Legislature(1995 - 1996)
05/01/1996 08:10 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE May 1, 1996 8:10 a.m. MEMBERS PRESENT Representative Joe Green, Co-Chairman Representative William K. "Bill" Williams, Co-Chairman Representative Scott Ogan, Vice Chairman Representative Alan Austerman Representative Pete Kott Representative Don Long Representative Irene Nicholia Representative John Davies Representative Ramona Barnes MEMBERS ABSENT All Members Present COMMITTEE CALENDAR CS FOR SENATE BILL NO. 283(RLS) "An Act relating to filing, recording, and indexing of documents with or by the Department of Natural Resources; repealing certain filing requirements concerning property involving nonresident aliens; and providing for an effective date." - PASSED CSSB 283(RLS) OUT OF COMMITTEE SENATE BILL NO. 257 am "An Act relating to the taking of game or fish for public safety purposes." - PASSED SB 257 am OUT OF COMMITTEE CS FOR SENATE BILL NO. 262(RES)(ct rule fld) "An Act relating to management of game populations for maximum sustained yield for human harvest and providing for the replacement of areas closed to consumptive uses of game; relating to management of fish and game areas." - PASSED HCS CSSB 262(RES) OUT OF COMMITTEE CS FOR SENATE BILL NO. 199(FIN) "An Act relating to environmental audits and health and safety audits to determine compliance with certain laws, permits, and regulations." - PASSED HCS CSSB 199(RES) OUT OF COMMITTEE CS FOR SENATE BILL NO. 247(RLS) am(efd fld)(ct rule fld) "An Act restricting the use of certain funds deposited in the fish and game fund; and relating to the powers and duties of the commissioner of fish and game." - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: SB 283 SHORT TITLE: DOCUMENT FILING, INDEXING, & RECORDING SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 02/09/96 2353 (S) READ THE FIRST TIME - REFERRAL(S) 02/09/96 2353 (S) RES, STA, FIN 02/09/96 2353 (S) FISCAL NOTE (DNR) 02/09/96 2354 (S) GOVERNOR'S TRANSMITTAL LETTER 03/08/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 03/08/96 (S) MINUTE(RES) 03/11/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 03/11/96 (S) MINUTE(RES) 03/13/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 03/13/96 (S) MINUTE(RES) 03/14/96 2737 (S) RES RPT 4DP 1NR 03/14/96 2737 (S) PREVIOUS FN (DNR) 04/10/96 3135 (S) STA REFERRAL WAIVED 04/17/96 (S) FIN AT 5:00 PM SENATE FINANCE 532 04/18/96 (S) FIN AT 9:00 AM SENATE FINANCE 532 04/19/96 (S) FIN AT 8:30 AM SENATE FINANCE 532 04/23/96 (S) FIN AT 8:30 AM SENATE FINANCE 532 04/23/96 3445 (S) FIN RPT 1DP 6NR 04/23/96 3445 (S) PREVIOUS FN (DNR) 04/24/96 (S) RLS AT 10:30 AM FAHRENKAMP RM 203 04/24/96 (S) MINUTE(RLS) 04/25/96 (S) RLS AT 10:30 AM FAHRENKAMP RM 203 04/25/96 (S) MINUTE(RLS) 04/25/96 3555 (S) RULES TO CALENDAR WITH CS 4/25/96 04/25/96 3557 (S) READ THE SECOND TIME 04/25/96 3558 (S) RLS CS ADOPTED UNAN CONSENT 04/25/96 3558 (S) ADVANCED TO THIRD READING UNAN CONSENT 04/25/96 3558 (S) READ THE THIRD TIME CSSB 283(RLS) 04/25/96 3558 (S) PASSED Y20 N- 04/25/96 3558 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 04/25/96 3581 (S) TRANSMITTED TO (H) 04/26/96 4034 (H) READ THE FIRST TIME - REFERRAL(S) 04/26/96 4034 (H) RESOURCES, FINANCE 04/29/96 (H) RES AT 8:00 AM CAPITOL 124 04/29/96 (H) MINUTE(RES) 05/01/96 (H) RES AT 8:00 AM CAPITOL 124 BILL: SB 257 SHORT TITLE: TAKING FISH OR GAME FOR PUBLIC SAFETY SPONSOR(S): SENATOR(S) ZHAROFF JRN-DATE JRN-PG ACTION 02/02/96 2282 (S) READ THE FIRST TIME - REFERRAL(S) 02/02/96 2282 (S) RES, JUD 02/19/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 02/19/96 (S) MINUTE(RES) 02/21/96 2488 (S) RES RPT 5DP 02/21/96 2488 (S) ZERO FISCAL NOTE (F&G) 03/22/96 (S) JUD AT 9:00 AM BELTZ ROOM 211 03/22/96 (S) MINUTE(JUD) 03/25/96 (S) RLS AT 7:00 PM FAHRENKAMP RM 203 03/25/96 (S) MINUTE(RLS) 03/25/96 2862 (S) JUD RPT 4DP 03/25/96 2862 (S) ZERO FISCAL NOTES (DPS-2) 03/25/96 2862 (S) PREVIOUS ZERO FN (F&G) 04/03/96 3045 (S) RULES TO CALENDAR 4/3/96 04/03/96 3045 (S) READ THE SECOND TIME 04/03/96 3046 (S) ADVANCED TO THIRD READING UNAN CONSENT 04/03/96 3046 (S) READ THE THIRD TIME SB 257 04/03/96 3046 (S) PASSED Y12 N7 E1 04/03/96 3046 (S) MILLER NOTICE OF RECONSIDERATION 04/04/96 3070 (S) HELD ON RECONSIDERATION TO 4/9 CALENDAR 04/09/96 3097 (S) HELD ON RECONSIDERATION TO 4/10 CALENDAR 04/10/96 3129 (S) PLACED AT BOTTOM OF CALENDAR 04/10/96 3134 (S) RECON TAKEN UP - IN THIRD READING 04/10/96 3134 (S) RETURN TO SECOND FOR AM 1 UNAN CONSENT 04/10/96 3134 (S) AM NO 1 ADOPTED UNAN CONSENT 04/10/96 3134 (S) AUTOMATICALLY IN THIRD READING 04/10/96 3134 (S) PASSED ON RECONSIDERATION Y20 N- 04/10/96 3136 (S) TRANSMITTED TO (H) 04/12/96 3690 (H) READ THE FIRST TIME - REFERRAL(S) 04/12/96 3690 (H) RESOURCES, JUDICIARY 04/26/96 (H) RES AT 8:00 AM CAPITOL 124 04/26/96 (H) MINUTE(RES) 04/29/96 (H) RES AT 8:00 AM CAPITOL 124 04/29/96 (H) MINUTE(RES) 05/01/96 (H) RES AT 8:00 AM CAPITOL 124 BILL: SB 262 SHORT TITLE: MANAGEMENT OF FISH/GAME POPULATION & AREA SPONSOR(S): SENATOR(S) MILLER, Sharp, Pearce, Halford, Green, Frank, Taylor JRN-DATE JRN-PG ACTION 02/02/96 2286 (S) READ THE FIRST TIME - REFERRAL(S) 02/02/96 2286 (S) RES, JUD 02/05/96 2309 (S) COSPONSOR(S): TAYLOR 02/12/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 02/12/96 (S) MINUTE(RES) 03/08/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 03/08/96 (S) MINUTE(RES) 03/11/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 03/11/96 (S) MINUTE(RES) 03/12/96 2709 (S) RES RPT CS 5DP 1NR SAME TITLE 03/12/96 2709 (S) FISCAL NOTE TO SB & CS (F&G) 03/18/96 2785 (S) FIN REFERRAL ADDED 03/26/96 2910 (S) JUD REFERRAL WAIVED Y12 N8 04/03/96 (S) FIN AT 9:00 AM SENATE FINANCE 532 04/03/96 (S) MINUTE(FIN) 04/04/96 3065 (S) FIN RPT 2DP 2NR (RES)CS 04/04/96 3065 (S) PREVIOUS FN (F&G) 04/09/96 (S) RLS AT 12:20 PM FAHRENKAMP RM 203 04/09/96 (S) MINUTE(RLS) 04/10/96 3112 (S) RULES TO CAL & 1 NR 4/10/96 04/10/96 3116 (S) READ THE SECOND TIME 04/10/96 3116 (S) RES CS ADOPTED UNAN CONSENT 04/10/96 3116 (S) ADVANCE TO THIRD READING FLD Y12 N8 04/10/96 3116 (S) THIRD READING 4/11 CALENDAR 04/11/96 3168 (S) READ THE THIRD TIME CSSB 262(RES) 04/11/96 3168 (S) PASSED Y12 N8 04/11/96 3169 (S) COURT RULE CHANGES FAILED Y13 N7 04/11/96 3176 (S) TRANSMITTED TO (H) 04/12/96 3690 (H) READ THE FIRST TIME - REFERRAL(S) 04/12/96 3690 (H) RESOURCES, JUDICIARY 04/26/96 (H) RES AT 8:00 AM CAPITOL 124 04/26/96 (H) MINUTE(RES) 04/29/96 (H) RES AT 8:00 AM CAPITOL 124 04/29/96 (H) MINUTE(RES) 05/01/96 (H) RES AT 8:00 AM CAPITOL 124 BILL: SB 199 SHORT TITLE: ENVIRONMENTAL & HEALTH/SAFETY AUDITS SPONSOR(S): SENATOR(S) LEMAN,Pearce JRN-DATE JRN-PG ACTION 01/05/96 2058 (S) PREFILE RELEASED - 1/5/96 01/08/96 2058 (S) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2058 (S) RESOURCES 01/31/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 01/31/96 (S) MINUTE(RES) 02/02/96 2287 (S) FIN REFERRAL ADDED 03/06/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 03/06/96 (S) MINUTE(RES) 03/11/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 03/11/96 (S) MINUTE(RES) 03/12/96 2708 (S) RES RPT CS 4DP 1NR NEW TITLE 03/12/96 2708 (S) FISCAL NOTES TO SB & CS (DEC, F&G) 03/12/96 2708 (S) INDETERMINATE FISCAL NOTE (DNR) 03/12/96 2708 (S) ZERO FISCAL NOTES TO SB & CS (DOT, MVA) 03/20/96 (S) FIN AT 9:00 AM SENATE FINANCE 532 03/21/96 (S) MINUTE(FIN) 03/26/96 (S) FIN AT 9:00 AM SENATE FINANCE 532 03/27/96 (S) MINUTE(FIN) 04/02/96 (S) FIN AT 9:00 AM SENATE FINANCE 532 04/03/96 (S) FIN AT 9:00 AM SENATE FINANCE 532 04/03/96 (S) RLS AT 1:15 PM FAHRENKAMP RM 203 04/03/96 (S) MINUTE(FIN) 04/03/96 (S) MINUTE(RLS) 04/03/96 3041 (S) FIN RPT CS 1DP 4NR 1AM NEW TITLE 04/03/96 3041 (S) FNS TO CS (DEC, DNR) 04/03/96 3041 (S) ZERO FN TO CS (DOT) 04/03/96 3041 (S) PREVIOUS FN (F&G) 04/03/96 3041 (S) PREVIOUS ZERO FN (DMVA) 04/09/96 3092 (S) RULES TO CALENDAR & 1NR 4/9/96 04/09/96 3094 (S) READ THE SECOND TIME 04/09/96 3094 (S) FIN CS ADOPTED Y11 N5 E4 04/09/96 3095 (S) ADVANCE TO THIRD READING FLD Y11 N5 E4 04/09/96 3095 (S) THIRD READING 4/10 CALENDAR 04/10/96 3128 (S) READ THE THIRD TIME CSSB 199(FIN) 04/10/96 3128 (S) PASSED Y11 N9 04/10/96 3128 (S) SALO NOTICE OF RECONSIDERATION 04/11/96 3161 (S) RECON TAKEN UP - IN THIRD READING 04/11/96 3161 (S) PLACED AT BOTTOM OF CALENDAR 04/11/96 3171 (S) PASSED Y11 N9 04/11/96 3176 (S) TRANSMITTED TO (H) 04/12/96 3689 (H) READ THE FIRST TIME - REFERRAL(S) 04/12/96 3690 (H) RESOURCES, LABOR & COMMERCE 04/17/96 (H) RES AT 8:00 AM CAPITOL 124 04/17/96 (H) L&C AT 3:00 PM CAPITOL 17 04/17/96 (H) MINUTE(RES) 04/17/96 (H) MINUTE(L&C) 04/19/96 (H) L&C AT 3:00 PM CAPITOL 17 04/19/96 (H) MINUTE(L&C) 04/22/96 (H) RES AT 8:00 AM CAPITOL 124 04/22/96 (H) MINUTE(RES) 04/23/96 (H) RES AT 3:00 PM CAPITOL 124 04/23/96 (H) MINUTE(RES) 04/24/96 (H) RES AT 8:00 AM CAPITOL 124 04/24/96 (H) MINUTE(RES) 04/29/96 (H) RES AT 10:00 AM CAPITOL 17 04/29/96 (H) MINUTE(RES) 04/30/96 (H) RES AT 8:00 AM CAPITOL 17 04/30/96 (H) MINUTE(RES) 05/01/96 (H) RES AT 8:00 AM CAPITOL 124 WITNESS REGISTER NICO BUS, Acting Director Division of Support Services Department of Natural Resources 400 Willoughby Avenue Juneau, Alaska 99801-1724 Telephone: (907) 465-2406 POSITION STATEMENT: Testified in support of CSSB 283(RLS) GORDON WILLIAMS, Legislative Assistant to Senator Fred Zharoff Alaska State Legislature Capitol Building, Room 121 Juneau, Alaska 99801-1182 Telephone: (907) 465-3473 POSITION STATEMENT: Gave sponsor statement for SB 257 am WAYNE REGELIN, Director Division of Wildlife Conservation Department of Fish & Game P.O. Box 25526 Juneau, Alaska 99802-5526 Telephone: (907) 465-4190 POSITION STATEMENT: Testified on CSSB 262(RES) (ct rule fld) KEVIN SAXBY, Assistant Attorney General Natural Resources Section Department of Law 1031 West 4th Avenue, Suite 200 Anchorage, Alaska 99501-1994 Telephone: (907) 269-5100 POSITION STATEMENT: Testified on CSSB 262(RES) (ct rule fld) STEVEN DAUGHERTY, Assistant Attorney General Natural Resources Section Department of Law P.O. Box 110300 Juneau, Alaska 99811-0300 Telephone: (907) 465-3600 POSITION STATEMENT: Testified on CSSB 262(RES) (ct rule fld) SENATOR LOREN LEMAN Alaska State Legislature Capitol Building, Room 115 Juneau, Alaska 99801-1182 Telephone: (907) 465-2095 POSITION STATEMENT: Sponsor of SB 199 J. DAVENPORT Address Unknown Telephone: (918) 584-1962 POSITION STATEMENT: Testified in support of CSSB 199(FIN) JOHN RILEY, Director Litigation Support Texas Natural Resources Conservation Commission Address and Telephone Number Unknown POSITION STATEMENT: Testified on CSSB 199(FIN) SARA HANNAN, Representative Alaska Environmental Lobby, Inc. P.O. Box 22151 Juneau, Alaska 99802 Telephone: (907) 463-3366 POSITION STATEMENT: Testified in opposition to CSSB 199(FIN) DWIGHT PERKINS, Special Assistant Office of the Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Testified on the Proposed Committee Substitute for CSSB 199(FIN) MARIE SANSONE, Assistant Attorney General Natural Resources Section Department of Law P.O. Box 110300 Juneau, Alaska 99811-0300 Telephone: (907) 465-3600 POSITION STATEMENT: Testified on the Proposed Committee Substitute for CSSB 199(FIN) NANCY WELLER, Medical Assistance Administrator Division of Medical Assistance Department of Health & Social Services P.O. Box 110660 Juneau, Alaska 99811-0660 Telephone: (907) 465-3355 POSITION STATEMENT: Testified in support of the Proposed Committee Substitute for CSSB 199(FIN) JANICE ADAIR, Director Division of Environmental Health Department of Environmental Conservation 555 Cordova Street Anchorage, Alaska 99501 Telephone: (907) 269-7644 POSITION STATEMENT: Testified on the Proposed Committee Substitute for CSSB 199(FIN) MIKE PAULEY, Legislative Administrative Assistant to Senator Loren Leman Alaska State Legislature Capitol Building, Room 115 Juneau, Alaska 99801-1182 Telephone: (907) 465-2095 POSITION STATEMENT: Testified on the Proposed Committee Substitute for CSSB 199(FIN) ACTION NARRATIVE TAPE 96-73, SIDE A Number 001 CO-CHAIRMAN JOE GREEN called the House Resources Committee meeting to order at 8:10 a.m. Members present at the call to order were Representatives Green, Williams, Ogan, Austerman and Davies. Members absent at the call to order were Representatives Barnes, Kott, Long and Nicholia. CSSB 283(RLS) - DOCUMENT FILING, INDEXING, & RECORDING CO-CHAIRMAN GREEN announced the first order of business would be CSSB 283(RLS). He asked Nico Bus to come forward to testify. Number 043 NICO BUS, Acting Director, Division of Support Services, Department of Natural Resources, said that Senate Bill 283 is a combination of bills. House Bill 438 sponsored by Representative Tom Brice is the recording bill by location index and the essence of that bill is that the Recorder's Office has been doing recording by location indexing since 1972 on a discretionary basis. When the workload would get too heavy, that would be dropped and the Recorder's Office would simply do grant or grantee. Section 5 of CSSB 283(RLS) would make that mandatory and guarantee a better quality record in terms of researching the real estate files. Number 123 MR. BUS further explained the other part of CSSB 283(RLS) is the result of many years of process analyses by the Recorder's Office. Knowing they have to do more with less, the office has tried to streamline the operation to make it more uniform and easily understood by the public and by the 14 different offices. In doing so, the Recorder's Office has done everything they could on the administrative side and those things which they were unable to do are contained in this bill. The housekeeping measures would actually make the recording process easier, there would be less rejection and the documents could be turned around faster. The department has met with their customers - the mining industry and the title companies and they all support this legislation. He noted the department will be saving some money and has prepared a positive fiscal note. If CSSB 283(RLS) is passed, the department projects a savings between $140,000 and $145,000 annually. He commented that in budget deliberations, the Senate recognized they had reduced the department's budget immediately for 1997; the department had hoped that could be delayed in order to catch up on the backlog of archiving. MR. BUS directed the committee's attention to a letter of support from Alaska Land Title Association which represents all the title companies which is 40 percent of the customers of the Recorder's Office. He urged the committee's support of CSSB 283(RLS). Number 293 CO-CHAIRMAN GREEN noted that Mr. Bus had testified that with this legislation the department could do a better job, a faster job and also save money. He asked what was wrong with the bill? MR. BUS said this is a win/win for everyone involved. Number 315 REPRESENTATIVE SCOTT OGAN made a motion and asked unanimous consent to pass CSSB 283(RLS), Version C from the House Resources Committee with individual recommendations and the attached positive fiscal note. Hearing no objection, it was so ordered. SB 257 am - TAKING FISH OR GAME FOR PUBLIC SAFETY Number 352 CO-CHAIRMAN GREEN announced that SB 257 am was the next bill to be heard. Number 371 GORDON WILLIAMS, Legislative Assistant to Senator Fred Zharoff, testified that SB 257 amended was introduced by Senator Zharoff in response to a lot of problems expressed by individuals throughout his district about habituated bears in communities which was affecting people's feeling of safety. Additionally, it was felt that the defense of life and property laws were not addressing the situation with the habituated animals. Senator Zharoff met with the Department of Fish & Game and the Board of Game last fall and through those discussions, it was determined that at this point neither the department nor the board had the clear authority to make regulations for the taking of fish or game for public safety reasons. Number 474 MR. WILLIAMS explained that Section 1 of the bill provides that the commissioner of the Department of Fish & Game can authorize the taking of fish or game for public safety reasons. Section 2 addresses the Board of Game's authority in this area. In December, Senator Zharoff addressed the Board of Game and the Attorney General's Office was also present to notify the board that they probably had never had the authority to make regulations for public safety, clearly did not have it, probably couldn't adopt the regulations that were before them at that meeting and probably didn't have the authority to do some of the things they had done in the past including defense of life and property, hunter education classes, taking birds around airports and those types of things that are done for public safety reasons. The Attorney General's Office advised the board they needed to addressed the issue and out of that came this legislation. Number 563 CO-CHAIRMAN BILL WILLIAMS made a motion to pass SB 257 amended from committee with individual recommendations. CO-CHAIRMAN GREEN commented the committee had heard this bill previously; however, not all the members were present. He asked if there was further discussion. Number 579 REPRESENTATIVE JOHN DAVIES referred to Section 1 and asked Mr. Williams if there would be some consideration to alternate means rather than disposing of the animal. MR. WILLIAMS responded they envision the department working with the board to establish criteria for how this will be implemented. That will be done through a public process to establish steps that a community or group would go through to contact the department and explain what they have done to alleviate the habituated bear, moose or whatever. He noted that Haines has put together a community policy on exactly what needs to be done and he foresees something along those guidelines but it would be developed along with the board. While there's been no opposition to this bill, individuals have expressed concern in that they don't want this bill viewed as relieving the community responsibility for not attracting animals in the first place. Those things need to be addressed on a continuing basis to remove the attractions for the animals; however, when the animals are clearly habituated, he thinks this is a needed tool. Number 709 REPRESENTATIVE OGAN asked what methodology would be in place to ensure that this wasn't abused. The way he interpreted the statute was for example, if there was a problem with birds at an airport, as we've had recently, you could technically blast the birds, take eggs or whatever. He asked if that was a fair interpretation of the statute? MR. WILLIAMS said it is envisioned that both the board and department would establish the criteria. He noted the board has done some things with regard to birds, but they're being told now that they never clearly had the authority to implement regulations for public safety so they can't do that type of thing unless it's clarified in statute that they have those powers. Number 808 CO-CHAIRMAN WILLIAMS made a motion to pass SB 257 am out of committee with individual recommendations. Hearing no objection, it was so ordered. CSSB 262(RES) (ct rule fld) - MANAGEMENT OF FISH/GAME POPULATION & AREA CO-CHAIRMAN GREEN announced that CSSB 262(RES) would be the next bill for consideration. Number 868 REPRESENTATIVE ALAN AUSTERMAN noted that he had spoken against the bill last week and would probably continue to have opposition, but a number of legislators had contacted him with reference to their wishes to have the opportunity to vote on this legislation on the House floor. Therefore, he was going to withdraw his objection to voting it out of committee. CO-CHAIRMAN GREEN noted there had been some minor changes made. The committee had before them proposed Committee Substitute, Version O. REPRESENTATIVE OGAN made a motion to adopt Committee Substitute, Draft 9-LS 1431\O, dated 4/29/96 as the working draft. Hearing no objection, it was so ordered. Number 938 REPRESENTATIVE IRENE NICHOLIA inquired