Legislature(2015 - 2016)BELTZ 105 (TSBldg)
04/11/2016 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| SB108 | |
| SB113 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 108 | TELECONFERENCED | |
| + | SB 113 | TELECONFERENCED | |
| *+ | SB 211 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE JUDICIARY STANDING COMMITTEE
April 11, 2016
1:38 p.m.
MEMBERS PRESENT
Senator Lesil McGuire, Chair
Senator John Coghill, Vice Chair
Senator Mia Costello
Senator Bill Wielechowski
Senator Peter Micciche
MEMBERS ABSENT
All members present.
COMMITTEE CALENDAR
SENATE BILL NO. 108
"An Act repealing and reenacting the Alaska Securities Act,
including provisions relating to exempt securities and
transactions; relating to registration of securities, firms, and
agents that offer or sell securities and investment advice;
relating to administrative, civil, and criminal enforcement
provisions, including restitution and civil penalties for
violations; allowing certain civil penalties to be used for an
investor training fund; establishing increased civil penalties
for harming older Alaskans; retaining provisions concerning
corporations organized under the Alaska Native Claims Settlement
Act; amending Rules 4, 5, 54, 65, and 90, Alaska Rules of Civil
Procedure; and providing for an effective date."
- MOVED CSSB 108(L&C) OUT OF COMMITTEE
SENATE BILL NO. 113
"An Act relating to prescribing, dispensing, and administering
an investigational drug, biological product, or device by
physicians for patients who are terminally ill; and providing
immunity for persons manufacturing, distributing, or providing
investigational drugs, biological products, or devices."
- MOVED CSSB 113(HSS) OUT OF COMMITTEE
SENATE BILL NO. 211
"An Act relating to the limitation period to commence a false
claims action; relating to recovery for false claims for state
or municipal funds; and amending Rules 4, 24, and 46, Alaska
Rules of Civil Procedure."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 108
SHORT TITLE: AK SECURITIES ACT; PENALTIES; CRT. RULES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
04/13/15 (S) READ THE FIRST TIME - REFERRALS
04/13/15 (S) L&C, JUD, FIN
02/09/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/09/16 (S) Scheduled but Not Heard
02/11/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/11/16 (S) Heard & Held
02/11/16 (S) MINUTE (L&C)
02/18/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/18/16 (S) Heard & Held
02/18/16 (S) MINUTE (L&C)
03/03/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/03/16 (S) Moved CSSB 108(L&C) Out of Committee
03/03/16 (S) MINUTE (L&C)
03/04/16 (S) L&C RPT CS 2DP 1NR NEW TITLE
03/04/16 (S) DP: COSTELLO, GIESSEL
03/04/16 (S) NR: MEYER
04/04/16 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
04/04/16 (S) Scheduled but Not Heard
04/11/16 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 113
SHORT TITLE: NEW DRUGS FOR THE TERMINALLY ILL
SPONSOR(s): WIELECHOWSKI
04/17/15 (S) READ THE FIRST TIME - REFERRALS
04/17/15 (S) HSS, JUD
02/24/16 (S) HSS AT 1:30 PM BUTROVICH 205
02/24/16 (S) Heard & Held
02/24/16 (S) MINUTE (HSS)
03/30/16 (S) HSS AT 1:30 PM BUTROVICH 205
03/30/16 (S) Moved CSSB 113(HSS) Out of Committee
03/30/16 (S) MINUTE (HSS)
04/01/16 (S) HSS RPT CS 1DP 2NR NEW TITLE
04/01/16 (S) DP: ELLIS
04/01/16 (S) NR: STEDMAN, STOLTZE
04/11/16 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
KEVIN ANSELM, Director
Division of Banking and Securities
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Introduced SB 108 on behalf of the
administration.
KRISTY NAYLOR, Securities Examiner
Division of Banking and Securities
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Stated the department has no concerns with
the way SB 108 is drafted.
BROOKE IVY, Staff
Senator Bill Wielechowski
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 113 on behalf of the sponsor.
KURT ALTMAN, Attorney
Goldwater Institute
Phoenix, Arizona
POSITION STATEMENT: Testified in support of SB 113.
MICHAEL MAHARREY, National Communications Director
10th Amendment Center
Lexington, Kentucky
POSITION STATEMENT: Testified in support of SB 113.
CHARLOTTE WHITELEY, representing herself
Homer, Alaska
POSITION STATEMENT: Testified in support of SB 113.
KEN LANDFIELD, representing himself
POSITION STATEMENT: Testified in support of SB 113.
