Legislature(2001 - 2002)

04/19/2002 02:00 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE JUDICIARY STANDING COMMITTEE                                                                             
                         April 19, 2002                                                                                         
                           2:00 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Norman Rokeberg, Chair                                                                                           
Representative Jeannette James                                                                                                  
Representative John Coghill                                                                                                     
Representative Kevin Meyer                                                                                                      
Representative Ethan Berkowitz                                                                                                  
Representative Albert Kookesh                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Scott Ogan, Vice Chair                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 472                                                                                                              
"An Act relating to persons who buy and sell secondhand articles                                                                
and to certain persons who lend money on secondhand articles."                                                                  
                                                                                                                                
     - MOVED CSHB 472(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 499                                                                                                              
"An Act relating to the sale, lease, exchange, or other                                                                         
disposition of business property and assets."                                                                                   
                                                                                                                                
     - MOVED CSHB 499(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 271                                                                                                              
"An Act relating to recovery of punitive damages resulting from                                                                 
an aviation accident; and providing for an effective date."                                                                     
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 489                                                                                                              
"An Act relating to cruelty to animals."                                                                                        
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 269                                                                                                              
"An Act establishing employment protections for certain                                                                         
employees in the aviation industry relating to safety issues."                                                                  
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 472                                                                                                                  
SHORT TITLE:PAWNBROKERS/SECONDHAND DEALERS                                                                                      
SPONSOR(S): REPRESENTATIVE(S)GREEN                                                                                              
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/19/02     2315       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/19/02     2315       (H)        L&C, JUD                                                                                     
03/04/02                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
03/04/02                (H)        Heard & Held                                                                                 
03/04/02                (H)        MINUTE(L&C)                                                                                  
04/01/02                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/01/02                (H)        Moved CSHB 472(L&C) Out of                                                                   
                                   Committee                                                                                    
04/01/02                (H)        MINUTE(L&C)                                                                                  
04/02/02     2752       (H)        L&C RPT CS(L&C) NT 5NR 1AM                                                                   
04/02/02     2752       (H)        NR: MEYER, HAYES, KOTT,                                                                      
                                   HALCRO,                                                                                      
04/02/02     2752       (H)        MURKOWSKI; AM: ROKEBERG                                                                      
04/02/02     2753       (H)        FN1: ZERO(DPS)                                                                               
04/03/02     2788       (H)        COSPONSOR(S): MCGUIRE                                                                        
04/05/02                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
04/05/02                (H)        Scheduled But Not Heard                                                                      
04/08/02     2840       (H)        COSPONSOR(S): MEYER                                                                          
04/10/02                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
04/10/02                (H)        Heard & Held                                                                                 
                                   MINUTE(JUD)                                                                                  
04/19/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 499                                                                                                                  
SHORT TITLE:DISPOSITION OF BUSINESS ASSETS                                                                                      
SPONSOR(S): JUDICIARY                                                                                                           
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/27/02     2407       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/27/02     2407       (H)        JUD                                                                                          
03/15/02                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
03/15/02                (H)        Heard & Held                                                                                 
03/15/02                (H)        MINUTE(JUD)                                                                                  
04/05/02                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
04/05/02                (H)        Heard & Held                                                                                 
                                   MINUTE(JUD)                                                                                  
04/17/02                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
04/17/02                (H)        Heard & Held                                                                                 
04/17/02                (H)        MINUTE(JUD)                                                                                  
04/19/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 271                                                                                                                  
SHORT TITLE:CAP ON AVIATION ACCIDENT PUNITIVE DAMAGES                                                                           
SPONSOR(S): LABOR & COMMERCE                                                                                                    
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
05/04/01     1532       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
05/04/01     1532       (H)        L&C, JUD                                                                                     
05/06/01     1617       (H)        PRIME SPONSOR CHANGED                                                                        
04/10/02                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/10/02                (H)        Moved CSHB 271(L&C) Out of                                                                   
                                   Committee                                                                                    
                                   MINUTE(L&C)                                                                                  
04/11/02     2881       (H)        L&C RPT CS(L&C) 2DP 2NR 3AM                                                                  
04/11/02     2881       (H)        DP: HAYES, HALCRO; NR:                                                                       
                                   CRAWFORD,                                                                                    
04/11/02     2881       (H)        MURKOWSKI; AM: ROKEBERG,                                                                     
                                   MEYER, KOTT                                                                                  
04/11/02     2881       (H)        FN1: ZERO(ADM)                                                                               
04/11/02     2881       (H)        FN2: ZERO(CED)                                                                               
04/19/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
                                                                                                                                
BILL: HB 489                                                                                                                  
SHORT TITLE:CRUELTY TO ANIMALS                                                                                                  
SPONSOR(S): REPRESENTATIVE(S)CHENAULT                                                                                           
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/19/02     2319       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/19/02     2319       (H)        JUD                                                                                          
02/22/02     2370       (H)        COSPONSOR(S): KOTT                                                                           
03/01/02     2450       (H)        COSPONSOR(S): CROFT                                                                          
03/06/02     2497       (H)        COSPONSOR(S): JAMES, FOSTER                                                                  
03/15/02                (H)        JUD AT 1:00 PM CAPITOL 120                                                                   
03/15/02                (H)        Heard & Held                                                                                 
03/15/02                (H)        MINUTE(JUD)                                                                                  
03/15/02     2564       (H)        COSPONSOR(S): LANCASTER                                                                      
03/20/02     2628       (H)        COSPONSOR(S) REMOVED: JAMES                                                                  
04/19/02                (H)        JUD AT 1:30 PM CAPITOL 120                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LAURA ACHEE, Staff                                                                                                              
to Representative Joe Green                                                                                                     
Alaska State Legislature                                                                                                        
Capitol Building, Room 403                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION  STATEMENT:   On behalf  of the  sponsor, Representative                                                               
Green,  provided  information  regarding the  proposed  committee                                                               
substitute (CS) for HB 472 and responded to questions.                                                                          
                                                                                                                                
HEATHER M. NOBREGA, Staff                                                                                                       
to Representative Norman Rokeberg                                                                                               
House Judiciary Standing Committee                                                                                              
Alaska State Legislature                                                                                                        
Capitol Building, Room 118                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION  STATEMENT:    Responded   to  questions  regarding  the                                                               
proposed committee substitute (CS) for HB 499.                                                                                  
                                                                                                                                
REPRESENTATIVE ANDREW HALCRO                                                                                                    
Alaska State Legislature                                                                                                        
Capitol Building, Room 414                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:   As  chair of  the subcommittee  on aviation                                                               
insurance, presented  HB 271,  which was  sponsored by  the House                                                               
Labor and Commerce Standing Committee.                                                                                          
                                                                                                                                
CHRISTOPHER KNIGHT, Staff                                                                                                       
to Representative Andrew Halcro                                                                                                 
Alaska State Legislature                                                                                                        
Capitol Building, Room 414                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Assisted with the presentation of HB 271.                                                                  
                                                                                                                                
KIP KNUDSON, President                                                                                                          
Alaska Air Carriers Association (AACA).                                                                                         
6160 Carl Brady Drive                                                                                                           
Anchorage, Alaska  99502                                                                                                        
POSITION STATEMENT:   Provided comments  during discussion  of HB                                                               
271 and responded to questions.                                                                                                 
                                                                                                                                
BOB LOHR, Director                                                                                                              
Division of Insurance                                                                                                           
Department of Community & Economic Development (DCED)                                                                           
3601 C Street, Suite 1324                                                                                                       
Anchorage, Alaska 99503-5948                                                                                                    
POSITION STATEMENT:   Provided comments  during discussion  of HB                                                               
271.                                                                                                                            
                                                                                                                                
SARAH McNAIR-GROVE, Actuary P/C                                                                                                 
Central Office                                                                                                                  
Division of Insurance                                                                                                           
Department of Community & Economic Development (DCED)                                                                           
PO Box 110805                                                                                                                   
Juneau, Alaska  99811-0805                                                                                                      
POSITION STATEMENT:  Responded to questions during discussion of                                                                
HB 271.                                                                                                                         
                                                                                                                                
JOHN L. GEORGE                                                                                                                  
3328 Fritz Cove Road                                                                                                            
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Provided comments during discussion of HB                                                                  
271.                                                                                                                            
                                                                                                                                
SHARALYN "SUE" WRIGHT, Staff                                                                                                    
to Representative Mike Chenault                                                                                                 
Alaska State Legislature                                                                                                        
Capitol Building, Room 432                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Presented HB 489 on behalf of the sponsor,                                                                 
Representative Chenault.                                                                                                        
                                                                                                                                
ETHEL CHRISTENSEN, Director                                                                                                     
Alaska Society for the Prevention of Cruelty to Animals (SPCA)                                                                  
549 West International Airport Road, SuiteB-2                                                                                   
Anchorage, Alaska  99518                                                                                                        
POSITION STATEMENT:  Testified in support of HB 489.                                                                            
                                                                                                                                
SHANNA ANDERSON; Animal Control Officer; Manager                                                                                
Valdez Animal Shelter                                                                                                           
City of Valdez                                                                                                                  
PO Box 307                                                                                                                      
Valdez, Alaska  99686                                                                                                           
POSITION STATEMENT:  Provided comments during discussion of HB                                                                  
489.                                                                                                                            
                                                                                                                                
BILL GODEK, Chief Animal Control Officer                                                                                        
City of Kenai                                                                                                                   
210 Fidalgo Avenue, Suite 200                                                                                                   
Kenai, Alaska  99611                                                                                                            
POSITION STATEMENT:  Testified in support of HB 489.                                                                            
                                                                                                                                
BRETT REID, Animal Control Assistant                                                                                            
City of Kenai                                                                                                                   
210 Fidalgo Avenue, Suite 200                                                                                                   
Kenai, Alaska  99611                                                                                                            
POSITION STATEMENT:  Testified in support of HB 489.                                                                            
                                                                                                                                
SUE CARTER                                                                                                                      
PO Box 212                                                                                                                      
Kenai, Alaska  99611                                                                                                            
POSITION STATEMENT:  Testified in support of HB 489.                                                                            
                                                                                                                                
ANNE CARPENETI, Assistant Attorney General                                                                                      
Legal Services Section-Juneau                                                                                                   
Criminal Division                                                                                                               
Department of Law (DOL)                                                                                                         
PO Box 110300                                                                                                                   
Juneau, Alaska  99811-0300                                                                                                      
POSITION  STATEMENT:   Testified  in  opposition  to HB  489  and                                                               
responded to questions.                                                                                                         
                                                                                                                                
CANDACE BROWER, Program Coordinator/Legislative Liaison                                                                         
Office of the Commissioner - Juneau                                                                                             
Department of Corrections (DOC)                                                                                                 
431 North Franklin Street, Suite 400                                                                                            
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:   Provided information during  the discussion                                                               
of HB 489.                                                                                                                      
                                                                                                                                
MARIE RILEY, Staff                                                                                                              
to Representative Mike Chenault                                                                                                 
Alaska State Legislature                                                                                                        
Capitol Building, Room 432                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Assisted with  the presentation of HB 489 on                                                               
behalf of the sponsor, Representative Chenault.                                                                                 
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-51, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  NORMAN  ROKEBERG  called   the  House  Judiciary  Standing                                                               
Committee  meeting  to  order  at   2:00  p.m.    Representatives                                                               
Rokeberg, Coghill, Meyer, and Berkowitz  were present at the call                                                               
to  order.   Representatives  James and  Kookesh  arrived as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
HB 472 - PAWNBROKERS/SECONDHAND DEALERS                                                                                       
                                                                                                                                
Number 0037                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG announced  that the first order  of business would                                                               
be HOUSE  BILL NO. 472, "An  Act relating to persons  who buy and                                                               
sell secondhand  articles and to  certain persons who  lend money                                                               
on  secondhand  articles."    [Before   the  committee  was  CSHB                                                               
472(L&C).]                                                                                                                      
                                                                                                                                
Number 0099                                                                                                                     
                                                                                                                                
LAURA  ACHEE, Staff  to Representative  Joe  Green, Alaska  State                                                               
Legislature,  sponsor, on  behalf of  Representative Green,  said                                                               
that  a proposed  committee substitute  contains the  requirement                                                               
that  any retailer  who  takes  in an  item  with  the intent  of                                                               
selling it or  holding it as collateral for a  loan shall provide                                                               
a report biweekly to his/her local  police agency.  There is also                                                               
a requirement that pawnbrokers,  but not secondhand dealers, hold                                                               
items for 30  days.  A third change notes  that the Department of                                                               
Public Safety (DPS)  is responsible for establishing  the form or                                                               
format of the report made to the local police agencies.                                                                         
                                                                                                                                
CHAIR ROKEBERG  remarked that  the latter  change is  intended to                                                               
provide  for a  consistent  method of  communication between  law                                                               
enforcement agencies.                                                                                                           
                                                                                                                                
Number 0191                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER  moved  to  adopt  the  proposed  committee                                                               
substitute  (CS)  for  HB 472,  version  22-LS1519\O,  Bannister,                                                               
4/18/02, as  a work draft.   There being no objection,  Version O                                                               
was before the committee.                                                                                                       
                                                                                                                                
REPRESENTATIVE  BERKOWITZ, referring  to  Section  1, asked  what                                                               
would  happen  if the  pawnbroker  or  secondhand dealer  doesn't                                                               
record all  the items listed,  one of which  is the eye  color of                                                               
the person selling/pawning the item.                                                                                            
                                                                                                                                
MS. ACHEE  indicated that a  person who is guilty  of "knowingly"                                                               
violating [Section 1-3] of Version O  would be subject to a class                                                               
A misdemeanor.   She mentioned that the language  used in Section                                                               
4, regarding that penalty, was recommended by the drafter.                                                                      
                                                                                                                                
REPRESENTATIVE  BERKOWITZ mentioned  he'd received  comments from                                                               
someone who had concerns about the 30-day holding period.                                                                       
                                                                                                                                
