Legislature(2003 - 2004)

05/16/2003 01:35 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 196-CARBON SEQUESTRATION                                                                                                   
Number 1664                                                                                                                     
CHAIR FATE  announced that the  final order of business  would be                                                               
HOUSE BILL  NO. 196,  "An Act  relating to  carbon sequestration;                                                               
and providing for an effective date."                                                                                           
CHAIR  FATE  asked  whether  anyone wished  to  testify.    [Lisa                                                               
Weissler, staff to Representative  Berkowitz, sponsor, offered to                                                               
answer questions.]   Chair  Fate informed  members that  he likes                                                               
the idea of the bill.                                                                                                           
Number 1600                                                                                                                     
CHAIR  FATE  brought attention  to  Amendment  1, which  was  two                                                               
amendments  stapled  together.   The  first  page read  [original                                                               
punctuation provided]:                                                                                                          
     Page 2, line 13-16:                                                                                                        
          delete all material.                                                                                                  
     Page 2, line 27:                                                                                                           
          delete ", the Bureau of Land Management,"                                                                             
     Renumber subsections accordingly.                                                                                          
The second page read [original punctuation provided]:                                                                           
     Page 4, line 13:                                                                                                           
          Delete "On or before January 31, 2004"                                                                                
         Insert "Within nine months after the effective                                                                         
     date of this section"                                                                                                      
     Page 4, line 15, following "prepare":                                                                                      
          Insert "and submit"                                                                                                   
     Page 4, line 30:                                                                                                           
          Delete all material.                                                                                                  
          Insert new bill sections to read:                                                                                     
      "*Sec. 4.   The uncodified law of the  State of Alaska                                                                  
     is amended by adding a new section to read:                                                                                
          DIRECTION TO SEEK FUNDING SOURCES.  (a)  The                                                                          
     Department of Natural  Resources shall immediately seek                                                                    
     and apply for  funding of the activities  that would be                                                                    
     authorized by secs.  2 and 3 of this  Act by contacting                                                                    
     the federal  Department of  Energy, the  Pew Charitable                                                                    
     Trust,  and  other   appropriate  federal  and  private                                                                    
          (b)  The Department of Natural Resources shall                                                                        
     notify the revisor of statutes  of the day on which the                                                                    
     department  receives  approval  of  an  application  or                                                                    
     applications  under  (a)  of this  section  that  would                                                                    
     result in  receipt of $85,000  or more from  federal or                                                                    
     private sources.                                                                                                           
      *Sec. 5.   Sections 1  and 4  of this Act  take effect                                                                  
     immediately under AS 01.10.070(c).                                                                                         
      *Sec. 6.  Sections 2 and  3 of this Act take effect on                                                                  
     the day  on which  the department receives  approval of                                                                    
     an application or applications under  sec. 4(a) of this                                                                    
     Act that  would result  in receipt  of $85,000  or more                                                                    
     from  federal or  private  sources  for the  activities                                                                    
     that  would be  authorized by  secs.  2 and  3 of  this                                                                    
[NOTE:    Representative  Berkowitz's staff  later  informed  the                                                               
committee off record that the  foregoing was the wrong amendment.                                                               
Although Amendment 1  ultimately was adopted, it  is Chair Fate's                                                               
concept,  discussed  during  this   hearing,  that  ended  up  in                                                               
CSHB 196(RES).]                                                                                                                 
CHAIR  FATE explained  that  the board  will  be expensive,  even                                                               
though  there is  a  zero fiscal  note.   He  reported that  he'd                                                               
talked  with Representative  Berkowitz  about this.   Chair  Fate                                                               
said he  himself thinks  it will  be just  as efficient  and will                                                               
provide   just  as   much  information   if  the   Department  of                                                               
Environmental Conservation  (DEC) and  the Department  of Natural                                                               
Resources (DNR)  study this  and give  every legislator  a report                                                               
prior  to  the  convening  of  the second  session  of  the  23rd                                                               
legislature.   He  indicated the  amendment  goes along  somewhat                                                               
with Representative Berkowitz's proposal,  which had a little bit                                                               
different time range.                                                                                                           
