HOUSE JUDICIARY STANDING COMMITTEE March 4, 1994 1:15 p.m. MEMBERS PRESENT Rep. Brian Porter, Chairman Rep. Jeannette James, Vice-Chair Rep. Pete Kott Rep. Joe Green Rep. Jim Nordlund Rep. Cliff Davidson MEMBERS ABSENT Rep. Gail Phillips COMMITTEE CALENDAR SB 239: "An Act relating to evidence of financial responsibility provided by persons who conduct oil operations; and providing for an effective date." CSSB 239 MOVED FROM COMMITTEE HB 418: "An Act extending the termination date of the Board of Parole; and providing for an effective date." MOVED FROM COMMITTEE HB 299: "An Act relating to education programs on consumption of alcohol and to revocation of a driver's license for illegal consumption of alcohol; and providing for an effective date." CSHB 299 MOVED FROM COMMITTEE HB 439: "An Act enacting the Uniform Fraudulent Transfer Act." NOT HEARD WITNESS REGISTER ANNETTE KREITZER, Committee Aide Senate Oil and Gas Committee Alaska State Legislature State Capitol, Room 413 Juneau, AK 99801-1182 465-3711 Position Statement: Testified in support of CSSB 239 SEN. BERT SHARP Alaska State Legislature State Capitol, Room 514 Juneau, AK 99801-1182 465-3005 Position Statement: Testified in support of HB 239 RAY GILLESPIE, Lobbyist Refined Fuel Dealers 9478 Riverbend Court Juneau, AK 99801 Position Statement: Testified in support of HB 239 MIKE CONWAY, Director Division of Spill Prevention and Response Department of Environmental Conservation 410 Willoughby Ave., Suite 302 Juneau, AK 99801-1795 465-5250 Position Statement: Answered questions on SB 239 RENEE CHATMAN, Legislative Aide Rep. Bettye Davis Alaska State Legislature State Capitol, Room 432 Juneau, AK 99801-1182 465-3875 Position Statement: Represented prime sponsor of HB 418 RICHARD COLLUM, Executive Director Parole Board Department of Corrections P.O. Box 112000 Juneau, AK 99811 465-3304 Position Statement: Testified in support of HB 418 REP. CYNTHIA TOOHEY Alaska State Legislature State Capitol, Room 104 Juneau, AK 99801-1182 465-4919 Position Statement: Prime Sponsor of HB 299 JUANITA HENSLEY, Chief Driver Services Division of Motor Vehicles Department of Public Safety P.O. Box 20020 Juneau, AK 99802 465-4335 Position Statement: Testified in support of HB 299 MARGOT KNUTH, Assistant Attorney General Criminal Division Department of Law Room 17, Court Bldg. Juneau, AK 99811 465-3428 Position Statement: Answered questions on HB 299 DANIELLA LOPER, Staff Counsel House Judiciary Committee State Capitol, Room 122 Juneau, AK 99801-1182 465-4930 Position Statement: Addressed HB 299 PREVIOUS ACTION BILL: SB 239 SHORT TITLE: OIL OPERATIONS:FINANCIAL RESPONSIBILITY SPONSOR(S): SPECIAL COMMITTEE ON OIL AND GAS JRN-DATE JRN-PG ACTION 01/10/94 2457 (S) READ THE FIRST TIME/REFERRAL(S) 01/10/94 2457 (S) O&G, JUD 01/25/94 (S) O&G AT 03:00 PM BUTROVICH ROOM 205 01/25/94 (S) MINUTE(O&G) 02/04/94 2681 (S) O&G RPT CS 3DP 2NR NEW TITLE 02/04/94 2681 (S) ZERO FISCAL NOTE TO SB & CS (DEC) 02/02/94 (S) MINUTE(O&G) 02/04/94 (S) JUD AT 01:30 PM BELTZ RM 211 02/04/94 (S) MINUTE(JUD) 02/07/94 2718 (S) JUD RPT 2DP O&G(CS) 2NR 02/07/94 2719 (S) PREVIOUS ZERO FN (DEC) 02/08/94 (S) RLS AT 01:00 PM FAHRENKAMP ROOM 203 02/09/94 (S) RLS AT 01:00 PM FAHRENKAMP ROOM 203 02/09/94 (S) MINUTE(RLS) 02/11/94 2786 (S) 3 RLS TO CALENDAR 1NR 2/11/94 02/11/94 2799 (S) READ THE SECOND TIME 02/11/94 2800 (S) O&G CS ADOPTED Y14 N5 E1 02/11/94 2800 (S) ADVANCED TO THIRD READING UNAN CONSENT 02/11/94 2800 (S) READ THE THIRD TIME CSSB 239(O&G) 02/11/94 2801 (S) PASSED Y14 N5 E1 02/11/94 2801 (S) EFFECTIVE DATE SAME AS PASSAGE 02/11/94 2801 (S) Zharoff NOTICE OF RECONSIDERATION 02/14/94 2841 (S) RECON TAKEN UP - IN THIRD READING 02/14/94 2841 (S) PASSED ON RECONSIDERATION Y18 N- E2 02/14/94 2841 (S) EFFECTIVE DATE SAME AS PASSAGE 02/14/94 2843 (S) TRANSMITTED TO (H) 02/15/94 2400 (H) READ THE FIRST TIME/REFERRAL(S) 02/15/94 2401 (H) JUDICIARY 03/04/94 (H) JUD AT 02:00 PM CAPITOL 120 BILL: HB 418 SHORT TITLE: EXTEND BOARD OF PAROLE SPONSOR(S): REPRESENTATIVE(S) B.DAVIS