Legislature(1993 - 1994)
04/08/1994 02:07 PM Senate JUD
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE
April 8, 1994
2:07 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chairman
Senator George Jacko
Senator Dave Donley
Senator Suzanne Little
MEMBERS ABSENT
Senator Rick Halford, Vice-Chairman
COMMITTEE CALENDAR
SENATE BILL NO. 113
"An Act making a special appropriation to the constitutional budget
reserve fund of certain money obtained in settlement with British
Petroleum America for resolution of disputes over taxes arising
under the state's worldwide unitary apportionment income tax; and
providing for an effective date."
SENATE BILL NO. 306
"An Act relating to an antitrust exemption for persons engaged in
the fishing industry."
SENATE BILL NO. 213
"An Act extending the Alaska Public Utilities Commission and the
regulatory cost charge."
SENATE BILL NO. 367
"An Act relating to health care and insurance for health care; to
review and approval of health insurance rates and rating factors;
relating to certain civil actions against health care providers; to
coordination of insurance benefits and to determination and
disclosure of fees paid to an insured or health care provider; to
the rate of interest on certain judgments and decrees; to excise
taxes on cigarettes; amending Alaska Rules of Civil Procedure 26,
27, 68, 79, and 82 and Alaska Rules of Evidence 802, 803, and 804;
repealing Alaska Rule of Civil Procedure 72.1; and providing for an
effective date."
SENATE BILL NO. 275
"An Act relating to the disposal of real property by the Department
of Transportation and Public Facilities."
SB 332 (POSSESSION OF 25 LIVE MARIJUANA PLANTS) was scheduled, but
not taken up this date.
SB 349 (GRAND JURY EVIDENCE BY POLICE OFFICERS) was scheduled, but
not taken up this date.
SB 350 (ARREST FOR VIOLATING RELEASE CONDITIONS) was scheduled, but
not taken up this date.
SB 351 (CHARACTER EVIDENCE IN CRIMINAL TRIALS) was scheduled, but
not taken up this date.
SB 353 (PEREMPTORY CHALLENGE OF JURORS) was scheduled, but not
taken up this date.
PREVIOUS SENATE COMMITTEE ACTION
SB 113 - See Judiciary minutes dated 2/22/93 and 4/16/93.
SB 306 - See Resources minutes dated 3/24/94 & 3/28/94.
SB 213 - See Labor & Commerce minutes dated 9/28/93, 2/8/94,
2/24/94, 3/10/94 and 3/15/94. See Judiciary minutes
dated 3/30/94.
SB 367 - See Health, Education & Social Services minutes dated
3/28/94, 3/30/94, 4/6/94 and 4/7/94.
SB 275 - See Transportation minutes dated 2/10/94.
SB 332 - See Judiciary minutes dated 2/11/94 and 3/11/94.
SB 349 - See State Affairs minutes dated 3/14/94. See
Judiciary minutes dated 3/25/94.
SB 350 - See State Affairs minutes dated 3/14/94. See
Judiciary minutes dated 3/25/94.
SB 351 - See State Affairs minutes dated 3/14/94. See
Judiciary minutes dated 3/25/94.
SB 353 - See State Affairs minutes dated 3/14/94. See
Judiciary minutes dated 3/25/94.
WITNESS REGISTER
Senator Randy Phillips
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 113
Senator Jim Duncan
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime sponsor of SB 306
Jim Forbes, Assistant Attorney General
Department of Law
1031 W. 4th Ave., Suite 200
Anchorage, AK 99501-1994
POSITION STATEMENT: Offered information on SB 306
Ms. Dorn Hawxhurst
Cordova District Fishermen United
P.O. Box 939
Cordova, AK 99574
POSITION STATEMENT: Supports SB 306
Kate Troll, Executive Director
Southeast Alaska Seiners Association
Juneau, AK
POSITION STATEMENT: Testified in support of SB 306
Jerry McCune, President
United Fishermen of Alaska
211 4th St., No. 112
Juneau, AK 99801
POSITION STATEMENT: Urged passage of SB 306
Dean Paddock
Bristol Bay Driftnetters Association
211 4th St.
