Legislature(1993 - 1994)

04/08/1994 02:07 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE JUDICIARY COMMITTEE                                  
                         April 8, 1994                                         
                           2:07 p.m.                                           
  MEMBERS PRESENT                                                              
 Senator Robin Taylor, Chairman                                                
 Senator George Jacko                                                          
 Senator Dave Donley                                                           
 Senator Suzanne Little                                                        
  MEMBERS ABSENT                                                               
 Senator Rick Halford, Vice-Chairman                                           
  COMMITTEE CALENDAR                                                           
 SENATE BILL NO. 113                                                           
 "An Act making a special appropriation to the constitutional budget           
 reserve fund of certain money obtained in settlement with British             
 Petroleum America for resolution of disputes over taxes arising               
 under the state's worldwide unitary apportionment income tax; and             
 providing for an effective date."                                             
 SENATE BILL NO. 306                                                           
 "An Act relating to an antitrust exemption for persons engaged in             
 the fishing industry."                                                        
 SENATE BILL NO. 213                                                           
 "An Act extending the Alaska Public Utilities Commission and the              
 regulatory cost charge."                                                      
 SENATE BILL NO. 367                                                           
 "An Act relating to health care and insurance for health care; to             
 review and approval of health insurance rates and rating factors;             
 relating to certain civil actions against health care providers; to           
 coordination of insurance benefits and to determination and                   
 disclosure of fees paid to an insured or health care provider; to             
 the rate of interest on certain judgments and decrees; to excise              
 taxes on cigarettes; amending Alaska Rules of Civil Procedure 26,             
 27, 68, 79, and 82 and Alaska Rules of Evidence 802, 803, and 804;            
 repealing Alaska Rule of Civil Procedure 72.1; and providing for an           
 effective date."                                                              
 SENATE BILL NO. 275                                                           
 "An Act relating to the disposal of real property by the Department           
 of Transportation and Public Facilities."                                     
 SB 332 (POSSESSION OF 25 LIVE MARIJUANA PLANTS) was scheduled, but            
 not taken up this date.                                                       
 SB 349 (GRAND JURY EVIDENCE BY POLICE OFFICERS) was scheduled, but            
 not taken up this date.                                                       
 SB 350 (ARREST FOR VIOLATING RELEASE CONDITIONS) was scheduled, but           
 not taken up this date.                                                       
 SB 351 (CHARACTER EVIDENCE IN CRIMINAL TRIALS) was scheduled, but             
 not taken up this date.                                                       
 SB 353 (PEREMPTORY CHALLENGE OF JURORS) was scheduled, but not                
 taken up this date.                                                           
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 113 - See Judiciary minutes dated 2/22/93 and 4/16/93.                     
 SB 306 - See Resources minutes dated 3/24/94 & 3/28/94.                       
 SB 213 - See Labor & Commerce minutes dated 9/28/93, 2/8/94,                  
          2/24/94, 3/10/94 and 3/15/94.  See Judiciary minutes                 
          dated 3/30/94.                                                       
 SB 367 - See Health, Education & Social Services minutes dated                
          3/28/94, 3/30/94, 4/6/94 and 4/7/94.                                 
 SB 275 - See Transportation minutes dated 2/10/94.                            
 SB 332 - See Judiciary minutes dated 2/11/94 and 3/11/94.                     
 SB 349 - See State Affairs minutes dated 3/14/94.  See                        
          Judiciary minutes dated 3/25/94.                                     
 SB 350 - See State Affairs minutes dated 3/14/94.  See                        
          Judiciary minutes dated 3/25/94.                                     
 SB 351 - See State Affairs minutes dated 3/14/94.  See                        
          Judiciary minutes dated 3/25/94.                                     
 SB 353 - See State Affairs minutes dated 3/14/94.  See                        
          Judiciary minutes dated 3/25/94.                                     
