Legislature(1993 - 1994)

04/22/1994 08:15 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
               HOUSE RESOURCES STANDING COMMITTEE                              
                         April 22, 1994                                        
                            8:15 a.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Representative Bill Williams, Chairman                                       
  Representative Bill Hudson, Vice Chairman                                    
  Representative Con Bunde                                                     
  Representative Pat Carney                                                    
  Representative John Davies                                                   
  Representative David Finkelstein                                             
  Representative Joe Green                                                     
  Representative Jeannette James                                               
  Representative Eldon Mulder                                                  
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  None                                                                         
                                                                               
  OTHER LEGISLATORS PRESENT                                                    
                                                                               
  Senator Mike Miller                                                          
                                                                               
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  SB 215:   "An Act relating to oil and hazardous substances;                  
            redesignating the oil and hazardous substance                      
            release response fund and relating to it;                          
            repealing the Citizens' Oversight Council on Oil                   
            and Other Hazardous Substances and the authority                   
            in law by which marine highway vessels may be                      
            designed and constructed to aid in oil and                         
            hazardous substance spill cleanup in state marine                  
            water using money in the oil and hazardous                         
            substance release response fund and repealing the                  
            authority of the Department of Environmental                       
            Conservation to levy and collect fees for review                   
            of certain submissions related to oil; altering                    
            requirements applicable to liens for recovery of                   
            state expenditures related to oil or hazardous                     
            substances; terminating the nickel-per-barrel oil                  
            conservation surcharge; levying and collecting two                 
            new oil surcharges; and providing for the                          
            suspension and reimposition of one of the new                      
            surcharges."                                                       
                                                                               
            HCS CSSB 215(RES) MOVED OUT OF COMMITTEE WITH                      
            INDIVIDUAL RECOMMENDATIONS                                         
                                                                               
  SB 310:   "An Act relating to the management and sale of                     
            state timber and relating to the administration of                 
            forest land."                                                      
                                                                               
            HEARD AND HELD FOR FURTHER CONSIDERATION                           
                                                                               
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  SENATOR MIKE MILLER                                                          
  State Capitol, Room 423                                                      
  Juneau, Alaska   99801-1182                                                  
  Phone:  465-4976                                                             
  POSITION STATEMENT:  Prime Sponsor SB 215                                    
                                                                               
  DAVID ROGERS, Special Counsel                                                
  Senate Finance Committee                                                     
  P.O. Box 33932                                                               
  Juneau, Alaska   99803                                                       
  Phone:  586-1107                                                             
  POSITION STATEMENT:  Answered questions on SB 215                            
                                                                               
  BOB POE, Director                                                            
  Division of Information and Administrative Services                          
  Department of Environmental Conservation                                     
  410 Willoughby Avenue, Ste. 105                                              
  Juneau, Alaska   99801-1795                                                  
  Phone:  465-5010                                                             
  POSITION STATEMENT:  Answered questions on SB 215                            
                                                                               
  MIKE CONWAY, Director                                                        
  Division of Spill Prevention and Response                                    
  Department of Environmental Conservation                                     
  410 Willoughby Avenue, Ste. 105                                              
  Juneau, Alaska   99801-1795                                                  
  Phone:  465-5250                                                             
  POSITION STATEMENT:  Answered questions on SB 215                            
                                                                               
  RICK SOLIE, Aide                                                             
  Senator Steve Frank                                                          
  State Capitol, Room 518                                                      
  Juneau, Alaska   99801-1182                                                  
  Phone:  465-3709                                                             
  POSITION STATEMENT:  Answered questions on SB 310                            
                                                                               
  CHRIS GATES, Director                                                        
  Division of Economic Development                                             
  Department of Commerce and Economic Development                              
  P.O. Box 110804                                                              
  Juneau, Alaska   99811-0804                                                  
  Phone:  465-2017                                                             
  POSITION STATEMENT:  Answered questions on SB 310                            
                                                                               
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  SB 215                                                                
  SHORT TITLE: OIL/HAZARDOUS SUBS. RELEASE RESPONSE FUND                       
  SPONSOR(S): SENATOR(S) MILLER,Kelly                                          
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  05/08/93      2207    (S)   READ THE FIRST TIME/REFERRAL(S)                  
  05/08/93      2207    (S)   RESOURCES, FINANCE                               
  11/19/93              (S)   MINUTE(RES)                                      
  01/19/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  01/19/94              (S)   MINUTE(RES)                                      
  01/25/94              (S)   RES AT 02:00 PM BELTZ ROOM 211                   
  01/26/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  01/27/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  01/31/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  02/03/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  02/07/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  02/07/94              (S)   MINUTE(RES)                                      
  02/11/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  02/16/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  02/16/94              (S)   MINUTE(RES)                                      
  02/22/94              (S)   RES AT 12:00 PM BUTRVICH RM 205                  
  02/22/94              (S)   MINUTE(RES)                                      
  02/28/94      2987    (S)   RES RPT CS 4DP 2NR  NEW TITLE                    
  02/28/94      2988    (S)   FISCAL NOTE TO SB PUBLISHED                      
                              (DEC)                                            
  02/28/94      2988    (S)   FISCAL NOTE TO CS PUBLISHED                      
                              (DEC)                                            
  03/01/94              (S)   FIN AT 09:00 AM SENATE FIN 518                   
  03/01/94              (S)   MINUTE(FIN)                                      
  03/03/94              (S)   FIN AT 09:00 AM SENATE FIN 518                   
  03/22/94              (S)   FIN AT 09:00 AM SENATE FIN 518                   
  03/25/94              (S)   FIN AT 09:00 AM SENATE FIN 518                   
  04/07/94              (S)   FIN AT 08:00 AM SENATE FIN 518                   
  04/07/94              (S)   FIN AT 05:00 PM SENATE FIN 518                   
  04/08/94      3521    (S)   FIN RPT  CS 5DP 1NR NEW TITLE                    
  04/08/94      3522    (S)   ZERO FN TO SB & CS PUBLISHED                     
                              (DPS)                                            
  04/08/94      3522    (S)   ZERO FN TO CS PUBLISHED (DEC)                    
  04/11/94              (S)   RLS AT 00:00 AM FAHRENKAMP                       
                              ROOM 203                                         
  04/12/94      3587    (S)   ZERO FN TO SB & CS PUBLISHED                     
                              (ADM)                                            
  04/12/94      3587    (S)   ZERO FN TO CS PUBLISHED  (REV)                   
  04/12/94      3587    (S)   FN TO SB & CS PUBLISHED (LAW)                    
  04/12/94      3586    (S)   RULES RPT 3CAL 1NR 1DNP 4/12/94                  
  04/12/94      3590    (S)   READ THE SECOND TIME                             
  04/12/94      3590    (S)   FIN  CS ADOPTED UNAN CONSENT                     
  04/12/94      3591    (S)   AM NO  1  MOVED BY KERTTULA                      
  04/12/94      3592    (S)   AM NO  1  FAILED  Y9 N11                         
  04/12/94      3592    (S)   AM NO  2  MOVED BY KERTTULA                      
  04/12/94      3592    (S)   AM NO  2  FAILED  Y8 N12                         
  04/12/94      3594    (S)   AM NO  3  MOVED BY LINCOLN                       
  04/12/94      3594    (S)   AM NO  3  FAILED  Y9 N11                         
  04/12/94      3595    (S)   AM NO  4  MOVED BY ADAMS                         
  04/12/94      3595    (S)   AM NO  4  FAILED  Y9 N11                         
  04/12/94      3595    (S)   AM NO  5  MOVED BY ADAMS                         
  04/12/94      3598    (S)   AM NO  5  FAILED  Y9 N11                         
  04/12/94      3599    (S)   AM NO  6  MOVED BY ZHAROFF                       
  04/12/94      3599    (S)   AM NO  6  FAILED  Y10 N10                        
  04/12/94      3599    (S)   AM NO  7  BY ZHAROFF/WITHDRAWN                   
  04/12/94      3599    (S)   MTN TO ADVANCE TO 3RD READING                    
  04/12/94      3600    (S)   ADVANCE MOTION WITHDRAWN                         
  04/12/94      3600    (S)   AM NO  8  MOVED BY MILLER                        
  04/12/94      3600    (S)   AM NO  8  ADOPTED UNAN CONSENT                   
  04/12/94      3601    (S)   AM NO  9  MOVED BY SALO                          
  04/12/94      3601    (S)   AM NO  9  FAILED  Y9 N10 A1                      
  04/12/94      3602    (S)   ADVANCE TO THIRD READING FLD                     
                              Y10 N9 A1                                        
  04/12/94      3602    (S)   THIRD READING 4/13 CALENDAR                      
  04/13/94      3641    (S)   ZERO FN TO CS PUBLISHED(LAW)                     
                              REPLACES #6                                      
  04/13/94      3641    (S)   READ THE THIRD TIME  CSSB                        
                              215(FIN) AM                                      
  04/13/94      3641    (S)   FAILED PASSAGE Y10 N9 A1                         
  04/13/94      3641    (S)   Miller NOTICE OF                                 
                              RECONSIDERATION                                  
  04/14/94      3672    (S)   RECON TAKEN UP/IN THIRD READING                  
  04/14/94      3673    (S)   PASSED ON RECONSIDERATION Y11                    
                              N8 E1                                            
  04/14/94      3674    (S)   EFFECTIVE DATES FAILED Y13                       
                              N6 E1                                            
  04/14/94      3689    (S)   TRANSMITTED TO (H)                               
  04/15/94      3457    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  04/15/94      3458    (H)   RESOURCES,STATE AFFAIRS,FINANCE                  
  04/22/94              (H)   RES AT 08:15 AM CAPITOL 124                      
                                                                               
  BILL:  SB 310                                                                
  SHORT TITLE: STATE/PRIVATE/MUNI TIMBER OPERATION/SALE                        
  SPONSOR(S): SENATOR(S)FRANK,Taylor,Pearce,Sharp,                             
  Miller,Kelly,Halford; REPRESENTATIVE(S) Olberg                               
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  02/14/94      2829    (S)   READ THE FIRST TIME/REFERRAL(S)                  
  02/14/94      2829    (S)   RESOURCES                                        
  03/02/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  03/02/94              (S)   MINUTE(RES)                                      
  03/05/94              (H)   MINUTE(ECO)                                      
  03/16/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  03/16/94              (S)   MINUTE(RES)                                      
  03/22/94              (S)   RES AT 1:30 PM BUTROVICH RM 205                  
  03/24/94              (S)   RES AT 03:30 PM FAHRENKAMP                       
                              ROOM 203                                         
  03/28/94              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  03/30/94      3406    (S)   RES RPT CS 4DP 1DNP NEW TITLE                    
  03/30/94      3407    (S)   ZERO FN TO SB & CS PUBLISHED                     
                              (DNR)                                            
  03/30/94              (S)   RLS AT 11:35 AM FAHRENKAMP                       
                              ROOM 203                                         
  03/30/94              (S)   MINUTE(RLS)                                      
  04/05/94      3448    (S)   RULES RPT  3CAL  2NR 4/5/94                      
  04/05/94      3449    (S)   HELD TO 4/6/94                                   
  04/06/94      3476    (S)   READ THE SECOND TIME                             
  04/06/94      3477    (S)   RES  CS ADOPTED UNAN CONSENT                     
  04/06/94      3477    (S)   AM NO  1     MOVED BY LITTLE                     
  04/06/94      3478    (S)   AM NO  1     FAILED  Y9 N11                      
  04/06/94      3478    (S)   AM NO  2     MOVED BY LITTLE                     
  04/06/94      3479    (S)   AM NO  2     FAILED  Y9 N11                      
  04/06/94      3479    (S)   AM NO  3     NOT OFFERED                         
  04/06/94      3479    (S)   AM NO  4     MOVED BY LITTLE                     
  04/06/94      3479    (S)   AM NO  4     FAILED  Y9 N11                      
  04/06/94      3480    (S)   AM NO  5     MOVED BY DUNCAN                     
  04/06/94      3480    (S)   AM NO  5     FAILED  Y8 N12                      
  04/06/94      3480    (S)   AM NO  6     MOVED BY DUNCAN                     
  04/06/94      3481    (S)   AM NO  6     FAILED  Y9 N11                      
  04/06/94      3481    (S)   AM NO  7     MOVED BY DUNCAN                     
  04/06/94      3482    (S)   AM NO  7     FAILED  Y9 N11                      
  04/06/94      3482    (S)   AM NO  8     MOVED BY DUNCAN                     
  04/06/94      3482    (S)   AM NO  8     FAILED  Y9 N11                      
  04/06/94      3483    (S)   AM NO  9     MOVED BY LINCOLN                    
  04/06/94      3483    (S)   AM NO  9     FAILED  Y9 N11                      
  04/06/94      3483    (S)   AM NO 10     MOVED BY ZHAROFF                    
  04/06/94      3484    (S)   AM NO 10     FAILED  Y9 N11                      
  04/06/94      3484    (S)   AM NO 11     MOVED BY ZHAROFF                    
  04/06/94      3484    (S)   AM NO 11     FAILED  Y9 N11                      
  04/06/94      3485    (S)   AM NO 12     MOVED BY LINCOLN                    
  04/06/94      3485    (S)   AM NO 12     FAILED  Y10 N10                     
  04/06/94      3486    (S)   AM NO 13     MOVED BY ZHAROFF                    
  04/06/94      3486    (S)   AM NO 13     FAILED  Y9 N11                      
  04/06/94      3486    (S)   AM NO 14     MOVED BY ADAMS                      
  04/06/94      3487    (S)   AM NO 14     FAILED  Y8 N12                      
  04/06/94      3487    (S)   ADVANCE TO THIRD READING FLD                     
                              Y11 N9                                           
  04/06/94      3487    (S)   THIRD READING 4/7 CALENDAR                       
  04/07/94      3506    (S)   READ THE THIRD TIME                              
                              CSSB 310(RES)                                    
  04/07/94      3506    (S)   PASSED Y11 N8 E1                                 
  04/07/94      3506    (S)   Adams NOTICE OF RECONSIDERATION                  
  04/08/94      3527    (S)   RECON TAKEN UP/IN THIRD READING                  
  04/08/94      3527    (S)   PASSED ON RECONSIDERATION Y11                    
                              N7  E2                                           
  04/08/94      3531    (S)   TRANSMITTED TO (H)                               
  04/08/94      3212    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  04/08/94      3212    (H)   RESOURCES                                        
  04/08/94      3220    (H)   CROSS SPONSOR(S):  OLBERG                        
  04/15/94      3526    (H)   FIN REFERRAL ADDED                               
  04/15/94              (H)   RES AT 08:15 AM CAPITOL 124                      
  04/15/94              (H)   MINUTE(RES)                                      
  04/20/94              (H)   RES AT 08:15 AM CAPITOL 124                      
  04/20/94              (H)   MINUTE(RES)                                      
  04/22/94              (H)   RES AT 08:15 AM CAPITOL 124                      
                                                                               
