SENATE JUDICIARY COMMITTEE February 4, 1994 1:42 p.m. MEMBERS PRESENT Senator Rick Halford, Vice-Chairman Senator George Jacko Senator Dave Donley Senator Suzanne Little MEMBERS ABSENT Senator Robin Taylor, Chairman OTHERS PRESENT Senator Bert Sharp Senator Loren Leman COMMITTEE CALENDAR SENATE CS FOR CS FOR HOUSE BILL NO. 212(JUD) "An Act relating to a factor in aggravation of the presumptive term of a criminal sentence, and prohibiting the referral of a sentence based on application of that factor to a three-judge sentencing panel as an extraordinary circumstance." CS FOR SENATE BILL NO. 239(O&G) "An Act relating to evidence of financial responsibility provided by persons who conduct oil operations; and providing for an effective date." SENATE JOINT RESOLUTION NO. 39 Proposing an amendment to the Constitution of the State of Alaska to guarantee, in addition to the right of the people to keep and bear arms as approved by the voters at the time of ratification of the state Constitution, that the individual right to keep and bear arms shall not be denied or infringed by the state or a political subdivision of the state. PREVIOUS SENATE COMMITTEE ACTION HB 212 - See Judiciary minutes dated 2/2/94. SB 239 - See Oil & Gas minutes dated 1/24/94 and 2/2/94. SJR 39 - See State Affairs minutes dated 1/21/94. WITNESS REGISTER Michael Conway Director, Division of Spill Prevention and Response Department of Environmental Conservation 410 Willoughby Ave. Suite 105 Juneau, AK 99801-1795 POSITION STATEMENT: Reviewed SB 239. Ray Gillespie Association of Refined Fuel Distributors 9478 Riverbend Court Juneau, AK 99801 POSITION STATEMENT: Reviewed SB 239. Tom Lakosh P.O. Box 100648 Anchorage, AK 99510 POSITION STATEMENT: Reviewed SB 239. Dean Guaneli Chief Assistant Attorney General Criminal Division, Department of Law P.O. Box 110300 Juneau, AK 99811-0300 POSITION STATEMENT: Opposed SJR 39. John George Alaska Outdoor Council Juneau, AK POSITION STATEMENT: Supported SJR 39. Mike Chryst P.O.Box 982488 Wasilla, AK 99687 POSITION STATEMENT: Supported SJR 39. Sally Chryst P.O. Box 982488 Wasilla, AK 99687 POSITION STATEMENT: Supported SJR 39. David McGraw 1500 Catalina Dr. Wasilla, AK 99654 POSITION STATEMENT: Supported SJR 39. Scott Coryell P.O. Box 1044 Ward Cove, AK 99928 POSITION STATEMENT: Supported SJR 39. Les Zetterberg P.O. Box 663 Ward Cove, AK 99928 POSITION STATEMENT: Supported SJR 39. Lyle Stack P.O. Box 8594 Ketchikan, AK 99901 POSITION STATEMENT: Supported SJR 39. Wesley Jones HCR 64, Box 535 Seward, AK 99664 POSITION STATEMENT: Supported SJR 39. Scott Hamann P.O. Box 934 Kenai, AK 99611 POSITION STATEMENT: Supported SJR 39. Michael Neligh P.O. Box 1937 Kenai, AK 99611 POSITION STATEMENT: Supported SJR 39. Greg Machacek P.O. Box 56245 North Pole, AK 99705 POSITION STATEMENT: Supported SJR 39. Rudy Vetter P.O. Box 70342 Fairbanks, AK 99707 POSITION STATEMENT: Supported SJR 39. David Miller P.O. Box 470 Barrow, Ak. 99723 State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Supported SJR 39. Dwayne Uppland Anchorage, Ak POSITION STATEMENT: Concerned with ambiguous language in SJR 39. 9. Charles McKee 1508 W. 43rd, #7 Anchorage, AK 99503 POSITION STATEMENT: Supported SJR 39. Portia Babcock, Legislative Aide c/o Senator Leman Capitol Building Juneau, AK 99801-1182 POSITION STATEMENT: Supported SJR 39. ACTION NARRATIVE TAPE 94-5, SIDE A Number 001 VICE- CHAIRMAN HALFORD called the Judiciary Committee meeting to to order at 1:42 p.m. VICE-CHAIRMAN HALFORD introduced HB 212 (SENTENCING: AGGRAVATING FACTORS) and the CS draft as the first order of business before the committee. He asked for testimony regarding HB 212. DAVID HARDING, representing Representative MacLean, expressed Representative MacLean's view that the changes in the CS were appropriate. SENATOR JACKO moved to adopt CS 8-LS0780/J of HB 212. Hearing no objections, it was so ordered. SENATOR LITTLE asked about the difference in the new fiscal note. DAVID HARDING stated that this fiscal note used some guess work due to the lack of records other than the offenses themselves. He explained that Diane Schenker used a formula to arrive at the presumed fiscal impacts. VICE-CHAIRMAN HALFORD reminded the committee that this would be decided by the Finance Committee, where he predicted this fiscal note would be rejected. SENATOR LITTLE commented that impacts on the Correctional Department should be kept in mind. SENATOR JACKO moved CSHB212 out of committee with individual recommendations. Hearing no objections, it was so