Legislature(2009 - 2010)CAPITOL 120

03/15/2010 01:00 PM JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 381 SELF DEFENSE TELECONFERENCED
Heard & Held
+= HB 71 ADVANCE HEALTH CARE DIRECTIVES REGISTRY TELECONFERENCED
Moved CSHB 71(JUD) Out of Committee
+= HB 115 PERMANENT ABSENTEE VOTING TELECONFERENCED
Failed To Move Out Of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 355 CRIMINAL FINES FOR ORGANIZATIONS TELECONFERENCED
Moved CSHB 355(JUD) Out of Committee
           HB 355 - CRIMINAL FINES FOR ORGANIZATIONS                                                                        
                                                                                                                                
1:56:54 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS announced  that the next order of  business would be                                                               
HOUSE  BILL NO.  355,  "An  Act relating  to  criminal fines  for                                                               
organizations."                                                                                                                 
                                                                                                                                
1:58:17 PM                                                                                                                    
                                                                                                                                
GRETCHEN  STAFT,  Staff,  Representative  Max  Gruenberg,  Alaska                                                               
State   Legislature,  speaking   on   behalf   of  the   sponsor,                                                               
Representative  Gruenberg,  offered  her understanding  that  DOL                                                               
doesn't  keep the  data  as  part of  its  formal  records.   The                                                               
document  that  notes  it was  "Distributed  by  Rep.  Gruenberg"                                                               
encompasses the  information the department was  able to compile.                                                               
She related  her understanding  that many of  the cases  in which                                                               
this  statute would've  been used  were settled,  and thus  there                                                               
isn't a  lot of data  for situations  in which data  was imposed.                                                               
Ms. Staft pointed out that HB  355 would help set the bottom line                                                               
for organizations faced with potential criminal penalties.                                                                      
                                                                                                                                
1:59:31 PM                                                                                                                    
                                                                                                                                
ANNE  CARPENETI,  Assistant   Attorney  General,  Legal  Services                                                               
Section,  Criminal Division,  Department of  Law, confirmed  that                                                               
DOL doesn't keep  data collected in this form,  and therefore the                                                               
document in  the committee packet  is anecdotal  recollections of                                                               
prosecutors.    Ms. Carpeneti  informed  the  committee that  the                                                               
department   doesn't  prosecute   corporations  that   often  and                                                               
corporations don't  go to  jail.  When  a corporation  is charged                                                               
with a  crime, the fine  and the  amount of restitution  is often                                                               
negotiated.    She related  her  understanding  that the  special                                                               
prosecutions  that   allow  three  times  the   harm  in  certain                                                               
circumstances are helpful, in terms  of negotiating.  In response                                                               
to Chair Ramras, offered her  understanding that the BP case when                                                               
the field was depleted fell under statutes other than Title 12.                                                                 
                                                                                                                                
REPRESENTATIVE  GRUENBERG recalled  that the  BP case  fell under                                                               
Title 46,  environmental crimes.   In  further response  to Chair                                                               
Ramras,  Representative   Gruenberg  said  that  the   VECO  case                                                               
would've fallen  under this and  was the reason for  the original                                                               
legislation.    The  VECO situation  wouldn't  have  allowed  the                                                               
treble damages because the tax bill  passed and there was no gain                                                               
to VECO or its clients and no loss  to the state.  That glitch in                                                               
the law,  he said, is what  compelled him [to introduce  HB 355].                                                               
The amendment  was suggested in  conversations with  Mr. Sniffen,                                                               
DOL.                                                                                                                            
                                                                                                                                
2:02:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN mentioned  that there  is legislation  under                                                               
consideration that requires certain disclosures.   He asked if HB
355   would   cover   [corporations]  that   don't   make   those                                                               
disclosures.  He further asked  if, under this legislation, those                                                               
corporations could be fined for failure to disclose.                                                                            
                                                                                                                                
REPRESENTATIVE  GRUENBERG replied  yes, adding  that it  would be                                                               
covered by Title 11.                                                                                                            
                                                                                                                                
2:03:13 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS characterized HB 355 as a very important bill.                                                                     
                                                                                                                                
2:04:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  offered his understanding that  in the past                                                               
when  fines have  been  doubled,  not even  half  of the  damages                                                               
resulting have been received.  He  asked if HB 355 does more than                                                               
simply increase the fines.                                                                                                      
                                                                                                                                
REPRESENTATIVE  GRUENBERG referred  to Amendment  1, labeled  26-                                                               
LS1385\E.1, Luckhaupt, 3/9/10, which read:                                                                                      
                                                                                                                                
     Page 1, line 7:                                                                                                            
          Delete "$1,000,000"                                                                                                   
          Insert "$2,000,000 [$1,000,000]"                                                                                  
                                                                                                                                
     Page 1, line 9:                                                                                                            
          Delete "$200,000"                                                                                                     
          Insert "$400,000 [$200,000]"                                                                                      
                                                                                                                                