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 94-60, SIDE A                                                           
  Number 000                                                                   
                                                                               
  The House Resources Committee was called to order by                         
  Chairman Bill Williams at 8:30 a.m.  Members present at the                  
  call to order were Representatives Williams, Hudson, Bunde,                  
  Finkelstein, Green, James, and Mulder.  Members absent were                  
  Representatives Carney and Davies.                                           
  CHAIRMAN BILL WILLIAMS announced there is a quorum present.                  
  He stated the meeting is on listen only teleconference with                  
  Anchorage, Cordova, Fairbanks, and Kenai/Soldotna.  He said                  
  the committee will hear SB 215 for the first time.  The                      
  committee has held seven hearings on HB 238 regarding the                    
  same subject.  He felt since the committee has had so many                   
  hearings on HB 238 and has taken so many hours of public                     
  testimony, the committee members should be very familiar                     
  with the issues and the public and industry sentiments on                    
  the issues.                                                                  
                                                                               
  CHAIRMAN WILLIAMS told committee members contained in their                  
  folders are copies of several amendments which the                           
  Department of Law (DOL) and the Department of Environmental                  
  Conservation (DEC) propose and two amendments he proposes.                   
  He requested that if committee members have additional                       
  amendments, they should get the amendments to staff in time                  
  to fax them to the teleconference sites.                                     
                                                                               
  SB 215 - OIL/HAZARDOUS SUBS. RELEASE RESPONSE FUND                           
                                                                               
  SENATOR MIKE MILLER, PRIME SPONSOR, stated he will give a                    
  history on SB 215 and what has occurred on the 470 fund                      
  since the nickel a barrel tax was instituted.  He said the                   
  tax was voted on because there was a desire to build up a                    
  $50 million fund for the purpose of having an amount of                      
  money available for responding in case of another disaster.                  
  At that time, it was felt that once the $50 million was                      
  reached, the tax would go away.  He noted over the years,                    
  the tax has never gone away because of the accounting                        
  mechanism used.  He added that over $100 million has been                    
  collected through the nickel a barrel tax.                                   
                                                                               
  SENATOR MILLER said he decided last year to rectify the                      
  problem.  He saw the need for an ongoing maintenance of                      
  prevention but at the same time, saw the need to build up                    
  the $50 million fund.  He stated the original bill he                        
  introduced in the Senate had 2 cents going into the spill                    
  prevention account and 3 cents going into the response                       
  account.  DEC, at that time, said they did not want the                      
  nickel split.  A number of hearings were then held in the                    
  Senate Resources Committee and the bill which came out of                    
  that committee provided for a 2.5 cents/2.5 cents split.  He                 
  noted at that time, DEC came back with a proposal of                         
  splitting the nickel 3 cents/2 cents.                                        
  SENATOR MILLER stated the bill then went to Senate Finance                   
  where several hearings were held and a compromise was                        
  reached.  He said industry is not totally happy with the                     
  compromise but he and the department are both satisfied with                 
  the compromise.  He explained the current version of SB 215                  
  provides for 3 cents going to the prevention side, 2 cents                   
  going to the response side, and the $37 million which has                    
  been collected going into the response side.  He noted there                 
  have been arguments that the $37 million should be split.                    
  He felt the counter-argument is that the split is in fact a                  
  60/40 split, since over $100 million has been collected in                   
  nickels and 40 percent of $100 million is $40 million.                       
                                                                               
  Number 088                                                                   
                                                                               
  REPRESENTATIVE BILL HUDSON said he was at the table                          
  throughout the entire deliberations on the establishment of                  
  the 470 fund and noted there are different recollections of                  
  how the fund developed.                                                      
                                                                               
  REPRESENTATIVE JOHN DAVIES noted there are 17 specific                       
  enactments which relate to the issue and all of those need                   
  to be looked at together to understand the current                           
  situation.                                                                   
                                                                               
  DAVID ROGERS, SPECIAL COUNSEL, SENATE FINANCE COMMITTEE,                     
  told committee members they have a sectional analysis in                     
  their folders and he will highlight a few of the sections.                   
  He stated Section 2 adds school districts to existing law                    
  authorizing municipal and village assistance for spill                       
  related expenses and limits the applicability of this                        
  section to sudden releases.  Section 3 retains the existing                  
  2,500 barrel (or hazardous substance equivalent) threshold                   
  for grant eligibility but eliminates a related requirement                   
  for a declaration of a disaster emergency and certain                        
  findings by the Governor; grant money could come from either                 
  the response or prevention account depending on the type of                  
  spill; and also makes technical, conforming changes.                         
  MR. ROGERS stated Section 13 creates a new section which                     
  levies a 2 cent per barrel surcharge.  Section 14 authorizes                 
  the legislature to appropriate that surcharge into the                       
  response account.  Section 15 sets up the accounting                         
  mechanics, similar to HB 238.  Section 16 provides that the                  
  surcharge not be levied during any fiscal year for which the                 
  legislature fails to appropriate the required amounts to the                 
  response account or the appropriation is vetoed or reduced                   
  by the Governor.  He said Article 2A authorizes a second                     
  surcharge of 3 cents per barrel that can be appropriated                     
  into the prevention account.  Section 21 revises existing                    
  law to reflect the new names:  oil and hazardous substance                   
  release prevention and response fund and the two accounts--                  
  the oil and hazardous substance release prevention account                   
  and the oil and hazardous substance release response                         
  account.                                                                     
                                                                               
  Number 136                                                                   
                                                                               
  MR. ROGERS said Section 23 deletes reference to a provision                  
  that currently allows the commissioner to transfer fund                      
  money to the Department of Transportation (DOT) for purposes                 
  of constructing or refurbishing ferries that can respond to                  
  spills but adds two exceptions to the general rule that the                  
  fund cannot be used for capital improvements:  1) response                   
  depot equipments and 2) the acquisition, repair, or                          
  improvement of assets to be used as preparedness measures                    
  for oil and hazardous substance releases.  He stated Section                 
  24 provides for the financing of the prevention account.                     
  The legislature is authorized to appropriate money from the                  
  following sources into the prevention account:  Applicable                   
  surcharge proceeds; money from other state, federal, and                     
  private sources; money recovered for reimbursement of                        
  expenditures made out of the prevention account; and all                     
  fines, penalties, damages and interest earned on the various                 
  accounts.                                                                    
                                                                               
  MR. ROGERS stated Section 25 provides for the financing of                   
  the response account.  The response account includes                         
  surcharge proceeds; money from other state, federal and                      
  private sources; and money recovered from parties that was                   
  initially paid out of the current fund or the new response                   
  account.  Section 26 rewrites existing law to establish the                  
  allowed uses for money in the response and prevention                        
  accounts.  Response account uses include:  To investigate,                   
  evaluate, contain and clean up and take other necessary                      
  action to address a release or threatened release of oil and                 
  hazardous substances described in Section 29; to provide                     
  certain matching funds in connection with a Section 29                       
  release; and to pay for the costs to the state,                              
  municipality, village or school district for cost recovery                   
  efforts relating to money that was expended from the                         
  response account.                                                            
                                                                               
  MR. ROGERS explained the prevention account can be used to:                  
  Investigate, evaluate, contain and clean up and take other                   
  necessary action regarding releases not described in Section                 
  29; pay all costs to establish and maintain the response                     
  office, response corps, and response depots; pay all costs                   
  to review contingency plans, conduct training, inspections,                  
  tests and take other action to verify or establish                           
  preparedness for oil and hazardous substance releases, and                   
  to establish proof of financial responsibility; pay                          
  documented expenses incurred by the Alaska State Emergency                   
  Response Commission for staff and response and restoration                   
  support activities; pay all costs incurred to acquire,                       
  repair or improve an asset to be used as an emergency                        
  preparedness measure relating to releases of oil or a                        
  hazardous substance; pay the costs, approved by the                          
  commissioner, incurred by the local emergency planning                       
  committees; provide certain matching funds; provide money to                 
  the storage tank assistance fund; pay for cost recovery                      
  efforts relating to money expended from the prevention                       
  account; prepare, revise and review the master and regional                  
  prevention and contingency plans; and to pay for restoration                 
  efforts.                                                                     
                                                                               
                                                                               
  Number 181                                                                   
                                                                               
  MR. ROGERS stated Section 28 limits the expenditures for                     
  local emergency planning committees to not more than three                   
  percent of the estimated balance of the prevention account.                  
  Section 29 provides that money from the response account can                 
  be used for disaster emergencies relating to oil and                         
  hazardous substance releases and other oil and hazardous                     
  releases.  In the latter case, the commissioner has to                       
  report the situation to the Governor and the Legislative                     
  Budget and Audit Committee within 120 hours.  The Governor                   
  may at any time approve, disapprove or modify.  If no action                 
  is taken by the Governor, the commissioner may continue to                   
  use the account.                                                             
                                                                               
  MR. ROGERS said Sections 30-34 implement the legislative                     
  auditor's recommendations.  Section 42 contains repealers of                 
  note:  Repeals existing surcharge; repeals departments user                  
  fee authority for contingency plan and financial                             
  responsibility reviews; repeals provisions relating to                       
  construction of ferries; repeals all provisions regarding                    
  Citizens Oversight Council on Oil and other Hazardous                        
  Substances.  He stated Section 44 suspends the response                      
  account surcharge for the next fiscal year if the unexpended                 
  and unobligated balance of the former oil and hazardous                      
  substance release response fund as of June 30, 1994, is not                  
  appropriated to the newly-created response account this                      
  session or the appropriation is vetoed or reduced by the                     
  Governor.                                                                    
                                                                               
                                                                               
  Number 210                                                                   
                                                                               
  REPRESENTATIVE ELDON MULDER referring to Section 26, asked                   
  what the definition of a "threatened release" is.                            
                                                                               
  MR. ROGERS replied "threatened release" is defined on page                   
  25, Section 39 of the bill.  He said it is an existing                       
  definition which has been revised.  He explained a                           
  threatened release means it is imminent and a release is                     
  imminent if it is impending or on the point of happening or                  
  in the judgment of the commissioner, while it is not                         
  impending, it may be reasonably be expected to culminate in                  
  an actual release and the actual release may reasonably be                   
  expected to cause personal injury, other injury to life, or                  
  loss of or damage to property, including the environment.                    
                                                                               
  REPRESENTATIVE MULDER felt without an enhanced definition as                 
  just described, the word threatened could be very open-                      
  ended.                                                                       
                                                                               
  REPRESENTATIVE MULDER referring to the end of Section 26,                    
  noted the prevention account is allowed to pay for                           
  restoration efforts.  He asked if restoration efforts are                    
  provided for in the prevention account because of the funds                  
  coming in from the federal Exxon receipts.                                   
                                                                               
  MR. ROGERS responded it is existing law.                                     
                                                                               
  BOB POE, DIRECTOR, DIVISION OF INFORMATION AND                               
  ADMINISTRATIVE SERVICES, DEC, stated there is a fine line                    
  between cleanup and restoration--when does cleanup stop and                  
  restoration begin.  By including restoration, a full cleanup                 
  effort is allowed.                                                           
                                                                               
  REPRESENTATIVE MULDER asked if there is any definition                       
  provided for restoration.                                                    
                                                                               
  MR. POE stated there is no definition but rather there is a                  
  reliance on the history demonstrated thus far and the                        
  department has not had to abuse the use of the word.                         
                                                                               
                                                                               
  Number 258                                                                   
                                                                               
  REPRESENTATIVE HUDSON asked how SB 215 provides for response                 
  depots and corps.  He also wondered where the funding comes                  
  from.                                                                        
                                                                               
  MR. ROGERS replied the funding aspect for response depots                    
  and corps is on page 19, line 26 on down and added that the                  
  funding comes from the prevention account in the fund.                       
                                                                               
  REPRESENTATIVE HUDSON clarified the funding will come from                   
  the 3 cents.                                                                 
                                                                               
  MR. ROGERS responded that is correct.                                        
                                                                               
  SENATOR MILLER interjected not only will the 3 cents be                      
  coming in but also the money from the Exxon Valdez                           
  settlement will be coming in.  He added there is also a                      
  mechanism which provides that the interest from the $50                      
  million fund can be appropriated into the prevention                         
  account.  He felt the 3 cents is somewhat misleading because                 
  there are other avenues to get additional funds into the                     
  prevention side.                                                             
                                                                               
  REPRESENTATIVE HUDSON wondered how much the 3 cents will add                 
  up to in the next couple of years.                                           
                                                                               
                                                                               
  Number 286                                                                   
                                                                               
  SENATOR MILLER replied for fiscal year 1995, the 3 cents                     
  will provide approximately $15.6 million and in fiscal year                  
  1999, it will provide $11.34 million, assuming there is no                   
  additional production coming on line.  He said the numbers                   
  he mentioned will probably go up because there are                           
  indications that additional production will come on line.                    
                                                                               
  REPRESENTATIVE HUDSON asked if the $15.6 million includes                    
  interest.                                                                    
                                                                               
  SENATOR MILLER said the $15.6 million does not include                       
  interest.  He stated the interest on $50 million at 5                        
  percent would be $2.5 million and on the mitigation account                  
  approximately $5.7 million.                                                  
                                                                               
  REPRESENTATIVE HUDSON wondered if DEC has estimated when the                 
  response depots and corps monies will be needed and how much                 
  is needed.                                                                   
                                                                               
  SENATOR MILLER said the department should answer that                        
  question.  He believed there is a real dedication in the                     
  department to ensure the response depots and corps happen.                   
                                                                               
  CHAIRMAN WILLIAMS asked where does the money come from for                   
  the mitigation account.                                                      
                                                                               
  MR. ROGERS replied the money comes from fines, penalties,                    
  damages, cost recovery moneys, and interest.                                 
                                                                               
