Legislature(2017 - 2018)BARNES 124

02/12/2018 01:00 PM RESOURCES

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

Audio Topic
01:04:24 PM Start
01:04:50 PM HB322
03:01:13 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 322 OIL SPILLS/POLLUTION:PENALTIES;PREVENTION TELECONFERENCED
Moved CSHB 322(RES) Out of Committee
-- Testimony <Invitation Only> --
+ Presentation: Contaminated Alaska Native TELECONFERENCED
Corporation Lands by Representatives from the
Alaska Native Village Corp. Assoc.
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
        HB 322-OIL SPILLS/POLLUTION:PENALTIES;PREVENTION                                                                    
                                                                                                                                
1:04:50 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON announced  that the  first order  of business                                                               
would be  HOUSE BILL NO. 322,  "An Act relating to  penalties for                                                               
discharges  of oil  and other  pollution violations;  relating to                                                               
oil  discharge prevention  and contingency  plans for  commercial                                                               
motor  vehicles  transporting crude  oil;  and  providing for  an                                                               
effective date."                                                                                                                
                                                                                                                                
1:05:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH moved  Amendment 1 to HB  322, labeled, 30-                                                               
LS1015\O.12, Nauman, 2/8/18, which read:                                                                                        
                                                                                                                                
     Page 2, line 27:                                                                                                           
          Delete "$20"                                                                                                      
          Insert "$40"                                                                                                      
                                                                                                                                
     Page 2, line 30:                                                                                                           
          Delete "$5"                                                                                                       
          Insert "$10"                                                                                                      
                                                                                                                                
     Page 3, line 1:                                                                                                            
          Delete "$2"                                                                                                       
          Insert "$4"                                                                                                       
                                                                                                                                
1:06:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO objected.                                                                                               
                                                                                                                                
REPRESENTATIVE  PARISH   explained  Amendment  1   increases  the                                                               
amounts of penalties to reflect the rate of inflation.                                                                          
                                                                                                                                
1:06:39 PM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representatives  Drummond, Parish,                                                               
Josephson,   and   Tarr   voted   in  favor   of   Amendment   1.                                                               
Representatives  Talerico,  Lincoln,  Birch,  and  Johnson  voted                                                               
against it.   Therefore, Amendment  1 failed  to be adopted  by a                                                               
vote of 4-4.                                                                                                                    
                                                                                                                                
1:07:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH moved  Amendment 2, labeled 30-LS1015\O.13,                                                               
Nauman, 2/8/18, which read:                                                                                                     
                                                                                                                                
     Page 4, line 7:                                                                                                            
          Delete "$1,000"                                                                                                   
          Insert "$2,000"                                                                                                   
          Delete "$200,000"                                                                                                 
          Insert "$400,000"                                                                                                 
                                                                                                                                
1:07:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO objected.   He said previous testimony on                                                               
the bill revealed the responsibility to  clean up an oil spill is                                                               
held  by  the  company  and  the people  who  caused  the  spill.                                                               
Furthermore,  the fee  structure is  put  in place  to cover  the                                                               
state's  cost and  he  opined few  transporters  would choose  to                                                               
spill oil.   The  state has  provisions in  place that  require a                                                               
responsible party  to clean  up a  spill and he  said he  did not                                                               
support the fee increases in the proposed amendment.                                                                            
                                                                                                                                
CO-CHAIR TARR directed  attention to the bill on page  4, line 7,                                                               
that read:                                                                                                                      
                                                                                                                                
      assessed by the court of not less than $1,000 [$500]                                                                      
     nor more than $200,000                                                                                                     
                                                                                                                                
CO-CHAIR TARR  expressed her understanding the  penalty addressed                                                               
by Amendment  2 applies when  a company  has been found  liable -                                                               
through civil action  - to have acted irresponsibly  and caused a                                                               
spill.                                                                                                                          
                                                                                                                                
