Legislature(1997 - 1998)

03/05/1997 01:48 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
          SB  41 ENVIRONMENTAL & HEALTH/SAFETY AUDITS                         
                                                                               
  AL DWYER , Director of the Division of Labor Standards and Safety,           
 Department of Labor (DOL) read the following from a letter from               
 Acting Assistant Secretary of Labor, Mr. Greg Watchman:                       
 Employers' privilege and immunities proposed in SB 41 would greatly           
 limit Alaska's authority to investigate accidents and illnesses in            
 the workplace, document their cases, and enforce job safety and               
 health standards.  This bill would significantly damage the                   
 credibility and effectiveness of Alaska's enforcement program.  As            
 you know, Congress has required the states with OSHA-approved state           
 plans to maintain an occupational safety and health program which             
 is at least as effective as the federal.  Enactment of such a                 
 provision by the state would seriously undermine the continued                
 approvability of Alaska's 18E Occupational Safety and Health                  
 Program and may result in the withdrawal of federal approval and              
 funding for the Alaska program.                                               
                                                                               
 SEE PAGES 17 - FOR THE PROPOSED AMENDMENTS.                                   
                                                                               
  BETH KERTTULA , Assistant Attorney General, testified on Amendment           
 will have on tariff cases.  First, if the bill is amended to extend           
 the privilege under Amendment 8, it will jeopardize tariff cases              
 which could cost the state millions of dollars.                               
                                                                               
  MS. KERTULLA  outlined the tariff rate procedure as follows.  Under          
 Alaska's royalty and production tax statutes, the state pays one-             
 quarter of the tariff.  That calculation includes pipeline                    
 operation costs through reduced revenues to the state.  The state             
 has the right to challenge imprudent costs and technical errors               
 under the TAPS settlement agreement.  In the 1995 tariff case, the            
 state is challenging over $300 million worth of remediation costs             
 to the pipeline's electrical systems, as-built drawings, and                  
 business management systems because it believes the carriers did              
 not act reasonably in maintaining those systems.  The vast majority           
 of the evidence in that case came from audits.  If the state had              
 not had access to those audits, its ability to bring the case would           
 have been severely curtailed.  The estimated cost of conducting the           
 audits was $25 million.  Amendment 8 would grant a privilege to               
 anything that was not "necessary" to determine pipeline rates,                
 tariffs, or charges.  Use of the imprudent standard requires review           
 of all pipeline costs to determine which are justified and in                 
 normal discovery, one is allowed to get information that leads to             
 relevant information.  Furthermore, most audits are mixed between             
 fact and analysis, making the two difficult to separate.                      
 Therefore, Amendment 8 is either meaningless, because audit                   
 information is truly necessary to determine rates, or harmful if              
 the intent is to limit the ability of the state to receive                    
 information related to pipeline management just because that                  
 information is in an audit.  Amendment 8, in conjunction with the             
 fact the bill was previously amended to not allow the state to                
 review objective facts in audits, is a threat to the state properly           
 bringing TAPS tariff cases.                                                   
                                                                               
 Regarding the immunity provision,  MS. KERTTULA  noted because of the         
 bill's limitations to the definition of "penalty," it appears the             
 sponsor may not have intended immunity to apply to tariff cases,              
 however the definition states the penalty means administrative or             
 civil sanctions.  It is possible an argument could be made that an            
 APUC order could be viewed as an administrative sanction.  More               
 problematic on the immunity point is the fact that there are tariff           
 related cases that can be brought civilly, instead of                         
 administratively.  Civil penalties are available for egregious                
 behavior.   If immunity is limited in tariff cases, the right of              
 the state to receive civil penalties in penalties would cease.                
                                                                               
  MS. KERTTULA  summarized at best, Amendment 8 confuses what                  
 information the state will be able to receive to bring tariff cases           
 and will hamstring the Department of Law.  She requested the                  
 committee add the tariff exception back to the immunity clause.               
                                                                               
 Number 429                                                                    
                                                                               
  SENATOR MILLER  moved the adoption of Amendment 8.   SENATOR ELLIS           
 objected to the motion.                                                       
                                                                               