JRN-DATE JRN-PG ACTION 01/31/94 2205 (H) READ THE FIRST TIME/REFERRAL(S) 01/31/94 2205 (H) HES, JUDICIARY, FINANCE 02/17/94 (H) HES AT 03:00 PM CAPITOL 106 02/17/94 (H) MINUTE(HES) 02/18/94 2454 (H) HES RPT 5DP 02/18/94 2454 (H) DP: G.DAVIS,BUNDE,TOOHEY, B.DAVIS,BRICE 02/18/94 2454 (H) -ZERO FISCAL NOTE (CORR) 2/18/94 03/04/94 (H) JUD AT 02:00 PM CAPITOL 120 BILL: HB 299 SHORT TITLE: DRIVER'S LIC REVOCATION;ALCOHOL/DRUGS SPONSOR(S): REPRESENTATIVE(S) TOOHEY,Bunde,Mulder JRN-DATE JRN-PG ACTION 05/06/93 1664 (H) READ THE FIRST TIME/REFERRAL(S) 05/06/93 1664 (H) HES, JUDICIARY, FINANCE 02/17/94 (H) HES AT 03:00 PM CAPITOL 106 02/17/94 (H) MINUTE(HES) 02/18/94 2450 (H) HES RPT CS(HES) NEW TITLE 6DP 02/18/94 2451 (H) DP: G.DAVIS, BUNDE, TOOHEY, B.DAVIS 02/18/94 2451 (H) DP: NICHOLIA, BRICE 02/18/94 2451 (H) -FISCAL NOTE (DPS) 2/18/94 02/18/94 2451 (H) -ZERO FISCAL NOTE (LAW) 2/18/94 03/04/94 (H) JUD AT 02:00 PM CAPITOL 120 BILL: HB 439 SHORT TITLE: UNIFORM FRAUDULENT TRANSFER ACT SPONSOR(S): JUDICIARY JRN-DATE JRN-PG ACTION 02/04/94 2256 (H) READ THE FIRST TIME/REFERRAL(S) 02/04/94 2256 (H) LABOR & COMMERCE, JUDICIARY 03/01/94 (H) L&C AT 03:00 PM CAPITOL 17 03/01/94 (H) MINUTE(L&C) 03/02/94 2575 (H) L&C RPT 5DP 03/02/94 2575 (H) DP: PORTER,GREEN,WILLIAMS, MULDER,HUDSON 03/02/94 2575 (H) -ZERO FISCAL NOTE (LAW) 3/2/94 03/04/94 (H) JUD AT 02:00 PM CAPITOL 120 ACTION NARRATIVE TAPE 94-32, SIDE A Number 000 The House Judiciary Standing Committee was called to order at 2:10 p.m. on March 23, 1994. A quorum was present. Chairman Porter announced that the committee would take up CSSB 239 first, then HB 418, HB 299, and HB 334. SB 239 - OIL OPERATIONS:FINANCIAL RESPONSIBILITY Number 030 ANNETTE KREITZER, Legislative Aide to the Senate Special Committee on Oil and Gas, Prime Sponsor of CSSB 239, gave a brief history of SB 239 and read from a sectional analysis, which follows: Section 1. Subsection (b)(1) The OFFSHORE exploration or production financial responsibility requirement of $50 million is UNAFFECTED by this amendment. Subsection (b)(2) The amended language clarifies that financial responsibility should be greater for an onshore facility producing more than 10,000 barrels per day of oil, than for an onshore facility producing 2,5000 barrels or less per day. Subsection (b)(3) Limits the financial responsibility for an onshore exploration facility to $1,000,000. Section 2. Chapter 102, SLA 1992 gives the Department of Environmental Conservation the authority to waive its requirement that financial responsibility instruments provide for a direct action and appointment of an agent for service of process. The direct action provision is NOT AVAILABLE in marine pollution insurance, and has not been available since about 1989. Section 6 of Ch. 102, SLA 1992 repealed this temporary law effective June 1, 1994. Rather than grant another two- year exemption, the Committee Substitute repeals the repealer and allows the DEC to grant waivers until direct action again becomes available. Section 3. Makes certain there is no gap between the effective date and the date of the repeal of the former temporary waiver. Section 4. Immediate effective date. In summary, MS. KREITZER said, SB 239 repeals the temporary provision to waive mandatory insurance requirements. Instead, the waiver would be established in statute. In addition, Section 1 would reduce the mandatory liability limits to a more reasonably available level. Number 158 SEN. BERT SHARP, member of the Senate Special Committee on Oil and Gas, said the current insurance requirements were prohibitively high for onshore exploration. He said SB 239 would reduce the mandatory liability limits to a more reasonable level. He read the sponsor statement for CSSB 239(O&G), which follows: The Oil and Gas CS for SB 239 recognizes that existing statutes mandates levels of proof of financial responsibility liability that are so unrealistic that coverage is not available and have has been. This is true as much for AS 46.04.040(b) onshore