if the Department of Fish & Game was going to comment on the Committee Substitute just adopted by the committee. CO-CHAIRMAN GREEN asked Wayne Regelin if he wished to comment on the Committee Substitute? Number 955 WAYNE REGELIN, Director, Division of Wildlife Conservation, Department of Fish & Game, said, "I think the CS changed it from replacing one acre for one acre rather than one for three and then took out some of this where you were going to guarantee any lawyer that sued us that they'd get rich." That helps a little bit, but he didn't think it solves the basic problems the department has with the bill and they are still very strongly opposed to it. He said the Department of Law had some concerns about the trust relationship. It's the first time it would be in statute and he had expected a representative from the Department of Law to be present at this hearing. CO-CHAIRMAN GREEN noted this committee had also expressed some concern about the trust aspect. Even though the "almost invitation" to litigation only deals with closing, there is still a concern if it also energizes further litigation. He had expressed his concern at the previous hearing and still maintains that concern. Number 1034 REPRESENTATIVE DAVIES asked Mr. Regelin to comment on the harvestable surplus, highest levels of human harvest and maximum sustained yield definition. MR. REGELIN responded, "I think those definitions, tied together, would require the department in areas that are going to be managed for intensive purposes to harvest one-third of the number of animals born each year. Our feeling is that it's very difficult to achieve that in most areas of Alaska. We approach it on areas where we don't have any predators, such as on the Army bases in Anchorage and that place, but in most areas of Alaska where you have severe winters in the farther north in those areas, that it's just not a level of harvest that's sustainable over time. Even if we would reduce the wolf and bear populations to very, very low levels, we probably couldn't achieve that level over time because of the severe winter weather we have. So we have some real concerns with that. It's the same language and definitions that were in SB 77." REPRESENTATIVE DAVIES commented that he was trying to contemplate how the department would manage this if it's simply an unworkable level. Based on Mr. Regelin's testimony that these goals were simply unattainable, he wondered if in Mr. Regelin's view, there would be litigation as a result of not meeting those goals. MR. REGELIN said if this became law, the department would do their very best to achieve those goals. They would probably reduce the wolf and bear populations and see what they could maintain. He didn't think that biological reality could be mandated by legislation; the department would probably not achieve it and then he'd probably get sued according to the way this bill is drafted. Number 1214 REPRESENTATIVE DAVIES said, "I guess the next question I had is in terms of this opening up new habitat that's called no net loss features of this and based on restrictions -- is it your reading of this bill that even a change in the methods of access would be viewed as a restriction, if the change were to eliminate one method of access?" MR. REGELIN replied yes, he thought it's very clear that is what this law does. REPRESENTATIVE DAVIES asked if in Mr. Regelin's view it was possible to find one for one? What are the typical sizes of an area that those kinds of changes and restriction might apply to and would those comparable areas be available within the geographic regions all over the state? MR. REGELIN said the way the Board of Game usually does that is when they make regulations, it's a good sized area for the convenience of the hunter. He noted there are 26 game management units in the area, many with sub-units, so often it's done on a sub-unit basis. In certain places where it's not necessary, it's restricted by portions of the sub-unit if there's rivers or roads that allow the hunter to know where they're at in the woods. These areas are typically large. For example, on the North Slope where the moose harvest was restricted in a big area even though the moose are only along the river corridors and to find a replacement for that size that the Board of Game could look at just doesn't exist. He thought the result would be that the Board of Game wouldn't be able to restrict because there's nothing else to open up. He noted the Department of Law is looking at this and may be able to provide additional information. Number 1323 REPRESENTATIVE DAVIES referred to page 4, line 15, which states, "The Board shall adopt regulations guaranteeing access to and for continued consumptive uses" and asked if that was a similar kind of restriction against any kind of restrictions? MR. REGELIN said he thought the guarantee of access is a different part of the bill and has its own special problems in his mind because in many areas they allow hunting but they restrict it by the number of permits. If the opportunity to hunt is guaranteed in statute, he didn't think the department could by regulation restrict them by permits. So in many of the trophy areas or where they have to limit the number of animals taken, they probably won't be able to do that. The other alternative is shorter seasons which presents a "Catch 22" situation because if the season is shortened, then another place has to be found to replace that. Number 1382 CO-CHAIRMAN GREEN said, "On that same idea, under harvestable surplus, where it talks about excluding those animals that are taken for predation and human harvest, am I misreading that or does that lead to a convolution of reducing the number of game?" MR. REGELIN replied, "Over time, you would be mandated by the regulation to always harvest one-third of the number born less those that die from natural causes other than predation. And when you have severe winters and you lose 10, 15 and even 30 percent of the populations at times, you wouldn't be allowed to reduce the harvest levels to allow the herds to rebuild. That's one of the basic concerns we've had with this language from the beginning. I should also say on the closure of these areas where restrictions, there's a clause in there that says, `except for biological emergencies' so what that means, I'm not sure. The Board of Game doesn't manage by emergency, they try to think ahead so I would think it would be difficult to say that the board was taking this action for an emergency. Now the department has emergency authority to close seasons when we reach certain harvest levels or something unusual happens, so I don't think they'd be restricted in that case because we call it emergency order. I'm not sure if that's what they meant or not - the drafters." CO-CHAIRMAN GREEN remarked like the severe winter when there were so many killed by the railroad and also by freezing, etc. MR. REGELIN thought the goals of the bill were to ensure higher harvest levels which he didn't object to, but he didn't think the means of getting there in this case were not very wise. Number 1491 REPRESENTATIVE DAVIES asked, "Do you think it's possible that this bill might have the opposite result in the sense that -- I'm trying to envision being on the Board of Game and contemplating increasing access to an area where suppose the population has increased and you wanted to maybe add another method of access or add to the length of the season - I might under the terms of this bill, be pretty uncomfortable with making those additions when I knew that if I had at some point in the future to produce that, I would be prohibited from doing that. Wouldn't this actually - I think in some respects have a dampening effect on opening up access when there was some possibility that you might have to withdraw that three or four years in the future?" MR. REGELIN said it was a possibility that the Board of Game would be reluctant to take a short term opportunity to harvest more wildlife because in the long term, that level couldn't be sustained. He added, "Or for instance in Unit 13, where we're trying to reduce the caribou population and harvest, I think 15,000 caribou this year, if they're going to be forced to maintain that harvest level some way, they probably wouldn't be able to do it. They probably wouldn't do it in the first place." Number 1567 REPRESENTATIVE OGAN said this subsection does not apply to temporary closure based on biological emergency. If it's a tough winter, it means that's a biological emergency. There is still latitude in this legislation to manage wildlife. Section 1 says that it's to be managed solely on a biological basis. The legislation simply says that if an area is going to be closed, it has to be closed for a good reason; not because some special interest group wants to have the area closed. Number 1626 MR. REGELIN said he agreed that that's probably what the intent of the bill is, but individuals from the Departments of Fish & Game and Law who have analyzed the bill believe these are real problems and the department would probably end up in court. Number 1647 CO-CHAIRMAN WILLIAMS referred to the deer and timber in the Southeast area and asked how this would affect the timber industry. MR. REGELIN said he didn't think it would have any affect on the timber industry, but the Department of Law had some concerns with the trust language so perhaps they should address that question. Number 1683 REPRESENTATIVE NICHOLIA asked how this legislation would affect the controlled use areas, which in her district are used to rebuild their big game populations. MR. REGELIN responded, "The way that we feel the bill is structured, and it guarantees access by different methods and means, that you wouldn't be able to do that. I'm not sure that we wouldn't be able to maintain the ones that are in place now, but new controlled use areas that restrict methods of access - I don't think they'd be allowed because it's very clear that you can't restrict methods of access except to protect habitat. You can't do it to use methods of access to restrict harvest." Number 1735 REPRESENTATIVE NICHOLIA commented, "Then, if we can't use controlled use areas then you're probably going to tell me that we can't use the restricting the human consumption uses - restricting human uses?" MR. REGELIN thought the board would still be able to restrict seasons and bag limits but when they do, they would have to find another area to open. He added that if this could be interpreted that it's for a biological emergency, then they wouldn't have to do that. It's the language regarding the emergency that concerns him because he didn't think the actions taken by the Board of Game could be construed as emergencies. During his 13 years of working with the board, he recalled only twice when the board did emergency actions because of having to give advance notice of a meeting. Number 1815 REPRESENTATIVE NICHOLIA said, "I first got involved in fish and game activities since 1984 and then I learned that the Yukon Flats had a low moose population and they've been rebuilding every since. They had low moose populations across the whole Yukon Flats, so I don't see how that provision would help them because you don't really want to open up one part of it and restrict one part of it because then you would decrease the population in that one section some more. It says if you restrict one area, then you have to open up another portion of another area. I just don't see how that would work." MR. REGELIN said he thought it would be difficult for the board to do that because there wouldn't be other areas to open. Number 1868 REPRESENTATIVE NICHOLIA said under this bill if one area is restricted for moose for example, then another area is supposed to be opened up but what happens if the department doesn't open another area. MR. REGELIN said there are two things that would happen. The Board of Game would not be allowed to close the area or the Department of Fish and Game would be sued and he didn't know what the relief would be if there's no area to open. Number 1902 REPRESENTATIVE DAVIES said he was also concerned about the restrictions on the use of revenues. He referred to page 3 which includes a restriction on the utilization of revenue generated from taxes, license fees and other fees paid by sportsmen or funds received from federal aid in sport fish and wildlife programs and prohibits the use of those funds in an area where consumptive use of fish and game is not permitted or for the use for management of nongame species and asked how these funds are used and what the impact of this language would be on how the funds are used now. MR. REGELIN replied that since the department has lost their general funds, they are using fish and game funds which are license fees, to help manage areas like Pack Creek, Cramer's Field and McNeil River - although some of these are paid somewhat by user fees - this legislation would prohibit the use of fish and game funds for those in addition to prohibiting the use of those funds for work on endangered species or nongame species. He noted the department does a small amount of that now but mostly on species that are either endangered, threatened or being petitioned to be threatened. The reason they do that is that most of the time once they start doing the research, they find there are more animals than what people thought and the department feels the decisions on listings should be based on the best data available so they try to collect it. He thought the department had a good record of keeping lots of species that were petitioned to be listed or actually started through the process to stop them, like the goshawk in Southeast. Number 1992 REPRESENTATIVE OGAN asked if Mr. Regelin's discomfort would be eased somewhat if the language on page 2, line 7, regarding biological emergency was changed to biological basis? MR. REGELIN responded it would certainly make it better in that section about replacing the one for one. He would still have concerns about the guaranteeing of access to hunt and no restrictions on access by any kind of methods and means. He was proud of some of their trophy areas and the walk in areas for trophy management and quality hunting experiences where access is restricted by various means and he would hate to lose those. Those are areas were put in by hunters working in conjunction with the department and he felt it was something that Alaska should continue to offer to the hunting public. Number 2055 REPRESENTATIVE OGAN asked if it was Mr. Regelin's contention that they would lose controlled use areas? MR. REGELIN said, "When it guarantees access to hunting and you guarantee something in statute, and then I say that only 10 people can go or 100 people - or the Board of Game does - you're no longer guaranteeing and the one hundred and first person can sue us, the way I read it." Number 2077 REPRESENTATIVE OGAN said if it's managed on a biological basis and then determined for biological reasons that only 10 people can go in there, then that's a legitimate restriction. He asked if that was correct. MR. REGELIN replied that was a completely separate part of the bill and the lawyers would need to explain whether that was a possibility. He thought controlled use areas are used as a tool for the Board of Game to help spread out pressure and for a whole variety of reasons to protect the local users and give them more opportunities in places. He thought those would go away. CO-CHAIRMAN GREEN asked if the committee had any other questions of Mr. Regelin. Hearing none, he called on Kevin Saxby to testify. Number 2126 KEVIN SAXBY, Assistant Attorney General, Natural Resources Section, Department of Law, said he was assigned to both represent the Board of Game and in Anchorage does most of the work for the Division of Forestry, also. He stated, "I want to assure you that we haven't yet spotted all the legal issues on this bill yet, but there's a few important ones that the department thought that members might want to be aware of as they engage in final debate on this. The first one, probably the most important one we've spotted so far is this public trust issue that Wayne has just talked about a little bit. The public trust doctrine is that an established - it's a term of art in the law and when you buy into that language, you're buying into - just by the fact of using it, you're buying into many, many decades of jurisprudence on that issue. There's already a lot of law on the public trust doctrine. Being the person who both defends timber sales that are planned by the Department of Natural Resources (DNR) and who defends the decisions of the Board of Game, I can tell you that I'm uniquely (indisc.) to explain to you some of the ways that the public trust doctrine might be popping up in the future." Number 2196 MR. SAXBY continued, "One of the ways that we've often seen it in litigation in the past is when anti-development proponents want to halt, say a timber sale or some other commodity use of resources, they'll come in and argue that the wildlife in that particular area or some other resource on the land in that particular area must, under our constitution, be managed as a public trust and that the (indisc.) agency hasn't given sufficient consideration to the public trust value - the higher values that are implicated if you have a public trust there. (Indisc.) the Department of Law has successfully defended against that kind of an argument by arguing that the public trust doctrine historically applies only in navigable waters. It doesn't apply on the land. To my knowledge, this is the first time that the public trust doctrine would be exclusively applied on the land. So the point is I guess, I think that you need to be aware that if you decide to use this kind of language and for the first time take the important step of applying the public trust doctrine on land, you'll be taking a tool away from the Department of Law that we've used to defend disposals of resources in the past and handing a tool to those who would want to delay government action or prohibit it." Number 2279 MR. SAXBY stated, "The second issue is, as Wayne pointed out, this issue about some of the definitions and he pointed out the biological implications of the maximum sustained yield and harvestable surplus and highest level of human harvest definitions. I just want to add to that that because these will be viewed as implementing the sustained yield clause of Article VIII, Section 4 of the State Constitution, there's a pretty strong chance that these will eventually be interpreted as what sustained yield management means for game resources. And that's really an important step to take and given that the record is that this isn't what managers have in the past thought of sustained management as, it's a really narrow definition of sustained yield management. It will have very broad implications. To the extent that these definitions are equated with sustained yield management, they could have very broad implications requiring severe re-thinking of most game management (indisc.) that appear to have been accepted as appropriate." Number 2306 MR. SAXBY further stated, "The third issue I wanted to point out very quickly for you is the citizen suit provisions. There are two -- I realize I may be looking at a version of the bill that perhaps has changed recently, although I think they just tried to get me the most current draft -- but as I read it, there are two citizens suit provisions both of which allow suits to be brought against public officials other than members of the Board of Game to enforce the other provisions of the bill. There are some problems in that. The first citizen suit provision on - in my version, it's on page 2, beginning at line 8, authorizes citizens to sue public officials other than members of the Board of Game for an injunction to compel compliance with the preceding section. The preceding section says that the Board of Game and other state agencies, if they close areas, must open other areas. Well, I'm (indisc.) this provision authorizes is a suit against someone for action that the Board of Game has taken - someone who is powerless to change the action of the Board of Game. That problem could possibly be fixed by changing language somewhere. But the underlying problem is still there which is that's it's generally the Board of Game that adopts means and methods, seasons, bag limits, all the restrictions applicable to hunting and it's just inappropriate to authorize suit against other state officials when it's the Board of Game itself that's (indisc.). Of course, I'm not recommending that you change the language and allow suit against the Board of Game. I think if that were the case, you'd have major problems recruiting and keeping good Board of Game members. The second citizen suit provision has basically the same problem." In an attempt to keep his testimony brief, he reiterated that he hadn't identified all the issues. He offered to answer any questions the committee might have. REPRESENTATIVE RAMONA BARNES joined the meeting at 8:55 a.m. Number 2388 CO-CHAIRMAN GREEN asked if there were any questions of Mr. Saxby. Number 2392 REPRESENTATIVE DAVIES said, "Under these -- the possibility of bring suit against public officials -- just suppose that an area was closed or a method of access to an area was restricted and then somebody sued to open up an equivalent area and the cognizant public official could not find an area to open that was equivalent in size. What would then ensue?" Number 2419 MR. SAXBY replied, "We'd be faced with a couple of problems. First of all, there'd be so much - depending on which public official was sued, let's say it's Wayne as he was talking earlier, one of the first points that would be made, I guess is that Wayne doesn't have authority to open and close areas except in cases of biological emergency, like he earlier testified. So it (indisc.