03/09/2005 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB103 | |
| HB187 || HB188 | |
| HB149 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 103 | TELECONFERENCED | |
| *+ | HB 187 | TELECONFERENCED | |
| *+ | HB 188 | TELECONFERENCED | |
| = | HB 149 | ||
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
March 9, 2005
1:15 p.m.
MEMBERS PRESENT
Representative Lesil McGuire, Chair
Representative Tom Anderson
Representative Pete Kott
Representative Les Gara
Representative Max Gruenberg
MEMBERS ABSENT
Representative John Coghill
Representative Nancy Dahlstrom
OTHER LEGISLATORS PRESENT
Representative Harry Crawford
COMMITTEE CALENDAR
HOUSE BILL NO. 103
"An Act requiring an actionable claim against the state to be
tried without a jury."
- HEARD AND HELD
HOUSE BILL NO. 187
"An Act establishing the Alaska capital income account within
the Alaska permanent fund; relating to deposits into the
account; relating to certain transfers regarding the Amerada
Hess settlement to offset the effects of inflation on the Alaska
permanent fund; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 188
"An Act establishing the State of Alaska Capital Corporation;
authorizing the issuance of bonds by the State of Alaska Capital
Corporation to finance capital improvements in the state; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 149
"An Act relating to further regulation of the sale, possession,
and delivery of certain chemicals and precursors used in the
manufacture of methamphetamine."
- MOVED CSHB 149(JUD) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 103
SHORT TITLE: CLAIMS AGAINST THE STATE
SPONSOR(S): REPRESENTATIVE(S) KELLY
01/24/05 (H) READ THE FIRST TIME - REFERRALS
01/24/05 (H) STA, JUD, FIN
03/03/05 (H) STA AT 8:00 AM CAPITOL 106
03/03/05 (H) Moved Out of Committee
03/03/05 (H) MINUTE(STA)
03/04/05 (H) STA RPT 1DNP 5NR
03/04/05 (H) DNP: GRUENBERG;
03/04/05 (H) NR: GARDNER, GATTO, RAMRAS, ELKINS,
SEATON
03/09/05 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 187
SHORT TITLE: AMERADA HESS INCOME; CAPITAL INCOME ACCT.
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
02/28/05 (H) READ THE FIRST TIME - REFERRALS
02/28/05 (H) JUD, FIN
03/09/05 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 188
SHORT TITLE: STATE OF AK CAPITAL CORP.; BONDS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
02/28/05 (H) READ THE FIRST TIME - REFERRALS
02/28/05 (H) JUD, FIN
03/09/05 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 149
SHORT TITLE: SALE OF METHAMPHETAMINE AND PRECURSORS
SPONSOR(S): REPRESENTATIVE(S) RAMRAS
02/14/05 (H) READ THE FIRST TIME - REFERRALS
02/14/05 (H) JUD, FIN
03/07/05 (H) JUD AT 1:00 PM CAPITOL 120
03/07/05 (H) Heard & Held
03/07/05 (H) MINUTE(JUD)
03/09/05 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
HEATH HILYARD, Staff
to Representative Mike Kelly
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 103 on behalf of the sponsor,
Representative Kelly.
CHERYL FRASCA, Director
Office of Management & Budget (OMB)
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Opened the presentation of HB 187 [and HB
188] on behalf of the administration.
MICHAEL BARNHILL, Assistant Attorney General
Commercial/Fair Business Section
Civil Division (Juneau)
Department of Law (DOL)
Juneau, Alaska
POSITION STATEMENT: Assisted with the presentation of HB 187
[and HB 188] on behalf of the administration.
DEVON MITCHELL, Debt Manager
Treasury Division
Department of Revenue (DOR)
Juneau, Alaska
POSITION STATEMENT: Assisted with the presentation of HB 187
and HB 188 on behalf of the administration.
REPRESENTATIVE JAY RAMRAS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 149.
JANE PIERSON, Staff
to Representative Jay Ramras
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 149, explained the
proposed CS, Version S, and responded to questions during
discussion of proposed amendments.
DEAN J. GUANELI, Chief Assistant Attorney General
Legal Services Section-Juneau
Criminal Division
Department of Law (DOL)
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 149, responded to
questions regarding the proposed CS, Version S, and proposed
amendments.
ACTION NARRATIVE
CHAIR LESIL McGUIRE called the House Judiciary Standing
Committee meeting to order at 1:15:08 PM. Representatives
McGuire, Kott, Gruenberg, and Gara were present at the call to
order. Representative Anderson arrived as the meeting was in
progress. Representatives Coghill and Dahlstrom were excused.
HB 103 - CLAIMS AGAINST THE STATE
1:16:00 PM
CHAIR McGUIRE announced that the first order of business would
be HOUSE BILL NO. 103, "An Act requiring an actionable claim
against the state to be tried without a jury."
1:16:22 PM
HEATH HILYARD, Staff to Representative Mike Kelly, Alaska State
Legislature, sponsor, said on behalf of Representative Kelly
that HB 103 provides for a simple change to the existing [law]
that says claims against the state shall be tried by a jury;
with the change proposed by HB 103, such claims shall be tried
by a judge without a jury. He pointed out that the proposed
change would return the state to the same procedure it had prior
to 1975, when Senator John Butrovich introduced legislation
providing for the current procedure. He also pointed out that
in 1975, the state was a party in University of Alaska v.
National Aircraft leasing, Ltd., 536 P.2d 121, 128-29 (Alaska
1975), and relayed that according to information he received
from a member of the 1975 University of Alaska Board of Regents,
Senator Butrovich introduced the aforementioned legislation in
response to that case. Mr. Hilyard said that he and
Representative Kelly have spoken to general counsel for the
University of Alaska, who indicated that she has no problem with
the proposed change. In addition, he relayed, he and the
sponsor were told by the Alaska Academy of Trial Lawyers (AATL)
that it remains neutral on the issue.
CHAIR McGUIRE, after ascertaining that no one else wished to
testify, closed public testimony on HB 103.
1:18:57 PM
REPRESENTATIVE GARA relayed that he has a lot of concerns
regarding HB 103 and would like to have more discussion on it
with all committee members present.
CHAIR McGUIRE noted that the members who were absent have
requested that the bill be heard another time when they can
attend. She suggested that today, members that are present can
provide the sponsor's staff with a list of items they'd like
more information on for the bill's next hearing.
REPRESENTATIVE GRUENBERG mentioned that HB 103 was discussed in
the House State Affairs Standing Committee; that he has concerns
with the bill; and that when the bill was reported out of the
House State Affairs Standing Committee, he voted "do not pass."
He said he would like to have testimony reopened [when the bill
is heard next].
CHAIR McGUIRE relayed that she would do so.
REPRESENTATIVE GRUENBERG opined that juries tend to favor
defendants, and offered his understanding that in the
aforementioned case, it was the University of Alaska that had
asked for a trial by jury.
[Chair McGuire turned the gavel to over to Representative Kott.]
REPRESENTATIVE KOTT asked Representative Gara to explain his
concerns.
1:22:11 PM
REPRESENTATIVE GARA Opined that there's more chance of a jury
getting a case right than there is of a judge getting it right.
