02/13/2012 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB274 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 235 | TELECONFERENCED | |
| *+ | HB 274 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 13, 2012
3:21 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Craig Johnson, Vice Chair
Representative Steve Thompson
Representative Lindsey Holmes
Representative Bob Miller
MEMBERS ABSENT
Representative Mike Chenault
Representative Dan Saddler
COMMITTEE CALENDAR
HOUSE BILL NO. 274
"An Act relating to the exemption of certain acts and
transactions from the provisions dealing with unfair methods of
competition and unfair or deceptive acts or practices."
- MOVED HB 274 OUT OF COMMITTEE
HOUSE BILL NO. 235
"An Act relating to certain vehicles, including trailers; and
relating to motor vehicle dealer advertising, motor vehicle
dealer sales of used motor vehicles, motor vehicle sales
contracts, motor vehicle service contracts, and motor vehicle
sales financing."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 274
SHORT TITLE: UNFAIR TRADE PRACTICES
SPONSOR(s): REPRESENTATIVE(s) HOLMES, OLSON
01/17/12 (H) PREFILE RELEASED 1/13/12
01/17/12 (H) READ THE FIRST TIME - REFERRALS
01/17/12 (H) L&C
02/13/12 (H) L&C AT 3:15 PM CAPITOL 106
WITNESS REGISTER
JAMES WALDO, Staff
Representative Lindsey Holmes
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 274 on behalf, Representative
Lindsey Holmes, a joint prime sponsor of HB 274.
CLYDE (ED) SNIFFEN, JR., Senior Assistant Attorney General
Commercial/Fair Business Section
Civil Division (Anchorage)
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of HB 274.
ACTION NARRATIVE
3:21:37 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:21 p.m. Representatives Holmes,
Miller, Johnson, and Olson were present at the call to order.
Representative Thompson arrived as the meeting was in progress.
HB 274-UNFAIR TRADE PRACTICES
3:22:12 PM
CHAIR OLSON announced that the only order of business would be
HOUSE BILL NO. 274, "An Act relating to the exemption of certain
acts and transactions from the provisions dealing with unfair
methods of competition and unfair or deceptive acts or
practices."
3:22:27 PM
REPRESENTATIVE LINDSEY HOLMES, Alaska State Legislature, prime
joint sponsor, stated HB 274 is a consumer protection bill that
would clear up a potential ambiguity in the Alaska's Consumer
Protection Act (CPA). This bill would clarify that the state
can step in and protect Alaskan consumers when the federal
government is not pursuing enforcement of prohibited conduct.
This bill would make it clear that the state and its citizens
are not without remedy due to a misapplication of what is known
as the safe harbor provision in the consumer protection laws.
3:23:26 PM
JAMES WALDO, Staff, Representative Lindsey Holmes, Alaska State
Legislature, on behalf of Representative Lindsey Holmes agreed
with the sponsor's summary of the bill. He reiterated that
Alaska's consumer protection laws should be able to protect
Alaska and its citizens in instances in which the federal
government is unable or disinterested in enforcing laws that
overlap with the state's Consumer Protection Act (CPA). This
bill would remove an exemption for federal law contained in the
CPA. Currently, an exemption in the CPA says that if conduct is
covered by another state law, or federal law, or regulation, a
party cannot bring an action using the CPA. He related that the
CPA works well with state law, since the legislature and the
governor are in control of state law. Additionally, if the
state decided to ramp up enforcement or scale it back, it could
do so; however, the state has less control with respect to
federal regulation or prohibitions.
3:25:04 PM
MR. WALDO highlighted that little can be done when the federal
government decides to handle a case or preempts the state. In
some instances, the federal government may leave it up to states
to enforce certain conduct. He highlighted that the problem
arises when the federal government expresses some interest, yet
has not preempted the state nor taken any action. The joint
sponsors want to make the state's position clear, that it is
willing and able to pursue enforcement when bad conduct happens.
The current exemption in law leaves the enforcement jurisdiction
somewhat unclear. In some instances a federal judge has not
issued a ruling, but may have implied that the exemption would
apply in certain cases. He offered one remedy is to remove from
the CPA the exemption for federal law. In instances in which
the federal government preempts the state, little can be done.
Thus in the gray areas, the proposed change would clearly
indicate the state has the authority to enforce the CPA. He
gave an example in which a consumer identifies troubling conduct
from an insurance company, and concluded that the Division of
Insurance (DOI) would proceed to investigate the matter.
However, in areas in which jurisdiction is unclear, or in other
gray areas, this bill would empower the DOL to enforce the CPA.
In closing, he summarized that under the bill, the state could
move forward to enforce the law when no other remedy is
available and it would clarify that the state has the right to
do so.
3:27:20 PM
REPRESENTATIVE JOHNSON referred to page 1, line 6, and asked for
the effect of removing the language, "or regulation."
MR. WALDO asked for further clarification.
REPRESENTATIVE JOHNSON suggested that removing the language "or
regulation" from the bill would be to only refer to statute.
MR. WALDO suggested that the Department of Law could better
answer this. He offered his belief that removing the reference
to regulation might create some difficulty in instances in which
state regulations have already been promulgated, such as with
the Division of Insurance (DOI). He emphasized the importance
of relying on specific state laws govern that conduct - in this
case the DOI - rather than relying on the DOL since the DOI's
enforcement would be preferable to enforce the CPA.
