Legislature(1999 - 2000)

04/28/2000 04:20 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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HOUSE FINANCE COMMITTEE                                                                                                         
April 28, 2000                                                                                                                  
4:20 P.M.                                                                                                                       
                                                                                                                                
TAPE HFC 00 - 139, Side 1.                                                                                                      
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair Therriault called the House Finance Committee                                                                          
meeting to order at 4:20 P.M.                                                                                                   
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
Co-Chair Therriault   Representative Foster                                                                                     
Co-Chair Mulder    Representative Grussendorf                                                                                   
Representative Austerman  Representative G. Davis                                                                               
Representative Bunde   Representative Phillips                                                                                  
Representative J. Davies  Representative Williams                                                                               
                                                                                                                                
Representative Moses was not present for the meeting.                                                                           
                                                                                                                                
ALSO PRESENT                                                                                                                    
                                                                                                                                
Senator Drue Pearce; Pat Carter, Staff, Senator Drue Pearce;                                                                    
Larry Dietrick, Acting Director, Division of Spill                                                                              
Prevention and Response, Department of Environmental                                                                            
Conservation; Alison Elgee, Deputy Commissioner, Department                                                                     
of Administration.                                                                                                              
                                                                                                                                
TESTIFIED VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Michele Brown, Commissioner, Department of Environmental                                                                        
Conservation, Anchorage; Breck Tostevin, Anchorage; Tom                                                                         
Rueter, North Star Terminal, Anchorage.                                                                                         
                                                                                                                                
SUMMARY                                                                                                                         
                                                                                                                                
                                                                                                                                
HB 52 An Act making and amending capital appropriations                                                                         
and reappropriations and capitalizing funds; and                                                                                
providing for an effective date.                                                                                                
                                                                                                                                
 CS HB 52 (FIN) was reported out of Committee with                                                                              
individual recommendations.                                                                                                     
                                                                                                                                
SB 273 An Act requiring oil discharge prevention and                                                                            
contingency plans and proof of financial                                                                                        
responsibility for non-tank vessels and railroad                                                                                
tank cars; authorizing inspection of non-tank                                                                                   
vessels and trains; and providing for an effective                                                                              
date.                                                                                                                           
                                                                                                                                
 HCS CS SB 273 (WTR) was reported out of Committee                                                                              
with a "do pass" recommendation and with fiscal                                                                                 
notes by Department of Environmental Conservation                                                                               
dated 4/26/00 and Department of Community &                                                                                     
Economic Development 4/17/00.                                                                                                   
SB 298 An Act relating to the compensation of certain                                                                           
public employees and officials not covered by                                                                                   
collective bargaining agreements; and providing                                                                                 
for an effective date.                                                                                                          
                                                                                                                                
 SB 298 was SCHEDULED but not HEARD.                                                                                            
SB 310 An Act providing for and relating to the issuance                                                                        
of general obligation bonds for the purpose of                                                                                  
paying the state cost of school, University of                                                                                  
Alaska, and port and harbor capital projects; and                                                                               
providing for an effective date.                                                                                                
                                                                                                                                
SB 310 was SCHEDULED but not HEARD.                                                                                             
SB 311 An Act providing for and relating to the issuance                                                                        
of general obligation bonds for the purpose of                                                                                  
paying the state cost of port and harbor capital                                                                                
projects; and providing for an effective date.                                                                                  
                                                                                                                                
  SB 311 was SCHEDULED but not HEARD.                                                                                           
HOUSE CS FOR CS FOR SENATE BILL NO. 273(RES)                                                                                    
                                                                                                                                
An Act regarding oil discharge prevention, and relating                                                                         
to contingency plans and proof of financial                                                                                     
responsibility for all self-propelled non-tank vessels                                                                          
exceeding 400 gross registered tonnage and for railroad                                                                         
tank cars; and providing for an effective date.                                                                                 
                                                                                                                                
