Legislature(2001 - 2002)

04/27/2001 09:09 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 27, 2001                                                                                           
                         9:09 A.M.                                                                                              
                                                                                                                                
TAPE HFC 01 - 100, Side A                                                                                                       
TAPE HFC 01 - 100, Side B                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 9:09 A.M.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Williams, Co-Chair                                                                                          
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Con Bunde, Vice-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative John Davies                                                                                                      
Representative Carl Moses                                                                                                       
Representative Richard Foster                                                                                                   
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Jim Whitaker                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative Beth  Kerttula; Michelle Brown,  Commissioner,                                                                   
Department  of   Environmental  Conservation;   Mike  Conway,                                                                   
Director,  Division of Statewide  Public Service,  Department                                                                   
of   Environmental   Conservation;    Lynne   Smith,   Staff,                                                                   
Representative  Con  Bunde;  Mark   Hickey,  American  Cancer                                                                   
Society,  Coalition  of  Alaskans   for  Tobacco  Free  Kids,                                                                   
Juneau;  John  Bitney, Legislative  Liaison,  Alaska  Housing                                                                   
Finance Corporation,  Department  of Revenue; Craig  Tillery,                                                                   
Assistant   Attorney    General,   Environmental    Division,                                                                   
Department of Law.                                                                                                              
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 234    An  Act relating to  the financing of  construction                                                                   
          and renovation of certain public facilities; and                                                                      
          providing for an effective date.                                                                                      
                                                                                                                                
          CS HB 234 (FIN) was reported out of Committee with                                                                    
          a "do pass" recommendation and with a fiscal note                                                                     
          by Department of Revenue.                                                                                             
                                                                                                                                
HB 260    An  Act  requiring   the  owners  or  operators  of                                                                   
          certain passenger  vessels operating in  the marine                                                                   
          waters  of  the  state  to  register  the  vessels;                                                                   
          establishing     information-gathering,      record                                                                   
          keeping,  and  reporting requirements  relating  to                                                                   
          the vessels' graywater  and sewage; prohibiting the                                                                   
          discharge  of  untreated  sewage from  the  vessels                                                                   
          unless  exempted; placing  limits on discharges  of                                                                   
          treated  sewage  and gray  water  from the  vessels                                                                   
          unless   exempted;    establishing   a   commercial                                                                   
          passenger    vessel   coastal   protection    fund;                                                                   
          establishing   a   fee  on   commercial   passenger                                                                   
          vessels,  that are  not  exempt from  the fee,  for                                                                   
          each  voyage during  which the  vessels operate  in                                                                   
          the  marine  waters  of  the  state  based  on  the                                                                   
          overnight  accommodation  capacity  of the  vessels                                                                   
          determined  with reference to  the number  of lower                                                                   
          berths;  establishing   penalties  for  failure  to                                                                   
          comply with  certain laws relating to  the vessels;                                                                   
          authorizing   the   Department   of   Environmental                                                                   
          Conservation  to encourage  and recognize  superior                                                                   
          environmental   protection   efforts   related   to                                                                   
          commercial    passenger     vessels;    authorizing                                                                   
          exemptions  from some  laws relating to  discharges                                                                   
          from  the vessels  and  from the  fee  requirements                                                                   
          related  to the  vessels; requiring  a report  from                                                                   
          the   Department  of   Environmental   Conservation                                                                   
          concerning  matters  relating to  the vessels;  and                                                                   
          providing for an effective date.                                                                                      
                                                                                                                                
          HB 260 was HELD in Committee for further                                                                              
          consideration.                                                                                                        
                                                                                                                                
HOUSE BILL NO. 234                                                                                                            
                                                                                                                                
     An Act relating to the financing of construction and                                                                       
     renovation of certain public facilities; and providing                                                                     
     for an effective date.                                                                                                     
                                                                                                                                
Vice-Chair  Bunde MOVED to  ADOPT the  new Amendment  #1, 22-                                                                   
LS0863\O.2, 4/26/01.  [Copy on  File].  Representative Davies                                                                   
OBJECTED for discussion.                                                                                                        
                                                                                                                                
Vice-Chair Bunde  explained that  the amendment  would secure                                                                   
the final  20% of  the Tobacco  Settlement money for  funding                                                                   
smoking  education   and  cessation  and  would   remove  any                                                                   
reference to the University.                                                                                                    
                                                                                                                                
