Legislature(2017 - 2018)ADAMS ROOM 519

04/07/2018 01:00 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Continued from 4/6/18
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 299 EXTEND: ALCOHOLIC BEVERAGE CONTROL BOARD TELECONFERENCED
Moved CSHB 299(FIN) Out of Committee
+= HB 322 OIL SPILLS/POLLUTION:PENALTIES;PREVENTION TELECONFERENCED
Moved CSHB 322(FIN) Out of Committee
+= HB 316 RESTRICT ACCESS MARIJUANA CRIME RECORDS TELECONFERENCED
<Bill Hearing Canceled>
+= SB 158 OIL/HAZARDOUS SUB.:CLEANUP/REIMBURSEMENT TELECONFERENCED
Scheduled but Not Heard
+= HB 268 OPIOID PRESCRIPTION INFORMATION TELECONFERENCED
Moved CSSSHB 268(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 7, 2018                                                                                            
                         1:08 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:08:59 PM                                                                                                                    
                                                                                                                                
[Note:  continuation  of  4/6/18   1:30  p.m.  meeting.  See                                                                    
separate meeting document with that date for detail.]                                                                           
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:08 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz (via teleconference)                                                                                   
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative   Adam    Wool,   Sponsor;    Mike   Navarre,                                                                    
Commissioner,   Department  of   Commerce,  Community,   and                                                                    
Economic  Development;  Kris  Curtis,  Legislative  Auditor,                                                                    
Alaska  Division of  Legislative Audit;  Representative Andy                                                                    
Josephson,  Sponsor;  Tom  Atkinson,  Staff,  Representative                                                                    
Adam Wool.                                                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Erika  McConnell, Director,  Alcohol  and Marijuana  Control                                                                    
Office,  Department  of  Commerce,  Community  and  Economic                                                                    
Development; Linda  Bruce, Legislative  Counsel, Legislative                                                                    
Legal Services; Kristin Ryan, Director, Division of Oil                                                                         
Spill Prevention and Response, Department of Environmental                                                                      
Conservation.                                                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 268    OPIOID PRESCRIPTION INFORMATION                                                                                       
                                                                                                                                
          CSHB 268(FIN)  was REPORTED out of  committee with                                                                    
          an "amend" recommendation  and with one previously                                                                    
          published fiscal impact note: FN1(CED).                                                                               
                                                                                                                                
HB 299    EXTEND: ALCOHOLIC BEVERAGE CONTROL BOARD                                                                              
                                                                                                                                
          CSHB 299(FIN)  was REPORTED out of  committee with                                                                    
          a  "do  pass"  recommendation  and  with  one  new                                                                    
          fiscal   impact  note   from  the   Department  of                                                                    
          Commerce, Community and Economic Development.                                                                         
                                                                                                                                
HB 322    OIL SPILLS/POLLUTION:PENALTIES;PREVENTION                                                                             
                                                                                                                                
          CSHB 322(FIN)  was REPORTED out of  committee with                                                                    
          four  "do  pass"  recommendations,  four  "do  not                                                                    
          pass"    recommendations,    and    two    "amend"                                                                    
          recommendations;  and with  one new  fiscal impact                                                                    
          note   from   the  Department   of   Environmental                                                                    
          Conservation.                                                                                                         
                                                                                                                                
SB 158    OIL/HAZARDOUS SUB.:CLEANUP/REIMBURSEMENT                                                                              
                                                                                                                                
          SB 158 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
Co-Chair Foster reviewed the meeting agenda.                                                                                    
                                                                                                                                
HOUSE BILL NO. 299                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the                                                                              
     Alcoholic Beverage Control Board; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
1:10:46 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster noted  the bill had been  heard the previous                                                                    
day  and  three amendments  had  been  passed. A  letter  of                                                                    
intent had been drafted, which  may not be needed because he                                                                    
anticipated an amendment may be rescinded.                                                                                      
                                                                                                                                
REPRESENTATIVE  ADAM WOOL,  SPONSOR, reviewed  the committee                                                                    
action  from the  previous day.  Three  amendments had  been                                                                    
adopted,  after  which the  committee  was  interested in  a                                                                    
letter  of  intent.  After more  consideration  he  believed                                                                    
Amendment 2,  which gave the  commissioner power  to reverse                                                                    
board  decisions, may  not be  the best  way to  achieve his                                                                    
intended  goal.  He provided  a  scenario  where a  licensee                                                                    
objected  to  a  ruling  made  by the  board.  He  had  been                                                                    
searching for  an expedited way  for another set of  eyes to                                                                    
look  at  the  issue   through  a  Department  of  Commerce,                                                                    
Community and Economic Development  (DCCED) lens rather than                                                                    
a Department of  Public Safety or law  enforcement lens. The                                                                    
division had  been moved to  DCCED in  the past, but  he was                                                                    
uncertain there had been a  transformation in the way things                                                                    
were viewed.                                                                                                                    
                                                                                                                                
Representative Wool believed the  attachment to DCCED should                                                                    
have been more significant, which  was one of the reasons he                                                                    
had included the appeal process  that could happen within 30                                                                    
days.   Additionally,  if   someone  had   a  grievance   or                                                                    
disagreement with  the board they  could appeal -  the board                                                                    
met  every  three months  and  an  administrative law  judge                                                                    
could  get involved.  He explained  the  process could  take                                                                    
many  months and  two  or three  board  meeting cycles.  The                                                                    
timeframe  could  close a  business  down,  especially if  a                                                                    
business  was forced  to close  during the  period due  to a                                                                    
board  decision. When  a small  business operating  on tight                                                                    
margins closes for a few months,  it could mean going out of                                                                    
business.  He  hoped DCCED  staff  understood  the issue  as                                                                    
well. He surmised  it may not be the best  process where the                                                                    
commissioner was only able to  see the records the board was                                                                    
able to see and was not  able to discuss the issues with the                                                                    
director because they may be adjudicating the case.                                                                             
                                                                                                                                
1:14:22 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  MOVED to RESCIND the  adoption of Amendment                                                                    
2 [adopted on 4/6/18].                                                                                                          
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
MIKE   NAVARRE,   COMMISSIONER,  DEPARTMENT   OF   COMMERCE,                                                                    
COMMUNITY,  AND ECONOMIC  DEVELOPMENT, relayed  that he  had                                                                    
not  spoken with  the Department  of Law  (DOL), but  he had                                                                    
spoken with  Representative Wool  and Alcohol  and Marijuana                                                                    
Control Office  Director Erika McConnell since  the previous                                                                    
meeting  to  gain  a better  understanding  of  the  current                                                                    
process.  He had  also reviewed  whether  Amendment 2  would                                                                    
help  accommodate Representative  Wool's  goal of  achieving                                                                    
quicker decisions  in the appeal process.  Ms. McConnell had                                                                    
communicated  there  was  an  informal  appeal  process  (in                                                                    
addition to  the formal process)  that could be  made within                                                                    
the  division or  by  the board.  He believed  it  may be  a                                                                    
better  opportunity  to  truncate  the  conflict  resolution                                                                    
issues  Representative  Wool  was   trying  to  get  to.  He                                                                    
believed  the   ability  for   an  appeal   to  go   to  the                                                                    
commissioner  would  compromise  commissioner's  ability  to                                                                    
participate in the  process because he would not  be able to                                                                    
gather  information  in  an  informal   process  if  he  was                                                                    
adjudicating an appeal.                                                                                                         
                                                                                                                                
Mr. Navarre  had also spoken with  Representative Wool about                                                                    
the fact  that it  was an administrative  issue; it  had not                                                                    
been something identified  in the audit with  respect to the                                                                    
board  and "this  is  an  extension of  the  board." He  was                                                                    
disinclined to  deal in  a rushed manner  in a  process that                                                                    
should  be  deliberative  in terms  of  changes  that  could                                                                    
manifest as  unforeseen impacts within the  division and for                                                                    
individuals regulated  by the division.  He would  work with                                                                    
Ms. McConnell  and the  board to  develop a  better conflict                                                                    
resolution process  that would  hopefully meet the  needs of                                                                    
individuals being regulated  and the unique responsibilities                                                                    
the division had for the protection of public safety.                                                                           
                                                                                                                                
1:17:14 PM                                                                                                                    
                                                                                                                                
ERIKA  MCCONNELL, DIRECTOR,  ALCOHOL  and MARIJUANA  CONTROL                                                                    
OFFICE,  DEPARTMENT  OF  COMMERCE,  COMMUNITY  AND  ECONOMIC                                                                    
DEVELOPMENT  (via  teleconference),  relayed  that  she  had                                                                    
spoken with the  ABC Board chair and he did  not support the                                                                    
amendment.  She   shared  that  the  chair   had  called  an                                                                    
emergency meeting  for the following Tuesday  with the board                                                                    
to discuss  the amendments. She  also had concerns  with the                                                                    
amendments. She spoke to her  concern about Amendment 2 with                                                                    
prepared remarks:                                                                                                               
                                                                                                                                
     Regarding  Amendment 2,  the five  member ABC  Board is                                                                    
     comprised  of  2  industry  members,  a  public  safety                                                                    
     member, a  rural member, and  a general  public member.                                                                    
     The  members are  vetted by  the governor's  Boards and                                                                    
     Commissions  Office,  appointed  by the  governor,  and                                                                    
     confirmed  by the  legislature.  These individuals  are                                                                    
     familiar with  the industry and  with the  statutes and                                                                    
     regulations  that govern  the manufacture,  possession,                                                                    
     and  sale of  alcohol. They  manage over  1,800 alcohol                                                                    
     licenses. As  required by statute,  the board  meets at                                                                    
     least once  per year in  each judicial district  in the                                                                    
     state  "to  study this  title  and  to modify  existing                                                                    
     board  regulations  in  light of  statewide  and  local                                                                    
     problems."  The  board  may  hold  public  hearings  to                                                                    
     ascertain  the  reaction  of  the  public  or  a  local                                                                    
     governing  body to  a license  application and  where a                                                                    
     local  government   protest  or  public   objection  is                                                                    
     received, such a hearing is required.                                                                                      
                                                                                                                                