1:10:34 PM                                                                                                                    
                                                                                                                                
KRISTIN  RYAN,   Director,  Division  of  Spill   Prevention  and                                                               
Response,   Department   of  Environmental   Conservation,   said                                                               
Representative  Tarr is  correct and  the aforementioned  penalty                                                               
would come into effect after the  state has found the spiller has                                                               
harmed the environment in a manner to warrant a penalty.                                                                        
                                                                                                                                
REPRESENTATIVE  PARISH explained  Amendment 2  is also  to adjust                                                               
the amount  of the fines to  reflect inflation.  He  opined civil                                                               
penalties based  on compliance are appropriate  because companies                                                               
are  responsible  for  a  maximum   return  to  their  investors;                                                               
however, it  is the responsibility  of the legislature  to ensure                                                               
the public and  the state's environment are protected.   He spoke                                                               
in  favor  of  keeping  civil  penalties  from  eroding  [due  to                                                               
inflation] so they are effective to address violations.                                                                         
                                                                                                                                
CO-CHAIR  JOSEPHSON  referred  to   testimony  provided  by  Kara                                                               
Moriarty [President/CEO  of the  Alaska Oil and  Gas Association]                                                               
during a previous hearing [on 2/9/18] and remarked:                                                                             
                                                                                                                                
     ... she  noted that depending  on the fiscal  year, the                                                                    
     number  of  spills  that  belong to  the  oil  and  gas                                                                    
     industry are in  the 24-29 percent range,  but in terms                                                                    
     of volume, they're only in  the 2 percent range. ... My                                                                    
     concern is  that other industries are  not paying [for]                                                                    
     their clean  up, in  fact, the cost  is being  borne by                                                                    
     the  oil industry  through the  SPAR  fund. ...  Here's                                                                    
     what she said: ... DEC  usually recovers full cost from                                                                    
     the  oil and  gas spills,  it's not  true of  the other                                                                    
     industries.                                                                                                                
                                                                                                                                
CO-CHAIR JOSEPHSON opined given [liability]  would be proven in a                                                               
court of  law, and the  proposed penalty  is "true to  really the                                                               
inflationary  rate,   ...  it  merits  the   committee's  serious                                                               
consideration."                                                                                                                 
                                                                                                                                
1:14:15 PM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representatives  Drummond, Parish,                                                               
Tarr,   and   Josephson   voted   in  favor   of   Amendment   2.                                                               
Representatives Rauscher,  Talerico, Lincoln, Birch,  and Johnson                                                               
voted against  it.  Therefore,  Amendment 2 failed to  be adopted                                                               
by a vote of 4-5.                                                                                                               
                                                                                                                                
1:15:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR moved Amendment  3, labeled 30-LS1015\O.16, Nauman,                                                               
2/10/18, which read:                                                                                                            
                                                                                                                                
     Page 7, line 28:                                                                                                           
          Delete "$1,000"                                                                                                       
          Insert "$500"                                                                                                         
          Delete "the initial"                                                                                                  
          Insert "each"                                                                                                         
                                                                                                                                
     Page 7, lines 28 - 29:                                                                                                     
          Delete ", and may not exceed $24 a gallon of oil                                                                      
     discharged"                                                                                                                
                                                                                                                                
     Page 8, line 6:                                                                                                            
          Delete "extent"                                                                                                       
          Insert "volume, extent,"                                                                                              
                                                                                                                                
1:15:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON objected.                                                                                                
                                                                                                                                
CO-CHAIR TARR  directed attention to  the bill on page  7, [lines                                                               
27-30], which read:                                                                                                             
                                                                                                                                
     (b)   An  administrative  penalty  assessed under  this                                                                    
     section  may not  be  less than  $1,000  nor more  than                                                                    
     $10,000 for  the initial violation, and  may not exceed                                                                    
     $24  a  gallon  of  oil discharged.  When  assessing  a                                                                    
     penalty  under  this   section,  the  department  shall                                                                    
     consider                                                                                                                   
                                                                                                                                
