HOUSE JUDICIARY STANDING COMMITTEE April 21, 1993 1:00 p.m. MEMBERS PRESENT Rep. Brian Porter, Chairman Rep. Jeannette James, Vice-Chair Rep. Pete Kott Rep. Gail Phillips Rep. Joe Green Rep. Cliff Davidson Rep. Jim Nordlund OTHER MEMBERS PRESENT Rep. Jerry Mackie COMMITTEE CALENDAR SB 178 "An Act relating to civil nuisance actions." HOUSE JUDICIARY COMMITTEE SUBSTITUTE PASSED OUT WITH NO RECOMMENDATION SB 173 "An Act relating to health insurance for small employers; and providing for an effective date." NOT HEARD WITNESS REGISTER CHIP THOMA Juneau, Alaska 99801 Position Statement: Opposed SB 178 DAVE MATTHEWS Acting Manager Alaska Forest Association 111 Stedman, Suite 200 Ketchikan, Alaska 99901 Phone: 225-6114 Position Statement: Supported SB 178 JAMES F. CLARK Robertson, Monagle & Eastaugh Attorneys at Law P.O. Box 21211 Juneau, Alaska 99802 Phone: 586-3340 Position Statement: Supported SB 178 PETER EHRHARDT 35401 Spur Highway Soldotna, Alaska 99669 Phone: 262-9164 Position Statement: Opposed SB 178 CHUCK ROBINSON 35401 Spur Highway Soldotna, Alaska 99669 Phone: 262-9164 Position Statement: Opposed SB 178 MATTHEW DONOHOE P.O. Box 2993 Sitka, Alaska 99835 Phone: 747-6467 Position Statement: Opposed SB 178 DON MULLER P.O. Box 1042 Sitka, Alaska 99835 Phone: 747-6734 Position Statement: Opposed SB 178 CHUCK ACHBERGER Alliance for Juneau's Future P.O. Box 21143 Juneau, Alaska 99802 Phone: 586-2495 Position Statement: Supported SB 178 MARY FORBES Kodiak Audubon Society 418 Mill Bay Road Kodiak, Alaska 99615 Phone: 486-2685 Position Statement: Opposed SB 178 JAMIE PARSONS Alaska State Chamber of Commerce 217 Second Street, #201 Juneau, Alaska 99801 Phone: 586-2323 Position Statement: Supported SB 178 VALORIE NELSON P.O. Box 1356 Sitka, Alaska 99835 Phone: 747-5030 Position Statement: Opposed SB 178 RONN DICK 801 Lincoln Street Sitka, Alaska 99835 Phone: 747-2505 Position Statement: Opposed SB 178 ROBERT ELLIS P.O. Box 2966 Sitka, Alaska 99835 Phone: 747-8950 Position Statement: Opposed SB 178 NANCY LETHCOE P.O. Box 1353 Valdez, Alaska 99686 Phone: 835-4300 Position Statement: Opposed SB 178 STEVE BORRELL Alaska Miners Association 501 West Northern Lights Boulevard Anchorage, Alaska 99503 Phone: 276-0347 Position Statement: Supported SB 178 JEFFREY TROUTT Birch, Horton, Bittner & Cherot One Sealaska Plaza, Suite 301 Juneau, Alaska 99801 Phone: 586-2890 Position Statement: Opposed SB 178 AVRUM GROSS Gross & Burke 424 North Franklin Street Juneau, Alaska 99801 Phone: 586-1786 Position Statement: Opposed SB 178 BOB LESHER P.O. Box 3 Pelican, Alaska 99832 Phone: 735-2276 Position Statement: Opposed SB 178 DOUG MERTZ 319 Seward Street Juneau, Alaska 99801 Phone: 586-4004 Position Statement: Opposed SB 178 SUSAN STURM 617 Katlian, #B-23 Sitka, Alaska 99835 Phone: 747-5990 Position Statement: Opposed SB 178 DAVID KATZ Tongass Conservation Society P.O. Box 3377 Ketchikan, Alaska 99901 Phone: 225-5827 Position Statement: Opposed SB 178 CAROLYN NICHOLS 305 Islander Drive Sitka, Alaska 99835 Phone: 747-3146 Position Statement: Opposed SB 178 NATASHA CALVIN P.O. Box 2966 Sitka, Alaska 99835 Phone: 747-8950 Position Statement: Opposed SB 178 VANCE SANDERS 424 North Franklin Street Juneau, Alaska 99801 Phone: 586-1786 Position Statement: Opposed SB 178 PAULA TERREL Thane Neighborhood Association 5025 Thane Road Juneau, Alaska 99801 Phone: 586-3451 Position Statement: Opposed SB 178 LAURIE FERGUSON CRAIG Alaskans for Juneau P.O. Box 22428 Juneau, Alaska 99802 Phone: 463-5065 Position Statement: Opposed SB 178 RICHARD HOFFMAN 5025 Thane Road Juneau, Alaska 99801 Phone: 586-3451 Position Statement: Opposed SB 178 ROBERT ENGELBRECHT Temsco Helicopters 1650 Maplesden Way Juneau, Alaska 99801 Phone: 789-9501 Position Statement: Discussed SB 178 RUSSELL HEATH Alaska Environmental Lobby P.O. Box 22151 Juneau, Alaska 99802 Phone: 463-3366 Position Statement: Opposed SB 178 ROBERT LOESCHER Sealaska Corporation One Sealaska Plaza Juneau, Alaska 99801 Phone: 586-1512 Position Statement: Discussed SB 178 FLORIAN SEVER 1706 Edgecumbe Drive Sitka, Alaska 99835 Phone: 747-8466 Position Statement: Opposed SB 178 PAM BRODIE Sierra Club 241 East Fifth Avenue, #205 Anchorage, Alaska 99501 Phone: 276-4048 Position Statement: Opposed SB 178 GAYLE HORETSKI Committee Counsel House Judiciary Committee Capitol Building, Room 120 Juneau, Alaska 99801-1182 Phone: 465-6841 Position Statement: Discussed SB 178 PREVIOUS ACTION BILL: SB 178 SHORT TITLE: CIVIL NUISANCE ACTIONS BILL VERSION: CSSB 178(JUD)AM (EFD FLD) SPONSOR(S): JUDICIARY TITLE: "An Act relating to civil nuisance actions; and providing for an effective date." JRN-DATE JRN-PG ACTION 03/31/93 1006 (S) READ THE FIRST TIME/REFERRAL(S) 03/31/93 1006 (S) JUDICIARY 04/05/93 (S) JUD AT 01:30 PM BELTZ ROOM 211 04/06/93 (S) JUD AT 01:30 PM BELTZ ROOM 211 04/12/93 (S) JUD AT 01:30 PM BELTZ ROOM 211 04/13/93 1334 (S) JUD RPT CS 3DP 1NR SAME TITLE 04/13/93 1334 (S) ZERO FISCAL NOTE TO SB & CS (LAW) 04/15/93 1406 (S) RULES 3CAL 1DNP 4/15/93 04/15/93 1410 (S) READ THE SECOND TIME 04/15/93 1410 (S) JUD CS ADOPTED UNAN CONSENT 04/15/93 1411 (S) ADVANCE TO 3RD RDG FAILED Y11 N9 04/15/93 1411 (S) THIRD READING 4/16 CALENDAR 04/15/93 1420 (S) RETURN TO FINANCE FAILED Y9 N11 04/16/93 1446 (S) READ THE THIRD TIME CSSB 178(JUD) 04/16/93 1447 (S) RETURN TO JUDICIARY FAILED Y9 N11 04/16/93 1447 (S) PASSED Y11 N9 04/16/93 1448 (S) EFFECTIVE DATE FAILED Y11 N9 04/16/93 1448 (S) PHILLIPS NOTICE OF RECONSIDERATION 04/18/93 1461 (S) RECON TAKEN UP-IN THIRD READING 04/18/93 1462 (S) HELD ON RECONSIDERATION TO 4/19/93 04/19/93 1547 (S) RECON TAKEN UP-IN THIRD READING 04/19/93 1548 (S) AM NO 1 NOT OFFERED 04/19/93 1548 (S) RETURN TO SECOND FOR AM 2 UNAN CONSENT 04/19/93 1548 (S) AM NO 2 MOVED BY TAYLOR 04/19/93 1549 (S) DIVIDE AM 2 INTO 3 PARTS UNAN CONSENT 04/19/93 1549 (S) AM NO 2 PART A FLD Y- N20 04/19/93 1549 (S) AM NO 2 PART B ADPTD UNAN CONSENT 04/19/93 1549 (S) AM NO 2 PART C ADPTD UNAN CONSENT 04/19/93 1549 (S) AUTOMATICALLY IN THIRD READING 04/11/93 3550 (S) AM NO 3 NOT OFFERED 04/19/93 1550 (S) RETURN TO SECOND FOR AM 4 UNAN CONSENT 04/19/93 1550 (S) AM NO 4 ADOPTED UNAN CONSENT 04/19/93 1550 (S) AUTOMATICALLY IN THIRD READING 04/19/93 1550 (S) RETURN TO SECOND FOR AM 5 FLD Y10 N10 04/19/93 1551 (S) RETURN TO SECOND FOR AM 6 UNAN CONSENT 04/19/93 1552 (S) AM NO 6 MOVED BY RIEGER 04/19/93 1552 (S) AM TO AM 6 ADOPTED UNAN CONSENT 04/19/93 1552 (S) AM NO 6 AS AM ADOPTED Y11 N9 04/19/93 1552 (S) AUTOMATICALLY IN THIRD READING 04/19/93 1552 (S) PASSED ON RECONSIDERATION Y11 N9 04/19/93 1552 (S) EFFECTIVE DATE FAILED Y11 N9 04/19/93 1555 (S) TRANSMITTED TO (H) 04/20/93 1346 (H) READ THE FIRST TIME/REFERRAL(S) 04/20/93 1346 (H) JUDICIARY, FINANCE 04/21/93 (H) JUD AT 01:00 PM CAPITOL 120 BILL: SB 173 SHORT TITLE: GROUP HEALTH INS. FOR SMALL EMPLOYERS BILL VERSION: CSSB 173(FIN) SPONSOR(S): SENATOR(S) RIEGER,Pearce,Salo,Kelly,Phillips; REPRESENTATIVE(S)B.Davis,Nordlund,Ulmer,Brice TITLE: "An Act relating to health insurance for small employers; and providing for an effective date." JRN-DATE JRN-PG ACTION 03/25/93 946 (S) READ THE FIRST TIME/REFERRAL(S) 03/25/93 946 (S) LABOR & COMMERCE, FINANCE 03/30/93 (S) L&C AT 01:30 PM FAHRENKAMP ROOM 203 03/30/93 (S) MINUTE(L&C) 03/30/93 (S) MINUTE(L&C) 03/31/93 1003 (S) L&C RPT 4DP 1AM 03/31/93 1003 (S) ZERO FISCAL NOTE (DCED) 04/08/93 (S) FIN AT 09:00 AM SENATE FINANCE ROOM 518 04/08/93 1269 (S) FIN RPT CS 5DP SAME TITLE 04/08/93 1269 (S) PREVIOUS ZERO FN APPLIES TO CS 04/12/93 1307 (S) RULES TO CALENDAR 4/12/93 04/12/93 1309 (S) READ THE SECOND TIME 04/12/93 1309 (S) FIN CS ADOPTED UNAN CONSENT 04/12/93 1310 (S) AM NO 1 FAILED Y5 N11 E3 A1 04/12/93 1311 (S) AM NO 2 FAILED Y5 N11 E3 A1 04/12/93 1311 (S) AM NO 3 FAILED Y6 N11 E3 04/12/93 1312 (S) AM NO 4 WITHDRAWN 04/12/93 1313 (S) AM NO 5 FAILED Y5 N11 E3 A1 04/12/93 1313 (S) FAILED TO ADVANCE TO 3RD RDG Y11 N6 E3 04/12/93 1313 (S) THIRD READING 4/13 CALENDAR 04/13/93 1338 (S) READ THE THIRD TIME CSSB 173(FIN) 04/13/93 1338 (S) RET TO SECOND FOR AM 6 FAILED Y10 N10 04/13/93 1339 (S) PASSED Y19 N1 04/13/93 1339 (S) EFFECTIVE DATE CLAUSE VOTE SAME AS PSG 04/13/93 1339 (S) Adams NOTICE OF RECONSIDERATION 04/14/93 1393 (S) RECON TAKEN UP-IN THIRD READING 04/14/93 1394 (S) PASSED ON RECON Y19 N1 04/14/93 1394 (S) EFFECTIVE DATES VOTE SAME AS PASSAGE 04/14/93 1396 (S) TRANSMITTED TO (H) 04/15/93 1249 (H) READ THE FIRST TIME/REFERRAL(S) 04/15/93 1250 (H) JUDICIARY, FINANCE 04/15/93 1272 (H) CROSS SPONSOR(S):B.DAVIS 04/16/93 1303 (H) CROSS SPONSOR(S):NORDLUND,ULMER 04/19/93 1341 (H) CROSS SPONSOR(S):BRICE 04/21/93 (H) JUD AT 01:00 PM CAPITOL 120 ACTION NARRATIVE TAPE 93-66, SIDE A Number 000 The House Judiciary Standing Committee meeting was called to order at 1:45 p.m. on April 21, 1993. A quorum was not present; therefore, a work session remained in progress until a quorum was established. SB 178 CIVIL NUISANCE ACTIONS CHAIRMAN PORTER announced that the committee would take up SB 178 first. He noted that the meeting was being teleconferenced. CHAIRMAN PORTER stated that the bill before the committee was the Senate-passed version of SB 178, as amended on the Senate floor. He suggested that those testifying on SB 178 consider the significant amendments which had been made to the original bill. He mentioned that he had heard people express concern that some permits were not issued after a public hearing process, making it difficult for individuals to be aware of problems related to the permits. He stated that SB 178 had been amended on the Senate floor so that the prohibition against civil actions would not apply to permits or licenses issued without a public hearing. (Rep. Nordlund arrived at 1:49 