  CHAIRMAN TAYLOR  asked Ms. Kerttula if she disagrees with Senator            
 Leman's statement that Amendment 8 will allow review of only those            
 parts of an audit report necessary to assist in determining rates,            
 tariffs, fares or charges to be nonprivileged.   MS. KERTTULA  felt           
 the problem lies in the fact the language could be interpreted very           
 restrictively and allow disclosure to determine appropriate tariff            
 rates, but not imprudence.  In the 1995 case, all of the costs used           
 to calculate the tariff included the costs of managing the                    
 pipeline, which can be very broad.                                            
                                                                               
  CHAIRMAN TAYLOR  said the original intent of reviewing some audit            
 results was not for TAPS regulation for purposes of revenue, but to           
 ensure that environmental safety concerns, such as corrosion, were            
 addressed.  DEC would have jurisdiction over those matters.   MS.             
 KERTTULA  agreed that might have been the primary focus of those              
 audits, but repeated those problems do relate back to the rates.              
                                                                               
 Number 455                                                                    
                                                                               
  CHAIRMAN TAYLOR  commented if an audit discloses pipe corrosion and          
 DEC requires three miles of pipe to be replaced, the repair cost              
 then gets calculated into the operation costs of the facility which           
 is paid for by the people of the state.   MS. KERTTULA  agreed.               
                                                                               
  CHAIRMAN TAYLOR  stated it appears all Amendment 8 would protect is          
 disclosure of audits conducted for ancillary purposes that may, or            
 may not, get built into the tariff someday.  For example, if a                
 carrier determined, through a self-audit, it did not have                     
 appropriate monitoring equipment for gas releases and was in                  
 violation of the Clean Air Act, parts of the self-audit would be              
 available to the Department of Law for rate-fixing aspects, but not           
 for the penal aspect.   MS. KERTTULA  was unsure how Amendment 8              
 would be interpreted because of the inclusion of the word                     
 "necessary."                                                                  
                                                                               
  MS. KERTTULA  explained the state gets charged up front, through a           
 reduction to production in the state's royalty tax return.  The               
 department gets to look at the charge once it has been assessed.              
 In the 1995 electrical code case, the tariff suddenly took a jump,            
 so the Department of Law had to work back to determine the cost of            
 the increase: in this case it had to review audits, including self-           
 audits, that explained what had occurred to cause the cost                    
 increase.   The self-audits were a mix of facts and analysis.  She            
 cautioned without access to those types of audits, millions of                
 dollars to the state could be jeopardized.                                    
                                                                               
 Number 492                                                                    
                                                                               
  CHAIRMAN TAYLOR  asked whether millions of dollars of revenue, or of         
 costs to the state, would be jeopardized.   MS. KERTTULA  responded           
 at this point, it is millions of dollars the state would have lost            
 in royalty and production taxes.  The state will be reimbursed if             
 it wins the case.                                                             
                                                                               
  CHAIRMAN TAYLOR  noted Ms. Kerttula was making the assumption the            
 state would not have its own audit report available.   MS. KERTTULA           
 replied the Department of Law might not have access to the                    
 company's audit, if Amendment 8 is enacted.                                   
                                                                               
  CHAIRMAN TAYLOR  commented the Senate Finance Committee can more             
 adequately address that aspect.                                               
                                                                               
  SENATOR ELLIS  maintained his objection to adopt Amendment 8.  The           
 motion carried with Senators Miller, Parnell and Taylor voting                
 "yea," and Senator Ellis voting "nay."                                        
                                                                               
 Number 510                                                                    
                                                                               
  SENATOR ELLIS  moved to adopt a packet of amendments submitted by            
 the Administration.   CHAIRMAN TAYLOR  objected and asked Senator             
 Ellis to describe each one individually.                                      
                                                                               
  SENATOR ELLIS  explained Amendment 25 deletes the words "health and          
 safety" following the word "environmental" throughout the bill.               
                                                                               
  JANICE ADAIR , Director of Environmental Quality, DEC, testified in          
 support of Amendment 25 because she believes although SB 41 works             
 well for DEC, it does not work well for the Department of Labor.              
                                                                               
  SENATOR LEMAN  believed SB 41 will help employers come into                  
 compliance with health and safety laws as well as environmental               
 laws.                                                                         
                                                                               
 Amendment 25 was adopted with Senators Ellis, Miller, Parnell, and            
 Pearce voting "yea," and Senator Taylor voting "nay."                         
                                                                               