Representative  Davies  asked for  more  detail.   Vice-Chair                                                                   
Bunde explained  that "taxable versus non-taxable"  was still                                                                   
being debated.   The amendment  would provide the  detail and                                                                   
vehicle to address the consequences.                                                                                            
                                                                                                                                
Representative  Davies  questioned how  the  payout could  be                                                                   
addressed through the legislation.                                                                                              
                                                                                                                                
Representative Croft  interjected that it is  imperative that                                                                   
the final  20% of  the money  be used  for tobacco  cessation                                                                   
programs.                                                                                                                       
                                                                                                                                
Vice-Chair Bunde  explained that there is a  moral connection                                                                   
with the use of that money.                                                                                                     
                                                                                                                                
MARK HICKEY,  AMERICAN CANCER SOCIETY, COALITION  OF ALASKANS                                                                   
FOR TOBACCO FREE  KIDS, JUNEAU, discussed that  the amendment                                                                   
would  take the  remaining  20%  from the  Master  Settlement                                                                   
Agreement (MSA)  and would  trade it in  the same  fashion as                                                                   
the 40% was treated  last year.  The other 40%  would be sold                                                                   
to the  Alaska Housing Finance  Corporation (AHFC) or  to its                                                                   
subsidiary, the Northern Tobacco  Seuritization Program, with                                                                   
the intent to issue  debt bonds.  The corpus  that comes from                                                                   
that would have to be appropriated  to the account created in                                                                   
the bill.  That account is located  on Page 2, Section 3, the                                                                   
Smoking  Education   Account.    That  is  where   the  money                                                                   
generated from the  bond sale would be deposited  and subject                                                                   
for legislative  appropriation.  The  intent is to  have that                                                                   
money  used for  prevention education  cessation  activities.                                                                   
The Legislature  would  have to appropriate  annually  out of                                                                   
that  account  for  the  program.    He  concluded  that  the                                                                   
amendment attempts to address that detail.                                                                                      
                                                                                                                                
Representative Davies asked an  estimate of annual funds that                                                                   
would  be  available.    Mr. Hickey  replied  that  AHFC  has                                                                   
indicated that the range would  be between $40 to $63 million                                                                   
dollars.    Mr.  Hickey  stated the  need  was  $8.1  million                                                                   
dollars per  year, in a  perfect scenario.   It could  not be                                                                   
done  at  the  proposed  level.   The  recommendation  is  to                                                                   
provide   that  amount   as  close   as   possible,  in   the                                                                   
neighborhood  of   $5-$6  million  dollars  per   year.    He                                                                   
emphasized that number was conservative.                                                                                        
                                                                                                                                
JOHN  BITNEY,  LEGISLATIVE LIAISON,  ALASKA  HOUSING  FINANCE                                                                   
CORPORATION, DEPARTMENT  OF REVENUE, responded  that based on                                                                   
the current market condition,  the amount would need to be in                                                                   
taxable bonds  with a 25-year  term.  He believed  that could                                                                   
generate about $40 million dollars in proceeds.                                                                                 
                                                                                                                                
Co-Chair  Mulder  commented that  the  intent  was  to put  a                                                                   
"fence"  around  the  payout.    The  payout  averages  $6.82                                                                   
million  dollars.   He commented  that in  order to  maximize                                                                   
with a  minimal amount  of confusion,  the language  needs to                                                                   
clarify the intent.                                                                                                             
                                                                                                                                
Representative Croft argued that  there would be a benefit to                                                                   
using the money for cessation  programs.  He pointed out that                                                                   
the  proposed  language  moves  the Legislature  out  of  the                                                                   
program.    He  reminded  members   that  the  money  is  not                                                                   
guaranteed.                                                                                                                     
                                                                                                                                
Vice-Chair  Bunde agreed that  it is  important to  do things                                                                   
the simplest way possible, however,  there is a risk that the                                                                   
tobacco industry will fall on  hard times and that the income                                                                   
stream would  need to  be securitized for  other takers.   He                                                                   
commented that  the legislation  would build a  "moral fence"                                                                   
around  the money.    Vice-Chair  Bunde wanted  to  guarantee                                                                   
various groups  offering programs  that there would  continue                                                                   
to be an income stream.                                                                                                         
                                                                                                                                