     As all of  you are aware, alcohol  has both significant                                                                    
     negative effects  on communities  in our state  as well                                                                    
     as  significant positive  economic  effects. Under  the                                                                    
     current Title IV, the legislature  has committed to the                                                                    
     five member  board with expertise, knowledge  base, and                                                                    
     sensitivity  to the  issues to  appropriately ascertain                                                                    
     the public interest  in controlling alcoholic beverages                                                                    
     within the state.                                                                                                          
                                                                                                                                
     The  amendment   adopted  yesterday  could   cede  this                                                                    
     authority to the commissioner who  has none of the same                                                                    
     requirements  relating   to  the  establishment   of  a                                                                    
     knowledge  base,  development  of an  understanding  of                                                                    
     statewide  and  local  problems  relating  to  alcohol,                                                                    
     through travel and public meetings,  and actions in the                                                                    
     public  interest.  To  replace the  judgement  of  five                                                                    
     individuals with  the judgement  of one is  puzzling at                                                                    
     best.                                                                                                                      
                                                                                                                                
     There   are  additional   sections   of  statute   that                                                                    
     authorize  the  board   to  take  particular  licensing                                                                    
     actions that may be  affected particularly by Amendment                                                                    
     2,  which  has  the   potential  to  create  regulatory                                                                    
     confusion.   Those  sections   are  AS   04.06.090,  AS                                                                    
     04.11.040,  and AS  04.11.480. Yesterday's  Amendment 2                                                                    
     in Section 3  would appear to muddy  the appeal process                                                                    
     for  applicants   and  licensees.   AS  04.11.510(b)(1)                                                                    
     states that  if an application is  denied the applicant                                                                    
     is  entitled  to  a formal  hearing  conducted  by  the                                                                    
     office  of administrative  hearings in  accordance with                                                                    
     the  Administrative Procedures  Act, Section  44.62.330                                                                    
     through  Section 44.62.630.  AS  44.62.500 states  that                                                                    
     the proposed  decision of the administrative  law judge                                                                    
     may  be  adopted by  the  agency,  which would  be  the                                                                    
     board,  and is  considered the  final decision  for the                                                                    
     purposes of  AS 04.11.560,  which may then  be appealed                                                                    
     to  superior court.  It is  entirely unclear  where the                                                                    
     appeal  to  the  commissioner  of  Commerce  would  fit                                                                    
     within that process.                                                                                                       
                                                                                                                                
     Another   concern,  having   participated  in   several                                                                    
     administrative hearings  in my  tenure as  director, is                                                                    
     who would be  assisting the commissioner in  his or her                                                                    
     review of the records and  how the review of the record                                                                    
     would proceed.  In some of  these cases the  record can                                                                    
     go  to hundreds  of pages  and can  require significant                                                                    
     time and resources to adequately  review. Thank you for                                                                    
     the opportunity to speak on Amendment 2.                                                                                   
                                                                                                                                
1:22:14 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked if  the removal of  Amendment 2                                                                    
impacted the other two adopted amendments.                                                                                      
                                                                                                                                
Ms. McConnell  replied that  based on  Representative Wool's                                                                    
testimony from  the previous day,  she believed  Amendment 3                                                                    
had been offered because of  Amendment 2. She questioned the                                                                    
purpose of Amendment 3 if Amendment 2 was repealed.                                                                             
                                                                                                                                
Representative  Wool   agreed  that  Amendment   3  followed                                                                    
Amendment 2 since  it was no longer  only for administrative                                                                    
purposes. He stated  that to have something  in a department                                                                    
for  administrative purposes  only, it  was possible  to put                                                                    
the ABC Office  or the Alcohol and  Marijuana Control Office                                                                    
(AMCO)   in  any   department   (e.g.   the  Department   of                                                                    
Corrections)  -  he wondered  what  the  difference was.  He                                                                    
stated,   "they're  moving   them   around  from   different                                                                    
departments with  intent." He did  not have  the legislative                                                                    
intent on  hand describing  the reason  the office  had been                                                                    
moved from DPS to DCCED. He  believed the intent was to make                                                                    
the  division  more  sensitive   to  the  needs  of  private                                                                    
business.                                                                                                                       
                                                                                                                                
Representative  Wool referenced  testimony by  Ms. McConnell                                                                    
that alcohol had a negative  impact on society in Alaska and                                                                    
a positive economic  impact. He stressed alcohol  also had a                                                                    
positive impact on  society - there were  people who enjoyed                                                                    
a  glass of  wine  with  dinner, which  was  not a  negative                                                                    
thing. He was in favor of  Amendment 3 that would delete the                                                                    
language  specifying  the  ABC  Board was  under  DCCED  for                                                                    
administrative  purposes  only.  He supported  a  connection                                                                    
between the  AMCO and  ABC Board  with DCCED.  He reiterated                                                                    
there  was  economic  value.  He  reviewed  Ms.  McConnell's                                                                    
explanation of  the appeal process  the previous  day, which                                                                    
required going  to the board,  an administrative  law judge,                                                                    
and the state  superior court. He stated the  process took a                                                                    
year  on  average.  He  stressed the  average  mom  and  pop                                                                    
business owner should  have access to a  shorter recourse to                                                                    
try to  resolve issues. He  was not claiming  resolution did                                                                    
not occur  in an informal way,  but he had read  about cases                                                                    
that were not resolved.                                                                                                         
                                                                                                                                
Representative Wool supported having  eyes on the issue that                                                                    
were more commerce friendly. He  wanted to keep Amendment 3.                                                                    
He  understood  the  confusion   that  could  be  caused  by                                                                    
Amendment 2, but he did  not believe the current process was                                                                    
all  that  great.  He  specified that  when  someone  had  a                                                                    
disagreement  it could  take months.  He  continued that  if                                                                    
someone's license  was denied  because they  did not  have a                                                                    
set of  finger prints  and the  operation of  their business                                                                    
was  on hold,  they may  close. He  did not  believe it  was                                                                    
fair.  He wanted  to hear  from  someone else  on the  topic                                                                    
besides the board and the director.                                                                                             
                                                                                                                                
1:25:48 PM                                                                                                                    
                                                                                                                                
Representative Wilson referenced  Ms. McConnell's mention of                                                                    
an ABC  Board meeting the  coming Tuesday. She asked  if the                                                                    
meeting would  look at the  impact of the  amendment changes                                                                    
during the  meeting. She wondered  if the agency  planned to                                                                    
weigh  in  on the  bill's  impact  on  the board  after  its                                                                    
Tuesday meeting.                                                                                                                
                                                                                                                                
Ms. McConnell  answered in the  affirmative. The  intent was                                                                    
for the board  to provide its opinion to  the legislature on                                                                    
whatever amendments remain in the bill.                                                                                         
                                                                                                                                
Vice-Chair Gara stated that Amendment  2 was the guts of the                                                                    
agency    review.   He    asked   for    verification   that                                                                    
Representative Wool  was comfortable that  without Amendment                                                                    
2, Amendment  3 still  satisfied the goal  of having  a more                                                                    
independent review.                                                                                                             
                                                                                                                                
Representative Wool answered in  the negative. He understood                                                                    
the  concern that  as written,  Amendment 2  may hamper  the                                                                    
ability  for   someone  in  the  commissioner's   office  to                                                                    
interface with the division to  resolve an issue in a timely                                                                    
manner,  while offering  another  set of  eyes.  He did  not                                                                    
really  want  to go  through  the  administrative law  judge                                                                    
process  - he  noted he  was not  claiming there  was not  a                                                                    
place for that.  He wanted to resolve some of  the issues in                                                                    
a timelier  manner. He  was amenable  to the  elimination of                                                                    
Amendment  2 if  it  could help  the  situation. He  thought                                                                    
perhaps there  would be another  solution down the  road. He                                                                    
noted  there  was  a  Title IV  rewrite  going  through  and                                                                    
perhaps that was a more appropriate time.                                                                                       
                                                                                                                                
1:27:57 PM                                                                                                                    
                                                                                                                                
Commissioner Navarre commented  on Ms. McConnell's testimony                                                                    
that the  board had  five vetted  members. He  remarked that                                                                    
the members were also lay  members who came together at four                                                                    
meetings  per   year  (or  more   if  called   into  special                                                                    
meetings).  He stated  the individuals  could  not speak  to                                                                    
each other  to make  decisions prior  to meetings.  He added                                                                    
the   members  all   had  lives   they  were   leading.  The                                                                    
information  that came  to  the board  came  in a  truncated                                                                    
period  of time  when  meeting for  board deliberations.  He                                                                    
explained  that most  of the  board  packet information  was                                                                    
provided by the division.  He explained from his perspective                                                                    
and   he    believed   the   frustration    experienced   by                                                                    
Representative  Wool, reflected  a desire  to find  a better                                                                    
way to  do conflict  resolution. He  did not  think usurping                                                                    
the appeal process  had that outcome. He  believed the issue                                                                    
had more  to do  with an  administrative function.  He would                                                                    
try  to  have the  discussion  with  the board  and  further                                                                    
discussions with  Ms. McConnell to determine  something that                                                                    
worked for everyone.                                                                                                            
                                                                                                                                
Representative   Wool   referenced  Commissioner   Navarre's                                                                    
mention of  an informal hearing  process. He did  not recall                                                                    
Ms. McConnell  mentioning the process  in her  testimony the                                                                    
previous day.  He asked to  hear from Ms. McConnell  that it                                                                    
was part  of the  process. Additionally,  he wondered  if it                                                                    
was  something that  someone from  the  department could  be                                                                    
notified  of  or  asked for  advice  on.  Alternatively,  he                                                                    
wondered if that was off limits.                                                                                                
                                                                                                                                