MS. ACHEE, after acknowledging that  those concerns did come up a                                                               
lot,  relayed that  law enforcement's  position is:   What's  the                                                               
point  of having  a reporting  requirement  if an  item could  be                                                               
taken in on  one day and sold  the next day.  She  noted that the                                                               
position of  the business owners  is that  it costs them  to hold                                                               
items.    The compromise  proposed  by  Version O  requires  only                                                               
pawnbrokers to  hold items for  30 days, which is  something they                                                               
already do with pawned items.                                                                                                   
                                                                                                                                
REPRESENTATIVE BERKOWITZ  referred to  Section 6,  which contains                                                               
the language  regarding the  30-day holding  period.   He pointed                                                               
out that  are no exceptions to  that holding period, even  if law                                                               
enforcement were to acknowledge that  a particular item was not a                                                               
stolen item.                                                                                                                    
                                                                                                                                
MS. ACHEE said that is correct.                                                                                                 
                                                                                                                                
REPRESENTATIVE  BERKOWITZ remarked  that  this could  lead to  an                                                               
inequitable  situation because  the  pawnbrokers  would be  stuck                                                               
holding inventory  for no legitimate  purpose.  "As  I understand                                                               
[it], the  purpose of this bill  is to make sure  that you're not                                                               
purveying stolen  goods, and  if you know  that the  goods aren't                                                               
stolen, what's  the object of  requiring them  to hold it  for 30                                                               
days?" he asked.                                                                                                                
                                                                                                                                
MS. ACHEE replied that the object  would be to allow time for law                                                               
enforcement to  correlate the  reports of  stolen goods  with the                                                               
reports of received goods.                                                                                                      
                                                                                                                                
REPRESENTATIVE  BERKOWITZ   posited:     "So,  on  day   10,  law                                                               
enforcement  comes  back and  says  'This  is totally  legitimate                                                               
goods  ...,' and  yet the  broker  still has  to hold  it for  an                                                               
additional 20 days."                                                                                                            
                                                                                                                                
Number 0452                                                                                                                     
                                                                                                                                
MS. ACHEE said that unfortunately,  that's not the way it usually                                                               
works.  She  opined that police departments would not  be able to                                                               
clear an item in that short  a period of time simply because they                                                               
would not  yet have  a record  of stolen items.   She  noted that                                                               
under   the  existing   Municipality   of  Anchorage   ordinance,                                                               
pawnbrokers  currently  hold  items  for 30  days  regardless  of                                                               
whether the  police have  received a  report of  particular items                                                               
being stolen.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  COGHILL  mentioned  that he,  too,  has  concerns                                                               
regarding the  requirement that items "purchased  or acquired" be                                                               
held for 30  days.  He noted that many  [of these businesses] buy                                                               
[wholesale] merchandise for  retail sale.  He asked  if Section 6                                                               
would apply to this sort of item as well.                                                                                       
                                                                                                                                
MS.  ACHEE said  that at  this time,  the language  in Section  6                                                               
would apply  to all  items.   She offered that  there is  room to                                                               
specify  that  Section  6  only apply  to  items  purchased  from                                                               
individuals,  which  would  exempt  items  purchased  from  other                                                               
dealers or  licensed wholesalers.   She said that  another option                                                               
would  be to  "look  directly  at the  30-day  provision".   This                                                               
provision was modeled after  Anchorage's municipal ordinance, but                                                               
other states use different holding  requirements, ranging from 24                                                               
hours up to 30 days, she explained.                                                                                             
                                                                                                                                
REPRESENTATIVE COGHILL  indicated that  his concern,  rather than                                                               
being  with the  30-day holding  period itself,  pertains to  the                                                               
fact that the holding period  would also apply to items purchased                                                               
wholesale.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  surmised,  then,  that  Representative                                                               
Coghill's  concern pertains  to  pawnbrokers  who might  purchase                                                               
items at  Costco Wholesale  Corporation ("Costco"),  for example,                                                               
and then  resell those  items for a  slight markup;  according to                                                               
the current language  in Section 6, those  pawnbrokers would have                                                               
to hold those items for 30 days before reselling them.                                                                          
                                                                                                                                
REPRESENTATIVE COGHILL confirmed that that is his concern.                                                                      
                                                                                                                                
CHAIR ROKEBERG suggested decreasing the holding period.                                                                         
                                                                                                                                
REPRESENTATIVE BERKOWITZ questioned whether  doing so would serve                                                               
a legitimate purpose.                                                                                                           
                                                                                                                                
REPRESENTATIVE  KOOKESH   said  he  agreed   with  Representative                                                               
Coghill.   He opined  that a distinction  should be  made between                                                               
items purchased  wholesale and items purchased  from individuals,                                                               
since  the purpose  of HB  472 is  to assist  law enforcement  in                                                               
recovering stolen goods.   There should be  a distinction between                                                               
what the pawnbroker does as a  pawnbroker and what he/she does as                                                               
a merchant, he added; it's not fair  to have to hold items for 30                                                               
days if, acting as a merchant, one purchases items wholesale.                                                                   
                                                                                                                                
REPRESENTATIVE  BERKOWITZ   added  that   such  items   might  be                                                               
perishable.                                                                                                                     
                                                                                                                                
Number 0742                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL   made  a  motion  to   adopt  Conceptual                                                               
Amendment 1, which  would change the language on page  3, line 29                                                               
to read:  "shall hold pawned items purchased or acquired".                                                                      
                                                                                                                                
REPRESENTATIVE JAMES  noted that  sometimes items [brought  in by                                                               
individuals]   are  not   "pawned";   sometimes  the   pawnbroker                                                               
purchases those items outright.                                                                                                 
                                                                                                                                
CHAIR ROKEBERG  added that  it is more  likely that  stolen goods                                                               
would be sold outright rather than pawned.                                                                                      
                                                                                                                                
REPRESENTATIVE JAMES  recounted that  she'd had  something stolen                                                               
from her, and  when she went to [a pawnshop]  three days later to                                                               
search for it, it had already been [sold].                                                                                      
                                                                                                                                
Number 0853                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL,  after noting  that he still  has concern                                                               
about  requiring items  purchased  wholesale to  be  held for  30                                                               
days, withdrew Conceptual Amendment 1.                                                                                          
                                                                                                                                
CHAIR  ROKEBERG mentioned  that  one option  would  be to  delete                                                               
Section 6.                                                                                                                      
                                                                                                                                
REPRESENTATIVE BERKOWITZ said  that one of the  problems with the                                                               
30-day  holding  requirement in  Section  6  is that  it  doesn't                                                               
provide  for any  exceptions  for  items that  have  "a chain  of                                                               
legitimate custody" established.                                                                                                
                                                                                                                                
Number 0939                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG made a motion  to adopt a new Conceptual Amendment                                                               
1 to  page 3 [line 29-30]:   "shall hold a  purchased or acquired                                                               
item for  30 days  if purchased or  acquired from  an individual,                                                               
but not from a retail or wholesale business".                                                                                   
                                                                                                                                
REPRESENTATIVE JAMES stated she may have a conflict of interest.                                                                
                                                                                                                                
Number 0995                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  noted that  there were no  objections to  the new                                                               
Conceptual Amendment  1.  Therefore,  Conceptual Amendment  1 was                                                               
adopted.                                                                                                                        
                                                                                                                                
REPRESENTATIVE BERKOWITZ  asked whether  there is anything  in HB                                                               
472  that  would  prohibit  or encourage  public  access  to  the                                                               
information that  pawnbrokers have.   How does the public  get at                                                               
this information?                                                                                                               
                                                                                                                                
MS. ACHEE said  that that issue is not  specifically addressed in                                                               
HB  472.    She  added   that  other  states  do  have  statutory                                                               
provisions that specifically  state that for the  purposes of the                                                               
Freedom  of Information  Act, "these  are  not considered  public                                                               
records."   In  response to  another question,  she said  that if                                                               
someone has  something stolen,  it is  the responsibility  of the                                                               
local law enforcement agency to search pawnbroker records.                                                                      
                                                                                                                                
CHAIR ROKEBERG pointed  out that [Section 3]  says, "A pawnbroker                                                               
or  secondhand dealer  shall make  all records  required by  this                                                               
chapter,  whether  entered  by  handwriting  or  in  a  computer,                                                               
available  for inspection  by a  law enforcement  officer at  all                                                               
reasonable   times".      He  added   that   according   to   his                                                               
understanding, this  information is not available  to the general                                                               
public.                                                                                                                         
                                                                                                                                
MS. ACHEE relayed  that the Anchorage Police  Department does not                                                               
consider these records public.                                                                                                  
                                                                                                                                
Number 1133                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER  moved  to report  the  proposed  committee                                                               
substitute  (CS)  for  HB 472,  version  22-LS1519\O,  Bannister,                                                               
4/18/02,   as  amended,   out   of   committee  with   individual                                                               
recommendations and  the accompanying  zero fiscal notes.   There                                                               
being no objection,  CSHB 472(JUD) was reported out  of the House                                                               
Judiciary Standing Committee.                                                                                                   
                                                                                                                                
HB 499 - DISPOSITION OF BUSINESS ASSETS                                                                                       
                                                                                                                                
Number 1141                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be, HOUSE  BILL NO.  499, "An  Act relating  to the  sale, lease,                                                               
exchange, or other disposition of  business property and assets."                                                               
[Before the committee  was committee substitute (CS)  for HB 499,                                                               
version 22-LS1490\S,  Bannister, 4/5/02,  which was adopted  as a                                                               
work draft on 4/5/02.]                                                                                                          
                                                                                                                                
Number 1162                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL moved  to  adopt  the proposed  committee                                                               
substitute  (CS)  for  HB 499,  version  22-LS1490\B,  Bannister,                                                               
4/19/02, as a work draft.                                                                                                       
                                                                                                                                
Number 1181                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ objected for the purpose of discussion.                                                                
                                                                                                                                
Number 1190                                                                                                                     
                                                                                                                                
HEATHER  M. NOBREGA,  Staff  to  Representative Norman  Rokeberg,                                                               
House  Judiciary Standing  Committee,  Alaska State  Legislature,                                                               
explained that Version  B has been tailored  to more specifically                                                               
address the  issues raised  by the Savage  Arms, Inc.  v. Western                                                             
Auto  Supply  Co.  case.   Version  B  specifically  rejects  the                                                             
"continuity  of enterprise"  theory,  and places  in statute  the                                                               
generally  accepted  law -  from  the  [American Law  Institute's                                                               
Restatement (Third)  of the Law  of Torts ("Third  Restatement of                                                             
Torts")] - regarding successor liability.                                                                                       
                                                                                                                                
CHAIR  ROKEBERG noted  that  [the provisions]  of  Version B  are                                                               
retroactive.                                                                                                                    
                                                                                                                                
MS. NOBREGA confirmed that.                                                                                                     
                                                                                                                                
CHAIR ROKEBERG said:                                                                                                            
                                                                                                                                
     So what  we're doing  here is,  by slimming  this thing                                                                    
     down,  we're overcoming  some  of  the objections  that                                                                    
     were raised  by the trial  attorneys as to  the general                                                                    
     applicability  (indisc.) other  areas  of contract  law                                                                    
     and so forth that went  further afield [and] might have                                                                    
     some unintended  consequences we weren't ...  [able to]                                                                    
     specifically identify  at this  juncture.   And because                                                                    
     of the need for speed, I  felt is was wise to take this                                                                    
     route.   Also, because  of the  briefs provided  by all                                                                    
     parties,  I   think  that  we're  on   ...  very  sound                                                                    
     foundation as  to the  applicability provisions  in the                                                                    
     bill.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  BERKOWITZ asked  for  an explanation  of why  the                                                               
title was changed.                                                                                                              
                                                                                                                                
MS.  NOBREGA said  she  had  not requested  a  title change,  and                                                               
surmised that the drafter must have decided to change the title.                                                                
                                                                                                                                
CHAIR ROKEBERG asked Representative  Berkowitz if he is concerned                                                               
that the new title is "too loose."                                                                                              
                                                                                                                                
REPRESENTATIVE  BERKOWITZ said,  "Let me  just put  it this  way:                                                               
I'm suspicious of titles at this time of year."                                                                                 
                                                                                                                                
CHAIR ROKEBERG opined that [the title] is a little too broad.                                                                   
                                                                                                                                
REPRESENTATIVE  BERKOWITZ said:   "It  doesn't specify  that what                                                               
we're  doing  now   is  a  fairly  narrow   modification  to  the                                                               
"continuity  of   enterprise"  exception   to  the   doctrine  of                                                               
successor liability."                                                                                                           
                                                                                                                                
Number 1316                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  made  a  motion  to  adopt  Conceptual                                                               
Amendment 1, to  "tighten this title so tight  that no blowtorch,                                                               
that no crowbar can get into it."                                                                                               
                                                                                                                                
CHAIR ROKEBERG  noted that Version B  must first be adopted  as a                                                               
work draft.                                                                                                                     
                                                                                                                                
Number 1339                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ withdrew his objection.                                                                                
                                                                                                                                
CHAIR  ROKEBERG   announced  that   Version  B  was   before  the                                                               
committee.                                                                                                                      
                                                                                                                                
Number 1348                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ restated his  motion to adopt Conceptual                                                               
Amendment 1.   There being  no objection, Conceptual  Amendment 1                                                               
was adopted.                                                                                                                    
                                                                                                                                
Number 1362                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  moved  to report  the  proposed  committee                                                               
substitute  (CS)  for  HB 499,  version  22-LS1490\B,  Bannister,                                                               
4/19/02,   as  amended,   out   of   committee  with   individual                                                               
recommendations  and the  accompanying zero  fiscal note.   There                                                               
being no objection,  CSHB 499(JUD) was reported out  of the House                                                               
Judiciary Standing Committee.                                                                                                   
                                                                                                                                
