Legislature(2005 - 2006)HOUSE FINANCE 519

04/28/2005 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled
+= HB 218 PRIVATE HATCHERY COST RECOVERY FISHERIES TELECONFERENCED
Moved CSHB 218(FIN) Out of Committee
+= HB 243 REG. COST CHARGES: UTILITIES/PIPELINES TELECONFERENCED
<Bill Hearing Postponed>
+= SB 103 OIL & GAS: REG. OF UNDERGROUND INJECTION TELECONFERENCED
Moved Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 28, 2005                                                                                           
                         8:52 a.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 8:52:47 AM.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Jim Holm                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Carl Moses                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Bruce Weyhrauch                                                                                                  
Representative Eric Croft                                                                                                       
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Ian Fisk, Staff, Representative Bill Thomas                                                                                     
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Daniel  T. Seamount, Jr.,  Commissioner,  Alaska Oil  and Gas                                                                   
Conservation   Commission,  Department   of   Administration;                                                                   
Steven   Daugherty,  Assistant   Attorney  General,   Natural                                                                   
Resource Section, Department of Law                                                                                             
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 218    "An  Act relating  to cost  recovery fisheries  for                                                                   
          private nonprofit hatchery facilities."                                                                               
                                                                                                                                
          CSHB 218 (FIN) was REPORTED out of Committee with                                                                     
          a "no  recommendation" recommendation and  with the                                                                   
          following fiscal impact  notes: zero note #1 by the                                                                   
          Department  of  Commerce,  Community  and  Economic                                                                   
          Development,  zero  note #2  by  the Department  of                                                                   
          Fish and  Game, zero note  #3 by the  Department of                                                                   
          Public  Safety, and with  indeterminate note  #4 by                                                                   
          the Department of Revenue.                                                                                            
                                                                                                                                
SB 103    "An  Act  relating  to  regulation  of  underground                                                                   
          injection  under the  federal  Safe Drinking  Water                                                                   
          Act; and providing for an effective date."                                                                            
                                                                                                                                
          SB 103 was REPORTED out of Committee with a "no                                                                       
          recommendation"  recommendation   and  with  fiscal                                                                   
          impact    note   #1    by    the   Department    of                                                                   
          Administration,  and  with  zero  note  #2  by  the                                                                   
          Department of Natural Resources.                                                                                      
                                                                                                                                
8:53:45 AM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 103                                                                                                           
                                                                                                                                
     "An Act relating to regulation of underground injection                                                                    
     under the federal Safe Drinking Water Act; and                                                                             
     providing for an effective date."                                                                                          
                                                                                                                                
DANIEL  T. SEAMOUNT, JR.,  COMMISSIONER,  ALASKA OIL  AND GAS                                                                   
CONSERVATION     COMMISSION     (AOGCC),    DEPARTMENT     OF                                                                   
ADMINISTRATION, (via teleconference)  testified in support of                                                                   
SB 103.   The bill  allows AOGCC to  take over primacy  for a                                                                   
small number  of waste  disposal wells  now overseen  by EPA.                                                                   
He explained that these are seven  Class I wells on the North                                                                   
Slope.   He  spoke of  AOGCC's  primacy over  1,155 Class  II                                                                   
injection wells.   He said it  is complicated trying  to sort                                                                   
out which wells  apply.  He spoke of redundant  processes and                                                                   
opined that there would be considerable  time and money saved                                                                   
because of this bill.  AOGCC has  a more streamlined process.                                                                   
                                                                                                                                
8:58:06 AM                                                                                                                    
                                                                                                                                
Representative  Holm   inquired  about  the   duplication  of                                                                   
efforts  by  the State  of  Alaska  and  EPA.   Mr.  Seamount                                                                   
responded that  AOGCC's process for evaluating  and approving                                                                   
Class II programs  are very similar to EPA's.   The state has                                                                   
full-time inspectors and geological  staff.  EPA requests the                                                                   
state's help  on Class I  well applications.   Representative                                                                   
Holm asked  if permit  fees support the  work.  Mr.  Seamount                                                                   
explained that a grant funds Class II wells.                                                                                    
                                                                                                                                
9:00:12 AM                                                                                                                    
                                                                                                                                
Representative  Holm asked if  there is a  charge to  the oil                                                                   
companies for  injection permits.  Mr. Seamount  replied that                                                                   
EPA and the  state do not charge;  they pay a charge  for the                                                                   
injection based on how much gas  is produced.  Representative                                                                   
Holm said that the fiscal note  does not reflect the costs of                                                                   
the permits.   Mr. Seamount reported  that there would  be no                                                                   
cost, but savings.                                                                                                              
                                                                                                                                