Juneau, AK 99801
POSITION STATEMENT: Supports SB 306
Donna Parker, Fisheries Development Specialist
Department of Commerce & Economic Development
P.O. Box 110800
Juneau, AK 99811-0800
POSITION STATEMENT: Offered testimony in support of SB 306
Kevin Sullivan, Staff to Senate Judiciary Committee
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on SB 213
Senator Steve Rieger
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 367
Ron Lind, Director
Administrative Services
Department of Transportation & Public Facilities
3132 Channel Drive
Juneau, AK 99801-7898
POSITION STATEMENT: Offered information in support of SB 275
Rupe Andrews
American Association of Retired Persons
9416 Long Run Drive
Juneau, AK 99801
POSITION STATEMENT: Testified in opposition to SB 367
Jeff Feldman, President
Alaska Academy of Trial Lawyers
P.O. Box 102323
Anchorage, AK 99510
POSITION STATEMENT: Addressed concerns with SB 367
Chris Christensen, General Counsel
Alaska Court System
303 K St.
Anchorage, AK 99501-2084
POSITION STATEMENT: No position on SB 367
Reed Stoops
AETNA Life Insurance Co.
Juneau, AK
POSITION STATEMENT: Presented amendments to SB 367
ACTION NARRATIVE
TAPE 94-32, SIDE A
Number 001
CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to
order at 2:07 p.m., and announced the first order of business would
be the consideration of SB 113 (APPROP: BP SETTLEMENT TO BUDGET
RESERVE).
SENATOR RANDY PHILLIPS, prime sponsor of SB 113, explained the
legislation was introduced a few days after the oil tax settlement
monies were released, and it will take that money out of the
general fund and put it into the constitutional budget reserve
account.
There being no further testimony on SB 113, SENATOR TAYLOR asked
for the pleasure of the committee.
SENATOR JACKO moved that SB 113 be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
Number 080
SENATOR TAYLOR introduced SB 306 (ANTITRUST EXEMPTION FOR
FISHERMEN) as the next order of business.
SENATOR JIM DUNCAN, prime sponsor of SB 306, said the bill confers
a state antitrust immunity on fishermen and, by doing that, they
would then be able to negotiate raw fish prices with processors in
order to improve the market price of Alaska seafood. It also
permits fishermen and fish processors to agree to the minimum price
for which processors will sell the processed fish. He pointed out
the legislation was recommended in the 1993 Alaska Attorney
General's report on the Bristol Bay sockeye salmon industry. That
report suggests that U.S. processors have become price takers when
dealing with the large Japanese firms that buy Alaska salmon,
leaving fishermen to bear the lost. An antitrust exemption such as
in SB 306 will help level the playing field for Alaska fishermen
and processors when dealing with foreign trading companies which do
not observe antitrust laws.
Senator Duncan pointed out the legislation is supported by the
Administration and many of the fishing organizations in the state.
Number 130
JIM FORBES, Assistant Attorney General, Department of Law,
testifying from Anchorage, said SB 306 does not provide a federal
antitrust exemption for processors. The federal law already
provides an antitrust exemption for fishermen or fishing
associations, but the processors still pay federal antitrust
liability under the current status quo. SB 306, in its current
form, even without the federal antitrust immunity for the
processors, would clarify the fact that the fishermen associations
do have both state and federal antitrust immunity.
Number 160
SENATOR JACKO asked if the federal problem could be resolved in
this legislation. MR. FORBES answered it could be, but to resolve
that particular problem through legislation, it would be necessary
to create a regulatory body that could give it studies and educated
stamp of approval to proposed prices that industry representatives
come up with. It would also require some kind of enforcement
authority to make sure that those prices were followed throughout
the industry within Alaska. SENATOR DUNCAN agreed that one option
is to create a state agency that would be involved, but he
suggested that this should be done on a state level as a first step
before approaching the federal government to give an exemption on
the federal level.
Number 203
SENATOR TAYLOR asked Mr. Forbes if he had any on thoughts on how
the bill could be redrafted to accomplish the state action immunity
provision. MR. FORBES suggested that it could be accomplished by
either creating a new commission, or an existing commission could
be given additional powers. SENATOR DUNCAN said he has considered
this as an option, but it would add more hurdles and would have a
fiscal impact, and it may be the option to pursue in a subsequent
legislative session if passage of this bill indicates that the
federal government will not take action to give us that exemption.
