Legislature(1997 - 1998)

04/23/1997 03:27 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            HOUSE LABOR AND COMMERCE STANDING COMMITTEE                        
                          April 23, 1997                                       
                             3:27 p.m.                                         
 MEMBERS PRESENT                                                               
 Representative Norman Rokeberg, Chairman                                      
 Representative John Cowdery, Vice Chairman                                    
 Representative Bill Hudson                                                    
 Representative Jerry Sanders                                                  
 Representative Joe Ryan                                                       
 Representative Tom Brice                                                      
 Representative Gene Kubina                                                    
 MEMBERS ABSENT                                                                
 All members present                                                           
 COMMITTEE CALENDAR                                                            
 HOUSE BILL NO. 116                                                            
 "An Act relating to workers' compensation self-insurance."                    
      - MOVED CSHB 116(L&C) OUT OF COMMITTEE                                   
 * HOUSE BILL NO. 192                                                          
 "An Act regulating chemical dependency counselors; and providing              
 for an effective date."                                                       
      - HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE                               
 * HOUSE BILL NO. 203                                                          
 "An Act relating to actions for unlawful trade practices."                    
      - HEARD AND HELD                                                         
 HOUSE BILL NO. 218                                                            
 "An Act relating to regulation and examination of insurers and                
 insurance agents; relating to kinds of insurance; relating to                 
 payment of insurance taxes and to required insurance reserves;                
 relating to insurance policies; relating to regulation of capital,            
 surplus, and investments by insurers; relating to hospital and                
 medical service corporations; and providing for an effective date."           
      - SCHEDULED BUT NOT HEARD                                                
 HOUSE BILL NO. 136                                                            
 "An Act relating to the regulation of physical therapists and                 
 physical therapy assistants; extending the termination date of the            
 State Physical Therapy and Occupational Therapy Board; and                    
 providing for an effective date."                                             
      - BILL CANCELLED                                                         
 (* First public hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  HB 116                                                                 
 SPONSOR(S): REPRESENTATIVE(S) KOTT, Hudson, Foster, Berkowitz,                
 Hodgins, Kelly, Dyson, Davis, Phillips, Kohring, Ogan, Green, Elton           
 JRN-DATE      JRN-PG               ACTION                                     
 02/05/97       243    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/05/97       243    (H)   LABOR & COMMERCE                                  
 02/07/97       277    (H)   COSPONSOR(S): KOHRING                             
 02/13/97       349    (H)   COSPONSOR(S): OGAN                                
 02/17/97       376    (H)   COSPONSOR(S): GREEN                               
 02/21/97       430    (H)   COSPONSOR(S): ELTON                               
 02/26/97              (H)   L&C AT 3:15 PM CAPITOL 17                         
 02/26/97              (H)   MINUTE(L&C)                                       
 04/18/97              (H)   L&C AT 3:15 PM CAPITOL 17                         
 04/18/97              (H)   MINUTE(L&C)                                       
 04/23/97              (H)   L&C AT 3:15 PM CAPITOL 17                         
 BILL:  HB 192                                                                 
 SHORT TITLE: CHEMICAL DEPENDENCY COUNSELORS                                   
 SPONSOR(S): REPRESENTATIVE(S) IVAN, Bunde, Foster, Grussendorf                
 JRN-DATE      JRN-PG                 ACTION                                   
 03/14/97       665    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/14/97       665    (H)   L&C, FINANCE                                      
 04/23/97              (H)   L&C AT 3:15 PM CAPITOL 17                         
 BILL:  HB 203                                                                 
 SPONSOR(S): REPRESENTATIVE(S) DYSON, Croft                                    
 JRN-DATE      JRN-PG                 ACTION                                   
 03/18/97       738    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/18/97       738    (H)   L&C, JUDICIARY                                    
 04/23/97              (H)   L&C AT 3:15 PM CAPITOL 17                         
 WITNESS REGISTER                                                              
 REPRESENTATIVE IVAN IVAN                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 418                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4942                                                    
 POSITION STATEMENT:  Prime sponsor of HB 192.                                 
 SANDRA DEASON                                                                 
 4330 South Bragaw                                                             
 Anchorage, Alaska  99508                                                      
 Telephone:  (907) 561-1336                                                    
 POSITION STATEMENT:  Testified on HB 192.                                     
 W. HARRISON CHILDERS, Certified Drug and Alcohol                              
    Counselor II and Nationally-certified                                      
    Addiction Counselor II                                                     
 Charter North Counseling Center                                               
 1650 South Bragaw                                                             
 Anchorage, Alaska  99508                                                      
 Telephone:  (907) 274-7313                                                    
 POSITION STATEMENT:  Testified on HB 192.                                     
 WILLIAM D. McCOLL, Director                                                   
 Government Relations                                                          
 National Association of Alcoholism and                                        
    Drug Abuse Counselors                                                      
 1911 North Fort Myer Drive, Suite 900                                         
 Arlington, Virginia  22209                                                    
 Telephone:  (800) 548-0497; Fax (703) 741-7698                                
 POSITION STATEMENT:  Testified in support of HB 192.                          
 GARY TURNER, Village Services Manager                                         
 Yukon-Kuskokwim Health Corporation                                            
 P.O. Box 528                                                                  
 Bethel, Alaska  99559                                                         
 Telephone:  (907) 543-6740                                                    
 POSITION STATEMENT:  Testified regarding HB 192.                              
 ARDYCE TURNER                                                                 
 Yukon-Kuskokwim Health Corporation                                            
 P.O. Box 528                                                                  
 Bethel, Alaska  99559                                                         
 Telephone:  (907) 543-6760                                                    
 POSITION STATEMENT:  Testified regarding HB 192.                              
 BETH KERSEY, Program Director                                                 
 Phillips Ayagnirvik                                                           
 Yukon-Kuskokwim Health Corporation                                            
 P.O. Box 528                                                                  
 Bethel, Alaska  99559                                                         
 Telephone:  (907) 543-6724                                                    
 POSITION STATEMENT:  Testified regarding HB 192.                              
 PATRICIA WINTYR                                                               
 American Counselors Association of Alaska                                     
 4411 Abby Way                                                                 
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 780-4999                                                    
 POSITION STATEMENT:  Testified in support of HB 192.                          
 CATHERINE REARDON, Director                                                   
 Division of Occupational Licensing                                            
 Department of Commerce and Economic Development                               
 P.O. Box 110806                                                               
 Juneau, Alaska  99811-0806                                                    
 Telephone:  (907) 465-2534                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 192.                              
 LORI NAMYNIUK, President                                                      
 Substance Abuse Directors Association                                         
 P.O. Box 190221                                                               
 Anchorage, Alaska  99519                                                      
 Telephone:  (907) 258-5578                                                    
 POSITION STATEMENT:  Testified in support of HB 192.                          
 REPRESENTATIVE FRED DYSON                                                     
 Alaska State Legislature                                                      
 Capitol Building, Room 428                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-2199                                                    
 POSITION STATEMENT:  Sponsor of HB 203.                                       
 DAVEED SCHWARTZ, Assistant Attorney General                                   
 Commercial Section                                                            
 Civil Division (Anchorage)                                                    
 Department of Law                                                             
 1031 West 4th Avenue, Suite 200                                               
 Anchorage, Alaska  99501-1994                                                 
 Telephone:  (907) 269-5100                                                    
 POSITION STATEMENT:  Provided department's position in support of             
                      HB 203 and answered questions.                           
 HELEN BEIRNE                                                                  
 P.O. Box 111125                                                               
 Anchorage, Alaska  99511                                                      
 (No telephone number provided)                                                
 POSITION STATEMENT:  Testified in support of HB 203.                          
 STEPHEN CONN, Executive Director                                              
 Alaska Public Interest Research Group                                         
 P.O. Box 101093                                                               
 Anchorage, Alaska  55510                                                      
 Telephone:  (907) 278-3661                                                    
 POSITION STATEMENT:  Testified in support of HB 203.                          
 RICK GILMORE                                                                  
 8001 Blink Street                                                             
 Anchorage, Alaska  99504                                                      
 Telephone:  (907) 333-3356                                                    
 POSITION STATEMENT:  Testified in support of HB 203.                          
 PEGGY MULLIGAN, Capital City Task Force Member                                
 American Association of Retired Persons                                       
 P.O. Box 240335                                                               
 Douglas, Alaska  99824                                                        
 Telephone:  (907) 364-3144                                                    
 POSITION STATEMENT:  Testified in support of HB 203.                          
 REPRESENTATIVE ERIC CROFT                                                     
 Alaska State Legislature                                                      
 Capitol Building, Room 430                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-2199                                                    
 POSITION STATEMENT:  Answered questions regarding HB 203.                     
 ACTION NARRATIVE                                                              
 TAPE 97-47, SIDE A                                                            
 Number 0001                                                                   
 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce                  
 Standing Committee to order at 3:27 p.m.  Members present at the              
 call to order were Representatives Rokeberg, Cowdery, Hudson and              
 Ryan; there was a quorum.  Representative Sanders arrived at 3:56             
 p.m., and Representatives Kubina and Brice arrived at 5:11 p.m.               
 HB 116 - WORKERS COMPENSATION SELF-INSURANCE GROUP                            
 Number 0044                                                                   
 CHAIRMAN ROKEBERG said the committee would first address House Bill           
 No. 116, "An Act relating to workers' compensation self-insurance,"           
 for the purpose of moving it out of committee.                                
 Number 0061                                                                   
 REPRESENTATIVE BILL HUDSON made a motion and asked unanimous                  
 consent to move HB 116, version 0-LS0463\H, Ford, 4/16/97, as                 
 amended and with accompanying fiscal notes, out of committee.                 
 Number 0135                                                                   
 CHAIRMAN ROKEBERG objected to ensure that the public hearing was              
 closed.  Noting that Mr. Grossi and Ms. Burke were available, he              
 asked whether there were any questions.  Hearing none, he closed              
 the public hearing.  Chairman Rokeberg withdrew his objection, then           
 asked whether there was a further objection to the motion.  There             
 being none, CSHB 116(L&C) moved out of the House Labor and Commerce           
 Standing Committee.                                                           
 Number 0219                                                                   
 CHAIRMAN ROKEBERG called a brief at-ease at 3:30 p.m.  He called              
 the meeting back to order at 3:31 p.m.                                        
 HB 192 - CHEMICAL DEPENDENCY COUNSELORS                                       
 Number 0234                                                                   
 CHAIRMAN ROKEBERG announced the next item of business was House               
 Bill No. 192, "An Act regulating chemical dependency counselors;              
 and providing for an effective date."                                         
 Number 0285                                                                   
 REPRESENTATIVE IVAN IVAN, prime sponsor, read the sponsor statement           
 into the record:                                                              
 "The bill before us today establishes a State Board of Chemical               
 Dependency Counseling examiners under Title 8 of the Alaska                   
 Statutes.  Alcohol and substance abuse is a growing concern for               
 Alaskans.  And a requirement of state licensing for chemical                  
 dependency counseling professionals provides consumer protection              
 and promotes the best possible professional-quality care for                  
 Alaskans seeking and/or in need of treatment services.                        
