Legislature(1993 - 1994)
04/08/1994 02:07 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.