3:28:57 PM
REPRESENTATIVE JOHNSON said he is comfortable if the regulations
adhere to the intent of the statute. He said,"...they don't
always and that is the concern that I have."
3:29:30 PM
CLYDE (ED) SNIFFEN, JR., Senior Assistant Attorney General,
Commercial/Fair Business Section, Civil Division (Anchorage),
Department of Law (DOL), stated his duties include the
enforcement of the CPA. He related that the DOL has experience
with HB 274. He characterized this bill as an important one for
his office for the reasons Mr. Waldo mentioned. He said the
state's CPA covers a lot of conduct. The DOL does its best to
enforce the CPA against wrongdoers, whether the wrongdoers are
in the state or outside the state. This bill pertains to
conduct regulated or prohibited by federal or state law. As Mr.
Waldo explained, when a federal statute or regulation limits
certain conduct, enforcement is off limits to the DOL, even when
the federal government decides not to enforce the federal law.
This bill would remove the reference to federal law in the
exemption statute. Thus the state could still take action even
if the federal government decided not to pursue enforcement of
conduct regulated and prohibited by federal law. He offered
numerous instances exist in which the federal government
recognizes the state's authority to enforce certain laws jointly
with the federal government. However, it becomes difficult for
the DOL to take action when the federal government decides not
to pursue a matter. He characterized this bill as a means to
strengthen the DOL's statute and to give the DOL another tool to
use to take action and not leave the state without a remedy. He
concluded by offering the DOL's support for HB 274.
3:31:48 PM
REPRESENTATIVE JOHNSON asked what would happen in an instance in
which the regulation was counter to the statute.
MR. SNIFFEN, in response to Representative Johnson's suggestion
to Mr. Waldo, said that removing the reference to regulation in
the bill would be fine. He offered his belief that when conduct
is regulated by statute by removing the reference to regulation
would broaden the scope of the DOL and allow the department to
pursue action in a number of cases. He understood the concern,
with respect to regulations, which may expand beyond the scope
of the statute and may give an agency more authority than the
legislature intended. He cautioned that changing the language
to collectively include statute and regulation could limit the
DOL's authority to enforce the CPA since many statutes do not
have corresponding regulations to interpret or enforce the
statute. He reiterated that some issues may arise. He
summarized that removing the reference to regulation would
expand the DOL's authority and give his office discretion to
take action in certain areas, but combining statute and
regulation in the proposed paragraph would be more restrictive.
3:33:52 PM
CHAIR OLSON related his understanding that the DOL has oversight
over any state agency or division.
MR. SNIFFEN clarified that conduct is regulated by statute in
some agencies, such as the DOI or the Division of Corporations,
Business, and Professional Licensing (DCBPL), which are agencies
with statutes and regulations that specifically prohibit certain
conduct. These agencies have remedies in their statutes for
misconduct and the agencies can take action against violators,
including issuing fines or imposing injunctive orders. He
explained that in those cases, the DOL does not have
jurisdiction to enforce the conduct, but rather it is up to the
state agency to enforce its statute or regulation.
CHAIR OLSON asked whether that would be true even if the
agencies had exceeded their scope of authority.
MR. SNIFFEN answered that the specific question of scope of
authority would need to be decided first. He pointed out in
circumstances in which a court has ruled that the regulation was
not authorized by statute and the specific regulation also
removed the DOL's jurisdiction, the DOL could then step in.
3:35:26 PM
REPRESENTATIVE JOHNSON asked whether it would clarify the
authority if the language included a caveat so the paragraph
would read, "statute and regulation, if they exist." He related
his understanding that in the absence of regulation the statute
would take precedent.
MR. SNIFFEN responded that he would need to further consider the
language. He did not see anything objectionable with the
language under consideration, so long as the statutory authority
exists without a corresponding regulation. He concluded that
the DOL interacts fine with state agencies, but what will help
the department's efforts is to remove the reference to the
federal agencies.
3:36:55 PM
REPRESENTATIVE JOHNSON acknowledged the importance of state
regulations matching statutory authority. He suggested that the
revisor may wish to consider adding language "if they exist" to
cease the regulatory overreach of some agencies.
MR. SNIFFEN suggested the committee may wish to consider another
way to perhaps accomplish the same goal, by adding language,
such as "regulated by a statute or by a regulatory board or
agency through its powers." He offered to give this concept
further consideration rather than to combine "statute and
regulation" in this bill.
REPRESENTATIVE JOHNSON remarked if it were that easy [to prevent
overreach] that he would have done so a long time ago.
3:38:50 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 274.
3:39:05 PM
REPRESENTATIVE JOHNSON moved to report HB 274 out of committee
with individual recommendations and the accompanying fiscal
note. There being no objection, HB 274 was reported from the
House Labor and Commerce Standing Committee.
3:39:49 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
3:39 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB274 Sponsor Statement.pdf |
HL&C 2/13/2012 3:15:00 PM SJUD 4/6/2012 1:30:00 PM |
HB 274 |
| HB274 ver B.PDF |
HL&C 2/13/2012 3:15:00 PM |
HB 274 |
| HB274 Supporting Documents-Beistline Order re MTD.pdf |
HL&C 2/13/2012 3:15:00 PM SJUD 4/6/2012 1:30:00 PM |
HB 274 |
| HB274 Fiscal Note-LAW-CIV-02-10-12.pdf |
HL&C 2/13/2012 3:15:00 PM |
HB 274 |