  WITNESS REGISTER                                                             
 Senator Randy Phillips                                                        
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Prime Sponsor of SB 113                                
 Senator Jim Duncan                                                            
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Prime sponsor of SB 306                                
 Jim Forbes, Assistant Attorney General                                        
 Department of Law                                                             
 1031 W. 4th Ave., Suite 200                                                   
 Anchorage, AK 99501-1994                                                      
  POSITION STATEMENT:   Offered information on SB 306                          
 Ms. Dorn Hawxhurst                                                            
 Cordova District Fishermen United                                             
 P.O. Box 939                                                                  
 Cordova, AK 99574                                                             
  POSITION STATEMENT:   Supports SB 306                                        
 Kate Troll, Executive Director                                                
 Southeast Alaska Seiners Association                                          
 Juneau, AK                                                                    
  POSITION STATEMENT:   Testified in support of SB 306                         
 Jerry McCune, President                                                       
 United Fishermen of Alaska                                                    
 211 4th St., No. 112                                                          
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Urged passage of SB 306                                
 Dean Paddock                                                                  
 Bristol Bay Driftnetters Association                                          
 211 4th St.                                                                   
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Supports SB 306                                        
 Donna Parker, Fisheries Development Specialist                                
 Department of Commerce & Economic Development                                 
 P.O. Box 110800                                                               
 Juneau, AK 99811-0800                                                         
  POSITION STATEMENT:   Offered testimony in support of SB 306                 
 Kevin Sullivan, Staff to Senate Judiciary Committee                           
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Offered information on SB 213                          
 Senator Steve Rieger                                                          
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Prime Sponsor of SB 367                                
 Ron Lind, Director                                                            
 Administrative Services                                                       
 Department of Transportation & Public Facilities                              
 3132 Channel Drive                                                            
 Juneau, AK 99801-7898                                                         
  POSITION STATEMENT:   Offered information in support of SB 275               
 Rupe Andrews                                                                  
 American Association of Retired Persons                                       
 9416 Long Run Drive                                                           
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Testified in opposition to SB 367                      
 Jeff Feldman, President                                                       
 Alaska Academy of Trial Lawyers                                               
 P.O. Box 102323                                                               
 Anchorage, AK 99510                                                           
  POSITION STATEMENT:   Addressed concerns with SB 367                         
 Chris Christensen, General Counsel                                            
 Alaska Court System                                                           
 303 K St.                                                                     
 Anchorage, AK 99501-2084                                                      
  POSITION STATEMENT:   No position on SB 367                                  
 Reed Stoops                                                                   
 AETNA Life Insurance Co.                                                      
 Juneau, AK                                                                    
  POSITION STATEMENT:   Presented amendments to SB 367                         
  ACTION NARRATIVE                                                             
 TAPE 94-32, SIDE A                                                            
 Number 001                                                                    
  CHAIRMAN ROBIN TAYLOR  called the Judiciary Committee meeting to             
 order at 2:07 p.m., and announced the first order of business would           
 be the consideration of  SB 113  (APPROP: BP SETTLEMENT TO BUDGET             
 SENATOR RANDY PHILLIPS, prime sponsor of SB 113, explained the                
 legislation was introduced a few days after the oil tax settlement            
 monies were released, and it will take that money out of the                  
 general fund and put it into the constitutional budget reserve                
 There being no further testimony on SB 113, SENATOR TAYLOR asked              
 for the pleasure of the committee.                                            
 SENATOR JACKO moved that SB 113 be passed out of committee with               
 individual recommendations.  Hearing no objection, it was so                  
 Number 080                                                                    
 SENATOR TAYLOR introduced  SB 306  (ANTITRUST EXEMPTION FOR                   
 FISHERMEN) as the next order of business.                                     