-coughing) to sue him, although there'd be a lot of confusion because this statute purports to authorize people to can sue him. The next issue raised would be if we're dealing with the right person - someone who does have authority to open an area and we still can't find an area large enough, it becomes a question of reconciling a constitutional sustained yield management mandate with this statutory mandate to open up areas and we'd have to do some real work in preparing the defense of that case and get the department and perhaps the board and perhaps others to look at establishing a record proving that there is no where else in the state that can be opened up to the use that was closed down for biological.... TAPE 96-73, SIDE B Number 001 MR. SAXBY continued..."I'm kind of saying this off the top of my head, but that would be the first place I would advise the decision makers to look - at reconciling the Constitution with the statute." Number 015 REPRESENTATIVE DAVIES inquired given the complexities discussed by Mr. Saxby, is it his opinion that if this bill were to be enacted into law that it would invite numerous lawsuits and they would be fairly expensive to defend. Number 026 MR. SAXBY said he agreed with that. He thought the citizen suit provisions in this bill are among the strongest that he's ever seen in statute and as others have mentioned, that is essentially an invitation to sue. Number 044 CO-CHAIRMAN WILLIAMS asked Mr. Saxby to explain how this might affect the timber industry in Southeast or anywhere else for that matter and how this might affect a challenge on the timber sale. MR. SAXBY responded that he was currently defending (indisc.) decision to conduct salvage logging on the Kenai Peninsula. A number of different organizations have challenged the entire five- year schedule and also each individual timber sale that was proposed last year - a total of, he thought 10 or 11 sales to try to deal to some extent at least with the bark beetle infestation that's ongoing there. He pointed out, "That the bark beetle infestation is the worst or one of the worst places and one of the places where a lot of those sales have been proposed and have actually been initiated, is in the southern part of the Kenai Peninsula adjacent to or actually within the Rich Creek critical habitat area. Of course, this bill deals a lot with what gets to happen in critical habitat areas." He noted that one of the arguments made by the environmental organizations and other groups who want to halt the timber sale or perhaps halt a proposed mine or some other commodity use is that the Department of Natural Resources has failed to consider other uses or failed to adequately consider other uses or failed to adequately allow for other uses. Their hand in making that argument is greatly strengthened to the extent that those other uses are recognized as coming within the rubric of the public trust doctrine. In the past, these groups have argued that these were public trust type concerns and we've defeated them by and large by saying the public trust doesn't apply here; it's never been applied here and it shouldn't be applied here now and it doesn't (indisc.-coughing) apply here by any law or by our Constitution. What this would change is that this now explicitly does apply public trust principles to what many would view as competing uses to logging or mining or some of the commodity uses. It strengthens their arguments. Number 147 REPRESENTATIVE DAVIES referred to page 4, line 15 which is a new instruction to the Board of Game to adopt regulations that would guarantee access to and for continued consumptive use and asked Mr. Saxby to comment on the possibilities for lawsuits under that language with respect to trophy areas and other areas where for some reason there exist restrictions at the present time. MR. SAXBY replied that he agreed with Mr. Regelin that it certainly raises questions about the continued validity of areas that have limited access regardless of the way that access is limited. He pointed out that in many, if not most of the trophy areas, the restriction was not entered based on a biological justification or at least not solely a biological justification. Often it was an allocation decision not solely based on biology but based also on managing competing types of allocated uses. He said that's also a reason for a lot of controlled use areas. For example, providing reasonable opportunity for subsistence as opposed to sport hunting where the board finds that one or the other of those uses is more important in that particular area. He agreed that it would increase the likelihood of lawsuits. He commented there was another problem with that provision and that is that it's always been thought that the Board of Game doesn't have authority over most state land to guarantee that anything happens on that state land. The Board of Game has authority to control means and methods of hunting but this language that says the Board of Game shall adopt regulations to guarantee access to land would throw a wrench into the works when they're trying to decide whether it's DNR, the Board of Game or what agency has the authority to decide what happens in this particular area. He recommended that some thought be put into some qualifying language in that area. CO-CHAIRMAN GREEN noted that Steven Daugherty from the Attorney General's Office was present to testify. Number 270 STEVEN DAUGHERTY, Assistant Attorney General, Natural Resources Section, Department of Law, testified that he is the lead attorney for the Alaska Board of Fisheries and wanted to point out that there are a few fisheries implications of this bill as well as game implications. He said, "The Board of Fisheries allocates between competing user groups and this includes non-consumptive as well as consumptive sport uses. The Board of Fisheries also closes areas to fishing and these are not always on a biological emergency basis. This is sometimes on a habitat basis trying to protect the habitat for the long term conservation of the stock. The Board of Fisheries recently adopted regulations allowing the closure of areas along the Kenai River and they felt these regulations were critical to the long-term preservation of king salmon in the Kenai River. This bill would have definite negative implications for that. A lot of those areas along that river might fall into some of these areas. They've been purchased - some of this Exxon Valdez restoration funds have been used to purchase areas and with the goal of defining these areas as critical habitat just so they can protect the habitat, protect spawning areas for salmon." Number 329 MR. DAUGHERTY continued, "The Board of Fisheries has a number of catch and release trophy type fisheries where you can only keep a trout if it's above 30 inches or under 12 inches, where the majority of the trout fall into the 12 to 30 inch range and you cannot retain them for consumptive use because in these areas the Board of Fisheries is trying to promote trophy fishing. It's a big draw for sportsmen to come to Alaska to fish and for Alaska sportsmen to get out and get a trophy fish. Without the ability to do this, there will basically be no trophy fish. If the board has to regulate for consumptive use, they won't be able to regulate to allow the development of these trophy fish that have to stay in the system for years in order to reach that size." Number 369 MR. DAUGHERTY said, "Kevin Saxby has touched on most of the issues with the public trust doctrine; however, I would note that the public trust doctrine is being applied to a fund here as well as just applying it to land and you're implicating all these funds that come in for our sport fish and this might - I can't say right now - the public trust doctrine is such a fuzzy issue that's out there. There's so much case law on it; it can be applied in some many different ways, but it's possible that if you were saying that there's a public trust to support fish funds, this could have negative implications for commercial fisheries. The Board of Fisheries might be required as a result of some lawsuit that might arise to restrict commercial fisheries in order to protect that public trust that is being assigned to the sport fish funds." Number 400 MR. DAUGHERTY remarked, "I also wanted to touch on one other point. It's not relating to the Board of Fisheries but to the biological emergency clause. The Alaska Supreme Court does look very narrowly on what constitutes an emergency and that language does present problems." He offered to entertain questions from the committee regarding the Board of Fisheries. Number 415 CO-CHAIRMAN GREEN commented that Representative Ogan had indicated there might be a change on page 2, line 7, which would change "emergency" to "basis" and asked if that would alleviate the last problem discussed by Mr. Daugherty? MR. DAUGHERTY said, "That would help with the emergency thing. I don't think that particular clause would apply to management of fisheries; however, I can say that it would prohibit - if you were doing things on a biological basis that would not allow you to develop these trophy fish. That would be something that would be ruled out because that's not something that is biologically necessary in order to promote maximum sustained yield. It is something that would actually decrease the pounds of fish that are harvested when you manage for trophy fish." Number 451 CO-CHAIRMAN GREEN said it appears that other than the fact that there may not be lands, river banks or types of lands available to go along with this, most of the problems that have been raised are of a legal nature. Inasmuch as the next committee of referral for this bill was the Judiciary Committee, he thought that would be the appropriate place to address the legal problems that have been raised. He asked Mr. Daugherty what would happen in a situation where River A is a fantastic fishing area but because it's being over fished, you restrict or maybe even close and you would make another area and there isn't another area like that. What happens when you cannot do what is physically do what is required? MR. DAUGHERTY wasn't sure what the courts would do in that situation. He added that in the fisheries area, nearly every area in the state is open to fishing. The Board of Fisheries only closes areas traditionally when there is a problem in that area and since most of the waters in the state are open to fishing, there isn't any other area that can be opened up because everything is already open that can permissibly be open without threatening the stocks. Number 520 REPRESENTATIVE OGAN stated, "On that point, I believe that - you mentioned that I was considering - I'd like to move an amendment when it's time to delete that "emergency" word from Section 1 and then if there was a biological basis for closing an area through the depletion of stocks or whatever, then they wouldn't be forced to open another area in the same geographic area if there wasn't another area to open. It would give them a little bit more of a management tool. I think the intent of the bill is simply to try to keep no net loss for hunting areas unless there's a biological reason to close an area. That's simply the intent. I think it's a laudable goal. If we soften that language somewhat, it would give them some more latitude. Whenever you're ready for an amendment, I'll be moving that amendment." CO-CHAIRMAN GREEN remarked that an amendment at this point might be helpful. Number 574 REPRESENTATIVE OGAN made a motion to amend page 2, line 7, delete "emergency" and insert "basis". Page 2, line 7 would then read "does not apply to a temporary closure based upon a biological basis." CO-CHAIRMAN GREEN asked if there was discussion or objection. Number 666 REPRESENTATIVE DAVIES objected for the discussion purposes. In conjunction with that, he inquired what "temporary" means. Number 676 REPRESENTATIVE OGAN said "I would interpret temporary as - for example to get into a situation, let's use the Nelchina Caribou Herd - it's a rather well known situation. They've gone into a tier-2 hunt, but if there's a depletion of a particular game or fish, they can temporarily close an area to let the stocks replenish for a biological basis. This clause gives them the ability - they don't necessarily have to reopen an area in another area immediately if it's a biological reason they're closing it. If there's another reason - political reason or special interest pressure group, ecotourism or whatever - that wouldn't be allowable but if it was simply for a biological basis, they would not have to reopen another area of equal size under this clause and hopefully, allow them to replenish the stocks and manage the game and fish or whatever, and when it's back to a level that can harvested again, then open it back up." CO-CHAIRMAN GREEN thought that whatever the biological basis was for closure would determine how temporary, temporary is. Number 695 REPRESENTATIVE DAVIES asked how that is different from what the department is doing right now. REPRESENTATIVE OGAN said there are some areas that are being closed by the Board of Game not for biological reasons. For example, the Paint River area for brown bear hunting. There's been a long history of three bears in that area for decades. There's an abundance of bears there and no biological reason to close that area; it was simply for political reasons and ecotourism reasons. REPRESENTATIVE DAVIES inquired if ecotourism would not be a valid reason to take any particular Board of Game action. REPRESENTATIVE OGAN remarked it is Board of Game, not Board of Tourism. REPRESENTATIVE DAVIES said, "Suppose that the residents of an area came and asked to have the means of access altered for their own economic reasons, but it turned out it was not a biological reason; it was an economic reason. Would that be prohibited under this?" REPRESENTATIVE OGAN commented that he is not an expert on this, he didn't write this legislation. He commented there had been a lot of areas closed in Alaska. He thought there was 40 million acres off limits for tourist reasons and various other reasons and the hunters are saying enough is enough. If an area is going to be for any reason other than a biological reason, then another area of equal size should be opened up. It noted it was originally three times bigger, but was softened to one for one. He asked if that area for example, in Paint River was not closed, would it affect the number of bears and the quality of experience there? He didn't think it would; there's still a lot of bears in that area. It hasn't affected it in the past. It's become an incredibly attractive tourist attraction, which he felt was a good thing. There has been hunting in there for many years and it hasn't affected it. He asked is there a biological reason to close that area down? If the bear population takes a crash, then absolutely it should be closed down and the tourists will benefit from that. Number 813 REPRESENTATIVE DAVIES asked if Mr. Regelin could come forward to answer some additional questions. CO-CHAIRMAN GREEN invited the assistant attorney general to join Mr. Regelin. Number 843 REPRESENTATIVE DAVIES asked Mr. Regelin to explain the effect of the word "temporary" and how would it differ from the present management? MR. REGELIN responded that he considers every action taken by the Board of Game is temporary in a way, because the next board can change it. There is nothing that is permanent versus temporary and it's not defined. The next Board of Game as it changes, can review the action and it's done on a schedule of every other year. He didn't think the word "temporary" meant a whole lot. Number 888 CO-CHAIRMAN GREEN inquired if on that basis, his earlier statement that "temporary" as it relates to page 2 would be dictated by whatever the biological concern was. MR. REGELIN said that was correct. He thought the board could change it as soon as (indisc.) changed or it could just be a different philosophy of the board, also. Number 905 REPRESENTATIVE DAVIES commented that with respect to biological issues, this would probably have no effect then on the way the board makes decisions. He asked Mr. Regelin if that was correct. MR. REGELIN said, "Temporary versus... REPRESENTATIVE DAVIES interjected, "In other words, if we change this wording so it reads `This subsection does not apply to a temporary closure based on a biological basis.'" MR. REGELIN replied, "I think what it would do is it would remove - if you make the decision for a biological basis, then you would not have to open another area equal in size somewhere else. If you made that closure for other reasons - social, political or whatever - then you'd have to find another area to open. And again, I guess the only area that I -- I think we're coming back to McNeil River and all the time I've worked on the Board of Game, they've closed an area to hunting that had been opened -- the Board of Game did -- and that was at the McNeil River area. That was not done for biology and we talked about it at great length with the board. It had been before them, I think, three consecutive meetings and it became a real divisive issue and an issue that was very harmful for hunters, in our opinion, throughout the Nation and the state because it was being exploited as making it look like hunters were really up there shooting bears at the falls. It wasn't happening, but that's the reason the board took that action. In that case, they'd have to find another area to open. The board did that. After they took that, they passed the no net loss policy of the Board of Game and instructed us to review all closed areas in the state and come back to them to open whichever ones we could. We've started doing that - that's why the Delta closed area was reopened at the last board meeting." Number 1013 CO-CHAIRMAN GREEN commented the committee had an amendment that should be acted on