  CHAIRMAN WILLIAMS asked if the $5.7 million includes the                     
  Exxon Valdez settlement of $28 million, which will be paid                   
  back by the year 2001.                                                       
                                                                               
  SENATOR MILLER stated that is correct.                                       
                                                                               
  CHAIRMAN WILLIAMS asked if the $28 million paid up-front by                  
  the state came from the general fund.                                        
                                                                               
  SENATOR MILLER replied the money was up-fronted out of                       
  general fund money.  He felt an argument can be made that                    
  many of the prevention efforts are things which should have                  
  done before and should have been funded out of general fund                  
  moneys.                                                                      
                                                                               
  Number 337                                                                   
                                                                               
  REPRESENTATIVE DAVIES recalled it was mentioned earlier that                 
  there are other funds available for prevention and he                        
  wondered if there was a characterization of what the order                   
  of magnitude might be.  He also asked about the policy in                    
  the bill which will put the entire $37 million into the                      
  response account.  He wondered what the estimated loss of                    
  revenues to the state will be in regard to the 2 cents.                      
                                                                               
  SENATOR MILLER stated it is a philosophical argument.  He                    
  said if the original concept would have taken effect, the                    
  nickel tax would have been gone by now.  He said it could be                 
  argued the 3 cents is a surplus revenue coming to the state.                 
                                                                               
  REPRESENTATIVE DAVIES asked how much less money will come                    
  into the state as a result of taking that out.                               
                                                                               
  SENATOR MILLER replied the department will have to give that                 
  estimate.  He has heard numbers from $38 million to $50                      
  million over the next five years.                                            
                                                                               
  Number 366                                                                   
                                                                               
  REPRESENTATIVE DAVID FINKELSTEIN asked where the reference                   
  to restoration is contained in SB 215.                                       
                                                                               
  MR. ROGERS replied on page 21, lines 8-9.                                    
                                                                               
  REPRESENTATIVE FINKELSTEIN said the previous discussion                      
  implied restoration funding comes from the response account.                 
                                                                               
  MR. ROGERS responded that is incorrect.  He said there may                   
  be a question of what is cleanup and what is restoration.                    
  Cleanup can be paid for from either account, depending on                    
  the kind of spill involved and Section 29 delineates the                     
  response account type of spill.  He stated there is a very                   
  fine line between cleanup and restoration.  He stressed SB                   
  215 and existing law clearly provides for restoration.                       
  Restoration has been plugged into the prevention account                     
  under the new scheme.                                                        
                                                                               
  REPRESENTATIVE FINKELSTEIN felt restoration should not be a                  
  part of prevention, because restoration is an outcome of                     
  response not prevention.                                                     
                                                                               
  MR. ROGERS reminded the committee that response can be paid                  
  for out of either account.  He stated there is not a clear                   
  dichotomy between response and prevention.                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN stated if that approach was being                 
  used, there would not be a plan to split the nickel.  He                     
  felt there is a clear differentiation between response and                   
  prevention being made.  There have been many discussions                     
  about when cleanup ends and restoration begins but he has                    
  never seen a case being made that restoration is a subset of                 
  prevention.                                                                  
                                                                               
  SENATOR MILLER replied he would need to go back through his                  
  original records to respond.                                                 
                                                                               
                                                                               
  Number 415                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN clarified there was a reference                   
  to a blackmail provision which says that if the money is not                 
  appropriated, the surcharge stops.                                           
                                                                               
  MR. ROGERS replied that provision is in Sections 16 and 44.                  
                                                                               
  REPRESENTATIVE FINKELSTEIN clarified Section 44 provides                     
  that the legislature has to separately appropriate the money                 
  and if that does not occur, the 2 cents surcharge stops.                     
                                                                               
  MR. ROGERS stated the 2 cents surcharge is suspended for one                 
  year.                                                                        
                                                                               
  REPRESENTATIVE FINKELSTEIN clarified Section 16 provides                     
  that the surcharge stops for any year in which any of the                    
  conditions listed are not met.                                               
                                                                               
  MR. ROGERS stated the surcharge stops if the legislature                     
  does not appropriate the money or the Governor vetoes or                     
  reduces the appropriation.  He said the amount is described                  
  in (b), and includes the surcharge and the portion of the                    
  mitigation account relating to cost recovery money.                          
                                                                               
                                                                               
  Number 455                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN asked why the provision only                      
  applies to the response account and not the prevention                       
  account.                                                                     
                                                                               
  SENATOR MILLER replied the response account is accumulating.                 
  He said he prefers to call the provision an incentive                        
  clause.  He stated the 3 cents surcharge is never going to                   
  shut off and therefore, the legislature does not need a tool                 
  to deal with it.                                                             
                                                                               
  REPRESENTATIVE FINKELSTEIN asked where in SB 215 is there a                  
  provision for the funds coming in from interest.                             
                                                                               
  MR. ROGERS replied that provision is on page 16, lines 12 -                  
  19, which outlines the funding sources for the prevention                    
  account and includes the interest on all of the accounts,                    
  including the surcharge account, which sits in the general                   
  fund for appropriation.                                                      
                                                                               
  REPRESENTATIVE FINKELSTEIN asked if the legislature has ever                 
  made these appropriations in the past.                                       
                                                                               
  SENATOR MILLER responded the legislature has never                           
  appropriated the interest before because the account was                     
  never set up in this manner.  He felt in next year's budget                  
  negotiations, there will be strong lobbying for the                          
  legislature to appropriate the interest to the prevention                    
  account.                                                                     
                                                                               
  Number 508                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN stated the legislature has always                 
  had the ability to spend the money and there has always been                 
  a need for the money.  He felt the demands on money in the                   
  future are going to be so extreme that there will be a                       
  battle over all interest, even from the small accounts.                      
                                                                               
  SENATOR MILLER agreed that the legislature may or may not                    
  appropriate the interest but the law clearly indicates the                   
  legislature should appropriate the money into the prevention                 
  account.                                                                     
                                                                               
  REPRESENTATIVE PAT CARNEY felt Section 16 puts a lot of                      
  power in the hands of the Governor to stop the surcharge.                    
  He wondered what the amount will be if the surcharge is                      
  stopped for one year.                                                        
                                                                               
  MR. POE responded it will amount to $10,500,000.                             
                                                                               
  REPRESENTATIVE CARNEY said there may be a situation where                    
  just the Governor can trigger the shutting off of the                        
  surcharge by vetoing one dollar of the appropriation,                        
  causing the loss of potential income.                                        
                                                                               
  Number 554                                                                   
                                                                               
  REPRESENTATIVE MULDER, referring to Section 24, asked if the                 
  Senate felt there was not a dedication of funds but rather a                 
  moral commitment by the legislature.                                         
                                                                               
  SENATOR MILLER said that is correct.  He felt anytime                        
  something is put in statute, there is a moral commitment.                    
                                                                               
  CHAIRMAN WILLIAMS clarified the $2.5 million received in                     
  interest will not necessarily go into the prevention                         
  account.                                                                     
                                                                               
  SENATOR MILLER replied the interest will have to be                          
  appropriated into the prevention account by the legislature.                 
                                                                               
  REPRESENTATIVE JOE GREEN commented if the 5 cents surcharge                  
  is not collected for a year, the amount not coming in will                   
  be over $25 million, not $10.5 million.                                      
                                                                               
  REPRESENTATIVE MULDER said the trigger only pertains to the                  
  response side not the prevention side.  Therefore, the $10.5                 
  million is correct.                                                          
                                                                               
  REPRESENTATIVE DAVIES felt an alternative approach can be                    
  taken in regard to the interest.  He said it could be set up                 
  so the commissioner of the Department of Revenue deposits                    
  the interest directly into the prevention accounts, which                    
  can be justified because the legislature still has to                        
  appropriate the money out of the accounts, similar to the                    
  royalty income.                                                              
                                                                               
  SENATOR MILLER responded that approach was not discussed.                    
                                                                               
  MR. ROGERS added that the money does go into a mitigation                    
  account so it is identified.                                                 
                                                                               
  REPRESENTATIVE DAVIES asked which repealer in SB 215                         
  addresses the Citizens' Oversight Council.                                   
                                                                               
  MR. ROGERS replied AS 24.20.600 through AS 24.20.630.                        
                                                                               
  SENATOR MILLER stated there was an amendment in Senate                       
  Finance to delete the Citizens' Oversight Council and the                    
  amendment passed 5-1.                                                        
                                                                               
  MR. ROGERS added that the theory was the Council had not                     
  been funded recently and no longer served a necessary                        
  function.                                                                    
                                                                               
  Number 699                                                                   
                                                                               
  CHAIRMAN WILLIAMS asked what the rationale was for placing                   
  the $27 million Exxon Valdez reimbursement moneys into the                   
  Oil and Hazardous Substance Prevention Account.                              
                                                                               
  SENATOR MILLER replied DEC said they needed the money to                     
  fund their ongoing programs and it was felt DEC should be                    
  able to use those funds for that purpose.                                    
                                                                               
  REPRESENTATIVE MULDER asked if mitigation funds are used for                 
  leaking underground storage tank cleanup.                                    
                                                                               
  SENATOR MILLER replied a portion of the funds are used for                   
  storage tank cleanup.                                                        
                                                                               
  TAPE 94-60, SIDE B                                                           
  Number 000                                                                   
                                                                               
  REPRESENTATIVE HUDSON asked what the source of funding for                   
  bulk field storage sites is in SB 215.                                       
                                                                               
  SENATOR MILLER replied there is no money provided for that                   
  purpose.  He said the state is under a federal mandate with                  
  the leaking underground storage tanks, unlike the bulk field                 
  storage sites.                                                               
                                                                               
  REPRESENTATIVE HUDSON asked where the leaking underground                    
  storage tanks cleanup will be funded from.                                   
                                                                               
  MR. ROGERS replied those can be funded out of the prevention                 
  account, subject to appropriation.                                           
                                                                               
  CHAIRMAN WILLIAMS said DEC has stressed how much money is                    
  needed to take care of the leaking underground storage                       
  tanks.  He felt that need will be competing with the 470                     
  fund.                                                                        
                                                                               
  SENATOR MILLER replied there have been several discussions                   
  on how to fund the cleanup of the leaking underground                        
  storage tanks.  He stressed at some point the need will have                 
  to be funded, whether the money comes from the Exxon Valdez                  
  reimbursement, general funds, etc.  He said once the Exxon                   
  Valdez moneys are gone, it is felt there will be some other                  
  mechanism, such as a 1 cent gasoline tax, to supplement the                  
  funding for the cleanup of the leaking underground storage                   
  tanks.                                                                       
                                                                               
  REPRESENTATIVE HUDSON asked Senator Miller to explain the                    
  addition of school districts.                                                
                                                                               
  SENATOR MILLER replied the addition of school districts was                  
  an amendment offered in the Senate Finance Committee because                 
  it was a section of the law which had never been used.                       
  There have never been any grants issued under this section                   
  of the law.  However, it was felt that in many places in                     
  rural Alaska, the school district is the government and they                 
  have more problems with leaking underground storage tanks                    
  than perhaps the city.  He said the amendment provided that                  
  if there is a spill, the school district will have access to                 
  a grant to clean up the spill.                                               
                                                                               
  REPRESENTATIVE CARNEY asked what section specifies                           
  (indiscernible).                                                             
                                                                               
  MR. ROGERS replied Section 44.                                               
                                                                               
  REPRESENTATIVE CARNEY clarified that section does not                        
  specify an amount.                                                           
                                                                               
  MR. ROGERS said that is correct.  He stated the amount is                    
  whatever the unexpended and unobligated amount is as of that                 
  date.                                                                        
                                                                               
  Number 064                                                                   
                                                                               
  REPRESENTATIVE MULDER said the fiscal note for SB 215 says                   
  the beginning balance of the response account for fiscal                     
  year 1995 will be $47.7 million, which is quite different                    
  than what is being talked about in the bill.  He wondered                    
  why there is a difference of approximately $10 million.                      
                                                                               
  MR. POE replied because of the 1994 nickels.                                 
                                                                               
  REPRESENTATIVE MULDER said when adding the beginning balance                 
  of the response account of $47.7 million to the beginning                    
  balance of the prevention account of $15.5 million plus the                  
  total response surcharge collected in 1995 of $5.2 million,                  
  the resulting amount is about $52.9 million.  He wondered                    
  why the ending balance of the response account shows $46.9                   
  million                                                                      
                                                                               
  MR. POE replied the appropriations do not occur until the                    
  beginning of the next fiscal year.                                           
                                                                               
  REPRESENTATIVE CARNEY asked if the Administration supports                   
  SB 215 as it is currently written.                                           
                                                                               
  MR. POE responded the Administration finds SB 215                            
  acceptable.  He stated SB 215 provides a 3 cents/2 cents                     
  split which provides adequate funding on the prevention                      
  side.  He said in regard to proposed amendments on splitting                 
  the $37.4 million, the Administration is not lobbying for                    
  that change.                                                                 
                                                                               
  Number 094                                                                   
                                                                               
  REPRESENTATIVE HUDSON noted that SB 215 eliminates any use                   
  of the funds for the development or purchase of new ferries.                 
  His concern for a long time has been what happens if there                   
  is a spill on the West Coast or in Southeast Alaska.  He                     
  stated SB 215 does provide for moneys to come from the                       
  prevention account to be used for the creation of depots and                 
  the response capabilities on the coast, but as the bill is                   
  currently written, it precludes using any of the moneys to                   
  enhance or upgrade the communications of a marine highway                    
  vessel, which he felt might be of benefit to any kind of                     
  coastal prevention/response capability.  He thought the                      
  depots and coastal response capability will lead to a                        
  collection of private operators, resulting in a consortium                   
  on the West Coast and in Southeast Alaska available to                       
  respond to a non-crude oil spill.                                            
                                                                               
  REPRESENTATIVE HUDSON wondered if SB 215 provides for the                    
  use of any funds for whatever it takes, such as a depot in                   
  Sitka and the establishment of materials and response                        
  contracts, etc., for a coastal prevention/response                           
  capability.  He asked Mr. Poe how he envisions that                          
  happening and where the funding will come from.                              
                                                                               