 TAPE 97-15, SIDE B                                                            
                                                                               
  SENATOR ELLIS  explained Amendment 26 removes references to the              
 Departments of Labor and Health and Social Services but asked that            
 Amendment 26 be reconstructed to say ", the Department of Labor,"             
 since the committee passed Amendment 7 at a previous meeting which            
 deleted references to the Department of Health and Social Services            
 from the bill.                                                                
                                                                               
  DWIGHT PERKINS,  Special Assistant to the Commissioner of the                
 Department of Labor, clarified Amendment 25 deleted all references            
 to health and safety audits; Amendment 26 would conform by removing           
 references to the Department of Labor.                                        
                                                                               
 There being no objection to Amendment 26, it was adopted.                     
                                                                               
  SENATOR MILLER  objected to Amendment 27.                                    
                                                                               
  MARIE SANSONE  explained under SB 41, the owner/operator who is              
 claiming the privilege has the burden of establishing that the                
 privilege applies and contains a category of information that is              
 excepted from the privilege requirements under SB 41.  These                  
 exceptions are very similar to what is contained in evidence rules            
 regarding attorney/client privileges or doctor/patient privileges.            
 For example, if the privilege is asserted for a criminal or                   
 fraudulent purpose, there would be an exception to the privilege.             
 This recognizes that a privilege should not be used to further                
 criminal or fraudulent acts.  Amendment 27 deals with the mechanics           
 of proving that an exception applies.  SB 41 requires the party               
 seeking disclosure come forward and prove an exception applies but            
 without access to the audit information, it would be very difficult           
 to prove.  Amendment 27 allows the person seeking disclosure to               
 make a prima facie case that the exception applies, using                     
 nonprivileged information to make that showing.  At that point, the           
 party maintaining privilege would be required to show that the                
 exception should not apply.  She discussed numerous court cases               
 which recognize the notion of the prima facie showing to establish            
 exceptions to the privilege.                                                  
                                                                               
  SENATOR MILLER  said his concern with Amendment 27 is the assumption         
 that the party is guilty unless it can prove itself innocent.  He             
 questioned whether the amendment would shift the burden from the              
 state to the company to prove why it should not have privilege.               
                                                                               
 MS. ADAIR  explained a private third party may believe it has been            
 harmed by an action.  That party would be required to get                     
 independent evidence to convince a judge or hearing officer to set            
 the privilege exception aside so that the party could review the              
 privileged documentation to make a case.  Without Amendment 27, SB
 41 requires the party to demonstrate something it has no way to               
 demonstrate because the documentation is privileged.  She believes            
 the amendment does not shift the burden, but levels the way it is             
 applied.                                                                      
                                                                               
 Number 501                                                                    
                                                                               
  CHAIRMAN TAYLOR  questioned whether a whistleblower could establish          
 a prima facie case based on the evidence he/she was fired for                 
 whistleblowing under Amendment 27 and then use self-audit                     
 information to defend his/her re-employment.                                  
                                                                               
  MS. SANSONE  felt in such a case, the employer may want to bring the         
 self-audit forward if it wished to prove the whistleblower was                
 sabotaging the company by intentional wrongdoing.                             
                                                                               
  CHAIRMAN TAYLOR  said he was thinking of a situation in which the            
 whistleblower was peripherally involved in sabotage with other                
 employees but uses his/her whistleblower status to bring a wrongful           
 termination suit.   MS. SANSONE  believed judges have quite an array          
 of means to protect the information in such a case.  The judge                
 could rule that part of the information is relevant to the                    
 whistleblower case but not for other purposes.  She believed the              
 bill would give the judge the appropriate latitude to craft a                 
 protective order so that the information cannot be misused.                   
                                                                               
  CHAIRMAN TAYLOR  asked what standard for the burden of proof is used         
 for parties wishing to seek this information.  He added Amendment             
 27 would obviously weaken the current standard by making it a prima           
 facie case.   MS. SANSONE  described two Alaska Supreme Court                 
 decisions that set out very good procedures for dealing with                  
 privileged information.  In 1974, the United Service Automobile               
 Association v. Worley decision defined what is a prima facie case             
 for purposes of trying to gain access to privileged information.              
 It is defined as the evidence that would sufficiently support a               
 showing of a crime or fraud if all contrary evidence is                       
 disregarded.  The burden of proof does not change in that scenario;           
 the question becomes how much of a burden does one have to meet, or           
 does one ever get to look at the privileged information in order to           
 show that the privilege does not apply.  To show that the privilege           
 does not apply without access would be very hard, if not                      
 impossible, in certain circumstances.  Where it would be possible,            
 under the Central Construction case, the Court recognized that a              
 trial judge can choose to not have an in-camera review if the                 
 proceeding established that enough evidence is available to tie the           
 case up.                                                                      
                                                                               