 SENATOR JIM DUNCAN, prime sponsor of SB 306, said the bill confers            
 a state antitrust immunity on fishermen and, by doing that, they              
 would then be able to negotiate raw fish prices with processors in            
 order to improve the market price of Alaska seafood.  It also                 
 permits fishermen and fish processors to agree to the minimum price           
 for which processors will sell the processed fish.  He pointed out            
 the legislation was recommended in the 1993 Alaska Attorney                   
 General's report on the Bristol Bay sockeye salmon industry.  That            
 report suggests that U.S. processors have become price takers when            
 dealing with the large Japanese firms that buy Alaska salmon,                 
 leaving fishermen to bear the lost.  An antitrust exemption such as           
 in SB 306 will help level the playing field for Alaska fishermen              
 and processors when dealing with foreign trading companies which do           
 not observe antitrust laws.                                                   
 Senator Duncan pointed out the legislation is supported by the                
 Administration and many of the fishing organizations in the state.            
 Number 130                                                                    
 JIM FORBES, Assistant Attorney General, Department of Law,                    
 testifying from Anchorage, said SB 306 does not provide a federal             
 antitrust exemption for processors.  The federal law already                  
 provides an antitrust exemption for fishermen or fishing                      
 associations, but the processors still pay federal antitrust                  
 liability under the current status quo.  SB 306, in its current               
 form, even without the federal antitrust immunity for the                     
 processors, would clarify the fact that the fishermen associations            
 do have both state and federal antitrust immunity.                            
 Number 160                                                                    
 SENATOR JACKO asked if the federal problem could be resolved in               
 this legislation.  MR. FORBES answered it could be, but to resolve            
 that particular problem through legislation, it would be necessary            
 to create a regulatory body that could give it studies and educated           
 stamp of approval to proposed prices that industry representatives            
 come up with.  It would also require some kind of enforcement                 
 authority to make sure that those prices were followed throughout             
 the industry within Alaska.  SENATOR DUNCAN agreed that one option            
 is to create a state agency that would be involved, but he                    
 suggested that this should be done on a state level as a first step           
 before approaching the federal government to give an exemption on             
 the federal level.                                                            
 Number 203                                                                    
 SENATOR TAYLOR asked Mr. Forbes if he had any on thoughts on how              
 the bill could be redrafted to accomplish the state action immunity           
 provision.  MR. FORBES suggested that it could be accomplished by             
 either creating a new commission, or an existing commission could             
 be given additional powers.  SENATOR DUNCAN said he has considered            
 this as an option, but it would add more hurdles and would have a             
 fiscal impact, and it may be the option to pursue in a subsequent             
 legislative session if passage of this bill indicates that the                
 federal government will not take action to give us that exemption.            
 SENATOR TAYLOR said his concern was that the legislation may be               
 raising false hopes or expectations that it is doing something more           
 other than just sending a message.                                            
 Number 253                                                                    
 SENATOR LITTLE asked if the changes proposed in SB 306 would be               
 effective without the imposition of a new agency or commission.               
 SENATOR DUNCAN answered that if the Legislature, the fishing                  
 community of the state, and the Administration went strongly on               
 record saying that a federal exemption would be in the best                   
 interest of our fishermen, then he thinks the congressional                   
 delegation would be supportive of getting that done.                          
 Number 345                                                                    
 MS. DORN HAWXHURST, speaking from Cordova on behalf of Cordova                
 District Fishermen United, stated their strong support for SB 306.            
 They support the bill for three primary reasons: (1) it clarifies             
 ambiguities in the existing law and it expressly allows fishermen             
 to collectively sell their catch; (2) it removes inconsistencies              
 between state and federal laws; and (3) it levels the playing                 
 field by putting fishermen in a better position to obtain the best            
 price for their fish by allowing them to collectively agree on the            
 price the processors will pay the fishermen for raw fish.   She               
 urged passage of SB 306.                                                      
 Number 370                                                                    
 SENATOR TAYLOR asked the legislative drafter of the legislation,              
 George Utermohle, the possibility of restructuring the legislation            
 by the following Monday to encompass a full step by creating a                
 regulatory agency as was discussed earlier in the meeting.  GEORGE            
 UTERMOHLE, Legislative Counsel, Legislative Affairs Agency, said it           
 could be done, but it would not be an easy task because there are             
 so many details involved in establishing a new agency or giving               
 those powers to an existing agency.                                           
 Number 393                                                                    
 KATE TROLL, Executive Director, Southeast Alaska Seiners                      
 Association, said fishermen don't really have a business                      
 relationship and a forum in which to negotiate, and her                       
 organization has spent a lot of time looking at what they can do to           
 try to make changes in the industry so that they can improve the              
 price situation.  One of the things that became very clear with               
 pink salmon is that they need new product forums and new                      
 development, and, to encourage that, they need price stability.  To           
 encourage price stability, they needed to consider the idea of                
 multi-year contracts.  They had conferences in which these concepts           
 were going to be part of the conference, but the processors could             
 not participate, even at discussion level, because of the concerns            
 of antitrust.  She said her board recognizes SB 306 as a first step           
 and the fact that the federal government is the second step of this           
 change in order to be able to make that evolution to having that              
 business partnership that they really want with their processors.             