  MR. POE stated SB 215 provides that depots and corps can be                  
  funded from the prevention account.  He pointed out that                     
  provision (E) on page 20, line 10 says "pay all costs                        
  incurred..."  He felt a ferry is an asset with a life over                   
  one year, if the improvement was specifically justified as a                 
  preparedness measure in order to better response to, recover                 
  from, etc., and would fall under this provision.  He said SB                 
  215 precludes the new construction of a vessel but if one                    
  goes wild with this provision, a new vessel could be                         
  acquired.                                                                    
                                                                               
  Number 151                                                                   
                                                                               
  MR. ROGERS said that was not the intent of the Senate.  The                  
  provision was designed to cover the emergency response                       
  centers.  He said the provision could be read as Mr. Poe                     
  indicated.                                                                   
                                                                               
  MR. POE stated the provision does allow the state the                        
  flexibility to do what it takes to be ready.                                 
                                                                               
  REPRESENTATIVE HUDSON stressed he is not interested in                       
  acquiring new vessels and felt the ferry system should not                   
  be turned into an oil response fleet for the state.  He                      
  believed, however, that a Southeast Alaska Petroleum                         
  Response Organization (SEAPRO) type of protective system                     
  could be established in Southeast Alaska and the Alaska                      
  Marine Highway vessels, which normally transit that route,                   
  could be a part of the response.  He stressed it will                        
  require the development of precise types of communications                   
  and equipment, or perhaps slight modifications in the                        
  forward section of a vessel to hold boom materials that will                 
  be carried at all times.  He asked if the depots and corps                   
  and the concept just mentioned is maintained in the                          
  integrity of SB 215.                                                         
                                                                               
  Number 181                                                                   
                                                                               
  MIKE CONWAY, DIRECTOR, DIVISION OF SPILL PREVENTION AND                      
  RESPONSE, DEC, stated that Representative Hudson has                         
  specifically identified a strategy which fits into SB 215.                   
  He said the division's current capital budget request                        
  includes money to install repeaters throughout Cook Inlet,                   
  maintain repeaters already in place in Prince William Sound,                 
  and have the capability in Fairbanks.  He said there is a                    
  work group working with the Alaska Marine Highway system on                  
  the design of the current vessel, to ensure that it will be                  
  able to do the things Representative Hudson mentioned.  He                   
  noted the new vessel is being designed to serve as a                         
  portable depot.  He felt slight modifications on the cargo                   
  capacity of the ferries could be a part of that also.                        
                                                                               
  REPRESENTATIVE HUDSON felt there could also be slight                        
  necessary modifications made to the ferry terminals as an                    
  integral part of the coastal protection.  He stated it is                    
  important that a funding source be maintained for those                      
  types of modifications.                                                      
                                                                               
  MR. CONWAY agreed and said when the near shore demonstration                 
  projects are completed, an overall review will be done to                    
  look at where the gaps are.                                                  
                                                                               
  Number 214                                                                   
                                                                               
  REPRESENTATIVE HUDSON clarified the current version of SB                    
  215 provides DEC the opportunity for minor acquisitions to                   
  upgrade some of the state facilities, in order to accomplish                 
  the near shore protection system.                                            
                                                                               
  MR. CONWAY replied that is correct.                                          
                                                                               
  REPRESENTATIVE DAVIES asked if the reason there is not an                    
  operational depots and corps system in place currently is                    
  because there has not been enough money to accomplish that.                  
                                                                               
  MR. CONWAY replied that is part of the reason.  He said the                  
  other reason is that the initial fiscal note included about                  
  $20 million and there has only been $2 million available at                  
  the most and less than that at other times in the last four                  
  years for that system.  He stated the Department of Military                 
  and Veteran Affairs (DMVA) and DEC realized there was a need                 
  for a strategic plan on what to purchase, etc.  That                         
  strategic plan is coming to fruition with the near shore                     
  demonstration projects.                                                      
                                                                               
  REPRESENTATIVE DAVIES asked Mr. Conway if he is satisfied                    
  that under SB 215 and the 3 cents/2 cents split there will                   
  be enough money in the future to make significant progress                   
  on the depots and corps.                                                     
                                                                               
  MR. CONWAY said he is satisfied to an extent but it depends                  
  on how rapidly the depots and corps are to be established.                   
  He stated there is a 3 cents limit on the amount paid into                   
  the prevention account to pay for prevention programs.  He                   
  noted in the letter which was sent to Representative James                   
  in regard to depots and corps, a sketch was presented on the                 
  amounts required for depots and corps.  Those amounts                        
  included $6 million for barge packages, about $5 million                     
  for the high speed vessel response packages, and about $1.25                 
  million for hazardous response teams.  He stressed if there                  
  is a desire to buy all of that at once, there is not enough                  
  money to do that in SB 215.  However, one package of each a                  
  year could be put in place, but it will take 10-20 years to                  
  get that accomplished or perhaps a source could be found to                  
  come up with the funds all at once.  Then there would be a                   
  need to provide for operations and maintenance out of the 3                  
  cents account.                                                               
                                                                               
  Number 258                                                                   
                                                                               
  REPRESENTATIVE DAVIES noted the total is approximately $12                   
  million and he asked if that amount was for each center.                     
                                                                               
  MR. CONWAY replied the amount is statewide.  He said it is                   
  felt what is not prudent public policy is to duplicate                       
  existing industry and coop capability.  He stated DEC is                     
  currently negotiating with them to be able to access those                   
  resources through a contract.                                                
                                                                               
  REPRESENTATIVE GREEN felt there are perceptions which should                 
  be clarified.  He said based on the l.6 million barrels a                    
  day, the nickel surcharge represents $29.2 million and if                    
  the interest and the mitigation account is added, the result                 
  is over $27 million to a department with a $13 million                       
  budget.  He felt there is already a large surplus which                      
  could be used for depots and corps.  He recalled that in an                  
  earlier discussion regarding HB 238, Mr. Conway was asked                    
  about the dollars already allocated through DMVA to                          
  establish depots and corps and the problem was not funding,                  
  but rather there was no plan.  He also recalled that it was                  
  mentioned that the plan will not be finished until after                     
  1995.                                                                        
                                                                               
  REPRESENTATIVE GREEN said it probably will not take many                     
  years to develop the depots and corps and there is not a                     
  desire to reinvent the wheel.  Therefore, the Division is                    
  putting in some emergency response equipment in the depots                   
  but not competing with a adequate series of private cleanup                  
  and containment organizations.                                               
                                                                               
  REPRESENTATIVE GREEN recalled there was a discussion about                   
  how effective the ferry fleet might be.  He said people                      
  interested in seeing the practicality of using a ferry in                    
  responding to an oil spill, should go on one of the oil                      
  spill drills.  He did not understand how a ferry going to                    
  and from Washington, with cars and people on it, will be a                   
  part of the activities of containing and cleaning up an oil                  
  spill.                                                                       
                                                                               
  Number 316                                                                   
                                                                               
  CHAIRMAN WILLIAMS noted the people and cars can be taken off                 
  the ferry within an hour.                                                    
                                                                               
  MR. CONWAY said what has been designed in the new ferry is                   
  the ability to have modules with equipment already loaded                    
  and ready to go.  The ferry would proceed to the nearest                     
  port practical to drop off the passengers and cars.  He                      
  explained the ferry will serve as a transportation platform                  
  and take equipment out which will be deployed by other                       
  response vessels such as industry vessels, fishing vessels                   
  of opportunity, etc.  He noted the other purpose the ferry                   
  will serve is as a floating hotel.                                           
                                                                               
  REPRESENTATIVE HUDSON stated he does not envision oil                        
  sucking ferries.  He felt Mr. Conway adequately described                    
  what the new vessel will provide.                                            
                                                                               
  REPRESENTATIVE GREEN expressed concern that it may take 18                   
  hours for a ferry to respond to a spill.  He said the                        
  existing private cleanup and containment associations can be                 
  there in 12 hours.  He felt the ferry might be more fringe                   
  than fact.  He noted by the time the ferry gets to a spill,                  
  an incident command system will already be in place working                  
  with private equipment, and he was not sure how the ferry                    
  will fit in.                                                                 
                                                                               
  Number 388                                                                   
                                                                               
  MR. POE stated SB 215 does provide that money going into the                 
  mitigation account may be appropriated by the legislature to                 
  the prevention side.  He felt that is very good.  He said                    
  many of the estimates on the dollar amounts seem to be high                  
  to him.  The $2.5 million in interest is probably accurate.                  
  However, there is no knowledge of what the mitigation                        
  account will hold.  He explained the Exxon Valdez payments                   
  which will occur between now and the year 2001 can happen in                 
  any amounts, over any period of time.  Therefore, there is                   
  no assurance when that money will come into the mitigation                   
  account or in what amounts.                                                  
                                                                               
  MR. POE said estimates of having $27 million available on                    
  the prevention side in a given year are either inflated or                   
  else there will be a one year blip where all the Exxon money                 
  comes in within a two year period.                                           
                                                                               
  REPRESENTATIVE FINKELSTEIN asked what is currently being                     
  spent on prevention activities.                                              
                                                                               
  MR. POE responded 1994's budget is about $13.4 million.                      
                                                                               
  REPRESENTATIVE FINKELSTEIN asked if the surcharge is paid on                 
  the royalty oil.                                                             
                                                                               
  MR. POE replied no surcharge is paid on the royalty oil.                     
                                                                               
  REPRESENTATIVE FINKELSTEIN clarified there is not enough                     
  money to take care of storage tanks and the existing                         
  prevention program.                                                          
                                                                               
  MR. POE stated SB 215 puts a fair amount of pressure on the                  
  prevention side.  He said it is difficult to estimate what                   
  the fiscal impact of the other demands on the prevention                     
  account will be.  He said any margin may disappear very                      
  quickly.                                                                     
                                                                               
  REPRESENTATIVE FINKELSTEIN clarified that for the two                        
  programs, and the amount being spent currently, there is                     
  enough money.                                                                
                                                                               
  MR. POE replied yes, if it is all spent out of the                           
  prevention side.                                                             
                                                                               
  Number 441                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN asked Mr. Poe if restoration has                  
  ever been a part of prevention in the past.                                  
                                                                               
  MR. POE responded no.                                                        
                                                                               
  REPRESENTATIVE FINKELSTEIN wondered if there is a big spill                  
  and a big level of restoration activities is needed, with                    
  funding coming from the 3 cents side, what will happen to                    
  the remaining prevention activities.                                         
                                                                               
  MR. POE replied it is a very difficult dollar amount to                      
  estimate.                                                                    
                                                                               
  REPRESENTATIVE FINKELSTEIN pointed out that millions could                   
  be spent in restoration on a good-sized spill.                               
                                                                               
  MR. POE said on a reasonable size spill, the response                        
  account could be used.                                                       
                                                                               
  REPRESENTATIVE FINKELSTEIN said restoration is only provided                 
  for in SB 215 under the prevention account.                                  
                                                                               
  MR. POE said Mr. Rogers will offer an argument for how                       
  restoration is included in the law on the response side and                  
  DEC will also offer an amendment to provide an additional                    
  clarification.                                                               
                                                                               
  REPRESENTATIVE FINKELSTEIN clarified if there is a                           
  reasonable size spill and restoration money is spent out of                  
  the prevention account, SB 215 as currently written does not                 
  provide for enough money to fund remaining prevention                        
  activities.                                                                  
                                                                               
  MR. POE said probably not.                                                   
                                                                               
  MR. ROGERS stated restoration could be funded out of the                     
  response account because of the broad wording contained in                   
  SB 215 on the bottom of page 17 and at the top of page 18.                   
                                                                               
  REPRESENTATIVE FINKELSTEIN disagreed.  He did not feel the                   
  language provided for any restoration activities to be                       
  funded out of the response account.                                          
                                                                               
  Number 518                                                                   
                                                                               
  REPRESENTATIVE GREEN said if restoration is an after the                     
  fact case, the spiller provides the funds.  He felt there is                 
  adequate funding.                                                            
                                                                               
  REPRESENTATIVE JEANNETTE JAMES said restoration is down the                  
  road and cleanup is important.  She agreed that the                          
  definition between cleanup and restoration is a fine line.                   
  She believed that by the time restoration efforts begin,                     
  money in the prevention account does not necessarily have to                 
  be available as there will be other funds coming into the                    
  mitigation account to cover those costs.  She felt                           
  comfortable with the language contained in SB 215.  She                      
  stressed what is not available in SB 215 is funding for                      
  continuing restoration which should be funded some other                     
  way.                                                                         
                                                                               
  REPRESENTATIVE FINKELSTEIN said to achieve what                              
  Representative James suggested, funding would have to be                     
  taken out of the prevention account because it is not just                   
  in the response account, restoration has been moved to the                   
  prevention side.                                                             
                                                                               
  SENATOR MILLER stated many things happening in cleanup, some                 
  people might feel are restoration efforts but those efforts                  
  would be funded out of the response account because of the                   
  threat to public health or the environment, etc.  He felt                    
  the concerns expressed are answered in SB 215.                               
                                                                               
  REPRESENTATIVE FINKELSTEIN noted Senator Miller's point is                   
  that restoration could be allowed under cleanup.  He felt                    
  language should be added to SB 215 which says that.                          
                                                                               
  REPRESENTATIVE JAMES stated the response fund is to be used                  
  for response to an emergency situation before anyone else is                 
  involved.  She stressed by the time restoration takes place,                 
  response has been completed.  Therefore, the funding for                     
  restoration should come from a different source.                             
                                                                               
  REPRESENTATIVE FINKELSTEIN felt restoration should not be                    
  funded from the prevention account.                                          
                                                                               
  REPRESENTATIVE GREEN said restoration sounds like mitigation                 
  and mitigation dollars go into the prevention account.  He                   
  felt since the dollars go into the prevention account,                       
  funding for restoration should come out of the prevention                    
  account.  He felt a lot of time was being wasted on debate                   
  with personal attitudes.                                                     
                                                                               
  REPRESENTATIVE CARNEY disagreed and said the committee is                    
  getting educated on SB 215.  He said he would like to                        
  understand SB 215 before voting to move it out of committee.                 
                                                                               
  REPRESENTATIVE FINKELSTEIN challenged anyone on the                          
  committee, including himself, to describe what SB 215                        
  actually does.                                                               
                                                                               
