ALASKA STATE LEGISLATURE
HOUSE RULES STANDING COMMITTEE
February 28, 2008
5:04 p.m.
MEMBERS PRESENT
Representative John Coghill, Chair
Representative John Harris
Representative Anna Fairclough
Representative Craig Johnson
Representative Ralph Samuels
Representative Beth Kerttula
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 14
Urging the United States Congress to enact Senate Bill 552 so
that individuals receiving a damage award from the Exxon Valdez
oil spill can benefit from the income averaging and retirement
contribution provisions of the bill.
- MOVED CSHJR 14(RLS) OUT OF COMMITTEE
HOUSE BILL NO. 303
"An Act relating to marine products and motorized recreational
products; and providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HJR 14
SHORT TITLE: FED S 552/HR 1334; EXXON PLAINTIFFS
SPONSOR(s): FISHERIES
03/14/07 (H) READ THE FIRST TIME - REFERRALS
03/14/07 (H) FSH, RES
03/19/07 (H) FSH RPT CS(FSH) NT 7DP
03/19/07 (H) DP: JOHNSON, LEDOUX, WILSON, JOHANSEN,
HOLMES, EDGMON, SEATON
03/19/07 (H) FSH AT 8:30 AM BARNES 124
03/19/07 (H) Moved CSHJR 14(FSH) Out of Committee
03/19/07 (H) MINUTE(FSH)
03/21/07 (H) FSH AT 8:30 AM BARNES 124
03/21/07 (H) <Bill Hearing Canceled>
04/03/07 (H) RES REFERRAL WAIVED
02/28/08 (H) RLS AT 5:00 PM CAPITOL 120
BILL: HB 303
SHORT TITLE: MARINE & MOTORIZED RECREATIONAL PRODUCTS
SPONSOR(s): REPRESENTATIVE(s) NEUMAN
01/11/08 (H) PREFILE RELEASED 1/11/08
01/15/08 (H) READ THE FIRST TIME - REFERRALS
01/15/08 (H) L&C
01/30/08 (H) L&C AT 1:00 PM CAPITOL 17
01/30/08 (H) Moved CSHB 303(L&C) Out of Committee
01/30/08 (H) MINUTE(L&C)
01/31/08 (H) L&C RPT CS(L&C) 4DP 3AM
01/31/08 (H) DP: BUCH, RAMRAS, NEUMAN, OLSON
01/31/08 (H) AM: GARDNER, LEDOUX, GATTO
01/31/08 (H) JUD REFERRAL ADDED
02/06/08 (H) JUD AT 1:00 PM CAPITOL 120
02/06/08 (H) Heard & Held
02/06/08 (H) MINUTE(JUD)
02/11/08 (H) JUD AT 1:00 PM CAPITOL 120
02/11/08 (H) <Bill Hearing Canceled>
02/13/08 (H) JUD AT 1:00 PM CAPITOL 120
02/13/08 (H) Heard & Held
02/13/08 (H) MINUTE(JUD)
02/14/08 (H) JUD AT 1:00 PM CAPITOL 120
02/14/08 (H) Moved CSHB 303(JUD) Out of Committee
02/14/08 (H) MINUTE(JUD)
02/20/08 (H) JUD RPT CS(JUD) 1NR 5AM
02/20/08 (H) NR: LYNN
02/20/08 (H) AM: GRUENBERG, COGHILL, SAMUELS,
HOLMES, RAMRAS
02/28/08 (H) RLS AT 5:00 PM CAPITOL 120
WITNESS REGISTER
REPRESENTATIVE PAUL SEATON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the chair of the House Special
Committee on Fisheries, sponsor of HJR 14.
JUDD WHITAKER
(No address provided)
POSITION STATEMENT: Provided comments on HJR 14.
REX SHATTUCK, Staff
Representative Mark Neuman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke on behalf of the sponsor of HB 303,
Representative Neuman.