     Page 1, line 11:                                                                                                           
          Delete "$25,000"                                                                                                      
          Insert "$50,000 [$25,000]"                                                                                        
                                                                                                                                
     Page 1, line 13:                                                                                                           
          Delete "$10,000"                                                                                                      
          Insert "$20,000 [$10,000]"                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG explained that  both HB 355 and proposed                                                               
Amendment 1 seek to legally obtain higher fines.                                                                                
                                                                                                                                
2:05:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM made a motion to adopt Amendment 1.                                                                    
                                                                                                                                
REPRESENTATIVE HOLMES objected for the purpose of discussion.                                                                   
                                                                                                                                
[Chair Ramras passed the gavel to Vice Chair Dahlstrom.]                                                                        
                                                                                                                                
REPRESENTATIVE  GRUENBERG, in  response  to a  question, posed  a                                                               
situation in which a bribe was  offered in exchange for a vote at                                                               
which point the  bribery crime is completed because  the crime is                                                               
the  offering  of  the  illegal  consideration.    Regardless  of                                                               
whether the offeree  does anything, the offeror is  guilty of the                                                               
bribe.   Subsequent  events  occur such  that  the offeree  votes                                                               
against the bill,  although the bill passes.   Paragraphs (2) and                                                               
(3) wouldn't  apply because  there was no  gain to  the defendant                                                               
because  the attempt  to defeat  the bill  failed.   Furthermore,                                                               
there was  no loss  to the  victim in the  case because  the bill                                                               
passed.  [This legislation] attempts to close the loophole.                                                                     
                                                                                                                                
MS. CARPENETI,  in response  to Representative  Dahlstrom, agreed                                                               
that HB 355 would close a loophole.                                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG  added that  the crime of  conspiracy is                                                               
frequently used  at the federal  level.  The crime  of conspiracy                                                               
is  an  illegal  criminal  contract  in  which  two  people  come                                                               
together  to do  something illegal,  even if  there's no  further                                                               
action the crime is complete.  In  that case, there is no gain to                                                               
the  defendant  and  no  loss  to  the  victim.    Representative                                                               
Gruenberg  opined  that  this  could be  used  in  virtually  any                                                               
conspiracy that involved a property crime.                                                                                      
                                                                                                                                
MS. CARPENETI  pointed out that  Alaska's conspiracy law  is very                                                               
limited,  adding that  she  would need  to  research whether  the                                                               
conspiracy law would apply to property crimes.                                                                                  
                                                                                                                                
REPRESENTATIVE  GATTO posed  a scenario  in  which an  individual                                                               
gives a candidate  $500, which is the limit, and  then gives $250                                                               
more.  He  inquired as to the  result of the crime,  the worth of                                                               
that crime.                                                                                                                     
                                                                                                                                
2:10:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG   answered   that  he   didn't   think                                                               
paragraphs  (2)  and (3)  would  apply  in  the case  of  illegal                                                               
campaign  contributions.    He explained  that  illegal  campaign                                                               
contributions  aren't   bribes  for   a  vote.     Representative                                                               
Gruenberg  opined that  it's not  a crime  involving a  pecuniary                                                               
gain or loss and thus isn't applicable.                                                                                         
                                                                                                                                
REPRESENTATIVE GATTO  suggested an  applicable scenario  in which                                                               
the  $250  continues  to  be compounded  into  newer  and  better                                                               
things.  He  asked if the [worth  of the crime] would  be $250 or                                                               
$250,000 because of investment connections.                                                                                     
                                                                                                                                
MS. CARPENETI  related her belief  that [the worth] would  be the                                                               
original amount.                                                                                                                
                                                                                                                                
REPRESENTATIVE   GRUENBERG   characterized   this   question   as                                                               
referring to how far out in the future it's applied.                                                                            
                                                                                                                                
MS. CARPENETI offered her belief that  it would be at the time of                                                               
the crime.   She added that the crime of  conspiracy in Alaska is                                                               
limited  to felonies  against  a  person, certain  Class  A or  B                                                               
felonies involving  controlled substances, and  criminal mischief                                                               
in  the first  degree, which  includes intentionally  damaging an                                                               
oil  or  gas pipeline  and  terroristic  threatening.   She  then                                                               
pointed  out  that  the  provisions  in HB  355  would  apply  to                                                               
attempts of  certain crimes,  which would be  useful.   She noted                                                               
that the [department's] attorneys are supportive of HB 355.                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG surmised  that in  a crime  against the                                                               
pipeline, there  would be  pecuniary loss.   He then  related the                                                               
need to consider including conspiracy for arson.                                                                                
                                                                                                                                
2:13:16 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 2:13 p.m. to 2:15 p.m.                                                                       
                                                                                                                                
[Vice Chair Dahlstrom returned the gavel to Chair Ramras.]                                                                      
                                                                                                                                
2:15:08 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS made  a motion to adopt Amendment 1  to Amendment 1,                                                               
such that  the change proposed  to page  1, line 7,  would insert                                                               
"$2,500,000" rather than "$2,000,000".                                                                                  
                                                                                                                                