CHAIR  FATE said  he believes  this has  merit.   One of  the big                                                               
things  about  the amendment  is  to  give information  to  every                                                               
member of  the legislature, not  just this committee.   Thus when                                                               
the  report  comes  from  DEC  and DNR,  and  probably  from  the                                                               
Division  of Forestry  through DNR,  it will  be disseminated  to                                                               
provide  information to  every [legislator].    He mentioned  the                                                               
need  for  an effective  date  at  the  beginning of  the  second                                                               
session of the 23rd legislature,  which he said he didn't believe                                                               
was in this amendment.                                                                                                          
Number 1420                                                                                                                     
REPRESENTATIVE HEINZE  moved to adopt Amendment  1 [text provided                                                               
previously, but see note following the amendment].                                                                              
REPRESENTATIVE WOLF objected for discussion purposes.                                                                           
Number 1368                                                                                                                     
CHAIR FATE  said the wording  would have to include  "within nine                                                               
months after  the effective date  of this section" on  the second                                                               
page, relating to  page 4, line 13.  He  suggested putting in the                                                               
language  "at the  beginning of  the second  session of  the 23rd                                                               
REPRESENTATIVE GUTTENBERG asked which day it would be.                                                                          
CHAIR FATE said  that would be determined, but [the  first day of                                                               
session] is already on the calendar.                                                                                            
REPRESENTATIVE WOLF said the amendment  would include "an $85,000                                                               
federal or  private-source fund" that  he surmised was  for doing                                                               
the study.   He expressed concern that there is  "a devil tied to                                                               
this  one,"  which is  the  Kyoto  Protocol, a  pollution-control                                                               
treaty  that the  United  States  hasn't adopted.    He said  the                                                               
principle  looks great,  but  highlighted  Alaska's vastness  and                                                               
wildfires  that could  cause  loss of  carbon  credits until  the                                                               
trees  are replanted.   He  specified that  his concern  with the                                                               
amendment is that  moving forward will cause $85,000  to be spent                                                               
just to see whether it works.                                                                                                   
CHAIR FATE pointed out that there  isn't a fiscal note to reflect                                                               
the $85,000.   He asked  Mr. Maisch  how these huge  forest fires                                                               
and the  resulting smoke  will be handled  with regard  to carbon                                                               
Number 1106                                                                                                                     
JOHN  "CHRIS" MAISCH,  Regional Forester,  Division of  Forestry,                                                               
Northern  Region Office,  Department of  Natural Resources,  said                                                               
it's  not  an  issue  that  would  be  affected  by  this  carbon                                                               
sequestration bill.  He explained:                                                                                              
     Those  are  either  natural or  man-caused  fires  that                                                                    
     certainly release  a lot of  atmospheric CO2  when they                                                                    
     burn, but that would not  affect a company's ability to                                                                    
     sell carbon credits.   The state would not  have to ...                                                                    
     try and put  these fires out in a more  rapid manner or                                                                    
     do  something  to  prevent  those  ...  occurrences  of                                                                    
     Simply,  this   bill  would   allow  people   that  can                                                                    
     sequester  carbon  through  reforestation  programs  or                                                                    
     other  programs  - such  as  offsets  of burning  other                                                                    
     fossil  fuel, such  as substituting  wood for  fuel-oil                                                                    
     consumption, which  would create an offset  - you could                                                                    
     trade  that carbon  credit to  a company  that needs  a                                                                    
     credit  to  reduce  their emissions  somewhere  in  the                                                                    
Number 1041                                                                                                                     
CHAIR FATE advised  Mr. Maisch that the  committee was discussing                                                               
an amendment that  has to do with  asking DEC and DNR  to write a                                                               
report about future potential and  what the program is about, "an                                                               
educational piece."   He noted that there is  lack of familiarity                                                               
with  carbon sequestration  throughout the  legislature.   Rather                                                               
than having a  board of 14, he  said this would ask  just DEC and                                                               
DNR to provide the legislature a  report at the start of the next                                                               
session.  He asked, "Do you think that's a doable thing?"                                                                       
MR. MAISCH  said he  couldn't comment, that  it is  a department-                                                               
level matter, and that the  department hasn't taken a position on                                                               
whether to support this legislation or not.                                                                                     
CHAIR  FATE said  he  wasn't  asking for  support,  but about  an                                                               
educational  report and  what the  department  would think  about                                                               
that.   He mentioned time limitations  for departmental personnel                                                               