p.m., establishing a quorum of the committee.) Number 110 CHAIRMAN PORTER noted that nuisances involving nuclear waste had been removed from SB 178's provisions as well. He said that SB 178 pertained to specific occupations, structures and acts for which a permit was issued. He cited an example regarding a veterinary clinic. The clinic could not be sued over a nuisance if someone simply did not like the fact that the clinic was located where it was. If, however, the clinic let its dogs out at night, and the dogs barked and disturbed the clinic's neighbors, then a nuisance suit could be filed, he said. He then turned to testimony from those in Juneau and those at the teleconference sites. He asked participants to limit their testimony to two minutes. Number 142 CHIP THOMA testified in opposition to SB 178, as amended on the Senate floor. He said that the bill originated because of a lawsuit filed by a Mr. Larry Edwards against the Alaska Pulp Corporation (APC). He asserted that the bill was designed to protect the APC pulp mill in Sitka, even if the mill violated its permit, which he said the mill had been doing for the last two decades. He stated that, to his knowledge, no other state imposed similar limitations on civil actions. He commented that the bill was probably unconstitutional because it denied due process to property owners. Number 160 MR. THOMA said that SB 178 constituted a "taking" of private property rights, and might make the state liable for the costs of injury to property caused by permitted activities. He called the members' attention to a letter from Lloyd Miller, an attorney representing many plaintiffs in the Exxon Valdez case. He said that SB 178 used permits to immunize polluters from liability, and expressed his opinion that that should not occur. He commented that the U.S. Supreme Court, and the Sixth and Ninth Circuit Courts of Appeals had struck down legislation similar to SB 178. Number 200 MR. THOMA cited a 1987 U.S. Supreme Court ruling which found that a private nuisance claim against a paper mill was not preempted by the fact that the mill operated under a federal water pollution permit. He submitted to the committee a memorandum from Mr. Jim Clark to Attorney General Charlie Cole, dated March 24, 1993, as well as a recent article from the Sitka Sentinel. He expressed his opinion that the federal Environmental Protection Agency (EPA) would take a "strong and significant interest" in SB 178. (Rep. Davidson joined the meeting at 1:55 p.m.) Number 214 DAVE MATTHEWS, representing the ALASKA FOREST ASSOCIATION (AFA), noted that Mr. Jim Clark would be speaking on AFA's behalf in support of SB 178. Number 216 MR. CLARK stated that SB 178 did not provide a wholesale exemption from nuisance lawsuits. What the bill did, he said, was to redefine "nuisance" to outline what was and what was not a reasonable use of property. He said SB 178 provided that, after a project went through the public permitting process, a permit-holder would be immune from nuisance suits stemming from actions the permit-holder was allowed to take under the permit. MR. CLARK commented that the legislature and the congress passed laws which defined property rights, including environmental restrictions which prevented people from using their property in certain ways. The courts, he said, had found that these types of regulations were reasonable restrictions on private property owners and did not constitute a "taking" by the government. Senate Bill 178, he said, was the other side of the coin; it established that it was reasonable for a permit-holder to do what his or her permit allowed. MR. CLARK said that for those who violated their permits, nuisance suits could be filed. He stated that court cases previously mentioned dealt with wholesale exemptions from all nuisance suits. Senate Bill 178 did not accomplish that, he argued. He addressed a concern that SB 178 would cause the state, not the permit-holders, to be the target of nuisance suits. He said that the only theory under which a person could sue the state over a nuisance was "inverse condemnation." Inverse condemnation suits that had been brought by mining and timber interests claiming that environmental regulations constituted a "taking" had uniformly lost, he noted. He acknowledged that someone might file an inverse condemnation action against the state, but said that the threat of inverse condemnation suits had never stopped the Alaska Legislature or the U.S. Congress from passing environmental laws. MR. CLARK asked the committee to consider three amendments which he said would improve SB 178. He suggested that the word "valid" be added on page 1, line 11, just before the word "statute." On page 1, line 14, he suggested replacing "decision" with "judgment." And on page 2, line 9, he recommended deleting the word "real." He said that he had spoken with officials from the Attorney General's office who felt that these three amendments would improve SB 178. (Rep. Phillips joined the meeting at 2:00 p.m.) REP. KOTT asked Mr. Clark if he felt that due process requirements were fulfilled during the public permitting process. MR. CLARK replied that he believed so. He called SB 178 a "minimalist" provision. All that SB 178 did, he added, was to say that governmental agencies, not the courts, would decide what activities were deemed to be in the public's interest. Number 339 REP. KOTT asked Mr. Clark to address why he wished to amend SB 178 so as to refer to a "valid" statute or regulation. Number 343 MR. CLARK stated that the Attorney General's office proposed that particular change. In his opinion, it did not change the effect of the bill. Number 350 REP. KOTT asked Mr. Clark if there were "invalid" statutes. Number 353 MR. CLARK said that he agreed with Rep. Kott. Number 356 REP. DAVIDSON took issue with Mr. Clark's contention that changing a definition was "no big deal" from a legal standpoint. He expressed his disagreement with Mr. Clark. He asked Mr. Clark to explain why inverse condemnation cases which had been filed on behalf of his clients had uniformly lost. Number 367 MR. CLARK responded that the theory of inverse condemnation had not been "bought" by the courts. He said that if someone chose to sue the state on the theory of inverse condemnation, the suit would probably be a "loser," based on the outcome of other inverse condemnation suits. He asserted that such a case might be filed once, and then likely would not happen again. Number 384 REP. NORDLUND asked how a damaged party could collect if he or she were damaged by an individual or a company that did meet the requirements of a permit. Number 396 MR. CLARK commented that it would be difficult to presume damages from a permitted activity. He noted that in order to get a clean air act permit in Alaska, a person would have to show that primary (human health) and secondary (vegetation and wildlife) ambient air standards would be met. He said that safety margins had been built into those standards. The standards were created to ensure that the public would not be harmed. Therefore, he said, it would be difficult to prove that harm resulted from a permitted activity. For that reason, he added, SB 178 was justified. Bringing a lawsuit after an activity had been permitted was "harassment for harassment's sake," he claimed. Number 423 REP. NORDLUND commented that it was not hard to imagine a situation in which a person's property truly was damaged by a permitted activity, with the result being an inability to sell the property at a fair price. Someone should be made to pay for such damages, he said, whether it be the permit- holder or the state. Number 432 MR. CLARK argued that people who were burdened with environmental regulations also had their property value diminished. The courts had decided that that did not give rise to just compensation, he said. The philosophy behind SB 178 was that if it was reasonable for government to put environmental restrictions on private property without compensation, then it was also reasonable to protect permit- holders to the extent that they were complying with their permits. He stated that SB 178 would encourage permit- holders to comply with the conditions of their permits. (Chairman Porter acknowledged the arrival of Rep. Jerry Mackie.) REP. GREEN asked Mr. Clark if the Attorney General supported SB 178. Number 472 MR. CLARK responded that the Attorney General was reserving judgment on the bill, but felt that the three proposed amendments would improve SB 178. Number 476 REP. GREEN mentioned that there had apparently been some differences of opinion between Mr. Clark and the Attorney General. He asked Mr. Clark to elaborate on those differences. Number 481 MR. CLARK replied that the Attorney General was concerned about several court cases interpreting laws similar to SB 178 in other jurisdictions. However, he said that those cases involved situations in which wholesale exemptions from nuisance suits were provided. But, he said, SB 178 would only apply to situations in which a public process had been followed, a permit had been issued, and the conditions of the permit were met. He expressed his opinion that SB 178 would be found constitutional, as it was very narrow in scope. Number 509 PETER EHRHARDT testified via teleconference from Kenai/Soldotna. He said that he was an attorney representing Mr. Larry Edwards in his nuisance case against the APC mill. He said that he also represented a local Native corporation which was very concerned about SB 178. He expressed his opinion that Mr. Clark was arguing that the public hearing process could be substituted for constitutional protections, because "what's good for the gander is good for the goose." He