CO-CHAIR TARR explained the first  change within Amendment 3 is a                                                               
reduction  from  $1,000 to  $500  of  the minimum  administrative                                                               
penalty on the  initial violation currently defined  in the bill.                                                               
The second change  deletes "the initial" and  inserts "each" thus                                                               
the penalty  would be assessed  for each violation.   She related                                                               
the Department  of Environmental Conservation (DEC)  advised that                                                               
a fine of $1,000 is too high for  a small spill, and DEC seeks to                                                               
assess  each violation  rather than  only  the initial  violation                                                               
because  without the  changes made  by  Amendment 3,  there is  a                                                               
conflict with  the language  [on page 7,  line 25]  in subsection                                                               
(a).   Also, DEC advised the  penalty that "may not  exceed $24 a                                                               
gallon of oil  discharged" is not necessary  because the proposed                                                               
bill has  a maximum penalty of  $10,000 and she gave  an example.                                                               
Finally, she directed attention to page 8, line 6, which read:                                                                  
                                                                                                                                
        (5) the extent and seriousness of the discharge,                                                                        
     including the potential ...                                                                                                
                                                                                                                                
CO-CHAIR  TARR  further  explained   Amendment  3  adds  "volume,                                                               
extent"  to  replace  "extent" which  asserts  DEC's  ability  to                                                               
calculate  the  volume of  the  spill.    She restated  the  four                                                               
changes within Amendment 3.                                                                                                     
                                                                                                                                
1:20:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH said  he was opposed to the bill  due to its                                                               
inconsistency.  He  asked whether the $24 a  gallon penalty would                                                               
be  assessed against  a person  or persons  who commit  a serious                                                               
discharge,  for  example,  the school  district  in  Bethel  that                                                               
accidentally spilled 3,000 gallons of crude oil.                                                                                
                                                                                                                                
MS. RYAN restated the question.   She said if the bill is enacted                                                               
[DEC]  would consider  the criteria  put  forth in  the bill  and                                                               
determine  if a  penalty  were  warranted.   The  criteria to  be                                                               
analyzed  includes  gross  negligence,  cause, and  harm  to  the                                                               
environment, and if  the volume level were  sufficient, DEC would                                                               
have  administrative penalty  authority  to  evaluate a  possible                                                               
penalty.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  BIRCH  surmised  DEC   would  make  a  subjective                                                               
determination, not  based on  the adverse impact  of a  spill, or                                                               
the  clean-up  cost, but  upon  whether  a regulator  chooses  to                                                               
assess a penalty.                                                                                                               
                                                                                                                                
MS.  RYAN  disagreed  and  advised  the  point  of  the  proposed                                                               
legislation  is to  clarify the  standards applied  by DEC.   The                                                               
aforementioned section  of the  bill is  utilized for  serious or                                                               
repeat  violations, and  the example  of the  school district  in                                                               
Bethel was  not a  repeat violation.   [DEC] seeks  guidance from                                                               
the legislature and does not wish to make subjective decisions.                                                                 
                                                                                                                                
REPRESENTATIVE BIRCH  opined [a serious discharge]  is "always in                                                               
the eye of the beholder," and he provided an example.                                                                           
                                                                                                                                
CO-CHAIR JOSEPHSON recalled  testimony from Ms. Ryan  that in the                                                               
examples of  the Hilcorp [2016 oil  spill on the North  Slope and                                                               
2017 natural gas  release and oil leak in Cook  Inlet], DEC could                                                               
have sought penalties through the court but declined to do so.                                                                  
                                                                                                                                
MS.  RYAN  advised  Hilcorp  experienced  two  releases,  one  of                                                               
natural  gas  and another  of  oil.    A  liquid volume  was  not                                                               
calculated in the  natural gas release because DEC  does not have                                                               
a process  to determine the volume  of a natural gas  release and                                                               
thereby determine  a penalty.   In  further response  to Co-Chair                                                               
Josephson, she said the release  of oil during the aforementioned                                                               
spill was three gallons and penalties were not pursued.                                                                         
                                                                                                                                
1:26:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON  questioned whether an  administrative penalty                                                               
could  be  appealed to  the  Office  of Administrative  Hearings,                                                               
Department of Administration.                                                                                                   
                                                                                                                                