 Number 416                                                                    
                                                                               
  CHAIRMAN TAYLOR  said he asked the question because he thought a             
 standard for access to privileged documents exists.  He felt                  
 Amendment 27 appears to be a reduction in the burden upon the                 
 person asking for the key to the vault.   MS. SANSONE  repeated the           
 Department of Law's concern and reason for the suggested amendment            
 was that SB 41 does not allow for a party to have access to the               
 privileged material at any time, to meet their burden of showing              
 that it did not apply.  The Department of Law is trying to                    
 establish a level at which one could gain access to that                      
 information in order to prove the exception.                                  
                                                                               
  SENATOR PARNELL  referred to back-up material provided by Ms.                
 Sansone and read the following.                                               
 The Alaska Supreme Court also follows this approach.  In Sloan              
 v. Jefferson, 758 P.2d 81, 83 (Alaska 1988), the court                       
 recognized that the burden of proof generally falls upon the                  
 party asserting a fact, particularly where that party controls                
 the evidence bearing upon that fact.                                          
 He asked, in this kind of a proceeding, for an example of a fact              
 being asserted by the owner/operator.                                         
                                                                               
  MS. ADAIR  replied an example would be that the owner/operator               
 promptly initiated the necessary action to correct a violation.               
                                                                               
  SENATOR MILLER  maintained his objection to the adoption of                  
 Amendment 27.  The motion failed with Senator Ellis voting "yea,"             
 and Senators Miller, Parnell, Pearce and Taylor voting "nay."                 
                                                                               
  CHAIRMAN TAYLOR  announced Amendment 28 was up for discussion.               
                                                                               
 Number 374                                                                    
                                                                               
  MS. ADAIR  advised Amendment 28 is a conforming amendment.   SENATOR         
 LEMAN  agreed Amendment 28 provides a necessary technical change.             
 There was no objection to Amendment 28, therefore it was adopted.             
  CHAIRMAN TAYLOR  clarified Amendment 29 is numbered #16 in packets,          
 and that Senator Ellis did not wish to offer #15.                             
                                                                               
  MS. ADAIR  informed the committee Amendment 29 reinstates language           
 that was contained in prior versions of SB 41 and may have been               
 inadvertently omitted.  Amendment 29 pertains to an exception to              
 immunity if the disclosure is in a proceeding relating to pipeline            
 rates, tariffs, fares, or procedures.                                         
                                                                               
  SENATOR LEMAN  stated he recommends Amendment 29 not be adopted              
 because an exception already exists under the privilege section. He           
 explained immunity is only granted regarding violations of                    
 environmental laws, and not underpayment of tariffs.                          
                                                                               
 Number 355                                                                    
                                                                               
  MS. KERTTULA  stated an APUC order is a state administrative order.          
 Outside of the administrative realm, the state can bring civil                
 cases where penalties are available, if there were particularly               
 egregious facts behind a tariff case.  If self-audits are immune,             
 the state will be unable to recover in APUC cases, as well as in              
 civil complaints and anti-trust cases.  Regarding the privilege               
 argument, environmental audits can contain information necessary              
 for tariff cases and rate-making to determine if money was                    
 imprudently spent.  If that information is privileged, the state              
 will never know if the rate charged was correct.                              
                                                                               
  SENATOR PEARCE  asked how this provision works in Texas with the             
 Texas Railroad and its utilities.   SENATOR LEMAN  replied                    
 Representative Warren Chisolm told him that out of 400 audits                 
 conducted, none of the potential problems brought forward to this             
 committee have occurred in Texas.                                             
                                                                               
 Number 325                                                                    
                                                                               
  CHAIRMAN TAYLOR  felt only certain audit information is of necessity         
 to the Department of Law for rate-setting.  He believes whichever             
 department sets the rates would like to cooperate with DEC on audit           
 information that could be used to file charges.                               
                                                                               