He added:
What happens in the dynamic of a jury trial is that
certain people miss certain evidence, and they all get
in the room and then one will say, "Do you remember
this part," and then another will say, "Do you
remember this part." And I think when you put 12
heads together - or 6 heads, I think, ... [in] a
district court case - ... you have more of a chance of
getting it exactly right than you do if you're one
person. So I think jury trials are better than judge
trials - that's my personal belief. I think the
constitutional framework is that people get to be
judged by their peers, and I think the value of the
jury system is incredible, in my view.
And so I don't like taking away the right of the
community to come in and judge the conduct of the
state, judge the conduct of the plaintiff. ... I would
be more scared, as a litigant, of a decision by a
judge than I would [be of] a decision by a jury. So I
think the jury process is much stronger than letting
just a judge decide a case. It's also faster. What
happens is, judges, when they decide cases, like any
sort of person who's overwhelmed with work, they'll
sit on a case during the trial and they feel compelled
to ... [provide] a written decision, and it can be six
months or longer to get a decision out of a judge
after the trial is over. [In comparison] a jury
returns the verdict pretty quickly. ...
REPRESENTATIVE GARA concluded by saying that he likes the jury
system.
REPRESENTATIVE GRUENBERG offered his belief that with a jury
verdict - unless there is something very unusual, or the
evidence could not possibly support the factual decision of a
jury, or the jury instructions are erroneous - it is very hard
to overturn a judgment by jury. On the other hand, he remarked,
judges enter factual findings and conclusions of law, "and
deference is given to them," but a decision by a judge can be
picked apart on appeal much more easily than can a jury's
decision.
REPRESENTATIVE KOTT noted that the committee would be holding
the bill over.
[Representative Kott returned the gavel to Chair McGuire.]
REPRESENTATIVE GARA said he doesn't find it useful to hear only
one side of a story and then make a decision based only on that
one side. So although members' packets contain a detailing of
four cases against the state, the information is from the
state's perspective, and so he is disinclined to rely on that
information without hearing the cases from the other side's
perspective. He acknowledged, however, that although he would
like to hear both sides of the story for each of the four cases
used as examples, the committee, as a practical matter, cannot
conduct "four trials on these cases"; instead, he is just
pointing out that anecdotal information from one side in
litigated cases is often not that useful.
CHAIR McGUIRE suggested that members or other interested parties
have a bit more time to present information from both sides of
the aforementioned cases. She stated that HB 103 would be held
over.
REPRESENTATIVE GARA asked Mr. Hilyard how the bill relates to
the [Alaska State] Constitution.
MR. HILYARD relayed that Article I, Section 16, of the Alaska
State Constitution says:
Civil Suits; Trial by Jury. In civil cases where the
amount in controversy exceeds two hundred fifty
dollars, the right of trial by a jury of twelve is
preserved to the same extent as it existed at common
law. The legislature may make provision for a verdict
by not less than three-fourths of the jury and, in
courts not of record, may provide for a jury of not
less than six or more than twelve.
MR. HILYARD also relayed that Article II, Section 21, of the
Alaska State Constitution says:
Suits Against the State. The legislature shall
establish procedures for suits against the State.
MR. HILYARD suggested that the language of Article II, Section
21, can be interpreted to mean that the legislature has the
discretion to determine how claims against the state will be
handled.
[HB 103 was held over.]
HB 187 - AMERADA HESS INCOME; CAPITAL INCOME ACCT.
HB 188 - STATE OF AK CAPITAL CORP.; BONDS
1:28:10 PM
CHAIR McGUIRE announced that the next order of business would be
a hearing on two bills: HOUSE BILL NO. 187, "An Act
establishing the Alaska capital income account within the Alaska
permanent fund; relating to deposits into the account; relating
to certain transfers regarding the Amerada Hess settlement to
offset the effects of inflation on the Alaska permanent fund;
and providing for an effective date."; and HOUSE BILL NO. 188,
"An Act establishing the State of Alaska Capital Corporation;
authorizing the issuance of bonds by the State of Alaska Capital
Corporation to finance capital improvements in the state; and
providing for an effective date."
The committee took an at-ease from 1:29 p.m. to 1:30 p.m.
1:30:01 PM
CHERYL FRASCA, Director, Office of Management & Budget (OMB),
Office of the Governor, explained that HB 187 is the
infrastructure for the [governor's] proposal by which the
governor's budget would fund approximately $340 million worth of
capital projects. She relayed that others from the
administration would speak to the provisions of [HB 187 and HB
188] and to the kind of structure that is necessary in order to
issue bonds and then use the earnings from the settlement of the
State v. Amerada Hess, et al. 1 JU-77-847 Civ. (Superior Court,
First Judicial District) case to pay for the debt.
1:31:09 PM
MICHAEL BARNHILL, Assistant Attorney General, Commercial/Fair
Business Section, Civil Division (Juneau), Department of Law
(DOL), explained that the state filed suit against the oil
companies in 1977. The litigation proceeded for many, many
years, and when the case was on its way to trial in the late
1980s, objections were raised, on the basis of bias, regarding
allowing Alaskans to sit on the jury and as judges on the case,
since they could potentially benefit from any judgment arrived
at, because a portion of the judgment would go into the
permanent fund and in turn be distributed to them via permanent
fund dividends (PFDs). This issue was litigated in multiple
courts, before multiple judges, and culminated in legislation
that altered Title 37 - specifically the statutes pertaining to
the permanent fund - and provided that any monies that came from
the Amerada Hess litigation would be segregated in the permanent
fund so that any earnings on those monies would not flow into
the (PFD) program but would instead be rededicated to the
principal of the permanent fund.
MR. BARNHILL relayed that the issue has been raised regarding
whether the state can now change that statute, and the DOL is of
the opinion that such can be done, though there are policy
implications inherent in doing so. The attorneys that worked on
the Amerada Hess litigation are concerned about the [public]
perception of repealing the statute if there were to be a big
case in the future that could potentially benefit the permanent
fund, since the same aforementioned bias issue could again be
raised. If the state gets the reputation of enacting "these"
statutes and then repealing them, the public's perception of
that could be of concern, but that is a policy issue, not a
legal issue. In response to questions, he relayed that the
aforementioned statute is in Title 37.13.145(d), which was
enacted in 1989.
REPRESENTATIVE GRUENBERG said he wants a copy of a written legal
opinion by the DOL addressing the issue of whether the state can
change the statute. He asked whether the DOL or any one else
has any opinions to the contrary.
MR. BARNHILL said the DOL did not, but he did not know whether
others did.
CHAIR McGUIRE, noting that the legislature has the authority to
change statute, suggested that the issue is really whether the
spirit of agreement is incorporated into the statute and how
that impacts future negotiations.