and most of the questions could be more appropriately addressed in the Judiciary Committee. He asked if there was other discussion relating to the proposed amendment. Number 1030 REPRESENTATIVE NICHOLIA requested the amendment be read again. Number 1035 REPRESENTATIVE OGAN explained the proposed amendment was on page 2, line 7, delete "emergency" and insert "basis." CO-CHAIRMAN GREEN asked if all committee members understood the amendment and if there was further objection. REPRESENTATIVE DAVIES withdrew his objection. CO-CHAIRMAN GREEN announced that Amendment 1 was adopted. Number 1056 REPRESENTATIVE NICHOLIA said she had a proposed amendment on page 3, line 7, insert "except for controlled use areas" after the word "game." She explained this addressed the concern she had raised earlier that this bill would wipe out the use of the controlled use areas which are used in her district to rebuild the big game population. She noted there have been moose population problems in her area and they have used the controlled use area to bring the population back up. CO-CHAIRMAN GREEN asked if there was discussion or objection to the amendment. Hearing none, Amendment 2 was adopted. CO-CHAIRMAN GREEN inquired if there were other amendments or discussion. Number 1119 REPRESENTATIVE NICHOLIA referred to page 2, line 8, and asked if a person couldn't bring a civil action suit against a state agency or a public official already? Number 1139 MR. DAUGHERTY replied that a member of the public already has the ability to bring an action if a state official is doing something that is ultra vires; that is something that is not within their statutory authority. However, he thought this provision was widening and inviting suit where it may even be a person who does not have the authority to do anything about the issue in question or it may be something that is within their authority and someone would have the ability under this provision to bring a suit. They probably would not have had the ability or been encouraged to bring that suit if this provision was not there. Number 1886 CO-CHAIRMAN GREEN said, "If that were the case and a person were not directly involved with this particular issue, would that be considered deleterious? I mean if you were going to sue the commissioner of health for something that -- there was a closure and this is actually talking about closure and opening another area -- would that actually hold then if they weren't in a position -- I mean, that's all this says is that it's that particular narrow issue. Or does it invite suit to other areas?" Number 1217 MR. DAUGHERTY said he wasn't certain if there's any situation where someone involved in the health area would be sued under this. He was certain there were cases in which state agencies that affect lands would be sued even though they do not have the direct authority to manage the game. If there's some type of land action that closes an area or closes an easement to access, that type of thing could result in a suit even though that person would have no authority to do anything about the game issues. CO-CHAIRMAN GREEN asked, "So would the suit then say that - you, person A don't have any authority under this bill but you litigated anyway, does that render it kind of neutral though. What would he lose and what would he be required to do because he doesn't have the authority to act under this legislation." MR. DAUGHERTY responded that anyone who sues under this would probably claim that they're a public interest litigant. CO-CHAIRMAN GREEN said he understood that, but he was talking about the person who doesn't have any authority to change it. MR. DAUGHERTY replied basically the state would defend that person and it would just be an expense to the state in defending that suit. The person who was suing would not bear any responsibility for attorney fees if they are public interest litigants, so they have no incentive to not bring suit while the state is going to be put to great expense in defending these officials even if the judge does dismiss it as soon as a motion is filed. CO-CHAIRMAN GREEN commented these issues should be addressed in the Judiciary Committee and asked if there were other questions. Number 1310 REPRESENTATIVE DON LONG referred to page 2, lines 11 and 12, and said it appeared to him that if this legislation is passed, we're inviting lawsuits, but if the legislation isn't passed, there won't be the lawsuits. CO-CHAIRMAN GREEN remarked that issue should be addressed in the Judiciary Committee. He agreed that it does invite litigation and while it may be dismissed as frivolous or even carried on, the person can't respond and couldn't be held accountable for any kind of damages. It's just that it's an expense that's incurred by the state. Number 1358 REPRESENTATIVE RAMONA BARNES made a motion to unanimously move CSSB 262(RES) as amended out of committee with individual recommendations with accompanying fiscal note. REPRESENTATIVE DAVIES objected. CO-CHAIRMAN GREEN asked for a roll call vote. Voting in favor of the motion were Representatives Barnes, Kott, Ogan, Williams and Green. Voting against the motion were Representatives Davies, Long and Nicholia. Co-Chairman Green announced that HCS CSSB 262(RES) moved from the House Resources Committee with individual recommendations and accompanying fiscal note. CO-CHAIRMAN GREEN noted the committee would take a five minute at ease. CSSB 199(FIN) - ENVIRONMENTAL & HEALTH/SAFETY AUDITS CO-CHAIRMAN GREEN called the meeting back to order at 9:35 a.m. He announced the committee would next hear CSSB 199(FIN) and asked Senator Loren Leman, Sponsor, for his remarks. Number 1519 SENATOR LOREN LEMAN, Sponsor, said, "I was hoping that the other members of the committee would be here to hear this because I think it's really important that they are. But since you're short on time and so am I, I'll take this opportunity. This is an opportunity to do some proactive work to help improve the responsibility of Alaskan businesses, of Alaska individuals in meeting their environmental responsibilities and health and safety. Unfortunately, a lot of people have misrepresented what the bill does and quite frankly, a lot of people still misunderstand it. Notwithstanding the headline article in yesterday's Anchorage Daily News, this bill does not create loopholes for environmental polluters. In fact, it does just the opposite. Unfortunately, people in the copy room, who want to establish headlines to get people drawn to an article will often do that and will totally misrepresent what the bill does." SENATOR LEMAN continued, "We have worked with the subcommittee to try to create some greater comfort for those who believe that additional sideboards are necessary. I believe the bill that came from the Senate, as is, provides that adequate protection. It does not protect bad actors; it doesn't do these things that the U.S. Attorney for Alaska all of sudden seems to have such great interest in protecting Alaska even though he claims he came here as a private citizen. What this is, is a national campaign to discredit a movement among states to begin taking on their own responsibility and dealing with these issues in a very positive way. Unfortunately, there's a lot of effort and even in this Administration, while we began in the very beginning of the session, in a very constructive, positive way, got unanimous endorsement for the concept, there's been nothing but foot dragging a long the way from these people. I will say that in the time that it's taken us to move from the Senate to the House, I've learned that two more states have adopted legislation similar to this; bringing that total up to 20. I believe that we'll see several more states by the time this legislative session has concluded who are added to that list. Alaska should be on that list and I would support that." Number 1680 SENATOR LEMAN stated, "In response to the subcommittee's work, one of the major changes is deleting the health and safety audits from the bill. I believe that's a step backwards because I believe that workers are also entitled to have safe work places and we ought to be taking a proactive approach for businesses to identify the health and safety aspects in the workplace also. But if this committee believes that we shouldn't be providing that benefit so businesses will practically be seeking that through audits, then I will accede to the wishes of the committee. I just would urge you, however, to not diminish the benefits from this because we know there are many industries in Alaska that are unsafe and we need to be doing what we can to protect workers." He invited questions from the committee. Number 1743 CO-CHAIRMAN GREEN noted the committee was on a very short time schedule and would be recessing in a few minutes. CO-CHAIRMAN GREEN stated, "One of the questions that has been pretty prevalent - that I've heard lots of hall talk about is the concern that has permeated most of the conversation is the immunity portion of this. That that does seem like `Boy, anybody feels like they're in jeopardy of being found out, they'll rush in and claim they found this leak and now want immunity while it takes time to fix it.' Would you care to just kind of gloss over -- I know there's a lot more detail to it than that and it is covered in the bill, but just for the record would you kind of give us your view on that." Number 1814 SENATOR LEMAN said, "Let me respond to it - there's at least two ways the bill addresses it. One is that this - there is no protection for anybody who knowingly violates law. This bill doesn't provide any immunity and the privilege doesn't apply to that. The second element is that there is no privilege for any substantial environmental damage offsite. So if you're off your own property and cause environmental damage, it doesn't apply. That's all that these writers and these naysayers would have to do is read the bill. It doesn't apply. I don't know how much more I need to say than that. The bill addresses that. There is protection against the bad actors. That is not the intent of the bill and that is not what the bill does." CO-CHAIRMAN GREEN asked if there were other questions of the sponsor. Number 1906 J. DAVENPORT testified offnet in support of CSSB 199(FIN). CO-CHAIRMAN GREEN asked if he was testifying for himself or on behalf of some organization. MR. DAVENPORT said, "I do represent clients that are interested in it, but primarily I am testifying on behalf of myself as a person that's been active in audit policy and audit privilege bills. I do represent MAPCO in a number of cases. I don't represent anyone else in this particular matter." Number 1957 MR. DAVENPORT continued, "I do support the bill. I've been involved both with the ABA (ph) focus group in Washington that work with the Environmental Protection Agency (EPA) on developing their policy which does focus more upon the penalty side. You had indicated there was a concern about the immunity portion. That is the area that was dealt with by the EPA in their policy that was promulgated December 22. I worked with the Oklahoma Department of Environmental Quality in developing their environment policy which also worked on the penalty side. I've been involved in auditing and overseeing audits. Essentially, when an audit is performed, it is a very expensive procedure. We need to bring in knowledgeable people to review the number of regulations that are involved. Typically, with the federal regulations, there's over 13,000 pages and there's a sense in the regulating community that it is virtually impossible to stay in compliance." Number 2054 MR. DAVENPORT stated, "When an audit is performed, typically the findings include primarily reporting violations where records were not kept as required by specific regulations or reports are not filed as required by specific regulations. These are not findings of pollution. They're not problems that involve environmental impact but they are difficult to keep up with and it is very helpful in maintaining a high level of compliance to have outside auditors come and review them. The difficulty with that, of course is that reporting violations must in fact be reported. I've had occasion with other clients who have reported violations who have then been penalized for seeking out problems and trying to correct them in bringing them to the state's attention. This is the area which is very vexing to managers and an area that this bill needs to address. Those who actually audit are not the companies who are trying or regulated entities that trying to avoid regulations. They are the ones who are seeking to stay in a high level of compliance. What they are seeking with this bill is to avoid being punished for acting proactively to stay in a high level of compliance. We think the bill does that." MR. DAVENPORT further stated, "It encourages companies. It only provides penalty relief for those that do not have knowing violations and do actively undertake efforts to achieve compliance. And that is probably the strongest and most important from a policy standpoint - from a state standpoint - that aspect of the bill as it encourages early and active efforts to comply. Secondly, those who find problems must cooperate with the appropriate agency in investigating and correcting the claim. This gets the state involved and provides for a cooperative partnership in resolving the issues. Whether it's an audit privilege, the audit privilege while it is provided in the bill, it certainly cannot provide a shield for a company to avoid reporting those things that are otherwise reportable. No responsible person would recommend that any company audit without being prepared before they know what they (indisc.) to actively deal with any findings that they come up with. This bill provides the carrot to encourage companies to seek out their problems and to correct them and does not inhibit the state in any way from using the stick as it needs to, to punish those companies that are not willing to take those proactive steps." Number 2330 MR. DAVENPORT commented, "We do feel this bill provides a balance in encouraging cooperation with the state. It encourages in a time of short budget resources, the encouragement for companies and regulated entities to go out and seek their problems. When I say regulated entities - two types of companies or entities that are strongly affected by this are governmental (indisc.) and municipalities, both of which have extensive environmental health and safety requirements that are imposed upon them. In fact, under the Oklahoma policy, the first two entities that took advantage of the voluntary disclosure policy were two air force bases in the state, both of which are very important to the economy." He offered to answer questions for the committee. Number 2402 CO-CHAIRMAN GREEN thanked Mr. Davenport for his testimony. He said,"You are in a state that has enacted this and I know your border state has been very, very much on the forefront of this kind of self-audit. Can you tell us, do you have a problem between.... TAPE 96-74, SIDE A Number 001 MR. DAVENPORT..."environmental law section of the Oklahoma Bar Section with the representatives of the Oklahoma DEQ, and the state is very supportive of this type of program. I just talked to the general counsel and his only regret is that more companies have not availed themselves of it. They're in favor of it for a couple of reasons. They want the companies to go out and find the problem. We don't have extra money here in Oklahoma to fund the inspectors to go out and find problems. They want to encourage companies to come in and -- seek out their problems and come in and work with the state in solving them. Secondly, frankly it frees the agency up of some complaints they occasionally get from - even from the legislative side where a large employer may be enforced again and they contact their legislator to ask why they're being picked at. The agency has, with this policy, provided every opportunity to the regulated community to voluntarily come into compliance and there's no sympathy at that point for companies that don't avail themselves of that. They're very supportive of this concept. In Texas, the bill was put together by working together between the industry and Texas Natural Resources Conservation Commission (TNRCC). At the Senate committee, Mr. John Riley of TNRCC testified that in the first six months, over 170 reports had been made to the agency of intended audit. I thought that was simply remarkable and a sign of the success of this group." Number 213 REPRESENTATIVE DAVIES inquired if Mr. Davenport had done some practice in Alaska. MR. DAVENPORT responded that he had. REPRESENTATIVE DAVIES asked if Mr. Davenport could cite one or more instances where a company had been penalized for engaging in an environmental self-audit? MR. DAVENPORT replied, "No, I cannot. I can from other states for those companies that do operate in more than one state, they're concerned wherever they do business." Number 256 REPRESENTATIVE OGAN remarked, "You stated that 170 violations were found in these audits that -- what would the same amount of violations would be found in that same time period before the law was enacted." MR. DAVENPORT responded, "The testimony was not concerning the number of violations but concerning the number of companies that notified the TNRCC that they intended to undertake audits and would bring them in when they were completed." Number 306 REPRESENTATIVE NICHOLIA said she was confused when Mr. Davenport introduced himself and asked if he represented MAPCO or himself? CO-CHAIRMAN GREEN remarked that Mr. Davenport had said he was representing himself but that he had done work for MAPCO. CO-CHAIRMAN GREEN announced the committee would stand in recess until 5:00 p.m. Number 338 CO-CHAIRMAN GREEN reconvened the House Resources Committee at 5:08 p.m. Members present were Representatives Kott, Davies, Long, Williams and Green. A quorum was present to conduct business. He said that discussion would resume on CSSB 199(FIN). He noted there was a new Committee Substitute, Version W. CO-CHAIRMAN WILLIAMS made a motion to adopt Committee Substitute, Version W, 9-LS 1312\Lauterbach dated 5/1/96 as the working document. CO-CHAIRMAN GREEN asked if there was any objection. REPRESENTATIVE DAVIES objected and asked if someone would explain the changes. Number 435 REPRESENTATIVE PETE KOTT said, "Essentially, as I understand it, the difference between Versions U and W is that in Draft U during the exercise in the subcommittee, we removed criminal intent from the immunity section and when it was conveyed to the drafter, they removed it throughout the entire bill, in the privilege section as well. That's the only difference. We went back in and put it back in to the privilege section of the bill. That's the difference between the two. I'll go through both drafts and do a comparison, if you like." CO-CHAIRMAN GREEN asked Representative Davies if he removed his objection. REPRESENTATIVE DAVIES withdrew his objection. CO-CHAIRMAN GREEN said, "Without objection then, we are on Version W." REPRESENTATIVE KOTT remarked, "Mr. Chairman, what I'm going to do is I have the original CS that we had in the committee that we had before us when this was sent to subcommittee. It was Version O. It's my understanding as I was not here for that afternoon session, that Version O was not adopted by the subcommittee - by the main committee - what we did in subcommittee was to adopt Version O as the working document. So, that is the document I will reference as far as the changes go as it is laid out in the new Version W." CO-CHAIRMAN GREEN inquired if there was any objection from the committee. CO-CHAIRMAN GREEN noted for the record that Representatives Austerman, Ogan and Barnes were in attendance. REPRESENTATIVE KOTT said, "Again, I appreciate the indulgence of the subcommittee members who sat through this