 Number 433                                                                    
 JERRY MCCUNE, President, United Fishermen of Alaska, urged that the           
 committee move ahead with the legislation in its current form as              
 one step to amending the federal law.                                         
 Number 452                                                                    
 DEAN PADDOCK, speaking on behalf of the Bristol Bay Driftnetters              
 Association, said they are very aware of the need for improved                
 marketing tools, as well as a real need for improved                          
 communications.  He urged that the committee move the original SB
 Number 493                                                                    
 DONNA PARKER, Fisheries Development Specialist, Department of                 
 Commerce & Economic Development, voiced the strong support of the             
 department and Commissioner Fuhs for SB 306.                                  
 Ms. Parker said most people are aware that the problem is over                
 supply and lost market share, so the state's strategy has to be on            
 increasing market share.  She spoke of the severe impact on the raw           
 fish tax to the state.  Since 1998, the state has lost                        
 approximately $12 million in raw fish tax revenue because of the              
 decline in salmon prices.  The state has $130 million invested                
 through its revolving loan program and commercial fishing loans to            
 fishermen and aquaculture associations.                                       
 Ms. Parker also addressed the importance of increasing price                  
 stability and increasing product options in the marketplace.                  
 Having an antitrust exemption would allow processors and fishermen            
 an opportunity to communicate in a positive way, to discuss market            
 conditions openly to be able to come up with price agreements that            
 will give them additional clout in the marketplace.                           
 Number 555                                                                    
 There being no further testimony, SENATOR TAYLOR closed the public            
 hearing on SB 306 and stated it would be back before the committee            
 on Tuesday, April 12.                                                         
 Number 560                                                                    
 CHARGE) before the committee.  He noted the committee had a                   
 previous hearing on the bill and that a committee substitute had              
 been drafted as a result of that hearing.                                     
 KEVIN SULLIVAN, staff to the Senate Judiciary Committee, explained            
 the committee substitute contains effective dates in Sections 17              
 and 18.  Section 1 will go into effect July 1, 1995 and the rest of           
 the bill will go into effect July 1, 1994.  Language was also added           
 in Section 9, subsection (k) on page 4 of the committee substitute,           
 which includes cable television under the regulation of the APUC.             
 They are automatically covered and may opt out if they meet the               
 qualifications already established in statute.                                
 TAPE 94-32, SIDE B                                                            
 Number 005                                                                    
 SENATOR LITTLE moved that CSSB 213(JUD) dated 4/7/94 be adopted.              
 Hearing no objection, the motion carried.                                     
 SENATOR LITTLE moved that CSSB 213(JUD) be passed out of committee            
 with individual recommendations.  Hearing no objection, it was so             
 Number 020                                                                    
 before the committee as the next order of business.                           
 SENATOR STEVE RIEGER, prime sponsor of SB 367, said the legislation           
 is a number of provisions that deal with proposals for health care            
 reforms. In general, they can be categorized as either measures to            
 improve public health, measures to increase the efficiency and                
 reduce the cost of delivery of health care, or measures which speak           
 to the pooling of risk aspects of health care.                                