HB 271 - CAP ON AVIATION ACCIDENT PUNITIVE DAMAGES                                                                            
                                                                                                                                
Number 1389                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be HOUSE BILL  NO. 271, "An Act relating to  recovery of punitive                                                               
damages resulting  from an aviation  accident; and  providing for                                                               
an effective date."  [Before the committee was CSHB 271(L&C).]                                                                  
                                                                                                                                
CHAIR ROKEBERG called an at-ease from 2:24 p.m. to 2:25 p.m.                                                                    
                                                                                                                                
Number 1442                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER  moved  to  adopt  the  proposed  committee                                                               
substitute (CS)  for HB 271, version  22-LS0741\L, Ford, 4/19/02,                                                               
as a work draft.  There  being no objection, Version L was before                                                               
the committee.                                                                                                                  
                                                                                                                                
Number 1445                                                                                                                     
                                                                                                                                
REPRESENTATIVE ANDREW HALCRO,  Alaska State Legislature, speaking                                                               
as  the chair  of the  subcommittee on  aviation insurance,  said                                                               
that the  concept of  HB 271,  which was  sponsored by  the House                                                               
Labor and Commerce Standing Committee,  originated last year.  He                                                               
elaborated:                                                                                                                     
                                                                                                                                
     We've   heard  ...   many   stories  about   increasing                                                                    
     insurance premiums and the effect  that that has had on                                                                    
     a state  that really,  seriously, depends  on aviation.                                                                    
     As  you know,  many of  our rural  communities you  can                                                                    
     only access by  air....  The trend in the  last five or                                                                    
     six years  has become very  alarming, and one  that has                                                                    
     caused  a number  of aviation  providers to  go out  of                                                                    
     business and  communities that rely on  vital air links                                                                    
     to suffer.   This is  a very difficult  conversation to                                                                    
     have; ... as  we all know, ... whenever  you talk about                                                                    
     affecting somebody's right to  sue for damages, I think                                                                    
     you need to  be very careful, but I think  in this case                                                                    
     it  is well  warranted  and there  still certainly  are                                                                    
     avenues out there.                                                                                                         
                                                                                                                                
     ... We're all  very aware of the fact  that aviation in                                                                    
     this state is  a very dangerous and risky  business.  I                                                                    
     believe  the   fact  that  we  found   out  during  our                                                                    
     subcommittee  research  was  that there  is  one  death                                                                    
     every nine  days in  the aviation  industry....   It is                                                                    
     ... just a very risky  proposition, but one that is ...                                                                    
     really  important  to the  success  of  this state  and                                                                    
     certainly access  to and from  these communities.   ...                                                                    
     We found  out in  our subcommittee [that]  there [were]                                                                    
     ...  three  areas where  we  could  improve.   One  was                                                                    
     education   for  aviation   companies;  and   combining                                                                    
     certain  industry  changes  with  educational  programs                                                                    
     such  as the  [Five Star]  Medallion Program  [and] the                                                                    
     ...  Capstone  Program,  we  can  start  to  make  some                                                                    
     inroads into safety in the aviation industry.                                                                              
                                                                                                                                
     The  second thing  we discovered  was  the ...  problem                                                                    
     where  aviators  are  being forced  to  fly  -  feeling                                                                    
     pressure to fly.  And  we introduced a subsequent piece                                                                    
     of legislation - HB 269  - which actually at this point                                                                    
     in time  we've kind of let  sit for a while  because in                                                                    
     our further  discovery, there [are]  enough protections                                                                    
     under    OSHA   [Occupational    Safety   and    Health                                                                    
     Administration]  Department   of  Labor   standards  to                                                                    
     provide whistleblower protection  for airline employees                                                                    
     ... and more  particularly pilots.  The  third ... area                                                                    
     that  we identified  that could  help this  industry is                                                                    
     tort reform for "aviation  insurance accidents."  There                                                                    
     was one  case, the  Hageland case, where  the insurance                                                                    
     policy was  for an  "X" amount per  seat, there  was an                                                                    
     unfortunate plane crash,  and in subsequent settlements                                                                    
     the judge  ruled that the  per-seat limitation  was not                                                                    
     the true exposure that the insurance company had.                                                                          
                                                                                                                                
Number 1617                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO continued:                                                                                                
                                                                                                                                
     Now, I would  simply say to you ...  that regardless of                                                                    
     what  type of  insurance business  you're in,  it's all                                                                    
     predicated  on   risk.     And  if   you  go   into  an                                                                    
     understanding - or the assigning  of a policy - whereby                                                                    
     you ...  are under  the legal  impression that  you are                                                                    
     liable for  "X" amount  of dollars, and  at the  end of                                                                    
     the day you find out you're  liable for "Y" or "Z," ...                                                                    
     I think it's understandable  why they have pulled back.                                                                    
     And we  have seen not  only an increase -  a tremendous                                                                    
     increase - in the amount  of premiums being paid, but a                                                                    
     real lack of coverage to begin with.                                                                                       
                                                                                                                                
CHAIR ROKEBERG said  that he is interested in  pursuing, with the                                                               
insurance  industry   and  the  Division  of   Insurance,  issues                                                               
regarding "per-seat-mile limitations," noting  that he would like                                                               
to add "that"  to the bill, if  at all possible.   He opined that                                                               
doing so  would avoid  some of the  problems that  surround "tort                                                               
reform, per  se," by limiting the  causes of action and  how much                                                               
can be  paid out.   He noted that he  has heard testimony  in the                                                               
House Labor  and Commerce Standing Committee  regarding the [Five                                                               
Star] Medallion Program.  He added:                                                                                             
                                                                                                                                
     In my conversations  with you on this,  and your staff,                                                                    
     it  indicates that  you're of  the believe  and of  the                                                                    
     opinion that we cannot create  any kind of an incentive                                                                    
     to  grant any  of  these limitations  to  a [Five  Star                                                                    
     Medallion  Program]  plan  member even  though  it's  a                                                                    
     [Federal Aviation  Administration (FAA)]  approved type                                                                    
     of a program for safety.  Could you comment on that?                                                                       
                                                                                                                                
REPRESENTATIVE HALCRO replied:                                                                                                  
                                                                                                                                
     The  [Five Star]  Medallion Program  was started  years                                                                    
     ago, here in Alaska; as  a matter of fact, Dick Harding                                                                    
     from [Peninsula  Airways, Inc.  ("Pen Air")]  is really                                                                    
     one of the  founders of this program and  a real strong                                                                    
     advocate  for  it.    And  the  [Five  Star]  Medallion                                                                    
     Program  basically  embraces   ...  specific  areas  in                                                                    
     aviation  -  your  operation, maintenance,  ...  flight                                                                    
     safety  techniques -  and they  come  around and  grade                                                                    
     you.   And  it's similar  to  a number  of the  chamber                                                                    
     programs,  for  instance,  the  "Green  Star  program,"                                                                    
     where  you meet  a criteria  and you  are awarded  this                                                                    
     distinction.                                                                                                               
                                                                                                                                
Number 1747                                                                                                                     
                                                                                                                                
     The  problem  with  interrelating  what  is  a  private                                                                    
     program, albeit sanctioned by the  FAA, [is that] it is                                                                    
     a private  program; and the  thought that we  are going                                                                    
     to base liability limits on  a private program causes a                                                                    
     number  of different  headaches for  the Department  of                                                                    
     Law.    And  they  did  cite to  us,  in  a  number  of                                                                    
     different  cases, where  this  legally  just would  not                                                                    
     work, and  even some hypothetical situations  where you                                                                    
     could see that you could run into problems.                                                                                
                                                                                                                                
     For instance, if I'm an air  carrier and I think that I                                                                    
     have  done   more  than   enough  to   satisfy  certain                                                                    
     "medallion  level"  criteria, and  I  am  told that  my                                                                    
     operation has  not, ... certainly  there's going  to be                                                                    
     some    confusion,   there's    going   to    be   some                                                                    
     contradiction, and I think ...  we just create work for                                                                    
     the  court system  with  [regard] to  this.   I'd  much                                                                    
     rather  see us  take an  approach, as  far as  a public                                                                    
     policy   standpoint,   [of]    just   straight   ahead.                                                                    
     Certainly, encourage  those companies in this  state to                                                                    
     participate  and  get  involved with  the  [Five  Star]                                                                    
     Medallion Program,  but any cap  of punitive  damage or                                                                    
     any reduction  in liability needs  to stand  clearly on                                                                    
     its  face, instead  of  being tied  to  a program  that                                                                    
     really  has no  governmental oversight  or governmental                                                                    
     involvement.                                                                                                               
                                                                                                                                
REPRESENTATIVE BERKOWITZ asked, "What assurances do you have                                                                    
from the insurance industry that if this bill is enacted, rates                                                                 
come down/coverage increases?"                                                                                                  
                                                                                                                                
REPRESENTATIVE HALCRO said:                                                                                                     
                                                                                                                                
     We have  had conversations; ... the  bottom line answer                                                                    
     is that  ... we  do not have  anything in  writing from                                                                    
     insurance providers  that said, "If you  do this, rates                                                                    
     will  come  down."   What  we  have  found out  in  our                                                                    
     investigation of award settlements  is that ... this is                                                                    
     one of those ... "silent  but deadly" type areas as far                                                                    
     as  insurance rates  are concerned.    What happens  is                                                                    
     sometimes  those that  sue use  the threat  of punitive                                                                    
     damages to  leverage a larger award,  and usually those                                                                    
     awards are sealed and not public information.                                                                              
                                                                                                                                
     So,  in our  discussions,  in  our having  [Legislative                                                                    
     Legal and  Research Services] do some  investigating on                                                                    
     these types  of accidents, ...  we have found  that ...                                                                    
     [the] influence is, as I said,  in kind of a silent but                                                                    
     damaging  way, where  they are  used as  leverage [but]                                                                    
     not actually  claimed on those  punitive damages.   And                                                                    
     by capping  punitive damages,  when these  companies go                                                                    
     into  these settlement  talks, at  least the  insurance                                                                    
     carrier can eliminate one of these variables.                                                                              
                                                                                                                                
Number 1873                                                                                                                     
                                                                                                                                
CHRISTOPHER KNIGHT, Staff to Representative Andrew Halcro,                                                                      
Alaska State Legislature, said:                                                                                                 
                                                                                                                                
     To answer your question, ...  I've talked with a number                                                                    
     insurance companies  and I've  talked with a  number of                                                                    
     businesses  that operate  air carriers  in Alaska,  and                                                                    
     each one  has said  every time they  enter into  one of                                                                    
     these agreements  - every  time - a  lawyer or  a trial                                                                    
     lawyer will  threaten with punitive damages.   And just                                                                    
     the  cost  of  defending   the  punitive  damage  case,                                                                    
     whether you  have committed any egregious  acts or not,                                                                    
     is  huge....   The  cost is  so  substantial that  99.9                                                                    
     percent  of the  time, these  people would  just rather                                                                    
     enter into  a settlement for the  compensatory damages,                                                                    
     and settle  out at the  insurance maximums.  So,  ... I                                                                    
     think  what  Representative Berkowitz  probably  really                                                                    
     wants  is empirical  evidence; we  don't  have it,  the                                                                    
     courts aren't going to give it to us ....                                                                                  
                                                                                                                                
MR. KNIGHT  relayed that  a representative  from the  Division of                                                               
Insurance  has  indicated  that  she  is  unable  to  distinguish                                                               
between premium costs and "torts,"  or whether there has been any                                                               
sort  of  correlation.    Referring  to  a  handout  in  members'                                                               
packets, he said  that it "talks about the  aviation industry and                                                               
how much  is going out  each year  in direct losses  incurred ...                                                               
and how  much is  earned in  ... premiums."   He also  noted that                                                               
according  to the  Division of  Insurance, "They  don't have  the                                                               
data  ... to  determine whether  that was  part of  a settlement,                                                               
[or] whether  that was  just increased  costs of  insurance; they                                                               
just  don't  have the  stuff  broken  down,  so we  really  can't                                                               
distinguish with empirical data."  He alledged:                                                                                 
                                                                                                                                
     Just  to reiterate,  every time  these things  go to  a                                                                    
     court   case,   every   time,  punitive   damages   are                                                                    
     threatened.  If I was a  trial lawyer - and I think ...                                                                    
     Representative  Berkowitz   has  probably  been   in  a                                                                    
     courtroom - when you go  to prosecute someone, and this                                                                    
     is  a similar  situation, ...  you always  threaten the                                                                    
     higher charges,  hoping to get some  sort of settlement                                                                    
     on  a lesser  charge.   It  saves you  time, saves  the                                                                    
     court  time,  and  it saves  everybody  else  ...  some                                                                    
     money.  So, it's usually how these people proceed.                                                                         
                                                                                                                                
Number 1982                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ countered:                                                                                             
                                                                                                                                
     First  of  all,  you  don't threaten  what  you  cannot                                                                    
     prove.   That's very bad practice,  ... particularly in                                                                    
     a small  bar like we  have here; people sniff  that out                                                                    
     pretty quickly....   So I  would just reject that  as a                                                                    
     premise,  that  people   would  seek  punitive  damages                                                                    
     without  a grounding  in  the law  that  they have  the                                                                    
     right  to do  so.    But what  we  heard  today on  the                                                                    
     [House] floor  ... is  that the folks  ... over  at the                                                                    
     insurance  companies could  calculate whatever  numbers                                                                    
     they  plug in  and [then]  come  up with  a reason  for                                                                    
     increasing premiums.  And it  would seem to me that the                                                                    
     state ought  to have  at it's disposal  individuals who                                                                    
     have that kind  of experience and can  enter into their                                                                    
     calculator whatever  formula is  used and come  up with                                                                    
     an answer to these questions.                                                                                              
                                                                                                                                
REPRESENTATIVE HALCRO  said he would  agree that the  Division of                                                               
Insurance  works  from  the disadvantage  of  not  having  enough                                                               
information, and that that information  is grouped together.  For                                                               
example, in 1998,  aviation insurance companies paid  out a $1.65                                                               
for  every $1  they  took in,  in  premiums.   So,  that kind  of                                                               
information is available  at the Division of  Insurance, he said,                                                               
but the more  specific and particular information  with regard to                                                               
suits and  the correlation  between "rights  and payouts"  is not                                                               
available  to the  division because  most  records pertaining  to                                                               
awards and settlements  are sealed by the courts.   He added that                                                               
it  would be  very interesting  to look  at any  correlation that                                                               
might exist.                                                                                                                    
                                                                                                                                