ordered. Number 113 VICE-CHAIRMAN HALFORD introduced SB 239 (NONCRUDE OIL OPERATIONS FINANCIAL RESPONSIBILITY) as the next order of business before the committee. MICHAEL CONWAY, Director of Spill Prevention and Response in the Department of Environmental Conservation (DEC), stated support in continuing the waiver provided in SB 239. The department is neutral on the position of changing the components of financial responsibility. He mentioned that under bonding requirements DEC works with the Department of Natural Resources (DNR) in order to ensure that small operators are able to have the financial resources that are onshore. SENATOR DONLEY asked if the responsibility for the transportation sector is in Section (1)(A) and the onshore exploration facility sector is addressed in Section (1) (3). MICHAEL CONWAY stated that SB 239 addresses onshore explorations regarding the proof of financial responsibility. He pointed out that these changes were entered by Senator Sharp who could speak to their intention. The waiver of the direct action requirement is for all transporters, handlers of petroleum products but it mainly effects the small operators. SENATOR DONLEY clarified Mr. Conway's position and asked if he had requested the changes in Section (1)(3). MICHAEL CONWAY agreed that he had not requested the change. SENATOR DONLEY asked if the onshore exploration facilities had problems getting this insurance. MICHAEL CONWAY stated that some of the smaller operators feel that this money can be better spent on the drilling operation due to their tight financial situations. The high limits of financial responsibility required for some of the operators is viewed as a block to entering into onshore operations. Number 195 SENATOR DONLEY inquired about the department's support of not changing the statutes for the large operations, but lowering the amount of liability for the smaller operations. MIKE CONWAY said that the department would be neutral due to the lack of data that could indicate the basis of changing the limits. SENATOR DONLEY observed that this change from $5 million to $1 million was immense and questioned the department's neutral stance. MICHAEL CONWAY said that if the legislation passed, the department would work with DNR. Mr. Conway pointed out that the difference with an onshore facility is that the operating conditions indicate easier response and access as opposed to offshore operations, individual cases should be reviewed. SENATOR DONLEY suggested that individual cases could be reviewed if there was a system which would point out smaller operations with less exposure of damage to the state. Then maybe a lesser amount would be reasonable. He noted that the departments are the professionals and would appreciate their input. MICHAEL CONWAY pointed out that the department keeps track of the financial responsibility of these operators, but there are no risk management officers or anyone on staff who has the ability to look at these insurance decisions. SENATOR LITTLE asked if this bill passed, how damage compensation could be obtained in the event of a spill. MICHAEL CONWAY explained that the financial responsibility is demonstrated by self insurance or insurance, a surety, the guarantee, a letter of credit approved by the department or other proof of financial responsibility including proof of financial responsibility provided by a group of insurers who have agreed to cover pollution risks of the members under the terms approved by the department. SENATOR LITTLE asked if the terms required now are similar to the terms written in this legislation. MICHAEL CONWAY said that SB 239 only changes the limits or amount required; the terms and methods of proof are not changed. Number 296 SENATOR LITTLE inquired of the state of Alaska's liability now or under this bill. MICHAEL CONWAY noted that currently the state has liability and SB 239 only changes the limits. He expressed that DNR does not have information indicating the likelihood of a spill. DNR believes that the likelihood of a spill is less in an exploratory situation otherwise each site must be reviewed. SENATOR DONLEY clarified that SB 239 was only for exploratory operations. He asked if there was a separate requirement for the bonding for ongoing production facilities. VICE-CHAIRMAN HALFORD pointed out that Section 1 of CSSB 239 explains that issue. SENATOR DONLEY asked if the department would oppose making the proof of fiscal responsibility requirement for onshore exploration a minimum of $1 million and up to $5 