1:36:04 PM
MR. BARNHILL said that there was never any agreement "to do
this," rather it was just a solution to the concern regarding
the potential bias of judges and jurors. He relayed that the
court also came up with its own solution in 1989, which was to
amend both the Alaska Rules of Civil Procedure and the Alaska
Rules of Criminal Procedure to provide that the mere receipt of
a PFD would not constitute a challenge for cause; these changes
took effect in 1990 via Alaska Supreme Court Order 1013, which
amended Rule 47(c) of the Alaska Rules of Civil Procedure and
Rule 24(c) of the Alaska Rules of Criminal Procedure. He added
that because of a later amendment to Rule 47, the change brought
about by the aforementioned Supreme Court Order can now be found
under Rule 47(c)(13).
REPRESENTATIVE GRUENBERG offered his interpretation of the
[rule] of necessity as being, "if everybody's disqualified,
nobody is disqualified," and said that court systems have used
the rule of necessity [when there are] challenges, for example,
to the federal judicial retirement system, where every federal
judge in the country would be disqualified. He asked whether
the DOL has any feeling about having the rule of necessity
statutorily enacted.
MR. BARNHILL declined to express an opinion on that issue at
this time.
REPRESENTATIVE GARA opined that it would be a travesty to base
policy on what he considers to be a frivolous argument made by
oil company attorneys 15 years ago, and noted that the [Alaska]
Supreme Court has ruled, via the adoption of court rule changes,
that it is okay for somebody to sit on a jury even though he/she
gets a dividend. He asked for details regarding the court
rulings on the Amerada Hess case.
1:40:10 PM
MR. BARNHILL said there were several court rulings and he would
provide the committee with a list. In response to additional
questions, he offered his understanding that most of the rulings
were in favor of not disqualifying the judge, and said he would
research the issue further but didn't think there were any
rulings favoring the oil company's position.
MR. BARNHILL, in response to further questions, relayed that the
statutory segregation of funds was done to address the perceived
problem regarding bias, so as to enable the case to go forward;
that Judge Walter Carpeneti issued a "notice of intention to
grant motion for disqualification," indicating that at that
point in time he was in favor of the oil companies' position,
but he never did grant the motion - it was in the wake of that
notice that the aforementioned legislation was enacted; and that
the U.S. Court of Appeals 1994 case, Exxon Corporation v. Harold
C. Heinze; Charles E. Cole; Ronald Swanson; James E. Eason, did
not address the bias issue, but did say, "Because the parties
have not yet developed a factual record on the value of the
remaining claims or their potential impact - if any - on Alaska
permanent fund dividends, we cannot evaluate Exxon's bias claims
on their merits."
CHAIR McGUIRE noted that that case also says: "We express no
opinion on the merits of the parties' arguments regarding
abstention and the rule of necessity. The district court order
dismissing Exxon's complaint with prejudice is vacated, and the
case is remanded to the district court to dismiss without
prejudice."
REPRESENTATIVE GARA asked how much the state received from the
Amerada Hess litigation.
MR. BARNHILL suggested that the OMB could better address that
question, but offered his belief that the total amount is [in
excess] of $250 million and that with interest compounding over
the years the amount is now [in excess] of $400 million.
1:45:09 PM
DEVON MITCHELL, Debt Manager, Treasury Division, Department of
Revenue (DOR), referred to a several-page handout in members'
packets and indicated that it contains information regarding
both HB 187 and HB 188, the general ideas of which flow in
concert. House Bill 187 would allow earnings from the Amerada
Hess settlement to flow into the proposed Alaska capital income
account. House Bill 188 creates the State of Alaska Capital
Corporation, which would have the ability to issue up to $350
million in corporation obligation bonds that would be used to
fund the state's capital projects. Further, the potential
source of payment of operating leases, which the corporation
would enter into with agencies that would benefit from the
projects, would be the Alaska capital income account, though
initially the Alaska capital income account would also be used
to fund the establishment of the State of Alaska Capital
Corporation.
MR. MITCHELL said that the goal of this proposed structure is to
allow the state to move forward and leverage "this" fund and
"achieve this project list" in a manner that would allow tax-
exempt bonds to be used as the funding source while maintaining
the ability to invest money in a taxable fashion. The bond
structure proposed [by HB 188] would be a combination of
"security features and flexibility features" to allow for the
adjustment of annual payments. Initially the DOR was
considering a structure that would have a 40-year interest-only
structure with a final maturity that would have a bullet, or
balloon, payment, and the DOR would have the flexibility in the
interim years to retire debt as receipts of the corporation
might exceed the nominal interest payment amounts. One key
security feature built into the corporation is the "moral
obligation" pledge of the state on a debt service reserve fund.
MR. MITCHELL suggested that flowcharts on pages 7-8 of the
aforementioned handout can help members visualize the governor's
proposal, which, in the latter stages, would provide for monies
to be appropriated annually into a revenue fund and from there
flow into either a debt service reserve fund, a bond redemption
fund, or towards the cost of operations. Also, issues of
corporate bonds would have flexible amortization and would "fund
up" the construction fund, which would be used for the [capital]
projects identified in [members' packets] through the normal
spending process the state uses for other capital projects.
Investors would be repaid from the cycling of money through the
bond redemption fund, which would be funded essentially a year
in advance of actual amortization requirements, allowing it to
[function through] potentially low appropriation years.
MR. MITCHELL referred to charts on pages 9-12 of the
aforementioned handout, and said they show "some modeling of how
this might work, with some assumptions that are currently being
used." Referring specifically to page 9, he said monies in the
Alaska capital income account would be invested in a manner
similar to other Alaska Permanent Fund Corporation (APFC)
investments, using the same asset allocation; the anticipated
realized earnings rate is 7.04 percent, which is differentiated
from the total return expectation of 7.61 percent for "the
corporation." He said that at 7.04 percent, there will be an
annual transfer of approximately $29.9 million.
MR. MITCHELL said page 10 of the handout shows the annual lease
appropriation received by the State of Alaska Capital
Corporation's revenue fund; that the amount [in column 4] is
equivalent to the earnings rate shown on page 9, column 5; that
[the revenue fund] has a borrowing rate of 6 percent, which he
characterized as high; that [the revenue fund] has a
reinvestment rate of corporate assets of 2 percent because they
would have been invested in a more liquid fashion. Referring to
the column on page 10 labeled, "Outstanding Bonds," he said it
might be helpful to look at page 12, which shows a net funding
of the project list at $343 million - this is from the amount
listed in the aforementioned Outstanding Bonds column beginning
in 2006; the $343 million has nominal interest payments
associated with it that were derived from the 6 percent
borrowing rate.
MR. MITCHELL added:
We have contributions of earnings on fund balance that
go into the calculation, transfers out; the transfer
out in 2006 would be to fund up the debt service
reserve ... fund - and then an ending balance column.
And if [you] look down, you can see the flexible
nature, where, in 2008, we begin paying on principal
with the $21 million figure, shown in 2008, and that
begins diminishing the outstanding bond amount and
diminishing the nominal payment requirement.
MR. MITCHELL said the DOR anticipates further refinement of the
bills' leveraging, security, and structure provisions as they
move through the process; as that happens, the DOR would
continue to explore structuring possibilities, including
variable rate debt, to ensure the highest probability that debt
service would be paid from receipts of the State of Alaska
Capital Corporation rather than from any other funding source.
