Legislature(1993 - 1994)
02/14/1994 08:15 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE February 14, 1994 8:15 a.m. MEMBERS PRESENT Representative Bill Williams, Chairman Representative Bill Hudson, Vice Chairman Representative Con Bunde Representative Pat Carney Representative David Finkelstein Representative Joe Green MEMBERS ABSENT Representative John Davies Representative Jeannette James Representative Eldon Mulder OTHER LEGISLATORS PRESENT Senator Drue Pearce Representative Gary Davis COMMITTEE CALENDAR SJR 40: Urging the Congress to amend the Oil Pollution Act of 1990 with respect to the financial responsibility requirements for offshore exploration and production facilities. CSSJR 40(RES) MOVED OUT OF COMMITTEE WITH INDIVIDUAL RECOMMENDATIONS *HB 306: "An Act relating to an optional municipal tax credit for costs of certain river habitat protection improvements." ADOPTED CSHB 306(RES) AND MOVED OUT OF COMMITTEE WITH INDIVIDUAL RECOMMENDATIONS WITNESS REGISTER SENATOR DRUE PEARCE Alaska State Legislature State Capitol, Room 508 Juneau, Alaska 99801-1182 Phone: 465-4993 POSITION STATEMENT: Prime sponsor SJR 40 REPRESENTATIVE GARY DAVIS Alaska State Legislature State Capitol, Room 15 Juneau, Alaska 99801-1182 Phone: 465-2693 POSITION STATEMENT: Prime sponsor HB 306 GERON BRUCE Alaska Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802 Phone: 465-6143 POSITION STATEMENT: Supported HB 306 and answered questions PREVIOUS ACTION BILL: SJR 40 SHORT TITLE: URGE CONGRESS TO AMEND OIL POLLUTION LAW SPONSOR(S): SENATOR(S) PEARCE,Leman,Taylor JRN-DATE JRN-PG ACTION 01/19/94 2543 (S) READ THE FIRST TIME/REFERRAL(S) 01/19/94 2544 (S) RESOURCES 01/24/94 (S) RES AT 03:30 PM BUTRVICH RM 205 01/28/94 (S) RES AT 03:30 PM BUTRVICH RM 205 01/28/94 (S) MINUTE(RES) 02/02/94 2656 (S) RES RPT CS 4DP SAME TITLE 02/02/94 2656 (S) ZERO FN TO SJR & CS PUBLISHED (S.RES) 02/04/94 (S) RLS AT 00:00 AM FAHRENKAMP ROOM 203 02/04/94 (S) MINUTE(RLS) 02/07/94 2719 (S) RULES TO CALENDAR 3CAL 1NR 2/7 02/07/94 2722 (S) READ THE SECOND TIME 02/07/94 2722 (S) RES CS ADOPTED UNAN CONSENT 02/07/94 2722 (S) ADVANCED TO THIRD READING UNAN CONSENT 02/07/94 2723 (S) PASSED Y14 N6- 02/07/94 2723 (S) ADAMS NOTICE OF RECONSIDERATION 02/07/94 2725 (S) COSPONSOR(S): TAYLOR 02/09/94 2764 (S) RECON TAKEN UP-IN THIRD READING 02/09/94 2764 (S) PASSED ON RECONSIDERATION Y20 N- 02/09/94 2766 (S) TRANSMITTED TO (H) 02/11/94 2334 (H) READ THE FIRST TIME/REFERRAL(S) 02/11/94 2334 (H) RESOURCES 02/14/94 (H) RES AT 08:15 AM CAPITOL 124 BILL: HB 306 SHORT TITLE: MUNICIPAL TAX CREDIT/HABITAT PROTECTION SPONSOR(S): REPRESENTATIVE(S) G.DAVIS,Phillips,Green JRN-DATE JRN-PG ACTION 01/03/94 (H) PREFILE RELEASED 01/10/94 2007 (H) READ THE FIRST TIME/REFERRAL(S) 01/10/94 2007 (H) RESOURCES, FINANCE 01/14/94 2083 (H) COSPONSOR(S): GREEN 02/14/94 (H) RES AT 08:15 AM CAPITOL 124 ACTION NARRATIVE TAPE 94-14, SIDE A Number 000 The House Resources Committee was called to order by Chairman Bill Williams at 8:20 a.m. Members present at the call to order were Representatives Williams, Hudson, Bunde, Carney, and Finkelstein. Members absent were Representatives Davies, Green, James and Mulder. CHAIRMAN BILL WILLIAMS announced a quorum was present and advised committee members they will hear SJR 40 and HB 306. SJR 40 - URGE CONGRESS TO AMEND OIL POLLUTION LAW CHAIRMAN WILLIAMS told committee members they had passed HJR 49 several weeks ago, which urged the federal Minerals Management Service (MMS) to interpret definitions in the Oil Pollution Act of 1990 (OPA `90) as narrowly as possible in promulgating their regulations under the financial responsibility sections of OPA '90. CHAIRMAN WILLIAMS said SJR 40 addresses the same concerns, but covers another angle of the problem by addressing the concerns to Congress. He encouraged members to use the hearing to refresh their memories about the issues involved with the OPA `90 regulations, because the committee would be meeting with the MMS officials the next day to discuss concerns. Number 028 SENATOR DRUE PEARCE, PRIME SPONSOR, SJR 40, stated SJR 40 takes a different tack than HJR 49 did. In December, the Energy Council passed a resolution in favor of changes to the OPA `90 financial responsibility section. As a part of that, and after meetings with people from