MS.  RYAN  said  correct;  as  the  bill  is  written,  decisions                                                               
assessing  administrative  penalties  would  be  appealed  to  an                                                               
administrative  law judge  and not  through the  judicial system.                                                               
In  further response  to Co-Chair  Josephson,  she confirmed  any                                                               
administrative penalty  levied would  be subtracted from  a civil                                                               
penalty assessed by the court.                                                                                                  
                                                                                                                                
REPRESENTATIVE RAUSCHER  inquired as  to the meaning  of "penalty                                                               
against a person" in the language of the bill.                                                                                  
                                                                                                                                
MS. RYAN deferred the question to the Department of Law.                                                                        
                                                                                                                                
REPRESENTATIVE RAUSCHER  said his  experience on the  North Slope                                                               
is that very  small oil discharges are reported,  and he strongly                                                               
cautioned if  penalties are increased,  oil companies  may decide                                                               
not to report spills.  He opined the present system is working.                                                                 
                                                                                                                                
CO-CHAIR JOSEPHSON stated the following points:                                                                                 
   • current law requires companies to report oil spills, which                                                                 
     is unchanged by HB 322                                                                                                     
   • [Fiscal note   identifier:      HB322-DEC-SPAR-02-01-2018]                                                                 
     indicates increased cost to industry of $75,000                                                                            
   • 2 percent of [reported spills] are on the North Slope                                                                      
   • the cost of cleaning up spills exceeds SPAR's fund, so the                                                                 
     industry is "covering more than its share"                                                                                 
   • Alaska residents are paying for clean up through a general                                                                 
     fund                                                                                                                       
                                                                                                                                
1:30:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   RAUSCHER  stated   he  has   not  received   the                                                               
information  he  requested  on  the size,  type,  and  status  of                                                               
spills.                                                                                                                         
                                                                                                                                
CO-CHAIR  JOSEPHSON pointed  out  the information  provided in  a                                                               
response document from [Ms. Ryan,  Director, Spill Prevention and                                                               
Response] DEC, dated 2/7/18, which  was posted on the bill action                                                               
status inquiry system (BASIS).                                                                                                  
                                                                                                                                
CO-CHAIR  JOSEPHSON,  in  response to  Representative  Rauscher's                                                               
previous question, read from [AS 46.04.918] as follows:                                                                         
                                                                                                                                
     "person"  means   an  individual,  public   or  private                                                                    
     corporation, political  subdivision, government agency,                                                                    
     municipality,   industry,   partnership,   association,                                                                    
     firm, trust, estate or any other entity.                                                                                   
                                                                                                                                
1:32:32 PM                                                                                                                    
                                                                                                                                
EMILY  NAUMAN, Attorney,  Legislative Legal  Counsel, Legislative                                                               
Legal Services, Legislative Affairs  Agency, advised the citation                                                               
for the applicable statute is  AS 46.03.918 and the definition as                                                               
read by Co-Chair Josephson is correct.                                                                                          
                                                                                                                                
1:34:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LINCOLN referred to an incomplete response from                                                                  
DEC for background documentation to support its $75,000                                                                         
estimated cost to the industry of the proposed legislation.                                                                     
                                                                                                                                
1:35:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON returned attention to DEC's abovementioned                                                                   
response document, which addressed the estimated cost on page 3.                                                                
                                                                                                                                
1:36:00 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 1:36 p.m.                                                                                 
                                                                                                                                
1:39:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON maintained her objection to Amendment 3.                                                                 
                                                                                                                                
1:39:40 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.   Representatives Lincoln, Drummond,                                                               
Parish,  Tarr,  and Josephson  voted  in  favor of  Amendment  3.                                                               
Representatives  Johnson,  Rauscher,  Talerico, and  Birch  voted                                                               
against it.   Therefore, Amendment 3 was adopted by  a vote of 5-                                                               
4.                                                                                                                              
                                                                                                                                
1:40:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   BIRCH   moved   Amendment   [4],   labeled   30-                                                               
LS1015\O.10, Nauman, 2/8/18, which read:                                                                                        
                                                                                                                                