laborious task - we had four meetings. We did make some headway. I hope we have improved the bill. I'll start off by referring you to Version O and in Version O on page 8, line 9, the phrase "on or after the effective date of this Act.... REPRESENTATIVE BARNES interjected that she did not have Version O. CO-CHAIRMAN GREEN said, "We just passed out the W, O was in your packet before. It's a prior version. And what Representative Kott is doing is comparing what the committee did with what we got from the Senate." REPRESENTATIVE AUSTERMAN said, "So, O is what we got from the Senate; W is what we just.... REPRESENTATIVE DAVIES explained that Version W was just adopted. REPRESENTATIVE KOTT commented, "Actually, Mr. Chairman, I'm not so sure even that is correct. I think what we got was a different version from the Senate. We had the CS before us when we sent this to a subcommittee. I think Version O was not adopted by the committee. That was the document we had before us when we went to subcommittee and we adopted Version O as the working document. Again, I wasn't here that afternoon so I'm kind of.... CO-CHAIRMAN GREEN said, "I believe you're right, Representative Kott. We had Version M - you're right." Number 728 REPRESENTATIVE KOTT explained, "We had another amendment - number 2 which was superseded by number 3, so I won't cover 2. Page 8, line 9, we just deleted the language, `on or after the effective date of the Act' so there's no inclusion insertion in the new draft. The next amendment which is an effective amendment - operative amendment - would be number 3. Page 8, line 16, we deleted starting from the words `in order to be considered' to `or property' at the end. Starting on line 16, `in order to be considered' through the end of line 18 - that was additionally deleted. There is no inclusion in the new version." Number 784 CO-CHAIRMAN GREEN questioned, "Then the bill drafter has...." REPRESENTATIVE KOTT said, "Yeah, everything else is - actually, we're okay there. We just deleted part of that sub-parenthesis (2). So parenthesis (2) on line 8 now reads, `Not attempting to bring the facility, operation or property into compliance so as to constitute a pattern of disregard of environmental or health and safety laws.'" REPRESENTATIVE DAVIES asked him to repeat that. REPRESENTATIVE KOTT responded, "I just repeated what I mentioned earlier. On line 16.... starting with the words, `in order' on page 8, line 16, working under Version O - we haven't done anything yet with Version W - these are the terms that we had excluded. You won't find them in the new version W. We've taken these words out of the bill. There's nothing to refer to yet in Version W. The next amendment number 4 was an insertion and that is in Section 1 of the bill, Version W, the Findings and Intent is all new language. That was brought to us by the council (indisc.) and the Alaska Oil and Gas Association (AOGA) folks. All of new Section 1 is new." CO-CHAIRMAN GREEN asked, "In that new Section 1, in essence that is what - just... REPRESENTATIVE KOTT interjected, "It's just intent language. The sponsor objected to the intent language going in primarily because the sponsor never puts intent language in bills. It makes it a little more clearer as to what direction we're really heading here. No one else objected, as I recall - none of the departments or Law and they were active participants at the table - we just had a round table discussion that involved the Department of Law, the Department of Environmental Conservation (DEC), Department of Labor, Sara Hannan was there and members of the committee as well as a member from the (indisc.) Council and a member from AOGA, representing them." Number 981 REPRESENTATIVE KOTT went to on explain, "The next amendment is on page 5, line 22, and this is inclusion - excuse me, on Version W, page 6, lines 19-21, Section (c) is new and reads, `An audit report is not privileged and is admissible as evidence and subject to discovery if the report was commenced after the owner or operator knew of an impending inspection or investigation by a regulatory agency.'" Number 1035 REPRESENTATIVE KOTT said, "Amendment 6 on page - going back to Version O - we're making a deletion here on page 5, lines 25-26. Basically, what we have done in this particular area was to delete `criminal penalty' from that section and essentially it is a conforming amendment throughout the section dealing with voluntary disclosures and immunity. This is what I was referring to earlier." REPRESENTATIVE BARNES inquired if it was lines 25 and 26 being discussed. REPRESENTATIVE KOTT said, "It's the term or the concept of `criminal penalty.' That term was removed so now we're applying this only to administrative or civil. And that has been changed throughout this particular section of the bill." CO-CHAIRMAN GREEN asked, "So there are several places under voluntary disclosure where `criminal penalty' has been removed from the O Version?" REPRESENTATIVE KOTT confirmed that. Just as a reference to show you where that would have fell into place, on page 7, line 26, that's one area that reflects this - we've taken out the criminal. This just says, `administrative or civil penalty may be imposed...' we've taken out the criminal. We felt that should be removed from that particular area. We didn't want to reward bad actors." CO-CHAIRMAN GREEN asked if Representative Kott was referring to page 6, line 26 on the O Version. REPRESENTATIVE KOTT responded affirmatively and added, "Again, that's conforming language. The next amendment that was adopted on page 7, line 31 of the O Version - we've deleted, `an extension is approved by the governmental entity with regulatory authority over the regulated facility, operation or property based on reasonable grounds'". REPRESENTATIVE DAVIES questioned what lines Representative Kott was referring to. REPRESENTATIVE KOTT replied, "That's right at the bottom - 31. Last two words on page 7, line 31, and then the subsequent two lines on page 8. That is what was in fact deleted." CO-CHAIRMAN GREEN clarified that Representative Kott was referred to Version O, the last two words on page 7 and the first two lines on page 8.... REPRESENTATIVE KOTT said, "...were deleted. They were replaced with - turn to the new Version W, page 8, lines 30 and 31 are where the changes start and commences on page 9, line 1. So we replaced that earlier language with `except that the audit period may be extended for up to 60 days if the facility gives notice of the extension and its duration to the appropriate regulatory agency by certified mail before the original time period expires.' That's what we've done there - we've offered an opportunity for an extension, basically." Number 1254 REPRESENTATIVE KOTT stated, "The next amendment on page 10 of the old bill - we deleted lines 1-8 in their entirety." CO-CHAIRMAN GREEN noted that takes out all of parenthesis (2). REPRESENTATIVE KOTT confirmed that. He added, "Subsection 2 parenthesis (a) and (b), that was replaced in the new version, page 10, (2), starting on line 26 where it defines environmental audit." CO-CHAIRMAN GREEN inquired if that went over to page 11, line 2. REPRESENTATIVE KOTT said, "Actually line 4." REPRESENTATIVE KOTT commented, "The last substantial amendment and you'll have to take my word for this - it was in the O Version, we deleted all references to occupational safety and health. I can go through the O Version based on the amendment that was turned in to us by the department - it was a two page -- primarily, it just deletes the words `occupational health and safety' from the bill with the exception of the title - as I mentioned, we did not want to cause alarm with a title change so we had the drafters, in the definition section of the audit, include the words `health and safety' which retains the title in legitimate terms." CO-CHAIRMAN GREEN commented, "We can see that the title hasn't changed, but you said there is a reference within the W Version, near the end someplace. He inquired if it was on page 11, line 25, where it talks about self-audits and environmental audit." REPRESENTATIVE KOTT stated, "On page 11, line 19 of the new bill -- see that on line 22, we've included the words `occupational health and safety' - that's what was added to ensure that the title would conform to the bill and thus would not need a title change. Otherwise, if we did not do that, the safety and audit aspect of it would be removed from the bill throughout and it would require a title change because the title does not refer to occupational safety and health in any respect once it's removed. We checked with the drafters on this." Number 1427 REPRESENTATIVE DAVIES commented, "I appreciate what they've done there but I don't think that that's required as long as the title covers what's in the bill, that's sufficient." REPRESENTATIVE KOTT said, "It was basically a concurrence with the drafters in ensuring that a title change would not be required.... Mr. Chairman, that's basically the areas that were identified as being changed. I think we came a long ways - probably still some concern within the - perhaps the Department of Law. I hope we have quelled, for the most part, the Department of Labor's concern. I think we've taken them out of play. I think we've taken the Department of Health & Social Services out of play. I'm not sure if we've taken DEC out of play or not. And obviously, I think the Department of Law still has some problems. We did at the conclusion of our work session before we agreed to move the bill back before the parent committee here, we did agree to allow the Department of Law to bring forth an amendment that would conform to the Reichhold decision which is a federal case that has been resolved. Whether or not the committee wants (indisc.- tape garbled) amendment remains to be seen, but I assured her that we would allow for that to come forth because it was pretty complex at the time rather than to hold this up another day or so." CO-CHAIRMAN GREEN inquired what the Reichhold decision was. REPRESENTATIVE KOTT said it was basically an environmental audit case, he believed. Number 1546 CO-CHAIRMAN GREEN commented, "So, as I understand this fairly significant redraft then is to try and keep this from having a problem legally as well as re-directing it under the Department of Labor and so this version now is, in your opinion, has cleaned up all that." Number 1571 REPRESENTATIVE KOTT said, "Mr. Chairman, we've come a long ways to remedy some of the problematic areas. But we think it's still a test tube for litigation based on just some general terms, I would suspect. Of course, any thing is subject to litigation but when you have some very liberal terms and speak in generalities, it leaves some openness as to where you're really going and where you've really come from, I think that potential still could be there, especially in this kind of an area - environmental cleanups and waste disposals - we've seen a lot of that in the past and I suspect it will continue in the future. But we have, I think, made some headway. I know there's still concerns out there." Number 1606 CO-CHAIRMAN GREEN inquired, "Will we get some discussion then of the fact that we have changed this significantly from what has been indicated to us by the sponsor to be a similar type bill that is used in now up to 20 states - will that be discussed by...." REPRESENTATIVE KOTT responded, "I think, Mr. Chairman, that that's a good point. During the subcommittee hearings and I think maybe before us, it was brought out that 18 states had passed something and two more had it on the governor's desk. It was brought out in subcommittee that 24 states have rejected it - I don't know where that came from - if that's an outright rejection or if it's a bill still sitting in somebody's committee. If that's what we're considering a rejection, I would submit that's probably going a little bit to the extreme but if someone as far as a governor has vetoed a bill, then I would say it was rejected or if there was a vote in either body and it failed to pass, that would, I believe construe to be rejected. As far as the other 20 states and my understanding - and again, it's a very narrow understanding that I have - many of the states that have passed this kind of legislation includes either privileges or immunities or a combination thereof - a little mixed bag or they might include both. We took out the OSHA portion of it because in the testimony that we heard, Texas was the only state that included OSHA and their plan is a little bit different than our plan - it was conveyed to us that we have what's called a state plan, where the feds convey in excess of $2 million to us and we essentially implement the OSHA regulations under the guidance, if you will, of the federal government. And several discussions surrounding that issue - the department basically confesses that they're already doing what the bill was required to do. They are already providing consultation. Privileges and immunities are already there for those that are involved in investigations and if my understanding is correct, the enforcement division does not have access to those records - at least, if I get this right - so that was the main reason why we took the Department of Labor out of play." Number 1747 REPRESENTATIVE AUSTERMAN said, "Just to reinforce what Representative Kott's saying (indisc.-tape garbled) health and safety issues and OSHA, Texas was the only state that had those set of criteria in here - that's what we were told and because the Department of Labor is basically the only department that was there that said they actually go out and do consultations with these different companies to help them get through some of these audits and make sure they're doing everything correctly. The DEC didn't have it and the rest of them didn't. That was kind of what sold me on removing OSHA and health and safety (indisc.). I think one of the things we'll probably hear from the Department of Law is on the privilege section, starting on page 2, in Section 2, line 20 - whether privileges should be in this bill or whether the immunity should just be in here and I think it was after either the second or third meeting of the Department of Law saying privileges are not a good thing to have in here that we finally said if you don't have anything in writing, let's move onto something different because we didn't have anything. All they were doing was talking about it. Maybe tonight they'll have some amendments in writing that will address some of their concerns about the privilege being too broad. We discussed the different type of privileges that the Department of Law had dealt with - confidentiality like an attorney which is fairly narrow, while this is a little bit more broad than they wanted to see. Maybe this other court case that they were talking about might cover some of those things. Those are really the two biggest issues." Number 1827 CO-CHAIRMAN GREEN noted that Mr. Davenport from Oklahoma had indicated in his testimony that the self-audit was in place in Oklahoma and it was working. He questioned if Oklahoma had the privileges portion. REPRESENTATIVE AUSTERMAN said he assumed they have the privilege aspects and the immunity aspects of it but not the health and safety OSHA because as he understood it, Texas was the only state that has that. Again, it was a different type of program. CO-CHAIRMAN WILLIAMS asked if the sponsor had been at the meetings. Number 1876 REPRESENTATIVE AUSTERMAN said a representative of the sponsor was there. He noted the sponsor does not agree with all the changes that were made in the subcommittee meetings. Neither do the Departments of Environmental Conservation and Law, nor did he, but there had to be some give and take to come up with the best possible bill. CO-CHAIRMAN GREEN announced that John Riley, Director, Litigation Support, Texas Natural Resources Conservation Commission would be testifying next via teleconference. CO-CHAIRMAN GREEN asked Mr. Riley to inform the committee how the self-audit was working in Texas. Number 1918 JOHN RILEY, Director, Litigation Support, Texas Natural Resources Conservation Commission, said he hadn't seen the latest draft of the legislation before the committee but Texas had passed similar legislation which became effective May 23, 1995. The Texas law does incorporate and include health and safety laws, so his agency is not specifically involved with the administration of the statute. From listening to the discussion in the committee meeting, he gathered that Alaska administers the federal OSHA standard. He noted the health and safety aspects of Texas' law would not extend to the federal enforcement (indisc.). He said since March 23, 1995, they've had 165 notices of intent to audit from various and diverse groups of regulated entities. Texas law requires that in order to avail oneself of the immunity provision, there must be a notice of intent to audit. He thought that was evidence of some of the level of interest in the regulated community for this type of legislation. Anyone seeking the immunity is required to report any violations detected in their audit process. It's completely voluntary - giving notice and then later if a company later decides they either didn't find anything or didn't care to report what they did find, but if you go to the next step there are several requirements for immunity under the Texas statute. He believed that so far what they've found is a pretty beneficial effect in terms of enhancing the enforcement functions of his agency. They have a huge regulated community and as with most state agencies, they have limited resources to actually do on-site inspections and respond to complaints. They've had about 30 disclosures under the immunity provision since the inception of the law. The disclosures have been somewhat interesting ranging from relatively small companies of about 50 employees to large multinational companies. They have found that many of these violations that are revealed in the (indisc.) process are types of violations that the agency would not ordinary have discovered in a routine inspection or a response to a complaint. Texas law requires that after discovery, the company must disclose whatever information they generate and cooperate with the agency toward the remediation. Texas law does not require them to give up their (indisc.) authority. He said, "And all you're really talking about what we talk in the terms of immunity, is the penalty mitigation or penalty elimination might be more appropriate. And that's the trade, I supposed. We can still re-contemplate in longer term, technical fixes or remedial projects that we will actually enter into like traditional enforcement order (indisc.). But for the ones that we think that fixes are in place or can quickly be put in place or not too long before they're in place, we probably would not pursue it any further from an enforcement point of view." He offered to answer questions from committee members. Number 2131 REPRESENTATIVE AUSTERMAN asked Mr. Riley to repeat how many self- audits had been turned in since the law was enacted. MR. RILEY replied, "We've had - (indisc.) measures the numbers of audits being conducted because our bill gives opportunity for privilege so an audit can be conducted and the agency would not necessarily know about them. But in terms of the immunity section, we received notice of intent to audit from 165 companies. Of that 165, approximately 30 have come in with disclosure, seeking the immunity for the violation." REPRESENTATIVE AUSTERMAN commented that it hasn't turned out to be something where everybody just files an intent to audit to cover themselves. MR. RILEY said not as far as he could tell. He thought there had been some pretty positive results in terms of the people who are coming in and exposing their violations and working toward solutions that ordinarily they may not