ACTION NARRATIVE
CHAIR JOHN COGHILL called the House Rules Standing Committee
meeting to order at 5:04:47 PM. Representatives Coghill,
Harris, Fairclough, Johnson, Samuels, Kerttula, and Guttenberg
were present at the call to order.
HJR 14-FED S 552/HR 1334; EXXON PLAINTIFFS
5:05:02 PM
CHAIR COGHILL announced that the first order of business would
be HOUSE JOINT RESOLUTION NO. 14, Urging the United States
Congress to enact Senate Bill 552 so that individuals receiving
a damage award from the Exxon Valdez oil spill can benefit from
the income averaging and retirement contribution provisions of
the bill.
5:05:31 PM
REPRESENTATIVE SAMUELS moved to adopt CSHJR 14, Version 25-
LS0639\L, Bullock, 2/20/08, as the working document. There
being no objection, Version L was before the committee.
5:05:54 PM
REPRESENTATIVE PAUL SEATON, Alaska State Legislature, speaking
as the chair of the House Special Committee on Fisheries,
sponsor of HJR 14, explained that this would support the
congressional legislation allowing Exxon Valdez plaintiffs, if
they receive the settlement, to deposit more than the current
allowable yearly amount in a retirement plan. The resolution
would also allow three-year income averaging, as is done with
farmers with variable income. The only changes encompassed in
Version L are the elimination of the reference to the previous
congressional legislation in the U.S. House and U.S. Senate and
replaces those with the current applicable legislation.
5:07:48 PM
JUDD WHITAKER informed the committee that he was present the
first week of the Exxon Valdez [oil spill] and heard ExxonMobil
Corporation lie. This resolution is problematic in that it's
not secure that the U.S. Supreme Court will award the punitive
damages. Although he opined that it's good to see this effort,
he highlighted the history of Exxon's behavior is not honorable.
Therefore, should the U.S. Supreme Court not award punitive
damages, he urged the committee to consider revoking ExxonMobil
Corporation's charter to do business in the state.
5:09:10 PM
REPRESENTATIVE SAMUELS moved to report CSHJR 14, Version 25-
LS0639\L, Bullock, 2/20/08, out of committee with individual
recommendations and the accompanying zero fiscal note. There
being no objection, CSHJR 14(RLS) was reported from the House
Rules Standing Committee.
The committee took a brief at-ease at 5:09 p.m.
HB 303-MARINE & MOTORIZED RECREATIONAL PRODUCTS
5:09:50 PM
CHAIR COGHILL announced that the final order of business would
be HOUSE BILL NO. 303, "An Act relating to marine products and
motorized recreational products; and providing for an effective
date."
5:10:15 PM
REPRESENTATIVE SAMUELS moved to adopt CSHB 303, Version 25-
LS1183\O, Bannister, 2/20/08, as the working document.
CHAIR COGHILL objected. He then announced his intention not to
move HB 303 from committee today.
5:11:12 PM
REX SHATTUCK, Staff, Representative Mark Neuman, Alaska State
Legislature, speaking on behalf of the sponsor, began by
explaining that the legislation was brought forth to address
some of the needs of consumers in Alaska as well as the small
businesses in Alaska that sell four wheelers, snow machines, and
marine products. He highlighted that the aforementioned
products are not just recreational vehicles but rather have
greater transportation and commercial use. He then highlighted
the need to recognize the seasonal use of these vehicles in
Alaska. Mr. Shattuck characterized the legislation as a work in
progress.
MR. SHATTUCK reviewed the changes encompassed in Version O as
related in the sectional analysis for Version O, which is
included in the committee packet. He noted that due to the many
deletions, Version O reflects the significant renumbering that
occurred. He mentioned that the language in Version L on page
3, line 18, was moved to Article 4 on page 5 of Version O.
5:18:37 PM
CHAIR COGHILL inquired as to what Version O has with regard to a
continuity with law.