     Page 1, lines 1 - 3:                                                                                                       
          Delete "relating to oil discharge prevention and                                                                    
        contingency plans for commercial motor vehicles                                                                       
     transporting crude oil;"                                                                                                 
                                                                                                                                
     Page 9, line 4, through page 12, line 16:                                                                                  
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 12, line 23:                                                                                                          
          Delete "Section 20"                                                                                                   
          Insert "Section 14"                                                                                                   
                                                                                                                                
     Page 12, line 24:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 15"                                                                                                      
                                                                                                                                
1:41:10 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR objected for discussion purposes.                                                                                 
                                                                                                                                
REPRESENTATIVE  BIRCH explained  Amendment  4 is  in response  to                                                               
previous testimony  from the  Alaska Trucking  Association, Inc.,                                                               
and others, that portions of  HB 322 are unnecessary, burdensome,                                                               
and duplicative  because there  are existing  federal contingency                                                               
plans related  to the transportation  of oil.  Amendment  4 would                                                               
reduce the duplicative  components that the bill  would impose on                                                               
industry and which were previously revealed to DEC.                                                                             
                                                                                                                                
CO-CHAIR TARR  agreed that industry  should not be  burdened with                                                               
duplicative  legislation;  however,  DEC   needs  access  to  the                                                               
available  safety information,  and both  of these  goals can  be                                                               
accomplished by a forthcoming amendment.                                                                                        
                                                                                                                                
REPRESENTATIVE  PARISH   urged  for  an  explicit   agreement  of                                                               
cooperation  between companies  transporting crude  oil and  DEC,                                                               
which Amendment 4 lacks.                                                                                                        
                                                                                                                                
1:44:57 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON  said a forthcoming amendment  cites AS 46.04,                                                               
in which  contingency plans are  established in existing  law for                                                               
oil terminal facilities, pipelines,  and tanker vessels; however,                                                               
the state does not commonly review  extant plans.  He referred to                                                               
testimony  [during the  hearing of  HB  322 on  2/9/18] from  Mr.                                                               
Thompson, [executive director,  Alaska Trucking Association], who                                                               
acknowledged  a  willingness  to  share  the  contingency  plans,                                                               
although Mr.  Thompson cautioned  he had  not consulted  with the                                                               
members of  the association in  this regard.   Co-Chair Josephson                                                               
said,  "... the  state  doesn't know  much  about these  response                                                               
plans, and  that's the term  DOT federal uses.   I'm going  to be                                                               
opposing the amendment."                                                                                                        
                                                                                                                                
1:47:06 PM                                                                                                                    
                                                                                                                                
A  roll call  vote was  taken.   Representatives Birch,  Johnson,                                                               
Rauscher,   and  Talerico   voted  in   favor  of   Amendment  4.                                                               
Representatives  Lincoln, Drummond,  Parish, Tarr,  and Josephson                                                               
voted against  it.  Therefore,  Amendment 4 failed to  be adopted                                                               
by a vote of 4-5.                                                                                                               
                                                                                                                                
1:47:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH moved Amendment 5 labeled 30-LS1015\O.17,                                                                 
Nauman, 2/12/18, which read:                                                                                                    
                                                                                                                                
     Page 1, line 2:                                                                                                            
         Delete "discharge prevention and contingency"                                                                        
          Insert "spill response"                                                                                             
                                                                                                                                