SEANTOR DRUE PEARCE stated that Alaska has the world's best                                                                     
oil spill prevention and response program.  The current                                                                         
program is limited to vessels that carry oil as cargo and                                                                       
on-shore oil facilities such as oil wells, pipelines,                                                                           
refineries and tank farms.                                                                                                      
                                                                                                                                
Most of Alaska's oil spills come from carriers that are                                                                         
currently not required to prepare for spill response.  Since                                                                    
1995, 93 spills totaling 5,286 gallons of oil came from                                                                         
regulated vessels and facilities.  During the same period,                                                                      
945 spills totaling 258,000 gallons oil came from non-                                                                          
regulated carriers.  SB 273 will expand the prevention and                                                                      
response program to include larger non-tank vessels and the                                                                     
railroads transporting oil in bulk.                                                                                             
                                                                                                                                
Senator Pearce continued, specifically, non-tank vessels                                                                        
covered by the bill are defined as self-propelled watercraft                                                                    
of 400 or greater gross registered tons.  These vessels                                                                         
include larger fishing and processing vessels, cargo and                                                                        
cruise ships and public vessels engaged in commerce such as                                                                     
the Alaska State ferries.  SB 273 would establish the spill                                                                     
response planning standard of containment and control up to                                                                     
15 percent of the vessel's maximum capacity within 48 hours,                                                                    
and clean up the spill as quickly as possible with minimal                                                                      
damage to the environment.  SB 273 would require the vessels                                                                    
and the Railroad to provide proof of financial ability to                                                                       
respond to damage resulting from a spill.                                                                                       
                                                                                                                                
Senator Pearce noted that SB 273 would establish a task                                                                         
force to study and report back to the Legislature by the                                                                        
first day of next session on how to achieve the planning                                                                        
standard in a way that minimizes any potential adverse                                                                          
impacts to industry.  She commented that Alaska is the only                                                                     
state on the West Coast that has not extended it's                                                                              
contingency plan and financial responsibility laws to                                                                           
include non-tank vessels.  In light of recent spills from                                                                       
these vessels and from the Railroad on the land, it is time                                                                     
to strengthen oil spill laws.  SB 273 would provide a                                                                           
heightened awareness of prevention and response readiness                                                                       
and would reduce the number of consequences of oil spills in                                                                    
the future.                                                                                                                     
                                                                                                                                
Vice Chair Bunde asked why concerns on the compliance issues                                                                    
had been voiced.  Senator Pearce replied that inspections                                                                       
are presently required in law, however, the inspection                                                                          
portion of the bill was deleted in one of the committees.                                                                       
She added that inspections had always been done in concert                                                                      
with the National Coast Guard inspection team.  There has                                                                       
never been a boarding by Department of Environmental                                                                            
Conservation following a complaint by the ship boarded.  She                                                                    
acknowledged that she did not understand the concern                                                                            
regarding inspections, reiterating that it had been deleted                                                                     
from the bill.                                                                                                                  
                                                                                                                                
Representative Phillips noted that the World Trade Committee                                                                    
amended the bill taking out the inspections because the                                                                         
scope of the bill did not deal with ships providing proof of                                                                    
financial ability.  The inspection process was not needed                                                                       
for that.  Instead, it was added to the task force purview                                                                      
so to address procedures and regulations for dealing with                                                                       
the inspections.  She emphasized that it would be covered.                                                                      
                                                                                                                                
Representative J. Davies asked if a table had been prepared                                                                     
for the Alaska Railroad Corporation.  Senator Pearce replied                                                                    
it had not.  She noted that before the bill was introduced,                                                                     
the Commissioner had already been in negotiations with the                                                                      
Railroad.  There was a verbal understanding that they would                                                                     
return with a completed contingency plan.                                                                                       
                                                                                                                                
Representative Austerman commented that he had received                                                                         
calls regarding impact to the U.S. Navy vessels.  He                                                                            
understood that the potentially the Department of                                                                               
Environmental Conservation could impose requirements too                                                                        
strict on the Navy.  Co-Chair Therriault pointed out that                                                                       
there was a memo in member's packets indicating that the                                                                        
Department must work in cooperation with the Navy.                                                                              
                                                                                                                                