ACTION NARRATIVE
1:38:40 PM
CHAIR LESIL MCGUIRE called the Senate Judiciary Standing
Committee meeting to order at 1:38 p.m. Present at the call to
order were Senators Wielechowski, Coghill, Costello, and Chair
McGuire. Senator Micciche arrived soon thereafter. She reviewed
the agenda and noted that SB 211 would not be heard.
SB 108-AK SECURITIES ACT; PENALTIES; CRT. RULES
1:39:30 PM
CHAIR MCGUIRE announced the consideration of SB 108. She noted
that this is the first hearing and the committee is considering
CSSB 108(L&C).
1:39:58 PM
KEVIN ANSELM, Director, Division of Banking and Securities,
Department of Commerce, Community and Economic Development
(DCCED), introduced SB 108 on behalf of the administration. She
informed the committee that the bill separates securities
statutes from the Alaska Native Claims Settlement Act (ANCSA)
statutes to reduce confusion and improve understanding of both
acts. It recognizes and incorporates current industry standards
and terms. It synthesizes with other states' laws to make it
easier for businesses, entrepreneurs, and investors to
understand their rights, responsibilities, and opportunities in
Alaska through adopting many of the Uniform Securities Act
provisions from the 2002 model act. The bill deters investment
scams and harm to Alaskans by increasing civil penalties and
providing resources from those penalties for investor, consumer,
or entrepreneurial education. SB 108 also enhances penalties
against people who harm older Alaskans.
MS. ANSELM offered to review the summary of changes from version
A to version W and the sectional analysis.
1:41:13 PM
SENATOR COGHILL requested a review of the changes.
CHAIR MCGUIRE asked Ms. Anselm to review the changes and noted
that Senator Micciche joined the committee.
1:41:34 PM
MS. ANSELM read the following summary of changes between version
A and version W of SB 108.
Structural Changes. The order of the sections has been
reorganized. SB 108A was drafted with the new AS 45.56
Alaska Securities Act at the beginning of the bill
with other statutes amended in numerical order at the
end. SB 108 CS W now follows the order of the statutes
amended beginning with Title 06.
Drafting. Legislative Counsel made conforming drafting
and legal improvements throughout the bill including
consolidating definitions into Article 7, Sec
45.56.740 or citing to existing definitions in other
statutes.
Sec. 1 - 24. Renumbered from SB108A and moved to the
front of the bill. SB 108 A, Sec. 7. AS 21.42.315(k)
is deleted because 'variable annuity' is removed from
the definition of security (see Article 7 Definitions)
Sec. 25. Chapter 56. Alaska Securities Act (pg. 14)
Article 1. General Provisions. No changes.
Article 2. Exemptions from Registration of Securities.
Small intrastate securities offerings (referred to as
"Crowdfunding") was removed at the request of Senate
Labor and Commerce (SB 126 contains similar
provisions)
Article 3. Registration of Securities and Notice
Filing of Federal Covered Securities. No substantive
changes.
Article 4. Broker-dealers, Agents, Investment
Advisers, Investment Adviser Representatives, and
Federal Covered Investment Advisers. No substantive
changes.
Article 5. Fraud and Liabilities. No substantive
changes.
Article 6. Administration and Judicial Review. (pp.
66-86)
Sec. 45.56.605(e) relating to the securities education
and training fund was moved to a new Sec. 45.56.625
Securities investor education and training fund.
Sec. 45.56.625 Jurisdiction contents were combined
with Sec. 45.56.635 Applicability of the chapter.
Sec. 45.56.660. Civil liability and Sec 45.56.665
Rescission Offers. The legal rate of interest for
rescission and civil enforcement is the legal rate of
interest under AS 09.30.970 or eight percent a year,
whichever is greater. (Bold is new)
Article 7. Miscellaneous and Additional General
Provisions.
Sec. 45.56.900. Definitions.
(23) Older Person (formerly Older Alaskan)- a natural
person that is age 60 or older (adapted from AS
47.26.290(6))
(32) Security - "variable annuity" is deleted from the
definition
Sections 26- 35. No substantive changes.
1:44:49 PM
SENATOR COGHILL asked if the two statutes were separated for
ease of application.
MS. ANSELM confirmed that it will be much easier for the public
and the corporations if the statutes relating to securities are
lifted out of the statutes that relate to the Alaska Native
Claims Settlement Act proxy solicitations.
SENATOR COGHILL asked why variable annuity was removed.
MS. ANSELM said the insurance industry is concerned that
including variable annuity in the Securities Act would result in
more regulation over that section of the industry. The division
does not agree and the topic will likely be discussed in the
future.