 "This bill changes a voluntary certification process to                       
 professional state licensing as a standard of practice.  Currently,           
 there is no mechanism in place in Alaska to prevent anyone, with or           
 without specific training or experience, from calling themselves a            
 chemical dependency counselor.                                                
 "The bill before you establishes minimum levels of academic or                
 experiential training requirements and supervised experience to               
 practice as a Counselor Associate, Counselor Level I, II, or a                
 Clinical Supervisor.                                                          
 "Alaskans age 12 and older sought chemical dependency treatment               
 services 9,165 times in fiscal year 1996 (admissions and re-                  
 admissions) from programs receiving some state funding.                       
 Additionally, there are an estimated 2,000 individuals who received           
 treatment services through private practice, private hospitals or             
 federal government providers.                                                 
 "There are currently 55 programs providing services, which are                
 certified by the State Alcohol & Drug Abuse office.  Currently,               
 there are over 700 certified chemical dependency counselors, and it           
 is anticipated that there will be growth in this field in the near            
 REPRESENTATIVE IVAN summarized the bill's purpose:  to standardize            
 a certification process for alcohol counselors, with the objectives           
 of consumer protection, quality care, and professional ethics and             
 conduct.  He noted that in his own district, with many small                  
 communities, there are many places where alcohol-related or drug-             
 related problems affect the community.                                        
 Number 0554                                                                   
 REPRESENTATIVE IVAN advised members that there are elders in the              
 communities who have provided these services.  Some fear those                
 elders may be displaced because of this legislation.  "But this               
 legislation certainly will recognize them, and there's ways and               
 means to include those people that are currently practicing their             
 field in providing alcohol counseling," he explained.                         
 REPRESENTATIVE IVAN said he would forward eight proposed technical            
 amendments; he offered to discuss them.  The Senate Labor and                 
 Commerce Committee had also forwarded nine or more changes.                   
 Representative Ivan indicated he would come up with a committee               
 substitute.  A representative from the Department and Commerce and            
 Economic Development (DCED), Division of Occupational Licensing,              
 would address the fiscal note and any concerns.                               
 Number 0663                                                                   
 REPRESENTATIVE JOHN COWDERY asked whether the most prevalent abuse            
 in Representative Ivan's district relates to alcohol or drugs.                
 REPRESENTATIVE IVAN replied, "Alcohol is historically number one."            
 Number 0715                                                                   
 REPRESENTATIVE COWDERY stated his understanding that many villages            
 have voted to be "dry."                                                       
 REPRESENTATIVE IVAN responded that in their efforts to combat                 
 problems related to alcohol, communities have utilized the state              
 option of laws to control it.  He said, "And in my area, most                 
 communities are dry/wet; in some communities ... you can have                 
 alcohol in your private possession."  He noted that historically in           
 the U.S., something that is banned tends to get there when people             
 can afford it.                                                                
 Number 0763                                                                   
 REPRESENTATIVE COWDERY asked whether Emmonak is in his district.              
 REPRESENTATIVE IVAN explained that while he comes from the Yukon-             
 Kuskokwim delta region, the district he represents from Akiak goes            
 south toward Dillingham.  Emmonak, north of the Yukon River, is in            
 Representative Foster's district.                                             
 REPRESENTATIVE COWDERY asked whether Representative Ivan could                
 estimate the population of Emmonak.                                           
 REPRESENTATIVE IVAN said he hadn't been there for six years, but he           
 would guess 800 to 900 people.                                                
 Number 0808                                                                   
 REPRESENTATIVE COWDERY recalled that a few winters ago, 12 youths             
 in Emmonak committed suicide because of alcohol and drugs.  He said           
 it is hard to comprehend for such a small village how large an                
 impact that would have.  He stated his belief that this is a good             
 piece of legislation.                                                         
 REPRESENTATIVE IVAN replied that certainly that is one of the                 
 biggest problems.  There have been occasional waves of suicides,              
 including copy-cat activities, which come like an epidemic.  Even             
 in his own community and extended family, some have lost relatives            
 from alcohol.                                                                 
 Number 0900                                                                   
 REPRESENTATIVE COWDERY reported that he'd talked to elders in rural           
 Alaska who'd indicated it had destroyed the traditional ways of the           
 families; many youths were no longer even going to fish camps.                
 Because of alcohol, sometimes they would get on a snow machine, for           
 example, run out of gas and freeze to death.                                  
 REPRESENTATIVE IVAN added that many people try to drink up their              
 alcohol, whether they are on a river boat or snow machine, before             
 arriving at a dry community; that is where some of the problems,              
 such as accidents, occur.                                                     
 Number 0963                                                                   
 REPRESENTATIVE JOE RYAN said he has no problem with the bill.                 
 Those who would be licensed already have a profession, but now it             
 would be more recognizable and acceptable.  He asked, "Is this                
 going to mandate this service for any particular person, or it's              
 still going to be voluntary?"                                                 
 REPRESENTATIVE IVAN replied, "The voluntary aspect is still there;            
 the churches and the community elders have performed that to the              
 maximum."  He said this would make the occupation equivalent to               
 other occupations, which come under the Board of Clinical Social              
 Work Examiners or Board of Nursing, for example, to ensure that               
 people are qualified and that they don't abuse those they are                 
 treating.  It will provide consumer protection.                               
 CHAIRMAN ROKEBERG invited Representative Ivan to join the committee           
 at the table.  He asked that testifiers restrict testimony to two             
 or three minutes.                                                             
 Number 1061                                                                   
 SANDRA DEASON came forward to testify, saying she chairs the Alaska           
 coalition for licensure.  A member of the current statewide                   
 certification commission, she was representing rural Alaska through           
 the Association of Rural and Alaska Native Drug and Alcohol Program           
 (ARANDAP) and the Substance Abuse Directors Association.                      
 MS. DEASON provided some history.  In 1993, there was a voluntary             
 certification commission.  That year, the Indian Health Service,              
 which funds a great number of the providers, required higher                  
 standards for certification.  Ms. Deason noted that her group is              
 affiliated with the National Alcoholism and Drug Abuse Counselors             
 MS. DEASON indicated at that time, they unified rural and urban               
 Alaska in the certification process.  Prior to 1993, there were               
 approximately 200 certified professionals in the field; most were             
 in the urban Anchorage area.  Rural Alaska had little accessibility           
 to obtain certification through education, simply because of their            
 remoteness, and they did not have representation on the commission.           
 MS. DEASON stated:  "At that time, the rural providers delegated              
 four of us onto the commission, and also the substance abuse                  
 directors delegated two people onto the commission.  Following the            
 year of 1993, the number jumped up into the thousands, certified              
 professionals.  And of that number, most were real providers.  As             
 Ivan had stated, consumer protection is definitely the number one             
 priority; and following consumer protection is also accessibility             
 to rural Alaska.                                                              
 "With dwindling dollar amounts, dwindling funding, it is essential            
 that rural Alaska continue to get quality of care and                         
 accessibility.  We cannot do that by flying people in, from the               
 urban settings, out to provide services in the scenario that you              
 talked of, the 12 youth suicides in the Emmonak area; that was a              
 chain reaction that year, and the amount of money that would have             
 been spent to fly people in to heal the community, versus having              
 providers or resources in that community, I mean, there's no way to           
 equalize it.  If there are providers in the communities that can              
 deliver the services, and who are familiar with and fall under some           
 standards to provide services, the quality of health care in all of           
 rural Alaska, all urban Alaska, of course, becomes quality care."             
 Number 1240                                                                   
 MS. DEASON continued:  "I am very concerned.  I've spent 16 years             
 working in the substance abuse field.  My concern is, and always              
 has been, that there are people out there who are providing                   
 services who are not ... certified, because it is a voluntary                 
 process at this point.  And sometimes those services are much more            
 detrimental than they are valuable, as far as a health service.               
 And what we would like to see is that everybody would be required             
 to follow a set of standards to practice. ... So, we wouldn't                 
 eliminate rural Alaska; we would want those people who have been              
 out there practicing these standards and providing these services             
 to still have access to licensure, without eliminating them.                  
 "And so, what we did is we rolled over our current certification              
 standards into licensure standards, which are quite high standards            
 for certification.  I've done extensive research in the last year,            
 with the Lower 48 states, those who have licensure, those who                 
 don't, those who have voluntary, those who have mandatory.  And ...           
 what all of us did on the coalition is we've ... seen what worked             
 in some states and what didn't in others."  She indicated that                
 other than the amendments they have, it is a very clean bill.                 
 Number 1304                                                                   
 REPRESENTATIVE RYAN noted that everyone seemed fairly satisfied               
 with the bill.  He offered to make a motion to move it.                       
 CHAIRMAN ROKEBERG responded that he was going to hold the bill over           
 for "further activities" that would come to light in the testimony.           
 He acknowledged the presence of Representative Dyson and invited              
 him to join the committee at the table.                                       
 Number 1336                                                                   
 W. HARRISON CHILDERS, Certified Drug and Alcohol Counselor II and             
 Nationally-certified Addiction Counselor II, Charter North                    
 Counseling Center, came forward to testify, specifying that he                
 works in the private sector.  They see this as a public protection            
 and believe it is in everyone's best interest, including the                  
 MR. CHILDERS cited an example of public protection.  Under the                
 current voluntary system, people coming out of prison can practice            
 as chemical dependency counselors, and there are no sanctions or              
 ways to control that.  He hopes this bill will provide a way to               
 investigate those people and to focus on everyone's best interest.            
 He concluded by saying they favor passage of this bill, which is              
 good for the state and is "just good business."                               
 Number 1391                                                                   
 REPRESENTATIVE HUDSON asked:  With there being no licensure, how              
 are the bona fides established under the present system?                      
 MR. CHILDERS explained that there are about 700 certified addiction           
 professionals in Alaska.  There is a voluntary system, with a code            
 of ethics attached to membership in that organization.  A board has           
 been put together to investigate allegations.  As he sees it, the             
 crux of the issue is that there is no way to "enforce allegations             
 of misconduct" at this point.  Although people who are not licensed           
 or even certified counselors have been cited, nobody on the board             
 has power to do anything about that.                                          
 REPRESENTATIVE HUDSON asked whether it is an ad hoc board.                    
 An unidentified speaker said yes.                                             
 Number 1450                                                                   
 CHAIRMAN ROKEBERG asked who now certifies counselors.                         
 MR. CHILDERS said it is the Alaska Commission for Chemical                    
 Dependency Professionals.                                                     
 CHAIRMAN ROKEBERG stated his understanding that the existing                  
 commission grants certification, but without state authority.                 
