The 3rd meeting of the Interim Joint Committee on Judiciary was held on Tuesday, October 21, 2003, at 10:00 AM, in Room 149 of the Capitol Annex. Representative Gross Lindsay, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Robert Stivers, Co-Chair; Representative Gross Lindsay, Co-Chair; Senators Lindy Casebier, Jerry Rhoads, Richard Roeding, Ernesto Scorsone, Dan Seum, and Katie Stine; Representatives Perry Clark, Stan Lee, Arnold Simpson, Kathy Stein, Robin L. Webb, Rob Wilkey, and Brent Yonts.
Guests: Representative Jack Coleman; Cheyenne Albro, Director of the Pennyrile Narcotics Task Force; Jeff Jones, Lieutenant, Criminal Investigations Division of the Daviess County Sheriff’s Office; Kenton Smith, President of the Commonwealth's Attorneys Association; Gale Cook, President Elect of the Commonwealth's Attorneys Association; Gerald Wilson, Robert Milligan, Kentucky State Police; Robert Lotz, Legislative Representative and Legislative Chairman of the Kentucky Association of Criminal Defense Lawyers; Ernie Lewis, Public Advocate; Representative Greg Stumbo, Majority Floor Leader; Tom Rutledge, Ogden Newell & Welch; Allan Vestal, Dean, University of Kentucky Law School; Bill Doll, Kentucky Medical Association; Bobby Otero, Drug Enforcement Agency; Dave Sallengs, Cabinet for Health Services; Karen Jones, Kentucky Agency for Substance Abuse Policy; Maresa Fawns, Kentucky Academy of Trial Attorneys; Jan Gould, Gay Dwyer, Kentucky Retail Federation; Prentice Harvey, State Farm Insurance; Nancy S. Horn, American Pharmaceutical Service Corporation; Steve Shannon, Kentucky Association of Regional MH-MR Programs.
LRC Staff: Norman Lawson, CSA; Jonathan Grate, Peter Cassidy, Stephanie Martin, and Lisa Fenner.
Chairman Lindsay called the meeting to order. The roll was called later in the meeting and there was no quorum.
Chairman Lindsay introduced the first topic relating to proposed methamphetamine legislation with a short review of the Kotila case in which the Supreme Court of Kentucky ruled that in order to be convicted of manufacturing methamphetamine, the defendant needed to have all, not just some of the chemicals, or all, not just some of the equipment, necessary to produce methamphetamine.
Representative Brent Yonts introduced Cheyenne Albro, Director of the Pennyrile Narcotics Task Force. Mr. Albro indicated that the Pennyrile Narcotics Task Force covers ten counties in the Pennyrile area and also distributes federal drug grant money for the First Congressional District. The amount of federal drug money distributed to the First Congressional District was approximately $2.8 million. Mr. Albro indicated that in his area two methamphetamine laboratories were seized in 1996, three in 1997, 180 in 1998, and during a six month period recently, local police and sheriffs seized 614 laboratories while the State Police seized an additional 190 laboratories. Mr. Albro described the growth of methamphetamine as "like a predatory creature" which has spawned a black market in pseudoephedrine and anhydrous ammonia, where anhydrous ammonia is stolen in Western Kentucky farm areas and then transported throughout the state for use in other methamphetamine laboratories. Mr. Albro indicated that stolen anhydrous ammonia can be sold in Eastern Kentucky for $400 per gallon. Additionally, Mr. Albro indicated methamphetamine laboratories produce hazardous byproducts which require an Environmental Protection Agency approved clean-up, and that $175,000 was spent in the Pennyrile area in 1998 just to clean up the hazardous byproducts from methamphetamine laboratories.
Representative Brent Yonts, accompanied by Representative Jack Coleman, then described the features of 04 RS BR 116 and 117, which are identical in language, one of which is sponsored by Representative Yonts and one by Representative Coleman. They would make possession of two or more items of equipment, or two or more ingredients, necessary to produce methamphetamine a crime, if accompanied by the intent to manufacture methamphetamine. Representative Yonts then described his 04 RS BR 118, which would criminalize at various felony degrees the possession of two to four ingredients, five to less than all of the ingredients, and all of the ingredients necessary to produce methamphetamine with the intent to manufacture the drug. The bill would also criminalize at the same levels possession of the equipment necessary for the manufacture of methamphetamine accompanied by the requisite intent. Representative Coleman and Representative Yonts said that they have agreed to work together to produce a single piece of legislation. Representative Coleman indicated that in the past year 39 methamphetamine laboratories had been seized in Mercer County.