REPRESENTATIVE BERKOWITZ  said:  "It  seems to me that  ... we're                                                               
focusing here  on the punitive-damage  aspect of  it as a  way of                                                               
driving  insurance rates  down,  but you  could also  conceivably                                                               
reduce them  by increasing the  performance standards  for pilots                                                               
and aviation companies.  Is that correct too?"                                                                                  
                                                                                                                                
REPRESENTATIVE HALCRO replied:                                                                                                  
                                                                                                                                
     By performance  standards I would  assume ...  you mean                                                                    
     training  and flight  time  requirements....   That  is                                                                    
     something that  is the purview of  the Federal Aviation                                                                    
     Administration  - certainly  I don't  believe one  that                                                                    
     the state  legislature has any  purview over...   To be                                                                    
     honest with you,  ... the way we're  trying to approach                                                                    
     this  ...  problem  is,  ...  we're  basically  in  the                                                                    
     position of  being backseat drivers....   When you hear                                                                    
     testimony, you will see real  Alaskans - small business                                                                    
     owners -  that have had their  going concern threatened                                                                    
     by ... these horrific  increases in insurance premiums.                                                                    
     So  ... I'm  not quite  sure how  we get  to the  point                                                                    
     where we get all of this information.                                                                                      
                                                                                                                                
REPRESENTATIVE BERKOWITZ  said, "Just ... so  the record's clear,                                                               
I'm very supportive of the idea  of keeping as many people flying                                                               
as possible, but  I just want to make sure  that we're looking at                                                               
the problem completely."                                                                                                        
                                                                                                                                
REPRESENTATIVE  JAMES  posited  that   HB  271  will  reduce  the                                                               
exposure  to the  insurance company,  and although  that may  not                                                               
lower  insurance  rates,  it  will   still  be  advantageous  for                                                               
individual insureds.   She acknowledged that there  are a variety                                                               
of reasons  that insurance  rates go  up.   She offered  that the                                                               
goal  of HB  271 is  not necessarily  to reduce  insurance rates;                                                               
rather,  it is  to keep  rates from  going higher  and to  reduce                                                               
exposure.                                                                                                                       
                                                                                                                                
Number 2202                                                                                                                     
                                                                                                                                
KIP KNUDSON,  President, Alaska Air Carriers  Association (AACA),                                                               
mentioned that  his employer, Era  Aviation, Inc. ("Era"),  has a                                                               
position similar to the AACA regarding HB 271.  He said:                                                                        
                                                                                                                                
     From  the industry's  perspective,  ...  we're just  as                                                                    
     frustrated ... that  we can't put something  on a piece                                                                    
     of  paper from  the  insurance  industry saying,  "This                                                                    
     change will result in this  decrease in rates."  We are                                                                    
     currently,  though, as  an association,  contacting the                                                                    
     underwriters  and vice  presidents of  the underwriters                                                                    
     in New York and London, trying  to get them to come and                                                                    
     at least  provide some verbal  testimony ...  saying in                                                                    
     the  affirmative, "Yes,  this would  have an  impact on                                                                    
     rates"  -   a  positive  impact,  I   guess,  from  our                                                                    
     perspective.   They're a little bit  like herding cats,                                                                    
     though, unfortunately, so it's quite a business.                                                                           
                                                                                                                                
     The empirical evidence you look  at, the ... sum of the                                                                    
     evidence  that  we  can  refer  to  on  this  issue  of                                                                    
     insurance and  lawsuits, is that  - and I've  read this                                                                    
     legislative research  and I'm  not exactly sure  if the                                                                    
     2,354  civil cases  are all  aviation-related or  not -                                                                    
     but from the  anecdotal evidence of our  90 members, no                                                                    
     case  in the  last three  [years]  has ever  gone to  a                                                                    
     jury.   So there's obviously  a great deal  of pressure                                                                    
     not to go to jury, and,  of course, then, we don't know                                                                    
     the outcome because it's all sealed, generally.                                                                            
                                                                                                                                
     But that  is one  piece of  empirical evidence  we know                                                                    
     of,  and   the  play  of  punitive   damages  -  again,                                                                    
     anecdotal from 90 members -  is, punitive [damages] are                                                                    
     threatened  simultaneously  with  compensatory,  in  an                                                                    
     effort to  get the insurance  company to settle  at the                                                                    
     liability limits,  because most  carriers in  the state                                                                    
     are not  insuring punitive damages -  couldn't, even if                                                                    
     they tried.  So the  threat to a carrier, fully exposed                                                                    
     to the punitive side, is  causing the carrier, then, to                                                                    
     go and negotiate with their  insurance company:  "Let's                                                                    
     get this out from under us and move on."                                                                                   
                                                                                                                                
Number 2283                                                                                                                     
                                                                                                                                
MR. KNUDSON continued:                                                                                                          
                                                                                                                                
     Just  in  general,  on  the   issue  of  insurance  and                                                                    
     aviation services  in the state, every  air carrier has                                                                    
     watched their rates  go through the roof  over the last                                                                    
     decade, actually.  And this is  a big problem.  I think                                                                    
     [the   terrorist  attacks   of   September  11,   2001,                                                                    
     ("9/11")] showed you a  little more empirical evidence:                                                                    
     the air  system shut  down for three  days, and  on the                                                                    
     fourth day, pretty much every  air carrier said, "We're                                                                    
     about to go  bankrupt."  So, it takes three  days of no                                                                    
     income  for them  to be  at  the edge  of the  business                                                                    
     model.    So,  what   happens  when  an  air  carrier's                                                                    
     insurance [rate]  goes up 20  percent, 50  percent, 100                                                                    
     percent?   All of these  small carriers [that  are] out                                                                    
     in rural  Alaska are on  the ragged edge of  being able                                                                    
     to stay in business.                                                                                                       
                                                                                                                                
     Two  reasons for  the crises  ...:   one,  and the  one                                                                    
     that's  hardest   for  us  to   talk  about,   is  loss                                                                    
     experience, and it's Alaska-specific.   There are a lot                                                                    
     of  airplanes crashing  in this  state,  and Alaska  is                                                                    
     generally considered as a  special entity when insurers                                                                    
     look at  the state.   And, unfortunately, they  look at                                                                    
     that unbelievably  high accident rate, and  that's just                                                                    
     sort of  a general  malaise in  an insurer's  head when                                                                    
     they come ... to underwriting carriers.                                                                                    
                                                                                                                                
     The  second  issue  ...   is  ...  the  jury/settlement                                                                    
     experience  in the  state.   Again, this  is anecdotal,                                                                    
     but insurers say  that Alaska is right up  there as the                                                                    
     worst state  in the  union as  far as  settlements, and                                                                    
     part of  it has to do  with the law that  doesn't allow                                                                    
     ...   the   cases   to    be   removed   from   certain                                                                    
     jurisdictions:   If a plane  crashes in  Bethel, that's                                                                    
     where  the  case occurs  and,  thus  -  I guess  -  the                                                                    
     settlements or jury awards are quite a bit higher.                                                                         
                                                                                                                                
Number 2355                                                                                                                     
                                                                                                                                
MR. KNUDSON went on to say:                                                                                                     
                                                                                                                                
     What is the industry's  response, then, to this crisis?                                                                    
     Well,  you've  heard  about [the  Five  Star  Medallion                                                                    
     Program] and  this is something that's  been hashed out                                                                    
     for years  among the carriers; it's  not something that                                                                    
     everybody's looking forward to,  but everybody knows we                                                                    
     have to do it.   [The Federal Aviation Association] has                                                                    
     very strict regulations about  how to operate aircraft,                                                                    
     and  they get  more strict  every  year.   And now  the                                                                    
     industry is going to come in  and add a higher level of                                                                    
     requirements  on  top of  that,  and  it's a  voluntary                                                                    
     program.    It   will  make  an  impact   on  the  loss                                                                    
     experience for  carriers that  are willing  to dedicate                                                                    
     themselves to it.                                                                                                          
                                                                                                                                
     The conundrum for the industry  is that there's a great                                                                    
     deal  of churning  at the  lower levels  - the  smaller                                                                    
     airplanes.   Some  person will  say, "This  is a  great                                                                    
     industry; I  want to get  into it."  They'll  fly, they                                                                    
     won't meet  the standards,  they won't  live up  to the                                                                    
     higher expectations, they'll  have problems, they'll go                                                                    
     out of  business, [and] somebody  else will  jump right                                                                    
     back in.  It's  just over and over again -  we see it -                                                                    
     there's a lot  of churning in the smaller  parts of the                                                                    
     industry.   And they're  the ones causing  the accident                                                                    
     rates,  in a  lot of  the  cases.   But it's  different                                                                    
     carriers  every  year,  because one's  going  bankrupt;                                                                    
     another  one starts  up,  crashes,  goes bankrupt;  and                                                                    
     they just  keep coming  in.  I  don't know  - something                                                                    
     about the industry is quite sexy, apparently.                                                                              
                                                                                                                                
TAPE 02-51, SIDE B                                                                                                              
Number 2388                                                                                                                     
                                                                                                                                
MR. KNUDSON, in conclusion, said that  the AACA feels that HB 271                                                               
would, in the long term, go  a long way towards smoothing out the                                                               
raises in insurance costs.  He  also mentioned that any effort to                                                               
tie any  kind of  punitive damage limit  to participation  in the                                                               
[Five Star Medallion Program] is  very attractive to the AACA; by                                                               
doing  so, there  would  be  a true  economic  incentive for  the                                                               
smaller carriers  to follow the  standards laid out in  the [Five                                                               
Star Medallion Program].                                                                                                        
                                                                                                                                
CHAIR ROKEBERG said  he agreed, adding that a legal  nexus has to                                                               
be established.   He asked:  "Are you familiar  with the Hageland                                                               
case and  what occurred there as  far as the different  causes of                                                               
action exceeding the 'per-seat-mile limitation'?"                                                                               
                                                                                                                                
MR. KNUDSON said  he only knew that that was  the first time that                                                               
a  "non-participant actually  got  their fingers  into the  money                                                               
pot."  He clarified that  by non-participant, he was referring to                                                               
someone who was not in the aircraft.                                                                                            
                                                                                                                                
CHAIR ROKEBERG said:                                                                                                            
                                                                                                                                
      It's a federal case that interpreted the actual real                                                                      
       estate policy or contract, and it allowed the 'per-                                                                      
     seat  cap'  to  be  breached ...  on  other  causes  of                                                                    
     action; so,  that's one thing  I think  the committee's                                                                    
     going  to look  at if  we can  ... draft  the statutory                                                                    
     contract language  to limit that....   And  in [regard]                                                                    
     to the  amounts and the  aircraft size and  seating and                                                                    
     weight, have you had a chance to look at the CS?                                                                           
                                                                                                                                
MR.  KNUDSON  said he  had,  adding  that  although it  may  seem                                                               
bizarre  to  most  people, those  "dividing  points"  are  fairly                                                               
consistent with  FAA regulations, so  from the standpoint  of the                                                               
AACA, that  is a fine division.   What it will  do, he explained,                                                               
is  it will  change the  punitive cap  based on  the size  of the                                                               
aircraft,  which  generally  corresponds   to  the  size  of  the                                                               
operator.    Most  small  operators  are  not  going  to  operate                                                               
anything over  the first level  indicated in HB 271;  "95 percent                                                               
of  the [AACA's]  membership is  going  to fall  under the  first                                                               
category," he remarked.                                                                                                         
                                                                                                                                
CHAIR ROKEBERG asked how many seats are in a [Douglas] DC-3.                                                                    
                                                                                                                                
MR. KNUDSON said 24 or 28.                                                                                                      
                                                                                                                                
CHAIR ROKEBERG inquired about a "conveyer."                                                                                     
                                                                                                                                
MR. KNUDSON  said 50, adding that  Twin Otters are 19,  and "Dash                                                               
8s" are 37.  But most carriers  in the state, he pointed out, are                                                               
19 seats  or less.   In response  to further questions,  he noted                                                               
that air carriers  are held to a higher standard  as evidenced by                                                               
the fact  that although a  DC-3 could carry 40  paratroopers with                                                               
all their equipment,  air carriers are only allowed  to carry "28                                                               
with cameras."                                                                                                                  
                                                                                                                                
Number 2243                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ said  that  one of  his concerns  about                                                               
"this proposal" is that the  current limit on punitive damages is                                                               
$500,000  or  three times  the  amount  of compensatory  damages,                                                               
whichever  is greater,  and this  doesn't  seem like  a lot  more                                                               
money than  is proposed in  "the amendment in  front of us."   He                                                               
said, "I'm  still a  little perplexed as  to how  this relatively                                                               
small percentage change  corresponds to a reduction  of rates; it                                                               
seems that  we ought  to be  looking ... at  all the  drivers, at                                                               
insurance costs, and we're not; we're  just looking at one of the                                                               
drivers."  He  suggested that they should expand  their scope and                                                               
be a little more comprehensive.                                                                                                 
                                                                                                                                
CHAIR ROKEBERG opined  that the committee is doing  just that via                                                               
its discussions  regarding the [the Five  Star Medallion Program]                                                               
and  possibly   restricting  causes   of  action   via  "contract                                                               
language" defining the  "seat-limit cap."  He  mentioned that the                                                               
"cap of $500,000" in the Hageland case was breached.                                                                            
                                                                                                                                