Representative  Hudson asked  how  much money  would the  20%                                                                   
generate.  Mr.  Hickey replied that the annual  average would                                                                   
be  a little  under $5  million dollars,  unsecuritized.   In                                                                   
2008,  there would  be an  additional  $2.5 million  dollars.                                                                   
Mr. Hickey pointed out that the formula is complicated.                                                                         
                                                                                                                                
Representative  J.  Davies  WITHDREW his  OBJECTION.    There                                                                   
being NO further OBJECTION, the amendment was adopted.                                                                          
                                                                                                                                
Representative Foster MOVED to  report CS HB 234 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS HB  234 (FIN)  was reported  out of  Committee with  a "do                                                                   
pass" recommendation and with  a fiscal note by Department of                                                                   
Revenue.                                                                                                                        
                                                                                                                                
HOUSE BILL NO. 260                                                                                                            
                                                                                                                                
     An  Act requiring  the owners  or  operators of  certain                                                                   
     passenger vessels operating  in the marine waters of the                                                                   
     state    to   register    the   vessels;    establishing                                                                   
     information-gathering,  record  keeping,  and  reporting                                                                   
     requirements  relating to  the vessels'  gray water  and                                                                   
     sewage;  prohibiting the  discharge of untreated  sewage                                                                   
     from  the vessels  unless  exempted;  placing limits  on                                                                   
     discharges  of treated  sewage and  gray water  from the                                                                   
     vessels  unless  exempted;   establishing  a  commercial                                                                   
     passenger vessel  coastal protection fund;  establishing                                                                   
     a  fee on  commercial passenger  vessels,  that are  not                                                                   
     exempt from  the fee, for  each voyage during  which the                                                                   
     vessels operate in the marine  waters of the state based                                                                   
     on the  overnight accommodation capacity of  the vessels                                                                   
     determined  with  reference   to  the  number  of  lower                                                                   
     berths;  establishing penalties  for  failure to  comply                                                                   
     with certain  laws relating to the  vessels; authorizing                                                                   
     the   Department   of  Environmental   Conservation   to                                                                   
     encourage    and   recognize   superior    environmental                                                                   
     protection  efforts  related   to  commercial  passenger                                                                   
     vessels; authorizing exemptions  from some laws relating                                                                   
     to  discharges  from  the   vessels  and  from  the  fee                                                                   
     requirements related to the  vessels; requiring a report                                                                   
     from  the   Department  of  Environmental   Conservation                                                                   
     concerning matters relating to the vessels; and                                                                            
     providing for an effective date.                                                                                           
                                                                                                                                
Co-Chair Mulder  provided an overview of the  handout titled,                                                                   
"Comparison  Between HB  260 HFC -  HB 22  Kerttula -  HB 183                                                                   
Knowles". [Copy on File].                                                                                                       
                                                                                                                                
He noted that the handout addressed the following concerns:                                                                     
                                                                                                                                
     ·    Permits                                                                                                               
     ·    Registration requirements                                                                                             
     ·    Prohibited discharges                                                                                                 
     ·    Gray water standards                                                                                                  
     ·    Discharge of treated sewage of gray water                                                                             
     ·    Air quality                                                                                                           
     ·    Monitoring and environmental studies                                                                                  
     ·    Safety exception                                                                                                      
     ·    Information gathering requirements                                                                                    
     ·    Record keeping requirements                                                                                           
     ·    Reporting requirements                                                                                                
     ·    Fees                                                                                                                  
     ·    Penalties                                                                                                             
     ·    Commercial passenger vessel coastal protection                                                                        
          program                                                                                                               
     ·    Commercial passenger vessel coastal protection                                                                        
          fund                                                                                                                  
     ·    Covered vessels                                                                                                       
     ·    Geographic coverage                                                                                                   
     ·    Exemptions                                                                                                            
     ·    Regulations                                                                                                           
     ·    Definitions                                                                                                           
     ·    Statutory changes                                                                                                     
                                                                                                                                
Co-Chair Mulder stressed that  the bill provides the State of                                                                   
Alaska  a compromise  and provides  some  certainty and  some                                                                   
harsh  penalties for  those  that do  illegal  activity.   He                                                                   
added that the bill provides the  industry with specifics and                                                                   
which  marks must  be  met for  the  industry  to operate  in                                                                   
Alaska State waters.  Co-Chair  Mulder emphasized that HB 260                                                                   
would go further  than any other state throughout  the United                                                                   
States to protect Alaska's water rights.                                                                                        
                                                                                                                                