SENATOR WIELECHOWSKI asked how variable annuities will be
regulated in Alaska
MS. ANSELM replied the same as they are now, which is through
the Insurance Act.
SENATOR WIELECHOWSKI asked if that is standard practice among
states.
MS. ANSELM said they're regulated a variety of ways and it's
something the division wants to vet further before bringing the
issue up again.
SENATOR WIELECHOWSKI asked if the division has had many
complaints about the way variable annuities are dealt with in
Alaska.
MS. ANSELM said there have been complaints and often they bridge
insurance and securities because variable annuity sales people
are often also registered as securities sales people. She
reported that the two divisions work well together to address
the complaints.
CHAIR MCGUIRE informed the committee that Renee Wardlaw with the
Department of Law and Kristy Naylor with the Division of Banking
and Securities are available to answer questions.
SENATOR COGHILL asked if either has concerns with the bill.
1:48:54 PM
KRISTY NAYLOR, Securities Examiner, Division of Banking and
Securities, Department of Commerce, Community and Economic
Development (DCCED), stated the department has no concerns with
the way SB 108 is drafted.
1:49:23 PM
CHAIR MCGUIRE closed public testimony on SB 108.
1:49:36 PM
SENATOR COGHILL moved to report the CS for SB 108(L&C) from
committee with individual recommendations and attached fiscal
note(s).
CHAIR MCGUIRE announced that without objection, CSSB 108(L&C) is
reported from Senate Judiciary Standing Committee.
SB 113-NEW DRUGS FOR THE TERMINALLY ILL
1:50:02 PM
CHAIR MCGUIRE announced the consideration of SB 113. [This is
the first hearing and CSSB 113(HSS) is before the committee.]
1:50:27 PM
SENATOR WIELECHOWSKI, Alaska State Legislature sponsor of SB
113, introduced the bill speaking to the following sponsor
statement:
Senate Bill 113 would create a legal climate in which
terminally ill patients who have exhausted other
available treatments and do not qualify for clinical
trials could gain faster access to safe, but
experimental drugs in an effort to save their own
lives. By providing certain immunities to prescribing
physicians, manufacturers and distributors acting in
good faith, this bill would allow terminal patients,
in consultation with their doctor, the freedom to try
new treatments as they fight to survive, without the
burden of waiting for federal approval.
The United States Food and Drug Administration
currently offers an "expanded access" or
"compassionate use" exemption that allows terminally
ill patients that meet certain criteria to access
drugs in the clinical trial phase, but not fully
approved. However, even with recent efforts by the FDA
to streamline the application process, this exemption
program is known to be arduous and can take longer
than patients facing terminal illness can wait.
Since 2014, at least 44 states have seen "right to
try" legislation introduced, 12 of which still have
bills pending and 25 of which have signed bills into
law with strong, largely unanimous, bi-partisan
support. It is clear this is a human issue and one
that goes beyond state and party lines.
In providing terminal patients the ability to access
safe, but experimental drugs in consultation with a
doctor they trust, this bill offers new hope when all
FDA-approved options have been exhausted.
SENATOR WIELECHOWSKI said this bill is intended for the 97
percent of terminally ill people who apply for clinical trials
but are not accepted.
1:52:28 PM
BROOKE IVY, Staff, Senator Wielechowski Alaska State
Legislature, explained that the goal of SB 113 is to create a
legal climate so that terminally ill people can work directly
with their doctor and the drug manufacturer to access
experimental drugs that have passed phase 1 of the FDA review
process.
MS. IVY reviewed the sections of SB 113.
Section 1: Prohibits disciplinary action of physicians
by the State Medical Board for prescribing, dispensing
or administering an investigational drug, biological
product or device to terminally ill patients that are
ineligible or unable to participate in a current
clinical trial, have considered all other treatment
options approved by the FDA and have provided written
consent. Defines "investigational drugs, biological
products and devices" as those that have successfully
completed Phase 1 of the FDA drug review process and
remain in ongoing Phase 2 or 3 clinical trials, but
have not been approved for general use. Defines
"terminal illness" as a disease that will result in
death in the near future or permanent state of
unconsciousness from which recovery is unlikely.
Section 2: Establishes immunity for physicians,
medical team members, manufacturers and distributors
in the case of injury or death of a terminally ill
patient from the use of an investigational drug,
biological product or device, provided informed
consent was obtained from the patient and notice of
immunity was given in advance.
Section 3: Amends statute limiting the sale and
distribution of new drugs (AS 17.20.110) so as not to
apply to physicians prescribing or administering
investigational drugs under the conditions established
in Section 1.