reach in their traditional enforcement process. Number 2180 REPRESENTATIVE AUSTERMAN asked if Mr. Riley had been sent a copy of the original draft of SB 199. MR. RILEY replied yes, he did have a copy. REPRESENTATIVE AUSTERMAN asked how similar the privilege statutes as compared to those passed by the state of Texas. MR. RILEY recalled they were very similar in the original draft. REPRESENTATIVE AUSTERMAN inquired if it had created a problem for the state of Texas. MR. RILEY responded not so far. He added there has been some confusion in implementation with some of their regional offices as to what information they may receive and under what circumstances they may receive it. But that has been very limited. There's been a couple of occasions where a company was not asserting the privilege and the confusion at the regional level resulted in the agency refusing to discuss certain aspects. That has been cleared up. Number 2224 REPRESENTATIVE AUSTERMAN noted the law had been on the books in Texas about 11 months and wondered if there were things they were contemplating changing in statute to make it a better concept. MR. RILEY said there were a couple of things in their law that could use some clarification. They have provisions for overcoming the privilege and there's two sections in the Texas law; one relating to civil or administrative proceedings which provides for an in camera review and the other section in criminal context also provides for in camera reviews. He noted there had been some confusion but he didn't believe it was ambiguous or as unclear as some people think it is. He thought that some standards could be inserted that would make it clear on what basis the tribunal may make a decision on whether the information can be disclosed and used in the proceeding. He believed the law was pretty tight except for that area. Number 2275 REPRESENTATIVE AUSTERMAN thanked Mr. Riley for his comments and input. CO-CHAIRMAN GREEN asked if committee members had any questions of Mr. Riley. He said, "So, I guess the overall response, with a slight difference since we have federal OSHA acting here, is that so far it seems to working in Texas." MR. RILEY replied he believes it's working very well. He added that Texas has taken the position under their law that both the notice of intent to audit as well as the disclosures made in initial form, are public. Number 2317 CO-CHAIRMAN GREEN noted that Mr. Riley had indicated there was a way to overcome the immunity portion. MR. RILEY said there are several requirements through their immunity section. One is the threshold requirement providing notice before the audit is conducted of the intent to conduct an audit and then there are seven other criteria that he believed were reflected in SB 199. He said essentially, it amounts to the disclosure is made promptly, there's cooperation with the agency in investigation of the aspect of the violations that are disclosed, that remedial measures are taken within a reasonable time. There is no immunity for violations that cause harm to humans on-site or harm to people, the environment off-site. He thought the most important aspect is the solution within a reasonable time and that applies to both the privilege and immunity. So both the privilege and immunity can be overcome if there isn't swift, remedial action. Number 2390 CO-CHAIRMAN GREEN inquired, "Let's say Company A comes to Texas and says `We intend to do the audit, we've found this issue' and you go through this litany of conditions and then you can't reach agreement as to what needs to be done or in what time it needs to be done. Now the company has exposed themselves, but it sounds like you have this either time to do or what effect would happen -- where does that place the company that has come forward?" MR. RILEY responded that essentially the company has taken that risk of coming forward and the benefit they'll retain if an agreement can't be reached on remedial measures, is that they will still retain the penalty. He noted there were some questions as to whether they would consider to have been cooperative in the investigation, but he's assuming in Co-Chairman Green's question that this is a good faith disagreement as to what's necessary and the state would still retain their ability to seek the injunctive provision so they could proceed with their normal enforcement action. They could go ahead and bring an enforcement action against the company, go to a hearing, each party would put on their evidence and eventually reach a decision, hopefully. Number 2448 CO-CHAIRMAN GREEN asked if there had been any problems working this out with the various agencies within the state. MR. RILEY said he had spoken with other agencies, but he could only speak to the experiences within his agency. He added he is not aware of any problems with any other agencies. TAPE 96-74, SIDE B Number 001 CO-CHAIRMAN GREEN thanked Mr. Riley for his testimony and called Sara Hannan to testify. Number 027 SARA HANNAN, Representative, Alaska Environmental Lobby, Inc., applauded the subcommittee for their work. She said, "I've spent a lot of hours reading and dialoguing about this bill for several months, both on the other side and while this bill has been on the House side. As much as I would say that the bill that you see today in Version W is substantially different than the original version and substantially different and improved over the version you first got before you, I don't have anything good to say about this bill because I believe it creates a fundamental shift in judicial procedures and policy that is major. You've heard that and my statistic that I threw out in the subcommittee was referenced when the subcommittee chairperson gave their report, that many states have sponsored this bill into law and many states have rejected it. My study comes from a community study and they had done a Price Waterhouse audits and coverage of this legislation across the country as referenced and I wasn't able to quickly flip through my footnotes to find - from their study that this (indisc.), but that 1995, 24 states rejected this legislation. So across the country it's being talked about at legislatures and it's being constructed and in every state, local laws are different." Number 097 MS. HANNAN continued, "Texas may be the state with the most closely paralleling legislation to what we've proposed or what's being proposed here, but there's some fundamental differences. They're not a state OSHA state, primacy.....that's not a current issue, but there are other fundamental differences. First, I want to talk about privilege and what that means because when the attorneys talk about it, it's fairly complex and it's something they study clearly and there's something - there's 250 years of judicial precedent about, but the clearest example that I recall through four months of listening to this debate, came in the other body when one of the attorneys talking about it said, `Here's what privilege means. Privilege is when you go to your attorney and you say I shot my husband and here's the handgun I used and I was pissed off and drunk and there you go' and your attorney extends to you the privilege - the attorney-client privilege that we hear mentioned on every cop show and they turn to the police and say here's the gun and the police say where did you get it and the answer is I invoke my attorney-client privilege and I can't tell you anymore and I don't have to tell you any more. Now the police have to prove that that's my gun and that I killed my husband. But what I said to my attorney is privileged. The evidence that the attorney has is not privileged. It is one example of when the judicial privilege is extended, it's fairly specific and it's fairly limited." MS. HANNAN further stated, " One of the problems with this bill all along has been that the privilege is very broad and I believe the Department of Law will probably talk to you in more detail about why it's broad. When we look at the Texas bill, it's much broader than the Texas law because there is a way that the Texas law, the privilege can be overcome if the judicial tribunal says that they haven't in a swift and reasonable fashion, remedied the solution. Our law still does not have a way to overcome the privilege unless it's criminal." Number 168 MS. HANNAN explained, "But in a civil proceeding, as in the case of most white collar crime, the evidence that's important to prove the case whether it's civil damage or civil neglect, is the paper trail - what did you know, when did you know it, who knew it, who's responsible for knowing it, who had the authority to remedy it if they knew it. Who's the guy that the buck stops at? And many of the problems with this bill apply in audit and privileges - who conducts the audit, how are they conducted, who's notified and who has the authority to remedy the situation if they know about it, and is the audit credible. If you were being audited by the IRS, the guy who comes in and audits you is a CPA. And when you say you're a CPA, that means very specific things all across the U.S. There's certain education and certain licensure. When you say I'm doing an environmental self-audit of my corporation that's regulated by the state of Alaska, we don't have any other terms defined in statute except for what's in this bill and they're still fairly broad about what the means. Who can come in and do it, what credentials do they have to have, what do they have to know about the regulations, who are they responsible to, did I get hired by the owner, did I get hired by the operator, did I get hired by the landowner, did I get hired by the incinerator operator who may not own the land who may be on a public leasehold and may decide that he goes bankrupt during the middle of his audit and the state who is the leaseholder never knows what that sludge was when we come to clean it up. And we may never know because privilege was involved. Maybe there was no crime committed but maybe there's something we need to know because we have to remedy the situation. So where privilege is invoked, how it's applied, and who holds the bag are important things to define when you're establishing this new very broad privilege." Number 252 MS. HANNAN stated, "When you're giving immunity and we think that privilege is something very specific and it's probably where the greatest heartburn about this comes from, because what paper trail do you get access to and who gets access to it and when is very important. Now immunity is a separate section and that is if I want to cooperate with you and I want to tell you, the IRS, that I've gone through my books and I've cooperated and we've gotten along and you have evidence and information about me that's pretty important to our company's doing business. Am I liable for what you find? Now Joe Hazelwood got immunity for doing something that we know when we put those federal laws in place that provided Joe Hazelwood immunity from reporting, it was because we wanted to give people in a certain environmental regulatory position - if they spilled oil - an incentive to come forward, come clean as soon as they knew they spilled oil because we want compliance with the law; we built an immunity into that and that's what we're doing with this law at the state level. We're building an immunity into it but we're not specifying where narrowly that immunity is going to be granted. We're saying, you self-audit, you're immune unless it's criminal. Now this version has taken out criminal and we've narrowed it. No longer work place safety or health issues; it's purely environmental. Maybe that's the right incentive. But now I'm going to drag you back to the very onset of this bill." Number 343 MS. HANNAN continued, "We don't have a problem in Alaska. The Department of Environmental Conservation cannot come into your plant, walk through it, find something that you're non-compliant with, and say you have been a bad operator and I'm going to fine you a million dollars today because we don't like the way you've acted and if you come forward with information and say we've been a bad operator - gosh, yesterday I walked in the plant and there was something green and oozy coming out - I shut it off - we've remedied it, we've cleaned it up, we've sent it to the chemist and we're gonna take care it - they can't come in a week later and say `bad operator - million dollar fine.' They don't have the penalty authority. They have to go to court to do that. The rhetoric from other states about why we have to do that is because sometimes state agencies have the authority to do that and it's created a hostile environment for companies to work in their states. We don't have that in Alaska. We have not had much civil tort precedent where companies who are auditing or confidentially doing compliance orders, reviewing their operations have said, `we're trying to comply, we're working with it and you're using our tools against us - you're making it difficult for our employees to talk to us about what's going on in our plants.' We don't have a problem in Alaska. In some other states there have been some huge civil tort damages between workers and operators where the operators have revealed information or the employees have sought information and found out that the reason that they're sick is because at work the ventilation system wasn't keeping the air clean enough." Number 362 MS. HANNAN concluded, "Immunity and privilege are very, very significant issues and when you're giving them broadly, there are ramifications. I think this is a bad law. I don't think it's a road we can go down and as much as this bill is vastly improved over where it started in January, I don't think it can be improved enough to be an important statute change in Alaska. If we have problems with our civil laws regulating companies, if we've got laws on the books that shouldn't be there, let's repeal them. But I don't think we have them. I'd be happy to give you the citation about the states that have rejected it. I think that there's much controversy about whether this provides a significant incentive to benefit of businesses in Alaska and I think that it would be unwise for you to pass this into law." Number 395 CO-CHAIRMAN GREEN asked Ms. Hannan to give the committee the citation for the record. MS. HANNAN responded, "It's from a report that I'm happy to leave with Jeff - a copy of." CO-CHAIRMAN GREEN asked if the committee had any questions of Ms. Hannan. Hearing none, he asked Dwight Perkins to come forward and present his testimony. Number 411 DWIGHT PERKINS, Special Assistant, Office of the Commissioner, Department of Labor, testified that Version W before the committee, does remove the health and safety audits from the bill. He said the committee had heard today from the states of Oklahoma and Texas as well as numerous other testimonies from outside the state of Alaska about this bill and he submitted that to date, no employer or shop owner has come forward and said the Department of Labor was causing them great problems. He pointed out the committee had heard that somewhere between 18-24 states have this legislation. That may be so, but every state that has it is only in the environmental audit side with the exception of Texas. Mr. Riley from Texas couldn't speak on behalf of OSHA there but as Representative Kott mentioned, the Department of Labor in the state of Alaska has been given the authority to run as an effective plan as the federal OSHA and receives revenue in excess of $2 million to run the state plan. To put it in perspective, Mr. Perkins mentioned the concerns and problems the Department of Fish & Game is experiencing with the federal government threatening to take back that plan and he noted it could very well happen with this. The Department of Labor thinks it is in the best interest for the state to handle their own matters. Even though there is a movement nationwide, we don't care how they do it "Outside." He noted the Department of Labor is already doing a lot of what is addressed in the bill. For example, he distributed a pamphlet "Free, Confidential Consulting Services" which goes to employers explaining how it works. As Representative Kott had indicated earlier, it is confidential and it does not go to the enforcement side and companies are given the opportunity to make sure it's a safe environment for workers. He said, in addition, the department promotes safety and well-being in the work place by giving courses, tapes, videos and information to companies for their employees. Number 643 MR. PERKINS stated, "In the trying to keep with this timely and your indulgence with this, what has come before you today is - the Department of Labor feels that this is in the best interest." He thanked committee members for placing the legislation in a subcommittee to allow them time to work on it. He believed it was very valuable and the Department of Labor agrees with the product. With respect to the health and safety issues he urged committee members to concur with the draft that was before them. He commented the department wants to ensure this is a clean bill and perhaps it's something that should be worked on during the interim. He had committed to working with the bill sponsor during the interim and the sponsor's office could be the conduit to the companies to enhance communications. He reiterated that to date no company has come forward to express a problem with the Department of Labor, Alaska Occupational Safety & Health. Number 714 CO-CHAIRMAN GREEN noted that a prior testifier had indicated that Alaska doesn't have the punitive effect that some states may have. He asked if that applied also with OSHA violations as it does in environmental violations? MR. PERKINS responded yes. The consultation section of Alaska OSHA performs confidential audits for employers and the audit results are not shared with the enforcement side. The employer is not fined for violations found in the course of consultation audits. A consultation survey in process can stop an enforcement inspection from being initiated. When enforcement does an inspection and penalties do arise, they can be reduced as much as 97.5 percent based on good faith, size of employer and the history. Number 796 REPRESENTATIVE AUSTERMAN asked Mr. Perkins to explain what the enforcement side referred to. MR. PERKINS pointed out that when complaints have been generated or an accident has happened, the enforcement side goes in, checks and finds violations. Because of certain violations, there are certain fines attached to each violation of occurrence, depending on what it is and severity of it. He added, "So, on the enforcement side, if you will, that is going in and doing the audit because of complaint matters or checking to make sure the safety of the workers are protected. Then those fees can be reduced up to 97.5 percent." Number 842 REPRESENTATIVE AUSTERMAN followed up, "So, when the enforcement side of the Department of Labor goes out and inspects a seafood processing plant - which is what I'm most familiar with - and finds the settling tanks too close to oxygen tanks, railings that are under repair and not roped off property, the normal process then is for the enforcement officer to write all this stuff up and then six months down the road somebody goes in and says, `Here's your violations and here's what your fines are and now let's sit down and negotiate what the fine is really going to be.' That's basically what happens." MR. PERKINS responded that was basically correct but he believed that somewhere in the process, the employer has the opportunity, with OSHA, to remedy the problem. If the problem isn't remedied, then they're into the fine section. Number 892 REPRESENTATIVE AUSTERMAN stated that was the aspect of the problem that he would like the department to take a look at. It appeared to him that in the instances he had been involved with OSHA inspections in Kodiak, enforcement