5:19:01 PM
CHAIR COGHILL, in response to Representative Kerttula, related
that his plan is to determine whether the committee wants to
bring this proposal before it. However, he expressed the desire
to have Mr. Shattuck review the current legislation and take
questions as the hearing proceeds.
5:21:06 PM
MR. SHATTUCK said that the major policy issues that have been
identified with HB 303 are possible interstate commerce and
anti-trust issues. In working with Legal and Research Services
and the Department of Law (DOL), the sponsor tried to address
those issues. During the last discussion with DOL, it seems
that the interstate commerce concern has been negated. He
related his understanding that the measurement or weight in
regard to interstate commerce is whether the manufacturer or
dealer is unduly impacted. He noted that this law is in place
in many other states. Furthermore, the attorney general
reviewing the legislation didn't believe the legislation at this
time had particular issues burdening one side or the other. In
response to Chair Coghill, Mr. Shattuck confirmed that the
aforementioned is the result of going from CSHB 303(JUD) to
Version O. He said numerous sections were deleted in relation
to interstate commerce.
5:23:42 PM
REPRESENTATIVE KERTTULA related that she is pro-consumer and
concerned when there isn't appropriate reaction from
manufacturers for Alaskans. In terms of the Interstate Commerce
Act (ICC), she inquired as to what the federal law sets as the
standard for states. She then expressed concern with regard to
what the Consumer Product Safety Commission does because she
related her understanding that there may be some preemption from
that federal law in this legislation. If what's proposed in HB
303 is the law in other states, she expressed interest in seeing
the law in those other states. Representative Kerttula then
turned to anti-trust issues and inquired as to how
distributorships work. Referring to page 5, lines 14-17, she
inquired as to why that provision is included in legislation
addressing problems with manufacturers.
MR. SHATTUCK offered to provide the committee with information
regarding the ICC criteria. In further response, Mr. Shattuck
confirmed that he has information from some of the other states
with similar laws. He noted that Louisiana has the most
strongly written law that far surpasses what's proposed in HB
303. He said he would generate a matrix [comparing the states
with laws similar to that proposed in HB 303].
5:27:10 PM
REPRESENTATIVE FAIRCLOUGH, referring to page 5, line 14,
requested a definition of "territory" since she said she
understands that dealerships have territories. She then
inquired as to how that will interact with the "may not compete"
component of the law in relation to the Internet and other
dealerships.
CHAIR COGHILL recalled that in a prior version the [language
"may not compete"] referred to a 30-mile radius restriction.
MR. SHATTUCK said that [the aforementioned restriction] was
removed from the legislation. The Attorney General's Office
advised that territories are recognized by geographic
boundaries. If there's an attempt to limit competition between
different brands, there would be an issue. However, addressing
territories agreed upon by the manufacturer and having like
brands and products wouldn't seem to be a problem. He indicated
that the section was removed.
CHAIR COGHILL characterized the aforementioned as a significant
change.
5:29:39 PM
REPRESENTATIVE JOHNSON inquired as to how Internet sales would
be addressed. He related his understanding that the language
doesn't prohibit Internet sales by a manufacturer.
5:30:18 PM
REPRESENTATIVE HARRIS asked if a dealer signs an agreement with
the manufacturer in which both agree to do certain things.
MR. SHATTUCK replied yes.
REPRESENTATIVE HARRIS asked then if all parties are clear with
regard to their responsibilities, requirements, and
restrictions.
MR. SHATTUCK related his understanding that the contracts
address many of those issues. However, marine dealers within
the state and nationally have raised concerns with regard to the
way in which the contracts are written. The aforementioned has
led to a movement in which to negotiate changes in new
contracts.
5:33:10 PM
REPRESENTATIVE HARRIS turned attention to Section 2, Article 1,
which prohibits a manufacturer from threatening to cancel an
agreement. He asked if the language refers to cancelation for
any reason. He inquired as to what would happen in a situation
in which the dealership didn't pay for the product purchased
from the manufacturer.