Ms. McConnell replied that after  the board denied a license                                                                    
application, the  applicant had  the opportunity  to request                                                                    
an  informal  conference with  either  the  director or  the                                                                    
board.  She  believed  it  would  be  up  to  the  board  to                                                                    
determine  whether or  not  other  individuals within  DCCED                                                                    
could  be  included.  She  stated   it  was  something  that                                                                    
Commissioner Navarre and the board could discuss.                                                                               
                                                                                                                                
1:30:34 PM                                                                                                                    
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, action on Amendment 2 was RESCINDED.                                                                      
                                                                                                                                
Co-Chair Seaton  was unsure of  the purpose of  Amendment 3.                                                                    
He  stated it  meant DCCED  would have  some regulatory  and                                                                    
intermediate   function,  without   identifying  what   that                                                                    
function was. He was uncertain  it would help the situation.                                                                    
He  thought the  interaction could  be quite  different than                                                                    
what   the  legislature   intended   because   it  was   not                                                                    
identifying anything.  He continued  that the  committee had                                                                    
just  eliminated the  process  discussed in  Amendment 2  to                                                                    
allow that  normal interaction and  control in  a department                                                                    
and  one   of  its   agencies.  The  amendment   would  have                                                                    
dramatically changed the structure  when the agency had been                                                                    
placed under the department  for administrative purposes. He                                                                    
was uncertain how the legislature  would be implementing the                                                                    
desire  by   leaving  some  amorphous   goal  to   have  the                                                                    
department control the board or interact with the board.                                                                        
                                                                                                                                
1:32:51 PM                                                                                                                    
                                                                                                                                
Representative  Wilson   agreed.  She  no  longer   saw  the                                                                    
connection  with Amendment  3.  She understood  there was  a                                                                    
rewrite of  Title IV. She  thought perhaps Title IV  was the                                                                    
more appropriate  place to consider the  issue. She reasoned                                                                    
that the  bill's purpose was  to provide a  board extension,                                                                    
which  was necessary.  She asked  how Amendment  3 could  be                                                                    
beneficial. She  wondered what could happen  by changing the                                                                    
board  to  a  regulatory   and  quasi-judicial  agency.  She                                                                    
reiterated her belief  there was no longer  a connection for                                                                    
Amendment 3.                                                                                                                    
                                                                                                                                
Representative  Wool   thought  taking  away   the  language                                                                    
[specifying   that   the   board  was   under   DCCED   for]                                                                    
administrative  purposes only  did not  give the  department                                                                    
more  power. He  believed for  example, if  the commissioner                                                                    
was called upon  to advise or listen in on  a case, suddenly                                                                    
the board would no longer  be under DCCED for administrative                                                                    
purposes only. He  did not believe that was a  bad thing. He                                                                    
reasoned  that if  there  was a  need  for communication  it                                                                    
would not  be forbidden [if  the amendment was  adopted]. He                                                                    
liked the amendment even without Amendment 2.                                                                                   
                                                                                                                                
Co-Chair  Foster  asked if  Ms.  McConnell  had comments  on                                                                    
Amendment 3.                                                                                                                    
                                                                                                                                
1:35:08 PM                                                                                                                    
                                                                                                                                
Ms.  McConnell  shared  the  same  uncertainty  as  Co-Chair                                                                    
Seaton and Representative Wilson on Amendment 3.                                                                                
                                                                                                                                
Representative  Wilson  MOVED  to RESCIND  the  adoption  of                                                                    
Amendment 3 [adopted on 4/6/18].                                                                                                
                                                                                                                                
Vice-Chair Gara OBJECTED.                                                                                                       
                                                                                                                                
Representative Wool  believed moving  the board from  DPS to                                                                    
DCCED for administrative purposes  only seemed like a waste.                                                                    
He thought the  move should have some  meaning, otherwise he                                                                    
believed  it was  for naught.  He opined  that removing  the                                                                    
language  "for  administrative   purposes  only"  gave  some                                                                    
intent  to the  move between  two departments.  He added  he                                                                    
could look  up the  historical record  to determine  why the                                                                    
move had taken place.                                                                                                           
                                                                                                                                
Vice-Chair Gara  thought they  were arguing  over semantics.                                                                    
He thought the semantics in  Amendment 3 were more accurate.                                                                    
Under   DCCED,  the   ABC  Board   was   allowed  to   issue                                                                    
regulations. Part  of the amendment specified  the board was                                                                    
regulatory  because  it  issued regulations.  He  elaborated                                                                    
that  the  board  made  decisions  on  licenses,  penalties,                                                                    
renewals, and revocations. Amendment  3 classified the board                                                                    
as a quasi-judicial agency, which  he believed was accurate.                                                                    
He believed  the amendment merely  specified what  the board                                                                    
does. He  did not see a  problem with the amendment.  He did                                                                    
not  see the  amendment  getting  where Representative  Wool                                                                    
wanted in  terms of giving  the commissioner the  ability to                                                                    
make  decisions, but  he believed  the amendment  accurately                                                                    
described what the board did.                                                                                                   
                                                                                                                                
1:37:24 PM                                                                                                                    
                                                                                                                                
Co-Chair   Seaton   stated    that   normally   departmental                                                                    
regulations  had to  be approved  by  the commissioner.  The                                                                    
wording in  Amendment 3  specified it would  not be  the way                                                                    
the board  would work. He  elaborated that  the commissioner                                                                    
would  not  be able  to  override  regulations. He  believed                                                                    
removing the  language would mean the  commissioner would be                                                                    
in charge  of and the  final decision maker  on regulations.                                                                    
He  speculated the  language  had  originally been  included                                                                    
because  the  intent   had  been  to  move   the  board  for                                                                    
administration to get  it out of DPS, but not  for the final                                                                    
approval of regulations made by the  board to be made by the                                                                    
commissioner. He thought the  amendment muddied the question                                                                    
of regulations and approval of regulations.                                                                                     
                                                                                                                                
Co-Chair Foster listed individuals available for questions.                                                                     
                                                                                                                                
Vice-Chair Gara  addressed a  question to  Legislative Legal                                                                    
Services. He  reviewed that the committee  had rescinded its                                                                    
action on  Amendment 2, which  would have given  the [DCCED]                                                                    
commissioner   certain   decision  making   authority.   The                                                                    
committee  was currently  considering  a  motion to  rescind                                                                    
Amendment  3.  His  understanding  was  the  board  proposed                                                                    
regulations  (confirmed by  others)  and  made decisions  on                                                                    
licenses including revocations  and penalties. Therefore, he                                                                    
did not  believe it seemed  odd to  classify the board  as a                                                                    
regulatory and  quasi-judicial agency. He asked  for comment                                                                    
on Amendment 3.                                                                                                                 
                                                                                                                                
1:41:00 PM                                                                                                                    
                                                                                                                                
LINDA   BRUCE,   LEGISLATIVE  COUNSEL,   LEGISLATIVE   LEGAL                                                                    
SERVICES (via  teleconference), stated her  understanding of                                                                    
the  question. She  questioned whether  Vice-Chair Gara  was                                                                    
asking if the amendment  would affect the board's regulatory                                                                    
and  quasi-judicial authority.  Alternatively, she  wondered                                                                    
if   he  was   asking  what   would  happen   if  the   "for                                                                    
administrative purposes" language was removed.                                                                                  
                                                                                                                                
Vice-Chair Gara clarified he wondered  what the effect would                                                                    
be  of leaving  Amendment  3  in the  bill.  He thought  the                                                                    
amendment  seemed consistent  with  the board's  activities.                                                                    
Alternatively,  he   wondered  what   the  removal   of  the                                                                    
amendment would do.                                                                                                             
                                                                                                                                
Ms.  Bruce  responded that  by  removing  the language  "for                                                                    
administrative  purposes only,"  the  department would  have                                                                    
the power  to manage the ABC  Board like any other  board as                                                                    
permitted within the statutory  power of the department. The                                                                    
department would  have potentially oversight  over operating                                                                    
and administrative procedures of  the board. However, within                                                                    
Title IV there was no  specification where duties and powers                                                                    
were  directed towards  the department  over the  board. She                                                                    
stated it was a little unclear.  She noted she had not had a                                                                    
chance to fully  analyze the question and would  be happy to                                                                    
provide a written response with more detail.                                                                                    
                                                                                                                                
1:42:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  pointed out  that the  duties of  the board                                                                    
were listed in current statute.  The only change Amendment 3                                                                    
would make  was the removal of  "for administrative purposes                                                                    
only"  language. He  stated that  if the  amendment did  not                                                                    
pass,  current  statute  already contained  the  amendment's                                                                    
language in lines 7 through 12.                                                                                                 
                                                                                                                                
Representative   Wilson  stated   that  normally   when  the                                                                    
legislature  changed  the duties  of  a  board, the  process                                                                    
involved seeking  the board's  input. She  was uncomfortable                                                                    
that the amendments had sparked an emergency board meeting.                                                                     
                                                                                                                                
Representative  Guttenberg supported  the motion  to rescind                                                                    
the amendment. He looked at  AS 04.06.010 and relayed he had                                                                    
been  present when  the board  had  been moved  from DPS  to                                                                    
DCCED. He  believed one  of the reasons  the move  had taken                                                                    
place was they wanted to deal  with DCCED instead of being a                                                                    
police board.  He continued that  under current  statute the                                                                    
board  was  a  regulatory   and  quasi-judicial  agency.  He                                                                    
recalled dialogue  about the commissioner  having discussion                                                                    
with  the  board.  He  stated  that  if  the  amendment  was                                                                    
adopted, the commissioner would  have no function remaining.                                                                    
He  believed  there was  a  positive  aspect of  having  the                                                                    
commissioner serve an administrative  role in the discussion                                                                    
with the administrative function of  the board. He stated if                                                                    
the  language  was  removed,  the  commissioner's  role  was                                                                    
removed.                                                                                                                        
                                                                                                                                