     Page 9, line 4, through page 12, line 16:                                                                                  
          Delete all material and insert:                                                                                       
        "*  Sec. 13.  AS 46.04 is  amended by  adding a  new                                                                
     section to read:                                                                                                           
          Sec. 46.04.057. Oil spill response plans for                                                                        
     commercial motor vehicles. (a)  If a person is required                                                                  
     to  submit an  oil  spill response  plan under  federal                                                                    
     law,  the person  may not  operate  a commercial  motor                                                                    
     vehicle  transporting crude  oil on  a highway  or road                                                                    
     maintained  by   the  state   unless  the   person  has                                                                    
     submitted  to the  department, and  the department  has                                                                    
     received, the  oil spill  response plan  required under                                                                    
     federal law.                                                                                                               
          (b) Failure of a holder of a response plan                                                                            
     submitted  to  the  department under  this  section  to                                                                    
     comply with the  plan or to have access  to the quality                                                                    
     or quantity of  resources identified in the  plan or to                                                                    
     respond  with  those   resources  within  the  shortest                                                                    
     possible time  in the event  of a spill is  a violation                                                                    
     of  this  chapter   for  purposes  of  AS 46.03.760(a),                                                                    
     46.03.765, 46.03.790, and any  other applicable law. If                                                                    
     the  holder  of  a  response   plan  submitted  to  the                                                                    
     department under  this section fails to  respond to and                                                                    
     conduct cleanup operations  of an unpermitted discharge                                                                    
     of  crude   oil  with  the  quality   and  quantity  of                                                                    
     resources  identified  in  the  plan and  in  a  manner                                                                    
     required  under  the  plan,   the  holder  is  strictly                                                                    
     liable, jointly  and severally,  for the  civil penalty                                                                    
     assessed  under AS 46.03.758,  46.03.759, or  46.03.760                                                                    
     against any other person for that discharge.                                                                               
          (c) In this section, "commercial motor vehicle"                                                                       
     has the meaning given in AS 19.10.399."                                                                                    
                                                                                                                                
     Page 12, line 23:                                                                                                          
          Delete "Section 20"                                                                                                   
          Insert "Section 15"                                                                                                   
                                                                                                                                
     Page 12, line 24:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 16"                                                                                                      
                                                                                                                                
1:48:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH objected to  Amendment 5, noting his concern                                                               
about the duplicative nature  of Alaska's regulatory environment.                                                               
He  expressed  his  understanding   there  are  existing  federal                                                               
requirements for contingency plans which may be duplicated.                                                                     
                                                                                                                                
CO-CHAIR  TARR directed  attention  to Amendment  5,  on page  1,                                                               
lines 11-13, which read in part:                                                                                                
                                                                                                                                
      ... the person has submitted to the department, and                                                                       
      the department has received, the oil spill response                                                                       
     plans ...                                                                                                                  
                                                                                                                                
CO-CHAIR  TARR  said  although  [DEC]  should  have  an  approval                                                               
mechanism  due  to  its   expertise,  industry  testimony  showed                                                               
concern  that an  additional  approval process  by  DEC would  be                                                               
burdensome;  however, Amendment  5  directs  industry to  provide                                                               
copies of existing plans for DEC  to have on file, which would be                                                               
adequate in an incident, but not burdensome.                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH  said  Amendment  5 has  a  narrow  focus:                                                               
applies only to commercial motor  vehicles transporting crude oil                                                               
on  a  highway  or  a  road maintained  by  the  state;  requires                                                               
companies to submit  copies of existing oil  spill response plans                                                               
-  which  industry  acknowledged  could be  provided  -  to  DEC;                                                               
reduces  work  by DEC  employees.    In addition,  the  amendment                                                               
stipulates  that contingency  plans  should be  followed, and  he                                                               
pointed out  the plans  are not reviewed,  which is  not adequate                                                               
oversight.                                                                                                                      
                                                                                                                                
REPRESENTATIVE BIRCH,  due to the clarification  Amendment 5 does                                                               
not create a hurdle for industry, withdrew his objection.                                                                       
                                                                                                                                
1:54:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TALERICO objected  to Amendment  5.   He directed                                                               
attention to  Amendment 5 on page  1, lines 18-20, which  read in                                                               
part:                                                                                                                           
                                                                                                                                
     ... If the  holder of a response plan  submitted to the                                                                    
     department under  this section fails to  respond to and                                                                    
     conduct cleanup operations  of an unpermitted discharge                                                                    
     of crude oil with the quality ...                                                                                          
                                                                                                                                
REPRESENTATIVE   TALERICO   urged   for  clarification   of   the                                                               
cumbersome language that  implies someone would get  a permit for                                                               
the  discharge  of  crude  oil.    Representative  Talerico  then                                                               
removed  his  objection.    There  being  no  further  objection,                                                               
Amendment 5 was adopted.                                                                                                        
                                                                                                                                