9:02:05 AM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault asked  if there  is  $127,000 for  federal                                                                   
funding for  Class II,  but no federal  funding for  Class I.                                                                   
Mr. Seamount said  that is correct.  Co-Chair  Chenault asked                                                                   
where the  money comes from.   Mr. Seamount replied  it comes                                                                   
from regulatory cost charge, which  is a direct charge to the                                                                   
operators.   He explained  the budgeting  process.   Co-Chair                                                                   
Chenault noted that they are paying  for the services for the                                                                   
injection of the waste.  Mr. Seamount agreed.                                                                                   
                                                                                                                                
9:03:37 AM                                                                                                                    
                                                                                                                                
Co-Chair Chenault inquired about  the presence of underground                                                                   
drinking  water.   Mr.  Seamount replied  that  there are  no                                                                   
underground supplies for drinking  water and all of the water                                                                   
is frozen by permafrost.                                                                                                        
                                                                                                                                
9:04:59 AM                                                                                                                    
                                                                                                                                
Representative  Foster   MOVED  to  report  SB   103  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
SB   103  was   REPORTED  out   of  Committee   with  a   "no                                                                   
recommendation"  recommendation and  with fiscal impact  note                                                                   
#1 by  the Department of  Administration, and with  zero note                                                                   
#2 by the Department of Natural Resources.                                                                                      
                                                                                                                                
Representative  Hawker MOVED  to ADOPT  the letter of  intent                                                                   
for SB 103.  There being NO OBJECTION, it was so ordered.                                                                       
                                                                                                                                
9:07:00 AM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 218                                                                                                            
                                                                                                                                
     "An Act relating to cost recovery fisheries for private                                                                    
     nonprofit hatchery facilities."                                                                                            
                                                                                                                                
STEVEN   DAUGHERTY,  ASSISTANT   ATTORNEY  GENERAL,   NATURAL                                                                   
RESOURCE  SECTION, DEPARTMENT  OF  LAW, (via  teleconference)                                                                   
noted problems with  subsection(d) of Section 1  in the bill.                                                                   
There are potential taxing authority  issues.  The Department                                                                   
of Law  has been working to  try to develop  clearer criteria                                                                   
so that it is  the legislature that is imposing  the tax, not                                                                   
the hatchery  operator.  He noted  concerns with some  of the                                                                   
potential amendments.                                                                                                           
                                                                                                                                
9:09:54 AM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  took up Conceptual Amendment  1, which was                                                                   
moved and objected  to during the meeting on  April 27, 2005.                                                                   
[Amendment  1 deleted Section  1 of  the Version X  Committee                                                                   
Substitute  to HB  218.]   Co-Chair Chenault  asked if  there                                                                   
were  any  objections  to  the  motion  to  adopt  Conceptual                                                                   
Amendment 1.  There being NO OBJECTION, it was so ordered.                                                                      
                                                                                                                                
Representative Hawker  MOVED to ADOPT the new CS  for HB 218,                                                                   
labeled  24-LS0544\P,  Utermohle, 4/27/05.    There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
IAN  FISK, STAFF,  REPRESENTATIVE  BILL  THOMAS, explained  a                                                                   
change in the new CS.  In Version  P, on page 1, language was                                                                   
eliminated  about  the  commissioner  consulting  with  other                                                                   
interested  parties.    Language  about  affected  commercial                                                                   
fishermen   and   "organizations   of   affected   commercial                                                                   
fishermen" was added.  Other suggestions  of Mr. Esquiro from                                                                   
an earlier meeting were not incorporated.                                                                                       
                                                                                                                                
9:13:22 AM                                                                                                                    
                                                                                                                                
Mr. Daugherty  commented  on the  changes in  the new CS  and                                                                   
said  there  are  no  problems   with  the  new  language  in                                                                   
subsection  (d).   He explained  that  the legislature  would                                                                   
apply  a  formula  that would  be  defensible  regarding  the                                                                   
amounts that have to be collected each year.                                                                                    
                                                                                                                                
9:14:24 AM                                                                                                                    
                                                                                                                                
Representative  Hawker clarified  that  the legislature  sets                                                                   
taxes and fees in the context of this bill only.                                                                                
                                                                                                                                
Representative Kelly  said he assumes that subsection  (d) is                                                                   
corrected.  Mr.  Fisk replied that it was discussed  with the                                                                   
Attorney General's office.                                                                                                      
                                                                                                                                
9:15:43 AM                                                                                                                    
                                                                                                                                
Representative  Foster  MOVED  to  report  CSHB  218  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB  218 (FIN)  was REPORTED  out  of Committee  with a  "no                                                                   
recommendation" recommendation  and with the following fiscal                                                                   
impact notes:  zero note  #1 by  the Department of  Commerce,                                                                   
Community  and  Economic Development,  zero  note  #2 by  the                                                                   
Department of Fish  and Game, zero note #3  by the Department                                                                   
of  Public Safety,  and  with indeterminate  note  #4 by  the                                                                   
Department of Revenue.                                                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 9:16 AM.                                                                                           

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