Section 4: Prohibits the Department of Health and
Social Services from requiring a licensed health care
facility to increase its services solely to
accommodate physicians prescribing, dispensing or
administering investigational drugs to a patient.
1:55:12 PM
KURT ALTMAN, Attorney, Goldwater Institute, Phoenix, Arizona,
testified in support of SB 113. He related he is the drafter of
the model legislation commonly referred to as "The Right to Try
Bill" and he has traveled across the country advocating for the
legislation. He pointed out that there are significant
protections in the bill and that this is a last chance for
terminally ill patients. For investigational medicine to be
eligible under right to try laws, it has to have passed the
safety testing phase 1 of the FDA approval process. More
importantly, the drug must be in ongoing phase 2 or phase 3
clinical trials. He confirmed that this is for the 97 percent of
terminally ill people who aren't accepted into clinical trials.
By the end of this legislative session, he expects that quite a
few more states will have passed similar legislation. This has
been a two to three year process and patients are finally taking
advantage of right to try laws, he said.
1:58:45 PM
SENATOR COGHILL asked if there have been liability issues or
families that feel somebody has been coerced into a treatment
program.
MR. ALTMAN said there has been no litigation to date with right
to try laws. For someone to receive a trial drug, there has to
be a detailed informed consent on behalf of the doctor and
patient. In practice, the manufacturers that have agreed to
provide these drugs also require a significant, detailed
informed consent liability waiver. Each law that has passed has
a similar liability waiver as SB 113 for any adverse effect from
the investigational drug. It does not waive any claims of
medical malpractice.
SENATOR COGHILL asked how the prohibition in Section 4 will
work.
2:00:53 PM
MS. IVY said the provision seeks to allay concerns of health
care facilities and hospitals about potentially losing their
certificate for Medicare or Medicaid. Other states have passed
this legislation with a similar provision. She noted that the
Department of Health and Social Services (DHSS) has determined
that SB 113 does not impact their operations due to that
provision in SB 113.
2:02:11 PM
MICHAEL MAHARREY, National Communications Director, 10th
Amendment Center, testified in support of SB 113. He said that
when the Center heard about the issue from the Goldwater
Institute, they knew they could support it without reservation.
SB 113 will take the decision-making process regarding a
patient's treatment options out of the hands of detached
individuals and put it where it belongs, with the patient and
their physician. He commented on the FDA approval process for
new drugs that is slow and cumbersome, and described right to
try laws as a bridge that spans the gap between federal
regulations and the needs of terminally ill patients. He urged
the committee to pass SB 113.
2:04:52 PM
CHARLOTTE WHITELEY, representing herself, testified in support
of SB 113. She shared a story about her father who was able to
participate in an experimental drug trial that helped him live
an extra 3 years. It was particularly important to him to know
that his data would be used to help future generations who get
multiple myeloma. She also described the case of a friend with
multiple sclerosis who participated in a drug trial in
Switzerland. A new and better drug is being developed as a
result of that trial. SB 113 allows people who are going to die
from their disease, a chance to give to the future.
2:06:35 PM
KEN LANDFIELD, representing himself, testified in support of SB
113. He said the situation is clear; the bill is designed to
provide a last ditch option for someone who is going to die
anyway. This is an opportunity for legislators to do the right
thing and it has no downside he can see. Further, it will cost
virtually nothing.
2:08:22 PM
CHAIR MCGUIRE closed public testimony on SB 113. She shared a
story about her physician father who made the decision to
develop a pilot program after the FDA denied the use of an
innovative scientific technique for his patients.
SENATOR COGHILL asked if a report goes back to the FDA to add to
the data on the experimental drug
MS. IVY said SB 113 does not include reporting requirements but
her understanding is that it is a requirement in the contracts
with manufacturers under both compassionate use and right to
try.
SENATOR COGHILL expressed satisfaction.
CHAIR MCGUIRE commented further on the pilot program her father
developed.
2:13:23 PM
SENATOR COGHILL moved to report the CS for SB 113, labeled 29-
LS0783\E, from committee with individual recommendations and
attached fiscal note(s).
2:14:04 PM
SENATOR WIELECHOWSKI said he was surprised and pleased to learn
that the Goldwater Institute supports the legislation. He
credited his staff for doing comprehensive research and
described SB 113 as good legislation that could save lives in
Alaska.
2:14:25 PM
CHAIR MCGUIRE announced that without objection, CSSB 113(HSS) is
reported from Senate Judiciary Standing Committee.
2:14:29 PM
There being no further business to come before the committee,
Chair McGuire adjourned the Senate Judiciary Standing Committee
at 2:14 p.m.