 Senator Rieger then presented a section-by-section analysis of the            
 Senator Rieger directed attention to an attached amendment adopted            
 by the Senate Health, Education & Social Services Committee, which            
 is the .08 alcohol content language which replaces the .01 language           
 in the bill.   He also noted that committee had received a                    
 memorandum from Mike Ford, a legislative legal counsel, addressing            
 a concern with single subject provisions.  He asked that the                  
 Judiciary Committee take a look at the single subject issues, and,            
 if it deems it advisable, to break out the recommendations as                 
 listed in Mr. Ford's memo into separate bills and have them move              
 SENATOR TAYLOR commented that the committee does have some real               
 concerns about violations of the single subject rule, and that it             
 would make a careful examination of Mr. Ford's memo.                          
 Number 225                                                                    
 SENATOR TAYLOR thanked Senator Rieger for his presentation on SB
 367 and stated the committee would take further testimony on the              
 bill upon completion of the next item on the agenda.                          
 Number 235                                                                    
 before the committee as the next order of business.                           
 RON LIND, Director, Administrative Services, Department of                    
 Transportation & Public Facilities, explained the legislation gives           
 the authority to dispose of land at airports or at facility sites             
 just as they have been doing for the highway excess properties.               
 Currently, if they have an airport site and there is some land they           
 want to trade with the municipality or they want to dispose of to             
 a municipality, they have to notify the Department of Natural                 
 Resources who then works with the municipality and DOT, and SB 275            
 is an attempt to put the process all in one agency.                           
 Number 245                                                                    
 SENATOR TAYLOR asked for an explanation of the differences in a               
 proposed committee substitute that was before the committee.  MR.             
 LIND said the difference basically relates to a concern identified            
 by the Department of Natural Resources.  There are numerous                   
 municipalities that still have land entitlements and they wanted to           
 assure that if they are actually conveying the land to a                      
 municipality and not trading it for another piece of property, that           
 that would count against the municipal land entitlement.  The same            
 section in the bill expanded it in a minor way to take care of                
 public facility sites as opposed to just airport sites.                       
 Number 280                                                                    
 SENATOR LITTLE asked if it was correct that if the municipality               
 purchases the land for full price, it would not be credited against           
 their land entitlement, and MR. LIND acknowledged that was correct.           
 Number 295                                                                    
 SENATOR JACKO moved that CSSB 275(JUD) be adopted.  Hearing no                
 objection, the motion carried.                                                
 SENATOR JACKO moved that CSSB 275(JUD) be passed out of committee             
 with individual recommendations.  Hearing no objection, it was so             
 Number 302                                                                    
 SENATOR TAYLOR stated the committee would again take up  SB 367               
 (HEALTH CARE REFORM COMMITTEES).                                              
 RUPE ANDREWS, representing the American Association of Retired                
 Persons, said SB 367 proposes to establish a system of mandatory              
 arbitration and AARP policy supports institution of voluntary                 
 rather than mandatory arbitration programs of state sponsored tort            
 reform legislation.  They do support the option to proceed to court           
 adjudication should arbitration not succeed.  They support state              
 efforts to require approval of insurance rates before the rates               
 take effect and to encourage that provider prices be made available           
 to the public.  Further, they support state efforts to facilitate             
 the development of health care data systems in both the public and            
 private sectors.  Rationalizing the system of insurance                       
 coordination of benefits is usual and AARP recommends that the                
 state work with such groups as the National Association of                    
 Insurance Commissioners and the American National Standards                   
 Institute in the process.                                                     
 Concluding, Mr. Andrews said SB 367 is neither an insurance reform            
 bill, nor a health care reform bill.  SB 367 would establish a                
 time-limited study commission charged with the analysis of one                
 specific health care reform plan for Alaska with the option to                
 examine other models as well.  AARP believes that from a policy               
 prospective, SB 367 is deficient in a number of areas.                        
