Legislature(1995 - 1996)
03/18/1996 03:12 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 439 - MINING BONDING POOL & ADVISORY COM'N Number 470 CHAIRMAN KOTT announced the committee would address HB 439, "An Act relating to minerals, including coal, to the statewide bonding pool for the reclamation activities imposed on mining operations, and to the statewide bonding pool's use for surface coal mining projects." FRED PASCO, Legislative Secretary to Representative Tom Brice, Alaska State Legislature, read the following statement on behalf of Representative Brice: "House Bill 439 originally sought to open the statewide bonding pool participation of Alaska's coal industry, in addition to creating a commission to evaluate the Alaska coal program. The matter of the bonding pool was addressed in a subsequent piece of legislation initiated in the other body and now in the House. However, there are issues beyond the statewide bonding pool affecting the coal industry in Alaska "The Alaska coal program is currently included in the proposed operating budget for FY 97, but Representative Brice strongly feels that the issues surrounding surface coal mining in Alaska with state regulatory primacy is the most effective approach to them, compel us to look to the long term impact of the state coal program with respect to federal primacy of over this resource. "The CS proposes to establish a temporary commission tasked with evaluating the Alaska coal program under the state Surface Coal Mining Control and Reclamation Act as it relates to the federal act and the Office of Surface Mining. This will open discussion on the issue during the life of the commission and enlarge the base for future decisions regarding state primacy with respect to regulation of surface coal mining in Alaska. "Once again, Representative Brice thanks you, Mr. Chairman, and the members of the Labor and Commerce Committee for the opportunity to present this legislation." Number 542 REPRESENTATIVE ELTON referred to page 1, line 8, of the proposed committee substitute which said, "The commission shall be composed of individuals not employed by government at any level..." He asked what the rationale is of having a commission that is (indisc.) commission exclusively rather than a commission that also has a representative or two on a nine member commission that understands the application of regulations as well as serving under the regulations. He questioned why they can't be employed by government at any level. MR. PASCO said when the commission we first discussed, they were looking at an original fiscal note of $75,000. Partially, an approach to this was looked at from the standpoint of the industry hoping to finance some of the undertaking of the commission. With an arrangement that the Department of Natural Resources, Division of Mining and the Coal Association had discussed, they came to an understanding that through private sector members of the commission being funded, per diem and travel costs by the industry, this is one mechanism which would lower the cost to the state. In addition, the publishing of the report would make it available to the division for its analysis. REPRESENTATIVE ELTON said he would be a little bit bothered, whether they're members of the commission or not, if they don't show up they are not going to be assets to the commission from (indisc.). CHAIRMAN KOTT noted there may be somebody on teleconference that could address that issue. Number 661 REPRESENTATIVE SANDERS moved to adopt the proposed committee substitute for HB 439, Version K, dated 2/22/96. CHAIRMAN KOTT asked if there was an objection. Hearing none, CSHB 439 was before the committee. Number 685 CHARLIE BODDY, Usibelli Coal Mine, Incorporated, testified via teleconference. He informed the committee he is also Secretary/Treasurer of the Alaska Coal Association. Mr. Boddy informed the committee that the bill before the committee is a bill the Alaska Coal Association has worked on through the Minerals Commission for about six years. The importance of the legislation at this time is that there has been major legislation at the federal level. One piece of federal legislation is HR 2372, sponsored by Wyoming Representative Barbara Cubin. He said there is another piece of legislation in the Senate. This legislation would turn control of the surface coal mining and reclamation in states that have primacy programs, which Alaska has, back to the state. Mr. Boddy noted Usibelli would get together with the state and federal agencies to work through exactly how that role change would occur. He referred to the composition of the commission and how the appointments would go and said they believe there should be certain members selected from the House and Senate, and the Governor will have (indisc.) appointed. Number 827 REPRESENTATIVE ROKEBERG asked why the pooling was taken out of the committee substitute. CHAIRMAN KOTT said he believes the pooling has been removed because SB 240 is now in the House. He referred to the selection of the members of the commission and said the current bill indicates that the Governor shall make the appointments to the commission. Chairman Kott said he doesn't see anything that indicates some of the members will be from the Senate or House. MR. BODDY clarified that as those individuals are selected, possibly there should be a division in that the Governor should not be selecting all nine members. He suggested that maybe the Governor, the House and the Senate should all select three members. Number 909 JULES TILESTON, Director, Division of Mining and Water Management, Department of Natural Resources, was next to testify via teleconference from Anchorage. He said he has reviewed the committee substitute. The Administration has proposed returning primacy of the Alaska Coal Program to the federal government. As a result of that DNR has been working very closely with representatives of the Alaska Coal Association and the federal government to make sure something doesn't drop