 Number 1499                                                                   
 REPRESENTATIVE HUDSON asked whether there is public funding for               
 MR. CHILDERS said there is some funding; others could speak to                
 Number 1526                                                                   
 WILLIAM D. McCOLL, Director, Government Relations, National                   
 Association of Alcoholism and Drug Abuse Counselors (NAADAC),                 
 testified via teleconference from Washington, D.C., in support of             
 HB 192.  With more than 17,000 members, NAADAC is one of the                  
 largest national organizations representing the interests of                  
 alcoholism and drug addiction treatment and prevention                        
 professionals.  They've assisted in authoring licensure bills                 
 throughout the U.S., and they provided relatively minor technical             
 input into HB 192.                                                            
 MR. McCOLL stated, "NAADAC strongly supports the enactment of state           
 licensure laws.  Such laws establish an organized system which                
 ensures that the delivery of this vital health care service is                
 provided by trained and experienced professionals who have met                
 rigorous training requirements prior to being licensed or certified           
 by the state as alcohol and drug counselors.  This is important for           
 the protection of consumers of these services in the state of                 
 MR. McCOLL continued, "Counselors who have met the licensing                  
 criteria outlined in this bill will constitute the one group of               
 professionals who specialize in the diagnosis, assessment and                 
 treatment of alcoholism and other substance abuse disorders.  These           
 counselors possess a constellation of knowledge that is unique to             
 the alcoholism and drug abuse counseling profession and which                 
 distinguishes them from other health care professions.  We believe            
 that the licensure of alcohol and drug counselors will help to                
 ensure that the citizens of this state who suffer from an addiction           
 disease will receive care from a qualified, experienced and                   
 competent professional."                                                      
 Number 1618                                                                   
 CHAIRMAN ROKEBERG asked what the national entry requirements are              
 for education and whether NAADAC provides a national examination.             
 MR. McCOLL replied, "NAADAC does provide a national examination.              
 We are a certifying body.  We have three exams.  They are for the             
 NCAC, which is our lowest level of certification and which has no             
 educational requirement; the NCAC II, which has a slightly higher             
 educational requirement, a bachelor's degree; and then the Masters            
 of Addictions Counselors, MAC, which, as it states, requires a                
 master's degree."                                                             
 MR. McCOLL continued, "The answer to your first question:  The                
 level in the states right now somewhat varies.  The trend has been,           
 I think, of late, to enact laws which may contain some educational            
 requirements.  However, I would add that that's certainly not                 
 uniform.  New Mexico just passed a bill without any educational               
 requirements."  He added that ten states now have licensure or                
 mandatory certification.                                                      
 Number 1690                                                                   
 REPRESENTATIVE COWDERY asked whether the national exam addresses              
 issues pertaining to Yupik or Alaska Native populations.                      
 MR. McCOLL indicated the exam addresses issues considered more                
 universal in addiction studies.  He said there are minority                   
 concerns within NAADAC itself, and they have established a minority           
 committee which relays those types of concerns.  He offered to find           
 out from the persons who create the certification exam whether any            
 questions regard Alaska Natives; however, he doesn't believe that             
 is the case.                                                                  
 Number 1749                                                                   
 REPRESENTATIVE COWDERY observed, from his 40 or 50 years here and             
 time spent in rural areas, that elders rather than outsiders may be           
 more respected and looked to for talks and encouragement.                     
 MR. McCOLL replied, "I certainly understand your concern.  I think            
 that the addiction treatment profession has a very clear commitment           
 to respecting Native rights, and certainly the kinds of questions             
 that we are talking about are very much geared towards a sort-of-a-           
 universalist practice, which can be modified, of course, for                  
 (indisc.) under those types of heritages."                                    
 Number 1802                                                                   
 REPRESENTATIVE HUDSON referred to Mr. McColl's indication that                
 NAADAC had helped other states in their move to licensure.  He                
 asked whether most counselors in other states had been                        
 grandfathered in or were disenfranchised.                                     
 MR. McCOLL answered that usually there is a move to grandparent               
 those existing counselors in, depending on the state.  For example,           
 he believed that Maine had an eight-year grandparenting clause;               
 however, that included a master's requirement.  He pointed out that           
 of the ten states that had enacted laws, only four had enacted any            
 degree requirements.                                                          
 Number 1845                                                                   
 REPRESENTATIVE HUDSON asked whether Mr. McColl was familiar with              
 the "Alkali Lake proposal" a few years before, which incorporated             
 "some pretty peculiar and specific drug and alcohol dependency,               
 primarily alcohol dependency, measures in that area."                         
 MR. McCOLL said he wasn't familiar with that specific legislation.            
 Number 1874                                                                   
 CHAIRMAN ROKEBERG referred to educational requirements in some                
 states.  He asked whether within the bylaws, or elsewhere,                    
 experience levels could be exchanged for education.                           
 MR. McCOLL replied that some states had made that an option, and it           
 is well within the tradition.  It is clear to him that each state             
 needs to decide.  For Alaska, based on its rural population, he               
 believes that type of exchange is quite fitting.                              
 CHAIRMAN ROKEBERG asked whether for Mr. McColl's national                     
 association, the examination is the primary method of entry into              
 MR. McCOLL said that is correct.  He stated, "I'd like to draw a              
 distinction here.  NAADAC certification is a private, voluntary               
 certification.  And we do certify at three levels, based on                   
 educational requirements. ... And many states do use NAADAC's                 
 written exams.  However, the state certifications very frequently             
 will accomplish ... their goals by doing things like trading off              
 experience levels with years of education, that type of thing.                
 That's not an unusual type of arrangement for a state to make."               
 Number 1935                                                                   
 CHAIRMAN ROKEBERG asked whether any other national organizations              
 work parallel to or in competition with NAADAC.                               
 MR. McCOLL said there are other certifying organizations, some                
 national, including the "international certification reciprocity              
 consortium" and the "FECC," for which he knew only the acronym.               
 CHAIRMAN ROKEBERG thanked Mr. McColl and exchanged contact                    
 MR. McCOLL said he'd send information regarding whether his                   
 organization asks questions specific to Alaska Native issues.                 
 Number 2050                                                                   
 GARY TURNER, Village Services Manager, Yukon-Kuskokwim Health                 
 Corporation, testified via teleconference from Bethel, specifying             
 that he works with the Village Alcohol Education Counselors (VAEC)            
 program.  He oversees village-based counselors in 18 villages who             
 serve about 36 villages in total.                                             
 MR. TURNER expressed concern about the testing.  When he'd failed             
 the test by one question, he'd felt incompetent.  He believed it              
 was culturally biased, not taking into account traditional values             
 of Natives.  He explained, "We have to kind of look at the world              
 backwards to pass this test.  We have to look at it the other way,            
 and it goes against all our own values and how we see the world."             
 MR. TURNER said he believes that many of their counselors are Level           
 II counselors out there.  He stated, "They've been in appeal for              
 ten years.  Just because they can't pass this test, they're not               
 considered Level II in the academic world.  And trying to teach               
 these people these things, to try to look at this test differently,           
 has been my goal.  I'm taking the test again Saturday, and I feel             
 I'm prepared to do a good job, but that doesn't guarantee me that             
 I'll pass.  I'll keep trying."                                                
 MR. TURNER said he is trying to obtain his degrees; he foresees               
 that if they don't stop this progression of being licensed and                
 needing a certain academic degree, they will lose many Native                 
 counselors.  Others would come in and provide services without                
 understanding the culture, traditions and values, which would not             
 benefit the Native people.                                                    
 MR. TURNER stated, "The people who are in place now are the ones              
 that should be providing the services and not be limited because of           
 these simple things like you need to be Level II and these are the            
 things you need to pass.  Maybe in the future we'll need a degree             
 to do that.  And it doesn't take in account that what we have,                
 experience, lifestyle, the things that we've been doing for                   
 centuries, is going to benefit our people, not a piece of paper               
 that says you're a Level II counselor or that you have this degree,           
 bachelor's degree in human services.  If we go that route, we're              
 going to lose a bunch of our people in the field."                            
 Number 2188                                                                   
 CHAIRMAN ROKEBERG asked whether Mr. Turner believes the existing              
 commission could develop an examination that is not culturally                
 biased and that would apply to rural Alaskans.                                
 MR. TURNER said with strong input from rural areas, and with rural            
 residents included in that process, he strongly believes they can             
 do that.                                                                      
 CHAIRMAN ROKEBERG asked whether, if that were the case, an                    
 examination should be required to gain certification.                         
 MR. TURNER agreed and said they also propose that someone certified           
 as a Level II, for example, according to current standards, could             
 supervise someone else for five years; that second person could               
 possibly automatically become Level II under that supervision.                
 MR. TURNER restated his recommendation that any test should take              
 into consideration Native values and traditions.  He stated, "It              
 doesn't have to be an easy test, but at least we'll have a chance             
 at it without being tricked:  Two negatives means a positive; I               
 don't know that stuff.  And big terminology like `multifacet,' we             
 don't know what those things mean.  So, we take the test already              
 beating ourselves.  That doesn't mean we're stupid or we're                   
 Number 2218                                                                   
 CHAIRMAN ROKEBERG wished Mr. Turner the best of luck on his exam.             
 Number 2292                                                                   
 ARDYCE TURNER, Yukon-Kuskokwim Health Corporation, testified via              
 teleconference from Bethel that she is the new "FAF coordinator/              
 supervisor."  She stated, "This is going to be my third attempt at            
 taking this test.  I also found it to be very culturally biased.              
 And what I mean is, my perspective isn't the national perspective,            
 and I found it very frustrating, even though I did study here and             
 there, you know."  Her first try, she'd been 15 away from passing.            
 Her second try, she'd been six away.                                          
 MS. TURNER said she'd wished the NAADAC would send a survey or make           
 recommendations for the rural area; often, it seems like taking a             
 test blindfolded, feeling their way around and hoping for the right           
 answer.  She agreed with Gary Turner that there are a lot of trick            
 questions, such as use of the word "multifaceted."  She considers             
 herself an educated woman, a parent, a mother, and a student as               
 well.  She is still going to school and is a year away from an                
 undergraduate degree.                                                         
 Number 2367                                                                   
 CHAIRMAN ROKEBERG asked whether Ms. Turner would be taking the                
 NAADAC test.                                                                  
 MS. TURNER said yes.                                                          
 CHAIRMAN ROKEBERG wished her luck on that.                                    
 Number 2384                                                                   
 BETH KERSEY, Program Director, Phillips Ayagnirvik (drug and                  
 alcohol program), Yukon-Kuskokwim Health Corporation, testified via           
 teleconference from Bethel.  She oversees a program with a staff of           
 60, primarily counselors, of which 27 are village-based.  They                
 cover approximately 57 villages in the region.                                
