Legislature(1993 - 1994)
01/31/1994 08:15 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 384 - FINANCIAL REQMTS: NONCRUDE OIL OPERATIONS Number 011 REPRESENTATIVE RICHARD FOSTER, PRIME SPONSOR, HB 384 told committee members he was appreciative that they were hearing HB 384 which was before the Oil and Gas Committee the previous week. He asked his chief of staff to come forward and give background information on HB 384. LARRY LaBOLLE, CHIEF OF STAFF, REPRESENTATIVE RICHARD FOSTER'S OFFICE, stated HB 384 is simple and straightforward. It eliminates the sunset clause in the current statute which requires direct action insurance for noncrude operators. He said after the current legislation became law, noncrude operators could not get $150 million direct action insurance. Direct action means the insurer is sued, not the perpetrator of the action. MR. LaBOLLE said the insurance companies for several reasons were unwilling to write the type of insurance policy required. He mentioned the Department of Natural Resources (DNR) did get waivers on the requirement before the legislation allowed it. He said at that time, Senator Lyman Hoffman asked for the current exemption which sunsets on July 1, 1994. MR. LaBOLLE told committee members that HB 384 removes the sunset provision from the statute. He stated there was testimony at the Oil and Gas Committee meeting from operators who cannot get the insurance, and added that DNR also testified at the meeting saying the department was in support of HB 384, since operators still would be required to show financial responsibility. Number 036 (VICE CHAIRMAN HUDSON noted for the record that REPRESENTATIVE FINKELSTEIN had joined the meeting at 8:25 p.m. and a QUORUM was not present). REPRESENTATIVE CON BUNDE asked if HB 384 speaks only to direct action insurance and not insurance at another level which operators have. MR. LaBOLLE responded HB 384 speaks only to the direct action insurance requirement and still does not provide any type of waiver from DNR oversight. VICE CHAIRMAN HUDSON asked if there still is a federal requirement for insurance. Number 050 MR. LaBOLLE replied the requirement for insurance still exists on the federal level, but the problem is not the requirement for insurance, the problem lies in the requirement for direct access. VICE CHAIRMAN HUDSON recalled when the current statute was enacted, there was a lot of concern about whether or not the insurance industry would be able to provide the type of insurance required, and whether or not small operators would be able to afford it if it were available. REPRESENTATIVE JOE GREEN made a motion to MOVE HB 384 from committee with INDIVIDUAL RECOMMENDATIONS. VICE CHAIRMAN HUDSON asked if there were any objections. Hearing none, the MOTION PASSED. ANNOUNCEMENTS VICE CHAIRMAN HUDSON advised the committee they would meet on Wednesday, February 2 at 8:00 a.m. for a briefing on the federal wetlands policy in Alaska. He said the presentation will be given by Alvin Ewing of the United States Environmental Protection Agency. Paul Rusanowski of the Governor's Office, Division of Governmental Coordination, will give a briefing on the administration's perspective on wetlands policy and federal activity in this area. REPRESENTATIVE GREEN asked if there will be any representatives from the Corps of Engineers at the meeting. MARY McDOWELL, HOUSE RESOURCES COMMITTEE AIDE, REPRESENTATIVE BILL WILLIAMS, responded the Corps of Engineers declined the invitation. She met with Paul Rusanowski earlier and he planned to ask them again. ADJOURNMENT There being no further business to come before the House Resources Committee, Vice Chairman Hudson adjourned the meeting at 8:30 a.m.