Co-Chair Mulder stated that currently under regulations, the                                                                    
type of ships referenced by Representative Austerman are not                                                                    
able to come up singularly into the State waters of Alaska                                                                      
without being accompanied.  He asked the intention of                                                                           
Department when dealing with the U.S. Navy and potential                                                                        
future problem.                                                                                                                 
                                                                                                                                
MICHELE BROWN, (TESTIFIED VIA TELECONFERENCE), COMMISSIONER,                                                                    
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, ANCHORAGE, replied                                                                    
that the Department had spoken with General Case of the                                                                         
Alaska Command, and Admiral Marshall's Chief of Staff,                                                                          
Admiral Barrett from the U.S. Coast Guard.  The Department                                                                      
knows that the issue must be addressed, as the ships can not                                                                    
come into Alaska without being accompanied by tankers.  She                                                                     
noted that there is a Statement of Cooperation written and                                                                      
in place, which allows the Department to work with the                                                                          
military when there is conflict with State law.                                                                                 
Commissioner Brown pointed out that the intent is to have a                                                                     
plan in place which mirrors the federal standard.  The tools                                                                    
to address these topics are already available under the                                                                         
Department's State Water Quality Standards.  She stressed                                                                       
that a good solution is available.                                                                                              
                                                                                                                                
Representative Austerman asked if it was correct that two                                                                       
vessels would be required to accompany any given vessel at                                                                      
the same time because of discharge.  Commissioner Brown                                                                         
understood that the Navy's concern was that in order to de-                                                                     
balance, they would need an accompanying vessel.  She knew                                                                      
that was a financial concern for the Navy.                                                                                      
                                                                                                                                
Representative Austerman questioned if there had been                                                                           
dialogue regarding that concern.  He requested all                                                                              
correspondence with the U.S. Navy regarding patrolling of                                                                       
outside waters.                                                                                                                 
                                                                                                                                
Representative J. Davies referenced the overview and the                                                                        
statement that "government owned and operated vessels that                                                                      
are not engaged in commerce" would be exempt.  He asked if                                                                      
that language was related to an earlier draft.                                                                                  
                                                                                                                                
PAT CARTER, STAFF, SENATOR DRUE PEARCE, replied that the                                                                        
only State operated ships engaged in commerce are the                                                                           
ferries.  "Government" refers to State or federal                                                                               
government.                                                                                                                     
                                                                                                                                
Representative Williams questioned how the statement of                                                                         
cooperation would work with the Navy.  Commissioner Brown                                                                       
explained that statement began between the State and all                                                                        
federal services several years ago.  It is a framework                                                                          
document which clarifies how to interact on issues of                                                                           
concern.  The group meets at least once a year to go over                                                                       
issues.                                                                                                                         
                                                                                                                                
Co-Chair Therriault pointed out that Section #6 allows the                                                                      
Department to draft regulations before the bill becomes                                                                         
effective so that the regulations and the bill can go into                                                                      
effect at the same time.                                                                                                        
                                                                                                                                
Representative Phillips congratulated the Department of                                                                         
Environmental Conservation for lowering the note by $10                                                                         
thousand dollars.                                                                                                               
                                                                                                                                
Co-Chair Mulder emphasized that the fiscal number is                                                                            
inflated and should be considered temporary.  Representative                                                                    
Phillips clarified that the initial fiscal note was for $338                                                                    
thousand dollars and a $130 dollar note for the task force.                                                                     
                                                                                                                                
Co-Chair Mulder MOVED to report HCS CS SB 273 (WTR) out of                                                                      
Committee with individual recommendations and with the                                                                          
accompanying fiscal notes.  Vice Chair Bunde OBJECTED for                                                                       
the purpose of making a comment.  He stated that oil tankers                                                                    
out of Valdez are paying for their own inspections.  He                                                                         
advised that is something to "look forward to in the                                                                            
future".                                                                                                                        
                                                                                                                                