Representative Wool replied that  the amendment would remove                                                                    
the language  "administrative purposes only," but  would not                                                                    
take    away    administrative    purposes.    He    thought                                                                    
Representative  Guttenberg was  saying the  department would                                                                    
lose all administrative purposes.                                                                                               
                                                                                                                                
Representative  Guttenberg  believed   the  amendment  would                                                                    
remove   the  department's   role  for   all  administrative                                                                    
purposes.  He stated  the situation  had arisen  before when                                                                    
the  board  had  specified  it   was  independent  from  the                                                                    
department and  that the department  had nothing to  do with                                                                    
how  the  board operated.  He  stated  it  had led  to  some                                                                    
problematic situations in the past.  He wanted to ensure the                                                                    
commissioner had some role in  oversight. He stated that the                                                                    
board  would  have  the  regulatory,  quasi-judicial  agency                                                                    
role, but the commissioner had some purpose as well.                                                                            
                                                                                                                                
1:46:41 PM                                                                                                                    
                                                                                                                                
Representative  Wool was  confused with  the interpretation.                                                                    
He  thought by  removing  the  language "for  administrative                                                                    
purposes only"  meant the department's role  was not limited                                                                    
to  administrative  purposes.  He explained  that  it  would                                                                    
remove the  commissioner from the  process. He  directed the                                                                    
question  to Legislative  Legal  Services and  asked if  the                                                                    
marijuana board also had similar language.                                                                                      
                                                                                                                                
Ms. Bruce asked for the question to be restated.                                                                                
                                                                                                                                
Representative  Guttenberg  complied.  He  asked  about  the                                                                    
commissioner's   role    and   what   the    language   "for                                                                    
administrative purposes only" meant in the statute.                                                                             
                                                                                                                                
Ms. Bruce  answered that currently  the department  only had                                                                    
oversight over  the board  for administrative  purposes. The                                                                    
deletion of the language  "for administrative purposes only"                                                                    
would  still  mean the  department  had  oversight over  the                                                                    
board for  administrative purposes.  She confirmed  that the                                                                    
same  language  was used  for  the  Marijuana Control  Board                                                                    
under  AS  17.38.080, which  provided  the  board was  under                                                                    
DCCED for administrative purposes only.                                                                                         
                                                                                                                                
Representative Guttenberg  asked what role  the commissioner                                                                    
would have  in relationship  to the  board if  the amendment                                                                    
was maintained.                                                                                                                 
                                                                                                                                
Ms.  Bruce   was  uncertain.  There  would   potentially  be                                                                    
operating and administrative  oversight by the commissioner,                                                                    
but  it depended  on the  statutory authority  given to  the                                                                    
department and commissioner,  which she had not  had time to                                                                    
analyze.                                                                                                                        
                                                                                                                                
1:49:50 PM                                                                                                                    
                                                                                                                                
Representative   Guttenberg   asked   if  anyone   had   the                                                                    
information.                                                                                                                    
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT, relayed that  the Division of Legislative                                                                    
Audit looked  at numerous quasi-judicial  entities including                                                                    
the  Commercial Fisheries  Entry Commission  and the  Parole                                                                    
Board.  The  entities were  required  to  be independent  in                                                                    
their  judicial   function.  She  believed  that   the  "for                                                                    
administrative purposes  only" language would  almost always                                                                    
appear associated  with the various entities.  She suggested                                                                    
the language  likely existed when  the board  had previously                                                                    
been under DPS and the Department of Revenue (DOR).                                                                             
                                                                                                                                
Representative  Pruitt believed  the  board  had been  moved                                                                    
from  DPS to  DCCED because  DPS had  been too  involved and                                                                    
there was  a feeling  of punishment  of license  holders and                                                                    
the  desire to  move  the  board to  a  more  of a  business                                                                    
mindset.   He reasoned the existing  statutory language went                                                                    
along  with that  line of  thinking. He  wondered about  the                                                                    
intent  and thought  the current  language aligned  with the                                                                    
move from DPS to DCCED.                                                                                                         
                                                                                                                                
1:52:22 PM                                                                                                                    
                                                                                                                                
Ms.  McConnell  answered that  she  had  not worked  in  her                                                                    
current position in 2012 when  the board had been moved from                                                                    
DPS  to  DCCED.  She  offered to  research  the  legislative                                                                    
history  and provide  a written  response to  the committee.                                                                    
She added  that under AS 04.06.070  "appointment and removal                                                                    
of  the  director,"  the  director   was  appointed  by  the                                                                    
governor, but  absent some malfeasance only  the board could                                                                    
remove  the  director. She  worked  for  the board;  if  the                                                                    
interpretation of the  effects of the amendment  was to give                                                                    
the commissioner of  DCCED the authority over  the agency it                                                                    
became very confusing  in her role. She  elaborated that she                                                                    
answered  to   the  board,  yet  under   the  amendment  the                                                                    
commissioner  would have  undefined authority.  She believed                                                                    
the  intent needed  clarification.  She planned  to ask  the                                                                    
board for  its opinion on  the amendment during  its meeting                                                                    
the coming Tuesday.                                                                                                             
                                                                                                                                
Representative Pruitt  stated they were having  to piece the                                                                    
items  together  to  fully  understand.  He  referenced  the                                                                    
testimony  by  Ms. Curtis  and  testimony  by Ms.  McConnell                                                                    
about trying  to keep the  independence of the  board. Based                                                                    
on the testimony he believed  the current language should be                                                                    
maintained. He  did not believe  the debate was  merely over                                                                    
semantics.  He  thought  rescinding the  amendment  was  the                                                                    
appropriate action.                                                                                                             
                                                                                                                                
Co-Chair  Seaton  directed  a  question to  Ms.  Bruce  with                                                                    
Legislative Legal  Services. He stated that  normally agency                                                                    
regulations  were  approved  by   the  commissioner  of  the                                                                    
department. He  asked if  the removal  of the  language "for                                                                    
administrative  purposes  only"  would  call  into  question                                                                    
whether  the  board  could  independently  set  regulations.                                                                    
Alternatively,  he wondered  if the  regulations would  fall                                                                    
under the commissioner.                                                                                                         
                                                                                                                                
Ms.  Bruce answered  that the  commissioner  would not  have                                                                    
final say on regulations adopted by the board.                                                                                  
                                                                                                                                
Co-Chair Foster  noted Representative  Ortiz had  joined the                                                                    
meeting earlier via teleconference.                                                                                             
                                                                                                                                
Vice-Chair  Gara  spoke  to the  Amendment  3  language.  He                                                                    
thought  he had  heard statements  that the  amendment would                                                                    
make the department a  regulatory and quasi-judicial agency.                                                                    
However, he  believed the amendment  would make the  board a                                                                    
regulatory  and  quasi-judicial  agency. He  read  from  the                                                                    
amendment. He asked if his understanding was accurate.                                                                          
                                                                                                                                
1:57:33 PM                                                                                                                    
                                                                                                                                
Ms. Bruce  responded that the  board was the  regulatory and                                                                    
quasi-judicial  agency  under   current  statute  and  would                                                                    
remain so under Amendment 3.                                                                                                    
                                                                                                                                
Commissioner Navarre  relayed that the board  had previously                                                                    
been housed under  DOR before moving to DPS  and then DCCED.                                                                    
He  believed the  transfers had  occurred because  there had                                                                    
been some frustration about  maintaining the independence of                                                                    
the board and administering of  a division or department. He                                                                    
believed   maintaining   the    board's   independence   was                                                                    
important.  He thought  the head  of  the department  should                                                                    
have some  ability to advise  a division about how  the laws                                                                    
were  administered, but  he did  not  believe the  amendment                                                                    
language would fix the issue.  He thought the language would                                                                    
be  inconsistent  with  the   way  independent  boards  were                                                                    
administered throughout various departments.                                                                                    
                                                                                                                                
Vice-Chair Gara MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll  call vote  was taken  on the  motion to  rescind the                                                                    
adoption of Amendment 3.                                                                                                        
                                                                                                                                
IN FAVOR: Tilton,   Wilson,   Kawasaki,  Pruitt,   Thompson,                                                                    
Seaton                                                                                                                          
OPPOSED: Gara, Grenn, Guttenberg, Ortiz, Foster                                                                                 
                                                                                                                                
The MOTION  PASSED (6/5). There being  NO further OBJECTION,                                                                    
the adoption of Amendment 3 was RESCINDED.                                                                                      
                                                                                                                                
Vice-Chair  Gara reviewed  the fiscal  note from  DCCED. The                                                                    
note  reflected  annual  board   operation  costs  of  $1.66                                                                    
million (through FY 23) to be paid for with fees.                                                                               
                                                                                                                                
Co-Chair  Seaton  MOVED  to  REPORT  CSHB  299(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
CSHB  299(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass"  recommendation and  with one  new fiscal  impact note                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
Development.                                                                                                                    
                                                                                                                                
2:02:05 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:09:00 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 322                                                                                                            
                                                                                                                                
     "An  Act relating  to penalties  for discharges  of oil                                                                    
     and  other   pollution  violations;  relating   to  oil                                                                    
     discharge   prevention   and  contingency   plans   for                                                                    
     commercial motor  vehicles transporting crude  oil; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
2:09:06 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  indicated that the  bill had been  heard on                                                                    
March 29, 2018.  He asked the sponsor of the  bill if he had                                                                    
any comments before taking up amendments.                                                                                       
                                                                                                                                