oil and gas exploration activity as it is for moving refined products along the waterways of Alaska. Section 1 only reduces the mandatory liability limits to more reasonably available levels. The reduced levels are still approximately 10 times higher than other oil producing states. The 20 million dollar requirement for onshore production facilities remains intact for facilities producing over 10,000 barrels of oil per day. Requirements are stair stepped down from over 10,000 B/P/D/, to 5,000 - 10,000, 2,500 - 5,000 and 2,500 and under. It seems to make sense that producers handling less daily volumes would create less of a spill potential. This bill provides for reductions for onshore oil and gas exploration activities that in nine out of 10 cases, never involve an exposure to on site crude oil. If the activity is successful, the safety devices and their operations required are highly developed and effective. There has never been an onshore crude spill in Alaska caused by an exploration rig. This bill is an attempt to open the door of opportunity a little bit. This would create a more realistic environment for small independent exploration firms to operate in Alaska. Let me point out that AS 46.04.040(b) is not the only proof of financial liability required of onshore exploration. It's only one of many. The Division of Oil and Gas requires the posting of a bond in paragraph 23 of their lease contract as well as satisfy requirements in 11 AAC 83.160. The Division of Oil and Gas can also require supplemental bonding if it believes the nature of the surface and its uses or the degree of risk justifies an increased bond. The Alaska Oil and Gas Conservation Commission also requires a lessee to post a separate bond of at least $100,000 dollars prior to any drilling activity. With many of the major oil companies now redirecting their exploration efforts overseas, it would only seem prudent to remove impossible liability requirements presently required which virtually shuts out independent exploration and producers in our state. I believe this legislation is a reasonable move to correct this situation. This bill, along with a balanced "exploration licensing" bill, may well stimulate renewed exploration activity in our state, thereby creating not only new jobs for Alaskans, but new revenue sources to the state treasury. I ask for your support of this bill. Number 340 There was general discussion of the resolution passed in both houses of congress regarding offshore exploration, drilling, and transportation of oil. Number 380 RAY GILLESPIE, Representing the Trade Association - Refined Fuel Distributors, testified in support of SB 239. He noted the difficulty for companies to provide the mandatory insurance. Number 436 MIKE CONWAY, Director, Division of Spill Prevention and Response, Department of Environmental Conservation, made himself available to answer any questions the committee had regarding SB 239. Number 468 REP. NORDLUND asked what would happen in the event there is a spill and the cost of cleanup is higher than the company's insurance coverage. Number 470 MR. CONWAY responded by saying the department would ensure the company had up to one million dollars of resources to cover costs. In the event that the damage caused by the company exceeded their means to pay, the state would fund a cleanup from the 470 Fund. REP. KOTT moved CSSB 239 with individual recommendations and zero fiscal note. REP. DAVIDSON objected. A roll call vote was taken. Voting yes: Reps. James, Kott, Green, Nordlund and Porter. Voting no: Rep. Davidson. CSSB 239 passed from committee. HB 418 - EXTEND BOARD OF PAROLE Number 510 CHAIRMAN PORTER announced that HB 418 would be taken up next. Number 515 RENEE CHATMAN, Legislative Aide to Rep. Bettye Davis, Prime Sponsor of HB 418, spoke on behalf of Rep. Davis and read a sponsor statement. In summary, the bill would simply extend the Board of Parole. She noted that there was a zero fiscal note. The sponsor statement follows: HB 418 would