    
     [proposed  CS],  in  which case,  Section  1  would  be                                                                    
REPRESENTATIVE  BERKOWITZ  offered  that  the  underlying  policy                                                               
issue is how to fund ASMI.                                                                                                      
Number 2707                                                                                                                     
REPRESENTATIVE  WEYHRAUCH said  that fundamentally  HB 130  is an                                                               
ASMI-funding bill  to market wild  salmon because wild  salmon is                                                               
not  being   sufficiently  marketed  in  Alaska;   the  financing                                                               
mechanism is the central concern.                                                                                               
CHAIR  SEATON voiced  appreciation of  that concern,  adding that                                                               
there was  an attempt being  made to  balance [the needs  of] the                                                               
seafood industry and the [funding] mechanism.                                                                                   
REPRESENTATIVE BERKOWITZ  asked what the current  ASMI budget was                                                               
and what amount of funding was needed.                                                                                          
REPRESENTATIVE WEYHRAUCH said  that if ASMI was  going to compete                                                               
on a worldwide basis, matching  dollar for dollar, the need would                                                               
be $70 million.                                                                                                                 
REPRESENTATIVE  BERKOWITZ asked  approximately  what the  current                                                               
revenues were.                                                                                                                  
REPRESENTATIVE WEYHRAUCH  said his  understanding was  that there                                                               
was not  a general fund appropriation  to ASMI.  He  said someone                                                               
else could  address the  issue of revenue  pertaining to  taxes -                                                               
such as the raw fish tax and federal taxes.                                                                                     
REPRESENTATIVE   BERKOWITZ  said   something  successfully   done                                                               
pertaining  to  power cost  equalization  was  "a fund  that  was                                                               
created from which  a revenue stream helped to ensure  a level of                                                               
funding."   He  then  added, "The  minority  doesn't control  the                                                               
Constitutional  Budget Reserve  (CBR),  but it  might  be a  good                                                               
avenue for creating that kind of fund, at least in the House."                                                                  
REPRESENTATIVE WILSON  reiterated that the salmon  industry is in                                                               
dire trouble and  that ASMI doesn't have the funds  to offer much                                                               
assistance; she  said she thought  it was important to  help with                                                               
the situation.                                                                                                                  
Number 2835                                                                                                                     
REPRESENTATIVE SAMUELS  offered his  belief that the  proposed CS                                                               
was before  the committee and  said the intention of  Amendment 1                                                               
was to eliminate Section 1.                                                                                                     
CHAIR SEATON  clarified that this  would eliminate the  intent of                                                               
the bill to direct funds towards ASMI.                                                                                          
Number 2850                                                                                                                     
REPRESENTATIVE WILSON objected.                                                                                                 
REPRESENTATIVE SAMUELS  said he  was back  to the  same argument,                                                               
which is,  if the  oil industry  was sued,  why wouldn't  that be                                                               
directed  to  education, the  state  troopers,  nurses, or  other                                                               
entities ...  "why pick  just one";  he said  he didn't  "get the                                                               
connection" [to ASMI].                                                                                                          
REPRESENTATIVE WILSON suggested fixing the  bill in order to make                                                               
that connection.                                                                                                                
The committee took an at-ease from 9:25 a.m. to 9:28 a.m.                                                                       
Number 2899                                                                                                                     
REPRESENTATIVE SAMUELS withdrew Amendment 1.                                                                                    
REPRESENTATIVE SAMUELS  moved to rescind actions  in adopting the                                                               
proposed CS, which  would thereby put HB 130,  the original bill,                                                               
back on the table.                                                                                                              
Number 2930                                                                                                                     
REPRESENTATIVE  OGG objected.    He said  that  in speaking  with                                                               
Representative  Weyhrauch  about the  bill  and  in listening  to                                                               
testimony today from  Ed Sniffen, in particular,  he believed the                                                               
retroactivity  clause had  some  constitutional  problems and  he                                                               
would rather  have the drafter  come up with another  proposed CS                                                               
to address those problems.  He  said another problem was that the                                                               
way  the bill  is drafted,  it doesn't  solely attack  the triple                                                               
damages, which, although  they are akin to  punitive damages, are                                                               
not  the  same  thing.    He  said  the  state  would  be  taking                                                               
compensatory   damages  from   people  who   had  actually   lost                                                               
something, and  he didn't agree  with that  aspect.  He  said the                                                               
basis  of the  bill and  the companion  bill was  focused on  one                                                               
particular  suit, so  the retroactivity  date was  bothersome and                                                               