said that Mr. Clark's argument was fatally flawed. MR. EHRHARDT commented that the level of hearings that occurred before the state decided to take the property rights of the APC mill was immeasurably greater than the level of hearings that occurred before the state decided to take the property rights of someone whose property was damaged by the nuisance created by the pulp mill or another entity. MR. EHRHARDT mentioned that the legislature's Citizen's Oversight Council on Oil and Other Hazardous Substances found that the public hearing process was fatally flawed: the public had insufficient input and impact on regulations and on decisions made by agencies. In that light, he said, Mr. Clark's contention that the public hearing process could serve as a substitute for constitutional protections was simply wrong. MR. EHRHARDT mentioned that the bill, as written, would not apply to nuclear waste. He said that he did not understand how nuclear waste was any worse than substances such as PCBs, benzene, or dioxin. Number 572 CHUCK ROBINSON, an attorney who worked for a law firm which represented Larry Edwards in his suit against the APC mill, testified via teleconference from Kenai/Soldotna. He said that case law established that it was unconstitutional for a state to take away an individual's ability to bring a private nuisance claim, particularly for a non-public purpose. He claimed that SB 178 was unconstitutional. In response to Mr. Clark's "tit for tat" argument, he said that there was a big difference between placing restrictions on the use of property that the public believed might be harmful and the pursuit of a legal claim because someone's property was harmed. MR. ROBINSON noted that the courts, for generations, had held that as long as restrictions on the use of property were health, safety, and welfare measures intended to protect the public, and did not amount to a total confiscation of the property, then they were reasonable restrictions on property use. He expressed an opinion that there was a big difference between that and denying an individual whose property had been harmed the right to bring a claim for recompense. He said that if SB 178 merely changed the definition of "nuisance," then the legislation should be restricted to alter the definitions section of the law, AS 09.45.255. Number 630 MATTHEW DONOHOE testified via teleconference from Sitka. He said that SB 178 would limit his rights to redress, through the courts, any damage occurring to his property. He said that the bill would restrict his rights to due process. He commented that SB 178 assumed that all permit practices were fair and correctly carried out. He submitted that that was often untrue. Citizens were often damaged by permitted activities, he said, and SB 178 would restrict citizens' ability to recover. Number 640 MR. DONOHOE claimed that SB 178 was a direct constitutional challenge to a property owner's due process rights. He noted that the City of Sitka had not taken a position on the bill in any public meeting. He said that he was not against the Sitka pulp mill, but wanted to protect his rights as a citizen and his property. Number 670 DON MULLER testified via teleconference from Sitka. He said that he had been a business person in Sitka for 17 years; before that, he worked as a chemist for the APC mill. He stated that SB 178 was a very clever and cunning bill. He noted that in a democracy, the rights of an individual were supposed to be as important, or more important, than the rights of a single industry, particularly an industry that had a long history of violating laws and regulations. MR. MULLER said that SB 178 was obviously drafted because the APC mill did not like a particular right of individuals. He said that the mill believed that its rights outweighed the rights of individuals or the community. He urged the committee to vote against SB 178 in the interest of democracy and the rights of citizens. Number 689 CHUCK ACHBERGER, DIRECTOR OF THE ALLIANCE FOR JUNEAU'S FUTURE, said that his organization was founded four years ago to go through the "fairly simple and straightforward" process of opening the Alaska-Juneau (A-J) gold mine in Juneau. He discussed the lengthy, arduous, and expensive public process that had occurred over the last four years. He said that there should be a point at which legal challenges stopped. He noted that oftentimes legal recourse led to harassment. He mentioned a belief of some people that state courts had been "bought off." He expressed his organization's support for SB 178. Number 716 REP. DAVIDSON asked Mr. Achberger to expand on his statement that Alaska's courts had been "bought off." Number 722 MR. ACHBERGER replied that his comment pertained not to his own opinion, but to one expressed on the editorial page of the Juneau Empire. Number 727 REP. KOTT asked Mr. Achberger to address how important the public process and the public comment period were in the A-J permitting process. Number 734 MR. ACHBERGER replied that he felt that the public process was extremely important. He said that the public process produced a compromise in an effort to build a better permit and a better project. No one was perfectly happy with what the process produced, he said. Number 753 MARY FORBES, representing the KODIAK AUDUBON SOCIETY, testified via teleconference from Kodiak in opposition to SB 178, as amended on the Senate floor. She expressed concerns about the constitutionality of the bill, and whether it would constitute a "taking" by the state, thereby costing the state a great deal of money. She mentioned the Citizens' Oversight Council's finding that the permitting process was questionable. Number 765 JAMIE PARSONS, representing the ALASKA STATE CHAMBER OF COMMERCE, testified in support of SB 178. He said that the bill would go a long way toward reducing frivolous lawsuits and unnecessary litigation and create a more positive business development climate in the state. Number 782 VALORIE NELSON testified via teleconference from Sitka in opposition to SB 178. She said that she had a lawsuit pending which could be invalidated by the retroactivity clause of the bill. She likened the retroactivity clause to changing the rules in the middle of a game. She said that her lawsuit had been filed based on existing statutes and ordinances, and that she had spent a great deal of money fighting the expansion of a nonconforming use which had been allowed by government officials in Sitka. She said that SB 178 took away individuals' rights to protect their property. Number 792 RONN DICK testified via teleconference from Sitka in opposition to SB 178. He stated that the bill violated underlying principles of justice. He said that because the bill exempted polluters from any liability as long as they had the government's permission, it was absolutely essential that the integrity of the permitting process be untainted. That, he asserted, was not the case. The process often involved collusion between the permitting agency and the polluter, he said, and lacked the necessary integrity. Number 800 MR. DICK alleged that the Department of Environmental Conservation (DEC) and the APC mill had held numerous private meetings to agree upon acceptable pollution standards. Generally, he said, the mill informed the DEC of its current discharge levels for certain pollutants; the DEC then wrote standards so that those levels of discharge could be maintained. He commented that the DEC often failed to enforce its standards and regulations. He said that the EPA was considering suing the DEC over its extreme leniency toward the APC mill. He spoke against SB 178, saying that it would prevent the public from seeking legal redress, when the state and industry were already in collusion to circumvent laws and regulations. TAPE 93-66, SIDE B Number 000 ROBERT ELLIS testified via teleconference from Sitka in opposition to SB 178. He said that the bill represented a further erosion of the public's right to protect itself from the actions of government and industry. He questioned why nuclear waste was excluded from SB 178's provisions, while other toxic substances were included. He suggested that the committee add to the exclusions any toxic elements or chemicals. He expressed his opinion that public hearings were often a facade designed to make the public's anger go away, but resulting in no significant changes to pre- arranged deals between government and industry. MR. ELLIS stated that he did not understand why the legislature had omitted health -- physical destruction from chemicals, including acids and fallout -- from the bill. Also, he asked why the bill would only protect citizens of a municipality. He said that SB 178 emphasized the importance of public participation in hearings, but penalized those people who had not attended past hearings. He stated that he opposed the retroactivity clause of the bill. Number 050 NANCY LETHCOE, PRESIDENT OF THE ALASKA WILDERNESS RECREATION AND TOURISM ASSOCIATION (AWRTA), testified via teleconference from Valdez. She said that AWRTA's members were concerned about SB 178, and asked the committee members not to pass it out of committee. She said that there were two problems in the permitting process. First of all, permits were often issued using data provided by industry. Because of the state's declining revenues, independent checking of that data would occur less and less often. She expressed concern that more permits would be issued, under the pressure of economic constraints, that might lead to damage of private property. Number 075 MS. LETHCOE said that her second concern regarding the permit process was that it was very unequal. Industry lawyers met privately