  Number 647                                                                   
                                                                               
  CHAIRMAN WILLIAMS said SB 215 will be heard again at 3:30                    
  p.m. and he would like to move the bill out of committee at                  
  that time.                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN asked if he could explain his                     
  amendments so the committee can think about them.  The first                 
  amendment he will be offering is to restore the Citizens'                    
  Oversight Council and the other will be on the restoration                   
  issue.                                                                       
                                                                               
  CHAIRMAN WILLIAMS said DEC has several amendments they would                 
  like to discuss.                                                             
                                                                               
                                                                               
  TAPE 94-61, SIDE A                                                           
  Number 000                                                                   
                                                                               
  MR. POE said the first amendment deals with Section 19, on                   
  page 14, lines 7-16.  This amendment addresses cost                          
  recovery.  He explained SB 215, as currently written,                        
  provides that costs paid from the response account and are                   
  recovered should go back to the response account.  The                       
  amendment provides that cost recoveries from expenditures                    
  from the fund in the past would go into the prevention                       
  mitigation account.  He added that sometimes cost recoveries                 
  are mixed.  He stated the second portion of the amendment                    
  says that portion which came from the prevention account                     
  would go back into the prevention account.                                   
                                                                               
  REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)                   
  am (efd fld) as follows:                                                     
  Section 19, page 14, lines 7-16 replace with:                                
                                                                               
       (1) the oil and hazardous substance release response                    
       mitigation account established under AS 46.08.025(b);                   
       the amount required to be deposited under this                          
       paragraph shall represent the proportion of the                         
       expenses recovered that were originally paid for from                   
       the oil and hazardous substance release response                        
       account established under AS 46.08.010(a)(2); or                        
                                                                               
       (2) [A SPECIAL ACCOUNT CALLED] the ["] oil and                          
       hazardous substance release prevention mitigation                       
       account established under AS 46.08.020(b); the amount                   
       required to be deposited under this paragraph is the                    
       amount of money recovered that exceeds the amount                       
       payable to the response mitigation account under (1) of                 
       this section ["].                                                       
                                                                               
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections to the                  
  motion.                                                                      
                                                                               
  REPRESENTATIVE GREEN OBJECTED.  He said there has been                       
  restoration ongoing since the large spill and money has come                 
  back in.  While the funds may not have been appropriated to                  
  prevention, they have been returned to the state.  He stated                 
  that money has either paid off or has gone a long way toward                 
  the amount of money paid by the state.  He felt to now                       
  specifically say this amount of money will be allocated back                 
  to the prevention account is overfunding.                                    
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES JAMES,                           
  FINKELSTEIN, DAVIES, CARNEY, MULDER, WILLIAMS.  Voting                       
  against the amendment was REPRESENTATIVE GREEN.  The MOTION                  
  PASSED 6-1.                                                                  
                                                                               
  Number 041                                                                   
                                                                               
  MR. POE said the second amendment is related to Section 26,                  
  page 21, line 9.  This amendment was recommended by the                      
  Attorney General's office.  He stated since these grants are                 
  allowed in the beginning part of the bill, they needed to be                 
  an authorized use of the prevention account.                                 
                                                                               
  REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)                   
  am(efd fld) as follows:                                                      
                                                                               
  Section 26, page 21, line 9 add a new subsection L                           
                                                                               
       (L) pay for grants under AS 29.60.510 and impact                        
       assessments under AS 29.60.560 made by the commissioner                 
       of community and regional affairs.                                      
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
  Hearing none, the MOTION PASSED.                                             
                                                                               
  MR. POE stated the third amendment deals with Section 26,                    
  page 17, line 31, and relates to the previous debate on                      
  restoration.  He said this amendment will make it clear that                 
  restoration is included in possible cleanup activities.                      
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  215(FIN) am(efd fld) as follows:                                             
                                                                               
  Section 26, page 17, line 31, replace with:                                  
                                                                               
       contain, cleanup, including restoration of the                          
       environment, and take other necessary action, such as                   
       monitoring and                                                          
                                                                               
  REPRESENTATIVE JAMES OBJECTED.  She said earlier discussion                  
  on this subject made her feelings on the subject clear.                      
                                                                               
  REPRESENTATIVE DAVIES reiterated there is a very fine line                   
  between what is cleanup and what is restoration.  He felt                    
  this amendment will allow the state to proceed to do those                   
  things which are necessary without getting hung up on the                    
  difference between the two.  He agreed there will be other                   
  funds available for restoration and when those funds become                  
  available, they will be used for restoration and the logical                 
  transition from cleanup to restoration will be made.                         
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES MULDER, GREEN,                   
  FINKELSTEIN, DAVIES, CARNEY, and WILLIAMS.  Voting against                   
  the amendment was REPRESENTATIVE JAMES.                                      
                                                                               
  Number 103                                                                   
                                                                               
  MR. POE said the fourth amendment relates to Section 31,                     
  page 23, line 4.  He explained there are two kinds of cost                   
  recoveries--cost recoveries to the response account and cost                 
  recoveries to the prevention account.  This amendment allows                 
  for both kinds of cost recoveries to occur.                                  
                                                                               
  MR. ROGERS said this amendment is consistent with the intent                 
  and is truly a technical amendment.                                          
                                                                               
  REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)                   
  am(efd fld) as follows:                                                      
                                                                               
  Section 31, page 23, line 4 add a new subsection (D) between                 
  "cost recoveries" and "[AS SPECIFIED...":                                    
                                                                               
       (D) AS 46.08.020(a)(3) (cost recoveries)                                
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
  Hearing none, the MOTION PASSED.                                             
                                                                               
  MR. POE stated the fifth amendment deals with page 25, lines                 
  24-25.  This amendment removes the definition of                             
  catastrophic oil discharge.  He said this definition is no                   
  longer needed in the bill.                                                   
                                                                               
  REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)                   
  am(efd fld) delete lines 24-25, page 25 and renumber                         
  remaining subsections accordingly.                                           
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
  Hearing none, the MOTION PASSED.                                             
                                                                               
  Number 154                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  215(FIN) am(efd fld) as follows:                                             
                                                                               
  Page 21, following line 27:                                                  
                                                                               
       Insert a new bill section to read:                                      
                                                                               
       *Sec. 29. AS 46.08.040(d) is amended to read:                           
                                                                               
            (d) Upon a request from                                            
                 [(1)] the Alaska Legislative Council, the                     
                 commissioner shall use money from the                         
                 prevention account in the  fund to reimburse                  
                 the Alaska Legislative Council for                            
                 expenditures that it makes for the operation                  
                 of the Citizens' Oversight Council on Oil and                 
                 Other Hazardous Substances, established under                 
                 AS 24.20.600 [;] AND                                          
                                                                               
                 (2) THE COMMISSIONER OF TRANSPORTATION AND                    
                 PUBLIC FACILITIES, THE COMMISSIONER SHALL                     
                 TRANSFER MONEY FROM THE FUND TO THE                           
                 DEPARTMENT OF TRANSPORTATION AND PUBLIC                       
                 FACILITIES TO PAY FOR THE CONSTRUCTION OR                     
                 REFURBISHMENT OF ONE OR MORE VESSELS OF THE                   
                 ALASKA MARINE HIGHWAY SYSTEM THAT HAVE THE                    
                 CAPABILITY TO ASSIST IN RESPONDING TO SPILLS                  
                 OF OIL AND HAZARDOUS SUBSTANCES; IN EXPENDING                 
                 MONEY IN THE FUND WHOSE USE FOR VESSELS OF                    
                 THE MARINE HIGHWAY SYSTEM IS AUTHORIZED BY AS                 
                 19.65.025 AND THIS PARAGRAPH, THE                             
                 COMMISSIONER SHALL GIVE PRIORITY TO                           
                 CONSTRUCTION OF ONE OR MORE NEW VESSELS THAT                  
                 HAVE THE CHARACTERISTICS REQUIRED BY THIS                     
                 PARAGRAPH]."                                                  
                                                                               
  Renumber the following bill sections accordingly.                            
                                                                               
  Page 26, line 14:                                                            
                                                                               
       Delete "AS 24.20.600, 24.20.610, 24.20.620, 24.20.630;"                 
                                                                               
                                                                               
  Page 26, lines 15-16:                                                        
                                                                               
       Delete ", 46.08.040(d)"                                                 
                                                                               
  REPRESENTATIVE FINKELSTEIN said the Citizens' Oversight                      
  Council came out of the Oil Spill Commission.  The                           
  Commission's conclusion was that while there are specific                    
  oversight bodies tied to specific parts of the state, there                  
  was not an overall body to address the issue of how to get                   
  ahead of some of the problems.  He stressed the Citizens'                    
  Oversight Council did that.  He stated there was some                        
  political unhappiness with the council's activities because                  
  of its coverage of areas outside of oil such as hazardous                    
  waste issues, but there was never any unhappiness in the                     
  work which the council did in the field of oil.  He felt the                 
  council was a productive body.  He added that the                            
  legislature did make a decision not to fund the council in                   
  the current fiscal year.  However, SB 215 completely                         
  eliminates the council from the statute, which he did not                    
  feel is necessary or appropriate.                                            
                                                                               
  Number 174                                                                   
                                                                               
  REPRESENTATIVE DAVIES said he was previously the state's                     
  seismologist and one of the clear things he learned in that                  
  experience was that society's response to catastrophes,                      
  either man-made or natural, follows a predictable pattern.                   
  When a catastrophe occurs, a lot of money is thrown at it                    
  and then over time the problem is forgotten and money for                    
  the problem dwindles until the next catastrophe occurs.  He                  
  stated if there was a more even approach, the state would                    
  spend less money overall and do a better job.  He pointed                    
  out that one of the major functions of an Oversight Council                  
  is to keep the problem before the state, ensuring that the                   
  state's guard is not allowed to drop too far.  He felt the                   
  Citizens' Oversight Council can actually save the state                      
  money and save the state heartache in the long run.  He                      
  expressed support for the amendment.                                         
                                                                               
  REPRESENTATIVE MULDER said as Chair of the Legislative                       
  Council, he objects to the amendment.  He stated the                         
  Legislative Council feels the Citizens' Oversight Council is                 
  redundant and the work they are doing should be done by DEC.                 
  He pointed out the reason the Citizens' Oversight Council                    
  was not funded was because of an abuse of the funds by the                   
  council.  He said there were over a dozen contracts given                    
  out to so-called friends of individuals involved with,                       
  participating on, or running the council.  He stressed there                 
  have not been any problems with the deletion of the                          
  Citizens' Oversight Council.                                                 
                                                                               
  REPRESENTATIVE GREEN also objected to the amendment.  He                     
  felt the amendment may be unconstitutional.                                  
                                                                               
  REPRESENTATIVE FINKELSTEIN WITHDREW his MOTION.                              
                                                                               
  Number 217                                                                   
                                                                               
  CHAIRMAN WILLIAMS said the committee meeting will reconvene                  
  at 3:30 p.m.  He stated the committee will also discuss SB                   
  310 at that time.                                                            
                                                                               
  THE MEETING RECESSED AT 10:15 A.M.                                           
                                                                               
  TAPE 94-62, SIDE A                                                           
  Number 000                                                                   
                                                                               
  THE MEETING RECONVENED AT 3:58 P.M.                                          
                                                                               
  CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVES                  
  HUDSON, BUNDE, MULDER, AND JAMES are present.                                
                                                                               
  CHAIRMAN WILLIAMS stated the committee will again take up                    
  CSSB 215(FIN) am(efd fld).  When the committee recessed, the                 
  committee was discussing an amendment proposed by                            
  Representative Finkelstein, which was withdrawn because                      
  there was a need for the committee to get to the floor.                      
                                                                               
  REPRESENTATIVE JAMES made a MOTION to MOVE CSSB 215(FIN)                     
  am(efd fld), out of committee with INDIVIDUAL                                
  RECOMMENDATIONS.                                                             
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
  Hearing none, the MOTION PASSED.                                             
                                                                               
  A brief at-ease was taken.                                                   
                                                                               
  (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVES                 
  CARNEY, DAVIES, FINKELSTEIN, and GREEN had joined the                        
  committee.)                                                                  
                                                                               
  REPRESENTATIVE HUDSON made a MOTION to RESCIND the                           
  committee's action in adopting and moving CSSB 215(RES) out                  
  of committee.                                                                
                                                                               
  REPRESENTATIVES JAMES AND BUNDE OBJECTED.                                    
  REPRESENTATIVE BUNDE said the amendments will be seen again                  
  on the floor and felt it is an academic exercise to go                       
  through them, hear them now and again on the floor.                          
                                                                               
  Number 031                                                                   
                                                                               
  REPRESENTATIVE DAVIES stated unlike the previous speaker, he                 
  sat through the entire morning meeting and in the course of                  
  that discussion, he came up with an amendment that the                       
  sponsor of SB 215 had no objection to.  He said he asked                     
  Representative William's staff to contact him when the                       
  meeting was going to begin.                                                  
                                                                               
  REPRESENTATIVE MULDER said the Chairman did not railroad                     
  anything through.  He did not feel the burden of presence                    
  should be placed on a staff person to get the committee                      
  members to the meeting.  He felt it is the responsibility of                 
  each legislator to be at the meeting on time.                                
                                                                               
  REPRESENTATIVE CARNEY agreed that the burden should not be                   
  placed on staff if the meeting starts on time.  He said many                 
  committee members were available and waiting for the                         
  chairman to start the meeting.  He felt it was proper to                     
  expect some notification as to when the meeting was going to                 
  start.  He stressed if the meeting started on time, the                      
  committee members would have been there.                                     
                                                                               
  REPRESENTATIVE JAMES stated it is the legislator's                           
  responsibility to get to a meeting.  She was on time for the                 
  meeting and waited for the meeting to begin.  She WITHDREW                   
  her OBJECTION.                                                               
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections to                      
  rescinding the committee's action.  Hearing none, the MOTION                 
  PASSED.                                                                      
                                                                               
  Number 082                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  215(FIN) am(efd fld) as follows:                                             
                                                                               
  Page 21, following line 27:                                                  
                                                                               
       Insert a new bill section to read:                                      
                                                                               
       "*Sec. 29. AS 46.08.040(d) is amended to read:                          
                                                                               
       (d) Upon a request from                                                 
                                                                               
            [(1)] the Alaska Legislative Council, the                          
            commissioner may [SHALL] use money from the                        
            prevention account in the fund to reimburse the                    
            Alaska Legislative Council for expenditures that                   
            it makes for the operation of the Citizens'                        
            Oversight Council on Oil and Other Hazardous                       
            Substances, established under AS 24.20.600 [; AND                  
                                                                               