million pursuant of regulations. MICHAEL CONWAY reiterated that the department would remain neutral because there is no information indicating why this risk is considered greater or less. SENATOR SHARP pointed out that the Oil & Gas CS for SB 239 recognizes that existing statutes mandate levels of proof of financial responsibility and liability that are unrealistic to the point that coverage is not available and never has been. Section 1 only reduces the mandatory liability limits to more reasonably available levels; however, the reduced levels remain ten times higher than any other producing state in the U.S. Most states do not have liability responsibility. Section 2 makes the temporary waivers for shippers of refined products permanent, but Senator Sharp noted that while third party coverage is not available zero financial responsibility is provided. Senator Sharp asserted that his portion of SB 239 only provides reductions for onshore oil and gas exploration activities that in nine out of ten cases never involve exposure to crude oil. There has never been an onshore crude spill in Alaska caused by an exploration rig. He said that SB 239 creates a more realistic environment for small independent exploration firms to operate in Alaska. Independent oil companies in the lower forty-eight have historically discovered new basins and the wealth they generate is usually retained within the state one hundred percent. He believed that SB 239 along with the proposed balanced exploration licensing bill could stimulate renewed exploration in Alaska. He urged favorable consideration of this legislation. SENATOR LITTLE asked if under this legislation the state would still be maintaining an adequate safety net. SENATOR SHARP said yes. He believed the current situation stifles independent operations. Number 399 RAY GILLESPIE, Association of Refined Fuel Distributors representing Crowley Maritime, Delta Western, and Petro-Marine, spoke to Section 2 of SB 239. He referred to the direct action provision which allows the department to waive the requirement of an insurance policy to state that the insurer will be sued directly in the state. This would create a permanent law. VICE-CHAIRMAN HALFORD explained that Section 2 extends the ability to waive direct action indefinitely. The other sections deal with the incentive or disincentive of the liability amounts as they apply to onshore operators. SENATOR DONLEY clarified that Section 2 of the CS repeals a repealer on the section that allowed an exemption. SENATOR LITTLE questioned how the new provisions of liability in Section 1 came about. VICE-CHAIRMAN HALFORD explained that those provisions are an effort to make exploration licensing available and workable for small independents. The onshore production provisions are on a schedule that goes down to $1 million, while the pipeline and offshore provisions remain unchanged. SENATOR DONLEY asked how many facilities in the state apply to these categories added by this legislation. SENATOR SHARP stated that all onshore production facilities exceeding 10,000 barrels per day would be subject to the existing $20 million limit. SENATOR DONLEY inquired if this applied to operations taking a limited amount of product from pipeline to refine. MICHAEL CONWAY informed the committee that the refineries are considered terminal facilities who are addressed in AS 46.04.040. SENATOR DONLEY supported giving the department flexibility with appropriate independent exploration when a reasonable protection of public interests is included. He said that if there has been no problem with this and there is a low success rate; the insurance should be cheap due to the small risk of damage. Number 508 VICE-CHAIRMAN HALFORD expressed concern with the regulatory structure that allows DEC to change the rules after an bid is won. This could prohibit exploration after the initial process. He suggested that not allowing the standard to change during the period of an economic arrangement would weaken the ability to receive a decent bid or proposal. SENATOR DONLEY asked if there is a way to lock them into those requirements at a particular time. VICE-CHAIRMAN HALFORD noted that this program attempts to gain independence even in the face of obstacles such as distance and climate that are not within the government's control. VICE-CHAIRMAN HALFORD asked why shouldn't the department have regulatory authority; they could have more flexibility in the level of insurance required for onshore exploration activities. He asked if insurance