Legislature(1993 - 1994)

05/04/1994 01:50 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                           May 4, 1994                                         
                            1:50 P.M.                                          
                                                                               
  TAPE HFC 94 - 156, Side 2, #000 - end.                                       
  TAPE HFC 94 - 157, Side 1, #000 - end.                                       
  TAPE HFC 94 - 157, Side 2, #000 - end.                                       
  TAPE HFC 94 - 158, Side 1, #000 - #675.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Larson called  the House Finance  Committee meeting                 
  to order at 1:50 P.M.                                                        
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Larson               Representative Hoffman                         
  Co-Chair MacLean              Representative Martin                          
  Vice-Chair Hanley             Representative Navarre                         
  Representative Brown          Representative Parnell                         
  Representative Grussendorf    Representative Therriault                      
  Representative Foster                                                        
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative   David   Finkelstein;   Representative  John                 
  Davies; Representative Jeanette James; Senator Fred Zharoff;                 
  Richard Pegues, Director, Administrative  Services Division,                 
  Department  of   Law;  James  Baldwin,   Assistant  Attorney                 
  General, General  Civil Division,  Department of  Law; Wendy                 
  Redman, Vice President for University Relations,  University                 
  of  Alaska;  Nancy  Slagle,  Director,  Division  of  Budget                 
  Review, Office  of Management  and  Budget; Bruce  Geraghty,                 
  Deputy Commissioner,  Department of  Community and  Regional                 
  Affairs;  Bob  Poe,  Director,  Division  of  Administrative                 
  Services,  Department  of Environmental  Conservation; Ginny                 
  Fay,  Prince   William  Sound  Regional   Citizens  Advisory                 
  Council,  Juneau;  Jay   Hogan,  Staff,  Representative  Ron                 
  Larson;  Bryce Edgmon,  Staff,  Senator  George Jacko;  Greg                 
  Winegar,  Manager,   Juneau  Lending  Branch,   Division  of                 
  Investments, Department of  Commerce & Economic Development;                 
  Russel  Heath,  Executive  Director,   Alaska  Environmental                 
  Lobby, Juneau.                                                               
                                                                               
  SUMMARY                                                                      
  HB 455    An Act making  and amending operating  and capital                 
            appropriations   and   ratifying   certain   state                 
            expenditures; and providing for an effective date.                 
                                                                               
            HB  455   was  HELD   in  Committee   for  further                 
                                                                               
                                1                                              
                                                                               
                                                                               
            consideration.                                                     
  SB 92     An  Act  relating  to   an  advisory  vote  during                 
            regional educational attendance area  school board                 
            elections; and providing for an effective date.                    
                                                                               
            CS  SB  92  (CRA)  efd  am  was  reported  out  of                 
            Committee with  a "do  pass" recommendation and  a                 
            fiscal  note  by the  Office  of the  Lt. Governor                 
            dated  3/24/94  and  a  zero  fiscal note  by  the                 
            Department of Education dated 3/24/94.                             
  SB 132    An  Act  relating  to loans  for  the  purchase of                 
            individual fishery quota shares.                                   
                                                                               
            CS SB 132 (RES)  am was reported out  of Committee                 
            with "no  recommendations" and with a  fiscal note                 
            by  the   Department  of  Commerce   and  Economic                 
            Development dated  2/04/94 and a Letter  of Intent                 
            provided by the House Resources Committee.                         
  SB 215    An Act relating  to and redesignating the  oil and                 
            hazardous substance  release response fund  and to                 
            its  use  in the  event  of a  disaster emergency;                 
            repealing  the authority  in  law by  which marine                 
            highway vessels may be designed and constructed to                 
            aid in oil  and hazardous substance  spill cleanup                 
            in  state marine water using  money in the oil and                 
            hazardous   substance   release   response   fund;                 
            amending requirements relating  to the revision of                 
            state   and   regional   master   prevention   and                 
            contingency    plans;     altering    requirements                 
            applicable   to  liens   for  recovery   of  state                 
            expenditures   related   to   oil   or   hazardous                 
            substances; amending the authority to contract  to                 
            provide  personnel to  respond  to  a  release  or                 
            threatened release of oil or a hazardous substance                 
            and to contract to conduct spill related research;                 
            reassigning   responsibility   for  the   oil  and                 
            hazardous  substance  response corps  and  for the                 
            emergency  response depots  to  the Department  of                 
            Environmental Conservation, and for  the operation                 
            of the state emergency response commission and its                 
            attendant responsibilities for the local emergency                 
            planning commissions to the Department of Military                 
            and Veterans' Affairs;  and modifying  definitions                 
            of  terms relating  to  the preceding  provisions;                 
            terminating the nickel-per-barrel oil conservation                 
            surcharge;  levying  and  collecting  two new  oil                 
            surcharges; and  providing for the  suspension and                 
            reimposition of  one  of the  new surcharges;  and                 
            providing for an effective date.                                   
                                                                               
                                2                                              
                                                                               
                                                                               
            CS SB 215 (FIN)am (efd  fld) was HELD in Committee                 
            for further consideration.                                         
  HOUSE BILL NO. 455                                                           
                                                                               
       "An  Act  making  and  amending operating  and  capital                 
       appropriations    and    ratifying     certain    state                 
       expenditures; and providing for an effective date."                     
                                                                               
  Representative Brown MOVED TO WITHDRAW the pending motion on                 
  Amendment #16 - the Department  of Transportation and Public                 
  Facilities' request  for  the  road  connecting  the  Seward                 
  Highway and the Port of Whittier.  There being NO OBJECTION,                 
  it was withdrawn.                                                            
                                                                               
  REPRESENTATIVE JEANNETTE JAMES spoke in support of Amendment                 
  earnings of the  Alaska Science and Technology  endowment to                 
  the  University  of  Alaska,  Fairbanks,  agricultural   and                 
  forestry experiment station  for the virus-free seed  potato                 
  project.                                                                     
                                                                               
  Representative Foster MOVED  to adopt  Amendment #1.   There                 
  being NO OBJECTION, it was adopted.                                          
                                                                               
  RICHARD PEGUES, DIRECTOR, ADMINISTRATIVE  SERVICES DIVISION,                 
  DEPARTMENT OF LAW,  spoke in support  of Amendment #2  which                 
  would  provide the  sum of  $100 thousand  dollars from  the                 
  general fund  to  the Department  of Law  for attorney  fees                 
  related to Weiss versus  the State of Alaska for  the fiscal                 
  year ending June 30, 1994.                                                   
                                                                               
  Co-Chair Larson MOVED to adopt Amendment #2.  There being NO                 
  OBJECTION, it was adopted.                                                   
                                                                               
  JAMES  BALDWIN,  ASSISTANT ATTORNEY  GENERAL,  GENERAL CIVIL                 
  DIVISION, DEPARTMENT OF  LAW, spoke in support  of Amendment                 
  appropriated to the Department of Law for costs relating  to                 
  legal proceedings  involving oil and gas revenue due or paid                 
  to the  State or  state title to  oil and  gas land  for the                 
  fiscal year ending June 30, 1995.                                            
                                                                               