            (2) THE COMMISSIONER OF TRANSPORTATION AND PUBLIC                  
            FACILITIES, THE COMMISSIONER SHALL TRANSFER MONEY                  
            FROM THE FUND TO THE DEPARTMENT OF TRANSPORTATION                  
            AND PUBLIC FACILITIES TO PAY FOR THE CONSTRUCTION                  
            OR REFURBISHMENT OF ONE OR MORE VESSELS OF THE                     
            ALASKA MARINE HIGHWAY SYSTEM THAT HAVE THE                         
            CAPABILITY TO ASSIST IN RESPONDING TO SPILLS OF                    
            OIL AND HAZARDOUS SUBSTANCES; IN EXPENDING MONEY                   
            IN THE FUND WHOSE USE FOR VESSELS OF THE MARINE                    
            HIGHWAY SYSTEM IS AUTHORIZED BY AS 19.65.025 AND                   
            THIS PARAGRAPH, THE COMMISSIONER SHALL GIVE                        
            PRIORITY TO CONSTRUCTION OF ONE OR MORE NEW                        
            VESSELS THAT HAVE THE CHARACTERISTICS REQUIRED BY                  
            THIS PARAGRAPH]."                                                  
                                                                               
  Renumber the following bill sections accordingly.                            
                                                                               
  Page 26, line 14:                                                            
                                                                               
       Delete "AS 24.20.600, 24.20.610, 24.20.620, 24.20.630;"                 
                                                                               
  Page 26, lines 15-16:                                                        
                                                                               
       Delete ", 46.08.040(d)"                                                 
                                                                               
  REPRESENTATIVE FINKELSTEIN said this amendment provides to                   
  not delete the Citizens' Oversight Council.  He stated it                    
  may be the choice of the legislature to not fund the council                 
  again in the future, but he felt the council is a logical                    
  product of the Oil Spill Commission's deliberations on the                   
  impact of the oil spill and remains an important action.  He                 
  pointed out the change in this amendment from the previous                   
  amendment (offered and withdrawn at the morning hearing) is                  
  changing the word "shall" to "may".                                          
                                                                               
  REPRESENTATIVE MULDER OBJECTED to the motion.                                
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES CARNEY, DAVIES,                  
  AND FINKELSTEIN.  Voting against the amendment were                          
  REPRESENTATIVES GREEN, HUDSON, BUNDE, JAMES, MULDER, AND                     
  WILLIAMS.  The MOTION was DEFEATED 6-3.                                      
                                                                               
  Number 105                                                                   
                                                                               
  REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)                   
  am(efd fld) as follows:                                                      
                                                                               
  Page 26, line 21, through page 27, line 1:                                   
                                                                               
       Delete all material and insert:                                         
                                                                               
    "*Sec. 44.  CONDITIONAL SUSPENSION OF SURCHARGE IMPOSED BY                 
                                                                               
  AS 43.55.201 - 43.55.231.  In addition to the circumstances                  
  set out in AS 43.55.231, the surcharge authorized by AS                      
  43.55.201 is not levied on and after the effective date of                   
  this section and until June 30, 1995, if                                     
                                                                               
       (1) the Eighteenth Alaska State Legislature does not,                   
  during the Second Regular Session or during any special                      
  session held before the effective date of this section,                      
                                                                               
            (A) appropriate to the oil and hazardous substance                 
       release prevention and response fund established by AS                  
       46.08.010(a), as amended by sec. 21 of this Act, the                    
       balance, as of July 1, 1994, of the account established                 
       under former AS 43.55.210 to receive the proceeds of                    
       the conservation surcharge; the appropriation required                  
       by this subparagraph must be allocated as follows:                      
                                                                               
                 (i)  40 percent of that balance to the                        
       response account established by AS 46.08.010(a)(2), as                  
       amended by sec. 21 of this Act; and                                     
                                                                               
                 (ii) 60 percent of that balance to the                        
       prevention account established by AS 46.08.010(a)(1),                   
       as amended by sec. 21 of this Act; and                                  
                                                                               
            (B) appropriate at least an amount equal to the                    
       estimated amount, as of the day before the effective                    
       date of this section, of the unexpended and unobligated                 
       balance of the former oil and hazardous substance                       
       release response fund, exclusive of the amount                          
       appropriated under (A) of this paragraph, to the oil                    
       and hazardous substance release prevention and response                 
       fund; the appropriation required by this subparagraph                   
       must be allocated as follows:                                           
                                                                               
                 (i)   40 percent of that balance to the                       
       response account established by AS 46.08.010(a)(2), as                  
       amended by sec. 21 of this Act; and                                     
                                                                               
                 (ii)  60 percent of that balance to the                       
       prevention account established by AS 46.08.010(a)(1),                   
       as amended by sec. 21 of this Act, to be appropriated                   
       for purposes described in AS 46.08.040(a)(2)(C)(i) and                  
       (ii), added by sec. 26 of this Act, and for purposes                    
       described in AS 46.08.100 - 46.08.190; or                               
                                                                               
       (2) the governor vetoes or reduces any of the amounts                   
   appropriated or allocated under (1) of this section."                       
                                                                               
  Page 27, lines 2-4:                                                          
                                                                               
       Delete APPLICABLE TO CONSERVATION SURCHARGE ON OIL                      
  IMPOSED BY AS 43.55.200 AFTER JUNE 30, 1994, AND BEFORE THE                  
  EFFECTIVE DATE OF THIS SECTION."                                             
                                                                               
       Insert ". (a)"                                                          
                                                                               
  Page 27, line 18:                                                            
                                                                               
       Delete "section"                                                        
                                                                               
       Insert "subsection"                                                     
                                                                               
  Page 27, following line 20:                                                  
                                                                               
       Insert a new subsection to read:                                        
                                                                               
       "(b) On the effective date of this section, if so                       
  appropriated by the legislature, the commissioner of                         
  administration shall transfer to the oil and hazardous                       
  substance release prevention and response fund established                   
  by AS 46.08.010(a), as amended by sec. 21 of this Act, an                    
  amount equal to the estimated amount, as of the day before                   
  the effective date of this section, of the unexpended and                    
  unobligated balance of the former oil and hazardous                          
  substance release response fund; the appropriation required                  
  by this subparagraph must be allocated as follows:                           
                                                                               
       (1) 40 percent of that balance to the response account                  
  established by AS 46.08.010(a)(2), as amended by sec. 21 of                  
  this Act; and                                                                
       (2) 60 percent of that balance to the prevention                        
  account established by AS 46.08.010(a)(1), as amended by                     
  sec. 21 of this Act."                                                        
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections to the                  
  motion.                                                                      
                                                                               
  REPRESENTATIVE JAMES OBJECTED.                                               
                                                                               
                                                                               
  Number 115                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN noted he intends to move the                      
  Letter of Intent because it makes it clear that the                          
  amendment is attempting to ensure funding for the depots and                 
  corps.  He said unless the reserve is split, there is not                    
  going to be funding available to get the depots and corps                    
  going.  He stated the Letter of Intent will indicate an                      
  interest in accomplishing that goal.                                         
                                                                               
  REPRESENTATIVE DAVIES stated the amendment is important                      
  because in earlier discussions, DEC said if the depots and                   
  corps money has to be taken out of the declining prevention                  
  account, it will be 15-20 years before the depots and corps                  
  are in place.  He felt that is too long to wait.  He                         
  stressed if the amendment is passed and funds are designated                 
  for depots and corps, they might be in place in a couple of                  
  years instead of a couple of decades.                                        
                                                                               
  REPRESENTATIVE JAMES expressed support for getting the                       
  depots and corps on line also but she is concerned about                     
  spending a lot of money out of the prevention account for                    
  things which should not be paid for from the tax on the                      
  crude oil industry.  She is more interested in finding                       
  another source of funds.                                                     
                                                                               
                                                                               
  Number 145                                                                   
                                                                               
  REPRESENTATIVE HUDSON said he did not recall DEC saying the                  
  depots and corps will take 15-20 years.  He recalled there                   
  was a discussion about what the balance will be and what                     
  effect that balance will have on the accomplishment of                       
  putting some of the near shore depots and corps in place.                    
                                                                               
  MR. CONWAY replied there is going to be too many items on                    
  the plate to fund from the 3 cents revenue.  He said in the                  
  letter to Representative James, there was a strategic plan                   
  included on what the depots and corps will cost.  He stated                  
  with all the demands on the prevention account, along with a                 
  desire to pay for depots and corps out of that account, it                   
  could take 15-20 years to get them in place, depending upon                  
  the will of the legislature in looking at all of the demands                 
  and all things which need to be funded.                                      
                                                                               
  MR. POE explained approximately $15.7 million will be                        
  available the first year, and that decreases in the years                    
  thereafter.  He stressed one of the good things SB 215 does                  
  is make several funding sources available for the prevention                 
  mitigation account.  He pointed out the legislature may                      
  appropriate the money from the mitigation account to the                     
  prevention account.  He felt the $2.5 million is a                           
  reasonable estimate on interest earned one year from now.                    
  Additionally, there is $28 million in Exxon money which will                 
  come in sometime between now and the year 2000.  He noted                    
  the payment amounts and time are not specified.                              
                                                                               
  MR. POE stated the word "may" is an important aspect because                 
  the legislative history thus far has shown the mitigation                    
  moneys not being appropriated to the response fund.  The                     
  moneys have been appropriated to storage tank assistance,                    
  etc.  He said it is important to recognize there is an                       
  amount of money, with unlimited wants going after that                       
  money.  He said there is nothing preventing the legislature                  
  from treating the mitigation moneys as general funds.  He                    
  felt when legislators are gaging on what they positively                     
  will have for depots and corps and a prevention program, it                  
  will probably be the $15.7 million plus whatever the will of                 
  that particular legislature is to get the money out of the                   
  mitigation account to the prevention account.                                
                                                                               
  Number 207                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN clarified without the amendment,                  
  the 2 cents surcharge shuts off within the year and with the                 
  amendment, the 2 cents surcharge shuts off within 2 1/2                      
  years.                                                                       
                                                                               
  MR. POE replied that is correct.                                             
                                                                               
  REPRESENTATIVE FINKELSTEIN said at that point, until there                   
  is a major spill, there is no reason to assume there will be                 
  a significant amount of assessment on the 2 cents.                           
                                                                               
  MR. POE stated DEC has been using about $250,000 annually in                 
  the substantial threat (indiscernible) and that amount would                 
  come from the response account.                                              
                                                                               
  REPRESENTATIVE FINKELSTEIN pointed out that the assessment                   
  has been in place for a number of years and if it is                         
  continued for another year or two, there will be enough                      
  money to complete the program.                                               
                                                                               
  REPRESENTATIVE CARNEY asked who drafted the amendment.                       
                                                                               
  CHAIRMAN WILLIAMS replied he drafted the amendment.                          
                                                                               
  REPRESENTATIVE CARNEY asked Chairman Williams if the                         
  amendment is something the committee should not do now.                      
                                                                               
  CHAIRMAN WILLIAMS replied he chose not to bring the                          
  amendment before the committee.                                              
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES DAVIES,                          
  FINKELSTEIN, and CARNEY.  Voting against the amendment were                  
  REPRESENTATIVES GREEN, MULDER, BUNDE, HUDSON, JAMES, and                     
  WILLIAMS.                                                                    
                                                                               
  Number 242                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB                       
  215(FIN) am(efd fld) as follows:                                             
                                                                               
  Page 9, lines 30-31:                                                         
                                                                               
       Delete "the oil and hazardous substance release"                        
       Insert "a [THE OIL AND HAZARDOUS SUBSTANCE RELEASE]"                    
                                                                               
  Page 10, line 3:                                                             
                                                                               
            After "prevention"                                                 
                                                                               
       Insert "mitigation"                                                     
                                                                               
            After "in"                                                         
                                                                               
       Insert "AS 46.08.020(b)"                                                
                                                                               
  Page 10, line 5:                                                             
                                                                               
       Delete "OR] AS 46.08.020"                                               
                                                                               
       Insert "OR AS 46.08.020]"                                               
                                                                               
  Page 20, lines 25-27:                                                        
                                                                               
       Delete all material.                                                    
                                                                               
  Page 20, line 28:                                                            
                                                                               
       Delete "(I)"                                                            
                                                                               
       Insert "(H)"                                                            
                                                                               
  Page 21, line 1:                                                             
                                                                               
       Delete "(J)"                                                            
                                                                               
       Insert "(I)"                                                            
                                                                               
  Page 21, line 8:                                                             
                                                                               
       Delete "(K)"                                                            
                                                                               
       Insert "(J)"                                                            
                                                                               
  REPRESENTATIVE FINKELSTEIN said the amendment removes the                    
  reference to underground storage tanks.                                      
                                                                               
  REPRESENTATIVE JAMES OBJECTED.                                               
                                                                               
  REPRESENTATIVE FINKELSTEIN stated leaking underground                        
  storage tanks are a cleanup operation but the funding is                     
  coming from the prevention side.  He said he would not                       
  object to funding the cleanup of these tanks from the                        
  prevention side if there was enough money.  He felt the                      
  proper funding source for the cleanup of leaking underground                 
  storage tanks is a gasoline tax.  He stressed the last place                 
  the funding should come from is the assessment on the oil                    
  companies because they are not the cost causer and should                    
  not be the cost payer.                                                       
                                                                               
  Number 280                                                                   
                                                                               
  REPRESENTATIVE JAMES said she would like more explanation of                 
  the amendment.  She agrees with the statement that leaking                   
  underground storage tanks should be funded from another                      
  source and thought sufficient funds should be funneled to                    
  the prevention account to accomplish that.                                   
  REPRESENTATIVE FINKELSTEIN explained the key point of the                    
  amendment page 20, lines 25-27 is removing the cleanup of                    
  leaking underground storage tanks as a use of the prevention                 
  fund.  He said currently funding is taken from the                           
  mitigation account, which is basically general funds.  His                   
  preference is a gasoline tax in the future rather than the                   
  current approach or this proposed approach of taking the                     
  funding out of the 470 fund, which is the contribution from                  
  the oil companies.                                                           
                                                                               