with regulators during the permitting process, she said. She indicated that she did not object to that practice, but said that citizens whose property might be affected did not have the scientific expertise, nor the lawyers, time, funding, or access to regulators which industry enjoyed during the permitting process. It was only after permits were issued, when damage was seen, that the public recognized a problem with the permitted activity. The DEC often lacked funds to monitor compliance with permits. The public's only recourse, she said, was through the courts, and SB 178 would deny that recourse. A technical problem with the teleconference network prevented Ms. Lethcoe from continuing with her testimony. Number 126 STEVEN BORRELL, EXECUTIVE DIRECTOR OF THE ALASKA MINERS ASSOCIATION, testified in support of SB 178. He said that if an individual or company was conducting its business within the law, there should be nothing in statute encouraging third parties to file nuisance lawsuits against the activity. He said that SB 178 would remove one incentive for groups and individuals to file nuisance lawsuits. He predicted that the bill would decrease the number of suits which were filed merely to harass and stall projects. Fewer nuisance lawsuits would mean that individual miners and mining companies would have one less "artificial uncertainty" to deal with when trying to develop a project. He commented that passage of SB 178 would indicate to the international mining industry that Alaska was a good place to do business. REP. DAVIDSON asked Mr. Borrell how he would characterize the current definition of "nuisance" in the Alaska statutes. Number 160 MR. BORRELL responded that the current definition was broader than that contained in SB 178. He said that the bill would put reasonable restrictions on the definition. He noted that currently, even if a company had a permit, a person could file a nuisance suit merely because he or she did not enjoy seeing a particular item. He said that filing a suit over a "visual impairment" was simply a way in which an individual could harass a project. MR. BORRELL stated that permit requirements in Alaska were so considerable now that the international mining industry was looking to develop projects outside of the United States. Passage of SB 178 would help to encourage mining development in Alaska, he said. Number 196 REP. DAVIDSON asked Mr. Borrell if he felt that the state's current definition of "nuisance" was too broad. MR. BORRELL replied that Rep. Davidson was correct. Number 203 JEFFREY TROUTT, an ATTORNEY with the law firm of BIRCH, HORTON, BITTNER & CHEROT in Juneau, testified on his own behalf against SB 178. He stated that he was a conservative Republican and strongly supported business and economic development. He said that he liked the idea of statutorily defining "nuisance." He commented that by increasing the standard to "substantial and unreasonable" harm, the number of frivolous lawsuits would probably decrease. MR. TROUTT indicated that he did not support SB 178's shifting of the economic burden for pollution or other types of nuisances off of the person who caused the nuisance and onto the person who was affected by the nuisance. He said that he had done some preliminary legal research and found that only nine nuisance cases had been decided and published in the Alaska Digest -- only two since statehood. He acknowledged that he did not have any statistics for cases filed in District or Superior Court. That, he said, led him to believe that nuisance lawsuits were not much of a nuisance at all. MR. TROUTT expressed his opinion that trying to eliminate frivolous lawsuits by eliminating all nuisance lawsuits under certain circumstances was equivalent to trying to kill a mouse with a cruise missile. He stated that nuisance lawsuits existed in order to protect individuals' private property interests. When used legitimately, he continued, they encouraged the reduction of pollution. MR. TROUTT noted that the real issue in SB 178 was who would pay for the cost of reducing or eliminating pollution. In his conservative viewpoint, he said that the person who caused the nuisance ought to be the one who paid for it. Number 280 AVRUM GROSS, FORMER ATTORNEY GENERAL, said that he was an attorney in private practice with the law firm of GROSS AND BURKE. He added that he was testifying strictly on his own behalf against SB 178. He noted that there was a great deal of misinformation surrounding the bill. He commented that SB 178 was introduced in response to one particular lawsuit against a company. He expressed his opinion that SB 178 had nothing to do with what were referred to as "nuisance" or "frivolous" lawsuits. Those, he said, were filed for harassment purposes and were already prohibited through a number of different means. MR. GROSS claimed that the bill pertained to lawsuits to abate nuisances. He noted that the bill defined "nuisance" as an unreasonable and substantial interference with the property rights of another individual or entity. He said that if a person walked on, or built a house across a property line onto the neighbor's property, that would not be a nuisance, but a trespass. However, if a person interfered with the same property by unreasonably fouling the air above the property, or by spoiling the neighbor's water supply, or created such loud noises that it was literally impossible for the neighbors to live on their own property, then that would constitute a nuisance, he said. MR. GROSS said that, to his knowledge, in every state all property owners had the right to protect their property by filing a lawsuit to abate a nuisance. No state had ever allowed the creator of a nuisance to defend his or her conduct by showing a permit, or proving that his or her conduct was lawful. He mentioned a statute regarding permits for diverting and polluting anadromous fish streams. Those permits, he said, had nothing to do with whether or not the activity created a nuisance on adjoining land. MR. GROSS noted that permits also had nothing to do with actual damages created, as they were based on studies and assumptions. If those studies and assumptions were later proven incorrect, he asked, should a damaged private property owner be barred from suing the creator of a nuisance? He expressed his opinion that SB 178 attempted to get rid of an existing lawsuit by authorizing private property owners to commit nuisances. He said that the bill was not a development bill. He commented that SB 178 could hurt businesses just as much as individual private landowners. He called SB 178 an "anti-property rights bill." He said that the bill authorized taking private property rights away from people by the issuance of government permits. MR. GROSS said that until now the government could only take private property for public purposes and by compensating the owner. Senate Bill 178 would authorize private parties to "take" private property belonging to others, without any compensation to the landowner, to enhance their own property at the expense of another property owner. He said that if SB 178 was enacted, the courts likely would find the state liable. He stated that no one had investigated the magnitude of that liability. He predicted that if the state were issuing permits, and would be liable for any nuisance created by permitted activities, the permit process would grind to a halt. CHAIRMAN PORTER asked Mr. Gross if he was aware of amendments made to SB 178 on the Senate floor. MR. GROSS replied that, in his opinion, the Senate's amendments were of absolutely no significance. He commented that a nuisance caused by nuclear waste was no different than any other type of nuisance. He noted that, regardless of whether or not public hearings were held, the issuance of a permit often had nothing to do with the impact of the permitted activity on neighboring property. Number 486 REP. DAVIDSON commented that SB 178 seemed to create private property out of public permits, and to allow people to hide behind the permit process. Also, he questioned why the court system had not submitted a fiscal note, as it seemed that SB 178 would result in a significant fiscal impact on the state. Number 505 MR. GROSS noted that SB 178 would not just immunize holders of state-issued permits, but would also immunize holders of permits issued by the federal government. He said that, if enacted, the bill could prove very expensive for the state. He stated that, under SB 178, a permit-holder could do anything that he or she wanted, and would be immune from litigation. MR. GROSS commented that permits were often property rights, depending on the nature of the permit and how it could be revoked. The difference between permits generally and permits under the provisions of SB 178, he said, was that permits generally authorized someone to do a specific act. They did not say whether or not that act would create a nuisance to someone else, he noted. He used as an example a permit to burn in a national forest. A permit-holder could burn to his or her heart's content, he said, as long as he or she did not burn down the forest. But, if the burning was occurring adjacent to a fishing lodge, was going on day and night, and the smoke was going in the windows of the lodge, then the lodge owner could protest. Under SB 178, he said, unlike every other state in the union, the lodge owner would have no right to protest the burning. Number 532 REP. DAVIDSON asked Mr. Gross to address the fiscal impact on the state of SB 178. Number 535 MR. GROSS replied that SB 178 would result in much more extensive permit procedures. He said that under SB 178, no state agency in its right mind would issue a permit