Representative Coleman indicated that perhaps the statute could address the quantities of specific ingredients possessed. Mr. Albro indicated that one ounce of methamphetamine could be produced using as little as 600 pseudoephedrine tablets, two pints of ether, a cup of "liquid fire", four teaspoons of salt, less than a gallon of anhydrous ammonia, and some "Coleman" fuel. In the process of making methamphetamine, first an oil-based product is produced, which is converted to a water-based product through the use of other chemical processes, which is then finally converted to a powder. Representative Kathy Stein asked how long the process took to which Mr. Albro replied that it could be any time between 30 minutes to six hours depending on the process and chemicals used. Representative Coleman then described the hazardous properties of anhydrous ammonia, and the possibility that it may explode if water is put on it. Mr. Albro indicated that one out of five methamphetamine laboratories are discovered because they have exploded.
Senator Stivers indicated that he favors the one chemical plus intent approach to legislation, to which Representative Yonts indicated that the "two or more" plus intent approach aids the determination of "intent."
The next speaker was Deputy Sheriff Jeff Jones of the Daviess County Sheriff's Office. He described what is usually found at the scene of a methamphetamine laboratory are discarded pseudoephedrine boxes, stripped batteries, and other residue from the manufacturing process. In response to a question, Deputy Jones indicated that the lithium is stripped from batteries, used in the conversion process, and produces poisonous effects on the body.
Mr. Albro urged the committee to look at possession of anhydrous ammonia and precursors necessary to make methamphetamine and indicated that since various methods of producing methamphetamine are available and constantly changing, that about 2,000 chemicals might be used in the production of methamphetamine. As far as equipment is involved, he indicated that could be as simple as a one-gallon glass jar. Mr. Albro stated that he favored the "two or more" ingredients or "two or more" items of equipment proposals. Chairman Lindsay observed that "your mother could have two ingredients" in her kitchen to which Mr. Albro responded that she would not have the requisite intent. Chairman Lindsay then observed that the number of ingredients or equipment is an objective standard while the "intent" is subjective.
The next speakers were Kenton Smith, President of the Commonwealth's Attorneys Association, Ms. Gale Cook, President Elect of the Commonwealth's Attorneys Association, and Gerald Wilson of the Kentucky State Police. Mr. Smith indicated that the problem in the present statute is the word "the" in "the ingredients" which allowed the Supreme Court to require all of the ingredients. Mr. Smith indicated that the word "the" could be eliminated or replaced by the phrase "any of the" when referring to the number of ingredients. Mr. Smith further indicated that a petition for rehearing was before the Supreme Court and that the court might change the decision. With regard to ingredients, Mr. Smith observed that usually what is found is a garbage sack full of empty pseudoephedrine boxes, empty ether and other containers which have been punched at the end opposite the opening to ensure that all contents are used, and a container in which the methamphetamine has been "cooked." These are usually accompanied by chemical residue. With regard to "intent", Mr. Smith urged the committee to rely on prosecutorial discretion. In response to a question about possession of only instructions for the production of methamphetamine without any ingredients or equipment being illegal, the response was that the instructions would be protected by the first amendment and that possession of instructions only would not be illegal. Mr. Smith indicated that in order to get around possession of a specific number of ingredients or equipment, criminals were breaking the process into steps where only at the final step would anyone be in possession of all of the ingredients and necessary equipment. Chairman Lindsay asked if Mr. Smith wanted possession of only one ingredient or one item of equipment to be illegal to which the answer was yes. Chairman Lindsay then indicated that if a person had some pseudoephedrine and anhydrous ammonia plus instructions for manufacture of methamphetamine that they could be convicted. Chairman Lindsay further observed there could be a "stacking" of charges where a person could be charged with theft of anhydrous ammonia, possession of anhydrous ammonia in an unlawful container, possession of chemicals or equipment, thus increasing the number of charges and the term which the defendant must serve. Mr. Smith responded that this might result in double jeopardy problems and that the manufacturing statute is used more frequently than the possession or theft statutes.
