HB 87-ANTITRUST VIOLATION PENALTIES  5:28:22 PM CHAIR EGAN announced the next order of business would be HB 87 [CSHB 87(L&C) was before the committee]. 5:28:48 PM REPRESENTATIVE HOLMES, co-sponsor of HB 87, said this measure simply raises the penalties that can be imposed for anti-trust violations in this state (price fixing and monopoly behavior) up to a maximum of $50 million. The current penalties are capped at $50,000 for a corporation. It also increases the penalty to a Class C felony and allows the department to collect civil penalties. These are mostly found in multi-state actions such as price fixing among drug companies or computer chip manufacturers where a $50,000 penalty is not even a slap on the wrist for some. She explained that the Alaska Department of Law goes into these actions, but it doesn't have the ability to impose higher fines and that gives them very little bargaining power. This was developed with the chair of the House Labor and Commerce Committee and the Department of Law as a collaborative effort. CHAIR EGAN objected to take questions. 5:30:05 PM SENATOR MENARD asked the effective date. REPRESENTATIVE HOLMES replied that is has no actual effective date and so it would go into effect 90 days after being signed by the governor. 5:30:34 PM ED SNIFFEN, Assistant Attorney General, Department of Law (DOL), said he supported HB 87 as this measure would give the department another enforcement tool to recover more money for the state in some of the anti-trust cases they get involved in. They have been in multiple cases in the recent past where if Alaska had stronger penalty provisions, they would have likely recovered more money for the state. This will help them in that regard. SENATOR MENARD asked how many cases of anti-trust violations occur over the period of one year in the State of Alaska. 5:31:42 PM MR. SNIFFEN replied that not too many companies are actually in the State of Alaska, but the department gets involved in about two or three a year, mostly in connection with multi-state cases to pursue, for instance, pharmaceutical manufacturers or computer hardware manufacturers or other entities that sell products in Alaska. In the 10 years he has been in this position with the department, they have had at least a couple dozen anti- trust cases where this kind of penalty provision would have applied and would have made a difference in some of them. He said the department is also contemplating some other cases going forward where this kind of provision would help with enforcement efforts. SENATOR MENARD asked in those two or three cases are they ever repeat offenders. MR. SNIFFEN replied generally not. Most of the cases he has dealt with are first time offenders. The conduct itself has been repeated it seems, but with different defendants. An example might be price fixing in the pharmaceutical arena where he has seen abuses between generic drug manufacturers and branded drug manufacturers colluding to keep generic drugs off the market. That is a pattern that has been around for several years, but they usually catch different defendants doing it. SENATOR PASKVAN thanked Representative Holmes and Representative Olson for this measure. It's good for Alaskans. CHAIR EGAN closed public testimony. SENATOR PASKVAN moved to report CSHB 87(L&C) from committee with individual recommendations and attached fiscal note. There were no objections and it was so ordered. 5:34:52 PM Finding no further business to come before the committee, Chair Egan adjourned the meeting at 5:35 p.m.