the MMS, the Executive Committee had a draft resolution drawn up and SJR 40 follows the lines of that resolution. She said even though MMS would like to interpret the OPA `90 restrictions and regulations innovatively, the law says there is a $150 million financial responsibility for every facility. Those facilities are offshore facilities but include anything that is in, under or on any U.S. navigable or territorial water. Therein, lies the problem. Number 045 SENATOR PEARCE pointed out that MMS cannot change the definition because it will then filter down onto some of their other regulations. It is believed that Congress will ultimately need to change that section of the bill. SJR 40 requests that Congress act now before the financial responsibility section has negative effects on Alaska businesses. She noted the Energy Council has it's spring meeting in Washington, D.C., every year and the first weekend in March she will be attending that meeting. She added there will be a meeting with the Alaska Congressional delegation. She hoped to present both resolutions to the delegation and have a discussion directly with them, along with a meeting at the Department of Interior and the Department of Energy. Senator Pearce stated she planned to present both resolutions into public record on Wednesday. Number 070 REPRESENTATIVE DAVID FINKELSTEIN asked Senator Pearce to explain why the two resolutions are not redundant. SENATOR PEARCE replied that Representative Green's and her staff chose different language. The Administration feels the two resolutions are very complimentary and feels comfortable with having both resolutions taking a different tack. She noted that the MMS people have been asking for a way to interpret the definition in some manner in which they can make the regulations more palatable for states like Alaska. REPRESENTATIVE FINKELSTEIN thought that if there are two measures on the same subject, the first one passes and the other one disappears. SENATOR PEARCE stated the two resolutions are on the same subject, but take different tacks. Number 091 REPRESENTATIVE JOE GREEN explained the final cure has to be through Congress which can sometimes be a slow, methodical process. If the state can suppress MMS to not implement the rigid regulations, (interpreting the definition in the broadest possible sense) through HJR 49 and then allow SJR 40 to get to Congress, the state will prevent a period of time when the regulations might be enacted before the law is changed. REPRESENTATIVE BILL HUDSON felt both resolutions are complimentary. He asked Senator Pearce if she had asked the Congressional delegation of the probability of having Congress act on changes of OPA `90. SENATOR PEARCE replied she had discussed the issue primarily with Senator Steven's office. She said all Congressional delegations are reticent to go back into OPA `90, but they understand that it is not just an Alaska problem or a wetlands problem, it is a problem in every state. She pointed out that the broad way MMS is interpreting the definition, it will include many airports throughout the country, gas stations, etc. She did not think that is what Congress intended and added that Congress has admitted that is not what they intended. SENATOR PEARCE remarked that MMS believes they need to go to Congress with clear definitions of the actual economic problems which the strict interpretation will cause. She said the final response from the state will be delivered to MMS in testimony on Wednesday. Number 131 REPRESENTATIVE HUDSON made a motion to MOVE CSSJR 40(RES) with a fiscal note out of committee with INDIVIDUAL RECOMMENDATIONS. CHAIRMAN WILLIAMS asked if there were any objections to the motion. Hearing none, the MOTION PASSED. