Legislature(1995 - 1996)

03/11/1996 03:37 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          SB 199 ENVIRONMENTAL & HEALTH/SAFETY AUDITS                         
 SENATOR PEARCE moved to adopt the workdraft (f)Lauterback 3/9/96 as           
 their working document.  There were no objections and it was so               
 MIKE PAULEY, Staff to Senator Leman, said the new committee                   
 substitute incorporates certain recommendations they received from            
 both the business community and the administration.  Many changes             
 are technical matters.  They have added clarifying language in the            
 area of privilege saying that if one part of an audit report is               
 disclosed for any reason, the privilege still applies to the                  
 remaining portions of the audit report.  This is necessary because            
 some federal courts have adopted a four part test for determining             
 claims of privilege on the basis of self critical analysis.                   
 They have added to the list of nonprivilege materials such                    
 information that is required in order to obtain, maintain, or renew           
 a license and also such information that is required under a                  
 contract with the State.  These changes were made to address                  
 concerns of administration representatives.                                   
 In the area of immunities they clarified that a regulated entity              
 which voluntarily reports instances of noncompliance is not only              
 eligible for immunity for the violations reported, but also                   
 violations that are based on the facts disclosed and which were               
 unknown to the person making the disclosure.  This change was made            
 because of the concern that a person might not be covered by                  
 immunity for violations that were discovered as a result of a                 
 voluntary disclosure, but were not declared as violations in the              
 disclosure.  This possibility could be a powerful disincentive to             
 voluntarily report violations.                                                
 An extra requirement has been added for immunity.  A regulated                
 entity is required to disclose under terms of the confidentiality             
 agreement that part of an audit report which deals with the plan              
 for compliance, but only if the information is requested by the               
 appropriate regulatory agency.                                                
 A new paragraph has been added to the bill clarifying that a                  
 regulatory agency may not initiate an investigation of a regulated            
 entity based solely on the fact that the entity has provided a                
 notice of intent to perform a self audit.                                     
 He said that the circumvention by regulation prohibited regulation            
 was deleted because it is already covered in another part of State            
 SENATOR LEMAN noted that made three major changes that were                   
 requested by DEC.                                                             
 SENATOR LEMAN noted that the circumvention regulation was addressed           
 in AS44.62.030.  He said they wanted to make sure it was covered              
 not only by regulation, but by permit and other administrative                
 action as well.  They do not want to do things that are contrary to           
 DWIGHT PERKINS, Special Assistant, Department of Labor, said in the           
 hearing on this bill last week Mr. Paul Grossi, Director, Workers             
 Compensation, and Mr. Jeff Carpenter, Occupational Safety both                
 testified why they have concerns.  The Commissioner didn't have a             
 problem with the legislation prior to introduction of the bill.               
 After going through the bill they found that it does significantly            
 change their role in Workers Compensation.  On March 5 they had a             
 letter prepared reviewing their concerns and he noted it was in               
 their packets.  He said they would be happy to work with the                  
 TAPE 96-26, SIDE B                                                            
 Number 582                                                                    
 SENATOR LEMAN commented he was frustrated that they were notified             
 of concerns after the first hearing when the bill had been out for            
 60 days.  MR. PERKINS responded that during the first hearing the             
 DOL and DEC did speak, but they ran out of time and the Department            
 of Labor didn't go on record.  SENATOR LEMAN apologized.                      
 MR. WHEELER, Alaska Environmental Lobby, commented that none of               
 their concerns had been addressed in this CS.  He said they are               
 worried about the health and safety of the citizens of Alaska.                
 This legislation shows a blatant disregard for the health of the              
 public.  The bill seems to make it harder for DEC and other State             
 agencies to do their jobs by extending the right of privilege to              
 information disclosed in self audits, by allowing industry to get             
 around working toward compliance by excusing persons ignorant of              
 the law and granting immunity for violations which industry hasn't            
 even acknowledged breaking.                                                   
 MR. WHEELER said there was little evidence for protection against             
 bad actors.  There's not much talk about repeat violators.  They              
 are also concerned with interjecting "substantial" when referring             
 to injury on page 4 of the summary of changes.                                
 SENATOR LEMAN said the intent of this legislation was to get people           
 to come in compliance with environmental laws and he thought the              
 bill accomplished that.  He wanted to address some of his concerns.           