  Co-Chair  Larson  MOVED  to adopt  Amendment  #3.   Co-Chair                 
  MacLean  OBJECTED  suggesting  that  the  Department  of Law                 
  should  return  each  year to  request  additional  funding.                 
  Representative  Brown  spoke  in  support  of  Amendment  #3                 
  declaring  that   funding  the   amendment  would   indicate                 
  legislative support to the Department's effort.                              
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
                                3                                              
                                                                               
                                                                               
       IN FAVOR:      Navarre,  Brown,   Foster,  Grussendorf,                 
                      Hoffman, Larson.                                         
       OPPOSED:       Parnell,  Therriault,  Hanley,   Martin,                 
                      MacLean.                                                 
                                                                               
  The MOTION PASSED (6-5).                                                     
                                                                               
  Representative   Brown  MOVED  to   adopt  Amendment  #4,  a                 
  recommendation of the Alaska  Judicial Council as instructed                 
  by  the  Legislature  in  order  to  implement  a  plan  for                 
  integration  of Alaska's  criminal justice  computer system.                 
  She  added that  information systems within  each department                 
  warrant major work.  The requested funding would cover costs                 
  for  preparation  of  a  system  within  the  Department  of                 
  Corrections  and  the  Department  of  Law.   Representative                 
  Parnell  understood that  the  Department  of Public  Safety                 
  currently was working on coordinating a statewide plan.  Co-                 
  Chair MacLean OBJECTED to adopting Amendment #4.                             
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Brown, Grussendorf, Hoffman, Navarre.                    
       OPPOSED:       Parnell,  Therriault,   Foster,  Martin,                 
                      MacLean, Larson.                                         
                                                                               
  Representative Hanley was not present for the vote.                          
                                                                               
  The MOTION FAILED (4-6).                                                     
                                                                               
  Representative Brown MOVED to adopt Amendment #5.                            
                                                                               
  REPRESENTATIVE JOHN DAVIES explained  the $3 million dollars                 
  request would provide for an  appropriation from the general                 
  fund to the University  of Alaska for the completion  of the                 
  Natural Sciences Classroom building in Fairbanks.                            
                                                                               
  Representative  Navarre  MOVED  TO  AMEND  Amendment  #5  by                 
  deleting  "Natural Sciences"  and "Fairbanks"  and inserting                 
  "Kenai".   He  expressed discontent  with continual  capital                 
  improvement requests  by  the  University  for  campuses  in                 
  Fairbanks,  Anchorage  and  Juneau.   Representative  Davies                 
  stated  he  would  not  support   the  amended  language  as                 
  requested by Representative Navarre.  Representative Navarre                 
  WITHDREW THE MOTION to amend.  There being NO OBJECTION, the                 
  amended language was withdrawn.                                              
                                                                               
  Co-Chair  MacLean OBJECTED to adopting Amendment #5 pointing                 
  out that no construction money had been allocated to schools                 
  K-12 this year.                                                              
                                                                               
  Representative Davies stressed that the proposed request has                 
                                                                               
                                4                                              
                                                                               
                                                                               
  been a priority  project of the University for twenty years.                 
  The project  is  currently under  construction  and  nearing                 
  completion and  that without the appropriation  the building                 
  would be closed.   The  University would then  be forced  to                 
  spend $500 thousand  dollars to  just maintain the  building                 
  with no  students.  He  added that the  initial construction                 
  costs  had  been  deliberately  under-funded  and  that  the                 
  Legislature knew at that time that there would be additional                 
  financial need to  finish construction.  He  emphasized that                 
  each year the project is delayed  will waste the State money                 
  to maintain an empty building.                                               
                                                                               
  (Tape Change, HFC 94-157, Side 1).                                           
                                                                               
  A roll  call vote was taken on the MOTION to adopt Amendment                 
                                                                               
       IN FAVOR:      Brown, Grussendorf, Hoffman.                             
       OPPOSED:       Foster,   Martin,   Navarre,    Parnell,                 
  Therriault,                   Larson, MacLean.                               
                                                                               
  Representative Hanley was not present for the vote.                          
                                                                               
  The MOTION FAILED (3-7).                                                     
                                                                               
  NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF                 
  MANAGEMENT AND  BUDGET, OFFICE  OF  THE GOVERNOR,  explained                 
  Amendment  #6,  a request  for a  supplemental appropriation                 
  increase from the Department of Law to pay a FY94 judgments.                 
  She added that the  $19,832 increase was created by  one new                 
  judgement received since the Department's last request which                 
  was submitted on April 30, 1994.                                             
                                                                               
  Representative  Brown MOVED to adopt Amendment #6 explaining                 
  that judgments are the State's obligation.  Co-Chair MacLean                 
  OBJECTED.                                                                    
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Brown,  Grussendorf,  Hoffman,   Martin,                 
                      Navarre, Parnell.                                        
       OPPOSED:       Therriault, Foster, Larson, MacLean.                     
                                                                               
  Representative Hanley was not present for the vote.                          
                                                                               
  The MOTION PASSED (6-4).                                                     
                                                                               
  Co-Chair Larson  MOVED  that the  lapse date  for the  Sitka                 
  School District and  the appropriation for seed  potatoes be                 
  extended until June 30, 1995.  There being NO OBJECTIONS, it                 
  was adopted.                                                                 
                                                                               
                                                                               
                                5                                              
                                                                               
                                                                               
  Reappropriation Budget                                                       
                                                                               
  BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY                 
  AND REGIONAL  AFFAIRS, requested that  the Committee  extend                 
  the Department's lapse on last  years appropriations to June                 
  30, 1995.                                                                    
                                                                               
  Co-Chair MacLean MOVED  to adopt  Amendment #1, which  would                 
  state  "the  unexpended  and  unobligated  balance   of  the                 
  appropriation  made in Sec. 6,  Ch.19, SLA1993, Page 4, Line                 
  22  [Operating  costs for  the  Department of  Community and                 
  Regional  Affairs to carry  out its  power and  duties under                 
  AS42.45 and AS44.47.050]  and lapses  into the general  fund                 
  June 30, 1995".  Representative Navarre OBJECTED.                            
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Foster,  Grussendorf, Hoffman,  MacLean,                 
                      Larson.                                                  
       OPPOSED:       Parnell,   Therriault,  Brown,   Hanley,                 
                      Martin, Navarre.                                         
                                                                               
  The MOTION FAILED (5-6).                                                     
                                                                               
  Representative Brown WITHDREW Amendment #4.   There being NO                 
  OBJECTION, it was so ordered.                                                
                                                                               
  Co-Chair MacLean  MOVED to  adopt Amendment  #3 which  would                 
  provide  funding for  the Cambridge  Way/Tudor  Road traffic                 
  signal  and  Cambridge  Way improvements.    There  being NO                 
  OBJECTIONS, Amendment #3 was adopted.                                        
                                                                               
  Co-Chair MacLean  MOVED to  adopt Amendment  #4 which  would                 
  provide  funding  for   the  Municipality  of   Anchorage  -                 
  signalization  at  36th  Avenue  and Cottonwood  Street  and                 
  Locarno  Street  in  the amount  of  $214  thousand dollars.                 
  There being NO OBJECTIONS, it was adopted.                                   
                                                                               