comes in and inspects but then it takes the department about six months to go through the paperwork before they get back to the employer. At that time, it's negotiating over what the fine is going to be rather than "please remedy the problem." Number 920 MR. PERKINS said he'd look into that. With respect to inspections, he read, "The safety and health compliance officer will present his credentials before inspecting a place of employment. The purpose of an inspection is to determine the work place is in compliance with Alaska's Occupational Safety and Health standards and regs. Both the employer and the employee shall be given the opportunity to accompany the compliance officer during his inspection of the work place, opening and closing conferences will be held, but advance notice of inspections will not be given to an employer prior to the time of actual entry upon property except in the following situations: In cases of apparent eminent danger to enable an employer to abate the danger as quickly as possible." So if it is a life threatening situation, they will not issue a notice that they're coming, but normally they do. Number 977 REPRESENTATIVE AUSTERMAN asked if the fines were called program receipts? MR. PERKINS wasn't sure if they go into the general fund or back to the federal government. Number 1003 REPRESENTATIVE LONG inquired if the last two committee substitutes had been reviewed by OSHA? MR. PERKINS replied yes, they had been. He stated, "The concern that the federal Department of Labor has is that we have to be as stringent or as effective as the federal plan. And that's the difference again, where Texas has put it into safety and health issues, the feds can come in and those people will stand down -- Texas stands down, while the feds collect their information. They cannot be less effective than the federal plan so regardless of how many laws that the Texas Department of Labor - I'll call it because I'm not sure or OSHA - however that falls in that category - regardless of how many laws they put in that safety and health audits can be addressed this way as we're talking, the federal government supersedes them and goes in and they get the information they need. So, it's a law with no teeth. They can walk right in and get that information - and they do, because the federal OSHA does not allow any plan to have privileges and immunities." Number 1103 CO-CHAIRMAN GREEN asked if there were additional questions for Mr. Perkins? Hearing none, he asked Marie Sansone to present her testimony. Number 1130 MARIE SANSONE, Assistant Attorney General, Natural Resources Section, Department of Law, said the department has been following this bill through the entire process and appreciated the changes that have been made up to date. However, the department does have serious concerns with the privilege and she had drafted some language that would codify the privilege that's recognized in federal case law. Discussions were still underway as to whether that approach could be agreed upon or not. She feels it has some very important advantages. She said, "There are two federal cases, one in the Ninth Circuit that describe and set out all the requirements for the privilege known as the `self-evaluative privilege.' Those requirements are fairly succinct and clear. There are limitations and the cases where they have been applied are basically reacting to about 25 years of the development of this privilege of evaluating your own conduct. So, I feel that there's a body of law there, examples you could look at and information that you could use to make sense out of this privilege. So to my thinking, it's a very logical way to proceed. It has some other important advantages in that we would not get into a federal versus state law conflict. If we had a case involving environmental laws and this bill applies to federal, state and local environmental laws, and there was a question what's the evidence and where are you going to proceed - in federal court or state court - the lawyers and parties in that case would have to struggle long and hard with this question of `Should I apply the federal privilege law or should I apply the state privilege law' and by using the federal privilege law, it eliminates that conflict - that dispute and that would tend to probably -- if we enacted the privilege as it is in this state law and there was a federal law that was different and people perceived it was a more narrow, workable privilege, that would probably tend to force litigants into federal court where they had something defined and workable. It just seems to me that this is a good way to preserve our state law - keep people in having access to state court - not force them into forum shopping and not get (indisc.) up in lengthy disputes over what comes into evidence and what doesn't." Number 1280 MS. SANSONE said, "It also has another advantage in that agencies like the EPA that are tracking the audit privilege legislation have indicated they will scrutinize the privilege very carefully. The federal government does not -- the federal Justice Department and the Environmental Protection Agency are on record as being strongly opposed to any statutory audit privilege legislation and they've stated they will scrutinize our federally delegated programs. So if we had a privilege law that matched federal law, that wouldn't create a problem there because we could simply point to the federal case law and say, `Well, the remedy or the privilege really is no different than if you went to federal court and so our program stays fine - it stays consistent with what you can do at a federal level.' So we feel those are important advantages. I think the reason for concern maybe is that this privilege operates more like a normal attorney-client privilege or a trade secret privilege where if you are the party asserting the privilege, you have the obligation to assert it to keep the communication confidential - that's your responsibility, you can't shift that off to someone else to try to disprove it or enter into confidentiality agreements and get into trouble if you break those - it keeps the burden where it belongs on the party that feels that information is highly sensitive, that it is not the kind of information they want out in public or need to have out in public - if they keep that confidential, then that's how it stays. It also has the feature that if you do evaluate your own conduct, you find problems and then you don't act on that, that privilege ceases. You have to act on your knowledge of violations and correct your problems to keep the information privileged. So that's an important feature to us. So we will work some more with the other parties on that to see if it's acceptable. It differs from the bill and perhaps it won't be so..." Number 1419 MS. SANSONE further stated, "There's a couple other points I'd like to make. I was very interested in the testimony from J. Davenport, the environmental auditor from Oklahoma. I checked - I believe I have copies of all the state audit privilege laws and I do not have a copy and I believe Oklahoma does not have an audit privilege law. He described working on Oklahoma with an audit policy and that is an alternative to the type of legislation that's before us - is an agency policies or, particularly maybe with immunity, and he informed us that was working well. We do have state programs that do work well where people evaluate their own conduct. Within the DEC, within the Department of Law, we allow people to - if they did get into trouble with violations, we have incorporated audits into settlement agreements to resolve their problem. So that would be an alternative to the bill. He also mentioned though that these audits - in Oklahoma, he referred to them as external audits - that has been an important concern to us. The bill we have before us refers to internal audits or audits -- a person could audit their own conduct not necessarily hire someone independent or external, and we felt that for a long time that has a problem that the auditor in an internal setting, if there are not appropriate controls in place, that bias, conflict of interest or perhaps fear of retaliation or retribution might enter into play and affect the auditor's work. Another concern has also been that if it's an internal audit and there's no standard as to who can authorize that audit and who can conduct it, that there's no assurance that the auditor will be trained or qualified or have the appropriate experience. And we still feel those features are really missing from this bill. That there be some assurance of accountability. The auditor from Oklahoma mentioned he always made sure the owner or operator had the wherewithal to conduct and complete the audit and make the corrections and that's a feature we would like to see, too. That it really does not help environmental compliance very well if you can audit but you don't have the money or the authority to make the corrections. That is critical to us; that the owner or operator of the facility be the party that is authorizing the audit and will carry through with it. That's very important." Number 1592 MS. SANSONE remarked, "He also mentioned the EPA policy. The EPA policy is another alternative that we feel is very good. It sets out conditions and requirements that protect the public. So those are alternatives that would not necessarily have to be in a law that could achieve the same results. In the bill, we have taken out the occupational safety and health penalties section completely and then we've also removed criminal penalties from the environmental violations. The consequence of that for the Department of Environmental Conservation is that DEC does not have administrative penalty authority, so if someone were to audit and come to DEC and say, `Here's my audit, here's my corrections. I'd like the immunity from administrative penalties,' they can't get anything. There's nothing - there is no penalty to immunize them from, so in a way that's kind of false advertising as far as DEC is concerned. That would raise the question in my mind, `Is this really an incentive if you can't get the remedy you want?'" MS. SANSONE continued, "There's a similar problem with the civil penalties. The DEC can go to court to get civil penalties for catastrophic oil spills, well they would not be covered by immunity. The DEC can also get civil penalties in the area of hazardous waste although I think Ms. Adair can probably inform you, most of the hazardous waste enforcement is handled at the federal level by the EPA under the (indisc.) scheme, so even though that's theoretically possible, it's not a very great reality. The only other area where there's a civil penalty is air quality and that's been in connection with the new Title V permit program. So the civil penalties are also extremely limited. And the concept then of giving someone an incentive to come forward and getting immunity from penalties, there's nothing much to get immunity from and I guess I see that as a problem to put a lot verbiage in the books that might lead people to believe they're getting a benefit when there really isn't that possibility there." Number 1766 MS. SANSONE said, "Sara Hannan indicated some of the states with the audit privilege had strict penalties. That is true. This whole idea commenced in the state of Oregon. They dramatically increased their criminal penalties for environmental violations raising them in all areas to felonies and expanding the number of misdemeanors. So when they created the audit privilege, it was part of a compromise in that legislation. It was part of a package deal that if we dramatically increase the penalties, we need some mechanism to help people not get into a punitive situation. We just don't have that there to negotiate with or to give away. So it does raise the question in my mind, `Is the immunity provision really necessary? Is it really an incentive?'" MS. SANSONE said, "We had offered in the Senate Finance Committee that even our criminal division would consider audits as a mitigator. That seems to make more sense. I don't think we need all the detailed provisions to achieve that but I would just really question is the immunity necessary. It just doesn't seem it is." MS. SANSONE concluded, "I do think the privilege would hurt the state in our cost recovery cases where we're trying to recover money for contaminated properties whether it's through DEC trying to recover money expended from the cost recovery fund or from the Department of Natural Resources (DNR) or perhaps the Department of Transportation, Fish and Game or any of the departments that have property or manage property, they would be at a disadvantage. And I think the privilege would hurt us in enforcing the law when we really do need to take those official steps." Number 1902 REPRESENTATIVE LONG asked, "Will the federal government still oppose, you know these immunities to the privilege (indisc.) will fulfill the federal requirements, you know under OSHA and stuff?" MS. SANSONE responded, "The federal government has indicated that if the immunities were constructed in such a way as to reduce the effectiveness of an enforcement program, that they would oppose that and where they have a delegated program, consider withdrawing the delegation. The federal government also has the option in that circumstance of bringing its own enforcement action. So it is possible that if the immunity does interfere with what is a fair enforcement policy, they would step in and take their action." Number 1985 REPRESENTATIVE LONG inquired if this bill as it is written would interfere with the federal law. MS. SANSONE said, "It potentially interferes in the area of air quality because that is one area where the legislature gave DEC statutory authority to go to court to collect civil penalties for violations of the air regulations. And it also potentially would undermine the underground injection control program in the Alaska Oil and Gas Conservation Commission. That commission has a delegation from the EPA to regulate pollution - or disposal of waste into underground injection wells. So that would be another area. It's potentially more serious for the Oil and Gas Commission because they do have administrative and civil penalty authority, I believe. So they need to be as effective." Number 2073 REPRESENTATIVE NICHOLIA said that Ms. Sansone had made reference to Oklahoma not having privilege and asked how she felt about the privilege being in the legislation before the committee. MS. SANSONE stated, "What I was referring to was that Oklahoma had not enacted a program into statute. They apparently - according to the earlier witness, have a policy. Oklahoma would have probably on its books some privileges to protect evidence like the attorney- client privilege and the work product doctrine, trade secret privileges. These are pretty widely consistent throughout the United States. So they probably do have some privilege that a person could assert to protect highly sensitive information, although they don't have an audit privilege, per se." Number 2164 REPRESENTATIVE NICHOLIA again asked how Ms. Sansone felt about having the privilege in this legislation. MS. SANSONE replied, "We do not support the privilege as it's drafted and incorporated into this document. We feel it is very broad and subject to abuse. And even though we have a number of conditions that have been put into this bill to try to guard against abuse, that there is so much opportunity for litigation and dispute over what those terms mean. There's also a problem with the provision in the bill about how to get disclosure through an in camera proceeding if we believe there's been fraud or if someone has not acted in good faith. In that exception, the burden of proof would be on the state to come into the judge's chambers and try to prove that a party had engaged in a fraud or was protecting -- engaged in audit and was protecting information for a fraudulent reason or basically acting in bad faith. But to do that, we do not get access to the documents that we would need to prove that we essentially -- we would be in front of the judge and the judge would have the documents and be able to review them, but we would be arguing about something that we could not see or evaluate. We don't feel that that is very realistic or that that would work." Number 2291 CO-CHAIRMAN GREEN thanked Ms. Sansone for her testimony and asked if there were any questions from the committee. Number 2317 NANCY WELLER, Medical Assistance Administrator, Division of Medical Assistance, Department of Health & Social Services, testified the division supports the subcommittee's recommendation to take out health and safety because it eliminates the department's concerns with this bill. She concluded that it was never anyone's intent that this bill apply to the Medicaid program in the way they saw it would have with the definition of environmental and health and safety audit that had been in all the previous versions of the bill. She explained they guarantee that health care provided in facilities is safe and try to guarantee that the federal and state dollars that are spent to pay for health care for Medicaid recipients is paid appropriately. She stated the immunity and privilege make absolutely no sense when it comes down to these functions because she couldn't believe that anyone would want to give an individual the right to provide health care that was not done in a safe manner or hide from their responsibility to pay back funds that were inappropriately paid to them by the state and federal government for the Medicaid program." Number 2422 MS. WELLER concluded they could only see that this bill as it applied to their functions would allow people who wanted to be dishonest to take money they were not entitled to. She reiterated the Department of Health and Social Services supports the subcommittee proposal. TAPE 96-75, SIDE A Number 026 JANICE ADAIR, Director, Division of Environmental Health, Department of Environmental Conservation, thanked members of the subcommittee for their hard work but the department still has problems with the privilege. She thought the immunity is closer to what the department currently does, particularly with the criminal provisions being deleted. She hoped that in a couple of years, they wouldn't be trying to back track from the privilege because something had been kept a secret from the people of Alaska and there has been a bad result that came from that. She stressed that is really the department's concern. They deal not only with the good operators, but operators who are less than honorable, so they come at this with a full range of experience. It isn't supposition, it's real stuff. She has strong concern that a privilege will complicate that even more than what's currently happening. Testimony from other individuals and on other bills has indicated that DEC's enforcement authority is really very limited. They don't have administrative penalty authority, they only have civil penalty authority for two different programs, so they often have to take people to court. This just takes it back one more step and it's the people of the state that end up suffering from that, which is the department's concern. Number 235 CO-CHAIRMAN GREEN inquired, "If you had an organization that was burning refuse and for some reason they were in violation - they come to you under this immunity and privilege system and then begin to drag on and on about correction. Would this bill even as it's modified give them some sort of a hedge against acting like a good operator?" MS. ADAIR responded she thought that it could. She stated, "There is a provision in here that says that we can still have injunctive relief. We can still do what we can but they can hide things and that is really -- the immunity presumes that all your cards are on the table - we're all looking at the same things and