Representative  Davies MOVED  to INCORPORATE  HB 260  into HB
22.  Co-Chair Mulder OBJECTED.                                                                                                  
                                                                                                                                
Representative  Davies advised  that a lot  of hard  work had                                                                   
gone  into  HB 22.    He added  that  HB  22 has  been  under                                                                   
negotiation  for a much  longer period of  time.   The normal                                                                   
process  would  be to  take  the  material  from HB  260  and                                                                   
incorporate it into HB 22.                                                                                                      
                                                                                                                                
Co-Chair  Mulder  commented  that HB  260  was  substantially                                                                   
different from  HB 22.  He stated  that there was not  a need                                                                   
to replace  that legislation  and that HB  260 had  merits to                                                                   
"stand on its own".                                                                                                             
                                                                                                                                
Representative Croft  agreed that it would be  appropriate to                                                                   
start  with a  bill that  had a  lower number.   The  content                                                                   
would  be the  same  and the  amendments  would still  apply.                                                                   
Co-Chair Mulder  exclaimed that  there had been  no procedure                                                                   
previously  established.    He  stated  that HB  260  was  an                                                                   
allowable option.                                                                                                               
                                                                                                                                
Representative   Davies  argued  that   there  is   a  normal                                                                   
procedure  and that the  Committee works  with the  bill that                                                                   
has the lowest number.                                                                                                          
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Croft, Davies, Moses                                                                                             
OPPOSED:       Foster, Harris, Hudson, Lancaster, Whitaker,                                                                     
               Williams, Mulder                                                                                                 
                                                                                                                                
Representative Bunde was not present for the vote.                                                                              
                                                                                                                                
The MOTION FAILED (3-7).                                                                                                        
                                                                                                                                
MICHELLE  BROWN, COMMISSIONER,  DEPARTMENT  OF  ENVIRONMENTAL                                                                   
CONSERVATION, spoke  to the Alaska Cruse Ship  Initiative and                                                                   
the four objectives:                                                                                                            
                                                                                                                                
     ·    Steering committee members;                                                                                           
     ·    Sub groups: wastewater, air, oil spill prevention,                                                                    
          and environmental leadership;                                                                                         
     ·    Meetings; and                                                                                                         
     ·    Formation of a website.                                                                                               
                                                                                                                                
The  first objective  is  to get  the  facts  on cruise  ship                                                                   
wastewater discharges  and air emissions to  find out whether                                                                   
there  are  problems.    The   Department  developed  testing                                                                   
parameters and  protocols collaboratively so that  they would                                                                   
not  later  disagree  with  what  the  results  meant.    The                                                                   
findings were for wastewater:                                                                                                   
                                                                                                                                
     ·    Only 1 of 80 treated sewage samples met federal                                                                       
          standards;                                                                                                            
     ·    More than 75% of the gray water samples exceeded                                                                      
          the level required for treated sewage;                                                                                
     ·    Some gray water samples were as high as 50,000                                                                        
          times treated sewage limits; and                                                                                      
     ·    No serious priority pollutant problems were found,                                                                    
          the types of hazardous materials that RCCL                                                                            
          discharged which led to the court actions.                                                                            
                                                                                                                                
Commissioner Brown continued, the findings for air were:                                                                        
                                                                                                                                
     ·    15% of opacity readings violated standards; and                                                                       
     ·    The limited ambient air testing down at four sites                                                                    
          in Juneau did not show any excess of health-based                                                                     
          standards.                                                                                                            
                                                                                                                                
Commissioner  Brown noted  that  after the  results  revealed                                                                   
such serious  problems, the  Department started working  with                                                                   
the industry on  the second objective to find  technology and                                                                   
management improvements.   The  industry has been  looking at                                                                   
some  potentially  good  treatment  means.   She  noted  that                                                                   
equipment testing and review process is still underway.                                                                         
                                                                                                                                