2:09:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ANDY  JOSEPHSON, SPONSOR,  referenced  prior                                                                    
committee  discussion about  the bill's  purpose. He  shared                                                                    
the department's  [Department of  Environmental Conservation                                                                    
(DEC)] belief  it was important to  update penalty authority                                                                    
at present  in case it  was needed;  it was not  possible to                                                                    
"retroactively work  our way  out of that  and look  to 1977                                                                    
and 1989 penalty schedules."  Additionally, it was expensive                                                                    
and time  consuming for  the department  to deal  with small                                                                    
penalties  without going  through  the  legal system  (under                                                                    
current   law).   The   bill  would   allow   administrative                                                                    
penalties. He continued it was  easier for the department to                                                                    
obtain  cost  recovery  if  the  option  was  available.  He                                                                    
elaborated   that  the   department  noted,   and  the   law                                                                    
reflected, that  penalties of an administrative  nature were                                                                    
available  for  food  safety,  public  drinking  water,  and                                                                    
monitoring  of  contaminates. The  Environmental  Protection                                                                    
Agency  required administrative  penalty  authority for  all                                                                    
programs where the  state had taken primacy.  He stated that                                                                    
the idea was not novel. Relative  to the types of spills, he                                                                    
agreed  with the  Alaska Oil  and  Gas Association's  (AOGA)                                                                    
position that it was generally  not the main offender. About                                                                    
90 percent  of the spills requiring  DEC's intervention were                                                                    
not  related  to  the  oil industry,  but  were  related  to                                                                    
fishing boats,  abandoned mines,  and other  incidences. The                                                                    
bill was not designed to come after any one industry.                                                                           
                                                                                                                                
2:12:15 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara thought  it was an open  question on whether                                                                    
the state could retroactively adopt penalties.                                                                                  
                                                                                                                                
Co-Chair Foster  MOVED to  ADOPT Amendment  1, 30-LS1015\U.2                                                                    
(Nauman,    3/16/18)   (copy    on   file)    sponsored   by                                                                    
Representative Ortiz:                                                                                                           
                                                                                                                                
     Page 2, line 27:                                                                                                           
     Delete "$20"                                                                                                               
     Insert "$40"                                                                                                               
                                                                                                                                
     Page 2, line 30:                                                                                                           
     Delete "$5"                                                                                                                
     Insert "$10"                                                                                                               
                                                                                                                                
     Page 3, line 1:                                                                                                            
     Delete "$2"                                                                                                                
     Insert "$4"                                                                                                                
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Representative  Ortiz explained  that the  amendment aligned                                                                    
with  the spirit  of HB  322 in  the sense  it would  update                                                                    
penalties  last changed  in  1989. He  did  not believe  the                                                                    
increase  fully  accounted  for inflation.  The  amendment's                                                                    
purpose was to update the penalties.                                                                                            
                                                                                                                                
Representative  Wilson  directed  a  question  to  DEC.  She                                                                    
stated the department  had raised the penalties  from $10 to                                                                    
$20 and $2.50 per gallon to  $5.00 per gallon. She asked why                                                                    
the  department had  selected the  numbers  in the  original                                                                    
bill.                                                                                                                           
                                                                                                                                
KRISTIN  RYAN, DIRECTOR,  DIVISION OF  OIL SPILL  PREVENTION                                                                    
AND RESPONSE, DEPARTMENT  OF ENVIRONMENTAL CONSERVATION (via                                                                    
teleconference), explained that the  numbers included in the                                                                    
bill by  Representative Josephson accounted for  the cost of                                                                    
inflation.  She  deferred  to Representative  Josephson  for                                                                    
further detail.                                                                                                                 
                                                                                                                                
Representative  Josephson  replied  that with  exception  to                                                                    
Amendments 1 and  2 the bill contained  an update reflecting                                                                    
inflation. The figures  in Section 2 of  the bill (Amendment                                                                    
1) doubled  the existing out-of-date figures.  The amendment                                                                    
was to  be consistent  with other  parts of  the legislation                                                                    
that increased to inflation.                                                                                                    
                                                                                                                                
Representative  Wilson observed  that the  updated penalties                                                                    
appeared  to  be  four  times the  amount  of  the  existing                                                                    
penalties.                                                                                                                      
                                                                                                                                
Representative  Josephson responded  that he  would have  to                                                                    
check to  see if  the proposed numbers  were four  times the                                                                    
existing amounts.  The changes  in Amendments  1 and  2 were                                                                    
designed to be consistent with  the increases in the rest of                                                                    
the legislation.                                                                                                                
                                                                                                                                
2:16:12 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki referenced  a presentation  [by the                                                                    
sponsor] from  a previous bill  hearing ["HB 322:  The Spill                                                                    
Bill"  provided  on  March  29, 2018  (copy  on  file)].  He                                                                    
pointed to  Section 2, which  specified the  2018 equivalent                                                                    
value would  be closer to  $39.70. He asked why  the sponsor                                                                    
had decided to  set the penalties at half  of what inflation                                                                    
would have been in Sections 2 and 3 of the bill.                                                                                
                                                                                                                                
Representative  Josephson replied  that the  figures in  the                                                                    
bill reflected  the will of  the House  Resources Committee.                                                                    
He elaborated  that the committee  had chosen to  update the                                                                    
figures  for inflation  with the  exception  of the  figures                                                                    
included in  Amendments 1 and  2. The amendments  would give                                                                    
the House Finance Committee an opportunity to weigh in.                                                                         
                                                                                                                                
Representative Wilson  looked at  page 5, lines  8 and  9 of                                                                    
the  bill.  She  noted  the  bill  updated  various  penalty                                                                    
thresholds from  $500 to $1,000,  $100,000 to  $200,000, and                                                                    
$10,000 to $25,000. She turned to  page 6, lines 5 and 6 and                                                                    
observed  the same  thing was  happening.  She believed  the                                                                    
initial numbers in the bill had  to be close to inflation if                                                                    
pages 5 and 6 reflected it.                                                                                                     
                                                                                                                                
Representative Josephson deferred to his staff.                                                                                 
                                                                                                                                
TOM ATKINSON, STAFF, REPRESENTATIVE  ADAM WOOL, replied that                                                                    
the numbers had  been adjusted for inflation in  most of the                                                                    
bill sections. He stated that often  it had worked out to be                                                                    
approximately  double the  current penalty.  In some  cases,                                                                    
the  daily  penalty  had  been  multiplied  by  5.  How  the                                                                    
penalties  had  been  set throughout  the  bill  varied.  He                                                                    
referenced   Section  2   where  the   number  veered   from                                                                    
inflation. He  elaborated that the  Section 2  penalties had                                                                    
been set in December 1977;  if the penalties were changed to                                                                    
reflect  inflation they  would  be four  times the  existing                                                                    
numbers,  which seemed  extreme. The  reasoning had  been it                                                                    
seemed more acceptable to double those penalties.                                                                               
                                                                                                                                
Representative Wilson remarked on  a statement made that all                                                                    
of  the  other  penalties  had  been  increased  to  reflect                                                                    
inflation. She thought  the numbers would be  closer to four                                                                    
times  their  existing  amounts  if the  goal  was  to  keep                                                                    
everything the same [increase levels equally].                                                                                  
                                                                                                                                
Representative  Josephson answered  that  the penalties  had                                                                    
not all  been created at  the same time, meaning  there were                                                                    
different inflation rates.                                                                                                      
                                                                                                                                
2:19:54 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki pointed  out that  the presentation                                                                    
previously  given  by  the   sponsor  showed  that  original                                                                    
penalties in Section  2 were adopted in  1977, the penalties                                                                    
in Section 4 were adopted  in 1989, the penalties in Section                                                                    
6 were adopted in 1976, and  the penalties in Section 8 were                                                                    
adopted in  1984. He believed  keeping things  consistent by                                                                    
inflation proofing the entire bill was accurate.                                                                                
                                                                                                                                
Vice-Chair Gara requested to be  added as a cosponsor to the                                                                    
amendment.                                                                                                                      
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
1.                                                                                                                              
                                                                                                                                
IN FAVOR: Gara, Guttenberg, Kawasaki, Ortiz, Foster, Seaton                                                                     
OPPOSED: Wilson, Grenn, Pruitt, Thompson, Tilton                                                                                
                                                                                                                                
The MOTION  PASSED (6/5). There being  NO further OBJECTION,                                                                    
Amendment 1 was ADOPTED.                                                                                                        
                                                                                                                                
Co-Chair Foster  MOVED to  ADOPT Amendment  2, 30-LS1015\U.3                                                                    
(Nauman,    3/16/18)   (copy    on   file)    sponsored   by                                                                    
Representative Ortiz:                                                                                                           
                                                                                                                                
     Page 4, line 7:                                                                                                            
     Delete "$1,000"                                                                                                            
     Insert "$2,000"                                                                                                            
     Delete "$200,000"                                                                                                          
     Insert $400.000"                                                                                                           
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
2:21:47 PM                                                                                                                    
                                                                                                                                
Representative Ortiz  explained the  amendment was  the same                                                                    
as Amendment  1 but  applied to a  different section  of the                                                                    
bill.                                                                                                                           
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Guttenberg, Kawasaki, Ortiz, Gara, Seaton, Foster                                                                     
OPPOSED: Grenn, Pruitt, Thompson, Tilton, Wilson                                                                                
                                                                                                                                
The MOTION  PASSED (6/5). There being  NO further OBJECTION,                                                                    
Amendment 2 was ADOPTED.                                                                                                        
                                                                                                                                
Co-Chair Seaton  MOVED to  ADOPT Amendment  3, 30-LS1015\U.5                                                                    
(Nauman, 4/2/18) (copy on file):                                                                                                
                                                                                                                                
     Page 3, line 10:                                                                                                           
     Delete "annually"                                                                                                          
     Insert ", every three years,"                                                                                              
                                                                                                                                
     Page 3, line 28:                                                                                                           
     Delete "annually"                                                                                                          
     Insert", every three years,"                                                                                               
                                                                                                                                
     Page 7, line 17:                                                                                                           
     Delete "annually"                                                                                                          
     Insert", every three years,"                                                                                               
                                                                                                                                
     Page 8, line 24:                                                                                                           
     Delete "annually"                                                                                                          
     Insert ",every three years,"                                                                                               
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Seaton  explained the  amendment aimed  to increase                                                                    
administrative efficiency and would  mean the consumer price                                                                    
index  calculation  would  be  computed  every  three  years                                                                    
instead  of annually.  He elaborated  the change  would mean                                                                    
the  number  would  not  have  to  be  updated  annually  in                                                                    
publications. He believed  a three-year inflation adjustment                                                                    
was adequate.                                                                                                                   
                                                                                                                                