extend the Board of Parole for the customary four-year period un A.S. 44.66.010(c). Under current law, and without passage of this legislation, the Board is scheduled to sunset on June 30, 1994. The State Board of Parole was created in 1960 and has been an essential component of Alaska's criminal justice system. There are currently 70 felons on parole supervision. EAch year, about 400 prisoners are eligible to be released to discretionary parole supervision for a portion of their sentence. In addition, 500 prisoners are released to mandatory parole supervision for a period equal to one-third of their sentence. Expiration of the Parole Board will not alter the state's responsibility under Title 33, Chapter 16, which provides for prisoners to be eligible for and supervised on discretionary and mandatory parole. The State will almost certainly be a party to costly litigation to determine the legal status of prisoners, parolees and victims. The Board of Parole has been an effective vehicle in administering the parole process. I urge your support of HB 418. Number 547 RICHARD COLUMN, Executive Director, Parole Board, Department of Corrections, testified in support of HB 418. He made himself available for questions. Number 564 REP. JAMES motioned to move HB 418 from committee with individual recommendations and a zero fiscal note. With no objection, HB 418 was moved from committee. HB 299 - DRIVER'S LIC REVOCATION;ALCOHOL/DRUGS CSHB 299(JUD): "An Act relating to revocation of a driver's license for illegal possession or use of a controlled substance or illegal possession or consumption of alcohol; to fees for reinstatement of a driver's license; and providing for an effective date." Number 575 CHAIRMAN PORTER announced that HB 299 would be heard next and introduced Rep. Toohey. Number 580 REP. CYNTHIA TOOHEY, Prime Sponsor of HB 299, read from a sponsor statement. She said the intent of HB 299 is to deter teens from engaging in the use and abuse of a controlled substance. The bill would provide the Department of Public Safety with a tool to help discourage youth from starting the dangerous and often fatal association of controlled substances and alcohol with driving. She said an individual who is at least 14, but not yet 21, who has illegally consumed or possessed alcohol or a controlled substance, would have their license revoked. If that individual did not have a license at that time, the privilege to attain a driver's license would be temporarily withheld. Number 626 REP. GREEN motioned to adopt CSHB 299. Without objection CSHB 299 was adopted. Number 630 REP. DAVIDSON asked Rep. Toohey how the teenagers would know the consequences of their actions. Number 668 JUANITA HENSLEY, Division of Motor Vehicles, Department of Public Safety, responded to Rep. Davidson's concerns by stating the division of Alaska State Troopers has a community service bureau. That bureau would provide information to the public of the provisions outlined in the bill. Number 687 REP. DAVIDSON said he would like to have something in the testing booklet for when an individual is taking the permit test that pertains to the provision of HB 299. Number 696 MS. HENSLEY said that was an option the department could provide for. Number 702 REP. NORDLUND asked how long the revocation period was. MS. HENSLEY said the first offense would be ninety days, the second offense would be one year. Number 720 REP. NORDLUND asked the chairman to explain the differences in the CSHB 299 and the original bill. MS. HENSLEY responded by saying that page 3 of the committee substitute would allow for the individual to complete an alcohol education, rehabilitation examination. She said a further provision was added to allow a sworn report to be submitted at a hearing rather than the peace officer being required to be present. Number 725 CHAIRMAN PORTER clarified the statement Ms. Hensley made regarding the completion of an alcohol rehabilitation program. He noted that not all individuals would have to complete this