 MS. KERSEY thanked Representative Ivan for introducing the bill.              
 She works with both Gary Turner and Ardyce Turner.  Although they             
 support licensure and understand its importance, they want to                 
 ensure careful consideration of a few points.  First, the                     
 commission appointed by the governor must reflect Alaska's cultural           
 diversity; Ms. Kersey proposed that the language be stronger.                 
 MS. KERSEY said second, they want to make it clear that the                   
 strength of rural Alaska lies in its "natural helpers, who may be             
 the young people and certainly the elders."  She stated, "And we              
 want to make sure that they're going to fit into the clause that              
 allows them to be able to still turn around and do, kind of, what             
 we might consider counseling but not have to be licensed.  So, I              
 would assume that they're going to be able to fit under the clause            
 that says that as long as they're responsible to a tribal group,              
 that then they can be exempt from licensure."                                 
 MS. KERSEY mentioned the concept of "an inherent training, which              
 would bring people in from the villages."  Individuals willing to             
 act as natural helpers would reach out to members in the                      
 communities in such a way that licensure wouldn't be required, nor            
 would they be charged with a misdemeanor for doing what tradition             
 has taught them to do.  She also expressed concern, as an                     
 administrator, about filling vacancies that arise.                            
 TAPE 97-47, SIDE B                                                            
 Number 0006                                                                   
 MS. KERSEY mentioned the need to get people to where they can do              
 counseling and respond to their community fairly quickly.  She                
 stated, "So, having this counselor associate, where they've got to            
 wait for a year, I have real concerns.  I also wonder what we're              
 going to do until they can make that counselor associate level in             
 the year interim, again, because we don't have people with these              
 credentials waiting in the villages."  She restated her support of            
 licensure but requested consideration of these other points.                  
 Number 0034                                                                   
 CHAIRMAN ROKEBERG asked whether Ms. Kersey was referring to an                
 exemption for "traditional-type" counseling.                                  
 MS. KERSEY referred to pages 2 and 3.  She said it seems that                 
 someone who reports to a tribal group could be exempt from any kind           
 of licensure if there were "natural helpers" out there.                       
 CHAIRMAN ROKEBERG asked whether they would be employed or paid.               
 MS. KERSEY referred to page 3, lines 2 through 4, which says, "and            
 the person remains accountable to the established authority of the            
 religious denomination or the ruling body of the tribal group and             
 no separate charge is made for the services".  She said it appears            
 someone maybe could do this without worrying about being charged              
 with a misdemeanor.                                                           
 Number 0100                                                                   
 PATRICIA WINTYR, American Counselors Association of Alaska, came              
 forward to testify, indicating they are also working on licensure             
 for counselors.  She stated, "I definitely support this                       
 legislation.  And some of the wording potentially limits the                  
 practice of counselors, something we've been doing long before                
 there was the drug abuse counseling.  On page 2, it says a person             
 who is not licensed under this chapter may not engage in chemical             
 dependency counseling for compensation, et cetera."  She specified            
 she was referring to lines 18 through 20.                                     
 MS. WINTYR referred to page 9, line 31, continuing to page 10,                
 which defines "chemical dependency counseling" as the provision of            
 intervention, assessment, counseling and aftercare for persons who            
 are alcoholics or drug abusers or who participate in inhalant abuse           
 or for the members of their families who are affected by the use or           
 abuse of alcohol, drugs or inhalants.                                         
 MS. WINTYR suggested eliminating that or rewording it because                 
 counselors couldn't be in business if they were unable to counsel             
 those with alcoholism and drug abuse in their families.  It is                
 limiting and possibly infringes on established rights of                      
 counselors, marriage and family therapists, psychologists and                 
 social workers.  Although she often sends people to chemical                  
 dependency/abuse counselors, she could also counsel them well.  One           
 cannot be in the counseling business without learning a lot about             
 working with abuse.  She added, "Probably every client I work with            
 is affected by alcohol abuse in their family."                                
 Number 0270                                                                   
 REPRESENTATIVE HUDSON asked whether she wanted to remove "for the             
 members of their families."                                                   
 MS. WINTYR said yes.  It says on page 2 that a person who is not              
 licensed under this chapter may not engage in chemical dependency             
 counseling for compensation, which is later defined on page 9;                
 those two go together.  If she practiced counseling that way, she             
 would be in violation, a class B misdemeanor.  "And I don't think             
 that you want to do that to the number of Alaskan counselors or               
 psychologists; I mean, it just doesn't make sense," she added.                
 Number 0318                                                                   
 CHAIRMAN ROKEBERG said they'd not be moving the bill that day.  He            
 asked whether she had additional testimony.                                   
 MS. WINTYR replied, "No, I definitely support the testimony                   
 CHAIRMAN ROKEBERG asked Ms. Wintyr to provide written comments.               
 Number 0350                                                                   
 CATHERINE REARDON, Director, Division of Occupational Licensing,              
 Department of Commerce and Economic Development, came forward to              
 testify, noting that the board and associated licensing activities            
 in this bill would be part of her division.  She stated, "I did               
 work with the supporters of the bill to go through the version in             
 the other house, and I have a number of relatively small, from my             
 perspective, clean-up provisions that I think that - I haven't                
 spoken with the sponsor but with some of the folks sitting behind             
 me - seem to be mutually acceptable, ... which I'd hoped you might            
 consider for a draft CS."  She asked whether they wanted her to run           
 through those.                                                                
 CHAIRMAN ROKEBERG replied that they'd be sending this bill to a               
 subcommittee.  He asked that Ms. Reardon provide those in writing.            
 Number 0406                                                                   
 REPRESENTATIVE IVAN indicated the fiscal note had raised concern in           
 the Senate Labor and Commerce Committee, and he believes the start-           
 up costs for this control board will be substantial.  However, he             
 believes once this board is up and running, they could provide the            
 best possible service.  In addition, the people who will be                   
 counseled or affected by this bill will stay away from the                    
 Department of Public Safety, Department of Corrections and                    
 Department of Health and Social Services and therefore not impact             
 those departments fiscally in the future.  He asked Ms. Reardon to            
 comment on the fiscal note.                                                   
 Number 0458                                                                   
 MS. REARDON referred to page 2 of the fiscal note and said they'd             
 tried to provide a detailed description.  She explained, "What I've           
 calculated is that there are approximately 700 licensees, based on            
 the number of people who are currently licensed or certified by the           
 commission.  It seems to range from 650 to 800 in their history;              
 so, I picked the number 700.  And I estimated that it would take a            
 full-time Range 12 clerk, licensing examiner, to staff the board              
 meetings and work with the licensees, the applicants, and do all of           
 the paper processing and all of that."                                        
 MS. REARDON said the fiscal note also includes a half-time                    
 investigator for disciplinary and complaint investigations, which             
 is the first item under personal services.  "It includes $9,100 of            
 travel money for the board to meet, and ... $2,000 of that is for             
 the investigator to go to areas where events might occur that need            
 to be investigated," she said.                                                
 Number 0522                                                                   
 MS. REARDON pointed out that the contractual services line is a big           
 item in the fiscal note.  The smaller parts are the costs of public           
 noticing, regulations, telephones and so forth; the big item                  
 relates to examinations, with $75,000 to contract with an outside             
 company to write three exams.  "We just picked $25,000 each," she             
 explained.  "And that's where the decisions about what happens with           
 exams matter a lot.  My understanding is that ... the existing                
 commission has been using the Level I national exam for its Level             
 II ... counselors in this bill.  And so, that wouldn't cost us                
 anything to develop, if the board chose to continue using that                
 MS. REARDON said because they are using the Level I exam as the               
 test for Level II counselors, it is her understanding that no                 
 existing test remains for "the Level I people or the associates."             
 She believes that is being researched.  The board might want to               
 contract out to have those created, or perhaps the existing tests             
 wouldn't be considered acceptable from an Alaska perspective and              
 new tests would need to be written.  A big item in the fiscal note,           
 that was part of the discussion in the Senate Labor and Commerce              
 Committee the previous day, because building in that $75,000 made             
 the numbers big and made the license fees come out larger.                    
 MS. REARDON stated, "Also, if people are going to be paying us to             
 take the exam and we buy the exam from the national exam company,             
 that money flows through our budget; so, it shows as revenue and              
 expenditures.  If they pay the exam company directly, it stays                
 outside our budget; then you don't see it here.  So, part of not              
 being sure whether the board will choose to have exams or not,                
 since it's permissive language in the bill, means that ... it's a             
 little bit hard to know whether or not to build it into the fiscal            
 MS. REARDON further explained, "My concern was that if I didn't               
 build it into the fiscal note, and two years from now the board               
 wants to get exams written and wants to have everybody take them,             
 I'd say, `Well, I have no expenditure authority to do any of that.'           
 So, I put it in the fiscal note. ... If we had an understanding               
 that the board would not require examinations without going back to           
 the legislature for expenditure authority, then I probably wouldn't           
 put it in the fiscal note."  She said that had been one of the big            
 issues the previous day in the Senate.                                        
 MS. REARDON said in addition, there is $10,200 in the fiscal note             
 for paying the Office of the Attorney General to prosecute the                
 disciplinary cases and do regulation review.  She concluded by                
 saying those are the major items in there; she offered to discuss             
 the details if the subcommittee or the sponsor so desired.                    
 Number 0668                                                                   
 CHAIRMAN ROKEBERG stated his understanding that the educational and           
 examination formats are issues for the commission to settle.  The             
 fiscal note provides a baseline from which the subcommittee and the           
 bill sponsor can work.  He suggested that Ms. Reardon could consult           
 with them as necessary.                                                       
 Number 0711                                                                   
 MS. REARDON agreed.  She pointed out that, as with all of their               
 programs, the department would fall under the mandate that                    
 licensing fees and other fees received for exams and so forth must            
 cover all of the costs.  Therefore, the fiscal note will always be            
 a "net wash" to the general fund.  However, she expects that the              
 fees will be more expensive than what people are currently paying             
 to the nonprofit commission; she wants people considering licensure           
 to be aware of that.                                                          
 MS. REARDON advised members that fees for what she considers mental           
 health licensing boards, such as for marriage and family                      
 therapists, psychologists and social workers, run $350 to $500                
 every two years, depending on the profession.  However, they have             
 smaller numbers of licensees; for example, psychologists have fewer           
 than 200 licensees, compared to 700 here.  From the previous day's            
 testimony, she believes those affected by the bill now pay $125 for           
 a two-year license.  She expects that even if they take the whole             
 exam issue off the fiscal note, figuring that if exams are                    
 developed, it will be through a budget allocation in a future year,           
 the fees would still probably run about $350.                                 
 Number 0756                                                                   
 REPRESENTATIVE IVAN said he didn't want the fiscal note to kill the           
 bill or slow its progress.  He stated his belief that eventually              
 the licenses will become affordable.  In addition, he hopes this              
 will indirectly save money, in terms of people they take care of.             