 Number 525                                                                    
 JANICE ADAIR, Director , Division of Environmental Health, said she           
 continues to have concerns with the privilege and that immunity is            
 provided for criminal activity, and continue to have concerns with            
 the broad definition of environmental health and safety law.  She             
 also pointed out that in the section regarding substantial harm and           
 substantial injury she had pointed out that there was                         
 SENATOR TAYLOR asked if there was anyone here from ADF&G who wanted           
 to address the $66,500 fiscal note submitted with the bill.  He               
 asked specifically why they would need additional staff to                    
 encourage people to come into compliance.                                     
 GERON BRUCE, ADF&G, said they are looking at their authority under            
 AS16.05.870 which regards anadromous streams, crossing, and other             
 activities in the streams.  Because of the broad application of               
 privilege and immunity to information provided by this legislation            
 they feel they would have to have some increased effort to develop            
 their own sources of information when they suspect violations are             
 occurring.  In the past they have enjoyed good relationships with             
 the companies in the field and they have gone to them for a lot of            
 information, but they don't think that is likely to continue under            
 this legislation.                                                             
 SENATOR TAYLOR countered that the self audit would be an effort to            
 comply and would only impact the law if, in fact, it did.                     
 MR. BRUCE said he thought they were seeing things differently                 
 developing the balance between allowing private industry to conduct           
 their business and our responsibility to protect the public                   
 resources.  They are not eager to prosecute people.  They have very           
 few prosecutions under their authorities to protect anadromous fish           
 streams.  They generally try to work with operators up front to               
 prevent problems and when problems are detected to then work with             
 them to correct them.  Because of the broad nature of the                     
 legislation some operators may not be willing to cooperate the same           
 way they have in past.  The Department may have to develop                    
 independent information where they think violations have occurred,            
 because they will see this as a way to shield themselves from                 
 actions which were not in compliance.                                         
 SENATOR LEMAN noted that the protection of the self audit only                
 applies if the party who does the audit performs immediate                    
 compliance with the law.  He thought the Committee should be seeing           
 negative fiscal notes from all departments.                                   
 SENATOR TAYLOR asked for an example of how this could be used as a            
 shield.  In response MR. BRUCE explained that someone going to                
 engage in some kind of activities in an anadromous fish stream is             
 supposed to notify the Department, supply plans about their                   
 intentions, and then receive a permit from them.  After that, they            
 pretty much operate on their own.  For some reason, if they                   
 deviated from the terms of the permit that resulted in some damage            
 of the stream, they could conduct one of these audits, disclose the           
 information, then perhaps engage in some activity to correct the              
 problem.  The State would be in the position of arguing whether or            
 not their corrective action was actually equal to what they thought           
 it should be.                                                                 
 SENATOR TAYLOR said he thought their department would probably be             
 consulted on what was the best remedial action.  They don't get the           
 shield unless they haven't cleaned up their act.                              
 MR. BRUCE said their fiscal note addresses the cost of collecting             
 information to demonstrate that a violation has occurred since                
 under this legislation they can't get the information from the                
 operator themselves if they have conducted an audit and the                   
 information is then confidential.                                             
 SENATOR LEMAN commented that he thought they had the capacity to              
 put in permit conditions which are not protected under the audit.             
 MR. BRUCE said he thought it would be helpful for his staff to get            
 together with some of their field people to walk them through some            
 other examples.                                                               
 Number 312                                                                    
 SENATOR TAYLOR asked if he had conferred with other States to see             
 if they needed additional funding for self audit programs.  MR.               
 BRUCE said they didn't and one of the reasons they didn't contact             
 the state of Texas is there's so much difference between the two              
 states.  Texas, for instance, doesn't have salmon resources.  He              
 wasn't sure their experience would help us that much with the                 
 unique laws we have on the books to protect our salmon resources.             
 Number 299                                                                    
 SENATOR HOFFMAN moved to adopt the Department of Labor amendment to           
 add "except for worker's compensation proceedings."  There were no            
 objections and it was so ordered.                                             
 SENATOR TAYLOR moved to pass CSSB 199 am from committee with                  
 individual recommendations.  There were no objections and it was so           

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