1:53:41 PM
REPRESENTATIVE GARA offered his understanding that the proposal
would "set free" about $30 million, per year, of permanent fund
earnings that would then be put into the general fund (GF).
MR. MITCHELL replied:
The structure would allow for the earnings of the
Amerada Hess [settlement], rather than to become
principal, to flow over to the earnings reserve. And
so it would not go to the general fund, but rather to
the earnings reserve [in an account] called the Alaska
capital income account ... - available for
appropriation.
MR. MITCHELL indicated that the amount [available for
appropriation] is estimated to be about $30 million a year.
REPRESENTATIVE GARA asked whether the bonds that would be issued
would be based on the value of the entire Amerada Hess portion
of the permanent fund.
MR. MITCHELL replied:
The idea to leverage is not necessarily linked,
specifically, to ... a pledge of principal that
resides in [what]... we're calling the Amerada Hess
settlement. It would be a leveraging of a public
corporation of the State of Alaska, supported by
operating leases that that public corporation would
enter into, that could be paid from earnings of this
settlement that would flow through the Alaska capital
income account.
MR. MITCHELL characterized this as an important feature of the
potential leveraging, because one can't have a pot of money that
is pledged to a leveraging, and then issue bonds on a tax exempt
basis, since such is not allowed under the U.S. tax code.
REPRESENTATIVE GARA asked whether the state would be pledging
part of the permanent fund in any way to support the bonds.
MR. MITCHELL said no. He reiterated that the corporation's
revenues derived from operating leases would be pledged. He
indicated that such would be considered a less credit-worthy
pledge than the state might otherwise provide through other
financing vehicles, but by implementing a "moral obligation" on
the debt service reserve fund, even though such won't be relied
upon as a funding source, it creates a backstop, or a minimum
credit threshold, for leveraging, which is anticipated to be in
"the A ratings category."
REPRESENTATIVE GARA raised the issue of defaulting on bond
obligations. He asked what the bond issuer would attach in case
of such a default.
MR. MITCHELL said the bond issuer could not attach anything
other than the revenues of [the State of Alaska Capital]
Corporation. In the event of a failure to pay debt service, the
[proposed] statute requires the corporation to request that the
legislature replenish the [debt service] reserve fund from other
funding sources; that is what constitutes "moral obligation," he
explained, noting that other entities in state government
already have the authority to issue moral obligation debt.
1:59:01 PM
REPRESENTATIVE GARA said he still has questions regarding the
bonding portion of the governor's proposal.
CHAIR McGUIRE said that HB 187 and HB 188 would be held over and
brought back at a future meeting.
HB 149 - SALE OF METHAMPHETAMINE AND PRECURSORS
2:00:07 PM
CHAIR McGUIRE announced that the final order of business would
be HOUSE BILL NO. 149, "An Act relating to further regulation of
the sale, possession, and delivery of certain chemicals and
precursors used in the manufacture of methamphetamine." [Before
committee was the proposed committee substitute (CS) for HB 149,
Version 24-LS0596\L, Luckhaupt, 3/4/05, which was adopted as a
work draft on 3/7/05; in members' packets was a proposed CS for
HB 149, Version 24-LS0596\S, Luckhaupt, 3/9/05.]
REPRESENTATIVE JAY RAMRAS, Alaska State Legislature, sponsor,
thanked legislative staff and Department of Law staff for their
assistance with the creation of the proposed CS, Version S.
2:01:27 PM
JANE PIERSON, Staff to Representative Jay Ramras, Alaska State
Legislature, sponsor, on behalf of Representative Ramras,
explained the changes in Version S. She indicated that page 3,
line 7, now provides that the crime of endangering the welfare
of a child in the first degree would be a class B felony. Page
5, lines 3 and 7-8, now provides that the mental intent under
proposed AS 11.71.020(a)(6)(A) and (B) be one of reckless
disregard. Page 5, lines [17-23], now references 6 grams
instead of 9 grams, [and provides that the possession of
ephedrine, phenylpropanolamine, iodine, and crystal iodine -
among other chemicals - are prima facie evidence that the person
intended to manufacture, aid in the manufacture of, or deliver
to another person who intends to manufacture methamphetamine].
MS. PIERSON relayed that page [6, lines 1-14,] now uses terms,
for a person who possesses the listed chemicals, that are
consistent with those defined on pages [8-10]. Also, terms for
iodine distributor have been added to page 6 [lines 8-14], and
page 6, line 18, now correctly references proposed AS
11.71.020(a)(2)-(6). Page 8 [lines 28-31] now contains terms
for retail distributors and manufacturers that are consistent
[with other parts of the bill]. Version S no longer includes
Pediatric gel and liquid forms of pseudoephedrine in the list of
exceptions, since these products may start being used by
methamphetamine manufacturers if pseudoephedrine in tablet form
becomes more difficult to acquire in quantity. Version S no
longer requires manufacturers, wholesalers, or retail sellers of
pseudoephedrine to register with the Department of Public Safety
(DPS), since federal registration requirements already exist
under 21 U.S.C. 821.
MS. PIERSON relayed that [Section 11 of Version S] now includes
products containing ephedrine and phenylpropanolamine; now
specifies that the identification required to purchase the
chemicals listed in the bill must be valid government-issued
photographic identification; and now specifies that the logbook
must include the type of the aforementioned identification used
as well as the identification number on that ID card.
[Chair McGuire turned the gavel over to Representative
Anderson.]
MS. PIERSON relayed that page 10 [line 12] now includes iodine
and iodine crystals in the list of chemicals that must be kept
behind the counter.
2:06:15 PM
MS. PIERSON, in response to queries, explained that definitions
for "dispenser" and "retail distributor" were not included in
Version S because the wording [in other parts of the bill] had
been changed, and relayed that Version S now defines "readily
retrievable" in part as:
if the registration address is outside the state,
"readily retrievable" means records must be furnished
within three working days by courier, facsimile, mail,
or electronic mail
MS. PIERSON, in response to a further query, relayed that
Version S does not include a civil penalty for violations of the
proposed pseudoephedrine laws.
REPRESENTATIVE GRUENBERG asked why the crime of [endangering a
child in the first degree] should be a class B felony, and why
the mental intent [under proposed AS 11.71.020(a)(6)(A) and (B)]
has been changed to one of reckless disregard.
REPRESENTATIVE RAMRAS opined that the crime of endangering a
child in the first degree by exposing him/her to the toxic
materials and behavior inherent in the manufacture of
methamphetamine should be a class A felony, but acknowledged
that such a penalty might not be supportable, since other
behaviors resulting in child endangerment currently result in a
lesser penalty. He indicated that he is open to looking at that
issue further.
[Representative Anderson returned the gavel to Chair McGuire.]
REPRESENTATIVE RAMRAS, with regard to the question of why the
mental intent [standard] has been changed, offered his
understanding that "reckless" is a "lesser" term.
MS. PIERSON relayed that the Department of Law (DOL) had
indicated a preference for that standard.