  HB 455 was HELD in Committee for further consideration.                      
  SENATE BILL 92                                                               
                                                                               
       "An Act relating  to an  advisory vote during  regional                 
       educational attendance area school board elections; and                 
       providing for an effective date."                                       
                                                                               
  SENATOR FRED ZHAROFF stated that SB 92 would add a provision                 
  whereby  communities in REAA  school areas would  be able to                 
  voice their  positions on education via an  advisory vote on                 
  the regular school ballot.  He pointed out that REAA schools                 
  are spread over a wide area, and that  it is often difficult                 
  for members of those communities to attend board meetings in                 
                                                                               
                                6                                              
                                                                               
                                                                               
  order to make  their feelings known.   The bill would  allow                 
  the school board  to adopt a resolution  requesting that the                 
  advisory question be on the next  ballot.  He concluded that                 
  the Department of Education supports the legislation.                        
                                                                               
  Representative Hanley MOVED to report CS SB 92 (CRA)(efd am)                 
  out of Committee  with individual  recommendations and  with                 
  the accompanying fiscal  notes.  There being  NO OBJECTIONS,                 
  it was so ordered.                                                           
                                                                               
  CS SB  92 (CRA)(efd am)  out of  Committee with a  "do pass"                 
  recommendation and with a  fiscal note by the Office  of the                 
  Governor  dated  3/24/94  and  a  zero  fiscal  note  by the                 
  Department of Education dated 3/24/94.                                       
  SENATE BILL 132                                                              
                                                                               
       "An  Act  relating   to  loans  for  the   purchase  of                 
       individual fishery quota shares."                                       
                                                                               
  BRYCE EDGMON, STAFF, SENATOR GEORGE JACKO, explained that CS                 
  SB 132 would expand the  Commercial Fisheries Revolving Loan                 
  Fund Program to allow  Alaskan fishermen to obtain loans  to                 
  purchase Individual Fisheries Quotas (IFQs).  The Commercial                 
  Fisheries Revolving Loan Fund Program would service the debt                 
  to  purchase  limited  entry permits,  purchase  or  upgrade                 
  vessels, and purchase fisheries related gear.                                
                                                                               
  Co-Chair MacLean MOVED to report  CS SB 132 (RES) am out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  She explained that the IFQs  are                 
  transferrable, which creates a fear  that fishermen from out                 
  of state  will purchase  the Alaskan  fishing permits.   The                 
  Division of Investments would provide loan money through the                 
  Revolving Loan Fund,  whereas Alaskan  commercial banks  are                 
  reluctant  to  help  Alaskan  fishermen   who  do  not  have                 
  sufficient  collateral.  The  legislation would keep Alaskan                 
  fishermen in business in Alaskan waters.                                     
                                                                               
  Representative Brown asked  the total amount of  money which                 
  the State would be distributing.  Mr. Edgmon replied that $5                 
  million dollars would be loaned in  FY95 and then between $4                 
  and $5 million dollars appropriated in FY96.  He pointed out                 
  that the  qualification  requirements are  stringent.    The                 
  Division  of Investments  does  have  a regulation  priority                 
  listing.                                                                     
                                                                               
  Representative  Brown  deliberated  on  the  different  loan                 
  funding resources available in the State.  She spoke against                 
  providing  commercial opportunity  to  fishmen over  another                 
  class of  requestors.   Mr. Edgmon  responded that  when the                 
  program was established, it  was the intent of the  State to                 
                                                                               
                                7                                              
                                                                               
                                                                               
  keep as many  limited entry permits in  residence ownership.                 
  The  loan program  was established  in order  to offer  that                 
  arrangement to as many fishermen  as possible.  The  program                 
  allows  resident  fishermen  to   compete  with  nonresident                 
  fishermen who have better access to capital.                                 
                                                                               
  (Tape Change, HFC 94-157, Side 2).                                           
                                                                               
  Representative  Grussendorf commented  that the  IFQ's would                 
  provide collateral  for the  small fisherman.   The  program                 
  would  keep  the   limited  entry  permits  in   the  State.                 
  Representative Hoffman added that the  fishing industry is a                 
  renewable resource and will continue to provide jobs to many                 
  small rural areas within Alaska.                                             
  GREG WINEGAR,  MANAGER, JUNEAU  LENDING BRANCH, DIVISION  OF                 
  INVESTMENTS,   DEPARTMENT   OF    COMMERCE   AND    ECONOMIC                 
  DEVELOPMENT, responded to Representative Navarre's questions                 
  regarding the loan  requirements for  State resident's.   He                 
  advised that the  residency requirement was the same for all                 
  eligibility  requirements, pointing  out that law  states in                 
  Section #A that a person would have  to actively participate                 
  for the  past five  years which  would have  to include  the                 
  preceding season.  The current legislation would change that                 
  to indicate participation for two of the past five years and                 
  that it would be necessary to  include the preceding season.                 
  The borrowing interpretation would be more liberal than that                 
  of the past.                                                                 
                                                                               
  There  being  NO  OBJECTIONS,  to  reporting the  bill  from                 
  Committee, it was  so ordered.  Representative  Foster MOVED                 
  to adopt  the House  Resources Committee  Letter of  Intent.                 
  There being NO OBJECTIONS, it was so ordered.                                
                                                                               
  CS SB 132  (RES) am was reported  out of Committee with  "no                 
  recommendations", with the House Resources Committee  Letter                 
  of  Intent  and with  a  fiscal  note by  the  Department of                 
  Commerce and Economic Development dated 2/04/94.                             
  SENATE BILL 215                                                              
                                                                               
       "An  Act  relating  to and  redesignating  the  oil and                 
       hazardous substance release  response fund  and to  its                 
       use in the event of a disaster emergency; repealing the                 
       authority in law by which marine highway vessels may be                 
       designed and constructed  to aid  in oil and  hazardous                 
       substance  spill cleanup  in  state marine  water using                 
       money  in  the  oil  and  hazardous  substance  release                 
       response  fund; amending  requirements relating  to the                 
       revision of state  and regional  master prevention  and                 
       contingency plans; altering requirements  applicable to                 
       liens for recovery of state expenditures related to oil                 
       or  hazardous  substances;  amending  the authority  to                 
                                                                               
                                8                                              
                                                                               
                                                                               
       contract to provide  personnel to respond to  a release                 
       or threatened release  of oil or a  hazardous substance                 
       and  to contract  to  conduct  spill related  research;                 
       reassigning responsibility  for the  oil and  hazardous                 
       substance response corps and for the emergency response                 
       depots to the Department of Environmental Conservation,                 
       and for the  operation of the state  emergency response                 
       commission and  its attendant responsibilities  for the                 
       local emergency planning  commissions to the Department                 
       of  Military  and  Veterans'   Affairs;  and  modifying                 
       definitions  of   terms  relating   to  the   preceding                 
       provisions;  terminating   the  nickel-per-barrel   oil                 
       conservation surcharge; levying and  collecting two new                 
       oil surcharges; and  providing for  the suspension  and                 
       reimposition  of  one  of   the  new  surcharges;   and                 
       providing for an effective date."                                       
                                                                               