MR.   KNUDSON  said   that  the   industry   would  concur   with                                                               
Representative Berkowitz  in saying that the  punitive cap should                                                               
be zero.   He added, however, that  he did not know  that this is                                                               
realistic.  The theoretical concept  behind punitive is that if a                                                               
company is  negligent, it should be  made to pay to  a point that                                                               
it damages its business plan,  in order to end negligent business                                                               
practices.    Unfortunately,  he  noted, it  has  turned  into  a                                                               
different  tool in  the  settlement process;  very  few of  these                                                               
cases end up showing gross negligence or negligence of any kind.                                                                
                                                                                                                                
CHAIR  ROKEBERG said  he  assumes  that given  the  right set  of                                                               
circumstances,   three  times   compensatory  damages   could  be                                                               
substantially higher than $500,000.                                                                                             
                                                                                                                                
MR. KNUDSON  said that in Era's  case, it is, although  for a lot                                                               
of the smaller air carriers, it is not.                                                                                         
                                                                                                                                
CHAIR ROKEBERG  asked Mr.  Knudson what a  typical policy  is for                                                               
Era:  "What do you carry per seat?"                                                                                             
                                                                                                                                
MR. KNUDSON  replied:  "We carry  well in excess of  $1 million a                                                               
seat."   He  added, "We're  a  bit of  a strange  bird in  Alaska                                                               
because we  can actually  go and  get underwriting  separate from                                                               
the  Alaska experience."    He confirmed  that  this is  possible                                                               
because Era's  parent company has greater  financial strength and                                                               
has operations  all over the  world.  A typical  Alaska operator,                                                               
he noted,  is completely  at the  whim [of  insurance companies],                                                               
adding  that many  operators  have only  the  statutory limit  of                                                               
$150,000  per seat,  which, he  opined, is  "an almost  negligent                                                               
operational standard."                                                                                                          
                                                                                                                                
CHAIR  ROKEBERG  noted  that  the director  of  the  Division  of                                                               
Insurance is available to answer questions.                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ asked whether  there is enough actuarial                                                               
information to calculate, with a  reasonable degree of certainty,                                                               
what the impact  on insurance rates would be  if punitive damages                                                               
were reduced as proposed [by HB 271].                                                                                           
                                                                                                                                
Number 2025                                                                                                                     
                                                                                                                                
BOB  LOHR,   Director,  Division  of  Insurance,   Department  of                                                               
Community  & Economic  Development (DCED),  said he  would prefer                                                               
that the division's  actuary respond to that question.   He added                                                               
that anecdotally, folks  within the industry who  are involved in                                                               
litigation  have indicated  to him  their belief  that "punitives                                                               
are probably undervalued  in rates currently."  As  with the case                                                               
of  the terrorist  attacks of  September 11,  2001, for  example,                                                               
before that date,  terrorism "was simply not  a major rate-making                                                               
factor"; now,  of course,  it does have  a significant  effect on                                                               
"rate making" and availability of  coverage.  He pointed out that                                                               
to   the   extent   that   punitives   are   underrepresented   -                                                               
underreflected - in rates currently,  making the changes proposed                                                               
by HB  271 might  have less  of an  effect on  the rates  than it                                                               
would on  the availability of coverage.   But in that  regard, he                                                               
added, HB 271 would have  an extremely significant effect because                                                               
"underwriters do not need to  write the Alaska market"; thus, if,                                                               
on  balance,  underwriters feel  that  the  risk is  unacceptably                                                               
high, "we  won't see them up  here."  To that  extent, he opined,                                                               
HB 271  is an important  step toward providing an  incentive that                                                               
would bring insurance carriers back to the Alaska market.                                                                       
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  asked  what  the total  value  of  the                                                               
Alaska market is.                                                                                                               
                                                                                                                                
Number 1989                                                                                                                     
                                                                                                                                
SARAH  McNAIR-GROVE, Actuary  P/C,  Central  Office, Division  of                                                               
Insurance,  Department   of  Community  &   Economic  Development                                                               
(DCED), replied that  it probably would be possible  to make some                                                               
estimates,  but  the Division  of  Insurance  does not  have  the                                                               
individual claim data  with which to do that;  instead, "it would                                                               
be an  insurance company that  would look  at it."   In addition,                                                               
she  noted, since  the Division  of Insurance  does not  regulate                                                               
aviation  rates,  individual  company   rate  filings  that  have                                                               
aggregates are  not seen by  the division.   She remarked:   "So,                                                               
could we do  it?  The answer  is probably not.   Could an insurer                                                               
do it?  I believe they probably could make some estimates."                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  surmised,   then,  that  the  division                                                               
wouldn't  have  any  ability  to calculate  what  the  amount  of                                                               
coverage is in Alaska.                                                                                                          
                                                                                                                                
MS. McNAIR-GROVE,  referring to the handout  in members' packets,                                                               
said  that  in  2000,  there  were about  $23  million  worth  of                                                               
premiums in Alaska.                                                                                                             
                                                                                                                                
CHAIR ROKEBERG, referring to what  happened in the Hageland case,                                                               
said he would  like the Division of Insurance  and the Department                                                               
of Law  to assist him  in crafting statutory language  that would                                                               
ensure  that the  "per-seat  cap"  is not  breached.   "We  can't                                                               
really  limit the  number of  causes of  action," he  noted, "but                                                               
what we  want to  do is be  able to limit  the awards  to various                                                               
participants."                                                                                                                  
                                                                                                                                
MR. LOHR  remarked that  he is  familiar with  the issue  and had                                                               
reviewed the  "case or  cases involved,"  and opined  that "that"                                                               
would be a very worthwhile endeavor.  He said:                                                                                  
                                                                                                                                
     I  do  believe that  the  legislature,  of course,  can                                                                    
     provide guidance  to the  court, and  I do  believe the                                                                    
     supreme court  was involved in certifying  the question                                                                    
     in connection with one of those  cases.  In any case, I                                                                    
     think  that the  legislature  could  do a  considerable                                                                    
     amount of damage control, so  to speak, with respect to                                                                    
     the NIED claims, for example  - negligent infliction of                                                                    
     emotional    distress   -    and   the    unanticipated                                                                    
     consequences  of that  kind of  court  decision on  the                                                                    
     costs and  availability of coverage.   I do  think that                                                                    
     when insurers   - insurance  companies - end  up paying                                                                    
     judgments that are substantially  out of line with what                                                                    
     they thought they  were going to be  covering when they                                                                    
     wrote  the  policy, that  is  a  serious public  policy                                                                    
     problem, and  it comes  home to  roost with  respect to                                                                    
     withdrawal from the market and higher rates.                                                                               
                                                                                                                                
MR.  LOHR, in  conclusion, said  he would  be happy  to help  the                                                               
chairman draft appropriate language.                                                                                            
                                                                                                                                
CHAIR  ROKEBERG  extended  his  request  for  assistance  to  Mr.                                                               
Knudson  and to  the insurance  industry.   He then  specifically                                                               
asked  Mr. George  whether any  of his  clients could  "shed some                                                               
light on this 'per-seat-mile type limitation.'"                                                                                 
                                                                                                                                
Number 1794                                                                                                                     
                                                                                                                                
JOHN L.  GEORGE noted that he  was not speaking on  behalf of the                                                               
clients  for whom  he is  a  lobbyist.   He mentioned  that as  a                                                               
former "risk  manager" for  the state and  as former  director of                                                               
the Division  of Insurance,  he has a  fair understanding  of the                                                               
aviation market,  although he  did not  have direct  contact with                                                               
"those companies."                                                                                                              
                                                                                                                                
MR.  GEORGE said  that in  the case  of aviation  insurance, "you                                                               
really  have to  find an  underwriter that's  willing," who  then                                                               
might  just say,  "Well,  how much  is worth  to  you," and  then                                                               
charge according  to whim.   He  mentioned that  underwriters are                                                               
influenced  by  Civil Rule  82  [of  the  Alaska Rules  of  Civil                                                               
Procedure]  and  various  court   cases,  and,  thus,  might  not                                                               
necessarily  be willing  to  underwrite  in Alaska,  particularly                                                               
since other markets are more  attractive.  "These things, really,                                                               
are  incremental   in  changing   someone's  attitude   on  their                                                               
willingness  to participate,"  he remarked;  "if you  change five                                                               
things, you  might ...  change their perception  5 percent  or 10                                                               
percent  or 50  percent."   With  regard to  just  how much  that                                                               
perception might change, however, he  added that he did not think                                                               
it is possible, even by an underwriter, to "put a number on it".                                                                
                                                                                                                                
REPRESENTATIVE BERKOWITZ  indicated that  he is confused  by this                                                               
seeming  inability:   "Every  year,  the  underwriters ...  write                                                               
bills  to their  clients, so  if you  say, 'If  the facts  were a                                                               
little bit  different, what would the  bill be?'"  "I  don't know                                                               
why it's so difficult to plug that [variable] in," he added.                                                                    
                                                                                                                                
MR. GEORGE replied:                                                                                                             
                                                                                                                                
     As I  say, there is  no book they  go to and  say, "Ah,                                                                    
     your  airplane's  this,  and  your  pilot's  that,  and                                                                    
     therefore your  premium is  this."   It really  is very                                                                    
     subjective  how some  of  these  rates are  calculated.                                                                    
     And  ... September  11 [2001]  didn't affect  Alaska at                                                                    
     all from  a crash  standpoint, but somebody  said, "Oh,                                                                    
     geez, we lost  a lot a lot of money;  let's charge more                                                                    
     money."                                                                                                                    
                                                                                                                                
Number 1682                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ said:                                                                                                  
                                                                                                                                
     But   if  I   were   to  give   you  two   side-by-side                                                                    
     hypotheticals,  one that  was  the current  conditions,                                                                    
     and one with  the current conditions with  one of these                                                                    
     tweaks -  or more of these  tweaks - ... I  would think                                                                    
     that  someone  could  give  me  two  different  quotes,                                                                    
     right?                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES asked  Representative Berkowitz  whether he                                                               
had his checkbook out.                                                                                                          
                                                                                                                                
REPRESENTATIVE  BERKOWITZ, using  that  analogy,  said, "The  air                                                               
carriers  in Alaska  have their  checkbooks out."   He  suggested                                                               
that it's  a fair  question to  ask:  "Here's  one set  of facts;                                                               
what's the  rate here?  Here's  another set of facts;  what's the                                                               
rate?"  "I  think we ought to  be able to get an  answer for it,"                                                               
he added.                                                                                                                       
                                                                                                                                
CHAIR ROKEBERG posited that that is  only one aspect of the issue                                                               
that  must be  addressed,  the other  aspect  is that  "insurance                                                               
underwriters are  leaving the state,"  and thus  the availability                                                               
of insurance is decreasing.                                                                                                     
                                                                                                                                
MR.  KNIGHT  noted  that   he  posed  Representative  Berkowitz's                                                               
question to  representatives of  the insurance  company, American                                                               
International Group,  Inc. (AIG),  and was  told that  they would                                                               
like to  give him that actuarial  data.  Mr. Knight  said:  "They                                                               
have unequivocally told me that the  rates will, if they don't go                                                               
down,  they will  stay  at where  they're at  for  at least  some                                                               
time."   He  mentioned  that according  to  an insurance  company                                                               
representative  from  Ketchikan,  rates may  not  necessarily  go                                                               
down, but should  maintain their current value.   Rates shouldn't                                                               
go up  any more if there  is some sort of  limitation on punitive                                                               
damages,  surmised Mr.  Knight.   He added  that as  much he  and                                                               
others  would like  the  data pertaining  to  the calculation  of                                                               
insurance rates, he is not convinced that they will ever get it.                                                                
                                                                                                                                
REPRESENTATIVE  BERKOWITZ remarked  that  economists  use a  term                                                               
that means,  "all other things  being equal, what happens  if you                                                               
change a  variable."  "All  I'm asking  for," he said,  "is 'What                                                               
happens if  I change this variable?'"   He added that  Mr. Knight                                                               
has  given him  the first  glimmer of  evidence that  rates would                                                               
stay  flat if  one of  the variables  were changed,  and surmised                                                               
that to mean  that if nothing is  changed, rates will go  up.  In                                                               
closing, he said:   "So, How do we get  there?...  Somebody's got                                                               
a slide  rule or a calculator  or whatever it is  they're using -                                                               
adding machine, I don't know,  abacus, something - and things are                                                               
going up,  and ... I'd  like to  know how that  calculation takes                                                               
place."                                                                                                                         
                                                                                                                                
Number 1544                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that HB  271 [Version L] would  be held                                                               
over.                                                                                                                           
                                                                                                                                
HB 489 - CRUELTY TO ANIMALS                                                                                                   
                                                                                                                                
Number 1540                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  last order of  business would                                                               
be HOUSE BILL NO. 489, "An Act relating to cruelty to animals."                                                                 
                                                                                                                                
Number 1502                                                                                                                     
                                                                                                                                
SHARALYN  "SUE" WRIGHT,  Staff to  Representative Mike  Chenault,                                                               
Alaska  State  Legislature,  said  on  behalf  of  Representative                                                               
Chenault,  sponsor,  that  HB 489  increases  the  penalties  for                                                               
animal  cruelty.   It  staggers  the penalties  for  a first  and                                                               
second  serious offense.   Generally  speaking,  she noted,  when                                                               
there is an offense, an  animal control officer becomes involved,                                                               
adding that several such officers are available to testify.                                                                     
                                                                                                                                
Number 1474                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  moved to  adopt the  proposed committee                                                               
substitute  (CS)  for  HB 489,  version  22-LS1580\O,  Luckhaupt,                                                               
4/18/02, as  a work draft.   There being no objection,  Version O                                                               
was before the committee.                                                                                                       
                                                                                                                                
MS.  WRIGHT referred  to Section  2 of  Version O,  and explained                                                               
that a first-time offense would  be charged as a misdemeanor, and                                                               
a second-time offense would be charged  as a class C felony.  She                                                               
noted that some discretionary penalties  have been added as well.                                                               
She read from Version O:                                                                                                        
                                                                                                                                
     ... the court may (1)  require a defendant convicted of                                                                    
     cruelty  to  animals  to participate  in  psychological                                                                    
     counseling  and treatment  at the  defendant's expense,                                                                    
     as  the   court  determines  to  be   appropriate;  (2)                                                                    
     prohibit  a  defendant  from owning  or  possessing  an                                                                    
     animal for a period of not more than five years.                                                                           
                                                                                                                                