and so forth.   "We would much  rather do it this  way because it                                                               
seems much simpler than to have  ... a very large board that even                                                               
though we don't  have a fiscal note on that  board, could be very                                                               
expensive," he added.                                                                                                           
Number 0912                                                                                                                     
REPRESENTATIVE GATTO  noted that  an entity  would first  have to                                                               
own carbon  credits in order to  sell them.  He  asked where they                                                               
come from and who would declare that the entity owns them.                                                                      
MR.  MAISCH  said it  would  be  part  of the  certification  and                                                               
verification  process.    A third-party  company  would  have  to                                                               
certify that the entity had  sequestered carbon through some type                                                               
of  project such  as  reforesting on  the  Kenai Peninsula  where                                                               
spruce-bark beetles have destroyed the natural forest cover.                                                                    
REPRESENTATIVE  GATTO  clarified his  question:    "Last year,  I                                                               
didn't know I had them.  This year,  I have a whole bunch and I'm                                                               
allowed to sell  them to somebody that I don't  even know.  Where                                                               
did I get them from?"                                                                                                           
MR. MAISCH  replied that they've  always been here,  but suddenly                                                               
they  have an  associated  economic value  because  of the  Kyoto                                                               
Protocol.  In further response, he said:                                                                                        
     Essentially, because  of that  treaty, even  though the                                                                    
     United States  has not ratified  that treaty  but other                                                                    
     countries  have,  multinational  corporations  that  do                                                                    
     business in those other countries  could sell and trade                                                                    
     carbon anywhere in  the world.  And so  projects in the                                                                    
     U.S. could be purchased;  those carbon credits could be                                                                    
     purchased by companies that do  business in these other                                                                    
     jurisdictions,  and  they  can   get  credit  in  those                                                                    
     jurisdictions for those credits.                                                                                           
Number 0794                                                                                                                     
REPRESENTATIVE GATTO  asked whether  it's necessary to  belong to                                                               
the [Kyoto  Protocol] in order to  do this, since it  may give an                                                               
unfair advantage otherwise.                                                                                                     
MR.  MAISCH answered  that  one  doesn't need  to  belong to  the                                                               
treaty under the current protocols to participate.                                                                              
Number 0740                                                                                                                     
REPRESENTATIVE  GUTTENBERG   offered  his  assessment   that  the                                                               
amendment would narrow the fiscal note  to zero, since it says to                                                               
go out and raise the money.   He indicated all it does it request                                                               
a report  to be provided  on the first  day of the  next session.                                                               
If  the  legislature  doesn't  authorize  it  or  keep  something                                                               
moving, then nothing happens.                                                                                                   
Number 0670                                                                                                                     
REPRESENTATIVE WOLF maintained his objection.                                                                                   
A  roll call  vote  was taken.    Representatives Cissna,  Gatto,                                                               
Heinze,  Morgan,   Guttenberg,  and   Fate  voted  in   favor  of                                                               
Amendment 1.   Representative Wolf voted against  it.  Therefore,                                                               
Amendment 1  was adopted by a  vote of 6-1.   [See note following                                                               
the text of Amendment 1.]                                                                                                       
Number 0606                                                                                                                     
REPRESENTATIVE HEINZE moved to report  HB 196, as amended, out of                                                               
committee  with   individual  recommendations   and  accompanying                                                               
fiscal notes.                                                                                                                   
REPRESENTATIVE WOLF objected.                                                                                                   
A roll call vote was  taken.  Representatives Guttenberg, Cissna,                                                               
Gatto,  Heinze, Morgan,  and  Fate voted  in  favor of  reporting                                                               
HB 196, as  amended, from committee.   Representative  Wolf voted                                                               
against it.   Therefore,  CSHB 196(RES) was  reported out  of the                                                               
House Resources Standing Committee by a vote of 6-1.                                                                            
Number 0543                                                                                                                     
REPRESENTATIVE  WOLF, noting  that  the committee  also had  just                                                               
passed SB 149 concerning the state's  timber, remarked, "This one                                                               
requires that we cut our old-growth forests."                                                                                   
CHAIR FATE offered that HB 196  just enables a report and doesn't                                                               
authorize  any program.   He  indicated he'd  like to  learn more                                                               
about this.  [CSHB 196(RES) was reported from committee.]                                                                       

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