  Representative   Therriault   MOVED  to   adopt  8-LS1107\T,                 
  Chenoweth,  5/02/94, as  the version  before the  Committee.                 
  Co-Chair MacLean OBJECTED stating that the Governor's Office                 
  would not support  that version.  Representative  Therriault                 
  advised that  he would  be  offering two  amendments to  the                 
  draft which would remedy the concerns of the Administration.                 
  He  distributed  and explained  a  spread sheet  "Summary of                 
  Changes - CSSB 215 (FIN)  am, HCS CS SB 215 (RES), HCS CS SB
  215 (STA), and  the proposed work draft".  [Copy on file].                   
                                                                               
                                                                               
  BOB POE,  DIRECTOR,  DIVISION  OF  ADMINISTRATIVE  SERVICES,                 
  DEPARTMENT OF ENVIRONMENTAL CONSERVATION, addressed concerns                 
  of the Department resulting from the work draft.  He pointed                 
  out that there  are a number of changes made to that version                 
  which warrant concern.  He  clarified that there exists only                 
  one  situation  in  which DEC  could  spend  money from  the                 
  current response fund or the  future response account within                 
  the  response  fund.   This  would  occur  when  a spill  is                 
  eminent.  Over  the entire history  of that fund, only  $1.9                 
  million dollars of  the total $122 million  dollars has been                 
  spent.  The remaining portion  of the fund was  appropriated                 
  by the Legislature.                                                          
                                                                               
  The  original  intention of  the  prevention account  was to                 
  provide  funds  to  DEC and  other  state  agencies to  both                 
  prevent  spills and  to  be better  prepared  to respond  to                 
  spills.  The response  account, as passed by the  Senate and                 
  the House Resources  Committee, is intended to deal with all                 
  spills, including  the small  spills.   Mr. Poe  pointed out                 
  that most of the spills which DEC responds to are well under                 
  2,500 barrels.  Under  the bills passed from the  Senate and                 
  House Resources Committees,  there is  no threshold used  to                 
  determine when the response money could  be used in order to                 
  respond to a  spill.  He  added that the work  draft version                 
                                                                               
                                9                                              
                                                                               
                                                                               
  would establish an  artificial threshold  which would be  of                 
  great concern to the Department.                                             
                                                                               
  Mr. Poe  continued that  the  work draft  would establish  a                 
  special account  in the  prevention account  which would  be                 
  used for the smaller spills.   He explained that the problem                 
  is that a large fund would be necessary  in order to address                 
  those times when a  responsible party creates a spill.   The                 
  party would then be  forced to clean it up  appropriately or                 
  the  fund  money would  be  used  for litigation.    Mr. Poe                 
  stressed that  the State  does not  know what  future spills                 
  will occur.                                                                  
                                                                               
  The  work draft  also  would require  that  the Governor  be                 
  informed of  a spill within 72  hours of the  spill at which                 
  time he would provide specific instruction  regarding action                 
  to take  to address  that spill.   Mr.  Poe emphasized  that                 
  requiring the Governor's  approval to  act could be  harmful                 
  timing for the State.  Representative Therriault interjected                 
  that a proposed amendment would address that concern.                        
                                                                               
  (Tape Change, HFC 94-158, Side 1).                                           
                                                                               
  GINNY FAY,  PRINCE WILLIAM SOUND REGIONAL  CITIZENS ADVISORY                 
  COUNCIL, JUNEAU, briefed the Committee on the development of                 
  the legislation.   The bill  was originally  drafted from  a                 
  research  analysis  completed  in  1992,  which  erroneously                 
  stated that  the response  fund was  empty.   At that  time,                 
  there remained $27 million dollars in that account.  Ms. Fay                 
  emphasized that the bill gained  momentum based on incorrect                 
  information.                                                                 
                                                                               
  She  added  that the  bill  would  not protect  the  coastal                 
  communities  nor  public interest.   SB  215 is  an industry                 
  bill, emphasizing that  based on  a Department of  Revenue's                 
  fiscal note,   the  legislation would be  worth $50  million                 
  dollars over the next six years in lower surcharge payments.                 
                                                                               
                                                                               
  Ms. Fay concluded that the legislation as passed through the                 
  Senate and the House Resources Committees continued to allow                 
  the response account  to be  used for spill  response.   The                 
  proposed work draft  would make the prevention  account also                 
  serve  for  the  response  fund  and  would  also lower  the                 
  surcharge payment  from  five cents  to  three cents.    She                 
  stressed that the work draft was unacceptable.                               
                                                                               
  RUSSEL  HEATH,  EXECUTIVE  DIRECTOR,   ALASKA  ENVIRONMENTAL                 
  LOBBY, JUNEAU, encouraged  the Committee to adopt  the House                 
  Resources version  of the  bill.   He pointed  out that  the                 
  Resources committee substitute places the entire $37 million                 
  dollars into the response account.  The Alaska Environmental                 
                                                                               
                               10                                              
                                                                               
                                                                               
  Lobby  (AEL) would recommend that  balance to be split 60/40                 
  percent between prevention and response  accounts.  He noted                 
  concern  in  adding  the underground  storage  tanks  to the                 
  prevention account.  He thought  that action would encourage                 
  money to  be taken from  the prevention account  program and                 
  would drain money from other necessary prevention accounts.                  
                                                                               
  REPRESENTATIVE  DAVID FINKELSTEIN  reiterated  that the  tax                 
  levied  should be used  for the concerns  which created that                 
  tax.  He spoke against splitting the fund.  Currently enough                 
  money does not  exist to address  the needs of the  original                 
  program, whereas,  the proposed  legislation would  add more                 
  obligations  from  that  fund.   Representative  Finkelstein                 
  encouraged implementing  an increased  gas tax  in order  to                 
  make the programs balance.                                                   
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Hanley,  Martin,  Parnell,   Therriault,                 
                      Foster, Larson.                                          
       OPPOSED:       Hoffman,  Navarre,  Brown,  Grussendorf,                 
                      MacLean.                                                 
                                                                               
  The MOTION PASSED (6-5).                                                     
                                                                               
  Representative Therriault MOVED to  adopt Amendment #1 which                 
  would eliminate the 72 hour notice and approval requirement.                 
  There being NO OBJECTION, it was adopted.                                    
                                                                               
  Representative Therriault MOVED to adopt Amendment  #2 which                 
  would delete  "threatened release".   Representative  Martin                 
  OBJECTED.                                                                    
                                                                               
  Mr. Poe noted  that the  Department would support  Amendment                 
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Hoffman,  Navarre, Parnell,  Therriault,                 
                      Brown,   Foster,   Grussendorf,  Hanley,                 
                      Larson, MacLean.                                         
       OPPOSED:       Martin.                                                  
                                                                               
  The MOTION PASSED (10-1).                                                    
                                                                               
  CS  SB 215  (FIN)  am (efd  fld) was  HELD in  Committee for                 
  further consideration.                                                       
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 5:10 P.M.                                           
                                                                               