 Number 390                                                                    
 JEFF FELDMAN, President of the Alaska Academy of Trial Lawyers,               
 addressing specific areas of the bill, said Section 3, which                  
 requires that malpractice actions involving individuals less than             
 two years of age be brought before that individual reaches the age            
 of eight, has a serious constitutional problem.  It will deny some            
 citizens equal protection by giving some claimants different                  
 periods of time within which to bring their claim than other                  
 Speaking to Section 5, which is the mandatory arbitration                     
 provision,  Mr. Feldman said the mandatory portion of it is                   
 objectionable because there are some very practical problems in               
 terms of how these provisions will stack the deck against the                 
 person who has been the victim of medical malpractice.                        
 Number 490                                                                    
 SENATOR TAYLOR stated he would request that staff send a memo to              
 the Division of Insurance requesting a report on any malpractice              
 claims that have been brought after age 4, age 6, age 10, etc., as            
 well as justification on why they are billing doctors for a risk              
 that has never occurred, as far as he knows, in the history of the            
 State of Alaska.                                                              
 Number 534                                                                    
 Mr. Feldman clarified that the trial lawyers organization is not              
 adamantly opposed to arbitration.  They believe that arbitration of           
 all cases voluntarily is fine, and there are things the Legislature           
 can do to make arbitration more available to parties.  He noted               
 they submitted a bill that in the malpractice area would have                 
 required mandatory binding arbitration of all claims less than                
 Mr. Feldman also spoke to concerns with Section 6 and Section 23.             
 Number 690                                                                    
 CHRIS CHRISTENSEN, General Counsel, Alaska Court System, stated the           
 Supreme Court takes no position on SB 367, but there are three                
 sections that cause the court some concern.  The first is with                
 Section 4, which relates to a floating interest rate for                      
 prejudgment and postjudment interest, and would cause a tremendous            
 clerical burden to the court.                                                 
 TAPE 94-33, SIDE A                                                            
 Number 005                                                                    
 Mr. Christensen said the second concern is with Section 5, relating           
 to mandatory arbitration.  One significant problem is that since              
 arbitration is mandatory, since it is a cost of going into court,             
 any indigent person, generally the plaintiff, is going to be                  
 entitled to state-payed arbitration.  At this time, the court                 
 system is not certain what that cost will be, but they are                    
 preparing a fiscal note.                                                      
 Mr. Christensen said the third concern is with Section 6, relating            
 to expert advisory panels, which will also have a fiscal impact on            
 the bill.  Right now, half of these panels don't submit any bills             
 and the other half average $150 a case.  Section 6 provides that              
 the expert is entitled to a fee of $500 and that could add up to at           
 least an extra $25,000 a year of costs that the state would have to           
 pay, costs which he does not believe are necessary since doctors              
 are doing it right now, many of them for free.                                
 Number 040                                                                    
 REED STOOPS, representing AETNA, directed attention to three                  
 amendments to SB 367 which had been provided to the committee.                
 The first amendment would delete Section 7 of the bill, which sets            
 up a prior approval system for insurance rate regulation, and                 
 replace it with the version of rate regulation which was adopted by           
 the House in HB 414, which is called the file and use system.  He             
 pointed out that Alaska is one of a half dozen states that have no            
 health insurance rate regulation.  AETNA believes the file and use            
 is the better system for Alaska to adopt.                                     
 The second amendment is to Section 16 and relates to the structure            
 of the kind of universal care that the advisory committee is                  
 instructed to look at and provide a price tag for next year.  The             
 amendment requests that the committee look at a pool of all the               
 uninsured Alaskans who wish to acquire insurance through the pool.            
 The third amendment would delete the sections of the bill that                
 relate to coordination of benefits.  Essentially, this amendment              
 takes SB 201 and rolls it into SB 367.  AETNA thinks that there               
 should be an analysis by the Division of Insurance to show the                
 difference between the current regulations dealing with these same            
 issues, as well as an analysis to determine whether the cost of               
 doing that is worth the changes that are being made.                          
 Number 130                                                                    
 SENATOR TAYLOR closed the public hearing on SB 367 and stated the             
 committee consider amendments to the bill at its next hearing.  He            
 then adjourned the meeting at 3:55 p.m.                                       

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