 Number 0784                                                                   
 CHAIRMAN ROKEBERG said he didn't see revenues from the actual                 
 license examination fees.  He asked about that.                               
 MS. REARDON referred to the bottom of page 3 of the fiscal note and           
 explained that she hadn't been sure how many people would be taking           
 the exams.  She stated, "So, if we got to it, in a subcommittee,              
 the exam discussion, I could probably, you know, array the costs a            
 little bit."  In this fiscal note, however, they had put all of the           
 burden on the actual licenses.                                                
 CHAIRMAN ROKEBERG said presumably, there would be examinations                
 given and revenues generated by that, which would in turn lower the           
 biannual fees.                                                                
 MS. REARDON agreed.                                                           
 Number 0868                                                                   
 MS. REARDON said she'd move speedily through other issues.  She               
 restated that it will cost more than people have been paying, and             
 she doesn't want to take them by surprise.  Referring to testimony            
 by Ms. Wintyr, she pointed out there is an exemption for the other            
 licensed mental health professions, such as marriage and family               
 therapists, psychologists and social workers; they wouldn't need to           
 get this license as well.  She read from page 3, lines 8 and 9,               
 which says a "person licensed in this state under laws outside this           
 chapter when performing activities that are within the scope of the           
 person's licensure" is exempted.                                              
 MS. REARDON pointed out, however, that while a psychiatrist with a            
 license would be exempted, Ms. Wintyr is correct that someone not             
 in a licensed profession, such as a professional counselor, which             
 Ms. Wintyr is, wouldn't be exempt and would need to get this                  
 license to do chemical dependency counseling.                                 
 MS. REARDON noted that she had a whole collection of minor issues.            
 She suggested dealing with them at the subcommittee level unless              
 the committee preferred otherwise.                                            
 CHAIRMAN ROKEBERG said that was an excellent idea.                            
 Number 0946                                                                   
 REPRESENTATIVE HUDSON referred to the fiscal note and to testimony            
 about the difficulty some have relating to the exams and                      
 qualifications in rural Alaska.  He sees the major problem in rural           
 Alaska and doesn't see a lot of people out there making lots of               
 money as licensed professionals.  If it costs $500 to get a                   
 license, nobody out there would do this kind of service, and it is            
 in rural Alaska that they are needed.  "And I would hope that you'd           
 take a hard look at that whole situation and see if there isn't               
 some way in which we can accommodate that or provide it," he said.            
 REPRESENTATIVE HUDSON asked whether Ms. Reardon would have a hand             
 in creating the qualifications for the counselors, particularly in            
 rural Alaska.  He noted that in Juneau, Anchorage and Fairbanks,              
 there were many highly educated people.  However, the lion's share            
 of the problems are in rural Alaska.  He expressed hope that this             
 legislation could lead to professionals not necessarily from a                
 high-academic point of view but from cultural relationships and               
 some training.  In addition, he'd like to see an affordable cost              
 that is conducive to encouraging people to acquire these licenses.            
 Number 1061                                                                   
 MS. REARDON responded that the regulation-writing authority will              
 rest solely in the hands of the board.  "If I'm around, and if I'm            
 convincing, then ... the director may have a role," she added.  The           
 qualifications in terms of training and experience are fairly                 
 specifically laid out, "if we ignore the exam issue."  She said it            
 is important that the legislature be comfortable with those.                  
 MS. REARDON explained, "To enter into the profession as a counselor           
 associate, which is the lowest level, you will need to have ... one           
 year of training in an approved training course, under this law,              
 under the supervision of a licensee.  And I don't know whether                
 that's doable or not, but I assume that the (indisc.) believe so."            
 Number 1112                                                                   
 REPRESENTATIVE IVAN said he appreciates Representative Hudson's               
 recommendation and they will look at the level of licenses being              
 offered.  He suggested perhaps the costs could be "met at different           
 education or experience levels, versus chemical supervisor license            
 fee costs," and he acknowledged that some of these people aren't              
 making $80,000 to $100,000 a year.                                            
 Number 1154                                                                   
 REPRESENTATIVE HUDSON stated his belief that they should be leaning           
 towards a program similar to that for health aides in the villages,           
 for example.  He suggested devising in the subcommittee a way to              
 get a qualified person in every village, at no cost to the person,            
 who would be selected.  "And we should be able to find the moneys,            
 because I think that it's such a high public importance to do                 
 that," he concluded.                                                          
 Number 1198                                                                   
 MS. REARDON asked for confirmation that he was referring to having            
 a funding source from the general fund, not from program receipts.            
 REPRESENTATIVE HUDSON said that was his thinking.                             
 MS. REARDON said she was looking forward to working with the                  
 sponsor and any subcommittee.  She was glad they were talking about           
 costs now and working on the issue of the fiscal note, because she            
 didn't want to catch people by surprise and have unintended                   
 Number 1236                                                                   
 CHAIRMAN ROKEBERG asked whether anyone else wished to testify.  He            
 announced that they would hold HB 192 over.  He expressed the                 
 desire to send this to a subcommittee including the Senate Labor              
 and Commerce Committee, the existing commission and the bill                  
 sponsor, to develop "a bill that everybody can live with in an                
 affordable and effective manner."  He emphasized his belief that              
 this is excellent legislation.  He stated, "Hopefully, at a point             
 where it reaches its maturity, we of this committee would be happy            
 to take it back up and move it along in an expeditious manner, when           
 it reaches that point."                                                       
 CHAIRMAN ROKEBERG said the subcommittee should perhaps insert a               
 section on the examination criteria, particularly as it relates to            
 the types of questions, including definitions of terms, making it             
 clear that the examination meets the diverse needs of Alaska and              
 ensures adequate training and knowledge, without the difficulties             
 such as those discussed by the testifiers from Bethel.  He                    
 suggested that could be done through some "artful drafting in                 
 Number 1349                                                                   
 LORI NAMYNIUK, President, Substance Abuse Directors Association,              
 testified in support of HB 192 on behalf of herself and her                   
 association.  She believes it will ensure consumer protection and             
 enhance the quality of care.  It has statewide support, not only              
 from her association but also from ARANDAP and the Alaska Native              
 Health Board.  It will also ensure access to services in rural                
 MS. NAMYNIUK referred to concerns expressed from Bethel and said              
 this bill would protect providers like Gary Turner, in that                   
 currently within the bill there are no degree requirements;                   
 experience is important, as is supervision.  "And this would also             
 give us opportunity to be involved in the development of the                  
 testing standards," she concluded, thanking the sponsor.                      
 Number 1427                                                                   
 CHAIRMAN ROKEBERG appointed Representatives Hudson, Ryan and Kubina           
 to the subcommittee, advising them of their charge to meet with the           
 Senate, the sponsor, and the people involved.  He announced HB 192            
 was being held over.                                                          
 CHAIRMAN ROKEBERG called a brief at-ease at 4:47 p.m.  He called              
 the meeting back to order at 4:48 p.m.                                        
 HB 203 - ACTIONS FOR UNLAWFUL TRADE PRACTICES                                 
 CHAIRMAN ROKEBERG announced the next item of business, House Bill             
 No. 203, "An Act relating to actions for unlawful trade practices."           
 Number 1513                                                                   
 REPRESENTATIVE FRED DYSON, sponsor, advised members that                      
 Representative Croft and the person on line from the Office of the            
 Attorney General would address technical questions about Alaska's             
 consumer protection law.  He stated, "Since the mid-80s, we have              
 continued to defund the Attorney General's consumer fraud                     
 department.  And it's been reduced to the level where only the most           
 extreme cases are they able to handle.  And ... the response for              
 dealing with consumer fraud has largely fallen to the BBB, the                
 Better Business Bureau, who has no legal standing in enforcement."            
 REPRESENTATIVE DYSON said this bill purports to equip private                 
 citizens with most of the power of the Attorney General in terms of           
 seeking relief from fraud and injunctive power to stop it while it            
 is occurring.  It appeals to him because it gives private citizens            
 the power to do the enforcement and to seek relief.                           
 REPRESENTATIVE DYSON explained that part of the problem previously            
 was, as he remembered it, a $200 limit for punitive damages.  This            
 made it virtually impossible to find an attorney willing to take              
 the case.  As he understood it, it was also impossible to get an              
 injunction to stop a fraudulent act until going to court and                  
 obtaining a verdict of guilty.  This bill provides the means to               
 cure all of those problems.                                                   
 Number 1674                                                                   
 REPRESENTATIVE DYSON noted that a fair amount of fraud occurs in              
 Alaska,  He cited examples related to telemarketing, used cars in             
 Anchorage, "bait-and-switch" deals involving meat, mail-order and             
 pyramid schemes, and airline discount ticket deals.  Nationwide,              
 Alaska is the state least prepared, in terms of available staff or            
 resources, to deal with consumer fraud.  The Better Business Bureau           
 in Alaska has been receiving 100 to 300 calls a day.  In 1995, the            
 last year for which figures are available, there were 20,562 calls            
 relating to concerns about consumer fraud.  Since January of this             
 year, Representative Dyson indicated he and Representative Croft              
 had been working a good deal with the Administration, and he                  
 believes the Administration is wholeheartedly in favor of this.               
 Number 1804                                                                   
 REPRESENTATIVE COWDERY asked Representative Dyson to comment about            
 the amount of "actual damages or $500" in Section 2.  He said it              
 seems to be a very small figure.                                              
 REPRESENTATIVE DYSON stated, "Remember, it was $200 before," then             
 indicated the punitive damages are triple the actual damages award.           
 He deferred to Mr. Schwartz for technical answers.                            
 CHAIRMAN ROKEBERG invited Representative Dyson to join the                    
 committee at the table.                                                       
 Number 1889                                                                   
 DAVEED SCHWARTZ, Assistant Attorney General, Commercial Section,              
 Civil Division (Anchorage), Department of Law, testified via                  
 teleconference from Anchorage, saying he is in charge of consumer             
 protection enforcement for the department.  He stated, "The                   
 Department of Law's official position on this bill is that we                 
 enthusiastically support it.  We see it as a way of enhancing a               
 private litigant's ability to sue under the consumer protection act           
 and to exercise their private right of action ... to obtain redress           
 for a consumer protection violation, and this being especially                
 important in our era of dwindling public resources devoted to                 
 consumer protection enforcement."                                             
 MR. SCHWARTZ pointed out that the department hasn't taken                     
 individual complaints from the public in the area of consumer                 
 protection for about ten years; that function had been eliminated.            