MS. WRIGHT offered  her belief that [paragraphs] (1)  and (2) can                                                               
be enforced through probationary  orders/conditions from a judge.                                                               
She explained that HB 489 is event-driven:                                                                                      
                                                                                                                                
     In Sterling,  in November, we  [had] a lady  from Texas                                                                    
     who has  repeatedly - and  this is her third  offense -                                                                    
     taken  too many  dogs.   And  when I  went  out to  her                                                                    
     property, I came  upon a Bouvier that the  only part of                                                                    
     that dog that  wasn't frozen to the  ground, that could                                                                    
     move, was its  eyes.  It was the most  pathetic thing I                                                                    
     think I've  ever seen.   The [Alaska SPCA  (Society for                                                                    
     the Prevention  of Cruelty  to Animals)]  rescued those                                                                    
     animals at  a cost  that they've had  to absorb  to the                                                                    
     tune of between [$40,000 and  $50,000], and to the best                                                                    
     of my knowledge  ... most of those dogs  ... have found                                                                    
     homes....                                                                                                                  
                                                                                                                                
     We're  here  to  address   the  situation  that  animal                                                                    
     cruelty needs to  be [a] serious violation  of the law.                                                                    
     It  is   a  precursor  to  child   abuse  and  domestic                                                                    
     violence.   It's  been  pointed out  that  some of  the                                                                    
     penalties  for  both  of those  two  things  aren't  as                                                                    
     serious as what we're asking for  in the bill today.  I                                                                    
     wasn't  aware of  that until  after  we introduced  the                                                                    
     bill,  and   the  time  was  gone   to  introduce  more                                                                    
     legislation for child abuse.   Next year I promise that                                                                    
     my boss  will work on  child abuse [legislation].   And                                                                    
     with  that, I  understand  that [Representative  James]                                                                    
     may have an amendment.                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  noted  that   her  proposed  amendment  is                                                               
applicable to Version O of HB 489.                                                                                              
                                                                                                                                
Number 1313                                                                                                                     
                                                                                                                                
ETHEL CHRISTENSEN,  Director, Alaska  Society for  the Prevention                                                               
of  Cruelty to  Animals (SPCA),  testified via  teleconference in                                                               
support  of  HB  489.    She  said that  she  is  in  support  of                                                               
strengthening the laws  pertaining to this issue.   She recounted                                                               
that  the Alaska  SPCA was  involved in  a 1981  case in  which a                                                               
woman -  Charlotte Fitzhugh (ph)  - had over  40 dogs tied  up on                                                               
Bureau of Land Management (BLM)  land at "mile 101 Glen Highway".                                                               
The Alaska SPCA rescued those dogs,  although some did have to be                                                               
destroyed.   Ms.  Christensen relayed  that this  same individual                                                               
later created  similar circumstances  in the Fairbanks  area, and                                                               
over  100 dogs  had  to be  destroyed at  that  location in  1995                                                               
because they  were so emaciated.   Ms. Christensen  stressed that                                                               
this  individual, as  well as  others such  as the  woman in  the                                                               
Sterling  case  -  Carolyn Boughton  -  repeatedly  create  these                                                               
conditions.   She  indicated that  whatever can  be done  to stop                                                               
this behavior would  be very much appreciated  because the Alaska                                                               
SPCA  cannot continue  to  absorb the  financial  burden of  such                                                               
large rescue operations.                                                                                                        
                                                                                                                                
Number 1200                                                                                                                     
                                                                                                                                
SHANNA ANDERSON;  Animal Control Officer; Manager,  Valdez Animal                                                               
Shelter;  City  of Valdez,  testified  via  teleconference.   She                                                               
mentioned that  she has  been the manager  of the  animal shelter                                                               
for  almost  13 years  and  is  president  of the  Alaska  Animal                                                               
Control Association.  She said:                                                                                                 
                                                                                                                                
     As [professionals] in the  animal-welfare field, one of                                                                    
     our  most important  jobs is  to protect  the companion                                                                    
     animals in  our community.   Anyone  who has  worked in                                                                    
     this  area  for  any  length of  time  has  experienced                                                                    
     firsthand  acts of  incredible cruelty  and neglect  to                                                                    
     animals  (indisc.).     In   many  cases,   neglect  is                                                                    
     ignorance on  the part of  the animal's owner,  and can                                                                    
     be  corrected with  education  on  proper animal  care.                                                                    
     When  there   are  repeated  offenses,  and   when  the                                                                    
     animal's  life  is  in   immediate  danger,  then  that                                                                    
     neglect  becomes much  more serious,  and that  is when                                                                    
     animal  neglect  becomes  cruelty.   Even  in  a  small                                                                    
     community like  Valdez, I placed  17 animals  last year                                                                    
     in protective  custody.   Intentional cruelty  or abuse                                                                    
     can  encompass  behaviors  that  range  from  knowingly                                                                    
     depriving an animal of food to torturing an animal.                                                                        
                                                                                                                                
     There  is strong  evidence of  the correlation  between                                                                    
     animal abuse and  other acts of violence.   A child who                                                                    
     abuses animals  often comes from  a home where  they or                                                                    
     another  family member  is being  abused.   Most serial                                                                    
     killers  and   mass  murderers  begin  their   acts  of                                                                    
     violence as children by  torturing and killing animals.                                                                    
     In cases of domestic violence,  pets may be used as [a]                                                                    
     method to  control a victim;  abuse of  a pet may  be a                                                                    
     warning to  the victim  such as, "You  are next."   The                                                                    
     threat  of harming  the pets,  or actual  animal abuse,                                                                    
     may  be used  as a  method of  keeping the  victim from                                                                    
     reporting to  authorities the domestic or  sexual abuse                                                                    
     they're experiencing.  Many  abused victims hesitate to                                                                    
     leave  a  violent  situation  for   fear  of  what  the                                                                    
     perpetrator  may  do to  the  pets  they leave  behind.                                                                    
     Acts of  animal cruelty should never  be taken lightly;                                                                    
     they are signs that the  perpetrator may be involved in                                                                    
     other  violent  crimes.     (Indisc.)  acts  of  animal                                                                    
     cruelty are a threat to our communities.                                                                                   
                                                                                                                                
MS. ANDERSON concluded:                                                                                                         
                                                                                                                                
     As  professionals,  people  in animal  law  enforcement                                                                    
     will use the law, such  as the one being proposed, only                                                                    
     as a last  resort.  Educating and working  with the pet                                                                    
     owners  is always  a first  step.   And sometimes  much                                                                    
     more  is needed  to protect  an animal  and any  future                                                                    
     animals that person  may acquire.  I ask  that you take                                                                    
     animal cruelty  [seriously] and help to  strengthen the                                                                    
     existing  laws.   I  also  ask that  you  help make  it                                                                    
     mandatory   to   report   animal  cruelty   to   proper                                                                    
     authorities.    Many  acts  of  cruelty  are  committed                                                                    
     behind closed doors  and in backyards, areas  that I do                                                                    
     not have access [to]; I  rely heavily on the reports of                                                                    
     neighbors,   relatives,   veterinarians,  and   service                                                                    
     people to make me aware  of possible abuse cases.  With                                                                    
     mandatory  reporting  in  effect, those  who  would  be                                                                    
     afraid or  feel uncomfortable to come  forward would be                                                                    
     able to do so.  Thank you.                                                                                                 
                                                                                                                                
Number 1020                                                                                                                     
                                                                                                                                
BILL  GODEK,  Chief  Animal  Control   Officer,  City  of  Kenai,                                                               
testified via  teleconference in  support of HB  489.   He simply                                                               
offered that  it is  really important  to consider  making repeat                                                               
offenses a felony and to  allow the courts to order psychological                                                               
counseling and  prohibit the offender  from owning animals  for a                                                               
period of up to five years.                                                                                                     
                                                                                                                                
Number 0979                                                                                                                     
                                                                                                                                
BRETT REID,  Animal Control Assistant,  City of  Kenai, testified                                                               
via  teleconference.     He  said  he   concurred  with  previous                                                               
testimony.   He opined that the  most useful aspect of  HB 489 is                                                               
the  provision  that allows  the  courts  to order  psychological                                                               
counseling.  He said that  in passive cruelty cases, he considers                                                               
this  to   be  a  form   of  mental  illness  known   as  "animal                                                               
collecting,"  which,   he  added,   seems  to  be   plaguing  his                                                               
community.  He  noted that there has been some  discussion in his                                                               
area about making a change to  one of the domestic violence laws;                                                               
he pointed  out, however, that  animal abuse laws are  much older                                                               
than child abuse  laws.  He indicated that it  is not unusual for                                                               
individuals  with  abusive  tendencies   to  first  exhibit  this                                                               
behavior towards animals.   He encouraged members  to support the                                                               
proposed  changes  [encompassed  in   HB  489]  to  the  existing                                                               
statute.                                                                                                                        
                                                                                                                                
Number 0925                                                                                                                     
                                                                                                                                
SUE CARTER testified via teleconference in support of HB 489.                                                                   
She said:                                                                                                                       
                                                                                                                                
     Unfortunately,  Alaska  now  holds the  distinction  of                                                                    
     having the  highest rate  of abuse  in the  nation, not                                                                    
     only relative to people, but  animals as well.  This is                                                                    
     simply not tolerable to many  of us who expect and wish                                                                    
     to enjoy  a certain  level of quality  of life  here in                                                                    
     Alaska.   Animal  abuse appears  to be  increasingly on                                                                    
     the rise, and  some of the worst cases  in recent times                                                                    
     [have]  occurred  here  on the  Kenai  Peninsula.    It                                                                    
     appears  there  will  be  no   charges  in  the  recent                                                                    
     Sterling  rescue; the  [Alaska] State  Troopers advised                                                                    
     me  that  these  persons  most likely  will  be  repeat                                                                    
     offenders due  to the lack of  effective animal cruelty                                                                    
     laws  that provide  appropriate punishment  and perhaps                                                                    
     determent.                                                                                                                 
                                                                                                                                
     We   should  note   that  the   state  dogsled   racing                                                                    
     association  had  made  great strides  in  providing  a                                                                    
     healthier and  safer environment  for their dogs.   And                                                                    
     so  that leaves  the rest  of us  to work  - to  expect                                                                    
     responsible and  appropriate requirements  for shelter,                                                                    
     food,  and care  for  all domestic  animals in  Alaska.                                                                    
     The  first step,  in my  opinion, is  to make  stronger                                                                    
     animal  cruelty  laws  and let  those  individuals  who                                                                    
     cannot live within these  structures know their actions                                                                    
     won't be  tolerated by the  Alaska legal system....   I                                                                    
     do thank  you for giving  me this opportunity  to speak                                                                    
     in  favor of  HB  489.   I've been  a  resident ...  of                                                                    
     Alaska  since  1966  and it  appears  that  things  are                                                                    
     getting  worse rather  than better,  so  I know  you'll                                                                    
     help us,  and I wish  you all well in  this legislative                                                                    
     session.                                                                                                                   
                                                                                                                                
Number 0789                                                                                                                     
                                                                                                                                
ANNE CARPENETI, Assistant Attorney General, Legal Services                                                                      
Section-Juneau, Criminal Division, Department of Law (DOL), said                                                                
that the DOL is in opposition to HB 489.  She elaborated:                                                                       
                                                                                                                                
     I have  to oppose both  the substantive law  change and                                                                    
     the penalty  change.  In  terms of the  substantive law                                                                    
     change,  the  change  to subsection  (a)(2),  I  really                                                                    
     don't  think this  helps  us  prosecute animal  cruelty                                                                    
     cases.     It  adds   language  that  doesn't   have  a                                                                    
     definition,  and it's  hard to  articulate what  is the                                                                    
     minimal standard  of care for  an animal.  And  it also                                                                    
     adds  language  that  is not  only  unclear,  but  will                                                                    
     require  us  to  have  expert  testimony  by  including                                                                    
     "humane  veterinary  care"....    Terms  like  "minimal                                                                    
     standard  of care"  and  "humane  veterinary care"  are                                                                    
     really  difficult for  prosecutors  to deal  with.   We                                                                    
     would have to have a  veterinarian ... testify in terms                                                                    
     of  what  is humane  veterinary  care  in our  case  in                                                                    
     chief.  This  doesn't help us, and I  think the sponsor                                                                    
     wants to help  us prosecute animal cruelty  cases.  And                                                                    
     I don't think these changes do so.                                                                                         
                                                                                                                                
     The second  issue I'd  like to  address is  the felony.                                                                    
     And we  oppose it  just on a  proportionality argument.                                                                    
     It was  in this  very room  in the  late '70s  that the                                                                    
     criminal-code  revisors discussed  this issue,  ... and                                                                    
     it  was finally  decided not  to have  the felony-level                                                                    
     cruelty-to-animals  crime in  our  state.   And I  know                                                                    
     things  have   changed;  we   try  and   maintain  some                                                                    
     semblance  of proportionality  for ...  the seriousness                                                                    
     of offenses  - what  penalty they will  be.   And we're                                                                    
     not always perfect, and we  don't always ... [agree] on                                                                    
     what is  proportional.  But  in this state,  a domestic                                                                    
     violence crime  is [a class]  A misdemeanor -  [as] ...                                                                    
     is the second  [offense] ... - and it's hard  for me to                                                                    
     support a cruelty to animals  provision that makes that                                                                    
     crime a [class] C felony, under those circumstances.                                                                       
                                                                                                                                
Number 0651                                                                                                                     
                                                                                                                                
MS. CARPENETI continued:                                                                                                        
                                                                                                                                