REPRESENTATIVE GATTO objected, then removed his objection.                                                                      
                                                                                                                                
There being no further objection,  Amendment 1 to Amendment 1 was                                                               
adopted.                                                                                                                        
                                                                                                                                
CHAIR RAMRAS then  made a motion to adopt  Conceptual Amendment 2                                                               
to Amendment 1, such that the  change proposed on page 1, line 9,                                                               
would insert "$500,000"  rather than "$400,000".   There being no                                                       
objection, Conceptual Amendment 2 to Amendment 1 was adopted.                                                                   
                                                                                                                                
CHAIR RAMRAS  made a  motion to adopt  Conceptual Amendment  3 to                                                               
Amendment 1,  such that the proposed  change to page 1,  line 11,                                                               
would insert "$40,000" rather than "$50,000".                                                                           
                                                                                                                                
REPRESENTATIVE HOLMES objected.                                                                                                 
                                                                                                                                
REPRESENTATIVE  GRUENBERG  inquired as  to  why  Chair Ramras  is                                                               
proposing to lower  the amount with Conceptual  Amendment 3 while                                                               
Amendments 1 and 2 increased the amounts.                                                                                       
                                                                                                                                
CHAIR RAMRAS revised  his motion to adopt  Conceptual Amendment 3                                                               
to Amendment 1 such that the  proposed change to page 1, line 11,                                                               
would insert "$75,000" rather than "$50,000".                                                                           
                                                                                                                                
REPRESENTATIVE HOLMES withdrew her objection.                                                                                   
                                                                                                                                
There  being   no  further   objection,  the   committee  treated                                                               
Conceptual Amendment 3 to Amendment 1 as adopted.                                                                               
                                                                                                                                
2:17:59 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS  made a  motion to adopt  Conceptual Amendment  4 to                                                               
Amendment 1,  such that the proposed  change on page 1,  line 13,                                                               
would insert  "$25,000" rather  than "$20,000".   There  being no                                                       
objection, Conceptual Amendment 4 to Amendment 1 was adopted.                                                                   
                                                                                                                                
2:18:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLMES  removed her  objection to the  adoption of                                                               
Amendment 1, as amended.                                                                                                        
                                                                                                                                
REPRESENTATIVE GATTO objected, and asked  if the fine amounts are                                                               
justifiable.                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG explained  that the Legislative Research                                                               
Services  report  labeled  LRS  Report 10.206  relates  the  fine                                                               
amounts as  adjusted for  inflation.   The original  fine amounts                                                               
more than  accounted for inflation.   He noted that prior  to the                                                               
earlier adopted  amendments the  fine amounts  in HB  355 doubled                                                               
the existing fine  amounts since it has been some  20 years since                                                               
these fines have  been addressed.  The amendments  to Amendment 1                                                               
increase the fine  amounts more.  As  the sponsor, Representative                                                               
Gruenberg  said  that  he  doesn't  have  a  problem  with  those                                                               
increases  because things  are more  sophisticated  and there  is                                                               
more at risk than there was  20-30 years ago.  These fine amounts                                                               
merely  provide  the  judge  more   discretion  on  what  to  do.                                                               
Moreover, in  dealing with an organization/corporation  no one is                                                               
jailed and  people don't really  care if a large  corporation has                                                               
been convicted of a commercial felony.   He characterized it as a                                                               
business decision  on a cost  versus profit basis.   These fines,                                                               
he pointed  out, make it uneconomical/unprofitable  to commit the                                                               
crime.   Representative Gruenberg said  that he supports  all the                                                               
amendments to Amendment 1.                                                                                                      
                                                                                                                                
CHAIR  RAMRAS related  that he  believes that  the amendments  to                                                               
Amendment 1 strengthen Amendment 1.                                                                                             
                                                                                                                                
REPRESENTATIVE  GRUENBERG  interjected  that these  fine  amounts                                                               
aren't amended every year, just every 20-25 years.                                                                              
                                                                                                                                
REPRESENTATIVE  GATTO removed  his objection  to Amendment  1, as                                                               
amended.                                                                                                                        
                                                                                                                                
2:22:58 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS  announced then  that Amendment  1, as  amended, was                                                               
adopted.                                                                                                                        
                                                                                                                                
2:23:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM moved to report  HB 355, as amended, out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying  fiscal  notes.   There  being  no  objection,  CSHB
355(JUD)  was   reported  from   the  House   Judiciary  Standing                                                               
Committee.                                                                                                                      

Document Name Date/Time Subjects
1 HB 381 Sponsor Statement HJUD.pdf HJUD 3/15/2010 1:00:00 PM
HB 381
3 HB381 Sectional Analysis.pdf HJUD 3/15/2010 1:00:00 PM
HB 381
4 HB381 AS 11 81 335.pdf HJUD 3/15/2010 1:00:00 PM
HB 381