 Whereas they once had about 16 people in a separate consumer                  
 protection section, they now have a very small staff to litigate              
 the most egregious violations, some of which Representative Dyson             
 had mentioned.  They try to litigate cases involving large numbers            
 of consumers and try to get refunds.  Although fairly successful              
 with what they do, they are only a shadow of the staff that existed           
 in the 1980s.                                                                 
 Number 2002                                                                   
 MR. SCHWARTZ agreed this bill will enhance a consumer's ability and           
 incentive to sue under the consumer protection act.  Referring to             
 Representative Cowdery's question about Section 2, Mr. Schwartz               
 stated, "Section 2, as amended, would expand the types of actions             
 available.  Currently, under the private right of action section of           
 the consumer protection statute, a person must suffer an                      
 ascertainable loss of money or property in order to bring a private           
 action under the consumer protection act.  Last year, the                     
 legislature amended the consumer protection act to make unwanted              
 telephone solicitation a violation of the consumer protection act."           
 MR. SCHWARTZ pointed out that the new Anchorage telephone directory           
 and "some other books" contain black dots next to a few customers'            
 names.  He explained, "If a telemarketer calls a person with a                
 black dot next to their name, that's a violation of the consumer              
 protection act.  Those consumers may not suffer any ascertainable             
 loss of money or property, but they are `otherwise aggrieved' under           
 the consumer protection act, and they would have a cause of action            
 under the consumer protection act with this wording on lines 9 and            
 10, `or who is otherwise aggrieved.'"                                         
 MR. SCHWARTZ continued, "Additionally, under the current private              
 right of action section, a person may obtain their actual damages             
 or $200 for their entire case, whichever is greater, and they may             
 only get three times their actual damages if they can prove a                 
 willful or intentional violation.  The amendment would                        
 automatically triple the actual damages that would be awarded to a            
 consumer and would also give a consumer the greater of three times            
 their actual damages or $500 per violation.  So, even though it               
 looks like a small step up from $200 to $500, right now a consumer            
 who doesn't get his actual damages but gets $200 statutory damages            
 instead would get $200 for their entire case.  Under the amendment,           
 they would get $500 per violation."                                           
 MR. SCHWARTZ continued, "For example, someone with a black dot next           
 to their name gets ten calls from a telemarketer, each call being             
 a violation.  Under the current statute, they've suffered no actual           
 damages; so, they'd get only $200.  Under this amended statute,               
 since they've suffered no actual damages, they could get $500 per             
 telephone call, or $5,000.  So, that's how that might work."                  
 Number 2219                                                                   
 MR. SCHWARTZ reported that Sections 1 and 3 are housekeeping                  
 provisions to recognize other changes in the bill.  Section 4                 
 allows a person to bring an action for injunctive relief, which is            
 significant because of the state's inability, due to lack of                  
 resources, to obtain an injunction in every instance of a consumer            
 protection violation.  This would also encourage a private litigant           
 or a consumer group to engage in private enforcement of the                   
 MR. SCHWARTZ stated, "The section of the bill dealing with                    
 attorneys fees and costs, that's also part of Section 4, is very              
 significant because a prevailing plaintiff would be able to get an            
 award of full attorneys fees and costs and would only be subjected            
 to the payment of attorneys fees to a prevailing defendant if it              
 were shown that the plaintiff's suit was frivolous.  This amendment           
 would bring Alaska in line with the vast majority of states and ...           
 would, I believe, take us out of the same league as Mississippi."             
 MR. SCHWARTZ said his general comment about the bill is that it               
 would indeed encourage more private litigants to enforce their                
 rights under the consumer protection act, and it would generally be           
 a good thing for consumers.                                                   
 Number 2380                                                                   
 REPRESENTATIVE RYAN asked whether anything in this consumer                   
 protection law talks about due diligence on the part of the                   
 consumer.  He noted that a Persian saying found in the Old                    
 Testament says, "A buyer needs 100 eyes; a seller needs but one."             
 He asked, "Where is it that you are completely held harmless for              
 anything anybody hoodwinks you into, and the other person is the              
 only one that has any guilt?  Do you not have a responsibility to             
 be aware how you spend your money and to what agreements you make?"           
 MR. SCHWARTZ replied that most certainly, consumers should be aware           
 that there are a variety of business practices.  However, just                
 about every state has a consumer protection act.                              
 TAPE 97-48, SIDE A                                                            
 Number 0006                                                                   
 REPRESENTATIVE COWDERY commented that there are many things Alaska            
 has that other states don't, including Prudhoe Bay and the                    
 permanent fund.  Referring to "pyramid clubs," he said he receives            
 a letter at least once a year from somebody who is totally                    
 convinced it is workable, usually someone he knows.  He asked,                
 "Following up on Representative Ryan's comment, how do you handle             
 a situation like that?"  He also asked how this is different from             
 small claims court.                                                           
 Number 0125                                                                   
 MR. SCHWARTZ explained, "A consumer can sue under the consumer                
 protection act in small claims court.  Of course, the dollar                  
 recovery limit in small claims court is $5,000.  And in many                  
 instances, the consumer's actual damages will be much greater than            
 $5,000.  And so, that would bring the consumer into the area of               
 district or superior court.  So, small claims court is actually an            
 avenue of redress for consumers who have small claims, claims under           
 MR. SCHWARTZ pointed out that pyramid schemes are illegal.  A                 
 pyramid scheme of the worst variety is one where "spots on a chart"           
 are being sold, with no product involved at all.  In contrast,                
 there are multi-level marketing companies such as Amway that are              
 legal.  However, these companies may not work sometimes, and it may           
 depend on the motivation of the person who gets involved.                     
 Number 0262                                                                   
 CHAIRMAN ROKEBERG referred to new text in Section 2, beginning on             
 page 1, line 15, which says, "Nothing in this subsection prevents             
 a person who brings an action under this subsection from pursuing             
 other remedies available under the law, including common law."                
 Chairman Rokeberg said this is a rather unusual statement.  His               
 reading of it would be that a person could bring a cause of action            
 for anything allowable under statute; in addition, if there is any            
 other concept in common law, he could bring a cause of action on              
 that, whether or not it was codified in Alaska statute.  He asked             
 whether that is a correct interpretation.                                     
 MR. SCHWARTZ replied that he believes this last sentence in Section           
 2 is consistent with something in the consumer protection statute             
 at AS 45.50.471(c), which says, "The unlawful acts and practices              
 listed in (b) of this section are in addition to and do not limit             
 the types of unlawful acts and practices actionable at common law             
 or under other state statutes."                                               
 MR. SCHWARTZ said, "So, I guess the answer to the question is that            
 right now, a private litigant and the state, exercising the                   
 Attorney General's common law authority, may bring an action                  
 simultaneously under the state consumer protection act and under              
 the common law and pursue statutory and common law remedies.  So,             
 this sentence that you're focusing on here is consistent with, and            
 may be just an added clarification of, the ability of a litigant to           
 sue ... simultaneously under state law and common law."                       
 Number 0421                                                                   
 CHAIRMAN ROKEBERG asked whether that is under the consumer                    
 protection title or for any cause of action.                                  
 MR. SCHWARTZ said these amendments refer only to Alaska's own                 
 unfair trade practices and consumer protection act.                           
 Number 0449                                                                   
 CHAIRMAN ROKEBERG referred to page 2, lines 9 and 10.  He mentioned           
 Mr. Schwartz's reference to the "telephone situation" and the                 
 distinction that presently there must be an ascertainable loss or             
 property loss.  Section 3 deletes "the loss resulted" and inserts             
 "the cause of action arose."  Chairman Rokeberg asked whether that            
 is because if there is fraudulent activity but no actual loss, then           
 a cause of action would arise out of that activity.                           
 MR. SCHWARTZ affirmed that.  That change of language in Section 3             
 recognizes that persons who haven't suffered an ascertainable loss            
 of money or property, but who are otherwise aggrieved, could also             
 bring a cause of action.                                                      
 Number 0533                                                                   
 CHAIRMAN ROKEBERG referred to page 2, lines 27 and 28, which says,            
 "unless the court determines that the cause of action brought by              
 the plaintiff is frivolous."  He stated his understanding that                
 Alaska has no vexatious litigation statute or frivolous lawsuit               
 statute, except perhaps the recent tort reform bill.  He asked                
 whether that is correct.                                                      
 MR. SCHWARTZ said he isn't aware of such a statute, although in               
 other states this is a common provision.  It would have the effect            
 of encouraging private enforcement of the consumer protection                 
 Number 0627                                                                   
 HELEN BEIRNE testified via teleconference from Anchorage as an                
 aggrieved private citizen.  She recounted how a car was sold to her           
 fraudulently in 1994.  It had been listed in the paper as a 1993              
 model with 12,000 miles and a three-year warranty with one year               
 remaining.  Someone with her knew more about cars than she did, and           
 the car appeared to be in mint condition.  However, within four               
 days, it had significant mechanical problems, and she discovered              
 under the warranty that it had been in a major accident and was               
 DR. BEIRNE stated, "They agreed that many of the repairs that had             
 been made on the car by a local body shop here would have made it             
 not very discernible to someone, unless they put it up on a rack              
 and did a major inspection.  So, on advice of an attorney, I did              
 take it back to the gentleman and ask him if he would just take his           
 car back and return my money.  Of course, he would not and again              
 indicated that all he'd told me was true, that it was really a                
 family car and he couldn't afford to keep it, et cetera, et cetera.           
 This is a common story, I think, that all of you have heard."                 
 DR. BEIRNE continued, "When this failed, I did then start tracking            
 the car down and found that he had indeed purchased it from a                 
 salvage yard, at a very reduced price, and in conjunction with his            
 body shop had brought this up into what appeared to be absolutely             
 mint condition.  Other things that came to light was that he was              
 doing this frequently. ... It'd be difficult to say, but he had as            
 many as a hundred ads in the paper over the year and had many cars            
 listed under his name.  He was unlicensed."                                   
 DR. BEIRNE continued, "And in all cases, as I started contacting              
 these people, in most cases - there were people who were                      
 professional individuals - most of them didn't have the finances,             
 nor did they have the time, to actually pursue it.  There were two            
 or three who had sued him, and they dropped it because they                   
 realized after, I think, counsel from attorneys and others that               
 even if they won, they would indeed lose."                                    
 DR. BEIRNE continued, "And later on, ... I did choose to carry this           
 to a jury trial, which he requested, and I realized that these                
 individuals who work in these systems know all of the delay                   
 tactics.  They will take it to the very `nth' degree, and then                
 eventually people drop it.  They can't afford to spend the time,              
 the energy and the money to pursue it.  It appeared that after he             
 realized I was not going to do that -- and the reason I didn't is             
 it was in my first year of retirement as director of the                      
 Municipality of Anchorage's health department, and it wasn't the              
 way I would choose to spend my first year of retirement, but I                
 thought I would pursue it."  Dr. Beirne said a young woman attorney           
 contributed a great deal of time, and she also had the moral                  
 support of Mr. Gilmore.  In addition, she'd contacted the Office of           
 the Attorney General.                                                         
 Number 0853                                                                   
 DR. BEIRNE reported that she'd won that case, being awarded $25,000           
 by the jury, to repay her for what she'd put into the car, plus               
 attorneys fees and fixing up other cars for transportation, and so            
 forth.  Her interest in this bill arises from the fact that even              
 after judgment, it took two years to work it through the system.              