Commissioner  Brown continued,  the third  objective set  for                                                                   
the Cruise  Ship Initiative  was to  establish a process  for                                                                   
long-term  compliance verification.   Neither  the State  nor                                                                   
residents of coastal communities  could ever allow themselves                                                                   
to be  so ignorant  of and  powerless from  the impacts  from                                                                   
cruise ships' wastes.                                                                                                           
                                                                                                                                
The  need  for  State oversight  and  monitoring  program  to                                                                   
verify compliance led the Governor  to introduce legislation,                                                                   
HB 183.   The bill  would bring the  cruise industry  in line                                                                   
with  every other  industry in  the State  that presents  the                                                                   
potential   to  pollute.     For   a  successful   compliance                                                                   
verification  program,  there  must be  clear  standards  for                                                                   
what, where,  when, and how  pollutants can be  discharged or                                                                   
emitted.   She  submitted  that  Alaskans for  Alaska  should                                                                   
establish  those standards.   At that  time, the State  would                                                                   
need to  verify that standards  are being met.   Commissioner                                                                   
Brown advised  that credible  verification would  mean having                                                                   
the authority  and funding  to check  compliance, and  having                                                                   
enforcement authority for failures.                                                                                             
                                                                                                                                
Commissioner Brown  discussed in detail each  program and the                                                                   
elements and  how they relate  in HB  260 as compared  to the                                                                   
Governor's bill.                                                                                                                
                                                                                                                                
Commissioner Brown  addressed the standards.   The Governor's                                                                   
bill  states that  standards should  be  set consistent  with                                                                   
federal law  unless more protective standards  were necessary                                                                   
such as  protecting shellfish growing  areas.   HB  260 cedes                                                                   
the State's authority  to establish standards  to the federal                                                                   
Environmental  Protection Agency (EPA).   She commented  that                                                                   
no  state has  ever given  that  authority over  to the  EPA,                                                                   
especially since  the federal  Clean Water Act  provides that                                                                   
it  is up  to  each  state to  set  their own  water  quality                                                                   
standards.                                                                                                                      
                                                                                                                                
She noted  that it  is troubling,  since the recently  passed                                                                   
federal  cruise   ship  legislation,  that  HB   260  copies,                                                                   
virtually  verbatim, and  specifically allows  Alaska to  set                                                                   
its own standards and to develop  its own programs to protect                                                                   
Alaska's own interests.                                                                                                         
                                                                                                                                
Commissioner  Brown added  that the  specific reservation  of                                                                   
the State's rights is exceptionally  important because Alaska                                                                   
is the only place in the U.S.  that cruise ships travel where                                                                   
the ships  remain in state waters  for the majority  of their                                                                   
voyage.  At other  ports, the cruise ships come  into port to                                                                   
load  passengers  and supplies  and  then  head back  out  to                                                                   
international waters.  Those vessels  retain their wastes and                                                                   
discharge  at high  seas.  In  Alaska, State  waters are  the                                                                   
destination, not just a drop off  point.  Because of that the                                                                   
vessels discharge their wastes in State waters.                                                                                 
                                                                                                                                
The  next critical  element of  an  oversight and  monitoring                                                                   
program  is a  solid program  of  sampling and  verification.                                                                   
The Governor's  bill provides for  that but HB 260  does not.                                                                   
She suggested that this could  be a serious problem given the                                                                   
track record of that industry.                                                                                                  
                                                                                                                                
Commissioner Brown pointed out  that the cruise ship industry                                                                   
said its wastes  contained no hazardous materials.   That was                                                                   
found to be false.  The cruise  ship industry stated that its                                                                   
sewage  discharges   were  fully  treated  and   met  federal                                                                   
standards.   She  pointed out  that last  summer showed  that                                                                   
only 1 of the 80 samples met standards.   The industry claims                                                                   
that  its untreated  gray  water  was benign.    Commissioner                                                                   
Brown noted  that last  summer, the  Department learned  that                                                                   
was not true and most samples looked like raw sewage.                                                                           
                                                                                                                                
Commissioner  Brown stated that  in each  of the cases,  once                                                                   
the  truth was  discovered, the  industry  acted to  improve.                                                                   
However,  a credible  program  cannot  rely solely  upon  the                                                                   
industry    self-testing    and     self-reporting    without                                                                   
verification  authority.   It  cannot  rely  solely upon  the                                                                   
spotlight of getting caught to ensure improvement.                                                                              
                                                                                                                                