which exposed the state to liability for all conceivable nuisances which could result from the permit, without exhaustive hearings. He noted that it already took a great deal of time to obtain a permit. He urged the committee to not turn the entire civil justice system on its head in order to address one perceived problem in Sitka. CHAIRMAN PORTER announced that the teleconference network had been reconnected. He noted that when the line was disconnected, Ms. Nancy Lethcoe was in the middle of her testimony. He invited her to repeat her remarks in their entirety. MS. LETHCOE summarized her earlier remarks to the committee, and concluded by saying that her organization felt that SB 178 was a very bad bill. Polluters should be responsible for their own pollution, she added, not those who were impacted by that pollution. She thanked the Chairman for allowing her to testify again. Number 615 BOB LESHER, representing seven homeowners on Lisianski Inlet near Pelican, some of whom were entering the tourism business, testified in opposition to SB 178. He said that he viewed SB 178 as a threat to his right to protect his property and his lifestyle. He said that he particularly opposed the bill's section 1, subsections (b) and (c), and section 2. He commented that many activities which were not illegal could still cause harm to an individual's property rights. He cited the legal discharge of firearms on state- owned tidelands on a frequent basis as an example. MR. LESHER expressed his opinion that SB 178 opened the door to abuse. He noted that many licenses, permits, and orders were issued with brief, limited, or discretionary hearings. He offered as examples DEC's solid waste disposal permits and the U.S. Army Corps of Engineers' permits to discharge dredged or fill materials into U.S. waters. He said that he did not believe that a brief hearing of a few days or less deserved the privilege of denying property owners the right to ask for abatement of an offensive activity. MR. LESHER noted that he and those he represented lived outside of a local government unit. He questioned the constitutionality of SB 178, as it did not provide equal protection to those residing outside of municipal government boundaries. He stated his objections to the tightening of the definition of "nuisance." He asked why the legislature was considering reducing the property rights of individuals. He commented that it was obvious that SB 178 was designed to prevent civil suits from stopping or delaying industry projects that had gone through a permitting process. MR. LESHER commented that SB 178 did too much harm to individual property rights. He offered several alternatives to the bill's approach. He noted that a project which had received five days of public hearings could be protected from civil actions. He said that such an approach would more adequately protect private property rights and projects which had received sufficient public attention. He stated that SB 178, if enacted, could cost the state a great deal of money, as private property owners might sue the state for not providing equal protection and for depriving an individual of property rights without just compensation. Number 712 DOUG MERTZ noted that he had submitted written testimony to the committee, and added that former Attorney General Gross had made many points with which he agreed. He said that SB 178 was a bad bill because it would cut off the rights of property owners to protect their own property. He commented that that would be true for all property owners: residential, commercial, industrial, public, charitable, etc. He stated that the permitting or regulation writing process could not be substituted for the right of an individual to go to court to protect her or his own private property rights. MR. MERTZ noted that regulations and permits were written in general terms to protect general public interests. He added that they were not written to provide protection for all types of property in all types of circumstances. He commented that many permits were issued without the benefit of a public hearing process. When public hearings were held, he said, sometimes individuals could not participate, due to the location of the hearing, or due to illness, or because they had not read the public notices in the newspaper in order to learn that a public hearing was being held in the first place. Additionally, he said, some people purchased property after a permit was issued, but before offensive activities commenced. He said that SB 178 would cut off these individuals' rights to protect their property. MR. MERTZ commented that SB 178 embodied both bad public policy and bad law. The bill would subject the state to damages for takings, he noted. He mentioned that Alaska's constitutional condemnation provisions, unlike most other states', required compensation not only for "takings" of property, but also for damages to private property. TAPE 93-67, SIDE A Number 000 MR. MERTZ expressed his opinion that it was clear that if the state cut off the right of a property owner to protect his or her own property from damage, the state would be liable for a "taking." He noted that SB 178 was probably also unconstitutional because it would require that public funds be spent to compensate for a "taking" made for a private purpose. The differentiation between property in residential areas and non-residential areas also presented constitutional problems, he said. He concluded by saying that SB 178 was a bad law that would buy the state lawsuits, result in massive costs to the state, and be detrimental to virtually all private property owners in the state. Number 039 CHAIRMAN PORTER announced that the committee would not hold its hearing on SB 173, GROUP HEALTH INSURANCE FOR SMALL EMPLOYERS, today due to time constraints. He said that SB 173 would be rescheduled to the following Friday. Number 057 SUSAN STURM testified via teleconference from Sitka in opposition to SB 178, as it would prevent individuals from exercising their constitutional rights. She added that the bill would take away a citizen's right to due process. What was a nuisance to some was not a nuisance to others, she stated. She objected to the lack of information available to the public on SB 178. She commented that any testimony purporting to represent the views of the City of Sitka was invalid, as the city assembly had not discussed the bill, nor had any public hearings been held on the issue. She mentioned that she had taught her children that if they made a mess, they cleaned it up. CHAIRMAN PORTER responded to Ms. Sturm's comment that there had been no public hearings on the bill by saying that a public hearing was currently in progress. Number 090 DAVID KATZ, representing the TONGASS CONSERVATION SOCIETY, testified via teleconference from Ketchikan in opposition to SB 178. He expressed his opinion that the ability to file suit to abate a pollution nuisance was a very important part of the total body of regulation and law that inhibited pollution. He noted that he knew of no other state that intended to effectively eliminate the ability of a property owner to defend her or his property against nuisances. MR. KATZ stated that few nuisance suits were ever filed. He mentioned earlier testimony which asserted that only two such suits had been filed since statehood. He commented that SB 178 did not solve a problem; rather, it created one. He said that SB 178 would encourage people to pollute. He likened the tool of suits to abate nuisances to a precision tool like a scalpel. That tool would cut out specific acts of pollution, he said. Senate Bill 178 would eliminate that "scalpel," he said, requiring that it be replaced with some other, much blunter instrument. He said that property owners would not sit back and watch their property diminish in value. He predicted that removing the tool of suits to abate nuisances would result in more regulations and statutes. He echoed the comments of former Attorney General Gross. Number 149 CAROLYN NICHOLS testified via teleconference from Sitka in opposition to SB 178. She stated that, over the years, many people had tried, unsuccessfully, to curtail the pollution emitted by the pulp mill in Sitka. She expressed her opinion that the permitting process for that mill had obviously not worked. She said that passage of SB 178 would force private property owners to sue the state for damage to their property. She questioned whether the state wanted to be liable for the pollution of businesses. She noted that SB 178 addressed an issue far broader than Mr. Larry Edwards' lawsuit against the Sitka pulp mill, which she said the bill was obviously introduced to quash. MS. NICHOLS commented that SB 178 opened the door for polluters throughout the state to operate without risk. How could the state go after a polluter, she asked, in the event that the state was successfully sued by a private property owner over a nuisance created by a permitted polluter? She stated that SB 178 was unfair to the state and to the citizens of the state. She said that, as a fisherman, she felt very threatened by the bill, because the health of the state's fisheries depended upon clean water. She added that, to date, the City of Sitka had held no public meetings on SB 178; therefore, there was no publicly agreed upon position on the bill. Number 191 NATASHA CALVIN testified via teleconference from Sitka in strong opposition to SB 178. She stated that the bill would take away her rights as a citizen. She expressed doubt that the permitting process and the DEC would adequately protect the public's health and well-being. She noted that court orders and judgments did not include a public process or