Legislature(1993 - 1994)
11/05/1993 09:00 AM House ECO
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HOUSE ECONOMIC TASK FORCE
WORK SESSION ON
REGULATION AND GOVERNMENT OPERATIONS
November 5, 1993
9:00 a.m.
REPRESENTATIVE AL VEZEY chaired the meeting and made
introductory comments about the purpose of the task force
and goals of this work session. He opened the hearing to
public comment.
AL CLOUGH, Mining Specialist, Department of Commerce and
Economic Development, commented on the following regulatory
initiatives:
Water Quality - The Department of Environmental
Conservation (DEC) is continuing to work on federally-
mandated water quality standards. The cancer risk
(1/100,000) standard is central to those discussions.
They are also working on a provision that would allow
water treatment/discharge facilities to operate at a
lower standard than drinking water facilities. He
said DEC's work in this area is vital regulatory
change.
Title 38 - The Department of Natural Resources (DNR)
is conducting a review of Title 38 (land management
codes) for possible statutory changes to simplify the
law.
Wetlands - The Environmental Protection Agency (EPA) is
conducting meetings throughout the state. Wetlands
regulations have dire implications for everyone. We
need to make sure changes are made to allow for
reasonable business activity in Alaska.
Third-party Lawsuits - There is a bill in the
legislature that addresses this issue. The mining
industry is required to get use permits, which are then
appealed and end up in court. Why have a permit
system if it always ends up in court? Perhaps there
should be a bonding requirement for those who oppose a
permitted project.
Alaska Minerals Commission - Housed in the Department
of Commerce and Economic Development, the commission
releases an annual report with recommendations. The
final version of the 1994 report is due within a month.
DCED Funding Requests - The state has instituted a
geologic/geophysical mapping program. It was funded at
$750.0 in its first phase this year. They want to
make it an annual effort. DCED would like to see the
creation of an economic development foundation. This
entity could provide seed money for projects such as
geophysical mapping. This would require statutory
action.
Oil Industry Outlook - There is tremendous pressure to
relocate offshore. The oil companies have a huge
current investment with no assurance as to the tax or
regulatory climate. The state needs to provide a
higher degree of certainty to companies that meet
defined standards.
RUDY VETTER, Fairbanks, said that many companies are moving
out-of-state now, but they'll be back in a few years.
Alaska has good mineral reserves and will be one of the
better prospects in the Western world, he said.
BONNIE WILLIAMS, Fairbanks, asked that the report of the
Governor's Task Force on Regulatory Reform be added to the
documentation of this working group. She reviewed the six
major recommendations of the task force and spoke about the
cost of regulations to Anchorage ($429 million) and the
state (over $1 billion). She said the University of Alaska
spends $7 million a year for regulatory compliance.
She also talked about the state's agricultural policy. She
said the statute authorizing agricultural homesteads does
not favor private enterprise and dooms farmers to failure.
She urged a change to state law that would give farmers full
rights of ownership on agricultural parcels.
MS. WILLIAMS discussed the federal wetlands issue and
suggested that there should be a no-net-loss provision for
landowners which would replace the land and jobs and
compensate for the lost revenues to public and private
entities.
MS. WILLIAMS encouraged the legislature to pass tort reform
measures, saying they could have a big impact on the cost of
health care, child care, trucking, et cetera.
ED BOSTRUM, Fairbanks, referred to changes in the state's
agricultural policy recommended by the Governor's Task
Force on Regulatory Reform. He suggested tax statutes be
amended to exempt agricultural lands from municipal taxes if
ag land is conveyed as fee simple property.
MR. BOSTRUM said that red meat, elk farming, the sales of
farm products and home-developed products should be
regulated by the Division of Agriculture, not DEC. The
Division of Agriculture has an advocacy role with respect to
agriculture, so they could be expected to produce more
reasonable regulations.
RICHARD MULLEN, Manager, SE Alaska Petroleum, Ketchikan,
discussed new federal regulations governing pollution
liability and marine transportation. He pointed to proposed
regulations by the federal Minerals Management Service that
would require $150 million pollution liability insurance for
all petroleum users near navigable waters. He said they
propose changing the definition of navigable waters in such
a way that every diesel-fueled home in Southeast could fall
under this guideline.
MR. MULLEN stressed that regulations are often interpreted
in ways that go far beyond the intent when they were
drafted. He said regulations should be more strictly
construed so that businesses can know how to comply. He
said he doesn't mind jumping through hoops; he just wants
the hoops to be standing still when he jumps.
MR. MULLEN said the Exxon Valdez spill led to a morass of
regulations. He mentioned barge companies that were
required to submit their oil spill contingency plans to a
minimum of 11 regulatory entities. He said the hodge podge
of regulations has driven at least one major fuel
distribution company out of business in Southeast.
DON MAY, Ketchikan, said that as President of Kohler Mine,
he finds it more difficult to comply with regulations every
year. He sees the ambiguous terms in many regulations as an
opportunity for legal challenges to legitimate operations.
MR. MAY stated the risk factor resulting from regulatory
uncertainty and delay is overwhelming. He pointed to
overlapping regulatory authorities, such as DEC and the
Corps of Engineers, and ever-growing restrictions on
private lands as discouragement to developers.
MR. MAY said his operation generated lots of gravel last
year. The state used some for road construction. But
instead of saving gravel for that use in the future, the
Corps requires that gravel piles be leveled. That results
in the loss of millions of dollars worth of gravel.
REPRESENTATIVE VEZEY asked Mr. Clough for his thoughts on a
possible requirement that proposed regulations be endorsed
by both houses of the legislature. Mr. Clough said that
could lead to a worse situation than we have now. As an
example, he said DNR is working on proposed changes to Title
38 to make it more user-friendly. He suggested waiting to
see what happens to Title 38 revisions before trying other
routes. He also mentioned DEC's new water quality
regulations as a good effort to overcome regulatory
problems.
MR. MULLEN reiterated that he believes regulations are not
the problem. The problem arises in the interpretation of
regulations after they are in place. He advised the task
force not to worry about how regulations are written, but
how they are administered. He criticized DEC in this
respect. He feels some employees have a personal agenda,
and there should be more controls on employees charged with
implementing regulations.
CHARLIE BODDY, Vice President, Usibelli Mine) suggested the
task force review the report of the Governor's Task Force on
Regulatory Reform and the annual report of the Alaska
Minerals Commission for good ideas on regulatory reform.
MS. WILLIAMS said the cleanest way to make meaningful
regulatory reform would be through the Administrative
Procedures Act.
REPRESENTATIVE VEZEY asked what she thought about requiring
regulations to be approved by the legislature.
MS. WILLIAMS responded that such a requirement changes the
relationship between the legislature and the executive
branch. She pointed out that the voters have rejected the
idea three times.
MR. VETTER said the only way to change the federal
regulatory system is to sue them. He criticized unfunded
mandates, and suggested the only way to regain a reasonable
approach to regulation at the state level is through budget
cuts. He said there should be a requirement that permits be
processed within five days.
REPRESENTATIVE VEZEY closed the work session by thanking
those who participated. He said there would be further
opportunity to comment tomorrow when the work session
continues.
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