Commissioner  Brown added that  a credible oversight  program                                                                   
must  test for  the  pollutants  that are  of  concern.   The                                                                   
Governor's  bill   authorizes  Department   of  Environmental                                                                   
Conservation  to  work  with   the  industry  and  others  to                                                                   
establish  the list  of  contaminants to  be  tested and  the                                                                   
frequency  to  test.   HB  260  only  identifies a  very  few                                                                   
potential  water  contaminants.     It  doesn't  require  any                                                                   
verification that  industry is  not discharging the  types of                                                                   
toxic  chemicals   that  the   Royal  Caribbean   was  caught                                                                   
discharging.                                                                                                                    
                                                                                                                                
Commissioner  Brown stated that  an oversight and  monitoring                                                                   
program  must  be  flexible  and  developed  in  a  way  that                                                                   
protects the  environment, yet  allows business time  to come                                                                   
into  compliance and  continue  to operate.   The  Governor's                                                                   
bill provided  for negotiated rulemaking to set  well defined                                                                   
protective  conditions of  operation so  industry could  test                                                                   
and ultimately employ new technologies  until full compliance                                                                   
could be achieved.                                                                                                              
                                                                                                                                
She added  that in contrast, HB  260 allows gray water  to be                                                                   
discharged  at   "whatever"  quality   until  2003   with  no                                                                   
alternative,   interim   protective   measures   until   full                                                                   
compliance can  be achieved.   HB 260  also fails  to address                                                                   
the  air   emissions  testing   program,  the  subject   that                                                                   
Department  of   Environmental  Conservation   receives  more                                                                   
complaints about than any other industrial operation.                                                                           
                                                                                                                                
Commissioner  Brown summarized that  the cruise industry  has                                                                   
not been regulated and presents  a threat to Alaska's air and                                                                   
water quality.   The Department has worked with  the industry                                                                   
to  test  their  discharges  and emissions.    There  is  new                                                                   
technology.    The  Department  has  been  working  with  the                                                                   
industry on  the oversight and  monitoring program  to verify                                                                   
future  compliance.    Based  on  the  track  record  of  the                                                                   
industry,  the State  needs a  strong oversight,  monitoring,                                                                   
and  compliance  verification  program  that will  allow  the                                                                   
Alaska  public  to  have  confidence  that  the  industry  is                                                                   
meeting the standards expected from all other industries.                                                                       
                                                                                                                                
Representative  Croft asked what  the Royal Caribbean  charge                                                                   
had been relating to their discharge.                                                                                           
                                                                                                                                
CRAIG  TILLERY,  ASISTANT  ATTORNEY   GENERAL,  ENVIRONMENTAL                                                                   
DIVISION, DEPARTMENT  OF LAW, advised that the  discharge had                                                                   
been oily  waste, dry cleaning  fluids, and photo  chemicals,                                                                   
primarily silver.                                                                                                               
                                                                                                                                
Representative Davies  asked for a comparison  between HB 260                                                                   
and the  Governor's bill  given the  three-mile limit  "donut                                                                   
holes".                                                                                                                         
                                                                                                                                
Commissioner Brown  explained that the Governor's  bill would                                                                   
cover activities in State waters.   HB 260 adopts the federal                                                                   
definitions  only.  She  acknowledged  that the industry  had                                                                   
voluntary closed the "donut" holes.                                                                                             
                                                                                                                                
Representative Davies  asked if HB 260 would  limit the State                                                                   
to  less   than  all  state   waters.    Commissioner   Brown                                                                   
understood that  the legislation  would expand State  waters,                                                                   
not restrict  them.   He noted that  the Governor's  bill had                                                                   
not established the discharge provisions.                                                                                       
                                                                                                                                
Representative  Hudson questioned  how HB  260 would  compare                                                                   
with  the  essential  elements   as  used  by  the  State  of                                                                   
Washington.                                                                                                                     
                                                                                                                                
                                                                                                                                
TAPE HFC 01 - 100, Side B                                                                                                     
                                                                                                                                
                                                                                                                                
Commissioner Brown replied that  HB 260 goes further than any                                                                   
other state's legislation.                                                                                                      
                                                                                                                                