Mr. Smith indicated that the red phosphorus method of manufacturing methamphetamine is growing in popularity in the state and that red phosphorus is obtained from striker strips from books or boxes of matches.
In response to a question as to whether methamphetamine had legitimate uses, Mr. Smith responded that it was used in legitimate medical practice. Senator Roeding indicated that methamphetamine is produced by Abbott Laboratories, is a Schedule II controlled substance, with various legitimate medical uses.
The next speakers were Mr. Robert Lotz of the Kentucky Association of Criminal Defense Lawyers and Public Advocate Ernie Lewis of the Department for Public Advocacy. Mr. Lewis indicated that a thorough reading of the Kotila case indicates that the Supreme Court specified that manufacture with all ingredients or all equipment plus requisite intent is still illegal, as is theft of anhydrous ammonia, possession of anhydrous ammonia in an unapproved container, unlawful distribution of anhydrous ammonia, and possession of large amounts of pseudoephedrine or other specifically named precursor chemicals. He also stated these statutes along with the current statutes regarding possession and trafficking in methamphetamine cover all of the steps in the production and distribution of methamphetamine. Mr. Lewis further observed that since the Kotila case methamphetamine laboratories continue to be seized, persons trafficking in or possessing methamphetamine continue to be charged, manufacturing charges continue to be made, and that law enforcement has not been hampered and that most of the defendants enter a plea bargain. Mr. Lewis then gave a presentation of what he called the "granny problem" in which any person's grandmother would probably be in possession of most of the ingredients and equipment for the manufacture of methamphetamine. He stated that only the virtue and honesty of police and prosecutors might keep "granny" from being prosecuted and attempting to prove that she did not have the intent to manufacture methamphetamine even though she had a substantial number of the items necessary for its manufacture.
Mr. Lotz then urged the committee to read the Kotila case carefully and observed that a person can now be charged with manufacture, possession of a firearm in a drug activity, and various other offenses which could send the defendant to prison for 25 to 50 years. Mr. Lotz asserted that Kentucky is the only state to prohibit possession of the equipment to manufacture methamphetamine with requisite intent. Mr. Lotz indicated that there is a danger equating having the means to commit a crime and its commission. "We don't need another quick fix" Mr. Lotz observed. What is needed, according to Mr. Lotz is a unified statute which covers all of the offenses and which has gradations of offense levels depending on what the defendant is doing. The present law and the proposals Mr. Lotz indicated might be: 1) void for vagueness, 2) unconstitutional because of double jeopardy; and 3) permit "stacking" of offenses. Mr. Lotz indicated that possession of more than one ingredient would be probable cause for an arrest, and then the person would have to hire an attorney and expend money and time in an effort to prove that he or she was not guilty of the offense. Representative Robin Webb indicated that law enforcement tactics in Eastern Kentucky result in just such arrests, that defendants are not allowed a preliminary hearing, that 75 percent of the cases result in the appointment of a public defender at state expense, and that this results in tremendous expense for a case in which an improper arrest or improper law enforcement tactics were utilized.
The next speakers were Representative Greg Stumbo and Senator Richard Roeding who were cochairs of the Prescription Drug Abuse Task Force. They presented the results of the report and accompanying statutory draft and nonstatutory recommendations to the committee. Senator Roeding described the initiation of the task force through 2003 HB 303, the membership of the task force, the deliberations of the task force, and the use of the KASPER controlled substance prescription reporting program by law enforcement, and how the demand for KASPER reports has grown tremendously in recent years. Representative Stumbo then described the recommendations of the task force as a multifaceted response to prescription drug abuse in Kentucky and an improvement in the KASPER program itself. The proposed statute includes: 1) providing KASPER information to out of state law enforcement agencies; 2) providing that the Kentucky Board of Medical Licensure can request KASPER reports not only on a specific physician but other physicians in a physician group or physicians in a geographic area; 3) encourages the Board of Medical Licensure to develop prescribing standards; 4) provides for the Board of Medical Licensure to report violations to law enforcement; 5) provides that law enforcement agencies receiving KASPER reports can share the reports with any other law enforcement agency so long as the initial agency keeps a record of agencies with which the report is shared; 6) provides that the Cabinet for Health Services which operates the KASPER system can send KASPER reports to law enforcement agencies; 7) encourages the Board of Medical Licensure, Bar Association, Department of Criminal Justice Training, and other agencies to make KASPER access training part of their continuing education programs; 8) requires the Cabinet for Health Services to publish quarterly public reports on drug abuse and prescribing trends which do not identify specific persons; 9) provides for interstate sharing of prescription records; and 10) makes necessary technical changes.