                                                                               
                               11                                              
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                           May 4, 1994                                         
                            1:50 P.M.                                          
                                                                               
  TAPE HFC 94 - 156, Side 2, #000 - end.                                       
  TAPE HFC 94 - 157, Side 1, #000 - end.                                       
  TAPE HFC 94 - 157, Side 2, #000 - end.                                       
  TAPE HFC 94 - 158, Side 1, #000 - #675.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Larson called  the House Finance  Committee meeting                 
  to order at 1:50 P.M.                                                        
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Larson               Representative Hoffman                         
  Co-Chair MacLean              Representative Martin                          
  Vice-Chair Hanley             Representative Navarre                         
  Representative Brown          Representative Parnell                         
  Representative Grussendorf    Representative Therriault                      
  Representative Foster                                                        
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative   David   Finkelstein;   Representative  John                 
  Davies; Representative Jeanette James; Senator Fred Zharoff;                 
  Richard Pegues, Director, Administrative  Services Division,                 
  Department  of   Law;  James  Baldwin,   Assistant  Attorney                 
  General, General  Civil Division,  Department of  Law; Wendy                 
  Redman, Vice President for University Relations,  University                 
  of  Alaska;  Nancy  Slagle,  Director,  Division  of  Budget                 
  Review, Office  of Management  and  Budget; Bruce  Geraghty,                 
  Deputy Commissioner,  Department of  Community and  Regional                 
  Affairs;  Bob  Poe,  Director,  Division  of  Administrative                 
  Services,  Department  of Environmental  Conservation; Ginny                 
  Fay,  Prince   William  Sound  Regional   Citizens  Advisory                 
  Council,  Juneau;  Jay   Hogan,  Staff,  Representative  Ron                 
  Larson;  Bryce Edgmon,  Staff,  Senator  George Jacko;  Greg                 
  Winegar,  Manager,   Juneau  Lending  Branch,   Division  of                 
  Investments, Department of  Commerce & Economic Development;                 
  Russel  Heath,  Executive  Director,   Alaska  Environmental                 
  Lobby, Juneau.                                                               
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 455    An Act making  and amending operating  and capital                 
            appropriations   and   ratifying   certain   state                 
            expenditures; and providing for an effective date.                 
                                                                               
            HB  455   was  HELD   in  Committee   for  further                 
                                                                               
                               12                                              
                                                                               
                                                                               
            consideration.                                                     
                                                                               
  SB 92     An  Act  relating  to   an  advisory  vote  during                 
            regional educational attendance area  school board                 
            elections; and providing for an effective date.                    
                                                                               
            CS  SB  92  (CRA)  efd  am  was  reported  out  of                 
            Committee with  a "do  pass" recommendation and  a                 
            fiscal  note  by the  Office  of the  Lt. Governor                 
            dated  3/24/94  and  a  zero  fiscal note  by  the                 
            Department of Education dated 3/24/94.                             
                                                                               
  SB 132    An  Act  relating  to loans  for  the  purchase of                 
            individual fishery quota shares.                                   
                                                                               
            CS SB 132 (RES)  am was reported out  of Committee                 
            with "no  recommendations" and with a  fiscal note                 
            by  the   Department  of  Commerce   and  Economic                 
            Development dated  2/04/94 and a Letter  of Intent                 
            provided by the House Resources Committee.                         
                                                                               
  SB 215    An Act relating  to and redesignating the  oil and                 
            hazardous substance  release response fund  and to                 
            its  use  in the  event  of a  disaster emergency;                 
            repealing  the authority  in  law by  which marine                 
            highway vessels may be designed and constructed to                 
            aid in oil  and hazardous substance  spill cleanup                 
            in  state marine water using  money in the oil and                 
            hazardous   substance   release   response   fund;                 
            amending requirements relating  to the revision of                 
            state   and   regional   master   prevention   and                 
            contingency    plans;     altering    requirements                 
            applicable   to  liens   for  recovery   of  state                 
            expenditures   related   to   oil   or   hazardous                 
            substances; amending the authority to contract  to                 
            provide  personnel to  respond  to  a  release  or                 
            threatened release of oil or a hazardous substance                 
            and to contract to conduct spill related research;                 
            reassigning   responsibility   for  the   oil  and                 
            hazardous  substance  response corps  and  for the                 
            emergency  response depots  to  the Department  of                 
            Environmental Conservation, and for  the operation                 
            of the state emergency response commission and its                 
            attendant responsibilities for the local emergency                 
            planning commissions to the Department of Military                 
            and Veterans' Affairs;  and modifying  definitions                 
            of  terms relating  to  the preceding  provisions;                 
            terminating the nickel-per-barrel oil conservation                 
            surcharge;  levying  and  collecting  two new  oil                 
            surcharges; and  providing for the  suspension and                 
            reimposition of  one  of the  new surcharges;  and                 
            providing for an effective date.                                   
                                                                               
                               13                                              
                                                                               
                                                                               
            CS SB 215 (FIN)am (efd  fld) was HELD in Committee                 
            for further consideration.                                         
                                                                               
  HOUSE BILL NO. 455                                                           
                                                                               
       "An  Act  making  and  amending operating  and  capital                 
       appropriations    and    ratifying     certain    state                 
       expenditures; and providing for an effective date."                     
                                                                               
  Representative Brown MOVED TO WITHDRAW the pending motion on                 
  Amendment #16 - the Department  of Transportation and Public                 
  Facilities' request  for  the  road  connecting  the  Seward                 
  Highway and the Port of Whittier.  There being NO OBJECTION,                 
  it was withdrawn.                                                            
                                                                               
  REPRESENTATIVE JEANNETTE JAMES spoke in support of Amendment                 
  earnings of the  Alaska Science and Technology  endowment to                 
  the  University  of  Alaska,  Fairbanks,  agricultural   and                 
  forestry experiment station  for the virus-free seed  potato                 
  project.                                                                     
                                                                               
  Representative Foster MOVED  to adopt  Amendment #1.   There                 
  being NO OBJECTION, it was adopted.                                          
                                                                               
  RICHARD PEGUES, DIRECTOR, ADMINISTRATIVE  SERVICES DIVISION,                 
  DEPARTMENT OF LAW,  spoke in support  of Amendment #2  which                 
  would  provide the  sum of  $100 thousand  dollars from  the                 
  general fund  to  the Department  of Law  for attorney  fees                 
  related to Weiss versus  the State of Alaska for  the fiscal                 
  year ending June 30, 1994.                                                   
                                                                               
  Co-Chair Larson MOVED to adopt Amendment #2.  There being NO                 
  OBJECTION, it was adopted.                                                   
                                                                               
  JAMES  BALDWIN,  ASSISTANT ATTORNEY  GENERAL,  GENERAL CIVIL                 
  DIVISION, DEPARTMENT OF  LAW, spoke in support  of Amendment                 
  appropriated to the Department of Law for costs relating  to                 
  legal proceedings  involving oil and gas revenue due or paid                 
  to the  State or  state title to  oil and  gas land  for the                 
  fiscal year ending June 30, 1995.                                            
                                                                               
