HB 87 - ANTITRUST VIOLATION PENALTIES 1:40:07 PM CHAIR GATTO announced that the first order of business would be HOUSE BILL NO. 87, "An Act relating to penalties for antitrust violations." [Before the committee was CSHB 87(L&C).] 1:40:39 PM JAMES R. WALDO, Staff, Representative Lindsey Holmes, Alaska State Legislature, on behalf of Representative Holmes, one of the bill's joint prime sponsors, explained that HB 87 would update the penalties for certain violations of Alaska's antitrust laws. Currently, violations of AS 45.50.562 and AS 45.50.564 - combinations in restraint of trade unlawful, and monopolies and attempted monopolies unlawful, respectively - constitute a misdemeanor with a maximum fine of $20,000, or a maximum prison sentence of one year, or both, if committed by a natural person, and constitute a misdemeanor with a maximum fine of $50,000 if committed by an entity other than a natural person. By amending AS 45.50.578, Section 1 of the bill would make such violations a class C felony with a maximum fine of $1,000,000, or a prison sentence as provided for in AS 12.55, or both, if committed by a natural person, and a class C felony with a maximum fine of $50,000,000 if committed by an entity other than a natural person. Section 2 of the bill would add a new subsection (b) to AS 45.50.578 authorizing civil actions by the attorney general against those who violate AS 45.50.562; AS 45.50.564; AS 45.50.568 - mergers and acquisitions unlawful when competition unlawful; AS 45.50.570 - interlocking directorates and relationships; or an injunction issued under AS 45.50.580 - injunction by attorney general. The maximum civil penalty authorized under this new subsection (b) would be $1,000,000 for a violation committed by a natural person, and $50,000,000 for a violation committed by an entity other than a natural person. MR. WALDO mentioned that the joint prime sponsors obtained input from the Department of Law (DOL) regarding the bill's language; that the proposed penalties are far less than those imposed for violating [similar federal law]; that the proposed penalties are merely maximum amounts, rather than mandatory amounts, and so the court would have the same discretion under the bill as it has now in determining how high a penalty to impose; and that making the bill's civil penalty section congruent with its criminal penalty section is meant to ensure that if the state is one of the prevailing parties in a multi-state antitrust suit, that the damages awarded the state won't be limited to just its existing criminal penalty amounts. 1:45:20 PM CLYDE (ED) SNIFFEN, JR., Senior Assistant Attorney General, Commercial/Fair Business Section, Civil Division (Anchorage), Department of Law (DOL), in response to questions, concurred that the proposed penalty amounts would be maximum amounts, not mandated amounts, and that damage award amounts in multi-state antitrust cases hinge on a state's existing penalties; ventured that the bill's proposed changes would provide the DOL with the flexibility and strength to pursue "bigger" cases; and explained that the bill would apply to the person/entity that commits the wrongdoing and not necessarily to a parent company, subsidiary company, or other affiliated company unless such was actually responsible for the conduct, that he is not aware of anything illegal going on in Alaska with regard to gasoline pricing, and that although there are a few "local" antitrust investigations underway, most of the DOL's antitrust investigations pertain to multi-state antitrust cases. For example, currently the state is involved in a multi-state case involving shipping, one involving liquid crystal displays (LCDs), and one involving computer memory chips. REPRESENTATIVE GRUENBERG, in response to comments and a question, noted that AS 01.10.060(a)(8) defines the word, "person" as: (8) "person" includes a corporation, company, partnership, firm, association, organization, business trust, or society, as well as a natural person; CHAIR GATTO, after ascertaining that no one else wished to testify, closed public testimony on HB 87. 1:58:39 PM REPRESENTATIVE HOLMES, speaking as one of HB 87's joint prime sponsors, moved to report CSHB 87(L&C) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 87(L&C) was reported from the House Judiciary Standing Committee.