is available for independent onshore exploration. SENATOR SHARP said that the insurance was not available to small independent producers who form joint ventures to do an exploratory well. He pointed out that insurance is cheap and available if one's net worth is considerably more than the anticipated loss. SENATOR DONLEY asked if the $1 million level is offered to smaller companies. SENATOR SHARP did not know. SENATOR DONLEY indicated that the risks in various sites could be so different that having one arbitrary sum for everyone does not seem practical. SENATOR SHARP maintained that such flexibility is available through the Division of Oil & Gas and DNR. Senator Sharp said that site specific hazards can be addressed through the DNR permit process. SENATOR DONLEY asked if the option for additional fiscal responsibility would be available when a particular site poses a threat. Furthermore, could additional bonding requirements be added to the fiscal responsibility proof. MICHAEL CONWAY clarified that concerns with specific drill sites are worked through DNR on the bonding requirement. The bonding requirement of DNR wants to assure sufficient resources for site clean up after the operation is over. He said that in order to allow smaller operators to get into business, they could work with DNR reviewing their available bonds. He noted that there is flexibility to target a specific site such as those near a sensitive habitat. TAPE 94-6, SIDE B Number 585 TOM LAKOSH, testifying from Anchorage, questioned what happens in the event of a spill with connecting drainage or what happens to the radioactive substances from a dry well, both apply to the Kenai River area. He stated that individual lessening would be more appropriate than a total removal of the liability insurance requirements. He noted that in the case of a small operator exploring an area with access to response equipment or other clean up plans, liability could be reduced to encourage economic development. He requested revising the amendment accordingly. SENATOR JACKO moved to pass CSSB 239 out of the committee with individual recommendations. Hearing no objections, it was so ordered. Number 523 VICE-CHAIRMAN HALFORD introduced SJR 39 (RIGHT TO KEEP AND BEAR ARMS) as the final order of business before the committee. SENATOR LEMAN, prime sponsor, noted that he had hearings on SJR 39 around the state. He stated that the consensus of his hearings was that any change to the constitution should be clear and as simple as possible. He noted that SJR 39 does not prevent municipalities from having restrictive ordinances. DEAN GUANELI, Chief Assistant Attorney General in the Criminal Division of the Department of Law, stated that the Department of Law, the Department of Public Safety and the Alaska Association of Chiefs of Police are in opposition to SJR 39. He expressed their belief that there was no need to amend the Alaska constitution, but if amended it should not risk state firearms laws or the ability of municipalities to enact firearms regulations. Mr. Guaneli pointed out that according to reports from the Alcohol, Tobacco and Firearms Bureau, Alaska has one of the most liberal firearms laws in the country. Guns can be openly carried anywhere in Alaska and concealed while in your own home, on land adjacent to your home, and while involved in legitimate outdoor activities. He said that by amending the constitution in a non explicit manner, the power to determine the validity of the firearms laws would be shifted from the legislature to the courts. The courts would have to interpret the new language by interpreting the legislative history. Mr. Guaneli discussed the surprising results of the Raven Case. The Alaska Supreme Court used The Right to Privacy to prohibit the legislature from criminalizing marijuana possession by adult's in their home. He explained the U.S. Supreme Court's two tier analysis when determining the constitutionality of a law. The strict scrutiny analysis which must show a compelling overriding state interest to prohibit an activity was applied in the Raven Case. He suggested the same type of analysis and decision would be used with SJR 39. He explained the correlation in Alaska to the Oregon case regarding switch blade possession. Mr. Guaneli questioned the ability to prove a strict scrutiny analysis of Alaska state laws relating to felons in possession of firearms, in some cases non-violent felons. Under Alaska state law a convicted felon cannot even live in a house if a family member has a