public notice. She said that she agreed entirely with former Attorney General Gross. Number 227 VANCE SANDERS, an attorney in private practice in Juneau, testified against SB 178 as amended by the Senate. He cited two recent U.S. Supreme Court cases which were relevant to the bill. He explained that in Lucas v. South Carolina Coastal Council, the Supreme Court found that the state of South Carolina had deprived a property owner of his rights and was required to compensate the owner for a "taking." He cited another U.S. Supreme Court case pertaining to the City of Escondido, California's attempts to legislate mobile home park rates. He called the committee's attention to a 1982 New York case, in which the U.S. Supreme Court held that a property owner could prevent a cable company from wiring a building for cable. Number 305 MR. SANDERS expressed his opinion that the U.S. Supreme Court could find SB 178 to be unconstitutional, applying principles similar to those applied in the aforementioned cases. He added his prediction that the U.S. Supreme Court would find that the state was liable for diminished property value and rights resulting from nuisances. He recommended that the Attorney General examine the cases which he had just brought to the committee's attention. He said that he believed that SB 178 would result in fiscal liability to the state. Number 331 PAULA TERREL, representing the THANE NEIGHBORHOOD ASSOCIATION, said that her neighborhood would experience the greatest impact from the reopening of the A-J mine. She said that she had been actively involved in the permitting process for the A-J mine. She said that her neighborhood was zoned as residential, and that the A-J mine had gone through the public permitting process. She noted that a permit did not guarantee that a project would not have negative impacts on surrounding property owners. She questioned what would happen to private property owners in the event that the A-J mine received a permit, but the project still resulted in polluted wells and excessive noise. She predicted that property values would drop dramatically in that situation. MS. TERREL stated that governmental agencies did not protect individual property owners; rather, they protected the public's interests. She said that if SB 178 passed, homeowners like herself who were impacted by polluted wells and/or excessive noise would have no place to turn, except for the state. She said that SB 178 took away the rights of private property owners. Number 419 REP. JAMES indicated her understanding that SB 178 only applied to activities which were permitted. It did not, in her understanding, cover activities which were violations of permits. Number 446 MS. TERREL noted that if a permit allowed the A-J mine to produce a certain amount of noise, and that amount was such that no one wanted to buy her property, or she was unable to sleep at night, then she would have no recourse. REP. JAMES asked if Ms. Terrel would have a case against the state, which issued a permit, if permitted noise levels turned out to be excessive. Number 491 MS. TERREL replied that, as she was not an attorney, she could not address Rep. James' question. However, she noted that SB 178 took away citizens' rights to seek recourse from a polluter. Number 493 REP. GREEN asked Ms. Terrel if she was aware that "view, odor, or noise" were excluded from the provisions of SB 178. He said that this was an addition made by the Senate. Number 499 MS. TERREL indicated that her examples were not all- inclusive. Number 507 REP. NORDLUND stated that the "view, odor, or noise" exclusion only applied to areas zoned as residential. He added that in many cases people lived in areas which were not zoned as residential. Number 523 LAURIE FERGUSON CRAIG, representing ALASKANS FOR JUNEAU, a group involved in the permitting process for the A-J mine, testified against SB 178. She mentioned severe budget cuts to the DEC, curtailing that agency's ability to enforce and update permits designed to protect the public and property owners. She said that citizens needed to have the ability to protect their investments. She expressed her strong opposition to SB 178's retroactivity clause. She noted that pollution was not just an environmental issue, but also a health issue. MS. CRAIG stated that the public hearing process did not guarantee safety. Regarding the A-J permit, she said that there was overwhelming public opinion against the provisions in the A-J permit. But, she said, there was a strong likelihood that the permit would be approved. Of particular concern to her organization was the city's and the state's decision to address the permit in phases, because state water quality revision standards were not yet available. She said that the project as it now stood would violate state and federal laws. She objected to allowing the project to proceed, knowing that it violated the law. MS. CRAIG referred to a mine in Colorado which had exceeded its standards and gone bankrupt. The nation's taxpayers were now paying $45,000 a day to prevent that mine from becoming an environmental disaster. She said that she did not want to see a similar situation occur in Juneau. She noted that state agencies in Colorado had faced budget cuts, resulting in inadequate monitoring and enforcement. She said that if a permit were to be issued, it should be a complete permit. Number 589 MR. RICHARD HOFFMAN said that some people believed that local, state, and federal agencies had failed on numerous occasions to protect the public from adverse impacts of large businesses. He noted that SB 178's sponsor had indicated that the bill was an effort to remove administrative hurdles and loosen environmental regulations in order to make it easier for big business to carry out projects. MR. HOFFMAN commented that if a permitting agency knew that it, instead of a permit-holder, could be sued, it would likely carry out a more detailed permit process than it now did. He noted that a great deal of information used when granting permits came from a project's developers. If the information was flawed, he said, under SB 178, the agency would be liable for the improperly-issued permit, not the permit-holder. MR. HOFFMAN said that he lived on Thane Road, near the site of the proposed A-J mine project. He said that for several years, he had attempted without success to have his concerns regarding decreased property values addressed by the city. Additionally, he said that he had unsuccessfully tried to get the city to address the problem of increased traffic on an already hazardous road. He said that if, in the future, these concerns turned out to be valid, under SB 178, the permitting agency would be liable, not the permit-holder. MR. HOFFMAN stated that the A-J mine permit would allow the project to create more noise than was recommended by a consultant. The noise, he said, would be generated 24 hours a day, 365 days a year for three years. He noted that under SB 178, neighbors would have no recourse when they experienced excessive noise. He said that SB 178 would have the effect of reducing public protection against harmful projects. He added that the bill would force people to sue the government in order to get relief from adverse impacts. Number 663 BOB ENGELBRECHT, VICE PRESIDENT OF TEMSCO HELICOPTERS, noted that he had testified in support of SB 178 at a Senate hearing. Since that time, he said, the bill had been amended. He commented that his company operated under a U.S. Forest Service permit, which it obtained after extensive public hearings. Although his company complied with all of the conditions of the permit, he said, it was still at risk for a lawsuit from any individual over a nuisance issue. For that reason, he said, he supported SB 178. Unfortunately, the bill was amended on the Senate floor to exclude noise. He asked the committee to amend the bill so as to include noise. Number 696 REP. NORDLUND asked Mr. Engelbrecht to further explain the U.S. Forest Service permit under which Temsco operated. Number 701 MR. ENGELBRECHT responded that the permit pertained to impacts both on and off of the national forest. He noted that if a new impact occurred, which was not covered in the original permit, the permit would likely be amended. He said that the permit process was expensive and lengthy. REP. NORDLUND said that he had not known that the U.S. Forest Service was concerned with areas outside of the national forest boundaries. He stated that the Forest Service probably cared more about impacts on the national forest. MR. ENGELBRECHT responded that there had been virtually no impacts from his business identified on the national forest; therefore, the focus of the permit process had been on non- national forest impacts. Number 721 REP. MACKIE asked Mr. Engelbrecht if the reason behind his desire for the committee to amend language regarding noise was because he feared being the target of a lawsuit. He mentioned a situation in Ketchikan in which harbor residents had complained about floatplane noise. He noted that noise generated by a mine was substantially different from the noise created by aircraft. Number 739 MR. ENGELBRECHT replied that he did fear that Temsco would be sued. He said that people had complained about the noise of his operation. He noted that, in addition to receiving a Forest Service permit, Temsco was part of a 1987 Federal Aviation Administration (FAA) noise compatibility study which involved public hearings. He commented that the airport was found to be within noise guidelines for airports. But, he said, despite Temsco's compliance with its permit, it was subject to lawsuits. MR. ENGELBRECHT noted that Temsco complied with airport