didn't make the state look good.                                                                                                
TAPE 03-23, SIDE B                                                                                                            
CHAIR SEATON  asked if Representative  Ogg wanted to  offer these                                                               
as amendments.                                                                                                                  
REPRESENTATIVE OGG  said he'd be  happy to  do so, but  wanted to                                                               
give the sponsor the opportunity to make those corrections.                                                                     
REPRESENTATIVE WEYHRAUCH  said he'd  worked on  the retroactivity                                                               
date and  that it  was included  to the  extent permitted  by the                                                               
state and federal constitutions.                                                                                                
CHAIR SEATON said  that Representative Ogg's intent  was a policy                                                               
concern  rather than  a legal  concern, so  the question  was not                                                               
whether the  attorney general or [Legislative  Legal and Research                                                               
Services] would prevail in the end.                                                                                             
REPRESENTATIVE  WEYHRAUCH  asked if  this  meant  the removal  of                                                               
Section 6.                                                                                                                      
CHAIR SEATON  clarified that  there was  an objection  to putting                                                               
HB 130  back on  the  table  in its  original  form; the  current                                                               
discussion involved  whether, by removing retroactivity  and also                                                               
referencing this to  triple damages, the objection  would then be                                                               
REPRESENTATIVE  OGG said  that  conceptually he  did  not have  a                                                               
problem  offering amendments  that would  strictly apply  this to                                                               
triple damages,  and second, that the  retroactivity clause would                                                               
not be  applicable, thereby preventing  this bill  from affecting                                                               
any present lawsuits that are filed or ongoing.                                                                                 
REPRESENTATIVE WILSON  asked if  the motion was  to just  get the                                                               
bill before the committee.                                                                                                      
CHAIR SEATON  clarified that  there was  an objection  to putting                                                               
the [original]  bill on  the table,  and that  Representative Ogg                                                               
was explaining his objections.                                                                                                  
REPRESENTATIVE  SAMUELS  agreed  that  the state  should  not  be                                                               
taking "a piece of the pie" unless the damages were tripled.                                                                    
Number 2758                                                                                                                     
REPRESENTATIVE  WEYHRAUCH   stated  what  he  thought   were  the                                                               
conceptual  amendments.   He  said  that the  motion  is to  have                                                               
HB 130  before the  committee and  that Conceptual  Amendment [2]                                                               
deletes Section  6, whereas Conceptual  Amendment [3]  allows for                                                               
the damages, the portion paid as  damages, to be the treble award                                                               
of damages, not the compensatory  award.  [Conceptual Amendment 3                                                               
adds  the language  "of  the  amount of  the  award that  exceeds                                                               
actual  damages" to  Section 3,  subsection (c),  after the  word                                                               
"less".]  He told the committee  he was fine with the adoption of                                                               
these two conceptual amendments.                                                                                                
Number 2730                                                                                                                     
REPRESENTATIVE OGG  stated that with the  inclusion of Conceptual                                                               
Amendments [2 and 3], he was withdrawing his objection.                                                                         
CHAIR SEATON clarified that HB  130 [rather than the proposed CS]                                                               
was  before the  committee, with  the sponsor  agreeing with  two                                                               
conceptual  amendments.   He  restated  that  this would  be  the                                                               
removal of  Section 6, and  that the  damages would refer  to the                                                               
treble-damage portion relating to the compensatory damages.                                                                     
Number 2692                                                                                                                     
REPRESENTATIVE  WILSON objected  for  discussion  purposes.   She                                                               
said  it  was   important  to  include  "triple"   to  make  sure                                                               
fishermen know  that the  intent isn't  to get  fishermen's money                                                               
that is "due  them."  She said,  if it is ensured  that the state                                                               
would take  part of  it only  if it  is tripled,  fishermen would                                                               
realize that state isn't trying to "get their money."                                                                           
REPRESENTATIVE WILSON then withdrew her objection.                                                                              
Number 2674                                                                                                                     
REPRESENTATIVE WILSON moved  to report HB 130, as  amended out of                                                               
committee with  individual recommendations [and  the accompanying                                                               
zero fiscal note].   There being no objection,  CSHB 130(FSH) was                                                               
reported from the House Special Committee on Fisheries.                                                                         
HCR 10-RESTORATION OF RIPARIAN HABITAT                                                                                        
CHAIR SEATON announced  that the next order of  business would be                                                               
HOUSE CONCURRENT  RESOLUTION NO.  10, Relating to  restoration of                                                               