gun. He reviewed the 1977 Colorado Supreme Court analysis of their right to bear arms. He asserted that many individuals believed that many of Alaska's laws would be in jeopardy if SJR 39 passes. Number 407 VICE-CHAIRMAN HALFORD asked for the definition of assault weapons. DEAN GUANELI explained that they are military type weapons which the federal government was thinking about banning. Mr. Guaneli noted that such definitions were for the legislature to decide. VICE-CHAIRMAN HALFORD asked if any assault weapons were currently prohibited. MR. GUANELI said that Alaska statutes contain weapons prohibited by federal statutes. DEAN GUANELI discussed a 1983 opinion. He asked if private landlords could prohibit tenants from possessing weapons on rented property under SJR 39. He believed that such kinds of questions would arise if the courts are not told how to interpret the amendments. He also raised the issue of municipal ordinances. SENATOR DONLEY asked if Mr. Guaneli believed that municipalities should have the ability to prohibit handguns. DEAN GUANELI said that, in his opinion, municipalities should have the authority to adopt reasonable firearms regulations to address local concerns. Mr. Guaneli could not state a reasonable regulation. VICE-CHAIRMAN HALFORD questioned the current ordinance in Anchorage dealing with the sale of used guns which is not enforced today due to the resistance in the constitutionality question. Number 352 DEAN GUANELI asked what was wrong with localities having the power to address local problems; this is similar to current local option laws. He discussed a conversation with a proponent of SJR 39. SJR 39 cannot stop the federal government from enacting firearms laws. Mr. Guaneli detailed the history of the compromise he and Senator Donley had proposed which recognized the individual right to bear arms and at the same time does not change how the courts analyze firearms laws. He said that compromise is embodied in SJR 1. He expressed the desire not to adopt a strict scrutiny analysis. The Chiefs Association and Department of Public Safety support SJR 1. VICE-CHAIRMAN HALFORD asked if the current constitutional language applies to an individual right or some sort of collective right that can be satisfied by a state militia, a national guard, or something else. DEAN GUANELI said that the Department of Law believes that the constitutional language applies to both the individual and the militia. Mr. Guaneli explained that the Alaska Supreme Court analysis reviews the historical view of arms and there usage, which he believed would uncover a label of the individual right to bear arms. He stated that when labeling the question remains regarding the ultimate consequence of the label. VICE-CHAIRMAN HALFORD questioned why Mr. Guaneli is worried about changes to standards for reasonable exclusions, when he also believes that the existing language protects the individual right to keep and bear arms. The proposed language does no more than that. DEAN GUANELI pointed to legislative history surrounding this proposal which until now has rejected proposed amendments similar to this. Number 240 VICE-CHAIRMAN HALFORD asked if Mr. Guaneli's proposed qualifying language would ratify or protect Anchorage's ordinance regulating transactions of used firearms. He noted that the ordinance was originally designed to track stolen firearms. DEAN GUANELI said that kind of law probably would not be considered reasonable in today's world of computers. VICE-CHAIRMAN HALFORD was concerned about ratifying laws of 200 municipal entities having no common lexicon or ratifying laws that you do not know about. SENATOR DONLEY stated that SJR 1 applies only to laws in existence before the specified date, those would be considered under the existing standard. He clarified that existing laws would be measured under existing constitutional criteria, so if current laws are unconstitutional they would still be unconstitutional. The standard of today would be used. VICE-CHAIRMAN HALFORD expressed concern that the courts decision may be six years later because those who have a standard considered unreasonable do not enforce it for they know they will lose it. The issue would be avoided because of the lack of enforcement. DEAN GUANELI explained his belief that current laws should be able to withstand a court test of current standards not future standards. SENATOR LEMAN emphasized that the legislative history of SJR 39 makes clear that appropriate restrictions would continue to be so. He stated