  REPRESENTATIVE MULDER stated the reason the prevention                       
  account is identified as the source of funding for the                       
  cleanup of leaking underground storage tanks is because an                   
  earlier part of the bill says mitigation funds can be put                    
  into the prevention account.  He pointed out that mitigation                 
  funds have been the primary source of funding for this                       
  cleanup program in the past.                                                 
                                                                               
  REPRESENTATIVE JAMES is happy with Representative Mulder's                   
  explanation and will not support the amendment.                              
                                                                               
  REPRESENTATIVE FINKELSTEIN recalled Representative Mulder's                  
  point about the ability of putting the mitigation account                    
  into the prevention account and pointed out that has always                  
  been allowed but has never been done.  He said no changes                    
  have been made on the ability of the legislature to put the                  
  mitigation money into the prevention account.  He explained                  
  what has occurred is that there have been additions made to                  
  the list of allowed prevention account uses.  He stressed                    
  the list is a long way from what many believe should be done                 
  on the prevention side.                                                      
                                                                               
  Number 345                                                                   
                                                                               
  REPRESENTATIVE DAVIES asked DEC if the amendment is adopted,                 
  will it be more likely that the depots and corps will be put                 
  in place sooner.                                                             
                                                                               
  MR. POE replied the amendment will mean less potential                       
  pressure on the $15.7 million.                                               
                                                                               
  REPRESENTATIVE DAVIES recalled earlier that Mr. Conway had                   
  stated one of his concerns is that if the cleanup of the                     
  leaking underground storage tanks has to be taken from the                   
  prevention side, it will take longer to get the depots and                   
  corps in place.                                                              
                                                                               
  MR. POE responded that is not an unreasonable inference to                   
  draw.  He pointed out that if there is $15.7 million                         
  available and the program has cost about $13.5 million, that                 
  leaves approximately $2.2 million to do many of the things                   
  which have been added to the prevention account use list.                    
                                                                               
  REPRESENTATIVE DAVIES stated the minimum amount needed to                    
  accomplish the depots and corps was approximately $12                        
  million.                                                                     
                                                                               
  REPRESENTATIVE HUDSON stressed there is also $28 million                     
  coming in from the Exxon Corporation between now and the                     
  year 2000, which will flow into this account as well and                     
  will be available for whatever the legislature in the future                 
  decides to do with it.  That is one of the reasons he is not                 
  convinced the fund should be split because he felt it is                     
  important to get to the $50 million.  He asked if SB 215                     
  provides for a leaking underground storage tanks cleanup                     
  appropriation.                                                               
                                                                               
  MR. POE replied it does.                                                     
                                                                               
  REPRESENTATIVE HUDSON clarified the amendment will remove                    
  the cleanup of the leaking underground storage tanks                         
  language.                                                                    
                                                                               
  MR. POE said the amendment will remove the language relating                 
  to allowed uses for the prevention account.  The amendment                   
  does not mean the legislature could not still use the                        
  mitigation account to pay for the cleanup program.                           
                                                                               
  Number 410                                                                   
                                                                               
  REPRESENTATIVE HUDSON clarified if the amendment is adopted,                 
  the pressure is reduced on the funds in the prevention                       
  account, providing more money for depots and corps.                          
                                                                               
  MR. POE said that is correct.                                                
                                                                               
  MR. ROGERS stated he is not in a position to speak on the                    
  amendment for his client because there has been no                           
  discussion about it.  He said the Senate Finance Committee                   
  would probably oppose the amendment.                                         
                                                                               
  REPRESENTATIVE BUNDE clarified if the amendment passes, the                  
  legislature can still use the money for the cleanup of                       
  leaking underground storage tanks so the amendment is not                    
  that significant.                                                            
                                                                               
  REPRESENTATIVE DAVIES stated the amount which really needs                   
  to be appropriated to the leaking underground storage tanks                  
  cleanup program is $4-5 million annually, so if the                          
  amendment is passed, there will be $2 million potentially                    
  available for depots and corps.  He pointed out if the                       
  amendment is not passed, potentially $4-5 million will be                    
  taken out of the account.                                                    
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES FINKELSTEIN,                     
  DAVIES, AND CARNEY.  Voting against the amendment were                       
  REPRESENTATIVES BUNDE, JAMES, MULDER, GREEN, HUDSON, and                     
  WILLIAMS.  The MOTION was DEFEATED 6-3.                                      
                                                                               
  Number 462                                                                   
                                                                               
  REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 215(FIN)                   
  am(efd fld) as follows:                                                      
                                                                               
  Page 16, line 11, after "substance;":                                        
                                                                               
       Insert "and"                                                            
                                                                               
  Page 16, lines 14-19:                                                        
                                                                               
       Delete ";and                                                            
                                                                               
            (6) the interest earned on the balances of each of                 
            the following:                                                     
                                                                               
                 (A) the prevention account;                                   
                 (B) the prevention mitigation account;                        
                 (C) the response account; and                                 
                 (D) the response mitigation account"                          
                                                                               
  Page 16, line 20:                                                            
                                                                               
       Delete "(a)(2) - (6)"                                                   
                                                                               
       Insert "(a)(2) - (5)"                                                   
                                                                               
  Page 16, line 25:                                                            
                                                                               
       Delete "(a)(2) - (6)"                                                   
                                                                               
       Insert "(a)(2) - (5)"                                                   
                                                                               
  Page 16, following line 26:                                                  
                                                                               
       Insert a new bill section to read:                                      
                                                                               
                                                                               
    "*Sec. 25. AS 46.08.020 is amended by adding a new                         
  subsection to read:                                                          
                                                                               
                 (c) The interest earned on the balances of                    
  each of the following accounts shall be deposited into the                   
  general fund and credited to the prevention account in the                   
  fund:                                                                        
                                                                               
                      (1) the prevention account;                              
                      (2) the prevention mitigation account;                   
                      (3) the response account; and                            
                      (4) the response mitigation account."                    
                                                                               
  Renumber the following bill sections accordingly.                            
                                                                               
  Page 26, line 19:                                                            
                                                                               
       Delete "sec. 42"                                                        
                                                                               
       Insert "sec. 43"                                                        
                                                                               
  Page 27, line 21:                                                            
                                                                               
       Delete "Section 27"                                                     
                                                                               
       Insert "Section 28"                                                     
                                                                               
  REPRESENTATIVE JAMES OBJECTED.                                               
                                                                               
  REPRESENTATIVE DAVIES stated this amendment will accomplish                  
  the direct deposit of the interest from the various accounts                 
  through the general fund, into the prevention account and                    
  would obviate the necessity for legislative action to put                    
  the funds in the account.  The money will still have to be                   
  appropriated out of the prevention account.                                  
                                                                               
  REPRESENTATIVE MULDER stated the concept is good but he                      
  wondered if there is a constitutional problem with the                       
  amendment.                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN said funds can be designated to                   
  go to a particular place.  The constitutional problem is                     
  when the legislature is required to appropriate the money                    
  out of a particular place for a particular purpose.  He                      
  pointed out the amendment still requires the legislature to                  
  appropriate the money out.                                                   
                                                                               
  MR. POE stated the amendment does accomplish what has been                   
  debated throughout the discussion, which is using the                        
  interest from the funds on the prevention side.  He said DEC                 
  supports the amendment.                                                      
                                                                               
                                                                               
  REPRESENTATIVE JAMES asked if a large amount of money                        
  accumulates in the account, can the legislature appropriate                  
  the money for use other than what is listed.                                 
                                                                               
  MR. POE replied yes.                                                         
                                                                               
  REPRESENTATIVE HUDSON stated he has always wanted the                        
  interest to flow to the prevention account.  He said if the                  
  amendment makes that more specifically stated, he will                       
  support the amendment.                                                       
                                                                               
  REPRESENTATIVE GREEN expressed concern about the direct                      
  manner.  He felt there may be a constitutional problem.                      
                                                                               
  REPRESENTATIVE JAMES stated even though the interest is                      
  deposited directly, the legislature still has to appropriate                 
  the money.                                                                   
                                                                               
  REPRESENTATIVE BUNDE asked if it is determined that the                      
  amendment is unconstitutional, is the amendment severable or                 
  is the entire bill thrown out.                                               
                                                                               
  REPRESENTATIVE HUDSON replied the amendment is severable.                    
                                                                               
  REPRESENTATIVE FINKELSTEIN pointed out that Jack Chenoweth                   
  would not have drafted an amendment that was                                 
  unconstitutional.                                                            
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES HUDSON, CARNEY,                  
  MULDER, DAVIES, JAMES, FINKELSTEIN, and WILLIAMS.  Voting                    
  against the amendment were REPRESENTATIVES GREEN and BUNDE.                  
  The MOTION PASSED 7-2.                                                       
                                                                               
  Number 615                                                                   
                                                                               
  REPRESENTATIVE JAMES made a MOTION to MOVE CSSB 215(FIN)                     
  am(efd fld), as amended, out of committee with INDIVIDUAL                    
  RECOMMENDATIONS.                                                             
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
                                                                               
  REPRESENTATIVE FINKELSTEIN OBJECTED.                                         
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the motion were REPRESENTATIVES JAMES, BUNDE,                       
  MULDER, GREEN, HUDSON, and WILLIAMS.  Voting against the                     
  motion were REPRESENTATIVES DAVIES, CARNEY, and FINKELSTEIN.                 
  The MOTION PASSED 6-3.                                                       
  TAPE 94-62, SIDE B                                                           
  Number 000                                                                   
                                                                               
  SB 310 - STATE/PRIVATE/MUNI TIMBER OPERATION/SALE                            
  REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as                 
  follows:                                                                     
                                                                               
  Page 1, line 4:                                                              
                                                                               
       Delete "AS 38.05.112(c)"                                                
       Insert "AS 38.05.112"                                                   
                                                                               
  Page 1, following line 4:                                                    
                                                                               
       Insert new material to read:                                            
                                                                               
            "Sec. 38.05.112.  FOREST LAND USE PLANS.  (a) The                  
       department may not [SELL OR] harvest timber, except for                 
       isolated sales of less than 50,000 board feet [PERSONAL                 
       USE TIMBER HARVEST], until a site-specific forest land                  
       use plan has been adopted.  A forest land use plan is                   
       required whether or not a regional or area land use                     
       plan under AS 38.04.065(a) or a forest management plan                  
       under AS 41.17.230 has been adopted.                                    
                                                                               
            (b) The commissioner shall base a forest land use                  
       plan on the best available data, including information                  
       provided by other agencies [DESCRIBING THE IMMEDIATE                    
       AND LONG-TERM EFFECTS OF INDIVIDUAL AND COLLECTIVE                      
       FOREST ACTIVITIES ON THE TIMBER BASE AND ON OTHER                       
       RESOURCES AND USES]."                                                   
                                                                               
  Page 2, following line 14:                                                   
                                                                               
       Insert a new subsection to read:                                        
                                                                               
            "(d) A management plan prepared by the                             
  commissioner under AS 41.17.230 or AS 38.04.065 must                         
  consider and permit the uses described in (c) of this                        
  section.  If the commissioner finds that a permitted use is                  
  incompatible with one or more other uses in a portion of a                   
  state forest, the commissioner shall, consistent with AS                     
  41.17.200, affirmatively state in the management plan that                   
  finding of incompatibility for the specific area where the                   
  incompatibility is anticipated to exist and the time period                  
  when the incompatibility is anticipated to exist together                    
  with the reasons for each finding.  If the commissioner                      
  finds that the use described in (c)(1) of this section is                    
  incompatible, or otherwise restricts that use, the                           
  commissioner must also document the finding with sound                       
  scientific data that clearly proves the incompatibility and                  
  the benefits of the restriction."                                            
                                                                               
  REPRESENTATIVE JAMES stated the amendment was requested by                   
  the Interior Alaska Forest Association in Fairbanks and                      
  contains the needed changes to provide options for the                       
  "little guy" to be able to continue in the timber industry.                  
  The first part of the amendment allows for sales of less                     
  than 50,000 board feet.  She said that size of timber sales                  
  is not being done currently because the Division of Forestry                 
  feels those size sales are more trouble than what they are                   
  worth.  The amendment will allow salvage sales and sale of                   
  timber which has been stacked, without going through the                     
  planning process.                                                            
                                                                               
  REPRESENTATIVE JAMES explained the other portion of the                      
  amendment provides that if the commissioner finds the                        
  permitted use is incompatible with one or more uses in a                     
  portion of a state forest, that there will be scientific                     
  evidence proving the incompatibility and the benefits of the                 
  restriction.                                                                 
                                                                               
  Number 062                                                                   
                                                                               
  REPRESENTATIVE GREEN asked if a person has a hunting lodge                   
  with a vast panoramas, which is part of the reason the lodge                 
  is in a certain location, and a clearcut is allowed by a                     
  forest management agreement (FMA) affecting the lodge's                      
  view, will the proposed amendment have any impact.                           
                                                                               
  REPRESENTATIVE JAMES replied if trees have a direct relation                 
  to the person's livelihood, cutting the trees down is                        
  scientifically deteriorating to the business.  She felt that                 
  person would be protected.  She stated the intent of the                     
  language is to ensure that decisions are not made                            
  subjectively or politically.                                                 
                                                                               
  REPRESENTATIVE GREEN expressed concern about what is                         
  determined to be scientific and what is determined to be                     
  aesthetic.                                                                   
                                                                               
  REPRESENTATIVE JAMES reiterated the amendment says if a                      
  permitted use is incompatible with one or more of the uses                   
  in the state forest.  She gave several examples.                             
                                                                               
  Number 117                                                                   
                                                                               
  REPRESENTATIVE DAVIES made a MOTION to AMEND the AMENDMENT                   
  to CSSB 310(RES) on page 2, line 5, after the word                           
  "scientific" insert the words "or economic".                                 
                                                                               
  REPRESENTATIVE MULDER OBJECTED for the purpose of                            
  discussion.                                                                  
                                                                               
  REPRESENTATIVE DAVIES, referring to Representative Green's                   
  example of a hunting lodge, stated if the trees are cut down                 
  it is a scientific fact the trees are gone, but it would not                 
  be a scientific issue as to whether it impacted the value of                 
  the lodge.  Rather, it would be an economic issue.                           
                                                                               
  REPRESENTATIVE JAMES stated she does not object to the                       
  amendment to the amendment.                                                  
                                                                               