program, only those who have been screened and referred for this type of program. Number 757 REP. KOTT asked for clarification of the intent of the bill. Number 762 MS. HENSLEY said this bill is intended as a deterrent. Number 780 CHAIRMAN PORTER asked about the provision on page 5, lines 21 and 22, regarding testimony at hearing not being admissable in criminal trial. He asked if this was new. Number 790 MARGOT KNUTH, Assistant Attorney General, Criminal Division, Department of Law, said it was not new and that it was modeled after the DWI statute. Number 801 DANIELLA LOPER, Staff Counsel, House Judiciary Committee, asked about the issuance of a temporary license in the case of an appeal. Number 813 MS. HENSLEY said a temporary license would be issued pending the outcome of the case. She said it is the same as in the case of a DWI appeal. In conclusion, she said the temporary driver's license is issued for seven days. Number 829 REP. GREEN asked if there were any statistics of a person who had been granted a temporary license who had been arrested for the same offense, during the time of which they have their temporary license. Number 828 MS. HENSLEY said she had no statistics on that, but had not heard of that happening very often. Number 855 REP. KOTT asked about federal grants that would provide funds for the educational pamphlets regarding the provisions outlined in the bill. MS. HENSLEY noted that at this time congress had not passed the legislation that would provide the grants. In addition, Alaska has qualified for some grant money because of the passage of some legislation last year. Number 010 There was general discussion about the fiscal note and it was agreed that the program would be funded by program receipts. Number 137 CHAIRMAN PORTER asked if there was further discussion regarding the adoption of CSHB 299. Being none, CSHB 299 was adopted. CHAIRMAN PORTER noted there were two amendments before the committee. He addressed Amendment 1, which would add a provision that an individual who was in violation of this law and was directed to attend a treatment facility would have to pay that cost. Number 162 REP. JAMES moved Amendment 1. With no objection, Amendment 1 was adopted. Number 165 CHAIRMAN PORTER addressed Amendment 2. He said Amendment 2 would raise the reinstatement fee from $100.00 to $250.00. Number 196 REP. GREEN said he supported Amendment 2. Number 200 CHAIRMAN PORTER noted that both the sponsor and the department supported the amendments. Number 205 There was general discussion regarding the $250.00 fee being high. MS. KNUTH commented that $250.00 was a standard amount. Number 220 REP. JAMES aired a concern that the relationship between a drinking violation and a driver's license revocation was inconsistent. Number 381 REP. KOTT pointed out that perhaps the fine was too high and could not support Amendment 2. Number 417 MS. HENSLEY pointed out that these young adults pay money for drugs or alcohol and often pay more than the cost of the proposed fine. REP. TOOHEY noted that if the fine deters one child from drinking and driving, it was worth it. Number 504 REP. JAMES maintained her concern. Number 536 CHAIRMAN PORTER asked if there was any further discussion on Amendment 2. REP. KOTT maintained his objection. A roll call vote was taken. Voting yes: Reps. Green, Nordlund, James, Porter. Voting no: Rep. Kott. Amendment 2 passed. Number 568 REP. GREEN moved CSHB 299 as amended, with individual recommendations and attached fiscal note. With no objection, it was so moved; CSHB 299 was moved out of committee. Number 578 CHAIRMAN PORTER said the committee would attach a letter of intent with regard to the expenditure of the $250.00 reinstatement fee. Number 581 REP. KOTT reiterated his concern about a fine and suggested community service instead of a higher reinstatement fee. With no objection, CSHB 299 was moved from committee. The House Judiciary Committee adjourned at 3:30 p.m. BILL(S) NOT HEARD HB 439 - UNIFORM FRAUDULENT TRANSFER ACT