Representative Wilson  asked for verification  the amendment                                                                    
would  still  inflation  proof for  the  years  between  the                                                                    
three-year  period. She  surmised it  would not  necessarily                                                                    
mean inflation proofing once.                                                                                                   
                                                                                                                                
Co-Chair   Seaton   confirmed   the   inflation   would   be                                                                    
cumulative.  The  amendment  merely  removed  administrative                                                                    
burden.                                                                                                                         
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO further OBJECTION, Amendment 3 was ADOPTED.                                                                      
                                                                                                                                
2:22:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  MOVED to  ADOPT Amendment  4, 30-LS1015\U.6                                                                    
(Nauman, 4/3/18) (copy on file):                                                                                                
                                                                                                                                
     Page 9, following line 2:                                                                                                  
     Insert a new bill section to read:                                                                                         
     "*Sec. 13.  AS 46.03.900 is amended by adding a new                                                                        
     paragraph to read:                                                                                                         
     (38)    "produced  water"  means   water  that  is  the                                                                    
     byproduct of the  exploration, extraction, development,                                                                    
     production,  refining,   processing,  or   disposal  of                                                                    
     energy-related products;"                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 9, line 29:                                                                                                           
     Delete "Section 15"                                                                                                        
     Insert "Section 16"                                                                                                        
                                                                                                                                
     Page 9, line 30:                                                                                                           
     Delete "sec. 16"                                                                                                           
     insert "sec. 17"                                                                                                           
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Seaton explained the amendment.  He stated that the                                                                    
bill   addressed  penalties.   Produced  water   volume  was                                                                    
included  in the  bill,  but  the term  was  not defined  in                                                                    
statute. He had  worked with DEC, the  Department of Natural                                                                    
Resources (DNR),  and Legislative Legal Services  to craft a                                                                    
definition for  produced water. He  read the  definition the                                                                    
amendment proposed to include:                                                                                                  
                                                                                                                                
     "produced water"  means water that is  the byproduct of                                                                    
     the  exploration, extraction,  development, production,                                                                    
     refining,  processing,  or disposal  of  energy-related                                                                    
     products                                                                                                                   
                                                                                                                                
Co-Chair Foster asked to hear from DEC.                                                                                         
                                                                                                                                
KRISTIN  RYAN, DIRECTOR,  DIVISION OF  OIL SPILL  PREVENTION                                                                    
AND RESPONSE, DEPARTMENT  OF ENVIRONMENTAL CONSERVATION (via                                                                    
teleconference),  shared that  the  committee had  discussed                                                                    
concerns about  how produced water  would be defined  by the                                                                    
department   if  the   bill  passed.   Produced  water   was                                                                    
associated with  the exploration and production  of oil. The                                                                    
division found cleaning up produced  water spills to be very                                                                    
difficult  and damage  to the  environment was  significant;                                                                    
therefore, DEC requested produced water  to be a factor when                                                                    
calculating penalties associated with spills.                                                                                   
                                                                                                                                
Representative Pruitt  stated they  had discussed  the issue                                                                    
at a previous  bill hearing. He asked  for verification that                                                                    
DEC  had  not  taken   into  account  penalties  related  to                                                                    
produced water.                                                                                                                 
                                                                                                                                
Ms.  Ryan answered  in the  affirmative. The  current statue                                                                    
limited the department's ability  to only calculate oil when                                                                    
it  considered the  volume of  a spill,  for the  sake of  a                                                                    
penalty.                                                                                                                        
                                                                                                                                
Representative Pruitt  asked how often Ms.  Ryan anticipated                                                                    
the issue would  come into play. He asked  how many produced                                                                    
water spills the  division knew about, but did  not have the                                                                    
ability to do anything about.  He remarked that DEC made the                                                                    
offender clean up  produced water spills, but  was unable to                                                                    
issue a fine.  He asked how many cases there  would be where                                                                    
the  department missed  out on  being able  to fine  for the                                                                    
offense.                                                                                                                        
                                                                                                                                
Ms. Ryan  answered that it  was not  possible to clean  up a                                                                    
produced water  spill. Typically,  the water was  saline and                                                                    
when it  ran into  tundra, plants  were killed  quickly. She                                                                    
elaborated that the  spills occurred in older  fields on the                                                                    
North Slope  where more and  more water  came up as  the oil                                                                    
was  pumped down.  She  noted when  spills  occurred it  was                                                                    
becoming more  common for the  volume to be more  water than                                                                    
oil. From  DEC's perspective, the damage  was as significant                                                                    
to the  environment. The  fact that the  spill could  not be                                                                    
cleaned up  and that  spills could  occur in  large volumes,                                                                    
was the  reason DEC  proposed to  include produced  water in                                                                    
its volume calculation for penalties.  She added the request                                                                    
was  not  unusual.  She detailed  that  Oklahoma  and  Texas                                                                    
included produced  water in their penalty  calculations. She                                                                    
explained it was difficult for  the spiller to calculate and                                                                    
prove what portion  of the spill was water  and what portion                                                                    
was  oil.  The  amendment  would  simplify  the  calculation                                                                    
process.                                                                                                                        
                                                                                                                                
2:29:19 PM                                                                                                                    
                                                                                                                                
Representative Pruitt did not  believe there was a unanimous                                                                    
agreement  between the  department  and  partners about  the                                                                    
damage from  produced water. He asked  for verification that                                                                    
DEC's  position was  the water  caused immediate  damage and                                                                    
killed  tundra, while  some  industry  individuals felt  the                                                                    
damage was not at the same level.                                                                                               
                                                                                                                                
Ms.  Ryan  believed  there  were  many  opinions  about  the                                                                    
effects of produced water versus  oil. From the department's                                                                    
perspective, it  was easier to clean  up oil than it  was to                                                                    
clean  up salt  water. She  elaborated that  salt water  was                                                                    
absorbed  and  oil  tended  to   sit  on  the  surface.  The                                                                    
department's view was the water damaged the environment.                                                                        
                                                                                                                                
Representative Pruitt stated there  was a substantial amount                                                                    
of wind  on the  North Slope  and the  wind pushed  the salt                                                                    
onto the tundra. He asked about the difference.                                                                                 
                                                                                                                                
Ms.  Ryan answered  that  salt water  spray  from the  ocean                                                                    
impacted a small  amount of land near the shore.  A spill of                                                                    
produced water  was inland and  in the thousands  of gallons                                                                    
in  an area  of tundra  that was  not typically  impacted by                                                                    
ocean spray.  She added that  produced water  salinity could                                                                    
be much higher than ocean water salinity.                                                                                       
                                                                                                                                
Representative  Pruitt   asked  how  many   spills  happened                                                                    
annually and how many were off-pad.                                                                                             
                                                                                                                                
Ms. Ryan would have to follow up with the information.                                                                          
                                                                                                                                
Representative  Pruitt   asked  if  a  spill   on-pad  in  a                                                                    
contained environment was considered damaging to tundra.                                                                        
                                                                                                                                
Ms.  Ryan responded  that  DEC was  focused  on spills  that                                                                    
caused  damage to  the environment.  A  spill on  a pad  was                                                                    
captured in  gravel and was  not impacting  the environment.                                                                    
There were many spills on-pad,  which the department did not                                                                    
issue  penalties  for.  Penalty  language  would  apply  for                                                                    
spills off the pad.                                                                                                             
                                                                                                                                
Representative  Pruitt  highlighted   Ms.  Ryan's  testimony                                                                    
about thousands  of gallons [of produced  water]. He thought                                                                    
there would  be significantly  more reporting of  the spills                                                                    
[if  spills were  at that  level]. He  thought Ms.  Ryan was                                                                    
making  it  sound like  the  problem  was frequent.  He  was                                                                    
trying  to  determine  the  frequency   of  the  spills.  He                                                                    
wondered  if   there  were  bad   actors.  He   thought  the                                                                    
discussion from  the previous bill  hearing was  that people                                                                    
would   rather  do   something  inappropriate   because  the                                                                    
penalties  were  so  low.  He   asked  if  the  problem  was                                                                    
happening  without   abandon,  which  was  the   reason  the                                                                    
amendment was necessary.                                                                                                        
                                                                                                                                
2:34:10 PM                                                                                                                    
                                                                                                                                
Ms. Ryan  did not have the  numbers on hand, but  there were                                                                    
several  [produced water]  spills  per year  (not more  than                                                                    
10). The spills were semi-frequent.                                                                                             
                                                                                                                                
Vice-Chair  Gara  was  comfortable with  the  amendment.  He                                                                    
believed  the   point  of  the  legislation   was  to  deter                                                                    
individuals from  taking less care.  There was a  history of                                                                    
companies  that had  acted very  responsibly and  those that                                                                    
had acted irresponsibly at times.  He cited the Exxon Valdez                                                                    
oil spill  and Deepwater  Horizon as  spill examples  in the                                                                    
past.  He  reasoned that  everyone  did  not always  act  as                                                                    
desired, which was the reason for penalties.                                                                                    
                                                                                                                                
Representative Kawasaki  stated that the scope  of Amendment                                                                    
3 was limited  to adding a definition of  produced water. He                                                                    
asked  if  the  definition  included in  the  amendment  was                                                                    
typical when defining produced water.  He wondered if it was                                                                    
inclusive or exclusive.                                                                                                         
                                                                                                                                
Co-Chair  Seaton   answered  that  a  couple   of  different                                                                    
suggestions  had  been  provided including  "water  that  is                                                                    
brought  to the  surface as  a byproduct  of extraction  and                                                                    
hydrocarbons"  and "produced  water means  extracted in  the                                                                    
development,  extraction  or   disposal  of  energy  related                                                                    
products."  He elaborated  that  Legislative Legal  Services                                                                    
had  developed  the  definition  as there  was  not  one  in                                                                    
statute.  The  goal  was  to  avoid  confusion  as  to  what                                                                    
constituted produced  water. His  objective was to  have the                                                                    
ability to  solve a problem and  to avoid going to  court to                                                                    
determine  what the  definition of  produced water  was. The                                                                    
amendment was  limited to defining  produced water  and made                                                                    
no changes to fines or fees.                                                                                                    
                                                                                                                                