2:10:35 PM
DEAN J. GUANELI, Chief Assistant Attorney General, Legal
Services Section-Juneau, Criminal Division, Department of Law
(DOL), indicated that the mental intent was changed because of a
proof problem, and explained that what [law enforcement
officers] are finding is that methamphetamine users are often
trading the raw materials that go into the manufacture of
methamphetamine - the precursors, the pseudoephedrine, the
phosphorus, the iodine - for the finished product. And when
that occurs, the DOL believes that it will be difficult to prove
that the person purchasing the raw ingredients to give or trade
to someone else knew that those substances were going to used to
manufacture methamphetamine. So by having the mens rea be one
of reckless disregard - where one is aware of a risk but
consciously disregards it - it will be easier to prosecute
someone who purchases or possesses the raw materials for the
purpose of providing them to a methamphetamine manufacturer.
MR. GUANELI, in response to further questions, relayed that the
crime of misconduct involving a controlled substance in the
second degree is a class A felony, and opined that the delivery
of the precursor chemicals listed in proposed AS
11.71.020(a)(6)(A) and (B) of Version S should have the mens rea
of "reckless disregard" because AS 11.71.020 pertains to
schedule IA controlled substances, among which are heroin and
other opium-based products. He indicated that [proposed AS
11.71.0202(d) of Version S] also pertains to schedule IA
controlled substances.
REPRESENTATIVE GRUENBERG expressed concern about making
wholesale increases to the state's criminal penalties, and
opined that the legislature should be consistent [with regard to
the type of penalty that's imposed for similar crimes].
MR. GUANELI explained that [proposed AS 11.71.020(d)] pertains
to a possessory offense, and offered his belief that it wouldn't
make sense to say that someone possesses the chemicals used to
manufacture methamphetamine with reckless disregard that he/she
is going to manufacture methamphetamine. He surmised that when
AS 11.71.020(a)(1) was first enacted, the legislature probably
felt, particularly with regard to heroin, that possession was
adequate in terms of proof of the intent to deliver. However,
[law enforcement officers] are now dealing with people who
possess the ingredients used to manufacture of methamphetamine
but are not doing that manufacturing themselves, and so the DOL
feels that trying to prove that such people have a specific
mental state imposes too big a burden. He remarked that
although the mens rea of "reckless disregard," as provided for
in [proposed AS 11.71.020(a)(6)(A) and (B)], could be changed,
the DOL believes that "reckless disregard" is a more appropriate
mens rea.
REPRESENTATIVE GRUENBERG asked whether such people are being
charged with any kind of a crime.
2:15:46 PM
MR. GUANELI said there are some crimes related to the listed
chemicals.
REPRESENTATIVE GRUENBERG asked whether there is currently "a
proof problem" regarding those that possess heroin, and whether
those that possess the chemicals used in the manufacture of
methamphetamine could just be prosecuted under existing AS
11.71.020(a)(1), since that uses the term "manufacture".
MR. GUANELI said that after further review, he now believes that
the phrase in existing AS 11.71.020(a)(1) - "with the intent to
manufacture or deliver" - does modify the verb "possesses," and
thus does modify the possessory offense; therefore, the same
comments he made about [proposed AS 11.71.020(d)] also apply to
the language in existing AS 11.71.020(a)(1).
REPRESENTATIVE GRUENBERG acknowledged that point.
MR. GUANELI noted, though, that there has not been a lot of
manufacturing of opium products in Alaska; those products
generally come from outside of Alaska, and so one who possesses
opium products would most likely be charged with intent to
deliver, rather than with intent to manufacture.
2:17:55 PM
REPRESENTATIVE GRUENBERG asked why Section 6 of Version S -
proposed AS 11.71.020(d) - now specifies six grams, rather than
nine grams.
MR. GUANELI said that the amount of six grams has been
recommended by the Alaska State Troopers, who want to be able to
deal with consistent amounts, both for training purposes and for
providing notice to retailers and the public. He also offered
his understanding that six to nine grams of pseudoephedrine is
typical of the amount being found in many of the methamphetamine
laboratories ("labs") in Alaska. In response to a question, he
indicated that one gram would equal the size of a raisin, so six
grams would equal the size of about a handful of raisins, and
that most of the methamphetamine labs in Alaska are small -
sometimes referred to as "mom and pop" operations - and they are
particularly dangerous because of the ease with which they can
be set up, and even six grams of pseudoephedrine can be used to
manufacture about five and a half grams of methamphetamine, with
each gram being sold for between $100-$250, depending on the
location.
2:20:17 PM
REPRESENTATIVE GARA said that he is generally supportive of the
bill, but does still have concerns, such as one with the
reference to manslaughter. Turning attention to the six-gram
limitation proposed by the bill, he asked how much
pseudoephedrine can be used by a person legitimately.
MR. GUANELI offered his understanding that a typical package
contains roughly only nine-tenths of a gram or one gram, and
that if the instructions on the package are followed, that
amount should last several days. He relayed that most packages
recommend only taking the product for seven days before seeing a
doctor. He referred to the Iowa survey that he'd spoken of at
the bill's last hearing, and reminded members that that study
indicated most people generally only bought one package at a
time and just a few people bought two packages at a time. So
although there might be rare instances of a person buying five
or six packages for his/her family's usage over the course of a
year, that is not who law enforcement officers are going to be
pursuing, and if a person is obtaining six or more packages at
once, that might be an indication that he/she is not using the
pseudoephedrine in a legitimate manner.
2:23:50 PM
REPRESENTATIVE GARA asked whether [Costco Wholesale Warehouse
("Costco")] sells pseudoephedrine products.
MR. GUANELI said he'd heard that it did.
MS. PIERSON said she'd looked for pseudoephedrine products the
other day when she was in Costco but didn't find any.
REPRESENTATIVE GARA noted that [Section 6 of Version S] makes it
a crime to just possess six grams of pseudoephedrine, and
questioned whether that is something that should be
criminalized.
REPRESENTATIVE RAMRAS noted that he's heard a concern on that
issue from a Fairbanks company that sends cold medicine in bulk
to "manned camps" in remote sites, and acknowledged that perhaps
the bill doesn't yet adequately provide an exception for such
companies.
2:25:43 PM
REPRESENTATIVE GARA said he didn't think the bill should make
criminals out of all people who possess six or more grams of
pseudoephedrine products but aren't operating a methamphetamine
lab, because not all such people possess those products with
illegitimate purposes in mind.
MR. GUANELI clarified that the bill does not make simple
possession of pseudoephedrine products a crime; rather, someone
would first have to charged with manufacturing methamphetamine,
since Section 6 simply provides for a presumption that a person
who possesses more than six grams intends to manufacture. In
order to prosecute such a case, he remarked, there must be other
evidence as well; the bill does not provide for a strict
liability offense, a simple possessory offense. The bill is
trying to address the fact that possessing [certain] amounts of
pseudoephedrine products can lead to methamphetamine
manufacturing.
REPRESENTATIVE GARA said he disagrees with Mr. Guaneli's
statement. He remarked that although he believes that Mr.
Guaneli would never prosecute a person for simply possessing
pseudoephedrine products when the person doesn't intend to
manufacture methamphetamine, he doesn't want to pass a law that
would let another prosecutor do so. He noted that [Section 6]
says in part: "possession ... is prima facie evidence that the
person intended to use the listed chemicals to manufacture ...".