that the intent to have a clean constitutional amendment does no more than clarify what everyone already thinks the constitution means. He said that Mr. Guaneli's fear of a clean constitutional amendment was not founded in fact. He suggested that he and Mr. Guaneli agreed on the result but not the vehicle which would achieve that result. Number 121 SENATOR LITTLE asked Mr. Guaneli if passage of this resolution and institution of this amendment to the constitution would not allow a school district to prohibit guns from the school grounds. DEAN GUANELI stated that he did not believe that would be the case. Mr. Guaneli explained that particularly in the light of modern day events, the court would find an overriding compelling state interest. Mr. Guaneli stated that at some point the problem of reasonableness arises when municipalities want to extend the zone of protection. He supported having clear lines drawn by the legislature or the municipality not by the courts. VICE-CHAIRMAN HALFORD questioned Mr. Guaneli on the reasonableness of a municipality to prohibit the possession of a firearm in a persons own home if they live within a specified zone of protection of a school. DEAN GUANELI clarified that he did not say in their own home. SENATOR LITTLE asked if the adoption of SJR 1 would alleviate Mr. Guaneli's concerns. DEAN GUANELI agreed with Senator Little and he had other versions of language to accomplish the same thing. VICE- CHAIRMAN HALFORD requested a packet of all of Mr. Guaneli's information. DEAN GUANELI said that there are a number of additional clauses that contain safer language. SENATOR DONLEY expressed his belief that the proper standard for firearms laws is a strict scrutiny review. The legislature should be able to regulate arms when there is a compelling public safety interest. He asserted that the compelling public safety interest should be the test regarding whether laws are upheld or not; with firearms very few safety requirements are not reasonable. JOHN GEORGE, representing the Alaska Outdoor Council, stated support of SJR 39. He agreed with Senator Donley on the issue of the strict scrutiny review being the standard for review. TAPE 94-6, SIDE A Number 010 MIKE CHRYST supported the comments made by John George. He supported SJR 39. SALLY CHRYST supported SJR 39. DAVID MCGRAW thanked Senator Leman for his on-going efforts to protect his right to own guns. SCOTT CORYELL supported SJR 39. LES ZETTERBERG supported SJR 39. LYLE STACK supported SJR 39. He added that we focus more on the criminals and keep them in jail. WESLEY JONES supported SJR 39. SCOTT HAMANN said he would support what Michael Neligh would say. Number 118 MICHAEL NELIGH asked if they might consider inserting on line 10, "the right of the adult individual". GREG MACHACEK said it is in the overriding state's interest to support this bill. He said we are loosing more and more of our rights every day and SJR 39 is a step in the right direction. Number 159 RUDY VETTER supported SJR 39. DAVID MILLER said he was a police officer. He said the Chiefs of Police (who are for gun control) do not speak for the line officers. The majority of officers he works with support SJR 39. DWAYNE UPPLAND said he had talked to some of the Chiefs in Alaska and they didn't support the Brady Bill so he thought that was an unfair comment. He said he was very concerned that the language in SJR 39 is ambiguous. Number 200 CHARLES MCKEE supported SJR 39. He added that the right to keep and bear arms is a cornerstone of the right to free speech. PORTIA BABCOCK, Legislative Aide to the Senate State Affairs Committee, said the Municipality of Anchorage passed a resolution endorsing this resolution. Fairbanks, also, endorsed it; and Mat- Su would probably pass one. Number 250 SENATOR DONLEY commented that Dean Guaneli had done a very good job of representing the Department of Law, Department of Public Safety, and other law enforcement groups. VICE-CHAIRMAN HALFORD agreed with Senator Donley. SENATOR DONLEY said he supported the language in SJR 39. He said he would like to bring a letter of intent to the Committee clarifying the issue of the difference between a compelling state interest and a reasonable state interest, because the higher standard is what's appropriate. Number 290 SENATOR JACKO called for the question on his motion to pass SJR 39 from committee with a "do pass" recommendation. There were no objections, and it was so ordered. There being no further business before the committee the meeting was adjourned.