2:36:35 PM                                                                                                                    
                                                                                                                                
Ms. Ryan confirmed that the  definition in the amendment was                                                                    
consistent  with what  she  had seen  in  other states.  The                                                                    
definition  was  an  explanation  that  produced  water  was                                                                    
related to  the development, exploration, and  production of                                                                    
oil or other oil related products.                                                                                              
                                                                                                                                
Representative  Kawasaki  surmised   the  definition  was  a                                                                    
general  concept of  produced water  that was  inclusive and                                                                    
similar to  definitions in  other states.  He was  trying to                                                                    
ensure the  definition was accurate. He  added the amendment                                                                    
was in  context to Section  5 dealing with  fines associated                                                                    
with produced water. He believed  it was appropriate for the                                                                    
public,  industry,  legislators,  and courts  to  understand                                                                    
what was meant when the term produced water was used.                                                                           
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, Amendment 4 was ADOPTED.                                                                                  
                                                                                                                                
2:38:12 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  MOVED to  ADOPT Amendment  5, 30-LS1015\U.4                                                                    
(Nauman, 4/2/18) (copy on file):                                                                                                
                                                                                                                                
     Page 9, line 9, following "law.":                                                                                          
     Insert "The person shall submit the oil spill response                                                                     
     plan to the department electronically."                                                                                    
                                                                                                                                
Representative Pruitt OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Seaton  explained the  amendment would  require oil                                                                    
spill  response plans  to be  submitted electronically.  The                                                                    
idea was  for plans to  be viewable  by people in  more than                                                                    
one location. He  elaborated that the process  would be much                                                                    
more  efficient  for  responders  and  could  save  time  in                                                                    
cleanups  when people  knew exactly  what the  response plan                                                                    
was including items  that would be available on  scene or on                                                                    
board. For  example, what  a truck was  hauling and  who was                                                                    
designated in their response plan  as the responder in order                                                                    
to avoid confusion.                                                                                                             
                                                                                                                                
Representative Wilson clarified that  the oil spill response                                                                    
plans  were  submitted  to  DEC  for  the  record  and  were                                                                    
approved by a separate entity.  She surmised the purpose was                                                                    
to let people  know what would take place in  the event of a                                                                    
spill.                                                                                                                          
                                                                                                                                
Co-Chair Seaton answered in the  affirmative. The intent was                                                                    
for  plans  required  of  companies   to  be  available  for                                                                    
cleanup. The amendment  did not require anything  else to be                                                                    
done. Updating plans would also  be much more convenient and                                                                    
everyone would be apprised of the current plan.                                                                                 
                                                                                                                                
Representative  Pruitt WITHDREW  his OBJECTION.  He did  not                                                                    
believe DEC  needed all of  the plans; however,  he believed                                                                    
if the  state was  going to make  companies submit  plans it                                                                    
was better  to have them submitted  electronically. He noted                                                                    
his concern there would be  numerous documents that were not                                                                    
needed. He elaborated  that the department had  not known of                                                                    
the  federal  requirement  until  recently.  He  thought  it                                                                    
showed  either the  failure of  the department  or that  the                                                                    
issue  had been  managed in  the past  without needing  [the                                                                    
spill  plan].  He thought  the  documents  would sit  in  an                                                                    
electronic file that may not be needed.                                                                                         
                                                                                                                                
There being NO further OBJECTION, Amendment 5 was ADOPTED.                                                                      
                                                                                                                                
2:42:13 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara  reviewed the  fiscal  note  from DEC.  The                                                                    
amendment  reflected a  cost  of  $10,800 in  FY  19 and  an                                                                    
ongoing  expense of  $2,700  in outyears  from  the Oil  and                                                                    
Hazardous  Substance Release  Prevention and  Response Fund.                                                                    
The note  also reflected the  gain in revenue of  $74,700 in                                                                    
FY 20 up to $80,100 in FY 24.                                                                                                   
                                                                                                                                
Representative  Wilson asked  if  the inflation  calculation                                                                    
would cost $2,700.                                                                                                              
                                                                                                                                
Ms. Ryan replied  in the negative. The  only cost associated                                                                    
with doing  the inflation adjustments was  the publishing of                                                                    
the  regulations,  which  would  be on  a  three-year  cycle                                                                    
(based on an amendment that passed).                                                                                            
                                                                                                                                
Representative Wilson  asked for verification it  would cost                                                                    
$2,700 to update  for inflation every three  years. The note                                                                    
included  language   that  regulations  would  need   to  be                                                                    
reviewed  annually, which  would be  changed to  every three                                                                    
years  based  on  an  amendment that  passed.  She  did  not                                                                    
understand the cost.                                                                                                            
                                                                                                                                
Ms. Ryan  answered that it  would not  cost that much  to do                                                                    
the  inflation   regulations.  She  believed   the  language                                                                    
implied  the overall  cost of  doing regulation  changes for                                                                    
updating penalties over several cycles.                                                                                         
                                                                                                                                
Representative  Wilson  assumed  the  $10,800  was  for  the                                                                    
initial  regulation   in  FY  19.  She   wondered  if  other                                                                    
regulations had  to be  done annually  because of  a federal                                                                    
government   requirement.  She   asked  if   the  cost   was                                                                    
associated with  something the  department already  did that                                                                    
had nothing to do with the legislation.                                                                                         
                                                                                                                                
2:44:45 PM                                                                                                                    
                                                                                                                                
Ms. Ryan  answered that  the bill  assumed DEC  would update                                                                    
regulations every  year, but  it had  been changed  to every                                                                    
three years. She believed the  cost in the fiscal note would                                                                    
be slightly reduced due to the change.                                                                                          
                                                                                                                                
Representative  Wilson  stated  the   only  thing  the  bill                                                                    
required  every  three years  was  inflation.  She asked  if                                                                    
there  was  some  other regulation  update  requirement  the                                                                    
department would have to update every three years.                                                                              
                                                                                                                                
Ms. Ryan answered in the negative.                                                                                              
                                                                                                                                
Representative Wilson remarked  that calculators were pretty                                                                    
inexpensive.                                                                                                                    
                                                                                                                                
Co-Chair  Foster relayed  there  may be  a  new fiscal  note                                                                    
forthcoming with more revenue.                                                                                                  
                                                                                                                                
Vice-Chair  Gara clarified  that the  cost reflected  in the                                                                    
fiscal note was not for  someone using a calculator, but for                                                                    
the   RSA  [Reimbursable   Services   Agreement]  with   the                                                                    
Department  of Law  to address  the  regulations. There  was                                                                    
also a cost  when regulations went to public  notice. He did                                                                    
not see anything in the  fiscal note attributing the cost to                                                                    
someone calculating the inflationary effect.                                                                                    
                                                                                                                                
Representative Wilson pointed  to language on page  2 of the                                                                    
fiscal  note specifying  that regulations  would need  to be                                                                    
reviewed annually to reflect inflation.                                                                                         
                                                                                                                                
2:46:17 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara countered  that it  was not  what the  full                                                                    
sentence said.                                                                                                                  
                                                                                                                                
Representative Wilson  read the  sentence on  page 2  of the                                                                    
fiscal note:                                                                                                                    
                                                                                                                                
     Contractual  costs  reflect   estimated  RSA  with  the                                                                    
     Department  of Law  for consultation  and legal  review                                                                    
     during the  development of new  regulations as  well as                                                                    
     required  public  notice   in  Anchorage,  Juneau,  and                                                                    
     Fairbanks.  Regulations  would   need  to  be  reviewed                                                                    
     annually to reflect inflation.                                                                                             
                                                                                                                                
Representative  Wilson  stated   the  fiscal  note  included                                                                    
$2,700 in FY 20 through FY 24 associated with the work.                                                                         
                                                                                                                                
Co-Chair  Foster  asked  Ms.   Ryan  to  provide  a  written                                                                    
response with clarification.                                                                                                    
                                                                                                                                
Ms. Ryan agreed.                                                                                                                
                                                                                                                                
Co-Chair  Seaton  MOVED  to  REPORT  CSHB  322(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative Wilson OBJECTED.  Stated there was opposition                                                                    
to the bill  from the Alaska Trucking  Association and AOGA.                                                                    
She  did  not  believe   the  committee  had  addressed  the                                                                    
entities' concerns.  Conversely, she thought the  bill added                                                                    
additional things for the trucking industry to do.                                                                              
                                                                                                                                
Representative  Thompson corrected  the motion  to move  the                                                                    
bill.                                                                                                                           
                                                                                                                                
Co-Chair Seaton restated his motion.                                                                                            
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
2:49:09 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki  supported the updates  dealing with                                                                    
inflation.  He  remarked  there had  been  myriad  inflation                                                                    
changes since  1976, 1984,  and 1989.  He had  concern about                                                                    
the  policy dealing  with  resource  issues. He  appreciated                                                                    
clarity on  the definition of  produced water. He had  a bit                                                                    
of  trouble with  some of  the other  policy issues  dealing                                                                    
with  punitive  administration fees  in  Sections  1 and  6.                                                                    
Additionally,  he  had  overriding   concerns  about  how  a                                                                    
penalty  deters or  changes bad  behavior. He  did not  know                                                                    
that  it had  proven  to  be the  case.  He appreciated  the                                                                    
sponsor bringing the bill forward  and wanted to see it move                                                                    
forward. He believed the bill  was ready for a more thorough                                                                    
debate on the House floor.                                                                                                      
                                                                                                                                