  MS. KERTTULA  responded the Department of Law's concern is truly for         
 the 25 percent the state pays for the transportation of our oil.              
 In the last two years, on the 1995 case, the Department of Law was            
 faced with precisely this kind of information as evidence of the              
 problem.  Without it, the Department of Law could not have brought            
 the case.  Even if the Department of Law could have paid $25                  
 million to conduct those audits, it might not have been able to get           
 to it under SB 41's immunity section.   MS. ADAIR  added DEC would be         
 happy to offer an amendment prohibiting it from getting the tariff            
 setting information.                                                          
                                                                               
 Objection was maintained to the adoption of Amendment 29.  The                
 motion to adopt Amendment 29 failed with Senators Pearce, Miller,             
 Parnell, and Taylor voting "nay," and Senator Ellis voting "yea."             
                                                                               
 Number 277                                                                    
                                                                               
  CHAIRMAN TAYLOR  announced Amendment 30 was before the committee.            
                                                                               
  MS. ADAIR  commented because of discomfort with the specific                 
 language, DEC would like to propose Amendment 30 as a conceptual              
 amendment.  The purpose for the amendment is to assure that if SB
 41 is not crafted to meet all of EPA's standards, the state not               
 lose primacy of either the Clean Air Act program or the Drinking              
 Water program.  The amendment provides that if DEC is notified by             
 EPA that primacy withdrawal has begun, then the statutory                     
 provisions of SB 41 be set aside for the particular program.                  
                                                                               
  CHAIRMAN TAYLOR  believed Amendment 30 to be unconstitutional                
 because it would require a precedent be set by another entity's               
 actions.                                                                      
                                                                               
  SENATOR ELLIS  withdrew his motion to adopt Amendment 30.  There was         
 no objection.                                                                 
                                                                               
  CHAIRMAN TAYLOR  announced Amendment 31 was before the committee.            
                                                                               
  MS. ADAIR  explained Amendment 31 deletes the language, `To fully            
 implement the privilege and immunity established under AS                     
 09.25.450-09.25.490, the term "environmental or health and safety             
 law" shall be construed broadly.'  DEC sees no reason to "broadly             
 construe" its statutes, as well as municipal ordinances, which are            
 covered under SB 41.  The phrase lends uncertainty to the bill.               
                                                                               
 Number 198                                                                    
                                                                               
  SENATOR PARNELL  asked Ms. Adair what laws would then apply if that          
 section is deleted.   MS. ADAIR  responded SB 41 would apply to Title         
 46 which DEC implements, but she was unclear how municipal                    
 ordinances might be affected.  She added Amendment 31 clarifies SB
 41 would not impact the Underground Injection Control Program; an             
 EPA-delegated program run by the Oil and Gas Conservation                     
 Commission in Alaska.  That program does fall under Title 46 but is           
 not a DEC law.                                                                
                                                                               
  SENATOR PARNELL  expressed reluctance to narrow the language without         
 a clear understanding of the impact.   MS. ADAIR  thought that                
 language, when included in SB 41, was directed to DEC laws.                   
                                                                               
  SENATOR MILLER  cautioned although the Legislature may intend SB 41          
 to apply to all environmental laws, the Judicial Branch could                 
 interpret it more narrowly without the "construed broadly" phrase.            
                                                                               
  SENATOR PARNELL  asked whether operator/owners are making any                
 voluntarily disclosures of violations under federal law to state              
 agencies.   MS. ADAIR  replied affirmatively.   SENATOR PARNELL  asked        
 if SB 41 is limited to Title 46, whether those privileges and                 
 immunities would not attach to violations of federal law.   MS.               
 ADAIR  replied they would continue to attach as far as our state              
 laws are concerned that are implementing federal laws but they                
 would not apply in a federal proceeding.                                      
                                                                               
 Number 113                                                                    
                                                                               
  SENATOR ELLIS  asked if the major producers of the oil industry              
 would like to narrow the scope of the bill so that the UIC Program            
 is not impacted by SB 41.   MS. ADAIR  said the oil industry has not          
 indicated whether it supports the amendment one way or another, but           
 it has expressed concern about SB 41 applying to that program.  She           
 also corrected herself, and noted the UIC Program is not in Title             
 46.                                                                           
                                                                               