CO-CHAIR JOSEPHSON returned attention to the bill, as amended.                                                                  
                                                                                                                                
REPRESENTATIVE TALERICO  said Alaska  currently has  a successful                                                               
[oil  spill  prevention  and   reporting]  process  and  industry                                                               
reports any spills that take  place.  He cautioned against adding                                                               
to  industry's burden  and expense  related  to the  clean up  of                                                               
spills; in  fact, every drop of  product is valuable and  thus is                                                               
accounted for.  He said he did not support the bill.                                                                            
                                                                                                                                
REPRESENTATIVE  BIRCH objected  to the  bill's introduction  as a                                                               
committee bill  and to the  muddled nature  of the bill,  such as                                                               
references to  economic savings,  a competitive  advantage gained                                                               
by  noncompliance  with  standards,  the  lack  of  details,  and                                                               
further confusing and  contradictory concerns.  He  said the bill                                                               
is  "a solution  in  search of  a problem"  and  noted crude  oil                                                               
spills  are less  than  2 percent  of the  total  spills and  are                                                               
declining  due to  good management  by companies.   He  cautioned                                                               
adding layers of  regulatory components to business  adds to cost                                                               
and  reduces  Alaska's  competitiveness  in  attracting  resource                                                               
development.   Further, there will be  unintended consequences to                                                               
costs that can be collected by DEC.                                                                                             
                                                                                                                                
1:59:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON said  she would vote against  the bill for                                                               
the following  reasons:  industry testimony  related to increases                                                               
in oil taxes; her objection to  the introduction of the bill as a                                                               
committee  bill  at a  time  when  industry representatives  were                                                               
present; the bill  adds to the uncertainty of  ongoing changes to                                                               
industry regulations; the bill is  not an independent "rewrite of                                                               
spills and clean  up"; her objection to the  random procedure; in                                                               
the interest of showing stability for the industry.                                                                             
                                                                                                                                
CO-CHAIR  JOSEPHSON described  the  committee bill  process as  a                                                               
procedure allowed by  Alaska law, and utilized in  the House less                                                               
in the  30th Alaska  State Legislature than  in the  two previous                                                               
legislatures.   Further, the introduction  of the bill  was fully                                                               
transparent to  industry and  the scheduling  of hearings  is not                                                               
orchestrated, but  is affected  by many factors,  and he  gave an                                                               
example.  He  agreed with Representative Birch  there is evidence                                                               
the  oil  and  gas  industry  has a  good  record,  but  recalled                                                               
previous testimony  by the  Alaska Oil  and Gas  Association that                                                               
other industries are not as compliant.                                                                                          
                                                                                                                                
REPRESENTATIVE  LINCOLN said  he shared  some concerns  about the                                                               
bill   and  supported   the   improvements   made  by   committee                                                               
amendments.                                                                                                                     
                                                                                                                                
2:05:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  restated the  reason for  HB 322  is the                                                               
lack  of [spill]  regulation  of  commercial trucks  transporting                                                               
crude  oil,   compared  to  spill  regulation   of  oil  drilling                                                               
facilities and  oil tankers;  in fact, the  bill addresses  a new                                                               
section  of   industry.     Further,  Amendment   5  "contributed                                                               
considerably to the clarity of this bill."                                                                                      
                                                                                                                                
REPRESENTATIVE RAUSCHER  cautioned the intent  of the bill  is to                                                               
recover costs for  the state; however, the  bill puts limitations                                                               
on  companies that  are  addressing problems  very  well and  are                                                               
already concerned  about the environment.   He questioned whether                                                               
the bill would increase revenue or act as a deterrent.                                                                          
                                                                                                                                