SENATOR TAYLOR said his concern was that the legislation may be
raising false hopes or expectations that it is doing something more
other than just sending a message.
Number 253
SENATOR LITTLE asked if the changes proposed in SB 306 would be
effective without the imposition of a new agency or commission.
SENATOR DUNCAN answered that if the Legislature, the fishing
community of the state, and the Administration went strongly on
record saying that a federal exemption would be in the best
interest of our fishermen, then he thinks the congressional
delegation would be supportive of getting that done.
Number 345
MS. DORN HAWXHURST, speaking from Cordova on behalf of Cordova
District Fishermen United, stated their strong support for SB 306.
They support the bill for three primary reasons: (1) it clarifies
ambiguities in the existing law and it expressly allows fishermen
to collectively sell their catch; (2) it removes inconsistencies
between state and federal laws; and (3) it levels the playing
field by putting fishermen in a better position to obtain the best
price for their fish by allowing them to collectively agree on the
price the processors will pay the fishermen for raw fish. She
urged passage of SB 306.
Number 370
SENATOR TAYLOR asked the legislative drafter of the legislation,
George Utermohle, the possibility of restructuring the legislation
by the following Monday to encompass a full step by creating a
regulatory agency as was discussed earlier in the meeting. GEORGE
UTERMOHLE, Legislative Counsel, Legislative Affairs Agency, said it
could be done, but it would not be an easy task because there are
so many details involved in establishing a new agency or giving
those powers to an existing agency.
Number 393
KATE TROLL, Executive Director, Southeast Alaska Seiners
Association, said fishermen don't really have a business
relationship and a forum in which to negotiate, and her
organization has spent a lot of time looking at what they can do to
try to make changes in the industry so that they can improve the
price situation. One of the things that became very clear with
pink salmon is that they need new product forums and new
development, and, to encourage that, they need price stability. To
encourage price stability, they needed to consider the idea of
multi-year contracts. They had conferences in which these concepts
were going to be part of the conference, but the processors could
not participate, even at discussion level, because of the concerns
of antitrust. She said her board recognizes SB 306 as a first step
and the fact that the federal government is the second step of this
change in order to be able to make that evolution to having that
business partnership that they really want with their processors.
Number 433
JERRY MCCUNE, President, United Fishermen of Alaska, urged that the
committee move ahead with the legislation in its current form as
one step to amending the federal law.
Number 452
DEAN PADDOCK, speaking on behalf of the Bristol Bay Driftnetters
Association, said they are very aware of the need for improved
marketing tools, as well as a real need for improved
communications. He urged that the committee move the original SB
306.
Number 493
DONNA PARKER, Fisheries Development Specialist, Department of
Commerce & Economic Development, voiced the strong support of the
department and Commissioner Fuhs for SB 306.
Ms. Parker said most people are aware that the problem is over
supply and lost market share, so the state's strategy has to be on
increasing market share. She spoke of the severe impact on the raw
fish tax to the state. Since 1998, the state has lost
approximately $12 million in raw fish tax revenue because of the
decline in salmon prices. The state has $130 million invested
through its revolving loan program and commercial fishing loans to
fishermen and aquaculture associations.
Ms. Parker also addressed the importance of increasing price
stability and increasing product options in the marketplace.
Having an antitrust exemption would allow processors and fishermen
an opportunity to communicate in a positive way, to discuss market
conditions openly to be able to come up with price agreements that
will give them additional clout in the marketplace.
Number 555
There being no further testimony, SENATOR TAYLOR closed the public
hearing on SB 306 and stated it would be back before the committee
on Tuesday, April 12.
Number 560
SENATOR TAYLOR brought SB 213 (APUC EXTENSION AND REGULATORY COST
CHARGE) before the committee. He noted the committee had a
previous hearing on the bill and that a committee substitute had
been drafted as a result of that hearing.