MR. SHATTUCK specified that coercion is what's being discussed,
such as some of the practices through which dealers are coerced
to take on additional or different product.
REPRESENTATIVE HARRIS commented that he didn't see any language
referring to coercion. He then turned attention to the language
in Article 1 that says "without 90 days' advance written
notice". He posed a scenario in which a distributor doesn't pay
the manufacturer for the product he sold the distributor. In
such a situation the distributor can use the product for 90 days
after which the manufacturer can try to get the product back.
He asked if the manufacturer would have some recourse in such a
situation.
MR. SHATTUCK said there are several different ways a
manufacturer would have the product, including flooring in which
the manufacturer owns the product. In such a situation, when
the product is sold, the dealer pays the money to the
manufacturer. In a situation in which a dealer decides he/she
took on too much product/obligation, whether the manufacturer,
with 90 days' written notice, can cancel the agreement is
spelled out in the contracts.
REPRESENTATIVE HARRIS then inquired as to why this proposed law
is necessary if the contracts specify such details.
MR. SHATTUCK said that the dealers might better be able to
answer.
5:37:43 PM
REPRESENTATIVE SAMUELS recalled that in the last committee, the
legislation required the manufacturer to sell as much product as
the dealer could handle. Still, the dealer can force the
manufacturer to buy the inventory back. He inquired as to
whether that language is in Version O. He then directed
attention to page 5, lines 14-17, and related his understanding
that it's trying to stop a manufacturer from opening an
extension of the manufacturer within the [area agreed upon as
the competitive area] with the dealer.
MR. SHATTUCK related his understanding that [the buy back]
language was removed in Version O.
5:40:10 PM
REPRESENTATIVE GUTTENBERG, referring to proposed Article 4 on
page 5, line 10, related his belief that there must be
conditions upon which the manufacturer and distributor agree.
He posed a situation in which the manufacturer doesn't want to
do business with a retailer after that retailer violates the
terms of the agreement. He inquired as to how that comports
with the language "without just cause".
5:42:24 PM
CHAIR COGHILL directed attention to page 8, line 24, which
specifies that AS 45.45.700-45.45.790 don't apply. He inquired
as to why those statutes don't apply.
MR. SHATTUCK said the sponsor is trying to fully understand how
those statutes tie in.
5:43:38 PM
CHAIR COGHILL suggested that the legislation needs some work.
He related the need to ensure that all parties involved,
distributors, manufacturers, and consumers, receive a fair
shake.
5:44:17 PM
REPRESENTATIVE JOHNSON expressed concern with page 6, line 12,
which he read to mean that if someone alleges an act, the
manufacturer is responsible for all legal fees.
5:45:04 PM
CHAIR COGHILL removed his objection to the motion to adopt
Version O as the working document. There being no further
objection, Version O was before the committee.
5:46:12 PM
REPRESENTATIVE JOHNSON related that he already had a
conversation with the sponsor regarding many issues that weren't
discussed today. He said he wanted to be sure that those
matters are also addressed.
5:46:33 PM
CHAIR COGHILL emphasized that the sponsor will need to work with
the committee to produce balanced legislation. He then
announced his intention to work on this legislation to provide
distributors a shield. Therefore, HB 303 was held over.
HJR 14-FED S 552/HR 1334; EXXON PLAINTIFFS
The committee returned its attention to HOUSE JOINT RESOLUTION
NO. 14, Urging the United States Congress to enact Senate Bill
552 so that individuals receiving a damage award from the Exxon
Valdez oil spill can benefit from the income averaging and
retirement contribution provisions of the bill.
5:47:16 PM
REPRESENTATIVE SAMUELS inquired as to the timing of the
congressional action to which HJR 14 speaks.
REPRESENTATIVE SEATON informed the committee that the
congressional legislation has passed the U.S. House and is in
the U.S. Senate.
5:47:54 PM
ADJOURNMENT
There being no further business before the committee, the House
Rules Standing Committee meeting was adjourned at 5:47:57 PM.