restrictions as well as FAA flight pattern requirements. He asked Rep. Mackie to restate his question regarding mine noise as compared to aircraft noise. Number 758 REP. MACKIE asked Mr. Engelbrecht to discuss the difference between impacts of noise from a new mine on existing property owners and impacts of aircraft noise on people who bought property adjacent to an airport. Number 768 MR. ENGELBRECHT commented that he was not an attorney, and did not know how language might be crafted so as to differentiate between certain types of noise. He noted that Temsco operated near an airport which had been there for 40- 50 years, and that the noise which Temsco's operations produced was intermittent. Number 778 REP. MACKIE asked Mr. Engelbrecht if he agreed that there was a substantial difference between the type of noise produced by Temsco's helicopters and the type of noise generated by a new mine. MR. ENGELBRECHT indicated his agreement. REP. DAVIDSON asked if Temsco had ever been the target of a civil nuisance action. MR. ENGELBRECHT replied that, to his knowledge, it had not occurred in Juneau. But, he said, in Ketchikan, air taxi operators had once experienced a problem regarding noise. He stated that he was unsure as to whether that problem resulted in the filing of a nuisance lawsuit. Number 794 REP. DAVIDSON asked Mr. Engelbrecht what fueled his concern, given the fact that Temsco had never been sued, nor threatened with a suit. Number 795 MR. ENGELBRECHT responded that Temsco was threatened by lawsuits. He noted that Temsco had operated under a permit for nine years, and had improved its operations over the years by lessening the amount of noise it produced. During those nine years, he said, Temsco had had more restrictions placed on it by the FAA and the Forest Service. MR. ENGELBRECHT noted that the permit process was becoming more difficult and time-consuming. He commented that one person had objected to Temsco's permit and appealed the Forest Service's decision to grant it. Additionally, he said, that same person had threatened to sue Temsco. TAPE 93-67, SIDE B Number 000 RUSSELL HEATH, EXECUTIVE DIRECTOR OF THE ALASKA ENVIRONMENTAL LOBBY, questioned whether nuisance lawsuits were really a problem. Previous testimony indicated that very few had ever been filed in Alaska. He said SB 178 was introduced for one sole purpose, which was to kill a lawsuit against APC in Sitka. He noted that the bill was introduced only days after the court ordered APC's parent company to disclose its financial records. APC, he explained, had evaded complying with air and water quality standards for years by claiming that it lacked the financial resources to do so. Disclosure of financial records would destroy the company's last defense against compliance with pollution laws, he added. MR. HEATH explained that the APC mill emitted sulphur dioxide, which turned into sulfuric acid when released into the atmosphere. That substance burned eyes and throats and resulted in lowering property values for residences near the mill, he said. A monitor erected several years ago near the most heavily-impacted neighborhood indicated that the ambient air quality was still within the terms of the APC permit. He noted that APC's air quality permits were renewed annually, despite vociferous public complaints about the health hazard created by the release of the sulphur dioxide. Additionally, he stated, the DEC had received hundreds of written and telephonic complaints about the health hazard. MR. HEATH said the DEC had ignored the public's concerns for the past 20 years. And, he said, the public had been excluded from the permit writing process, even as observers. Administrative appeals had been filed against the DEC alleging that the public had been excluded from the permit writing negotiations. A DEC hearing officer found those allegations to be true, and ordered the DEC to include the public in future negotiations, he said. To date, this had not been done. He stated that, just because an activity which caused a nuisance was permitted, that did not guarantee the protection of private property. He also noted that the government had failed to protect the rights and interests of residents of the area surrounding a permitted facility. When the government failed to provide protection, he said, the only recourse was through the courts. Senate Bill 178 takes away that recourse, he noted. He called the bill bad policy and said that, as only two reported nuisance suits had been filed since statehood, they were clearly not a significant problem in Alaska. Number 126 ROBERT LOESCHER, EXECUTIVE VICE PRESIDENT FOR RESOURCE MANAGEMENT FOR SEALASKA CORPORATION, called the committee members' attention to written testimony which he had submitted. He commented that Sealaska was the owner of huge amounts of private land. He noted that a number of Sealaska's concerns had been addressed in the Senate's amended version of SB 178. But, he said, Sealaska still had some serious concerns about the bill. The main concern was that SB 178 sought to eliminate frivolous nuisance lawsuits by banning all lawsuits under certain circumstances. He said that the bill as written would result in legitimate nuisance claims not being heard, depriving private property owners with legitimate claims of their day in court. MR. LOESCHER noted that Sealaska supported some aspects of SB 178, including the amended definition of "nuisance" and the attempt to decrease the number of frivolous lawsuits. He expressed Sealaska's concern about the bill's provision that only property owners in areas zoned as residential could sue for nuisance against a permit or license holder on the basis of "view, odor, or noise." He noted that many Alaskans lived in areas where there was no zoning, thus providing less protection to those individuals living in rural Alaska and Native villages. He said that Sealaska opposed legislation which gave these people "second-class" property rights. Also, he said the bill was too narrow, as it only allowed nuisance suits based upon "view, odor, or noise." He expressed an additional concern that SB 178's retroactivity provision seemed to be specifically targeted at one lawsuit, raising constitutional concerns. He noted his agreement with former Attorney General Gross' comments regarding the constitutionality of SB 178. MR. LOESCHER stated that the Senate's substitute for SB 178 was an improvement over the original bill. He indicated Sealaska's support for the bill's attempts to weed out frivolous lawsuits; however, the bill would do so by banning valid lawsuits by property owners who had suffered economic loss due to the activities of another. He concluded by saying that the sponsor could achieve that objective without harming legitimate individual private property rights. He commented that the bill was flawed, but not unredeemable. He suggested that the bill be amended so as to include the revised statutory definition of "nuisance," but not to ban lawsuits based on nuisances. He also suggested that the bill ban lawsuits filed for injunctive relief in cases where a permit or license had been issued, but allow suits for monetary damages. He expressed Sealaska's willingness to work with the committee or the sponsor over the interim on compromise language. FLORIAN SEVER, representing the FOUNDATION FOR THE PROTECTION OF THE COMMON PEOPLE, a public interest group, testified via teleconference from Sitka. He said that he opposed SB 178, as it was intended to deprive the citizens of Alaska of their constitutional rights to due process and equal protection. He urged the committee to defeat the bill. Number 236 PAM BRODIE, representing the SIERRA CLUB, testified in opposition to SB 178, as it was unfair to property owners. She said that the bill was clearly designed to negate a pending lawsuit. Number 260 REP. DAVIDSON requested that the committee work on SB 178 during the interim in order to craft a bill with which all parties could agree. He noted that the former Attorney General's extensive concerns regarding the bill raised a lot of red flags. Number 275 REP. KOTT asked if, while he was out of the room, a representative from the Attorney General's office had testified on the bill. CHAIRMAN PORTER replied that no representative from the Attorney General's office had testified on SB 178. Number 277 REP. KOTT expressed a concern about the constitutionality of the bill's retroactivity clause. Number 284 REP. DAVIDSON offered Amendment 1, which would delete Section 3 of SB 178. CHAIRMAN PORTER objected. Number 293 REP. DAVIDSON commented that much of the discussion regarding the possible unconstitutionality of SB 178 centered around Section 3. He added that attempts to undermine due process blackened the reputation of the legislature. Number 304 REP. NORDLUND spoke in support of the proposed amendment. He said that the retroactivity provision was unfair to people currently involved in litigation, and expressed his opinion that the provision was clearly unconstitutional. He encouraged the other committee members to support the amendment. REP. JAMES stated that it seemed to her that, when laws were passed while a court case was pending, the court yielded to the new laws, making a decision moot. So, she said, a retroactivity clause in SB 178 would not matter very much. REP. DAVIDSON commented that when the Judiciary Committee passed bills out of committee, they should have been thoroughly examined. He said that SB 178 was clearly a bad law, with overwhelming opposition. He noted that dropping Section 3 would not produce a good law, but would improve SB 178 somewhat. Number 361 REP. JAMES agreed with Rep. Davidson that the committee needed to thoroughly