  CHAIRMAN TAYLOR  stated he shares Senator Miller's concern that the          
 phrase "broadly construed" speaks to state agencies and the courts,           
 and, as a matter of legislative interpretation, they will always              
 attempt to narrowly construe a grant of immunity unless                       
 specifically stated.                                                          
                                                                               
  MS. SANSONE  thought by defining the word "department" to mean DEC           
 in SB 41, if SB 41 were to apply to the UIC Program under the                 
 Department of Administration, the term "broadly construed" would              
 set up a schism in the bill.   CHAIRMAN TAYLOR  agreed and asked              
 Senator Leman to review that issue.                                           
                                                                               
  CHAIRMAN TAYLOR  noted objection was maintained to the adoption of           
 Amendment 31.  The motion failed with Senator Ellis voting "yea,"             
 and Senators Pearce, Parnell, Miller and Taylor voting "nay."                 
                                                                               
 The committee took up Amendment 32.   CHAIRMAN TAYLOR  clarified the          
 amendment would read:                                                         
 Page 5, line 24:                                                             
 Following "AS 09.24.450 for":                                               
 Insert: "objective facts and"                                              
                                                                               
  MS. ADAIR  explained with the adoption of Amendment 32, page 5,              
 lines 23 and 24 would read:                                                   
  Sec. 09.25.460.  Nonprivileged materials.   (a)  There is                  
 no privilege under AS 09.25.450 for objective facts and                       
 for that part of an audit report that contains the                            
 following:                                                                    
                                                                               
 TAPE 97-16, SIDE B                                                            
                                                                               
  SENATOR MILLER  maintained his objection to adoption of Amendment            
 32.   SENATOR PARNELL  asked for a description of Amendment 32.               
                                                                               
  MARIE SANSONE  explained the self-audit privilege is very similar to         
 a privilege against self-incrimination.  A person cannot be forced            
 to incriminate him/herself, but the evidence of a crime is not                
 privileged.   SENATOR PARNELL  noted the person would not have to             
 disclose the evidence and asked why a company should.   MS. SANSONE           
 responded the defendant would have to turn over the evidence, i.e.            
 O.J. Simpson had to turn over the shoes and glove, etc.  She                  
 explained in this amendment, the term "objective" was used to try             
 to make a distinction between something that might be subjective or           
 opinion, and something that might be an objective fact.  The EPA's            
 policy does not recognize the privilege, partially because the                
 underlying facts are necessary to determine whether the corrective            
 actions have been taken.  One can assure the privileges and                   
 immunities are not being abused only with the objective facts.                
                                                                               
 Number 097                                                                    
                                                                               
  SENATOR MILLER  stated he believes the underlying concept of the             
 bill is to provide incentive for businesses to determine and fix              
 problems.  If, under SB 41, the objective facts of the                        
 determination are not privileged and can be used against the                  
 company, no incentive exists.                                                 
                                                                               
  MS. ADAIR  explained if a company conducted tests on a stream                
 because it was orange and smelly, the fact the stream turned orange           
 would not be privileged, but the test results would be.                       
                                                                               
  SENATOR MILLER  asked if DEC got the information, it would not be            
 privileged.   MS. ADAIR  said that was correct.                               
                                                                               
  SENATOR LEMAN  said he opposed the amendment.                                
                                                                               
 Amendment 32 failed with Senators Pearce, Miller, Parnell and                 
 Taylor voting "nay," and Senator Ellis voting "yea."                          
                                                                               
  SENATOR LEMAN  clarified SB 41 will not apply to information that is         
 required to be disclosed by permit so the previous example would              
 not apply.                                                                    
                                                                               
  Number 141                                                                   
                                                                               
 CHAIRMAN TAYLOR  noted Amendment 33 was before the committee.                 
  SENATOR PARNELL  objected for the purpose of discussion.                     
                                                                               
  MS. ADAIR  stated DEC considers Amendment 33 to be a technical               
 amendment that would allow the court to require disclosure if,                
 after an in-camera review, the court found that the information for           
 which the privilege is claimed is evidence of a violation that                
 caused substantial injury.                                                    
                                                                               