TOM RUETER, (TESTIFIED VIA TELECONFERENCE), NORTH STAR                                                                          
TERMINAL, ANCHORAGE, testified on the legislation.  He                                                                          
stated that he looked forward to working with the task                                                                          
force.  He voiced concern with the cost of the practical                                                                        
application of the legislation.                                                                                                 
                                                                                                                                
There being NO further OBJECTION, the bill passed from                                                                          
Committee.  Co-Chair Therriault noted that the bill would                                                                       
require a title change, HCR 28.  He noted it would appear on                                                                    
the calendar with the legislation.                                                                                              
                                                                                                                                
HCS CS SB 273 (WTR) was reported out of Committee with a "do                                                                    
pass" recommendation and with the accompanying fiscal notes                                                                     
by Department of Environmental Conservation dated 4/6/00 and                                                                    
Department of Community & Economic Development dated                                                                            
4/17/00.                                                                                                                        
HOUSE BILL NO. 52                                                                                                               
                                                                                                                                
An Act making and amending capital appropriations and                                                                           
reappropriations and capitalizing funds; and providing                                                                          
for an effective date.                                                                                                          
                                                                                                                                
Representative J. Davies asked who would be covered in the                                                                      
collective bargaining agreements and which non-covered                                                                          
employees would be covered.  Co-Chair Mulder replied that                                                                       
everyone was covered.  He referenced Page 2, Lines 13 & 14                                                                      
which lists all three branches of government; the University                                                                    
employees are covered on Page 3, Line 18.  The only State                                                                       
employees not covered would be the legislators.                                                                                 
                                                                                                                                
Representative Phillips noted that the amount recommended                                                                       
for the University was different than that previously                                                                           
considered.  Co-Chair Mulder explained that those listed                                                                        
were "out funds".  That would include the $5.2 million                                                                          
dollars of general funds and $1.2 million dollars of other                                                                      
funds.                                                                                                                          
                                                                                                                                
Co-Chair Mulder pointed out that the total cost would be                                                                        
$37.195 million dollars, and would be all other funds.                                                                          
Representative Grussendorf asked what the "other funds"                                                                         
consisted of.  Co-Chair Mulder stated that he advised the                                                                       
Administration that if they desired to have the contracts                                                                       
funded, it was up to them to find the funding sources                                                                           
outside the $30 million dollar general fund budget.                                                                             
                                                                                                                                
Representative Austerman MOVED to ADOPT work draft #1-                                                                          
GH1022\H, Bannister, 4/28/00, as the version of the bill                                                                        
before the Committee.  There being NO OBJECTION, it was                                                                         
adopted.                                                                                                                        
                                                                                                                                
Representative J. Davies asked the effect of using all                                                                          
"other funds".  Co-Chair Mulder replied that the                                                                                
Administration had been looking for a number of other funds                                                                     
for some time.  He believed that they had found the                                                                             
financial sources to fund the contracts.                                                                                        
                                                                                                                                
Vice Chair Bunde MOVED to report CS HB 52 (FIN) out of                                                                          
Committee with individual recommendations.  Representative                                                                      
Grussendorf OBJECTED.  He asked if there was anyone that                                                                        
could identify the "other funds".                                                                                               
                                                                                                                                
ALISON ELGEE, DEPUTY COMMISSIONER, DEPARTMENT OF                                                                                
ADMINISTRATION, advised that "other fund" sources had been                                                                      
identified.  She was not aware of funding sources identified                                                                    
to fill or replace funds in the budget amendments as general                                                                    
funds.  She pointed out that only half of the initial                                                                           
request was going to be general funds.  There are funding                                                                       
sources appropriate for the employees being covered.                                                                            
                                                                                                                                
Representative Grussendorf WITHDREW his OBJECTION.  There                                                                       
being NO further OBJECTIONS, the bill was moved from                                                                            
Committee.                                                                                                                      
                                                                                                                                
CS HB 52 (FIN) was reported out of Committee with individual                                                                    
recommendations.                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
The meeting adjourned at 4:40 P.M.                                                                                              
                                                                                                                                
                                                                                                                                
H.F.C. 7 4/28/00                                                                                                                

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