CHAIR McGUIRE remarked that one of the difficulties law
enforcement and prosecutors are currently facing has to do with
obtaining proof in these cases and trying to track down who the
perpetrators are. She asked Representative Gara whether there
is an alternative amount he would prefer.
2:28:41 PM
REPRESENTATIVE GARA said he didn't offhand. He opined that it
should not be crime to simply possess six or more grams of
pseudoephedrine without there being some other evidence that a
person manufactures methamphetamine. He offered his belief that
when it becomes easier to prove cases it also becomes easier to
make mistakes [regarding whether a person should actually be
charged with a crime]. He indicated that if someone could relay
to him an amount of pseudoephedrine that could not possibly be
used for innocent purposes, then he would be willing to have
that amount specified in the bill.
MR. GUANELI, in response to a question, reiterated that one
package of a pseudoephedrine product contains approximately
nine-tenths of a gram of pure pseudoephedrine, and so one would
have to buy more than six packages of pseudoephedrine products
to exceed the limit proposed in the bill.
CHAIR McGUIRE noted that other states, including California,
have a nine-gram limitation.
MR. GUANELI concurred.
REPRESENTATIVE RAMRAS noted that Section 6 starts out by saying,
"In a prosecution under (a) of this section, possession of six
grams or more of the listed chemicals ..., or to deliver to
another person who intends to manufacture methamphetamine ...".
He surmised that "a big home or a girl scout camp," for example,
wouldn't be trying to deliver to another person who intends to
manufacture methamphetamine. "So I don't ... think that
reasonable people would prosecute a reasonable family," he
added.
REPRESENTATIVE GARA suggested as a solution that the bill say
that it is prima facie evidence of the intent to manufacture and
distribute methamphetamine if one is found with both
pseudoephedrine products and methamphetamine lab equipment. He
also noted that the bill makes it a crime to possess six or more
grams of iodine. He asked whether that is more iodine than one
could have a legitimate use for, or whether he should have the
same concern regarding the limitation on iodine as he does about
the limitation on pseudoephedrine.
REPRESENTATIVE RAMRAS noted that a Fred Meyer employee relayed
to him that Fred Meyer will allow a person to buy three boxes of
Sudafed at a time, and relayed that in one instance, four young
people pulled up in a car and each came into the store and
bought the maximum amount allowed. He opined that having twelve
packages of Sudafed in the car clearly indicated that those
youths had illegitimate intentions. In such situations, he
remarked, he would be reluctant to have the bill specify that
methamphetamine lab equipment must also be present. He
suggested that Ms. Pierson might be able to better address the
question regarding iodine quantities.
2:33:06 PM
MS. PIERSON said that according to discussions she's had with
the Department of Public Safety (DPS) and the Anchorage Police
Department (APD), "iodine is not the stuff your grandmother used
to put on your cut." Instead, iodine is a crystal that is used
in really large water purification plants, and is a highly toxic
substance. Apparently, one can go to a "local water supply
store," buy iodine in a five-gallon bucket, and then resell it
in smaller quantities. The bill proposes to limit the amount a
person could have in his/her possession, since it is not a
substance that the average person would keep around.
REPRESENTATIVE GRUENBERG asked whether iodine is used in the
manufacture of salt.
MS. PIERSON said she did not know.
MR. GUANELI, in response to questions, said that iodine is one
of the three primary ingredients used in making methamphetamine.
He, too, noted that iodine is a toxic chemical and can be
purchased in large quantities, adding that it is legitimately
used in water treatment and in some veterinary applications. A
five-pound box of iodine, for example, which can be bought for
approximately $200, is enough to treat over 1 million gallons of
water; therefore, if a person is in possession of five pounds of
iodine, then he/she should be in the business of treating water.
Iodine sells on the street for roughly $50 an ounce, he
remarked, and pointed out that other states set a limit of
either six or nine grams. He emphasized that the type of iodine
being referred to in the bill is not the type used in the
treatment of small cuts and scratches, but is the type for which
the state ought to be able to say that possession of six or more
grams is prima facie evidence of methamphetamine manufacture.
MR. GUANELI said he doesn't know of any reason for law
enforcement to go after somebody who is in the business of water
treatment or who is buying cold medication for a scout troop;
such would just lead to bad press and won't stop the
manufacturers of methamphetamine. With regard to the argument
that committee members trust him not to prosecute someone
unjustly but don't trust other prosecutors not to, he noted that
he has heard that argument for 29 years and has yet to have any
of his employees behave less cautiously than he does in
prosecution situations. "Again, we're trying to deal with a
real life crises that is endangering all Alaskans, including
children," he remarked, but acknowledged that [iodine] industry
representatives have yet to weigh in on this issue.
2:39:22 PM
CHAIR McGUIRE offered her understanding that it is difficult to
catch people in the middle of manufacturing methamphetamine, and
surmised that this would be one reason for having the
limitations proposed in the bill. Also, she surmised, there may
be people that are working in groups for the purpose of
obtaining ingredients for a methamphetamine manufacturer, and
opined that such peripheral players should have to face
penalties as well. To illustrate her point she used the example
of buying bullets for a gun knowing full well that the person
one is giving the bullets to is going to use the gun to shoot at
other people.
REPRESENTATIVE ANDERSON concurred, and offered his belief that
law enforcement officers will not want to go after those that
have a legitimate reason for possessing the ingredients listed
in the bill.
2:42:30 PM
REPRESENTATIVE GRUENBERG again raised the issue of manufacturing
salt, and asked that more research be done. He also asked what
amounts other states use in their limitations.
REPRESENTATIVE RAMRAS indicated that some states use a limit of
six grams and other states use a limit of nine grams; Version S
proposes a limit of six grams because that is what the DPS asked
for.
2:44:26 PM
MS. PIERSON added that her research has shown there to be about
an equal split between those states that have a six-gram
limitation and those that have a nine-gram limitation.
REPRESENTATIVE KOTT said he has some of the same concerns that
Representative Gara has regarding the six-gram limitation, and
opined that regardless of whether a person is caught and
prosecuted, the bill proposes to make criminals out of those who
possess six or more grams of the listed chemicals. He pondered
whether the selling of pseudoephedrine products in bulk
quantities might change the dynamics, and noted that they've not
yet heard from any retailers, wholesalers, manufacturers, or
"packaging groups."
REPRESENTATIVE ANDERSON indicated that he disagrees with
Representative Kott because Section 6 begins by saying, "In a
prosecution under (a) of this section ...". He characterized
this language as providing the delineation between just
possessing and possessing in conjunction with the intent to
manufacture or deliver, and opined that ownership alone would
not result in a violation of the law.
REPRESENTATIVE KOTT - referring to Section 9, beginning on page
8, which says in part, "A person commits the crime of purchase
or receipt of restricted amounts of certain listed chemicals if
the person purchases or receives more than ... six grams ..." -
asked Mr. Guaneli, "If I purchase seven grams, under this bill,
am I a criminal?"