 Amendment 33 failed with Senators Miller, Parnell, Pearce, and                
 Taylor voting "nay," and Senator Ellis voting "yea."                          
 The committee took up Amendment 34.   MS. ADAIR  explained SB 41 says         
 if immunity is not granted, there are certain actions that mitigate           
 any penalty.  The first action is the voluntariness of the                    
 disclosure.  DEC finds that awkward since the basic premise of SB
 41 is voluntary disclosure.  DEC believes what was intended is                
 good-faith actions of the owner/operator in disclosing the                    
 violations.  Amendment 34 uses that language.  There being no                 
 objection to Amendment 34, it was adopted.                                    
                                                                               
 The committee took up Amendment 35.   MS. ADAIR  noted the amendment          
 uses the word "contained" in reference to material in an audit                
 report, rather than material "described" in an audit report.  The             
 word "contained" is broader and will include appendices or other              
 documents that are a part of the audit.  Also, the word                       
 "implementation" has been changed to "findings, conclusions, and              
 recommendations" for the purpose of clarity.  There being no                  
 objection to Amendment 35, it was adopted.                                    
                                                                               
  SENATOR MILLER  moved CSSB 41(JUD) from committee with individual            
 recommendations.  The motion carried with Senators Taylor, Pearce,            
 Miller, and Parnell voting "yea," and Senator Ellis voting "nay."             
                                                                               
  CHAIRMAN TAYLOR  adjourned the meeting at 3:35 p.m.                          
                                                                               
                                                                               
  AMENDMENT #8                                                                 
                                                                               
 Page 6, lines 15-16:                                                          
                                                                               
  Reword subsection (b) as follows:                                            
                                                                               
 The parts of an audit report that consist of information                    
 necessary to determine pipeline rates, tariffs, fares, or                     
 charges are not privileged and are admissible as evidence and                 
 subject to discovery in a proceeding relating to pipeline                     
 rates, tariffs, fares, or charges.  [AN AUDIT REPORT IS NOT                  
 PRIVILEGED AND IS ADMISSIBLE AS EVIDENCE AND SUBJECT TO                       
 DISCOVERY IN A PROCEEDING RELATING TO PIPELINE RATES, TARIFFS,                
 FARES OR CHARGES.]                                                            
                                                                               
  AMENDMENT #25                                                                
                                                                               
 Page 1, line l:                                                               
                                                                               
  Following "environmental audits":                                            
  Delete "and health and safety audits"                                        
                                                                               
 Page 1, line 5:                                                               
                                                                               
  Following "environmental":                                                   
  Delete "and health and safety"                                               
                                                                               
 Page 1, line 8:                                                               
                                                                               
  Following "environmental":                                                   
  Delete "and health and safety"                                               
                                                                               
 Page 1, line 13:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "and health and safety"                                               
                                                                               
 Page 2, line 2:                                                               
                                                                               
  Following "environmental":                                                   
  Delete "and health and safety"                                               
                                                                               
 Page 2, line 7:                                                               
                                                                               
  Following "environmental":                                                   
  Delete "and health and safety"                                               
                                                                               
 Page 2, line 12:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "and health and safety"                                               
                                                                               
 Page 2, line 14:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "and health and safety"                                               
                                                                               
 Page 2, line 20:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "and health and safety"                                               
                                                                               
 Page 2, line 30:                                                              
                                                                               
  Delete "or health and safety"                                                
                                                                               
 Page 4, line 16:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 4, line 19:                                                              
                                                                               
  Delete "or health and safety"                                                
                                                                               
 Page 4, lines 26-27:                                                          
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 5, line 28:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 5, line 29:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 6, lines 4-5:                                                            
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 6, line 8:                                                               
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 6, line 10:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
 Page 6, line 26:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 7, line 7:                                                               
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 7, lines 24-25:                                                          
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 8, lines 21-22                                                           
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 9, line 16:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 9, line 22:                                                              
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 9, lines 26-27:                                                          
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 10, line 11:                                                             
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 10, line 27:                                                             
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 11, lines 2-4:                                                           
                                                                               
  Following "Conservation":                                                    
  Delete ", the Department of Labor, and the Department of                     
   Health and Social Services, as appropriate"                                 
                                                                               
 Page 11, line 5:                                                              
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 11, line 14:                                                             
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 11, line 16:                                                             
                                                                               
  Following "environmental":                                                   
  Delete "or health and safety"                                                
                                                                               
 Page 11, lines 17-18:                                                         
                                                                               
  Following "environmental":                                                   
  Delete "or occupational health and safety"                                   
                                                                               
 Page 11, line 30:                                                             
                                                                               