     I  did have  a  suggestion, however;  ...  and this  is                                                                    
     something I discussed today  with Dwayne McConnell, who                                                                    
     is our district  attorney for the Kenai  Peninsula.  As                                                                    
     a matter of  fact, just for a correction,  I think [in]                                                                    
     the  Sterling  case  there  have  been  charges  filed;                                                                    
     there's eight  or nine  counts in  that case  that have                                                                    
     been charged.   I  don't think  the defendant  has been                                                                    
     found yet  or served with  the charges, but  there have                                                                    
     been  charges filed.   I  would just  suggest for  your                                                                    
     consideration the possibility of  saying in the statute                                                                    
     that  harm   to  each  individual  animal   can  be  an                                                                    
     individual charge against a  defendant.  Generally this                                                                    
     is true.  I know in  one of the Kenai cases, [however],                                                                    
     the judge combined 40 to  50 charges into one charge; I                                                                    
     think  he was  incorrect because  statute does  say "an                                                                    
     animal", although the title says "Cruelty to animals".                                                                     
                                                                                                                                
     But  it might  be useful  to  make it  clear that  each                                                                    
     animal that  is mistreated  should be  the object  of a                                                                    
     separate  misdemeanor  charge,   and  maybe  have  some                                                                    
     provision for  sentencing that for every  animal that's                                                                    
     mistreated  there  should   be  some  consecutive  jail                                                                    
     time....  That's a possibility  for you to consider - I                                                                    
     don't know whether that is of  interest to you - but we                                                                    
     do think  that it is  simply not good public  policy to                                                                    
     make cruelty  to animals a felony,  when serious crimes                                                                    
     to people are not.                                                                                                         
                                                                                                                                
CHAIR  ROKEBERG noted  that  the Alaska  Farm  Bureau (AFB)  also                                                               
opposes HB 489; thus the DOL is not alone in its opposition.                                                                    
                                                                                                                                
REPRESENTATIVE  COGHILL  asked  how   many  class  A  misdemeanor                                                               
convictions have taken the full penalty  of the law.  He remarked                                                               
that  if the  current penalties  haven't been  fully applied,  he                                                               
would be reluctant to increase those penalties.                                                                                 
                                                                                                                                
MS. CARPENETI said that she  would research the issue and provide                                                               
the committee  with that information.   She  said that in  one of                                                               
the cases from  the Kenai area, a woman had  horses, dogs, birds,                                                               
and cats, and  had sort of just  turned her house over  to all of                                                               
them.  This woman, who also  had a drug problem, was sentenced to                                                               
three to six years on  the underlying case, although drug charges                                                               
were also involved.                                                                                                             
                                                                                                                                
REPRESENTATIVE   JAMES  said   she,  too,   is  concerned   about                                                               
increasing penalties  to the  felony level.   She  mentioned that                                                               
her proposed  amendment might make  some of the farmers  a little                                                               
happier.                                                                                                                        
                                                                                                                                
Number 0402                                                                                                                     
                                                                                                                                
CANDACE BROWER,  Program Coordinator/Legislative  Liaison, Office                                                               
of the  Commissioner - Juneau,  Department of  Corrections (DOC),                                                               
explained that  when she compiles  fiscal notes  for legislation,                                                               
she usually  consults with the DOL  to try to determine  "what is                                                               
the practice and  how many convictions there  have been regarding                                                               
the legislation."   After acknowledging that in  some years there                                                               
may be  significantly more convictions  than in other  years, she                                                               
relayed that the  DOL reported to her that during  the year 2000,                                                               
there  were  eight  people  who  were  convicted  of  cruelty  to                                                               
animals,  with that  being the  most  serious charge.   In  other                                                               
words, there  may have been  other convictions with  more serious                                                               
charges involved, but only eight  wherein the most serious charge                                                               
was cruelty to  animals, and for those, the  average sentence was                                                               
about ten days.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  BERKOWITZ asked  how  many  of those  individuals                                                               
were repeat offenders.                                                                                                          
                                                                                                                                
MS. BROWER said she did not know the answer to that question.                                                                   
                                                                                                                                
CHAIR  ROKEBERG suggested  making a  first offense  lower than  a                                                               
class A misdemeanor, and then having  a second offense be a class                                                               
A misdemeanor.   He asked  whether that would  alleviate concerns                                                               
regarding proportionality.                                                                                                      
                                                                                                                                
REPRESENTATIVE BERKOWITZ said  he would object to  such a change.                                                               
"A first  offense just  means that  it's the  first time  you got                                                               
somebody;  [a] first  offense could  be a  pretty heinous  act of                                                               
cruelty," he noted.                                                                                                             
                                                                                                                                
CHAIR ROKEBERG  said he did  not disagree, but  indicated concern                                                               
that there  have only been  eight convictions with only  ten days                                                               
in jail.  "That's like a slap on the hand," he added.                                                                           
                                                                                                                                
Number 0212                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  noted that  there is  a wide  degree of                                                               
what  constitutes cruelty  to animals,  and although  he has  not                                                               
looked at  those eight cases, he  said his hunch would  be that a                                                               
number  of them  were  probably in  lieu of  other  charges.   He                                                               
recounted that  he'd had a case  wherein a person had  hung a dog                                                               
for a while, and had had  another case wherein a person had tried                                                               
to dispatch  a number  of puppies  with a hammer  and with  a 22-                                                               
caliber firearm  and was  unsuccessful with  much of  the litter.                                                               
He said that those were "high misdemeanors."                                                                                    
                                                                                                                                
MS.  CARPENETI said  that  although  Chair Rokeberg's  suggestion                                                               
would  address some  of the  proportionality concerns,  she would                                                               
have  to agree  with  Representative Berkowitz  that "it  doesn't                                                               
hurt  to  have   this  possibility  here  and  have   a  class  A                                                               
misdemeanor  - it  seems to  have been  working -  and leave  the                                                               
particular sentences to the judge."                                                                                             
                                                                                                                                
CHAIR  ROKEBERG  indicated  that  he  is not  sure  it  has  been                                                               
working, or else HB 489 would not be before them.                                                                               
                                                                                                                                
REPRESENTATIVE BERKOWITZ said  that he is hearing  that there are                                                               
two  problems.   The first  is the  "problems of  proof with  the                                                               
existing   statute."     The  second   is  the   [propensity]  to                                                               
consolidate multiple cases into a  single count, which, he added,                                                               
might not always be appropriate.                                                                                                
                                                                                                                                
MS. CARPENETI  recalled that in  the case  of the woman  with the                                                               
drug problem, "we argued against  the ... decision to consolidate                                                               
it into  one charge;  we wanted  them to  be charged  in separate                                                               
counts  so that  the judge  ... [would  have] the  opportunity to                                                               
impose a  sentence for each one,  which is what he  or she should                                                               
do."   Hence her  suggestion that the  statute specify  that each                                                               
instance in  which an  animal is  abused be  a separate  case and                                                               
subject  to some  kind of  consecutive sentence.   She  indicated                                                               
that she  is not aware that  there are problems with  the current                                                               
statute,  nor has  Mr.  McConnell informed  her  of any  specific                                                               
problems with it.                                                                                                               
                                                                                                                                
REPRESENTATIVE BERKOWITZ  remarked that over the  past few years,                                                               
others  have tried  to  alter the  existing  statute, among  them                                                               
Representative Ben  Grussendorf.  Representative  Berkowitz again                                                               
mentioned "proof problems."                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  mentioned that the  statute regarding  cruelty to                                                               
animals was recently changed.                                                                                                   
                                                                                                                                
MS.  CARPENETI  added that  that  change  occurred in  1998,  and                                                               
entailed the  addition of AS  11.61.140(a)(2), which  pertains to                                                               
treating an animal with criminal negligence.                                                                                    
                                                                                                                                
TAPE 02-52, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  said he is envisioning  having to bring                                                               
into  the more  remote communities  an expert  witness who  could                                                               
testify  what the  minimal standard  of  care is  or what  humane                                                               
veterinary  care   is,  pointing   out  that  according   to  his                                                               
experiences  in the  criminal  system -  as  both prosecutor  and                                                               
defense attorney  - those cases  fell through the  cracks because                                                               
they became prohibitively  expensive to prosecute.   "You are not                                                               
going to  fly experts out  to Sand Point to  work on a  case ...;                                                               
the more striped down the language  is, the better a case you can                                                               
make for a prosecution," he added.                                                                                              
                                                                                                                                
REPRESENTATIVE JAMES,  at the request  of Chair  Rokeberg, turned                                                               
to her  proposed amendment, hereafter  called Amendment  1, which                                                               
read:                                                                                                                           
                                                                                                                                
     Page 1, line 8, following "care":                                                                                      
          Insert ", that conforms to accepted animal                                                                        
     husbandry practices"                                                                                                   
                                                                                                                                
     Page 1, following line 11:                                                                                                 
          Insert a new bill section to read:                                                                                    
        "* Sec. 2.  AS 11.61.140(b) is amended to read:                                                                     
          (b)  It is a defense to a prosecution under                                                                           
               (1) (a)(1) [OR (2)]  of this section that the                                                                
     conduct of the defendant                                                                                                   
               (A) [(1)]   conformed to  accepted veterinary                                                                
     or animal husbandry practice;                                                                                              
               (B) [(2)]   was  part of  scientific research                                                                
     governed by accepted standards;                                                                                            
               (C)  [(3)]     was  necessarily  incident  to                                                                
     lawful hunting or trapping activities; or                                                                                  
               (D)  [(4)]     conformed   to  professionally                                                                
     accepted training and disciplinary methods; or                                                                         
               (2)  (a)(2) of this  section that the conduct                                                                
     of the defendant                                                                                                       
               (A)     conformed   to  accepted   veterinary                                                                
     practice;                                                                                                              
               (B)     was   part  of   scientific  research                                                                
     governed by accepted standards;                                                                                        
               (C)    was  necessarily  incident  to  lawful                                                                
     hunting or trapping activities; or                                                                                     
               (D)    conformed to  professionally  accepted                                                                
     training and disciplinary methods."                                                                                    
                                                                                                                                
     Renumber the following bill section accordingly.                                                                         
                                                                                                                                
Number 0077                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  said Amendment  1 ensures  that HB  489 did                                                               
not apply  to accepted animal husbandry  practices, and addresses                                                               
the  conduct   of  the  defendant.     She  mentioned   that  the                                                               
agricultural community  has concerns anytime there  is talk about                                                               
altering the cruelty to animal  statutes; they don't want to "get                                                               
caught in the trap."                                                                                                            
                                                                                                                                
MS.  BROWER  mentioned that  some  people  don't think  that  dog                                                               
mushing  practices  are humane,  and  asked  whether Amendment  1                                                               
would give protection to dog mushing practices.                                                                                 
                                                                                                                                
REPRESENTATIVE JAMES,  in response,  read portions of  lines 9-16                                                               
of Amendment 1.                                                                                                                 
                                                                                                                                
CHAIR ROKEBERG asked where dog mushing fits in.                                                                                 
                                                                                                                                
REPRESENTATIVE  JAMES  indicated that  she  thought  it had  been                                                               
included.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  pointed  out   that  the  language  in                                                               
subsection (b)  of [Amendment  1] is  already in  statute, noting                                                               
that he is a little confused as to what [Amendment 1] adds.                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  said:  "It  puts the identification  of the                                                               
accepted animal  husbandry practices up  where it is part  of the                                                               
charge as opposed to part of the defense."                                                                                      
                                                                                                                                
MS. CARPENETI said  she has to express concern "about  that:  ...                                                               
I  think that  this bill  will make  it harder  for us  to prove,                                                               
beyond a reasonable doubt, animal cruelty."                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  said that  according to  her understanding,                                                               
that's absolutely true.  She  indicated that she wanted to ensure                                                               
that  it be  determined  in the  beginning  that individuals  are                                                               
guilty  of "this"  before they  have to  defend themselves.   She                                                               
said that  "this puts the  burden on the prosecution,  as opposed                                                               
to the defense."                                                                                                                
                                                                                                                                
REPRESENTATIVE BERKOWITZ  said that  as practical matter,  when a                                                               
crime  is  being  charged,  if   there  is  a  defense  that  the                                                               
prosecutor is able to perceive,  he/she cannot ethically proceed;                                                               
"one of  the ethical requirements  before you can charge  is that                                                               
you have to  believe that you can get beyond  a reasonable doubt,                                                               
and if  you have a  reason to think that  one of the  defenses is                                                               
applicable, you can't get beyond a reasonable doubt."                                                                           
                                                                                                                                
MS. CARPENETI added:   "And I will note that  these are defenses,                                                               
so the  state has to disprove  them beyond a reasonable  doubt in                                                               
order to get a [conviction]."                                                                                                   
                                                                                                                                
REPRESENTATIVE JAMES said that regardless  of whether Amendment 1                                                               
gets adopted, she  wanted to ensure that people  engaged in valid                                                               
activities don't get challenged.                                                                                                
                                                                                                                                
REPRESENTATIVE MEYER  remarked that  Amendment 1 appears  to take                                                               
HB 489 in a completely different direction.                                                                                     
                                                                                                                                
Number 0442                                                                                                                     
                                                                                                                                
MARIE RILEY, Staff to Representative  Mike Chenault, Alaska State                                                               
Legislature,  sponsor,  said  that   she  has  done  considerable                                                               
research on  animal cruelty  legislation.   She pointed  out that                                                               
even  before  a  case  gets  to the  stage  of  prosecution,  the                                                               
responding  animal control  officer  and  [Alaska] State  Trooper                                                               
have already determined the severity  of the situation.  She said                                                               
that she is  referring to situations of animal  cruelty such that                                                               
it  endangers  or  kills   animals;  intentionally  causes  pain,                                                               
suffering,  or death;  and could  include  neglecting to  provide                                                               
food, water, or  shelter.  In all instances,  the animal suffers,                                                               
and in some cases, clearly the perpetrator means to cause harm.                                                                 
                                                                                                                                