through the cracks should that primacy shift actually take place. This included a series of informal discussions at which time they identified several processing of decision points that needed fine tuning. He said they held a two day coal reclamation workshop with members of the industry, consultants and Alaskan scientists who are familiar with reclamation practices in Alaska. There is a follow up meeting scheduled for next week. Mr. Tileston explained that last week the Administration amended its proposed fiscal 97 budget to retain in the state primacy of the coal program. He said he would give the committee a "What if" scenario. If you assume that the Alaska Coal Program is to be retained, then we have already underway a series of steps that would do that and then the issue becomes one of what do we gain in relationship and there is a modest cost that goes with it. However, if you assume that the Alaska Coal Program cannot be funded, and that is a budget decision, then a sunsetted organization appointed by the Governor would serve a useful mechanism to ensure that the federal government listens to and fairly considers the specific challenges of producing coal in Arctic and SubArctic environments. Alaska is not like Canada or West Virginia and that is how the federal program is presently structured. Number 1032 REPRESENTATIVE ELTON said it seems odd to him that we are creating a commission of nine members to study this issue and to deal with primacy issues, none of whom would end up being agency people who were the applicators of the regulation. He asked if it would be helpful to have one or two members of this nine member commission actually be the people who apply regulations instead of industry people. MR. TILESTON said the basic thing they did in concert with the Alaska Coal Association at Representative Brice's request is take a very hard look at the fiscal note. A large percentage of that cost is when you start adding commissioners or these sorts of levels of staff. He said they were looking at a program that would assure industry the opportunity to pull together what they thought. He noted this is very similar to the way the way the Alaska Minerals Commission now operates. The costs go up as you add state government officials to the commission. REPRESENTATIVE ELTON questioned whether there would be agency people in attendance when the commission meets. MR. TILESTON said the fiscal note does contemplate that there would be staff support. He said he anticipates that one month of staff support would be required for each of the two years that the commission would be in operation. Mr. Tileston said they are working daily and his presumption at this point is that the coal program primacy will remain in the state. He said the department works daily with the various coal organizations and lessees. Number 1143 REPRESENTATIVE ELTON said it has been noted that this is a two year project. The committee substitute says it sunsets on July 1, 1999. He said the way he reads it, it would be three years. MR. TILESTON said Representative Elton is correct. Number 1256 REPRESENTATIVE ROKEBERG said in the sponsor statement there is an indication that there would be as much as $1.6 million with a $123,000 match. He asked what is happening in terms of the funds and what impact the bill has on those funds as well as the Governor's amended budget recommendation. MR. TILESTON said the Administration originally deleted the coal program and that was for general funding. There was a very substantial federal (indisc.) program that went with it. He said Representative Brice's figures were indeed in the Administration's original budget. Last week, the Administration adjusted that budget and the adjustments were made from other agencies within the Department of Natural Resources to come up with the general fund match money. The coal program, as far as the Administration, has been restored to its budget. The general fund amount was approximately $123,000 and in return, there was a combination of funds not only from federal match but from another entirely separate program called the Abandon Mine Lions Program. That has about $4 million, 100 percent federal kitty that is currently available to the state. He said right now they'll be contracting for "dirt work" to reclaim former areas mined by coal, (indisc.) track will be up in the Sutton area. REPRESENTATIVE ROKEBERG said this isn't all related to the Healey area. MR. TILESTON explained that the only producing coal mine today is at healey, the reclamation is not. REPRESENTATIVE ROKEBERG questioned whether Usibelli benefit from this federal money. MR. TILESTON said he would say the state as a whole benefits from it because part of it deals with the permitting, which is done in his shop, as opposed to Denver if the federal government takes it on. The fact that areas which are currently being used for recreation in the Sutton area have high walls that do indeed pose health hazards. They'll be reduced as a result of the AML program. Number 1352 CHAIRMAN KOTT referred to the issue of the sunsetting clause and asked if that was a typographical error. MR. TILESTON said it was an improper addition on his part. CHAIRMAN KOTT said we're giving them two years and on the third year, if they need it, they're on their own. He referred to testimony given in the House Resources Committee, and said according those who testified in the industry, two years was sufficient enough. MR. TILESTON said the wrong fiscal year was inadvertently inserted. Number 1394 REPRESENTATIVE ELTON moved on page 2, line 6, substitute 1998 for 1999. REPRESENTATIVE PORTER objected for the purpose of discussion. He said if it is that the committee wants to entertain the notion of putting three, three and three rather than all nine coming from Governor, they might need this time for that process to fully be completed. He said we wouldn't be able to make our appointments until next year. REPRESENTATIVE ROKEBERG questioned why the Senate President and House