KEVIN SULLIVAN, staff to the Senate Judiciary Committee, explained
the committee substitute contains effective dates in Sections 17
and 18. Section 1 will go into effect July 1, 1995 and the rest of
the bill will go into effect July 1, 1994. Language was also added
in Section 9, subsection (k) on page 4 of the committee substitute,
which includes cable television under the regulation of the APUC.
They are automatically covered and may opt out if they meet the
qualifications already established in statute.
TAPE 94-32, SIDE B
Number 005
SENATOR LITTLE moved that CSSB 213(JUD) dated 4/7/94 be adopted.
Hearing no objection, the motion carried.
SENATOR LITTLE moved that CSSB 213(JUD) be passed out of committee
with individual recommendations. Hearing no objection, it was so
ordered.
Number 020
SENATOR TAYLOR brought SB 367 (HEALTH CARE REFORM COMMITTEES)
before the committee as the next order of business.
SENATOR STEVE RIEGER, prime sponsor of SB 367, said the legislation
is a number of provisions that deal with proposals for health care
reforms. In general, they can be categorized as either measures to
improve public health, measures to increase the efficiency and
reduce the cost of delivery of health care, or measures which speak
to the pooling of risk aspects of health care.
Senator Rieger then presented a section-by-section analysis of the
bill.
Senator Rieger directed attention to an attached amendment adopted
by the Senate Health, Education & Social Services Committee, which
is the .08 alcohol content language which replaces the .01 language
in the bill. He also noted that committee had received a
memorandum from Mike Ford, a legislative legal counsel, addressing
a concern with single subject provisions. He asked that the
Judiciary Committee take a look at the single subject issues, and,
if it deems it advisable, to break out the recommendations as
listed in Mr. Ford's memo into separate bills and have them move
forward.
SENATOR TAYLOR commented that the committee does have some real
concerns about violations of the single subject rule, and that it
would make a careful examination of Mr. Ford's memo.
Number 225
SENATOR TAYLOR thanked Senator Rieger for his presentation on SB
367 and stated the committee would take further testimony on the
bill upon completion of the next item on the agenda.
Number 235
SENATOR TAYLOR brought SB 275 (DISPOSAL OF REAL PROPERTY BY DOTPF) )
before the committee as the next order of business.
RON LIND, Director, Administrative Services, Department of
Transportation & Public Facilities, explained the legislation gives
the authority to dispose of land at airports or at facility sites
just as they have been doing for the highway excess properties.
Currently, if they have an airport site and there is some land they
want to trade with the municipality or they want to dispose of to
a municipality, they have to notify the Department of Natural
Resources who then works with the municipality and DOT, and SB 275
is an attempt to put the process all in one agency.
Number 245
SENATOR TAYLOR asked for an explanation of the differences in a
proposed committee substitute that was before the committee. MR.
LIND said the difference basically relates to a concern identified
by the Department of Natural Resources. There are numerous
municipalities that still have land entitlements and they wanted to
assure that if they are actually conveying the land to a
municipality and not trading it for another piece of property, that
that would count against the municipal land entitlement. The same
section in the bill expanded it in a minor way to take care of
public facility sites as opposed to just airport sites.
Number 280
SENATOR LITTLE asked if it was correct that if the municipality
purchases the land for full price, it would not be credited against
their land entitlement, and MR. LIND acknowledged that was correct.
Number 295
SENATOR JACKO moved that CSSB 275(JUD) be adopted. Hearing no
objection, the motion carried.
SENATOR JACKO moved that CSSB 275(JUD) be passed out of committee
with individual recommendations. Hearing no objection, it was so
ordered.
Number 302
SENATOR TAYLOR stated the committee would again take up SB 367
(HEALTH CARE REFORM COMMITTEES).
RUPE ANDREWS, representing the American Association of Retired
Persons, said SB 367 proposes to establish a system of mandatory
arbitration and AARP policy supports institution of voluntary
rather than mandatory arbitration programs of state sponsored tort
reform legislation. They do support the option to proceed to court
adjudication should arbitration not succeed. They support state
efforts to require approval of insurance rates before the rates
take effect and to encourage that provider prices be made available
to the public. Further, they support state efforts to facilitate
the development of health care data systems in both the public and
private sectors. Rationalizing the system of insurance
coordination of benefits is usual and AARP recommends that the
state work with such groups as the National Association of
Insurance Commissioners and the American National Standards
Institute in the process.