  Co-Chair  Larson  MOVED  to adopt  Amendment  #3.   Co-Chair                 
  MacLean  OBJECTED  suggesting  that  the  Department  of Law                 
  should  return  each  year to  request  additional  funding.                 
  Representative  Brown  spoke  in  support  of  Amendment  #3                 
  declaring  that   funding  the   amendment  would   indicate                 
  legislative support to the Department's effort.                              
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
                               14                                              
                                                                               
                                                                               
       IN FAVOR:      Navarre,  Brown,   Foster,  Grussendorf,                 
                      Hoffman, Larson.                                         
       OPPOSED:       Parnell,  Therriault,  Hanley,   Martin,                 
                      MacLean.                                                 
                                                                               
  The MOTION PASSED (6-5).                                                     
                                                                               
  Representative   Brown  MOVED  to   adopt  Amendment  #4,  a                 
  recommendation of the Alaska  Judicial Council as instructed                 
  by  the  Legislature  in  order  to  implement  a  plan  for                 
  integration  of Alaska's  criminal justice  computer system.                 
  She  added that  information systems within  each department                 
  warrant major work.  The requested funding would cover costs                 
  for  preparation  of  a  system  within  the  Department  of                 
  Corrections  and  the  Department  of  Law.   Representative                 
  Parnell  understood that  the  Department  of Public  Safety                 
  currently was working on coordinating a statewide plan.  Co-                 
  Chair MacLean OBJECTED to adopting Amendment #4.                             
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Brown, Grussendorf, Hoffman, Navarre.                    
       OPPOSED:       Parnell,  Therriault,   Foster,  Martin,                 
                      MacLean, Larson.                                         
                                                                               
  Representative Hanley was not present for the vote.                          
                                                                               
  The MOTION FAILED (4-6).                                                     
                                                                               
  Representative Brown MOVED to adopt Amendment #5.                            
                                                                               
  REPRESENTATIVE JOHN DAVIES explained  the $3 million dollars                 
  request would provide for an  appropriation from the general                 
  fund to the University  of Alaska for the completion  of the                 
  Natural Sciences Classroom building in Fairbanks.                            
                                                                               
  Representative  Navarre  MOVED  TO  AMEND  Amendment  #5  by                 
  deleting  "Natural Sciences"  and "Fairbanks"  and inserting                 
  "Kenai".   He  expressed discontent  with continual  capital                 
  improvement requests  by  the  University  for  campuses  in                 
  Fairbanks,  Anchorage  and  Juneau.   Representative  Davies                 
  stated  he  would  not  support   the  amended  language  as                 
  requested by Representative Navarre.  Representative Navarre                 
  WITHDREW THE MOTION to amend.  There being NO OBJECTION, the                 
  amended language was withdrawn.                                              
                                                                               
  Co-Chair  MacLean OBJECTED to adopting Amendment #5 pointing                 
  out that no construction money had been allocated to schools                 
  K-12 this year.                                                              
                                                                               
  Representative Davies stressed that the proposed request has                 
                                                                               
                               15                                              
                                                                               
                                                                               
  been a priority  project of the University for twenty years.                 
  The project  is  currently under  construction  and  nearing                 
  completion and  that without the appropriation  the building                 
  would be closed.   The  University would then  be forced  to                 
  spend $500 thousand  dollars to  just maintain the  building                 
  with no  students.  He  added that the  initial construction                 
  costs  had  been  deliberately  under-funded  and  that  the                 
  Legislature knew at that time that there would be additional                 
  financial need to  finish construction.  He  emphasized that                 
  each year the project is delayed  will waste the State money                 
  to maintain an empty building.                                               
                                                                               
  (Tape Change, HFC 94-157, Side 1).                                           
                                                                               
  A roll  call vote was taken on the MOTION to adopt Amendment                 
                                                                               
       IN FAVOR:      Brown, Grussendorf, Hoffman.                             
       OPPOSED:       Foster,   Martin,   Navarre,    Parnell,                 
  Therriault,                   Larson, MacLean.                               
                                                                               
  Representative Hanley was not present for the vote.                          
                                                                               
  The MOTION FAILED (3-7).                                                     
                                                                               
  NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF                 
  MANAGEMENT AND  BUDGET, OFFICE  OF  THE GOVERNOR,  explained                 
  Amendment  #6,  a request  for a  supplemental appropriation                 
  increase from the Department of Law to pay a FY94 judgments.                 
  She added that the  $19,832 increase was created by  one new                 
  judgement received since the Department's last request which                 
  was submitted on April 30, 1994.                                             
                                                                               
  Representative  Brown MOVED to adopt Amendment #6 explaining                 
  that judgments are the State's obligation.  Co-Chair MacLean                 
  OBJECTED.                                                                    
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Brown,  Grussendorf,  Hoffman,   Martin,                 
                      Navarre, Parnell.                                        
       OPPOSED:       Therriault, Foster, Larson, MacLean.                     
                                                                               
  Representative Hanley was not present for the vote.                          
                                                                               
  The MOTION PASSED (6-4).                                                     
                                                                               
  Co-Chair Larson  MOVED  that the  lapse date  for the  Sitka                 
  School District and  the appropriation for seed  potatoes be                 
  extended until June 30, 1995.  There being NO OBJECTIONS, it                 
  was adopted.                                                                 
                                                                               
                                                                               
                               16                                              
                                                                               
                                                                               
  Reappropriation Budget                                                       
                                                                               
  BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY                 
  AND REGIONAL  AFFAIRS, requested that  the Committee  extend                 
  the Department's lapse on last  years appropriations to June                 
  30, 1995.                                                                    
                                                                               
  Co-Chair MacLean MOVED  to adopt  Amendment #1, which  would                 
  state  "the  unexpended  and  unobligated  balance   of  the                 
  appropriation  made in Sec. 6,  Ch.19, SLA1993, Page 4, Line                 
  22  [Operating  costs for  the  Department of  Community and                 
  Regional  Affairs to carry  out its  power and  duties under                 
  AS42.45 and AS44.47.050]  and lapses  into the general  fund                 
  June 30, 1995".  Representative Navarre OBJECTED.                            
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Foster,  Grussendorf, Hoffman,  MacLean,                 
                      Larson.                                                  
       OPPOSED:       Parnell,   Therriault,  Brown,   Hanley,                 
                      Martin, Navarre.                                         
                                                                               
  The MOTION FAILED (5-6).                                                     
                                                                               
  Representative Brown WITHDREW Amendment #4.   There being NO                 
  OBJECTION, it was so ordered.                                                
                                                                               
  Co-Chair MacLean  MOVED to  adopt Amendment  #3 which  would                 
  provide  funding for  the Cambridge  Way/Tudor  Road traffic                 
  signal  and  Cambridge  Way improvements.    There  being NO                 
  OBJECTIONS, Amendment #3 was adopted.                                        
                                                                               
  Co-Chair MacLean  MOVED to  adopt Amendment  #4 which  would                 
  provide  funding  for   the  Municipality  of   Anchorage  -                 
  signalization  at  36th  Avenue  and Cottonwood  Street  and                 
  Locarno  Street  in  the amount  of  $214  thousand dollars.                 
  There being NO OBJECTIONS, it was adopted.                                   
                                                                               