examine those bills which it passed out of committee. She said that she opposed the amendment, as it did not improve SB 178. She expressed her opinion that the amendment would have no effect. Number 369 REP. DAVIDSON countered that the amendment would delete the bill's retroactivity, obviously having an effect. He said that the amendment would make a bad bill just a little bit better. Number 376 REP. NORDLUND stated that the committee had opinions from attorneys which held that the bill's retroactivity clause was unconstitutional. He added that if Rep. James supported SB 178 and wanted it to be successful, it would make sense for her to support the amendment. Number 382 REP. KOTT asked to hear from Mr. Clark on the amendment. Number 393 REP. DAVIDSON noted that, instead of asking the person who wrote the bill to comment on it, the committee should ask for the Department of Law's opinion on the amendment. Number 397 MR. CLARK cited case law where retroactivity provisions were found to be valid. He stated that Rep. James' earlier comment regarding pending court cases and new laws was correct. He commented that the Alaska courts had found that, when used explicitly, retroactivity provisions were valid. Number 436 CHAIRMAN PORTER spoke in opposition to the amendment and in support of SB 178. He said that he did not agree with the opinion that the bill would preclude anyone's ability to sue over a nuisance, with the single exception of "nuisance suits." He expressed his opinion that the bill would prevent suits from being filed over activities which were specifically allowed under a permit, which was issued after a public hearing process. CHAIRMAN PORTER commented that, in the case of the A-J mine project polluting a neighbor's well, that neighbor could still sue the company, as the permit did not allow the company to pollute the wells of neighbors. He said that if the Sitka case was the type of case which SB 178 would preclude, then he expressed his opinion that the case should be precluded. If the Sitka case was not the type of case which SB 178 was trying to preclude, he added, then the bill would not affect the case. He commented that if the state issued a permit which was so onerous that it allowed the types of nuisances which the committee had heard testimony about, then the state should be sued. He said that SB 178 represented a balance, and would provide the state with an incentive to do a good job in issuing permits. Number 495 REP. DAVIDSON commented that if SB 178 represented a balance, then "lady liberty, I think, has lost her scales." He commented that the committee had heard many private property owners testify that they could not even get to first base during the permitting process. He said that SB 178 dealt with a very important issue and required a great deal of examination. He expressed his hope that the bill was not being rushed through the committee in order to be enacted prior to adjournment. Number 521 REP. NORDLUND noted that there was a large cloud hanging over SB 178. He expressed the viewpoint of some that the bill was written to solve one company's problem with a particular lawsuit. He commented that that was the worst kind of bill for the legislature to be passing. In order to remove the cloud, he said, the committee should remove the bill's retroactivity clause. A roll call vote was taken on Amendment 1. Reps. Nordlund and Davidson voted "yea." Reps. Kott, Green, Phillips, James, and Porter voted "nay." Amendment 1 failed. Number 549 REP. DAVIDSON offered Amendment 2, which provided that if a portion of SB 178 were found to be unconstitutional, then the entire law would be repealed. Number 559 CHAIRMAN PORTER stated that there was a general provision that specified that if any portion of a statute was found to be unconstitutional, then the rest of the statute was not negated. He noted that Amendment 2 would contradict that policy. Number 569 GAYLE HORETSKI, COMMITTEE COUNSEL TO THE HOUSE JUDICIARY COMMITTEE, stated that a general severability statute, located in Title 1 of the Alaska Statutes, held that all laws passed by the legislature should be read as though they included the phrase, "if any provision of this is struck down, the rest of it is severable." She said that the courts interpreted all bills as if they included that severability language. But, she said, there was nothing that would prevent the legislature from making specific exceptions to that statute, as Amendment 2 would do. A roll call vote was taken on Amendment 2. Reps. Nordlund and Davidson voted "yea." Reps. Phillips, Green, Kott, James and Porter voted "nay." Amendment 2 failed. REP. PHILLIPS made a motion to move SB 178 out of committee, with individual recommendations. Rep. Nordlund and Rep. Davidson objected. Number 591 CHAIRMAN PORTER noted that the committee had received an indirect request for a further amendment, which Mr. Clark had outlined earlier in the hearing. He expressed his opinion that adding the word "valid" before "statute" on page 1, line 11, of the bill was not a good idea. And, he said, replacing the word "judgment" with "decision" on page 1, line 14, was not necessary in his opinion. He expressed his support, however, for the deletion of "real" on page 2, line 9, of the bill. REP. NORDLUND moved that the committee amend the bill so as to strike "real" from page 2, line 9, of CSSB 178(JUD)am (efd fld). REP. DAVIDSON objected. A roll call vote on the amendment was taken. Reps. Davidson and James voted "nay." Reps. Green, Kott, Nordlund, and Porter voted "yea." Rep. Phillips passed. The amendment was adopted. Because the motion to move SB 178 out of committee was still on the table, the adoption of the amendment was deemed invalid. Rep. Phillips removed her motion to move the bill out of committee. REP. PHILLIPS asked for an explanation of the effect of deleting the word "real." CHAIRMAN PORTER explained that deleting the word "real" would expand the definition of property which might be affected by a nuisance. REP. NORDLUND moved the amendment. Another roll call vote on the amendment was taken. Reps. Davidson and James voted "nay." Reps. Green, Phillips, Nordlund and Porter voted "yea." Rep. Kott passed. The amendment was adopted. REP. PHILLIPS made a motion to move the Judiciary Committee substitute for SB 178 out of committee, with individual recommendations. Objection was heard. Number 673 REP. DAVIDSON said that it appeared that the committee was rushing a very important bill which would affect a huge number of people. He asked that the committee "back off" and take into account the grave concerns of those who had testified against the bill. He commented that SB 178 had obviously been hurried through the Senate, and should not be hurried through the House as well. Number 689 REP. JAMES expressed her opinion that the intent behind SB 178 was good. But, she said that she agreed with Rep. Davidson in that she was uncomfortable with the speed with which the bill was moving through the legislature, as well as the overwhelming testimony against the bill. She noted her preference for keeping the bill in committee for the time being, in order to address concerns surrounding it. Number 702 CHAIRMAN PORTER commented that there was a difference of opinion about the bill's scope and effect. He expressed his opinion that the bill was a very simple one that would preclude a "second bite" from someone who was attempting to negate a permit. TAPE 93-68, SIDE A Number 000 REP. GREEN questioned the effect of deleting the word "real." Number 011 REP. NORDLUND stated that he would vote "no" on the motion to move the bill out of committee, as the committee had not, in his view, given the bill adequate consideration. He noted that the committee had heard from several different attorneys, but not from Attorney General Charlie Cole. He indicated his desire to learn the Attorney General's opinion of SB 178. He recommended that a subcommittee be formed to work on the bill over the interim. He said that he did not see any reason to hurry an important bill like SB 178. Number 031 REP. PHILLIPS said that the concept behind SB 178 had been discussed for many years. She added that the pendulum was swinging the other way, and indicated her viewpoint that it was about time that the pendulum swung the other way. Number 046 REP. DAVIDSON disagreed with Rep. Phillips, saying that the pendulum sometimes served to protect people from losing their property. While others may have discussed the issue embodied in SB 178, he said, it had received very little discussion by the legislature. Number 073 REP. NORDLUND noted that SB 178 had been introduced on March 31. He said that while the issue may have been before the legislature in previous years, there were many freshmen members of the legislature who had not had adequate opportunity to consider the bill. He said that the bill had been before the legislature for less than a month, and commented that it was moving too fast. He added that it was being "railroaded." A roll call vote was taken on moving the bill out of committee. Reps. Kott, Phillips and Porter voted "yea." Rep. Nordlund voted "nay." Rep. Davidson voted "no, unconstitutional." Reps. Green and James passed. CHAIRMAN PORTER asked Rep. James and Rep. Green to vote. An "at ease" was taken at 4:50 p.m. The committee reconvened at 4:54 p.m. Number 119 REP. GREEN said that his earlier concern had been sufficiently addressed. He voted in favor of moving the bill out of committee. REP. JAMES voted "no" on moving the bill from committee. And so, by a vote of 4-3, the Judiciary Committee substitute for SB 178 passed out of committee. ADJOURNMENT CHAIRMAN PORTER adjourned the meeting at 4:55 p.m.