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE GREEN joined the committee at 8:25 a.m.) HB 306 - MUNICIPAL TAX CREDIT/HABITAT PROTECTION Number 147 CHAIRMAN WILLIAMS advised committee members there is a draft committee substitute in their folders, which was prepared by the sponsor of the bill. REPRESENTATIVE GARY DAVIS, PRIME SPONSOR, read his sponsor statement: "House Bill 306 will create a Municipal Tax Incentive Program (MTIP) to encourage private property owners to voluntarily protect important fishing habitat. Currently, under statute, it is not possible for local governments to provide a property tax credit. This legislation will grant local municipalities the ability to designate certain tax incentives for improving certain anadromous riparian habitats. This bill specifically addresses the Kenai River. The habitats must be determined by the State to warrant special management. In order to be eligible for a tax credit, the constructed improvement must aid in protecting the Kenai River or a tributary of the Kenai River from degradation due to public or private use; or restoring riparian fish habitat in the Kenai River or a tributary of the Kenai River that has been damaged by land use practices or can be damaged without preventative measures. "The eligible improvements will be in compliance with state and federal laws and certified by the Alaska Department of Fish and Game (ADF&G) as meeting the established criteria. Let it be noted that the Kenai River Special Management Area (KRSMA) Advisory Board established under statute, supports HB 306. The KRSMA Advisory Board is appointed by the Commissioner of Natural Resources to develop and implement the Kenai River Special Management Area plan established in AS 41.21.502(a). House Bill 306 sets parameters that allow local governments flexibility in determining their needs and interests, while protecting riparian habitats. No local government is required to create a MTIP that is not wanted. MTIPs have proven effective in conserving riparian habitat elsewhere in the country. Once the MTIP proves effective on the Kenai River it may serve as a pilot project for other areas of the state." Number 201 REPRESENTATIVE DAVIS said as indicated in the sponsor statement, the KRSMA Advisory Board is an important board in relating what goes on in the Kenai River. They made certain recommendations on HB 306 and their concerns have been incorporated into the committee substitute. REPRESENTATIVE PAT CARNEY asked why HB 306 was not written to permit any municipality in the state to allow the tax credit for other projects other than just the Kenai River. REPRESENTATIVE DAVIS responded that as indicated, there would probably be a fiscal note should the bill cover statewide. Since the Kenai River is established under statute as a special management area, it is felt that it will be in the state's best interest to use HB 306 as a pilot project to determine the expected benefits. He said there was an attempt to think of other areas in the state which might be in the same situation where there are a lot of private property owners along a heavily fished river, and none could be identified. Number 241 REPRESENTATIVE CON BUNDE wondered if passing HB 306 and providing tools to the communities along the Kenai River to use, will the communities use the tools. REPRESENTATIVE DAVIS felt the communities will. The Kenai River has been under the sharp eye of habitat agencies for a number of years. The habitat question along the river is something that both commercial and sport fish interests have agreed is in their best interests to conserve as much of the habitat as possible, in order to preserve and see continued returns of all salmon species. He said the city of Soldotna has established an overlay district, which requires Kenai Riverfront property owners to submit a request to the city before any development can be done on their property. Through that additional zoning requirement, there have been many innovative approaches to improvements along the riverbank seen. He felt HB 306 will see the same amount of interest at the borough level. REPRESENTATIVE DAVIS pointed out that the program will also be used as an educational tool. For years, there has been an attempt to inform everyone who uses the riverbanks about the need to preserve habitat. Number 300 REPRESENTATIVE GREEN stated he has gone with a guide to look at some of the inexpensive repairs made along the river. He stressed there are large areas of the river which are eroding and some of these repairs not only stabilize the bank, but do provide habitat. He felt HB 306 is extremely timely and a great idea. REPRESENTATIVE HUDSON felt there are other streams which also have been impacted and hoped there will be language in the bill indicating it is a pilot project, so it can possibly be expanded to include other