MR. GUANELI, in response, explained that there are two
provisions, one that creates the presumption that possession is
prima facie evidence of the intent to manufacture, and one, on
page 8, that stipulates that a crime has been committed if a
person purchases more than six grams of the listed chemicals
within a 30-day period. However, as a practical matter, he
suggested, stores are not going to sell someone that amount of
pseudoephedrine, and relayed that he has heard that drug
companies are in the process of developing cold medications that
do not contain pseudoephedrine. He said that if there is a
concern about the bill applying to those that are responsible
for legitimately providing pseudoephedrine products to certain
groups of people - such as someone responsible for supplying a
scout camp - then it would be easy to craft an exception.
CHAIR McGUIRE mentioned that hotels in the Bush might keep a
stock of pseudoephedrine products for employees and guests.
MR. GUANELI said he didn't know whether a hotel which did that
might be considered a retailer; if so, then it would be lawful
for the hotel to have more than six grams of pseudoephedrine.
2:50:25 PM
REPRESENTATIVE GRUENBERG said he has a concern that the language
on page 8 would criminalize someone who has to take a
pseudoephedrine product daily for health reasons.
MR. GUANELI pointed out, however, that the six-gram limitation
would equal a six-month supply for someone like that.
REPRESENTATIVE ANDERSON offered his belief that the regulation
process would be sufficient to inform retailers about the
restrictions proposed in the bill. He also noted that language
on page 8, line 25, of Version S provides an exemption for those
that have a prescription for pseudoephedrine products.
REPRESENTATIVE ANDERSON moved to adopt the proposed CS for HB
149, Version 24-LS0596\S, Luckhaupt, 3/9/05, as the work draft.
There being no objection, Version S was before the committee.
2:52:18 PM
REPRESENTATIVE GARA made a motion to adopt Amendment 1, to
strike Section 6. He suggested that the sponsor could then work
on language that would be more narrowly tailored.
REPRESENTATIVE ANDERSON objected [for the purpose of
discussion].
REPRESENTATIVE GARA said he would prefer the bill to make
possession a crime only if there is also some other indication
that the person is also distributing or manufacturing
methamphetamine. He added that he disagrees with Representative
Anderson's statement that the bill is not making simple
possession a crime; even in Section 6, he added, all that must
be proven is possession.
2:54:08 PM
REPRESENTATIVE ANDERSON acknowledged that he'd failed to note
that Section 9 does make possession a crime, said he may be
willing to consider deleting Section 9, but said he disagrees
with the concept of deleting Section 6 and reiterated his belief
that it only applies in situations where someone is already
being prosecuted under AS 11.71.020(a).
REPRESENTATIVE GRUENBERG indicated that he would be willing to
offer an amendment to delete Section 9.
REPRESENTATIVE ANDERSON maintained his objection on Amendment 1.
A roll call vote was taken. Representatives Gruenberg and Gara
voted in favor of Amendment 1. Representatives McGuire,
Anderson, and Kott voted against it. Therefore, Amendment 1
failed by a vote of 2-3.
2:55:30 PM
REPRESENTATIVE GARA made a motion to adopt Conceptual Amendment
2, to insert on page 5, line 29, after "valid prescription" the
words "or possessed for a legal use". Such a change might make
[Section 6] hard for the prosecution to use, but it will prevent
the criminalization of "buying Sudafed so people can treat
family colds."
MR. GUANELI pointed out, however, that the purpose of creating
the presumption [in Section 6] is to recognize that the
substances listed, when ingested in the amount listed, don't
have a legal use. He added that if the state could prove that a
substance is going to be used illegally, it wouldn't need the
presumption. Conceptual Amendment 2 guts the presumption, he
concluded, and said that the DOL is not in favor of Conceptual
Amendment 2.
REPRESENTATIVE ANDERSON predicted that Conceptual Amendment 2
would allow a methamphetamine manufacturer who had cleaned out
all his/her equipment to argue that he/she possessed the listed
chemicals for a legal purpose.
2:58:30 PM
REPRESENTATIVE RAMRAS concurred, adding that the Alaska State
Troopers have told him that they've been asked by the district
attorney's office to not pursue people who are found with
methamphetamine precursors when they offer up lawful excuses for
possessing the precursors.
REPRESENTATIVE GARA withdrew Conceptual Amendment 2.
REPRESENTATIVE GARA made a motion to adopt Conceptual Amendment
[3], to change Section 6 such that "six grams" becomes "nine
grams".
REPRESENTATIVE ANDERSON objected.
A roll call vote was taken. Representatives McGuire, Kott,
Gruenberg, and Gara voted in favor of Conceptual Amendment 3.
Representative Anderson voted against it. Therefore, Conceptual
Amendment 3 was adopted by a vote of 4-1.
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 4, to
delete Section 9.
REPRESENTATIVE ANDERSON objected.
MR. GUANELI said the whole point of having businesses keep
records on those that are buying the listed chemicals and what
amounts are being purchased is to deter people from buying large
amounts of [pseudoephedrine products] within a short period of
time, and opined that even if a person only purchases six grams
of pseudoephedrine product every 30 days, that amount could be
used to manufacture five grams of methamphetamine. He suggested
that without the six-gram limitation, much of the bill's value
goes away.
REPRESENTATIVE ANDERSON suggested amending Amendment 4 such that
instead of deleting Section 9, it changed "six grams" to "nine
grams". This would make Sections 6 and 9 conform, he added.
REPRESENTATIVE GRUENBERG said he would accept such a change to
Amendment 4, specifically that page 8, lines 14, 19, and 24, and
page 9, line 5, be changed by deleting "six" and inserting
"nine". [Although no formal motion was made, Amendment 4 was
treated as amended.]
REPRESENTATIVE ANDERSON withdrew his objection to Amendment 4,
as amended.
CHAIR McGUIRE asked whether there were any further objections to
Amendment 4, as amended. There being none, Amendment 4, as
amended, was adopted.
3:03:41 PM
REPRESENTATIVE GARA made a motion to adopt Conceptual Amendment
5, to alter Section 9 "to address the issue of the hotel or camp
or business that purchases this stuff in bulk." He asked,
however, whether the language on page 8, lines 26-27 - which
reads, "in the ordinary course of a legitimate business, or to
an employee of a legitimate business" - means any legitimate
business or only the ones listed on page 8, line 28, through
page 9, line 3.
MR. GUANELI said it would only apply to those businesses listed
on page 8, line 28, through page 9, line 3.
3:05:19 PM
REPRESENTATIVE RAMRAS mentioned that he sells Sudafed through
the gift shop in his hotel, and said that [if the bill passes],
he would keep logbook and comply with the proposed new
requirements.
CHAIR McGUIRE said she could envision lodges [in remote areas]
keeping large quantities of cold medication on hand for their
employees and clients, and noted that although the bill does
have the exception, "in the ordinary course of business", it
only pertains to specific types of businesses.
MR. GUANELI offered his understanding that lodges wouldn't be
exempted currently, but reiterated that it would be easy to
craft another exception that would apply to [that sort of
business].
CHAIR McGUIRE indicated that it is important to keep in mind how
Alaskans conduct business.
REPRESENTATIVE GARA withdrew Amendment 5.