riparian habitat that is vital  to the fisheries resources of the                                                               
Number 2558                                                                                                                     
REPRESENTATIVE KELLY WOLF, Alaska  State Legislature, speaking as                                                               
the sponsor  of HCR 10,  offered the historical  perspective that                                                               
in   the  early   1990s  habitat   wasn't  talked   about  within                                                               
communities or  in departments [as  it is  today].  He  said that                                                               
understanding the  importance of riparian habitat  has grown over                                                               
the past  8 to  10 years.   He  indicated that  HCR 10  asks that                                                               
state agencies, federal  agencies, communities, and organizations                                                               
understand  that the  fishery resource  is an  important part  of                                                               
Alaska's traditional consumptive use  and enjoyment, and provides                                                               
income to the  state, saying that HCR 10 asks  for recognition of                                                               
this via "working together."                                                                                                    
Number 2466                                                                                                                     
REPRESENTATIVE WOLF  said a key phrase  that he liked to  use was                                                               
"it's easier  to educate than it  is to regulate."   He said that                                                               
HCR  10  promotes  stewardship  through  communities  and  allows                                                               
agencies  - federal,  state, municipalities,  and  boroughs -  to                                                               
expand their  ability to  protect riparian  habitat for  all user                                                               
groups.   He explained  that this  resolution is  about promoting                                                               
agencies' understanding  that there are options  for partnerships                                                               
with community groups that would  bring in corporate funding, and                                                               
promote restoration and the protection of the riparian habitat.                                                                 
Number 2392                                                                                                                     
REPRESENTATIVE GUTTENBERG inquired  about the correlation between                                                               
HCR 10 and  Executive Order 107 (EO 107), saying  that HCR 10 was                                                               
based  on  healthy  habitat  and  fisheries,  while  EO  107  was                                                               
eliminating that program.                                                                                                       
Number 2350                                                                                                                     
REPRESENTATIVE  WOLF  replied that  EO  107  involved moving  the                                                               
Division of  Habitat and Restoration  from the  Alaska Department                                                               
of Fish  & Game  (ADF&G) to the  Department of  Natural Resources                                                               
(DNR), while HCR  10 was focused on agencies  working together to                                                               
raise the  awareness of the  importance of the  riparian habitat.                                                               
He noted  that the  governor has  acknowledged the  importance of                                                               
habitat and resources.   He said he would like to  keep HCR 10 as                                                               
far away from EO 107 as "China is from Alaska" or even further.                                                                 
Number 2300                                                                                                                     
REPRESENTATIVE  GUTTENBERG commented  that he  didn't know  if it                                                               
were possible [to separate the issues].                                                                                         
Number 2280                                                                                                                     
REPRESENTATIVE  WOLF asked  if  the committee  wanted  to view  a                                                               
portion  of a  videotaped  TV  program that  was  developed by  a                                                               
program that he [Representative Wolf] used  to run.  He said that                                                               
the  videotape   demonstrates  what  can  be   accomplished  from                                                               
cooperation and working together.                                                                                               
[The  committee watched  a few  minutes of  a videotape  entitled                                                               
"Bringing the Nation to Alaska."]                                                                                               
Number 2142                                                                                                                     
REPRESENTATIVE   WOLF  said   that   riparian  habitats   involve                                                               
partnerships, and  he explained that this  particular project was                                                               
done in  2001 as  part of the  "DOT Highway  Improvement Project"                                                               
and was done between mile 39  and 45 in Cooper Landing, involving                                                               
the development  of the gravel  pit as a  source of gravels.   He                                                               
said  the project  involved some  29  different agencies  working                                                               
together.  He  said the Youth Restoration Corps  was involved due                                                               
to  corporate   support  and  that  it   involved  137  sponsors,                                                               
nationwide.   There  were 84  teenagers from  around the  nation,                                                               
involving   10   states   including  Alaska   -   all   promoting                                                               
stewardship.   He added  that there was  no state  money involved                                                               
Number 2090                                                                                                                     
REPRESENTATIVE OGG moved  to report HCR 10 out  of committee with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
notes.   There being no objection,  HCR 10 was reported  from the                                                               
House Special Committee on Fisheries.                                                                                           
There being no  further business before the  committee, the House                                                               
Special  Committee   on  Fisheries   meeting  was   adjourned  at                                                               
9:50 a.m.                                                                                                                       

Document Name Date/Time Subjects