  HB 455 was HELD in Committee for further consideration.                      
                                                                               
  SENATE BILL 92                                                               
                                                                               
       "An Act relating  to an  advisory vote during  regional                 
       educational attendance area school board elections; and                 
       providing for an effective date."                                       
                                                                               
  SENATOR FRED ZHAROFF stated that SB 92 would add a provision                 
  whereby  communities in REAA  school areas would  be able to                 
  voice their  positions on education via an  advisory vote on                 
  the regular school ballot.  He pointed out that REAA schools                 
  are spread over a wide area, and that  it is often difficult                 
  for members of those communities to attend board meetings in                 
                                                                               
                               17                                              
                                                                               
                                                                               
  order to make  their feelings known.   The bill would  allow                 
  the school board  to adopt a resolution  requesting that the                 
  advisory question be on the next  ballot.  He concluded that                 
  the Department of Education supports the legislation.                        
                                                                               
  Representative Hanley MOVED to report CS SB 92 (CRA)(efd am)                 
  out of Committee  with individual  recommendations and  with                 
  the accompanying fiscal  notes.  There being  NO OBJECTIONS,                 
  it was so ordered.                                                           
                                                                               
  CS SB  92 (CRA)(efd am)  out of  Committee with a  "do pass"                 
  recommendation and with a  fiscal note by the Office  of the                 
  Governor  dated  3/24/94  and  a  zero  fiscal  note  by the                 
  Department of Education dated 3/24/94.                                       
                                                                               
  SENATE BILL 132                                                              
                                                                               
       "An  Act  relating   to  loans  for  the   purchase  of                 
       individual fishery quota shares."                                       
                                                                               
  BRYCE EDGMON, STAFF, SENATOR GEORGE JACKO, explained that CS                 
  SB 132 would expand the  Commercial Fisheries Revolving Loan                 
  Fund Program to allow  Alaskan fishermen to obtain loans  to                 
  purchase Individual Fisheries Quotas (IFQs).  The Commercial                 
  Fisheries Revolving Loan Fund Program would service the debt                 
  to  purchase  limited  entry permits,  purchase  or  upgrade                 
  vessels, and purchase fisheries related gear.                                
                                                                               
  Co-Chair MacLean MOVED to report  CS SB 132 (RES) am out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  She explained that the IFQs  are                 
  transferrable, which creates a fear  that fishermen from out                 
  of state  will purchase  the Alaskan  fishing permits.   The                 
  Division of Investments would provide loan money through the                 
  Revolving Loan Fund,  whereas Alaskan  commercial banks  are                 
  reluctant  to  help  Alaskan  fishermen   who  do  not  have                 
  sufficient  collateral.  The  legislation would keep Alaskan                 
  fishermen in business in Alaskan waters.                                     
                                                                               
  Representative Brown asked  the total amount of  money which                 
  the State would be distributing.  Mr. Edgmon replied that $5                 
  million dollars would be loaned in  FY95 and then between $4                 
  and $5 million dollars appropriated in FY96.  He pointed out                 
  that the  qualification  requirements are  stringent.    The                 
  Division  of Investments  does  have  a regulation  priority                 
  listing.                                                                     
                                                                               
  Representative  Brown  deliberated  on  the  different  loan                 
  funding resources available in the State.  She spoke against                 
  providing  commercial opportunity  to  fishmen over  another                 
  class of  requestors.   Mr. Edgmon  responded that  when the                 
  program was established, it  was the intent of the  State to                 
                                                                               
                               18                                              
                                                                               
                                                                               
  keep as many  limited entry permits in  residence ownership.                 
  The  loan program  was established  in order  to offer  that                 
  arrangement to as many fishermen  as possible.  The  program                 
  allows  resident  fishermen  to   compete  with  nonresident                 
  fishermen who have better access to capital.                                 
                                                                               
  (Tape Change, HFC 94-157, Side 2).                                           
                                                                               
  Representative  Grussendorf commented  that the  IFQ's would                 
  provide collateral  for the  small fisherman.   The  program                 
  would  keep  the   limited  entry  permits  in   the  State.                 
  Representative Hoffman added that the  fishing industry is a                 
  renewable resource and will continue to provide jobs to many                 
  small rural areas within Alaska.                                             
  GREG WINEGAR,  MANAGER, JUNEAU  LENDING BRANCH, DIVISION  OF                 
  INVESTMENTS,   DEPARTMENT   OF    COMMERCE   AND    ECONOMIC                 
  DEVELOPMENT, responded to Representative Navarre's questions                 
  regarding the loan  requirements for  State resident's.   He                 
  advised that the  residency requirement was the same for all                 
  eligibility  requirements, pointing  out that law  states in                 
  Section #A that a person would have  to actively participate                 
  for the  past five  years which  would have  to include  the                 
  preceding season.  The current legislation would change that                 
  to indicate participation for two of the past five years and                 
  that it would be necessary to  include the preceding season.                 
  The borrowing interpretation would be more liberal than that                 
  of the past.                                                                 
                                                                               
  There  being  NO  OBJECTIONS,  to  reporting the  bill  from                 
  Committee, it was  so ordered.  Representative  Foster MOVED                 
  to adopt  the House  Resources Committee  Letter of  Intent.                 
  There being NO OBJECTIONS, it was so ordered.                                
                                                                               
  CS SB 132  (RES) am was reported  out of Committee with  "no                 
  recommendations", with the House Resources Committee  Letter                 
  of  Intent  and with  a  fiscal  note by  the  Department of                 
  Commerce and Economic Development dated 2/04/94.                             
                                                                               
  SENATE BILL 215                                                              
                                                                               
       "An  Act  relating  to and  redesignating  the  oil and                 
       hazardous substance release  response fund  and to  its                 
       use in the event of a disaster emergency; repealing the                 
       authority in law by which marine highway vessels may be                 
       designed and constructed  to aid  in oil and  hazardous                 
       substance  spill cleanup  in  state marine  water using                 
       money  in  the  oil  and  hazardous  substance  release                 
       response  fund; amending  requirements relating  to the                 
       revision of state  and regional  master prevention  and                 
       contingency plans; altering requirements  applicable to                 
       liens for recovery of state expenditures related to oil                 
       or  hazardous  substances;  amending  the authority  to                 
                                                                               
                               19                                              
                                                                               
                                                                               
       contract to provide  personnel to respond to  a release                 
       or threatened release  of oil or a  hazardous substance                 
       and  to contract  to  conduct  spill related  research;                 
       reassigning responsibility  for the  oil and  hazardous                 
       substance response corps and for the emergency response                 
       depots to the Department of Environmental Conservation,                 
       and for the  operation of the state  emergency response                 
       commission and  its attendant responsibilities  for the                 
       local emergency planning  commissions to the Department                 
       of  Military  and  Veterans'   Affairs;  and  modifying                 
       definitions  of   terms  relating   to  the   preceding                 
       provisions;  terminating   the  nickel-per-barrel   oil                 
       conservation surcharge; levying and  collecting two new                 
       oil surcharges; and  providing for  the suspension  and                 
       reimposition  of  one  of   the  new  surcharges;   and                 
       providing for an effective date."                                       
                                                                               