 As soon as this individual had realized he wouldn't win, he'd                 
 divested himself of all his earnings, funds and accounts.                     
 DR. BEIRNE said the jury, in its wisdom, had asked the judge                  
 whether this man could resell the car if he got it back, since Dr.            
 Beirne hadn't wanted it; the judge had said yes, he could resell              
 it.  "So, they gave the car to me, for what it's worth, because               
 they didn't want him to have it," she noted.                                  
 DR. BEIRNE indicated the chance of collecting anything once a case            
 is settled is almost nil if the defendant has been working the                
 system for a long time.  "Also, you can't stop them, under the                
 present law, from going out and doing it, even without a business             
 license," Dr. Beirne said.  She noted that some of these issues are           
 addressed in the bill, including the increase to $500 and the                 
 ability of a person to obtain an injunction prohibiting a seller or           
 leaser to continue to engage in the unlawful act; she believes                
 these will be of value.                                                       
 Number 0983                                                                   
 DR. BEIRNE said, however, she believes AS 45.50.537 will probably             
 be of the greatest assistance to some who chooses to pursue it.  It           
 appears that there will be some financial assistance, as long as it           
 is not a frivolous case.                                                      
 DR. BEIRNE advised members that in the process, she'd learned a               
 great deal.  It appears that many people pick up salvaged vehicles;           
 some had testified on behalf of the man who sold her the car.  As             
 for "owner beware," she believes it is difficult for even fairly              
 astute average citizens to determine when they are being                      
 fraudulently involved.  Dr. Beirne would like to see the bill pass,           
 as she believes some of the relief would be helpful.                          
 Number 1050                                                                   
 STEPHEN CONN, Executive Director, Alaska Public Interest Research             
 Group (AKPIRG), testified via teleconference from Anchorage.  He              
 stated, "I think Representative Dyson is doing us all a major                 
 service by this bill.  As you may know, we have tracked the state             
 of consumer protection for at least a decade at AKPIRG.  We just              
 completed a research report, and there is no question that the                
 current state of affairs is that the private citizen must be armed            
 with the legal resources to go forward, if they do have the guts              
 and the stamina, as Dr. Beirne had, not only on her own behalf but            
 to deal with a person who, as she indicated, has been selling                 
 hundreds of these vehicles to unsuspecting consumers, "unbonded,              
 unlicensed, cheating the honest car dealer as much as the honest              
 consumer."  Had Dr. Beirne had private injunctive relief, as set              
 forth in the bill, she could have stopped this guy cold.                      
 MR. CONN indicated that while the state was once the chief consumer           
 protector, with vast resources, now people like Dr. Beirne carry              
 the torch for all consumers.  He applauded the sponsor for coming             
 up with a simple, easy bill that is carefully crafted to allow                
 people like Dr. Beirne to go forward and get some justice for                 
 herself and others in the marketplace.                                        
 Number 1172                                                                   
 CHAIRMAN ROKEBERG welcomed Representative Croft to the table.  He             
 called on Les Gara and Jim Forbes to testify via teleconference,              
 but he was informed that they'd had to leave.  He noted that Dr.              
 Beirne was a former member of this body.                                      
 Number 1225                                                                   
 RICK GILMORE testified via teleconference from Anchorage as a                 
 private citizen.  He had formerly been president of the Better                
 Business Bureau of Alaska, for four years, during which time they             
 saw numerous egregious cases.  He indicated he'd like to throw his            
 full support behind this bill.  He commended Daveed Schwartz and              
 his staff for their work despite inadequate funding.  He believes             
 this common sense bill can return some power to consumers.                    
 MR. GILMORE referred to comments about due diligence and mentioned            
 the billions of dollars in telemarketing fraud yearly.  He stated,            
 "These guys are very, very well educated in what they do and how to           
 take advantage of people."  While he agrees education is needed,              
 these perpetrators will prosper and bilk Alaskans out of millions             
 of dollars a year without legislation such as this.                           
 Number 1283                                                                   
 REPRESENTATIVE RYAN restated his beliefs about due diligence and              
 personal responsibility.                                                      
 MR. GILMORE replied that he wasn't denying that at all.  However,             
 having dealt with many of these "bad guys" over the years, he'd               
 found they are very, very sophisticated in what they do; in some              
 cases, even the most prudent people could fall into their pattern             
 of fraud.                                                                     
 Number 1323                                                                   
 REPRESENTATIVE COWDERY asked Mr. Gilmore to comment on senior                 
 citizens in Anchorage being vulnerable to this type of thing.                 
 MR. GILMORE indicated that happens nationwide.  For example, he'd             
 dealt with an 83-year-old Ketchikan woman who'd been bilked out of            
 her entire life savings, more than $87,000, by a Las Vegas                    
 telemarketing company over a three-year period.  Unfortunately,               
 she'd passed away; her daughter discovered the fraud and reported             
 it to the Better Business Bureau.  Mr. Schwartz and Mr. Gilmore had           
 worked with the attorney general's office in Nevada, which was                
 going after this guy.  "But unfortunately, they told us up-front              
 that because the woman was deceased and the fact that they could              
 find no assets for this guy, there wasn't much recourse," he said.            
 Number 1374                                                                   
 CHAIRMAN ROKEBERG requested Mr. Gilmore's opinion about the need              
 for this law and the ability of the Better Business Bureau to                 
 adequately protect consumers in Alaska.                                       
 MR. GILMORE said he wasn't trying to toot his own horn, but much of           
 that has been lost since he is no longer there.  He doesn't know              
 what direction the organization is now taking.  He suggested that             
 Mr. Schwartz might be able to answer that.                                    
 Number 1407                                                                   
 MR. SCHWARTZ pointed out that the Better Business Bureau, for all             
 of its fine efforts, is not an enforcement agency.  It can try to             
 persuade businesses to resolve consumer complaints, but if the                
 businesses don't want to resolve them, nothing short of enforcement           
 will cause a violation of the law to be corrected.  He cited a                
 recent case in which he'd obtained a permanent injunction;                    
 consumers had been totally fooled by a local Anchorage tire and               
 auto parts retailer who sold, as new tires, hundreds of used tires            
 covered with new rubber on the treads and sidewalls.  Although the            
 consumers carefully shopped around to different locations for the             
 best price and quality, no amount of care on their part would have            
 clued them in.  "So, we had to step in and enforce the law, and we            
 actually did; and we're getting refunds for over 150 people and               
 over $50,000 in refunds," he stated.  That is an example where the            
 Better Business Bureau wouldn't have been able to get that kind of            
 comprehensive relief for consumers.                                           
 Number 1499                                                                   
 MR. GILMORE reported that in addition to working with the Office of           
 the Attorney General and helping to identify some of these                    
 egregious things, they'd tried to educate people.  But because they           
 only had offices in certain parts of the state, the scope was very            
 limited.  He believes that should be taken into consideration.                
 Number 1549                                                                   
 PEGGY MULLIGAN, Capital City Task Force Member, American                      
 Association of Retired Persons (AARP), came forward to testify,               
 advising members that she would provide her written testimony and             
 an AARP model bill.  Referring to Representative Ryan's "100 eyes"            
 comment, she said they'd received $20,000 from the national AARP              
 and money from the western region, which they planned to use for              
 educational purposes, their top priority activity for the summer.             
 MS. MULLIGAN stated, "We do support House Bill 203.  Since the                
 Department of Law's Consumer Protection Section was eliminated in             
 the late 1980s, Alaskan consumers have grown increasingly                     
 vulnerable, costing an estimated $10 million a year.  We feel that            
 this bill empowers Alaskans to fight back fraud, and it also                  
 empowers citizens to be able to attract attorneys.  We intend to              
 spend the summer educating seniors and other Alaskans of current              
 fraud practices in the state, collect evidence of fraud attempts in           
 the state.  We'll work with other groups to help Alaskans become              
 aware of telemarketing and consumer fraud and such other                      
 activities, as may seem appropriate."                                         
 MS. MULLIGAN continued, "I know that Representative Ryan thinks               
 that it's strange that people can be conned into a telemarketing              
 fraud.  However, they are very sophisticated, and it is not always            
 that easy to identify.  One of the things they suggest is that in             
 the first minute of a call, you insist that the caller give his               
 name, the company he represents, what he is selling, what the item            
 costs, the telephone number, the fax number, the location and the             
 identity of this company.  And I think that if you did that, if we            
 can educate people to do that, in many times, you will see that who           
 you have on the line is not ... an honest person."  She concluded             
 by saying the AARP certainly supports this bill, as well as                   
 Representative Croft's sponsor substitute for HB 49.                          
 Number 1682                                                                   
 CHAIRMAN ROKEBERG commented that he is a member of the AARP.  He              
 asked whether anyone else wished to testify, then announced he                
 wasn't closing the public hearing.  He stated his belief that it is           
 an excellent bill in its intent; however, he is uncomfortable with            
 some provisions.  His biggest concern is that although this gives             
 the right to citizens to protect themselves, he sees a glaring                
 potential for abuse.  He asked Mr. Schwartz and Representative                
 Croft to address that.  Referring to Representative Ryan's                    
 comments, he said it is sometimes difficult to draw the line                  
 between a bad decision and what is fraudulent.  He noted the                  
 previous requirement of having a demonstrable loss and suggested              
 they were lowering the proof of damage or potential damage.  He               
 believes there is a need for that but it still concerns him.                  
 Number 1788                                                                   
 MR. SCHWARTZ responded that he doesn't anticipate any abuse of the            
 consumer protection enforcement based upon this bill.  Some of                
 these provisions are not unlike provisions available in other                 
 states, and he hasn't seen the kind of abuse that one might fear.             
 It would still take a lot of effort to sue under the consumer                 
 protection act, and any attorney who would seek to sue under the              
 consumer protection act is going to have to meet the burden of                
 proof established by the Alaska Supreme Court in State vs. O'Neill            
 Investigations and its "progeny."                                             
 MR. SCHWARTZ said he believes Alaska case law has set some                    
 standards.  In addition, the consumer protection statute itself               
 says the courts are to be guided by the decisions of the federal              
 trade commission.  There is a huge body of well-settled law under             
 the federal trade commission act concerning what constitutes an               
 unfair and deceptive act or practice.  Therefore, attorneys suing             
 under this particular statute will be held to that burden of proof            
 and still be put to the test, and it will not be a "slam-dunk" case           
 or a lowering of standards of burdens of proof in order to make               
 that a violation.  "What it does do is it encourages more private             
 citizens to enforce their rights through the consumer protection              
 act in an area in which, indeed, the state's resources are not what           
 they once were," he concluded.                                                
 Number 1881                                                                   
 CHAIRMAN ROKEBERG asked Representative Croft to respond to the                
 concerns he himself had raised about potential abuse of the powers            
 given to an individual to bring a cause of action without any loss.           