Speaker make the appointment. REPRESENTATIVE PORTER said, "Because they generally would like to check with us." Number 1394 REPRESENTATIVE ELTON said if there is going to be an amendment to change the appointment process, he would withdraw his amendment. CHAIRMAN KOTT said the amendment is withdrawn and asked if there was further discussion. Number 1465 REPRESENTATIVE PORTER moved that on page 1, line 11, the committee delete the phrase, "The governor shall appoint the member of the commission. Each member serves at the pleasure of the governor." and insert "Three members of the commission shall be appointed by the governor, three by the Speaker of the of the House and three by the Present of the Senate whose members shall serve at the pleasure of their appointer." REPRESENTATIVE ELTON objected for the purpose of discussion. He said, "A guess the only concern that I have, I don't know frankly if it is a valid concern or not, but we've got a commission in which we're requiring that the people all have knowledge of the surface coal mining industry. My guess is there is not an awful lot of -- not a large pool of people out there that may be available. I guess we're making an assumption also that this will bring balance to it. I don't know that it does. I guess somebody would have to convince me that we're going to end up with appointees that are better or worse under the old system. It just doesn't make an awful -- essentially what we're saying is we don't trust the Governor to do this so we're going to complicate the process and I don't know if that's a fair assumption." REPRESENTATIVE PORTER said what he is saying by the amendment is that regardless of who is in office at this particular time when these kinds of commissions are appointed, they are either confirmed or made by the legislature in balance with appointments made by the Executive Branch. Since there are no provisions for confirmation, he would offer the alternative of appointments from both groups. These kinds of commissions should, as much as possible, represent a balance of philosophies and points of view in addition to the requirement of a particular expertise. CHAIRMAN KOTT asked Mr. Boddy to comment as to how many applicants we really have out there and how difficult it would be to acquire the nine members. Number 1650 MR. BODDY said he believes that there would be a sufficient number of people probably to commission three or four times depending on the expertise you wanted to draw from. REPRESENTATIVE ROKEBERG said he still isn't clear on the amendment in terms of the appointments by the House and Senate. He asked if that is the Speaker and President, and then without confirmation so there wouldn't be a problem with that. REPRESENTATIVE PORTER said as the bill currently stands, it would be a three year commission. REPRESENTATIVE ROKEBERG said given the short duration of this commission, they should be appointed and get to work right away rather than wait for the next session to be confirmed. Number 1734 REPRESENTATIVE ELTON said we're recreating a situation where we're recreating the same problem we've had with other appointments. Representative Elton pointed out the effective date of the bill is July 1, and asked if the existing Speaker and the existing Senate President would the ones that are going to be allowed to appoint six members of the committee despite the fact that their term in office goes for another three or four months. He said he isn't sure that makes sense, yet he doesn't want get into the situation where we wait until there is a new Speaker and Senate President to do the appointments. REPRESENTATIVE ROKEBERG said he wasn't aware that they lost their titles and positions until the end of the year. REPRESENTATIVE ELTON pointed out the new legislature will elect the new presiding officers. CHAIRMAN KOTT said there is still a motion before the committee and asked for a roll call vote. Representatives Sanders, Masek, Porter Rokeberg and Kott were in favor of the motion. Representative Elton was against the motion. Representative Kubina was absent. So the amendment was adopted. REPRESENTATIVE PORTER explained he was anticipating that there would be discussion about confirmation and we'd end up that way. He said that is why he wanted to leave that option open. Representative Porter said he wouldn't be opposed to an amendment to shorten this time period considering the method for appointment the committee just adopted. REPRESENTATIVE ROKEBERG said he would support Representative Elton's motion. REPRESENTATIVE ELTON said he just withdrew it. He said if somebody offers it, he may vote for it. He said we've created a situation in which we may have delayed the appointment process. Number 1897 REPRESENTATIVE ROKEBERG moved on page 2, line 6, to substitute 1998 for 1999. CHAIRMAN KOTT said there is a motion to change the sunset date from July 1, 1998, to 1999. He asked if there was objection. Hearing none, the motion was adopted. Number 1931 REPRESENTATIVE ELTON made a motion to move HB 439, as amended, with the attached new fiscal note, out of committee with individual recommendations. CHAIRMAN KOTT said there is a motion before the committee to move CSHB 439 out of committee with individual recommendations and the attached fiscal note. He said the motion needs to be amended as there is a draft fiscal note. Chairman Kott said the committee has to adopt the draft fiscal note. REPRESENTATIVE ROKEBERG made a motion to adopt the fiscal note attached to CSHB 439(L&C), as amended, before the committee. CHAIRMAN KOTT said there is a motion to adopt the draft fiscal note as the fiscal note that will be forwarded to House Finance. He asked if there was an objection. Hearing none, the draft fiscal note was adopted. Number 1143 REPRESENTATIVE ELTON moved that CSHB 439, as amended, with the new fiscal note, out of committee. Hearing no objection, CSHB 439, as amended, was moved out of the House Labor and Commerce Committee.
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