  Representative   Therriault   MOVED  to   adopt  8-LS1107\T,                 
  Chenoweth,  5/02/94, as  the version  before the  Committee.                 
  Co-Chair MacLean OBJECTED stating that the Governor's Office                 
  would not support  that version.  Representative  Therriault                 
  advised that  he would  be  offering two  amendments to  the                 
  draft which would remedy the concerns of the Administration.                 
  He  distributed  and explained  a  spread sheet  "Summary of                 
  Changes - CSSB 215 (FIN)  am, HCS CS SB 215 (RES), HCS CS SB
  215 (STA), and  the proposed work draft".  [Copy on file].                   
                                                                               
                                                                               
  BOB POE,  DIRECTOR,  DIVISION  OF  ADMINISTRATIVE  SERVICES,                 
  DEPARTMENT OF ENVIRONMENTAL CONSERVATION, addressed concerns                 
  of the Department resulting from the work draft.  He pointed                 
  out that there  are a number of changes made to that version                 
  which warrant concern.  He  clarified that there exists only                 
  one  situation  in  which DEC  could  spend  money from  the                 
  current response fund or the  future response account within                 
  the  response  fund.   This  would  occur  when  a spill  is                 
  eminent.  Over  the entire history  of that fund, only  $1.9                 
  million dollars of  the total $122 million  dollars has been                 
  spent.  The remaining portion  of the fund was  appropriated                 
  by the Legislature.                                                          
                                                                               
  The  original  intention of  the  prevention account  was to                 
  provide  funds  to  DEC and  other  state  agencies to  both                 
  prevent  spills and  to  be better  prepared  to respond  to                 
  spills.  The response  account, as passed by the  Senate and                 
  the House Resources  Committee, is intended to deal with all                 
  spills, including  the small  spills.   Mr. Poe  pointed out                 
  that most of the spills which DEC responds to are well under                 
  2,500 barrels.  Under  the bills passed from the  Senate and                 
  House Resources Committees,  there is  no threshold used  to                 
  determine when the response money could  be used in order to                 
  respond to a  spill.  He  added that the work  draft version                 
                                                                               
                               20                                              
                                                                               
                                                                               
  would establish an  artificial threshold  which would be  of                 
  great concern to the Department.                                             
                                                                               
  Mr. Poe  continued that  the  work draft  would establish  a                 
  special account  in the  prevention account  which would  be                 
  used for the smaller spills.   He explained that the problem                 
  is that a large fund would be necessary  in order to address                 
  those times when a  responsible party creates a spill.   The                 
  party would then be  forced to clean it up  appropriately or                 
  the  fund  money would  be  used  for litigation.    Mr. Poe                 
  stressed that  the State  does not  know what  future spills                 
  will occur.                                                                  
                                                                               
  The  work draft  also  would require  that  the Governor  be                 
  informed of  a spill within 72  hours of the  spill at which                 
  time he would provide specific instruction  regarding action                 
  to take  to address  that spill.   Mr.  Poe emphasized  that                 
  requiring the Governor's  approval to  act could be  harmful                 
  timing for the State.  Representative Therriault interjected                 
  that a proposed amendment would address that concern.                        
                                                                               
  (Tape Change, HFC 94-158, Side 1).                                           
                                                                               
  GINNY FAY,  PRINCE WILLIAM SOUND REGIONAL  CITIZENS ADVISORY                 
  COUNCIL, JUNEAU, briefed the Committee on the development of                 
  the legislation.   The bill  was originally  drafted from  a                 
  research  analysis  completed  in  1992,  which  erroneously                 
  stated that  the response  fund was  empty.   At that  time,                 
  there remained $27 million dollars in that account.  Ms. Fay                 
  emphasized that the bill gained  momentum based on incorrect                 
  information.                                                                 
                                                                               
  She  added  that the  bill  would  not protect  the  coastal                 
  communities  nor  public interest.   SB  215 is  an industry                 
  bill, emphasizing that  based on  a Department of  Revenue's                 
  fiscal note,   the  legislation would be  worth $50  million                 
  dollars over the next six years in lower surcharge payments.                 
                                                                               
                                                                               
  Ms. Fay concluded that the legislation as passed through the                 
  Senate and the House Resources Committees continued to allow                 
  the response account  to be  used for spill  response.   The                 
  proposed work draft  would make the prevention  account also                 
  serve  for  the  response  fund  and  would  also lower  the                 
  surcharge payment  from  five cents  to  three cents.    She                 
  stressed that the work draft was unacceptable.                               
                                                                               
  RUSSEL  HEATH,  EXECUTIVE  DIRECTOR,   ALASKA  ENVIRONMENTAL                 
  LOBBY, JUNEAU, encouraged  the Committee to adopt  the House                 
  Resources version  of the  bill.   He pointed  out that  the                 
  Resources committee substitute places the entire $37 million                 
  dollars into the response account.  The Alaska Environmental                 
                                                                               
                               21                                              
                                                                               
                                                                               
  Lobby  (AEL) would recommend that  balance to be split 60/40                 
  percent between prevention and response  accounts.  He noted                 
  concern  in  adding  the underground  storage  tanks  to the                 
  prevention account.  He thought  that action would encourage                 
  money to  be taken from  the prevention account  program and                 
  would drain money from other necessary prevention accounts.                  
                                                                               
  REPRESENTATIVE  DAVID FINKELSTEIN  reiterated  that the  tax                 
  levied  should be used  for the concerns  which created that                 
  tax.  He spoke against splitting the fund.  Currently enough                 
  money does not  exist to address  the needs of the  original                 
  program, whereas,  the proposed  legislation would  add more                 
  obligations  from  that  fund.   Representative  Finkelstein                 
  encouraged implementing  an increased  gas tax  in order  to                 
  make the programs balance.                                                   
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Hanley,  Martin,  Parnell,   Therriault,                 
                      Foster, Larson.                                          
       OPPOSED:       Hoffman,  Navarre,  Brown,  Grussendorf,                 
                      MacLean.                                                 
                                                                               
  The MOTION PASSED (6-5).                                                     
                                                                               
  Representative Therriault MOVED to  adopt Amendment #1 which                 
  would eliminate the 72 hour notice and approval requirement.                 
  There being NO OBJECTION, it was adopted.                                    
                                                                               
  Representative Therriault MOVED to adopt Amendment  #2 which                 
  would delete  "threatened release".   Representative  Martin                 
  OBJECTED.                                                                    
                                                                               
  Mr. Poe noted  that the  Department would support  Amendment                 
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Hoffman,  Navarre, Parnell,  Therriault,                 
                      Brown,   Foster,   Grussendorf,  Hanley,                 
                      Larson, MacLean.                                         
       OPPOSED:       Martin.                                                  
                                                                               
  The MOTION PASSED (10-1).                                                    
                                                                               
  CS  SB 215  (FIN)  am (efd  fld) was  HELD in  Committee for                 
  further consideration.                                                       
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 5:10 P.M.                                           
                                                                               
                                                                               
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