we're saying, `Okay, we see what you're dealing with here and we won't take any action against you so long as you do these things.' But the privilege allows people - and the folks that you have heard from are not the ones that we're concerned about. The ones that we're concerned about aren't here - they can take that stuff, call it an audit, hide it and we won't be able to. And years from now someone ends up or a community ends up with a problem and we may never be able to figure out what happened. And there have been cases like that in this state. Many of them have involved the military, but I think that we've seen the problems that the kind of a secrecy that the military shields things with and we get mad about that and now we're kinda gonna do that." Number 395 REPRESENTATIVE OGAN referred to page 6 of Version W which lists the things that are not privileged and asked Ms. Adair if she was familiar with that list. MS. ADAIR responded affirmatively. Number 395 REPRESENTATIVE OGAN commented that as he reads the list of things that aren't privileged materials, it appears to him the department still has a great deal of authority in these areas. He brought up the issue of paranoia and thought that as a business owner he would feel a whole lot better if he did an environmental audit for his own health and safety if he was around chemicals and things of that nature. MS. ADAIR commented, "One of the things that we're trying to do in sort of a government reduction - because we're out of room for all the paper - is try not to ask people to give us everything in the world. That has been our department's operating procedure over the years - we want to look at everything you've got and then we'll tell you what we think. What we're moving to now is we're trying to get away from that because we're trying to develop that better good neighbor policy with the people that we regulate in understanding that their documents are open to us now so that we can look at them. Instead of giving us everything, it will be only when we need to see it. So yes, there is a laundry list here and we certainly appreciate that list, but there's a lot of things that we don't require and we don't require them on the premise that we can access them if we need them. That's particularly the case where there's a problem with compliance. People typically don't keep records that would indicate noncompliance, it takes putting together sort of a case." She referred to the paranoia issue that was brought up by Representative Ogan and said the immunity gets to the situation Representative Ogan brought up. If a business owner knows he/she could look at their operation, find a problem, report that problem to DEC and be immune from the department's "storm troopers," that's really what Representative Ogan was talking about. But the privilege is separate and distinct from that. She explained the privilege says that you may or may not report it to the department, but you can take the documentation that you find and stamp it privileged and no one will ever see it again. She said, "That's one of the fallacies here is that those things work separately. So you have the documentation - we'll use somebody else as an example - that finds a violation and you mark it as privileged and it goes away. You don't ever report the violation to us, so immunity isn't even a question. Because you've not reported it to us, we can't go back and get that documentation that shows the violation. Perhaps through an observation, we find a problem and we come to this operator and say, `We've observed this, can you give us some documentation on your discharges' and they say, `I'm sorry, that was part of an audit and it's privileged.' Then we're stuck with having to go back perhaps and re-create information if we can or do a separate investigation to uncover what we might have been able to more easily obtain through the documents that were part of the audit." Number 811 REPRESENTATIVE OGAN said, "On that point, but you said that if you find something by observation and the violator said, `I'm sorry that was privileged' however, under this section it's not privileged and it would seem to me that if there were things -- that you could require things by regulation that would not be privileged by simply maybe adjusting some of the things that are required." He believed that's what it said in the legislation. MS. ADAIR said, "We read this and I could certainly be reading this wrong as well, but the information that we gather wouldn't be privileged but that the person we are inspecting doesn't have to give us information that was done as part of their audit - that that still says privileged but to the extent that we gather it or we observe it, that there's a distinction made there. That's how I read it and if I am incorrect, then Ms. Sansone can correct me. And yes, we could amend our regulations to require people give us a bunch of stuff. It just kind of goes against what we've been trying to do which is not be so anal-retentive about this and understand that there's going to be a whole lot of information in people's files that we can get to when we need it but they don't need to give it to us, report to us and have it be in our files and in their files. We were just trying to get away from that whole mode of doing business." Number 911 REPRESENTATIVE OGAN commented, "It seems to me that what you just said is that if you discover the information somehow or a problem somehow, that that information is not privileged, but their audit is. But you still have the ability to inspect and discover and do this stuff anyway. It's just that if they went ahead and did it, they don't have to give you the information." Number 951 CO-CHAIRMAN GREEN said, "Perhaps, quite often there has to be shown that there has been - it's not just a one time shot - and what I think Ms. Adair is saying is that if you go in and make this audit just ahead of a normal inspection by DEC, all the monitoring that you may have been doing suddenly becomes privileged and so now you're kind of handcuffed as to what you could say. We saw a - a black smoke incident or something - that's not the same as saying, `Well ya, there have been black smoke incidents every week for the last five years' because that's all now privileged information." MS. ADAIR remarked that would be one example, but that is the distinction. She added, "What we see, we can use but we can't get the information that might back it up. We'd have to re-create that in some fashion." Number 985 REPRESENTATIVE NICHOLIA recalled that a person had died from drinking water that was contaminated with chlorine and asked what would have happened in that case if this legislation had been in effect. MS. ADAIR didn't believe that case would have been impacted by this legislation. Drinking water systems are legally required to monitor for different constituents in the drinking water. If chlorine is used, that is one that has to be monitored. She didn't know all the details of the case that may have been impacted by this bill. Number 1125 MS. SANSONE added, "In a case like that, DEC would have a lot of required records in its file that they had been submitting. They may not have other records that indicated what the owner/operator of that system really knew about the management of the system. That is a type of record that you would be concerned about in that incident - are there audits or reports that indicate the operator or owner should have been on notice that the chlorine was being put in at an excessive rate and didn't act - that would be a question the state would want to ask and the victim's family would want to ask just what was going on at that facility. That information DEC probably would not have the full spectrum of that - it's not all required. So I don't know that it did impact that case. It could impact a similar case." REPRESENTATIVE NICHOLIA said she was wondering if this bill passed, would it have a negative impact on a case like that? Number 1145 MS. SANSONE replied, "This bill would have a negative impact on cases like that because the evidence that you conducted an audit and you found you had a problem or series of problems and the auditor told you what you needed to do to fix those problems, if years go by and the problem is not fixed and then a person is injured or dies as a result, that audit report is probably the most valuable evidence of negligence that the business was not fulfilling its obligations to maintain safe operations. That they knew they had a problem, the auditor told them what needed to be done to fix it and then they don't fix it. That is extremely valuable evidence - that is crucial evidence. And the audit privilege in this bill is drafted so broadly that it could exclude that evidence." Number 1184 REPRESENTATIVE AUSTERMAN inquired, "Doesn't this bill come back to knowingly and this kind of stuff where you're actually committing a crime basically when you do that and somebody dies that you're exempt from this." MS. ADAIR responded the privilege applies to criminal proceedings. The immunity doesn't, but the privilege does and what Ms. Sansone was talking about was keeping evidence privileged that could indicate negligence and the department wouldn't be able to obtain that. Number 1224 MS. SANSONE added, "The conditions that are in the bill about immunity not being available if you had knowingly committed a violation or intentionally or recklessly, those provisions are found beginning on page 7 in Section 475 of the bill which is the immunity provision and this is a concern that we've had throughout - they don't carry over to the privilege. The limitations and restrictions all kick in for immunity - the privilege is still wide open as to whether you truly are a bad actor, whether you're intentionally engaged in wrongful conduct. And that is the major problem with the privilege that we see. The limitations are all built in for immunity but they don't carry over to the first part of the bill - the privilege." Number 1283 CO-CHAIRMAN WILLIAMS commented that from what he was hearing, the department would rather not see the privilege in the bill at all. MS. ADAIR responded that was correct. CO-CHAIRMAN WILLIAMS asked if the department could live with the other portion of the bill? MS. ADAIR believed the department could live with the other portion of the bill, as currently drafted. CO-CHAIRMAN WILLIAMS remarked he would like to hear comments from the bill sponsor. Number 1351 MIKE PAULEY, Legislative Administrative Assistant to Senator Loren Leman, said, "Let me start with the question of privilege. You know, it's an interesting thing that as this bill has moved through the legislature, the element of privilege has been the most controversial element of it. There have been concerns raised on the immunity and whether it reaches too far in certain areas or not, but at least conceptually no one has had as much problem with the immunity as they have with the privilege. The reason I find this interesting is that we've had a lot of discussion about the other states that have passed these laws and in the other states the privilege is the more uniform element that has been included in the other incentive laws in the other states. The 17 states that have enacted these laws so far, 16 of the 17 provide privilege. Only South Dakota has enacted a law which does not grant privilege. Their bill is immunity only. So it is the privilege that has been the unifying factor in the self-audit incentive bills and it's been the immunity that has kinda gone 50/50 in the other states. Ten of the 17 states provide privilege and immunity and, of course, the Alaskan legislation is in that spirit. In addition, there's two other bills - Ohio and South Carolina where the legislatures have approved them; they're sitting on the governor's desk and are expected to be signed. To be honest, I do not know - I can't tell the committee how those 2 bills stand with regard to privilege and immunity but at least of the 17 that I'm informed about, all but 1 include the privilege. We think the privilege is an essential thing. If you look at the Constitution and read the Fifth Amendment, there is a sense in which it is almost in that spirit - you know - the right not to incriminate oneself." Number 1476 MR. PAULEY continued, "When we talk about audit reports, we're talking about things that are not required by the law and I would refer the committee to the section of the bill that Representative Ogan read from that anything that you're required to report already - anything that you already do in the course of a normal business activity, such as inventory records - you know, things that aren't required by law but that you just do anyway as a normal business activity - that is not protected by privilege. So when we talk about what is protected by the privilege, we're talking about a very narrow thing that where you're going, you're going above and beyond what the law minimally requires. You're being a good citizen, you're taking money out of your business profits and valuable time and having a compliance audit done that no agency is requiring you to do - no one is forcing you to do it - but you're being proactive to try to evaluate your operations and see if you're in compliance with the law. Off the documents to be used in essence, as a rope to hang you with. A lot of companies think that's exactly what will happen. You know, the Price Waterhouse survey which I referred to in my testimony last week - 369 companies polled nationwide and 10 percent of the companies that are doing audits now reported that those documents had been used in enforcement actions against them; 15 percent of them reported that their audit documents had successfully been obtained from hostile third parties in litigation actions. So, it is a perception. The critics say, `Give us some examples in Alaska.' The fact of the matter is, is that we're talking about an issue of perceptions. As Mr. Davenport stated this morning, many of the companies that operate in Alaska, operate in other states. The experiences they've had in other states color their attitudes about their operations up here and you know, I used the example earlier of the Internal Revenue Service. I think if we were to go out on a sidewalk and just do the man-on-the-street interview and ask people if you discovered - you're going through your files and you discovered you did a little bit of short-term work last year - you earned $2,000 and forgot to report that to the IRS - when you ask the average citizen, `Do you think that if you voluntarily report to the IRS that you unknowingly forgot to disclose this income, do you think they are just going to say okay fine, pay the money and the interest that you owe and no penalty since you were a good citizen in turning yourself in.' I think you would find most people - you know 90 percent probably - would say no way, they're going to nail me and I'm just going to pretend that I never saw this and that unfortunately is what a lot of people in the regulated community are doing. It's the old adage that no good deed goes unpunished and what the sponsor of this legislation is trying to do is turn that adage on its head and say that we aren't going to punish good deeds, we're going to nail bad actors but we are not going to take conscientious people and punish them." REPRESENTATIVE AUSTERMAN inquired, "To the points you were just making, Mike - in reference to what was stated by DEC and the Department of Law a few minutes ago in reference to immunity versus privilege in reference to committing an act - knowingly committing an act and then trying to cover it up with the privilege. How do you respond to the fact that you can't get in then if they've done their self-audit and use any of their stuff that they could tie up under the privilege." MR. PAULEY replied, "There's a couple of different levels. First, again we have to start with the exceptions for non-privileged materials and you'd have to ask the question of `What is it that an agency ordinarily has access to in its enforcement actions that are going to be denied under the privilege law, given the fact that we have this very long list of exceptions.' That's one issue. The second issue is that to the extent that this bill encourages regulated entities to be performing audits that would not otherwise exist, you have to ask yourself, `If the documents weren't there in the first place, you know they wouldn't be there for the agency to even be attempting to subpoena them or confiscate them in the first place.' That's the second issue. The third issue is that we have a section in the bill that provides for an in camera review where if an agency believes - if they have grounds to suspect that an audit is being asserted for a fraudulent purpose or that the audit was being used to cover up documents that were in response to an investigation that was ongoing or if the audit report shows evidence that there is non-compliance and that attempts to bring the entity into compliance were not taken - if any of those things can be demonstrated in an in camera review, the privilege is jeopardized." Number 1719 CO-CHAIRMAN GREEN announced that due to time constraints, the committee needed to wrap up. He thanked the subcommittee for an exemplary job. Number 1740 REPRESENTATIVE OGAN remarked that the clearest testimony he had heard was that of Mike Pauley. He made a motion to move Amendment 1, Revised W. CO-CHAIRMAN GREEN asked if there was objection to Amendment 1? Representative Kott objected for discussion purposes. MR. PAULEY commented, "When we first introduced this bill, from the beginning it was our intent to have the broadest possible application to include not only incentives for environmental compliance but also for work place safety. And I do want to emphasis that in the bill health and safety is defined as occupational health and safety, so we're only talking about work place safety, not patient care standards or drinking water or blood supply or any of the other number of things that have been raised during the discussion. The reason why we think it's important to include the occupational safety element to this bill is that companies that currently conduct compliance audits - it's been our experience that most of them do so for both areas. I referenced a popular textbook in my last hearing that is used to guide companies in how to do this, this is one that's called `Environmental Health and Safety Audit Handbook.' You know, companies that do these usually do them together. I spoke with the person from ARCO Alaska who does their audits and his business card says `Environmental Health Safety Compliance Unit.' So companies group these things together and I just want to reiterate the argument I made in the subcommittee that if the committee believes that the bill is a good incentive for environmental compliance, then we think the same incentive would be good for worker safety as well and we would just urge that that be included in the bill." CO-CHAIRMAN GREEN asked if the objection was maintained. The objection was maintained and Co-Chairman Green called for a roll call vote. Voting in favor to adopt Amendment 1 were Representatives Ogan and Green. Voting against the adoption of Amendment 1 were Representatives Austerman, Kott, Long, Nicholia and Williams. Amendment 1 failed. Number 1869 CO-CHAIRMAN WILLIAMS made a motion to pass HCS CSSB 199, Version W from the House Resources Committee with individual recommendations. CO-CHAIRMAN GREEN noted there was an objection. He asked for a roll call vote. Voting in favor of the motion were Representatives Austerman, Kott, Ogan, Williams and Green. Voting against the motion were Representatives Long and Nicholia. CO-CHAIRMAN GREEN announced that HCS CSSB 199(RES) passed out of committee. CO-CHAIRMAN GREEN announced the committee would recess to the call of the Chair and they would try to hear SB 247 the following day.