  Following "environmental"                                                    
  Delete "or health and safety"                                                
                                                                               
 Page 12, line 2:                                                              
                                                                               
  Following "environmental"                                                    
  Delete "or health and safety"                                                
                                                                               
 Page 12, line 5:                                                              
                                                                               
  Following "environmental"                                                    
  Delete "or health and safety"                                                
                                                                               
                                                                               
 AMENDMENT 26                                                                  
                                                                               
 Page 11, lines 2-4:                                                           
                                                                               
  Following "Environmental Conservation":                                      
  Delete ", the Department of Labor"                                           
                                                                               
  AMENDMENT 27                                                                 
                                                                               
 Page 7, lines 3-4:                                                            
                                                                               
  Following "under":                                                           
  Delete all material.                                                         
  Insert:  "(a)(1) - (a)(4) of this section has the burden of                  
 establishing a prima facie case that the exception applies.                  
 (c)  A party seeking disclosure under (a)(5) of this section                 
 has the burden of establishing that the exception applies."                   
                                                                               
  AMENDMENT 28                                                                 
                                                                               
 Page 8, line 16:                                                              
                                                                               
  Following "under":                                                           
  Delete: "an agreement"                                                       
  Insert: "a written claim of confidentiality"                                 
                                                                               
  AMENDMENT 29                                                                 
                                                                               
  Page 9, line 21:                                                             
                                                                               
  Insert a new subsection as follows and renumber all                          
 subsections accordingly:                                                      
   "(b)  There is no immunity under AS 09.25.475 if the                        
  disclosure is in a proceeding relating to pipeline rates,                    
  tariffs, fares, or procedures."                                              
                                                                               
  AMENDMENT 30                                                                 
                                                                               
 Page 10, following line 2:                                                    
 Insert a new section to read:                                                
   "Sec. 09.25.482.  Inconsistencies with federal requirements.                
 (a)  When a state program requires federal approval or                       
 involves the expenditure of federal money or federal                          
 assistance, and there is a conflict between a provision of                    
 this chapter and a federal statute, regulation, or                            
 requirement, then, after completing the procedures in (b) of                  
 this section, the federal statute, regulation, or requirement                 
 shall prevail and the self-audit privilege and immunity                       
 created in this chapter are limited accordingly.                              
 (b)  Upon final written notice from the chief executive                      
 officer of a federal agency that a provision of this chapter                  
 is in conflict with a federal statute, regulation, or                         
 requirement and that federal approval, federal money, or                      
 federal assistance will be denied or withdrawn as a result of                 
 the conflict, the chief executive officer of the state agency                 
 in receipt of the notice shall immediately notify the revisor                 
 of statutes that the self-audit privilege and immunity created                
 by this chapter is limited, so that a revisor's note to that                  
 effect may be published in the Alaska Statutes.  The chief                    
 executive officer of the state agency shall also immediately                  
 cause public notice of the limitation to be given and widely                  
 distributed and provide written notice of the limitation to                   
 all owners and operators submitting notices to the state                      
 agency under AS 09.25.450(b)."                                                
                                                                               
  AMENDMENT 31                                                                 
                                                                               
  Page 12, lines 1-3:                                                          
                                                                               
   Delete all material.                                                        
  AMENDMENT 32                                                                 
                                                                               
  Page 5, line 24:                                                             
   Following "AS 09.24.450 for":                                               
   Insert: "objective facts and"                                               
                                                                               
  AMENDMENT 33                                                                 
                                                                               
  Page 6, line 23:                                                             
   At the beginning of line 23                                                 
   Insert:  "a violation that caused"                                          
                                                                               
  AMENDMENT 34                                                                 
                                                                               
  Page 9, line 25:                                                             
   Delete all material and insert:                                             
    "(1)  the good faith actions of the owner or                               
 operator in disclosing a violation;"                                          
                                                                               
  AMENDMENT 35                                                                 
                                                                               
  Page 10, line 24:                                                            
   Following "part of the material":                                           
   Delete: "described"                                                         
   Insert: "contained"                                                         
                                                                               
  Page 10, line 24:                                                            
   Following "including":                                                      
   Delete:  "implementation issues or"                                         
   Insert:  "findings, conclusions, opinions,                                  
 recommendations, and"                                                         
                                                                               

Document Name Date/Time Subjects