CO-CHAIR  TARR  recalled  DEC  reported  even  though  there  are                                                               
currently  fewer  spills,  and   spills  of  lower  volumes,  the                                                               
assessment of  fines and penalties  enacted in 1977 or  1989 will                                                               
not recoup DEC's costs accrued when  an operator is unable to pay                                                               
clean-up  costs.   She provided  examples of  prices affected  by                                                               
inflation and noted  a penalty of $20 per gallon  of oil entering                                                               
an anadromous  stream would be  insufficient to recoup  the costs                                                               
to clean  up a spill if  the state assumes responsibility  in its                                                               
role  as  the  "final  entity."   Further,  the  legislature  has                                                               
directed DEC to  recover its costs and needs the  resources to do                                                               
so.                                                                                                                             
                                                                                                                                
REPRESENTATIVE  PARISH said  penalties should  not be  allowed to                                                               
erode  to  one-quarter of  their  value  without concern  by  the                                                               
legislature.   He urged  for the  state to  move beyond  trust as                                                               
related  to contingency  plans, and  provided information  on the                                                               
adverse effects  of very small  amounts of crude oil  and refined                                                               
fuels on salmon.                                                                                                                
                                                                                                                                
2:11:34 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TARR  moved  to  report  HB 322,  as  amended,  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal notes.                                                                                                                   
                                                                                                                                
2:11:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO objected.                                                                                               
                                                                                                                                
A roll  call vote was  taken.  Representatives  Drummond, Parish,                                                               
Lincoln,  Tarr,  and Josephson  voted  in  favor  of HB  322,  as                                                               
amended.  Representatives Birch,  Johnson, Rauscher, and Talerico                                                               
voted against  it.  Therefore, CSHB  322 was reported out  of the                                                               
House Resources Standing Committee by a vote of 5-4.                                                                            
                                                                                                                                

Document Name Date/Time Subjects
HB 322 Sponsor Statement.docx HRES 2/9/2018 1:00:00 PM
HRES 2/12/2018 1:00:00 PM
HB 322
HB 322 HRES PwrPt for Feb 2.pdf HRES 2/2/2018 1:00:00 PM
HRES 2/9/2018 1:00:00 PM
HRES 2/12/2018 1:00:00 PM
HB 322
HB 322 Sectional Analysis.pdf HRES 2/2/2018 1:00:00 PM
HRES 2/12/2018 1:00:00 PM
HB 322
HB 322 DEC Spill Penalties Overview 2.2.18.pdf HRES 2/2/2018 1:00:00 PM
HRES 2/9/2018 1:00:00 PM
HRES 2/12/2018 1:00:00 PM
HB 322
1 2.7.2018 - DEC Response to H RES re HB322.pdf HRES 2/7/2018 6:30:00 PM
HRES 2/12/2018 1:00:00 PM
HB 322
2 OHSRRF 4th Qtr 2017.pdf HRES 2/7/2018 6:30:00 PM
HRES 2/12/2018 1:00:00 PM
HB 322
HB 322 - AOGA Testimony - Final - 2.7.2018.pdf HRES 2/7/2018 6:30:00 PM
HRES 2/12/2018 1:00:00 PM
HB 322
AK Trucking Assn testimony.pdf HRES 2/7/2018 6:30:00 PM
HRES 2/12/2018 1:00:00 PM
HB 322
AK Trucking Assn, 49 CFR Part 130.pdf HRES 2/7/2018 6:30:00 PM
HRES 2/12/2018 1:00:00 PM
HB 322
HRES ANVCA Contaminated Lands Presentation 2.12.18.pdf HRES 2/12/2018 1:00:00 PM
Contaminated Lands
Am. 1, Parish, Section 2.pdf HRES 2/12/2018 1:00:00 PM
HB 322
Am. 2, Parish, Section 6.pdf HRES 2/12/2018 1:00:00 PM
HB 322
Am.3, Tarr, Section 12.pdf HRES 2/12/2018 1:00:00 PM
HB 322
Am. 4, Birch, Sections 13-18.pdf HRES 2/12/2018 1:00:00 PM
HB 322
Am 5, Parish, Sections 13-18.pdf HRES 2/12/2018 1:00:00 PM
HB 322
HB 322 - AOGA Written Testimony - Feb. 9, 2018.pdf HRES 2/12/2018 1:00:00 PM
HB 322