 For example, would it be up to the courts to determine first                  
 whether the activity was unfair?  Was there a statutory burden to             
 ensure the activity was in fact unfair or deceptive?                          
 REPRESENTATIVE CROFT asked whether that was the main concern.                 
 CHAIRMAN ROKEBERG indicated it was that for starters.                         
 Number 1926                                                                   
 REPRESENTATIVE CROFT explained that there is a rather heavy burden            
 to show fraud.  He asked Mr. Schwartz to correct any misstatements,           
 then indicated one must show that the person knew, or should have             
 known, that something wasn't as it was represented.  Fraud is                 
 usually one of the most difficult things to show in civil actions.            
 The provision for a minimum amount of damage and removing the                 
 ascertainable loss is to protect when there have been all the                 
 elements of fraud, but without a physical loss.  Representative               
 Croft mentioned Dr. Beirne's case.  He said even if there is no               
 physical loss, one should be able to stop the action and, in some             
 cases, punish it.                                                             
 Number 2000                                                                   
 MR. SCHWARTZ said when he'd mentioned the unwanted telephone                  
 solicitation section of the consumer protection act and how it had            
 been amended, Representative Croft was out of the room.  He                   
 restated that that section of our statute allows a person who has             
 a black dot next to his or her name in a residential telephone                
 directory to have a cause of action under the consumer protection             
 act if hounded by a telemarketer.  Even if that consumer makes no             
 purchase, he or she is aggrieved under the consumer protection act,           
 despite having suffered no ascertainable loss of money or property.           
 Under this bill, that consumer would be allowed to recover                    
 statutory damages of $500 per violation, because there were no                
 actual damages.                                                               
 MR. SCHWARTZ pointed out that a person seeking an injunction under            
 Section 4 would still have to meet the burden of proof for                    
 obtaining injunctive relief, showing irreparable harm and a                   
 probability of success on the merits.  That person would be held to           
 the standards of proof established under Alaska case law, which are           
 not always easy to meet, as a judge will look at the evidence very            
 closely before enjoining what looks to be unlawful conduct.                   
 Number 2078                                                                   
 CHAIRMAN ROKEBERG asked what statutory protections a business                 
 person has from a frivolous action, either for injunctive relief or           
 as a further cause of action for damages.                                     
 MR. SCHWARTZ said currently, a business person who is on the wrong            
 end of a lawsuit but who prevails can obtain reasonable attorneys             
 fees and costs.  Under this bill, even, a business that is the                
 victim of a frivolous lawsuit could still obtain reasonable                   
 attorneys fees and costs under the court rules and case law.  That            
 is one significant protection that our system has provided.                   
 MR. SCHWARTZ stated, "I think there's a real disincentive on the              
 part of consumers to bring an action that is going to appear to be,           
 to an attorney, frivolous.  I think there's even a disincentive               
 right now to bring meritorious actions, because of the way in which           
 the law is worded, which doesn't provide a lot of incentive for               
 private litigation."                                                          
 Number 2138                                                                   
 CHAIRMAN ROKEBERG referred to the added section for attorneys fees            
 and costs.  He asked whether Mr. Schwartz was suggesting that if              
 they added "defendant" along with "plaintiff," that is the existing           
 case.  He asked, "Or would that be necessary to give both parties             
 equal footing as far as whoever prevailed should get the award?"              
 MR. SCHWARTZ indicated the law is currently worded so that the                
 prevailing party can obtain reasonable attorneys fees and costs.              
 Number 2146                                                                   
 CHAIRMAN ROKEBERG asked why this is in the bill, then.                        
 MR. SCHWARTZ explained that this bill would change the existing               
 state of affairs so that a prevailing plaintiff could get not only            
 reasonable Rule 82 fees, which amount to about 20 percent of the              
 attorneys fees; rather, the plaintiff could get full reasonable               
 attorneys fees and costs when prevailing over a defendant.                    
 However, the plaintiff would only be subjected to paying the                  
 defendant's attorneys fees if the plaintiff lost and the suit was             
 shown to be frivolous.                                                        
 MR. SCHWARTZ noted that this amendment to the attorneys fees and              
 costs section of the consumer protection statute would bring Alaska           
 in line with the vast majority of states' consumer protection acts            
 now.  According to the national consumer law center, Mississippi is           
 the only other state with an attorney fee statute similar to                  
 Alaska's, in which a plaintiff losing a consumer protection case              
 would have to pay reasonable attorneys fees and costs to a                    
 Number 2205                                                                   
 CHAIRMAN ROKEBERG said he finds it disturbing.  He asked, "But                
 you're suggesting this language is consistent with the norm                   
 MR. SCHWARTZ said that is correct.  He stated, "Not only did I                
 survey the other statutes, but I did check with the national                  
 consumer law center, and that is indeed the case."                            
 Number 2223                                                                   
 REPRESENTATIVE CROFT referred to earlier discussion of vexatious              
 litigation and said, "Right now, for a frivolous lawsuit, there are           
 substantial penalties.  You're right:  There's more coming."                  
 CHAIRMAN ROKEBERG said, "For attorneys, not plaintiffs or                     
 Number 2244                                                                   
 REPRESENTATIVE CROFT replied that under Civil Rule 11, the party is           
 responsible for them as well; it is anyone who signs the pleading.            
 This norm is appropriate because these are, by definition, injured            
 people with a claim that they've been defrauded.  They are often at           
 battle with organizations that are difficult to find or difficult             
 to isolate.  While he appreciated the concern for the legitimate              
 business that could be on the wrong end of this, he emphasized that           
 the burden of proving fraud is extremely difficult.  It is not like           
 a normal negligence suit.  It requires an intentional act to                  
 defraud someone.  Therefore, all the hurdles are there in the                 
 standard for the injunction or the standard for criminal fraud.               
 Number 2308                                                                   
 CHAIRMAN ROKEBERG responded that it is the charge of this committee           
 to make sure that the commerce and labor activities of the state              
 are carried out in due course, without anything infringing upon               
 them.  He said some of his questions may more properly belong in a            
 judiciary committee.  However, his primary concern is the level               
 playing field, "and the ability and the effect on business activity           
 without some countervailing force."                                           
 CHAIRMAN ROKEBERG asked Mr. Schwartz:  If a suit was found to be              
 frivolous and the defendant prevailed, would the award of fees be             
 based on Rule 82 or be for full fees?                                         
 Number 2363                                                                   
 MR. SCHWARTZ replied that if the defendant were able to show that             
 the suit was frivolous, then according to Section 4 of the bill,              
 which amends the consumer protection statute, Rule 82 attorneys               
 fees and costs would probably be awarded.                                     
 CHAIRMAN ROKEBERG suggested there wasn't a level playing field.               
 MR. SCHWARTZ pointed out that consumers generally don't have a                
 level playing field when it comes to dealing with businesses that             
 are out to deceive them.                                                      
 CHAIRMAN ROKEBERG said he was talking about a finding of                      
 "frivolousness," looking at the language of the bill.                         
 MR. SCHWARTZ replied that he wasn't sure what else to add, other              
 than that he believed Rule 82 attorneys fees would result if the              
 defendant could show that the plaintiff's suit was frivolous.                 
 Number 2419                                                                   
 CHAIRMAN ROKEBERG stated his understanding that a plaintiff who               
 prevailed would receive full attorneys fees.  However, if there was           
 a finding of a frivolous lawsuit, the defendant would only be                 
 awarded Rule 82 legal fees.  He asked whether that is correct.                
 MR. SCHWARTZ said yes and added that the rationale is to encourage            
 more private litigation under the consumer protection act.  There             
 has not been a lot of private litigation under the consumer                   
 protection act thus far.                                                      
 CHAIRMAN ROKEBERG submitted that they were giving a tool to                   
 consumers to bring their private cause of action, an enormous                 
 expansion of the ability of the consumers to protect themselves and           
 the rest of the public.  "And I agree with the premise of the bill            
 in that regard," he said.                                                     
 TAPE 97-48, SIDE B                                                            
 Number 0006                                                                   
 CHAIRMAN ROKEBERG continued, stating his belief that they are                 
 granting a significantly greater power to the plaintiff than to the           
 defendant.  He specified that he wasn't looking at the legal                  
 aspects but at "the basis of the bill before us right now."  He               
 said his concern was directed more to the sponsor.                            
 MR. SCHWARTZ commented that the defendant could also bring a                  
 lawsuit for abuse of process if the plaintiff was found to have               
 brought a frivolous lawsuit, which may be another protection for a            
 defendant.  He next referred to the concept of one competitor                 
 trying to gain an unfair advantage over another.  He said                     
 businesses have not often invoked the consumer protection act as a            
 tool to fight other businesses; he didn't know whether this would             
 encourage that or not.  However, he suspects that the vast majority           
 of litigation under this statute would continue to be on the part             
 of end-use consumers who are purchasing products from retailers,              
 rather than a lawsuit by one business against another.                        
 CHAIRMAN ROKEBERG suggested in the dog-eat-dog business world,                
 additional tools without "sideboards" on them could be misused for            
 business purposes, not just consumer protection purposes.                     
 Number 0079                                                                   
 REPRESENTATIVE GENE KUBINA noted that Chairman Rokeberg is on the             
 House Judiciary Standing Committee.  He asked whether perhaps that            
 issue could be addressed there.                                               
 CHAIRMAN ROKEBERG suggested there are other things they could                 
 address there.  He said if the sponsor looked at this and could               
 overcome his concerns, he'd be happy to bring it back up.  He                 
 agrees with the concept of the bill.  But while he could support              
 giving a tool to the public, he wants to ensure that it is drafted            
 so it has no deleterious effect on business.  "We want to get the             
 rascals; we don't want to interrupt commerce," he said.                       
 CHAIRMAN ROKEBERG stated his understanding that Alaska has no                 
 vexatious litigation statute.  He said, "If Representative Croft              
 wants to bring to this committee some examples of frivolous                   
 activities being in the courts, this committee would be real happy            
 to see it actually happen.  If you ... cite me some examples, then            
 I'm going to be a lot more comfortable."  He suggested the bill               
 should speak to that more specifically and give a little more                 
 balance, at the very least an amendment to provide reasonable fees            
 for both parties if the lawsuit was found to be frivolous or                  
 perhaps intended to infringe upon commerce, which would be even               
 beyond frivolous.  He noted that many times cases are brought with            
 the hope of settlement, which he characterized as a form of legal             
 extortion.  (HB 203 was held over.)                                           
 Number 0219                                                                   
 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing             
 Committee meeting at 5:55 p.m.                                                

Document Name Date/Time Subjects