streams which ADF&G might identify as potential recipients. REPRESENTATIVE DAVIS agreed and hoped that people keep an eye on the activity afforded under HB 360 so it can be expanded at some point. Number 345 REPRESENTATIVE CARNEY asked if they were talking about private property on the Kenai River which people are trespassing on. REPRESENTATIVE DAVIS responded HB 306 addresses private property. REPRESENTATIVE CARNEY wondered if people with private property have a choice as to whether or not other people can use their property for access to the river. Number 370 REPRESENTATIVE DAVIS replied it is their private land. There have been questions regarding an automatic 25-foot public easement along each side of the river, but he had not been able to find anything in statute which allows that. Over the years, in pursuing that question, he has been assured that is not the case. He stressed that private property owners do have control over their property. REPRESENTATIVE CARNEY said in many cases private property owners do not have a choice with regard to allowing other people to use their property for recreational purposes. He noted that he almost had to abandon a piece of property he owns because there is so much public traffic. He would have to spend all of his time policing it. He felt perhaps they should consider giving people a tax credit when their property is heavily utilized by the public. Number 418 REPRESENTATIVE DAVIS remarked that in the Kenai River area, everyone is aware of how people will use whatever property they want to get to a fishing spot. What is happening is people are sending requests to ADF&G saying their land is being used as a public fishing ground and asking the state to buy their property. The state would like to buy much of that land, as sufficient public access is definitely a problem. REPRESENTATIVE GREEN stated a person can get on the Russian River from almost anywhere along it's three mile length. It is just about the opposite on the Kenai River. There are very few access points and the Kenai is a very fast moving river. He stressed that a wake really causes a problem and tying up a boat where there is no vegetation to take up the constant movement of water between the boat and the land, causes the land to erode rapidly. He felt if there can be more private people taking advantage of HB 306 and showing that it is possible, then the Park Service might do the same thing. REPRESENTATIVE BUNDE asked ADF&G to answer the easement question. He also wondered if usage will be increased with this bill, thereby increasing habitat degradation. Number 495 REPRESENTATIVE HUDSON stated it was not desirable to put too much more of the private land in public hands because the number of people on the river will increase. REPRESENTATIVE CARNEY wondered why the words "Kenai River" could not be eliminated from HB 306 and make it generally apply to any river in the state. REPRESENTATIVE DAVIS believed with the Kenai River Special Management Area in place and with the amount of work the habitat division will be required to do, the department would be flooded with plans to review, etc. REPRESENTATIVE CARNEY stated there is a zero fiscal note for the Kenai River, which has many problems and he cannot imagine there will be additional costs with other streams. REPRESENTATIVE FINKELSTEIN felt there would be a higher fiscal note and pointed out that the fiscal note in the committee members' files was somewhat odd. It says it will cost a fair amount of money but they love the idea so much, they will do it. Number 580 GERON BRUCE, ALASKA DEPARTMENT OF FISH AND GAME, expressed support of HB 306. The Kenai River is being loved to death. There is a combination of extraordinary resources which attract much use, easy accessibility and a large population center nearby. He said the department has been watching the situation on the Kenai River with some concern for a period of time, and there are a number of programs which are being implemented to address the problems. He noted that HB 306 will provide an additional tool which will be valuable and help correct the situation, as well as prevent it from getting worse. MR. BRUCE told members to keep in mind, the department's studies indicate that 80 percent of the juvenile rearing salmon in the Kenai