Representative Croft questioned  how Alaska laws are enforced                                                                   
against a foreign flag vessel.   Commissioner Brown explained                                                                   
that Alaska  is allowed  to establish  standards for  our own                                                                   
waters.  The  federal legislation specifically  provides that                                                                   
Alaska could establish it own  program as long as it does not                                                                   
contradict  federal   law.    In  most  cases,   federal  law                                                                   
establishes the floor for the standard.                                                                                         
                                                                                                                                
Co-Chair  Mulder inquired  what  was wrong  with the  federal                                                                   
standards.   Commissioner Brown  emphasized that there  is no                                                                   
federal standard for gray water.                                                                                                
                                                                                                                                
Co-Chair Mulder  asked the different between  sewage and gray                                                                   
water.   Commissioner Brown  stated that  under State  law, a                                                                   
difference is  not made between  gray water and sewage.   She                                                                   
declared that  a study  needs to be  undertaken to  make that                                                                   
determination.                                                                                                                  
                                                                                                                                
Representative  Croft referenced Pages  3 & 4,  the discharge                                                                   
of gray  water.   He asked if  the Environmental  Protections                                                                   
Agency (EPA) standards were appropriate.   Commissioner Brown                                                                   
commented  that  HB 260  provides  that the  Alaska  standard                                                                   
would  be whatever  EPA promulgates.   Representative  Davies                                                                   
clarified  that regarding  gray water,  EPA presently  has no                                                                   
standard.                                                                                                                       
                                                                                                                                
Representative  Croft asked  what  is going  to happen  until                                                                   
2003 when  the EPA standard  comes into place.   Commissioner                                                                   
Brown advised that there would be no standard until 2003.                                                                       
                                                                                                                                
Representative  Croft  questioned if  the  bill should  pass,                                                                   
what  standard  would the  State  enforce  for the  next  two                                                                   
summers.   Commissioner  Brown  reiterated that  there is  no                                                                   
standard  to enforce  for the  next two summers.   She  added                                                                   
that whatever  the industry decides,  is what the  State will                                                                   
get.  Commissioner  Brown stressed that there  is no standard                                                                   
to work with.                                                                                                                   
                                                                                                                                
Representative  Croft asked  what  the State  could  do if  a                                                                   
foreign flag vessel  dumps.  Commissioner Brown  replied that                                                                   
Alaska  could only  fine  that  vessel.   That  would be  the                                                                   
State's sole authority.   Mr. Tillery added that  most of the                                                                   
vessels have offices in the United  States and that the State                                                                   
of  Alaska  would  be  able to  get  to  them  through  those                                                                   
offices.                                                                                                                        
                                                                                                                                
Representative Croft pointed out  that the alternative to the                                                                   
system  of going  to courts  on fines  would be  a system  of                                                                   
registration through a permit  system.  Mr. Tillery explained                                                                   
that with a  permit system, Alaska would have  the ability to                                                                   
fine the vessel for violating  the permit.  Alaska would have                                                                   
the authority to  discuss with that specific  line what would                                                                   
be allowed to be discharged in State waters.                                                                                    
                                                                                                                                
Representative  Croft asked  what rights  under HB 260,  does                                                                   
Alaska  have  if  a  vessel  repeatedly   violates  discharge                                                                   
standards  in State waters.   Mr.  Tillery explained  that is                                                                   
not a  question which  has been  determined  in the State  of                                                                   
Alaska.   There  is  a  body of  law  in federal  court  that                                                                   
suggests that  Alaska could prohibit  them from  State waters                                                                   
and could not  control their activities.  Under  HB 260, that                                                                   
could not  be done.   Under the Governor's  law, it  would be                                                                   
allowed.                                                                                                                        
                                                                                                                                
Representative Davies spoke to  the definition of pollutants.                                                                   
He recommended limiting the topics  of concern to gray water.                                                                   
Commissioner  Brown stated  that under  the Governor's  bill,                                                                   
the Department  would  look at all  the potential  pollutants                                                                   
and  decide which  to test  for and  which were  of the  most                                                                   
concern.   HB 260 does not  pick up most of  the conventional                                                                   
pollutants.  She noted that is  important because in 2003, if                                                                   
EPA has  not established standards,  Alaska will end  up with                                                                   
the standard  recommended in HB  260.  If the  industry wants                                                                   
that, one  of the easiest  ways to kill  fecal matter  is the                                                                   
use  of chlorine.    She  maintained  that chlorine  is  very                                                                   
dangerous to  aquatic life.  Under  the terms of HB  260, the                                                                   
State  could  not  regulate  the  amount  of  chlorine  being                                                                   
discharged.  Commissioner Brown  advised that there should be                                                                   
detailed water discussions when establishing the standards.                                                                     
                                                                                                                                