MS. RILEY  said that the types  of animal cruelty that  HB 489 is                                                               
attempting to address are not  simply situations in which someone                                                               
forgot to feed  the dog.  She mentioned that  when animal control                                                               
officers  respond to  complaints, they  don't just  go out  once;                                                               
they go  out and make every  effort to educate the  owner so that                                                               
he/she can take care of the  problem.  She reiterated that HB 489                                                               
is intended to  address severe cases of animal  cruelty - blatant                                                               
animal cruelty.                                                                                                                 
                                                                                                                                
CHAIR  ROKEBERG asked  about the  "criminal negligence"  standard                                                               
referred to in Section 1(a)(2).                                                                                                 
                                                                                                                                
MS. CARPENETI  explained that criminal  negligence is  the lowest                                                               
standard of  culpable mental  state, and  that this  language was                                                               
added to the current statute in 1998.                                                                                           
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  mentioned  that  it  made  prosecution                                                               
easier.  Prior  to that language addition, he  noted, the statute                                                               
only said, "knowingly inflicts severe  physical pain or prolonged                                                               
suffering on  an animal", which  is very  difficult to show.   He                                                               
pointed out  that one can't  ask the  animal, "Did that  hurt you                                                               
for  a long  period  of  time?"   He  asked  the sponsor's  staff                                                               
whether they'd  had a chance  to see  how the "model  penal code"                                                               
addresses animal cruelty.                                                                                                       
                                                                                                                                
Number 0633                                                                                                                     
                                                                                                                                
MS. WRIGHT replied:                                                                                                             
                                                                                                                                
     There's a  couple of things.   First of all, we  have a                                                                    
     state  veterinarian that  takes care  of these  issues,                                                                    
     that goes  in and determines some  of these cruelty-to-                                                                    
     animals  [issues].    Thirty-three  other  states  have                                                                    
     provisions for  penalties; Alaska  is sadly  lagging in                                                                    
     their penalty for  felonies.  The model  law is written                                                                    
     by  the "humane  society of  America," and  we are  far                                                                    
     behind  that.    The  models  that  we  used  are  from                                                                    
     Nebraska, Michigan, Washington,  Iowa - everywhere; ...                                                                    
     we've  looked at  every state.    Basically, there  are                                                                    
     thirty-three  states that  have  provisions for  felony                                                                    
     punishments in their animal cruelty law.                                                                                   
                                                                                                                                
     As far  as the case  ... in  Sterling, I talked  to Mr.                                                                    
     Wolfe from  the Kenai prosecutor's office,  [and] there                                                                    
     have been  ... nine charges  ... filed.   Ms. Boughton,                                                                    
     the perpetrator in this crime,  has been in court three                                                                    
     times  since she  was charged,  and we  have failed  to                                                                    
     serve her with  a summons to appear  on animal cruelty.                                                                    
     When I call the  District Attorneys office, it's almost                                                                    
     like, "Oh God, another  call about animal cruelty; what                                                                    
     about  kids?"    And  that's not  what  we're  here  to                                                                    
     address.   I'm really  sorry kids  get abused;  I don't                                                                    
     like it, ... but the fact  of the matter is, is that we                                                                    
     need  to address  animal  cruelty in  Alaska.   We  are                                                                    
     behind model law in any size, shape, or form.                                                                              
                                                                                                                                
MS. WRIGHT  mentioned that  she has  provided the  committee with                                                               
copies  of  the information  gathered  by  Legislative Legal  and                                                               
Research  Services,   as  well  as  a   "partial  petition"  from                                                               
"hundreds of  people" that  really want  to see  this legislation                                                               
[adopted].   She indicated that  the perpetrator in  the Sterling                                                               
case,  having  created similar  situations  two  prior times,  is                                                               
currently looking  for another  piece of  property upon  which to                                                               
create  the same  conditions.   Ms. Wright  relayed that  about a                                                               
month ago, there was a man who  drug his dog behind his truck for                                                               
eight or  ten miles, and  the dog had  to be destroyed;  this man                                                               
has been  charged and served,  but Ms. Boughton, who  had between                                                               
40 and 60 dogs, has not  been served even though she has appeared                                                               
in court twice.                                                                                                                 
                                                                                                                                
Number 0818                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ pointed out that  passage of HB 489 will                                                               
not affect the  charging decision in the Sterling case.   He said                                                               
that in order to correct the  failure to charge, he would need to                                                               
know whether  there is some  obvious reason why  "they're" unable                                                               
to pursue that case.                                                                                                            
                                                                                                                                
MS. WRIGHT indicated her belief  that there isn't an incentive to                                                               
pursue  the case.    "We  had to  encourage  prosecution of  this                                                               
case," she  explained; law  enforcement agreed  to take  the dogs                                                               
and turn  them over to  the Alaska SPCA,  but wanted to  keep the                                                               
case quiet.   Members of  the Kenai community,  however, wouldn't                                                               
stand for  it.   "This was  a serious  matter, ...  these animals                                                               
were locked in a bus with no  food, no water; they were laying in                                                               
feces - frozen  feces," she stated, and both she  and the trooper                                                               
were  physically ill  after seeing  the conditions.   "And  she's                                                               
going to do it again," warned Ms. Wright.                                                                                       
                                                                                                                                
CHAIR  ROKEBERG asked  why the  sponsor didn't  take the  tack of                                                               
establishing an  aggravated offense  that could  be charged  as a                                                               
felony -  for example,  aggravated animal  cruelty -  rather than                                                               
addressing a second offense as is done in HB 489.                                                                               
                                                                                                                                
MS. WRIGHT said:  "We weren't advised that we could do that."                                                                   
                                                                                                                                
CHAIR ROKEBERG noted that this is what Maine and Minnesota did.                                                                 
                                                                                                                                
MS. WRIGHT said:  "Our  [Legislative Legal and Research Services]                                                               
didn't  like those  terms; the  only options  that we  were given                                                               
were the class A misdemeanor and then the [class] C felony."                                                                    
                                                                                                                                
REPRESENTATIVE MEYER asked Ms. Wright to comment on Amendment 1.                                                                
                                                                                                                                
MS. WRIGHT  opined that it is  a fine amendment and  helps define                                                               
what the qualities of care are.                                                                                                 
                                                                                                                                
REPRESENTATIVE  COGHILL  noted that  a  class  A misdemeanor  can                                                               
carry  a  $5,000 fine.    He  asked  whether  there is  any  data                                                               
regarding how the class A misdemeanor fine has been applied.                                                                    
                                                                                                                                
MS. WRIGHT said  she did not have that data  on hand, adding that                                                               
the  animal  cruelty  laws  in   Alaska  are  very  difficult  to                                                               
prosecute.   She noted  that in  the previously  mentioned "horse                                                               
case," she knew  the woman and knew that  numerous complaints had                                                               
been made, but [law enforcement]  did nothing until the situation                                                               
was so bad that there were animals laying dead in piles.                                                                        
                                                                                                                                
REPRESENTATIVE COGHILL indicated that  before he would be willing                                                               
to increase the penalties, he would  like some kind of proof that                                                               
the  current  penalties  are  being applied  but  are  still  not                                                               
sufficient to deter the behavior.                                                                                               
                                                                                                                                
Number 1073                                                                                                                     
                                                                                                                                
MS. WRIGHT said:                                                                                                                
                                                                                                                                
     One  of the  most important  features of  this bill  is                                                                    
     recognizing  that  there  is a  problem,  and  ordering                                                                    
     psychological  counseling.    Every ...  mass  murderer                                                                    
     that we've  done research  on, including  Robert Hansen                                                                    
     from  Anchorage,  was guilty  of  animal  cruelty as  a                                                                    
     child; Jeffrey  Dahmer was guilty of  animal cruelty as                                                                    
     a child.   I think what our Department of  Law needs to                                                                    
     do is  be a little  bit more aggressive  in prosecuting                                                                    
     some of  these cases.   There were no charges  filed at                                                                    
     first in  Ms. Boughton's case until  [there was] outcry                                                                    
     from the community.                                                                                                        
                                                                                                                                
     ... I  had difficulty  even getting through  to someone                                                                    
     to confirm  the charges,  and then  trying to  find out                                                                    
     why she hadn't been served  yet when I know where she's                                                                    
     at -  I have given  them the  address.  Why  hasn't she                                                                    
     been  served?   I don't  know.   There's no  aggressive                                                                    
     [prosecution].   What's  really  frightening  to me  is                                                                    
     that she now has the care  of a child, and if we're not                                                                    
     going to stop  animal cruelty, what is she  going to do                                                                    
     with that child?                                                                                                           
                                                                                                                                
REPRESENTATIVE  COGHILL  remarked  that  he  has  concerns  about                                                               
making something a felony when  the state isn't even bothering to                                                               
prosecute  at the  misdemeanor level  and make  use of  the those                                                               
penalties.                                                                                                                      
                                                                                                                                
REPRESENTATIVE BERKOWITZ commented:                                                                                             
                                                                                                                                
     We have  crushed the  [Alaska State]  Troopers' budget,                                                                    
     we  have  crushed  the  prosecutor's  budget,  we  have                                                                    
     crushed  the  court  budget, and  ...  the  problem  is                                                                    
     [that] when  folks are looking  at what  [you're] going                                                                    
     to  prosecute -  are  you going  to  go after  domestic                                                                    
     violence and major felony assault,  or are you going to                                                                    
     do an  animal cruelty  case - it's  very tough  to make                                                                    
     that  decision,  but  you're going  to  go  for  [cases                                                                    
     involving]  people.    And that's  the  situation  that                                                                    
     they're  in;  those  offices  are  so  overloaded  down                                                                    
     there.   And  so you  want  to know  about cutting  the                                                                    
     budget?   This is  one of  the consequences  of cutting                                                                    
       the budget:  ... these kind of cases don't get the                                                                       
     attention they deserve.                                                                                                    
                                                                                                                                
CHAIR  ROKEBERG  asked for  input  regarding  what the  committee                                                               
should do to address the issues raised by HB 489.                                                                               
                                                                                                                                
Number 1257                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES said that first  the goal of the legislation                                                               
ought to be  determined:  "Is it to punish  these people that are                                                               
doing this?  Is it to save the  animals?  Is it [to] stop it from                                                               
happening  again?...    There's   all  those  different  kind  of                                                               
approaches  as  to  how  you  deal  with  it."    She  said  that                                                               
Representative  Berkowitz is  right; "every  time we  put another                                                               
law on  the book, it costs  us more money," as  does putting more                                                               
people in  prison.  There  is a cost associated  with everything,                                                               
she  noted,  and people  have  to  be  willing  to pay  the  cost                                                               
associated with a  desired goal.  She suggested  that there ought                                                               
to be  a better description  of what the  crime is; to  just list                                                               
certain  activities  as being  acceptable  and  then going  after                                                               
"whatever  is  leftover"  is  not  a good  solution.    She  also                                                               
mentioned  that  even  if  HB  489 becomes  law,  if  no  one  is                                                               
prosecuted, then  it is questionable whether  anything has really                                                               
been gained.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BERKOWITZ, referring  to page  2 [paragraphs  (1)                                                               
and (2)], said it  seems to him that a court ought  to be able to                                                               
take those actions currently.  He  asked Ms. Carpeneti if that is                                                               
accurate.                                                                                                                       
                                                                                                                                
MS. CARPENETI opined  that the court could do so,  but noted that                                                               
it doesn't  hurt to  "say it  again, under  these circumstances,"                                                               
nor would  it hurt  to say  that each animal  can be  "a separate                                                               
charge" requiring some consecutive time  in jail for every animal                                                               
that is abused.   She offered that this last  suggestion is a way                                                               
of accomplishing  the sponsor's goals  without having to go  to a                                                               
felony.   She indicated that  merely combining many  instances of                                                               
abuse  into one  charge, as  the judge  did in  one of  the Kenai                                                               
cases, is problematic.                                                                                                          
                                                                                                                                
REPRESENTATIVE BERKOWITZ proposed:                                                                                              
                                                                                                                                
     Deleting "provide  the minimal standard of"  on lines 7                                                                    
     and 8  - ... the  new language ... [in  paragraph] (2),                                                                    
     because  I  think  that  makes  it  more  difficult  to                                                                    
     prosecute the  cases.  I  understand the intent,  but I                                                                    
     think  the practical  consequences are  adverse to  the                                                                    
     intent.    In fact,  I  would  just ...  eliminate  the                                                                    
     changes in  [paragraph] (2).  I  understand the intent,                                                                    
     but [you've] got  to go in and prove each  one of these                                                                    
     elements, and  that compounds the  case.  For  the sake                                                                    
     of moving  this thing along  ... to [the  House Finance                                                                    
     Committee],  I would  remove the  felony provision  ...                                                                    
     [for] now.   I would  then ... [move] the  elements ...                                                                    
     [found at the]  top of ... page 2; I  think [they] more                                                                    
     properly belong  in Title  12 - I  don't know  what the                                                                    
     appropriate  section  is there,  but  Title  12 is  the                                                                    
     sentencing section.   I  would raise  those amendments,                                                                    
     suggest those amendments - conceptually  - and then I'd                                                                    
     be willing to move the bill.                                                                                               
                                                                                                                                
Number 1396                                                                                                                     
                                                                                                                                
REPRESENTATIVE    KOOKESH   suggested    putting   Representative                                                               
Berkowitz's  conceptual amendments  into  a committee  substitute                                                               
(CS), which the committee could then review before moving out.                                                                  
                                                                                                                                
CHAIR ROKEBERG asked whether the  committee wanted to include Ms.                                                               
Carpeneti's suggestion regarding multiple charges.                                                                              
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  indicated  that  he  would  like  that                                                               
included.                                                                                                                       
                                                                                                                                
CHAIR ROKEBERG asked  weather the CS should  also include Section                                                               
3, which addresses the duty to report.                                                                                          
                                                                                                                                
REPRESENTATIVE  BERKOWITZ indicated  that  he would  like to  see                                                               
that provision included as well.                                                                                                
                                                                                                                                
[HB 489 was  held over for the purpose of  developing a committee                                                               
substitute (CS).]                                                                                                               
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 1442                                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Judiciary Standing Committee meeting was adjourned at 4:00 p.m.                                                                 

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