Concluding, Mr. Andrews said SB 367 is neither an insurance reform
bill, nor a health care reform bill. SB 367 would establish a
time-limited study commission charged with the analysis of one
specific health care reform plan for Alaska with the option to
examine other models as well. AARP believes that from a policy
prospective, SB 367 is deficient in a number of areas.
Number 390
JEFF FELDMAN, President of the Alaska Academy of Trial Lawyers,
addressing specific areas of the bill, said Section 3, which
requires that malpractice actions involving individuals less than
two years of age be brought before that individual reaches the age
of eight, has a serious constitutional problem. It will deny some
citizens equal protection by giving some claimants different
periods of time within which to bring their claim than other
claimants.
Speaking to Section 5, which is the mandatory arbitration
provision, Mr. Feldman said the mandatory portion of it is
objectionable because there are some very practical problems in
terms of how these provisions will stack the deck against the
person who has been the victim of medical malpractice.
Number 490
SENATOR TAYLOR stated he would request that staff send a memo to
the Division of Insurance requesting a report on any malpractice
claims that have been brought after age 4, age 6, age 10, etc., as
well as justification on why they are billing doctors for a risk
that has never occurred, as far as he knows, in the history of the
State of Alaska.
Number 534
Mr. Feldman clarified that the trial lawyers organization is not
adamantly opposed to arbitration. They believe that arbitration of
all cases voluntarily is fine, and there are things the Legislature
can do to make arbitration more available to parties. He noted
they submitted a bill that in the malpractice area would have
required mandatory binding arbitration of all claims less than
$200,000.
Mr. Feldman also spoke to concerns with Section 6 and Section 23.
Number 690
CHRIS CHRISTENSEN, General Counsel, Alaska Court System, stated the
Supreme Court takes no position on SB 367, but there are three
sections that cause the court some concern. The first is with
Section 4, which relates to a floating interest rate for
prejudgment and postjudment interest, and would cause a tremendous
clerical burden to the court.
TAPE 94-33, SIDE A
Number 005
Mr. Christensen said the second concern is with Section 5, relating
to mandatory arbitration. One significant problem is that since
arbitration is mandatory, since it is a cost of going into court,
any indigent person, generally the plaintiff, is going to be
entitled to state-payed arbitration. At this time, the court
system is not certain what that cost will be, but they are
preparing a fiscal note.
Mr. Christensen said the third concern is with Section 6, relating
to expert advisory panels, which will also have a fiscal impact on
the bill. Right now, half of these panels don't submit any bills
and the other half average $150 a case. Section 6 provides that
the expert is entitled to a fee of $500 and that could add up to at
least an extra $25,000 a year of costs that the state would have to
pay, costs which he does not believe are necessary since doctors
are doing it right now, many of them for free.
Number 040
REED STOOPS, representing AETNA, directed attention to three
amendments to SB 367 which had been provided to the committee.
The first amendment would delete Section 7 of the bill, which sets
up a prior approval system for insurance rate regulation, and
replace it with the version of rate regulation which was adopted by
the House in HB 414, which is called the file and use system. He
pointed out that Alaska is one of a half dozen states that have no
health insurance rate regulation. AETNA believes the file and use
is the better system for Alaska to adopt.
The second amendment is to Section 16 and relates to the structure
of the kind of universal care that the advisory committee is
instructed to look at and provide a price tag for next year. The
amendment requests that the committee look at a pool of all the
uninsured Alaskans who wish to acquire insurance through the pool.
The third amendment would delete the sections of the bill that
relate to coordination of benefits. Essentially, this amendment
takes SB 201 and rolls it into SB 367. AETNA thinks that there
should be an analysis by the Division of Insurance to show the
difference between the current regulations dealing with these same
issues, as well as an analysis to determine whether the cost of
doing that is worth the changes that are being made.
Number 130
SENATOR TAYLOR closed the public hearing on SB 367 and stated the
committee consider amendments to the bill at its next hearing. He
then adjourned the meeting at 3:55 p.m.
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