Vice-Chair Gara stated  that he had worked with  some of the                                                                    
penalties when he had worked  on the Exxon Valdez oil spill.                                                                    
There had been  a debate at the time on  whether to just use                                                                    
the  penalties, which  had  been  inadequate. He  elaborated                                                                    
that  the  state would  not  have  received the  $1  billion                                                                    
settlement if it had merely  imposed the per gallon penalty.                                                                    
Additionally, in a  big case there were resources  to try to                                                                    
prove damages, but  in a smaller case, trying  to assess the                                                                    
value  of  a bird,  100  pink  salmon,  or other,  was  very                                                                    
difficult.  He stated  that  the  penalties were  especially                                                                    
important in  those cases, meaning  someone did not  have to                                                                    
go through  the vast expense  of measuring the value  of the                                                                    
harm. He believed penalties were  important. He reasoned the                                                                    
state might as well throw  out the penalties in criminal and                                                                    
administrative law and driving  violations if the belief was                                                                    
they were ineffective. He stressed  there would be a cost if                                                                    
the  state was  not careful,  especially at  the expense  of                                                                    
fishing streams  and waters,  which were  a hallmark  of the                                                                    
state. He noted the state  had always bragged to the federal                                                                    
government  that Alaska  did  things right  -  that oil  was                                                                    
produced in a  way that protected those  things. He believed                                                                    
the bill was important.                                                                                                         
                                                                                                                                
Representative  Pruitt opposed  the legislation.  He thought                                                                    
the bill seemed  to try to force certain actions  as if they                                                                    
were not  already being  done. He  referenced a  letter from                                                                    
AOGA (copy on  file) indicating the millions  of dollars per                                                                    
year put  into ensuring industry did  everything possible to                                                                    
prevent spills.  He pointed to the  Alyeska Pipeline Service                                                                    
Company  with  over 200  drills  and  $100 million  annually                                                                    
spent on prevention and readiness.  He recalled Alaska Clean                                                                    
Seas  had  specific equipment  on  the  North Slope  costing                                                                    
hundreds of thousands of dollars.  He stressed that industry                                                                    
was  already  doing  the  things the  bill  aimed  to  force                                                                    
industry to do. He pointed to  a report from the Division of                                                                    
Spill Prevention  and Response showing the  number of spills                                                                    
and  volume had  declined.  He emphasized  that many  people                                                                    
working in the oil industry did  not want to see damage done                                                                    
to the environment  and were doing everything  they could to                                                                    
prevent it. He  was concerned the bill was  aiming to attack                                                                    
a group  of people as  if they were  bad actors. He  did not                                                                    
believe   the   group   was    filled   with   bad   actors.                                                                    
Alternatively, he believed  the group was trying  to put the                                                                    
investment,   time,   and   energy   into   protecting   the                                                                    
environment.                                                                                                                    
                                                                                                                                
Representative  Pruitt   understood  a   conversation  about                                                                    
penalty fees,  but he  did not  support multiplying  them by                                                                    
four. He discussed  that the state had been  going after the                                                                    
cruise ship industry - the  penalties had been added in 2006                                                                    
and would be  increased beyond inflation under  the bill. He                                                                    
believed the bill was wrapped  in punitive policy as opposed                                                                    
to  considering what  the state  was doing  to partner  with                                                                    
industry to  protect the environment. He  believed the focus                                                                    
should  be on  partnering  with  industry/groups instead  of                                                                    
pitting people against each other.                                                                                              
                                                                                                                                
2:55:41 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg highlighted  a recent  occurrence                                                                    
as an  example. He elaborated  that someone had  not checked                                                                    
their [truck] load  and had taken out a  bridge. He recalled                                                                    
that one woman waiting in  traffic had a baby. He questioned                                                                    
how  all of  the people  waiting in  traffic felt  about the                                                                    
company not following procedures.  He supported the bill and                                                                    
was happy  there had not  been a recent accident  that would                                                                    
single out one  company in Alaska. He  referenced Ms. Ryan's                                                                    
testimony  there was  an Alyeska  issue  that was  basically                                                                    
sabotage that Alyeska  had nothing to do with  - the company                                                                    
was not fined, and it  participated in the cleanup. However,                                                                    
there had  been instances  where companies were  bad actors.                                                                    
He noted the incidents occurred  much less than in the past.                                                                    
When considering  the punitive  aspect, he asked  members to                                                                    
consider how  the individuals waiting  in traffic  for hours                                                                    
felt about  the situation.  He continued  that if  the truck                                                                    
had  not taken  out a  bridge there  would not  have been  a                                                                    
problem;  however, one  bad  apple  could cause  significant                                                                    
damage that could hurt many people.                                                                                             
                                                                                                                                
Co-Chair Seaton made  it clear that he did  not believe they                                                                    
were being  overly burdensome on  industry by  adjusting for                                                                    
inflation.  The  goal  from  1977  to  present  was  not  to                                                                    
continually  reduce  the  penalties.   He  believed  it  was                                                                    
prudent  to  adjust  for inflation.  The  passed  amendments                                                                    
merely  brought  penalties  up   to  account  for  inflation                                                                    
because the years the given  penalties were established were                                                                    
15 years earlier  than the penalties in  other bill sections                                                                    
(1977  versus  1985 and  1989).  He  did not  believe  prior                                                                    
legislatures   that  had   set   the   penalties  had   been                                                                    
overburdensome at  the time. He  reiterated his  belief that                                                                    
adjusting the  fines for  inflation was  the right  thing to                                                                    
do.                                                                                                                             
                                                                                                                                
2:58:54 PM                                                                                                                    
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Guttenberg, Kawasaki, Gara, Grenn, Foster, Seaton                                                                     
OPPOSED: Pruitt, Thompson, Tilton, Wilson                                                                                       
                                                                                                                                
Representative Ortiz was absent from the vote.                                                                                  
                                                                                                                                
The MOTION PASSED (6/4).                                                                                                        
                                                                                                                                
There  being   NO  further  OBJECTION,  CSHB   322(FIN)  was                                                                    
REPORTED   out   of   committee    with   four   "do   pass"                                                                    
recommendations,  four "do  not  pass" recommendations,  and                                                                    
two "amend" recommendations; and  with one new fiscal impact                                                                    
note from the Department of Environmental Conservation.                                                                         
                                                                                                                                
3:00:26 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:01:07 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 268                                                                                                            
                                                                                                                                
     "An  Act  relating  to  the  prescription  of  opioids;                                                                    
     relating  to  the  Department   of  Health  and  Social                                                                    
     Services;  relating  to   the  practice  of  dentistry;                                                                    
     relating to  the practice of medicine;  relating to the                                                                    
     practice  of  podiatry;  relating to  the  practice  of                                                                    
     osteopathy; relating  to the  practice of  nursing; and                                                                    
     relating to the practice of optometry."                                                                                    
                                                                                                                                
3:01:14 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  indicated that the  bill was last  heard on                                                                    
April 2, 2018.                                                                                                                  
                                                                                                                                
Vice-Chair Gara  MOVED to  ADOPT Amendment  1, 30-LS1081\E.1                                                                    
(Radford, 4/4/18) (copy on file):                                                                                               
                                                                                                                                
     Page 7, line 16:                                                                                                           
     Delete "February"                                                                                                          
     Insert "October"                                                                                                           
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Vice-Chair  Gara explained  the amendment  would extend  the                                                                    
date boards  shall adopt regulations  to implement  the CDC-                                                                    
type   [Centers  for   Disease   Control]  regulations   the                                                                    
committee had  previously discussed. The CDC  had recognized                                                                    
the national opioid epidemic. The  bill asked various boards                                                                    
with prescribing  authority to adopt  regulations consistent                                                                    
with the CDC's national  recommendations. The department had                                                                    
requested  giving  boards  additional   time  to  adopt  the                                                                    
regulations; therefore,  the amendment  would move  the date                                                                    
from February  2019 to October  2019. He reasoned  15 months                                                                    
should be  ample time for  the work to  be done. He  did not                                                                    
believe  the  regulations  should  be  difficult  to  adopt,                                                                    
consequently  he  hoped the  boards  would  adopt them  more                                                                    
quickly. He explained  that when the bill  passed the boards                                                                    
could  start  working  on the  regulations,  the  department                                                                    
could  put the  information on  its website  for prescribing                                                                    
practitioners  to  print  out for  patients.  The  amendment                                                                    
would mean regulations would be adopted by October 2019.                                                                        
                                                                                                                                
3:04:05 PM                                                                                                                    
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO further OBJECTION, Amendment 1 was ADOPTED.                                                                      
                                                                                                                                
3:04:41 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:04:54 PM                                                                                                                    
RECONVENNED                                                                                                                     
                                                                                                                                
Co-Chair Foster  asked Co-Chair Seaton to  review the fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
Co-Chair   Seaton  reviewed   the  fiscal   note  from   the                                                                    
Department of Commerce,  Community and Economic Development,                                                                    
which reflected  a cost of  $15,500 in receipt  services for                                                                    
FY 19.                                                                                                                          
                                                                                                                                
Co-Chair  Seaton  MOVED  to  REPORT  CSHB  268(FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
There being NO OBJECTION, CSHB  268(FIN) was REPORTED out of                                                                    
committee  with  an  "amend"  recommendation  and  with  one                                                                    
previously published fiscal impact note: FN1 (CED).                                                                             
                                                                                                                                
Co-Chair Foster reviewed the agenda for the next meeting.                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:06:56 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:06 p.m.                                                                                          

Document Name Date/Time Subjects
HB 322 - Amendment packet.pdf HFIN 4/7/2018 1:00:00 PM
HB 322
HB 299 - Letter of Intent.pdf HFIN 4/7/2018 1:00:00 PM
HB 299
HB 316 Support 4-6-18.pdf HFIN 4/7/2018 1:00:00 PM
HB 316
HB 322 Support 4-6-18.pdf HFIN 4/7/2018 1:00:00 PM
HB 322
HB 322 - DEC Response to H FIN re HB322.pdf HFIN 4/7/2018 1:00:00 PM
HB 322