HOUSE BILL NO. 56 An Act relating to the attorney fees and costs awarded in certain court actions relating to unfair trade practices; and, if considered court rule changes, amending Rules 54(d), 79, and 82, Alaska Rules of Civil Procedure. REPRESENTATIVE LES GARA explained that the bill would provide the State with a needed tool to fight consumer fraud more effectively and efficiently without any cost to the State. The bill strengthens the State's ability to represent Alaskans who have been victimized by fraudulent business practices whether by used car dealers or others who prey on Alaska's consumers. He added that the legislation would save money for the State of Alaska. HB 56 would change law allowing the State to recover its full enforcement, investigation and court costs if it prevails against a party that has violated Alaska's consumer protection laws. The bill is modeled after legislation in other areas that allow state and federal investigators and enforcement authorities to recover their enforcement costs. Representative Gara continued, highlighting public policy behind the bill: · Those who engage in unfair business practices should not force the State to bear the cost of their misconduct; and that · By allowing the State to recover not only the existing penalties that are available under the State law, but enforcement costs, the law would help fund a more cost-effective consumer protection presence in Alaska. Co-Chair Harris questioned what "reasonable fees" would consist of. Representative Gara explained that historically, the Courts have had laws that allow the case winner to also receive the attorney fees. The attorney fees assessed in the prevailing market rate would have to be indicated. The legislation stipulates what would be required to be reasonable in community and not excessive. Co-Chair Harris ascertained that "reasonable" in Valdez could be different than in Anchorage. He asked if there was an "across the board reasonable cost for an attorney". Representative Gara thought that the Court's would determine that the prevailing rate in Alaska should range between $100-$180/per hour. Co-Chair Harris acknowledged that the Courts would be making the decision. Representative Gara interjected that such a hearing would be a short, most likely not needing a jury trial. Co-Chair Harris asked if the Court's decision could be appealed. Representative Gara responded it could. The process would move no further forward than the State Supreme Court. Representative Gara pointed out support from the Attorney General's office in the Department of Law. Co-Chair Harris referenced the fiscal note. Representative Gara noted that it was a zero note as there is no need for the Department to hire new people. Co-Chair Harris pointed out that the major change to the fiscal note would be a change in revenues. Representative Gara reiterated that it will bring in additional revenues. CLYDE (ED) SNIFFEN, JR., (TESTIFIED VIA TELECONFERENCE), ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, ANCHORAGE, commented that the Department does support the bill as it provides a potential source of revenue in protection efforts. He offered to answer questions of the Committee. Representative Stoltze commented on legislation resulting from last year regarding consumer protection, which allowed the Legislature to look into motor fuel price gouging. Mr. Sniffen did not know the scenario referenced by Representative Stoltze and noted that HB 56 would require that there be an investigation conducted with legal action taken. If found fraudulent that action would allow the Department to recover the fees. The only anti-trust legislation that passed last session was a bill, which eliminated the source of funds for a prevailing party in a class action lawsuit. STEVE CLEARY, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, ALASKA PUBLIC INTEREST RESEARCH GROUP (AKPIRG), ANCHORAGE, testified in support of the legislation and urged the Committee's support. He reiterated that it would provide more protection for consumers while not costing the State anything. Co-Chair Williams advised that HB 56 would be HELD in Committee for further consideration.