Representative Croft referenced  Page 5, Lines 9-10, the gray                                                                   
water definition.   He asked if  there was evidence  that the                                                                   
vessel had been using chorine,  how could that be established                                                                   
under HB 260.   Commissioner Brown explained  that chorine is                                                                   
one of  the topics that could  be self-tested by  the vessel.                                                                   
HB 260  is not authorized  to establish requirements  of what                                                                   
should be tested for.                                                                                                           
                                                                                                                                
Representative  Hudson asked  what  section in  HB 260  would                                                                   
preclude  the  State  from  monitoring   discharges  and  the                                                                   
reduction of  those impacts.   Commissioner Brown  understood                                                                   
that the bill  would only provide regulatory  authority to do                                                                   
a  few  things.   The  bill  does not  allow  the  Department                                                                   
authority  to  promulgate rules  to  see  all aspects  of  it                                                                   
through.   The funds could not  be used to do  the monitoring                                                                   
or study.     Mr. Tillery added that the State  does not have                                                                   
authority to have the funds to do that.                                                                                         
                                                                                                                                
Representative  Davies asked if  "off-loading" was  addressed                                                                   
in HB  260.  Commissioner  Brown noted  that HB 260  does not                                                                   
deal with that  concern; however, both of the  other bills do                                                                   
address  it.    The Governor's  bill  requests  authority  to                                                                   
create a solid waste management plan.                                                                                           
                                                                                                                                
Co-Chair Mulder questioned what  the issue was.  Commissioner                                                                   
Brown  responded   that  solid  waste  and   hazardous  waste                                                                   
facilities are tightly managed.   Co-Chair Mulder argued that                                                                   
HB 260 is a  water bill and addresses keeping  Alaska's water                                                                   
clean.   Commissioner  Brown emphasized  that the  Governor's                                                                   
bill is about  water, air and solid waste,  all the potential                                                                   
impacts from industry.                                                                                                          
                                                                                                                                
Representative Croft referenced  Page 4, Section ©, and asked                                                                   
if that section  allowed for the State to say  that State law                                                                   
is whatever  it is decided  to be.   Mr. Tillery  stated that                                                                   
setting up the law dealing with  future amended statutes is a                                                                   
problem, particularly  in this case, as it does  not exist in                                                                   
current statute.   The Legislature has no idea  of what these                                                                   
laws will be and  the Alaska Supreme Court has  not spoken to                                                                   
the issue in the past 20 years.   He indicated that each time                                                                   
he has checked the standards,  the process of HB 260 would be                                                                   
declared illegal.   The likely  effect is that  the standards                                                                   
would not be in effect in Alaska.                                                                                               
                                                                                                                                
Representative  Croft  asked if  the  ability  to change  the                                                                   
standard  would become  problematic.   Mr. Tillery  explained                                                                   
that  it would  be a  problem.   If EPA  had already  adopted                                                                   
their regulations,  then the Legislature could  clearly adopt                                                                   
those.   It becomes  the illegal  delegation of authority  of                                                                   
the Legislature.                                                                                                                
                                                                                                                                
Co-Chair Mulder inquired if Mr.  Tillery was stating that the                                                                   
standards proposed in HB 260 were  "illegal provisions".  Mr.                                                                   
Tillery  replied  that  the  Supreme  Court  has  not  spoken                                                                   
definitively.  He  added that in the four states  that he had                                                                   
looked   at,  and  dealing   with  the   delegation   by  the                                                                   
legislature to the federal government  for standards, each of                                                                   
those states has  come to the conclusion that it  would be an                                                                   
illegal delegation.  Based on  previous action by the Supreme                                                                   
Court, Mr. Tillery noted that  it was his view, that it would                                                                   
be likely,  that the  Court would  uphold that  they are  not                                                                   
legally permissible.                                                                                                            
                                                                                                                                
HB 260 was HELD in Committee for further consideration.                                                                         
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:20 A.M.                                                                                         
                                                                                                                                
                                                                                                                                

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