River inhabit the area within six feet of the bank. They utilize the area for cover and feed, and it is an area where the water velocity slows down, so the small juvenile fish are able to maintain their position. Therefore, it is an extremely productive area. In the entire river itself, 80 acres account for approximately 80 percent of the productivity for rearing fish. Number 600 REPRESENTATIVE HUDSON asked if ADF&G has the authority to charge a fee for private property plans review. MR. BRUCE said he did not believe they did. He stated the legislature is usually rigorous about restricting the ability of the department to charge and establish fees. REPRESENTATIVE HUDSON believed the legislature had given the Department of Commerce and Economic Development authority to charge whatever fees necessary to handle licenses, etc. and thought it might be something they will want to consider. REPRESENTATIVE BUNDE asked Mr. Bruce if he could address the question about public easements. MR. BRUCE responded that he could not answer the question and felt it was a land management question which the Department of Natural Resources or legal could answer. He said he will pursue an answer. REPRESENTATIVE GREEN asked Mr. Bruce to also check and see when there is a setback from the existing riverbank and the bank erodes, does the setback follow the bank. Number 647 REPRESENTATIVE FINKELSTEIN stated he would be surprised if there is a public easement because if there is, a person could walk along the entire shore of the Kenai River. He said there is very little public land and it can be frustrating when trying to find access to the river. He asked what the general status is of the $3 million which was appropriated for habitat work along the Kenai River. MR. BRUCE explained that is the other major initiative which is beginning to go forward and he will provide an update to the committee at a later date. REPRESENTATIVE FINKELSTEIN questioned if that money and work can include acquisition. MR. BRUCE replied it can. REPRESENTATIVE BUNDE made a motion to MOVE committee substitute for HB 306 with two fiscal notes from committee with INDIVIDUAL RECOMMENDATIONS. CHAIRMAN WILLIAMS stated there is a need to adopt the committee substitute first. REPRESENTATIVE BUNDE WITHDREW his motion. REPRESENTATIVE FINKELSTEIN asked the sponsor to explain the differences between the committee substitute and the original bill. TAPE 94-14, SIDE B Number 000 REPRESENTATIVE DAVIS replied, the differences resulted from the recommendations made by the KRSMA subcommittee. He said on page 1, line 11, it now reads "degradation of fish habitat due to public or private use;". Page 1, line 12, now reads "restoring riparian fish habitat along or in the Kenai River...". Page 2, lines 4 and 5, now read "If the credit is granted for more than one year and the land or taxable interest in the land is conveyed, the portion of the credit remaining is extinguished." Page 2, line 13, now reads "located more than 150 feet from the mean high tide line...". Page 2, lines 25 and 26 now read "the criteria established under this subsection. The department may require submission of plans for approval before construction as a condition of certification." REPRESENTATIVE CARNEY asked if someone could define fish habitat, as he thought fish habitat was in the water itself rather than on the shore. Number 025 REPRESENTATIVE DAVIS responded that HB 306 allows for review and credit for improvements along or in the Kenai River and back up to 150 feet. REPRESENTATIVE HUDSON made a motion to ADOPT the committee substitute for HB 306. CHAIRMAN WILLIAMS asked if there were objections. Hearing none, CSHB 306(RES) was ADOPTED. REPRESENTATIVE HUDSON made a motion to MOVE CSHB 306(RES) with two zero fiscal notes out of committee with INDIVIDUAL RECOMMENDATIONS. CHAIRMAN WILLIAMS asked if there were objections. Hearing none, the MOTION PASSED. ANNOUNCEMENTS CHAIRMAN WILLIAMS announced the committee will meet February 15 at 3:00 p.m. with officials from the Minerals Management Service to discuss issues concerning the Oil Pollution Act of 1990. He also announced the committee will meet February 16 at 8:15 a.m. to consider SB 77 and SJR 13. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Williams adjourned the meeting at 9:10 a.m.