Chairman Lindsay indicated that he had problems with sharing of individual records and personal privacy, and asked if personal records would be available to which the answer was yes and that normally suspicious prescription levels would trigger an investigation. Representative Stumbo indicated that the Board of Medical Licensure would have broader investigative power than law enforcement agencies.
Senator Stivers asked if the trend report provided to the Board of Medical Licensure indicated high prescription levels in a county if all physicians in the county's prescription records could be examined to which the answer was yes. The Board of Medical Licensure would then report suspicious physicians to law enforcement for further investigation according to Representative Stumbo. Representative Webb indicated that the Board of Medical Licensure has maintained varying views of its ability to investigate physicians in the past, and then observed that until the Board of Medical Licensure decides to enforce its laws by proper discipline that the problem of physician over prescribing will continue. Senator Katie Stine asked about how reports would be used by the Board of Medical Licensure and whether the physicians could see their own trend reports and other records maintained by the board on that physician. The answer was no. Representative Stumbo responded that a physician may order a KASPER report on his patients but not on his or her own prescribing practices.
Nonstatutory recommendations included faster turn around times for KASPER information, individual patient identifiers, and addition of information on payment source.
Prior to the appearance of the next speakers, Chairman Lindsay announced that the agenda items relating to the State Police Forensic Laboratories and the Criminal Justice Council would be deferred to the November meeting of the committee due to a shortage of time.
The next speaker was Mr. Tom Rutledge of the Corporate Law Section of the Kentucky Bar Association who presented proposed amendments to the Limited Liability Corporation law. Mr. Rutledge described the amendments as being a follow-on to the corporate law changes made by amending the Constitution of Kentucky. Mr. Rutledge described the changes to the limited liability corporation laws as technical changes and updates which have been approved by the Kentucky Bar Association and the Secretary of State and which are needed because of changes in the corporate laws made by the General Assembly in 2002. The amendments solve a conflict between the corporation laws and the dental licensing statutes regarding limited liability corporations and also address the not for profit limited liability corporation in a manner consistent with the not for profit corporation laws. The amendment also provides for special purpose and series limited liability corporations, which are used for "hedge funds" and complicated real estate transactions. Representative Rob Wilkey asked if the drafters had looked at the tax consequences of the proposed legislation to which Mr. Rutledge replied that the proposal has no revenue consequences and that the taxation of limited liability corporations at partnership tax rates had been addressed by the Internal Revenue Service in 1998, but that the proposal had not been submitted to the Kentucky Revenue Cabinet for approval.
The next speaker was Dean Allan Vestal of the University of Kentucky College of Law who spoke of the necessity for an update of the Uniform Partnership Act to bring Kentucky into conformity with the law as it has already been adopted in 34 other states. Dean Vestal stated that the revised act provides for filings of dissolution of a partnership, shifts from the "entity theory" of partnership to the "aggregate theory" of partnership, adds fiduciary duty language to the partnership law, and provides for survival of a partnership in circumstances where a partner leaves or dies if that partner's interest has been purchased. Chairman Lindsay asked if the new accounting provisions in the act were mandatory for partners or whether exceptions could be made for other accounting provisions. Dean Vestal replied that a few of the provisions are mandatory and many others are optional, but that there are statutory accounting provisions for "unsophisticated" partners. According to Dean Vestal, the act provides for readjusting the accounts between the partners. Chairman Lindsay then asked if the proposal had been submitted to the certified public accountants organization for approval to which the dean replied that it had not been submitted to the accountants.
Mr. Rutledge then described the Uniform Limited Liability Partnership act as paralleling the limited liability corporation theories and as filling a gap in existing law. Mr. Rutledge indicated that a limited liability partnership would be taxed in the same manner as a partnership under federal law unless the partnership made a contrary election. In response to a question, Mr. Rutledge indicated that the proposal was revenue neutral. Senator Roeding asked if the three proposals would make Kentucky more competitive with other states or less competitive to which Mr. Rutledge responded that the changes proposed would make Kentucky more competitive.
The meeting was adjourned at 12:30 PM.