REPRESENTATIVE GARA made a motion to adopt Amendment 6: on page
9, line 3, insert a new subsection (b)(2)(E) to say, "a business
or organization for legal use by persons employed by or served
by that business or organization".
REPRESENTATIVE GRUENBERG said he opposes Amendment 6 because a
methamphetamine manufacturer might be able to use that
exception.
REPRESENTATIVE GARA pointed out, however, that Amendment 6
specifies "legal use".
CHAIR McGUIRE suggested that Amendment 6 be addressed at a later
time, and asked Representative Gara whether he would be willing
to withdraw Amendment 6 if the sponsor commits to working with
him before the bill gets to the House Finance Committee. She
offered her belief that there should be another category [of
businesses] listed in the exemption provision.
REPRESENTATIVE GARA said, "Sure." [Amendment 6 was treated as
withdrawn.]
REPRESENTATIVE GARA noted that Representative Ramras and
Representative Crawford had differing views with regard to the
reporting requirements. Currently, the bill provides that the
information collected by a business remain at the business
unless law enforcement requests it; he offered his understanding
that Representative Crawford would prefer for all the
information collected by businesses to be periodically sent in
to law enforcement.
REPRESENTATIVE GARA suggested that the registry provision be
changed [via a Conceptual Amendment 7]: "that it should be a
local option, that if a local government believes that they
would like to have this information sent to them, that on a
periodic basis, if the local government passes an ordinance
asking for this, that these records should be sent to the local
law enforcement agency on a periodic basis."
3:12:44 PM
REPRESENTATIVE RAMRAS said he'd had concerns that automatically
sending in all the information would be a burden on small
businesses, and that the DPS wouldn't want "the records of
everybody in Alaska that has caught a cold in the last six
months." He mentioned that [Conceptual Amendment 7] will allow
law enforcement to localize its research, and characterized
Conceptual Amendment 7 as a friendly amendment and an excellent
compromise.
CHAIR McGUIRE remarked that Conceptual Amendment 7 would allow
communities to evaluate their resources.
REPRESENTATIVE GARA made a motion to adopt Conceptual Amendment
7. There being no objection, Conceptual Amendment 7 was
adopted.
MS. PIERSON, in response to a question, relayed that there is a
penalty for violating the registration and recordkeeping
requirements of Section 11.
REPRESENTATIVE KOTT noted that a violation would result in a
fine of $10,000.
REPRESENTATIVE GARA said, "I think for the local option thing I
wouldn't want to make that a crime if you forgot to send your
... [information] in; ... [if] the local government says you
have to send ... [information] in every 30 days, I don't think I
want to make that a misdemeanor if they forget."
REPRESENTATIVE GARA made a motion to adopt Conceptual Amendment
8 to say, "[a] knowing violation of ... the local option
section, if the local government buys into it, ... is punishable
by a fine of up to $500 per violation." He posited that the
language "up to" gives the court the discretion of whether to
impose a fine.
CHAIR McGUIRE asked whether there were any objections to
Conceptual Amendment 8. There being no objection, Conceptual
Amendment 8 was adopted.
3:15:08 PM
REPRESENTATIVE GARA expressed concern with Section 1 of the
bill, indicating that he is not sure that he agrees that there
should be a new manslaughter crime. He noted that currently
there is a general manslaughter crime, but under [Section 1,
subsection (a)(3)] of the bill, the person delivering the
substance - "sort of a mule" - would be made "a murderer,"
adding that he is not sure he is comfortable with that
provision.
CHAIR McGUIRE noted that this issue had been debated thoroughly
in a prior hearing [on a different bill]. She asked that any
proposed amendment to Section 1 be reserved for the House floor.
REPRESENTATIVE GARA [although no formal motion had been made]
withdrew Amendment 9.
REPRESENTATIVE GARA made a motion to adopt Amendment 10, to
delete "or delivers" from page 2, line 1. He opined that the
person who knowingly manufactures methamphetamine is much more
culpable than the one hired to buy the pseudoephedrine product
and transport it to the manufacturer.
REPRESENTATIVE ANDERSON objected for the purpose of discussion.
MR. GUANELI noted that the language is also part of the
governor's bill and so the administration feels it should
remain. He offered his interpretation that "deliver" as used in
Section 1 means the person who is selling the finished product -
"a crack dealer ... a heroin dealer" - not the person who is
delivering the ingredients that go into the making of
methamphetamine; Section 1 specifies a "controlled substance"
but pseudoephedrine is not currently on a controlled substance
list. He opined that Section 1 addresses situations in which
overdoses have occurred or in which a person injected someone
else with these drugs, and noted that such situations are
treated as murder in other states, particularly on the east
coast. He concluded by saying that the DOL feels that a charge
of manslaughter in such situations is a fairly measured
response.
REPRESENTATIVE ANDERSON maintained his objection.
REPRESENTATIVE GARA withdrew Amendment 10.
3:19:43 PM
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 11, to
make the crime of endangering the welfare of a child in the
first degree, as described under proposed AS 11.51.100(g) and as
referenced in proposed AS 11.51.100(h), a class C felony instead
of a class B felony. He noted that the aforementioned
governor's bill makes that crime a class C felony.
CHAIR McGUIRE objected for the purpose of discussion.
REPRESENTATIVE RAMRAS said he objects to Amendment 11.
REPRESENTATIVE GARA what is the difference is between a class C
felony and a class B felony.
CHAIR McGUIRE said the [maximum sentence] is 5 years for a class
C felony, 10 years for a class B felony, and 20 years for class
A felony.
REPRESENTATIVE GARA asked what the presumptive sentence is for
those classes of felony.
CHAIR McGUIRE offered her understanding that there aren't any
presumptive sentences.
MR. GUANELI explained that under the recently passed new
sentencing structure, the presumptive range is 0-2 years for a
class C felony, and 1-3 years for first time class B felony. He
noted that for a first time offense, for either a class C felony
or a class B felony, a person might be eligible for a suspended
imposition of sentence (SIS).
CHAIR McGUIRE mentioned that fines are also imposed for felony
crimes.
REPRESENTATIVE ANDERSON withdrew his objection.
CHAIR McGUIRE asked whether there were any further objections to
Amendment 11. There being none, Amendment 11 was adopted.
REPRESENTATIVE GARA said he still has a concern about the list
of chemicals [in Section 8] because he doesn't know what they
are.
3:23:00 PM
MS. PIERSON said they are anabolic steroids.
REPRESENTATIVE RAMRAS relayed that that list of chemicals was
given to him by Representative Croft.
MS. PIERSON, in response to a question, indicated that Section 8
proposes to add those chemicals to the list of schedule VA
controlled substances.
REPRESENTATIVE GARA opined that there ought to be more
discussion regarding the issue of how much iodine someone can
possess/purchase.
CHAIR McGUIRE noted that the bill will be heard in the House
Finance Committee.
3:24:00 PM
REPRESENTATIVE ANDERSON moved to report the proposed CS for HB
149, Version 24-LS0596\S, Luckhaupt, 3/9/05, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 149(JUD) was
reported from the House Judiciary Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:25 p.m.
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