  REPRESENTATIVE MULDER WITHDREW his OBJECTION.                                
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
  Hearing none, the MOTION PASSED.                                             
                                                                               
  REPRESENTATIVE FINKELSTEIN clarified the amendment says if                   
  the commissioner finds commercial logging to be incompatible                 
  with any other use in the forest, or if any other use even                   
  restricts commercial logging, the finding must be made with                  
  scientific data clearly proving the incompatibility.  He                     
  felt that is a burden of proof which is nearly                               
  insurmountable.  He stressed the state forests were set up                   
  not only for the timber value but also because of public                     
  use.  He said currently, the commissioner is able to sell                    
  timber sales and only has to deal with local objections.                     
                                                                               
  REPRESENTATIVE JAMES stated Representative Finkelstein is                    
  assuming that FMAs are going to involve huge pieces of land,                 
  which is not necessarily true.  She said a forest management                 
  plan could be a small parcel of timber land.  The benefits                   
  and advantages of a forest management plan is it is a                        
  management plan as opposed to a timber sale, whereby                         
  reforestation and all of the other identified conditions                     
  needed to be maintained in that forest are the                               
  responsibility of the person who has the forest management                   
  plan.  She felt there is a need to ensure that subjective                    
  information does not stop every sale.  She pointed out it                    
  would be possible in a FMA to have a fishing or hunting                      
  lodge within the agreement, thereby protecting that lodge.                   
                                                                               
  Number 307                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN stated the previous discussion                    
  assumes the amendment is a provision which affects FMAs and                  
  he felt it is not.  He said the amendment is inserting a                     
  provision in the complete overall process and he felt the                    
  amendment is not restricted to FMAs.                                         
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES GREEN, MULDER,                   
  BUNDE, JAMES, CARNEY, HUDSON, and WILLIAMS.  Voting against                  
  the amendment were REPRESENTATIVES DAVIES and FINKELSTEIN.                   
  The MOTION PASSED 7-2.                                                       
                                                                               
  CHAIRMAN WILLIAMS noted for the record that proposed                         
  amendments X21 and X23 have been withdrawn.                                  
                                                                               
  REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES)                    
  as follows:                                                                  
                                                                               
  Page 2, line 31, following "land.":                                          
                                                                               
       Insert "The commissioner shall identify the forest land                 
  included in the solicitation of proposals.  The land                         
  identified may include land covered by a cooperative                         
  resource management or development agreement under AS                        
  38.05.027, subject to the approval of the owner of any land                  
  than state land."                                                            
                                                                               
  Page 6, line 10, following "commissioner.":                                  
                                                                               
       Insert "If the forest management agreement covers non-                  
  state land under an agreement authorized under AS 38.05.027,                 
  the owner of the land must approve the agreement."                           
                                                                               
  REPRESENTATIVE GREEN OBJECTED for discussion purposes.                       
                                                                               
  REPRESENTATIVE JAMES stated this amendment allows a FMA to                   
  include land owned by several other owners.  The amendment                   
  also provides that everyone will know what land is being                     
  discussed through the commissioner identifying the forest                    
  land in the solicitation of proposals.  She said the sponsor                 
  of SB 310 feels the amendment is fine.                                       
                                                                               
  REPRESENTATIVE HUDSON said the key language in the amendment                 
  is "the owner of the land must approve the agreement."                       
                                                                               
  REPRESENTATIVE GREEN WITHDREW his OBJECTION.                                 
                                                                               
  CHAIRMAN WILLIAMS stated no objections being heard, the                      
  MOTION PASSED.                                                               
  REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)                   
  as follows:                                                                  
                                                                               
  Page 8, following line 23:                                                   
                                                                               
       Insert a new bill section to read:                                      
                                                                               
    "*Sec. 7. AS 41.17.230(a) is amended to read:                              
                                                                               
            (a)  The commissioner shall prepare a management                   
  plan consistent with AS 38.04.005 and this chapter for each                  
  state forest and for each unit of a state forest to assist                   
  in meeting the requirements of this chapter.  An operational                 
  level forest inventory shall be completed before a                           
  management plan for the state forest or the unit of a state                  
  forest is adopted.  The management plan shall be adopted,                    
  implemented, and maintained within three years of the                        
  establishment of a state forest by the legislature.  The                     
  management plan shall set a total amount of the harvestable                  
  timber of the forest or unit, not to exceed 75 percent, that                 
  may be the subject of forest management agreements under AS                  
  38.05.122."                                                                  
                                                                               
  REPRESENTATIVE MULDER OBJECTED.                                              
                                                                               
  REPRESENTATIVE DAVIES stated the important part of the                       
  amendment is the underlined portion at the bottom.  He said                  
  the amendment addresses one of the basic concerns people                     
  have in regard to large FMAs, which is there is incomplete                   
  information about the inventory.  If there is an                             
  overestimation on what is available and the state commits to                 
  an offering based on that overestimate and is locked in for                  
  20 years, there is no way to make an adjustment.  He noted                   
  the other concern is by allowing a large fraction of the                     
  potential harvestable timber to go into an FMA, smaller                      
  operators are being eliminated.  He stressed there are                       
  enough small operators in the Tanana Valley currently to                     
  take care of all the spruce there and there is no need for                   
  another plant in the Tanana Forest.                                          
                                                                               
  REPRESENTATIVE DAVIES stated he does not want to prescribe                   
  for the entire state what the percentage of the allowable                    
  cut for FMAs should be.  Rather, he wants the allowable cut                  
  to be set on a region by region basis in the management                      
  plan, which is consistent with the way SB 310 sets up the                    
  relationship between the FMA and the management plan--every                  
  FMA has to be consistent with the existing management plan.                  
                                                                               
  Number 330                                                                   
                                                                               
  REPRESENTATIVE JAMES felt the protections are already in the                 
  bill but she asked the sponsor to speak on the amendment.                    
                                                                               
  RICK SOLIE, AIDE, SENATOR STEVE FRANK, stated there is no                    
  need to further restrict a FMA by requiring a certain                        
  percentage of harvest because there is already a sustained                   
  yield requirement in law and the Division of Forestry has to                 
  maintain the requirement.  He said there is no need to                       
  rewrite all of the Alaska statutes in SB 310 as there is the                 
  Forest Practices Act (FPA).  The Division of Forestry is not                 
  going to allow a FMA until there is a sufficient inventory                   
  to determine that the sustained yield can be maintained.  He                 
  felt the amendment is inappropriate and will hurt the spirit                 
  of giving the Department of Natural Resources (DNR)                          
  flexibility to do good FMAs, allowing for responsible                        
  sustained yield harvest.                                                     
                                                                               
  REPRESENTATIVE JAMES added that one of the requirements for                  
  a FMA is that existing operations be considered.  She is not                 
  comfortable with including certain amounts in the bill.                      
                                                                               
  REPRESENTATIVE DAVIES stated it could be consistent with the                 
  sustained yield philosophy to allocate the entire forest                     
  under a FMA, because a FMA has to operate under sustained                    
  yield.  The sustained yield requirement in the FPA does not                  
  restrict the percentage of the forest to be allocated to a                   
  FMA.  He felt it is a philosophical question as to whether                   
  one wants to allow the entire forest to be harvested by one                  
  large operator or to preserve some portion of the forest for                 
  small operators.  He agreed that SB 310 does protect                         
  existing small operators but does not protect future small                   
  operators.                                                                   
                                                                               
  REPRESENTATIVE DAVIES pointed out that testimony suggests                    
  spruce are not even being discussed, but rather the                          
  development of a new forest operation in the Tanana Valley                   
  relating to low quality hardwoods.  He stressed the issue is                 
  the allocation between large FMAs and small operators.  He                   
  felt the management plan should address that issue.                          
                                                                               
                                                                               
  Number 404                                                                   
                                                                               
  REPRESENTATIVE JAMES thought there could be a FMA which                      
  includes some small operators.  She said since existing                      
  small operators are already protected in the bill, she would                 
  like to leave that up to the decision of the FMA proposal                    
  and the public can respond during the public comment period.                 
  She did not feel there is a need for a further restriction.                  
                                                                               
  REPRESENTATIVE DAVIES stated SB 310 only protects existing                   
  small operators and does not preserve a niche for small                      
  operators to bid on the forest in the future.                                
                                                                               
  MR. SOLIE pointed out that the protection for existing                       
  operators is located on page 4, line 22, subsection (1).  He                 
  said the bill does address consistency with management plans                 
  both on page 2, line 26 and page 4, line 26, subsection (2).                 
  He felt the amendment restricts more than necessary.                         
                                                                               
  REPRESENTATIVE FINKELSTEIN reiterated the lines referred to                  
  do not speak to any future base for the small operators and                  
  their ability to run their small mills.                                      
                                                                               
  REPRESENTATIVE DAVIES agreed SB 310 does provide for                         
  protection of existing operators and does require that a FMA                 
  operate under existing land use plans but his concerns are                   
  still not addressed.  First, there is a possibility of an                    
  error in the inventory.  Second, the bill does not protect                   
  the niche for small operators.  Finally, the land use plans                  
  are not required to consider the percentage of forest to be                  
  allocated to FMAs.                                                           
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES DAVIES, CARNEY,                  
  and FINKELSTEIN.  Voting against the amendment were                          
  REPRESENTATIVES MULDER, JAMES, GREEN, BUNDE, HUDSON, and                     
  WILLIAMS.  The MOTION was DEFEATED 6-3.                                      
  Number 525                                                                   
                                                                               
  REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)                   
  as follows:                                                                  
                                                                               
  Page 2, line 29, following "yield.":                                         
                                                                               
       Insert "The commissioner may only enter into one forest                 
  management agreement that covers land within each state                      
  forest in a three-year period.  The commissioner may only                    
  enter into one forest management agreement in a three-year                   
  period in each region of the state for which a regional land                 
  use plan has been adopted or is to be adopted for land                       
  outside of state forests.  In this subsection, "state                        
  forest" has the meaning given in AS 41.17.950."                              
                                                                               
  REPRESENTATIVE MULDER OBJECTED for purposes of discussion.                   
                                                                               
  REPRESENTATIVE DAVIES stated this amendment addresses the                    
  concern regarding the forest being tied up in a series of                    
  large agreements and being renewed for a long period of                      
  time, with no possibility of responding to changing                          
  circumstances in the forest.  He said this amendment limits                  
  the number of FMAs entered into in any three year period.                    
  He pointed out that because the prior amendment was not                      
  passed, there is still a possibility of having the entire                    
  forest tied up in FMAs but with this amendment, every three                  
  years, there would be an opportunity to revisit at least one                 
  agreement.                                                                   
                                                                               
  REPRESENTATIVE JAMES stated this amendment also assumes the                  
  FMAs are going to be large.  She pointed out that the bill                   
  provides for an annual solicitation.  She did not feel                       
  comfortable binding the department.  She felt it should not                  
  be assumed that because a solicitation is put out, there                     
  will be response.  She added there may also be unsolicited                   
  FMAs.  She commented just because the state is ready to sell                 
  timber, does not mean there will be a buyer and to put                       
  restrictions on the commissioner, may close the door to some                 
  opportunities.  Based on that, she objected to the                           
  amendment.                                                                   
                                                                               
  REPRESENTATIVE MULDER felt there will be two adverse affects                 
  in adopting the proposed amendment.  He stated a bind will                   
  be put on the small companies as the amendment will not just                 
  involve big companies being bound to one contract, but also                  
  the small companies.  He said there may be a niche requiring                 
  several small companies for different needs.  He also felt                   
  the amendment puts further restraint on the economic                         
  feasibility.  He stressed the purpose of SB 310 is to                        
  promote economic diversity and opportunity and the amendment                 
  hinders that opportunity.                                                    
                                                                               
  MR. SOLIE stated the amendment will limit the time of the                    
  certainty of a FMA to three years.  He stressed it is                        
  fundamental to have some certainty in order for a company to                 
  be able to get financing to construct the value-added                        
  facilities, which will create long-term stable jobs.  The                    
  sponsor opposes the amendment.                                               
                                                                               
  REPRESENTATIVE DAVIES said he is not proposing limiting the                  
  length of a FMA.  The amendment only says a FMA can be                       
  entered into every three years.  The purpose is to stagger                   
  the FMAs in time and serves as a management tool for the                     
  department.  He stated no one is going to go through the                     
  process to establish a FMA for a small sale.  The purpose of                 
  a FMA is to capitalize a new plant and a new plant is not                    
  going to be built based on a small sale.  Rather, the sale                   
  will involve a large portion of the forest, guaranteeing a                   
  large resource in the future in order to get financing for a                 
  value-added plant.  He said there is a need to preserve some                 
  operations for small operators and preserve the ability for                  
  DNR to manage the forest in the best way possible.  He                       
  stressed whether or not SB 310 is passed, there will                         
  continue to be small lease sales and small plants.  He                       
  reiterated that FMAs are not directed at small operations.                   
                                                                               
  REPRESENTATIVE GREEN asked if the amendment precludes the                    
  Native associations.                                                         
                                                                               
                                                                               
  TAPE 94-63, SIDE A                                                           
  Number 000                                                                   
                                                                               
  REPRESENTATIVE DAVIES replied the amendment does not apply                   
  to private land, but to state land only.                                     
                                                                               
  REPRESENTATIVE GREEN noted the amendment says "land outside                  
  of state forests."                                                           
                                                                               
  REPRESENTATIVE DAVIES said the regional land use plan may                    
  cover portions of state land that are not classified as                      
  state forests.  Timber sales can be offered on land which is                 
  not classified as state forests.                                             
                                                                               
  REPRESENTATIVE HUDSON stated the earlier amendment by                        
  Representative James which was adopted does include private                  
  land within the forest (indiscernible).  He said whatever is                 
  done with the proposed amendment will couple with the                        
  private operator.                                                            
                                                                               
  REPRESENTATIVE DAVIES noted the previous amendment addressed                 
  FMAs and cooperative land sales.  The portions under the                     
  state forests would satisfy the requirement that it was a                    
  sale on state land within a regional land use area.  He                      
  pointed out that what is being discussed is a regional land                  
  use plan not under the FMA.                                                  
                                                                               
  Number 030                                                                   
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES FINKELSTEIN,                     
  DAVIES, and CARNEY.  Voting against the amendment were                       
  REPRESENTATIVES JAMES, BUNDE, MULDER, HUDSON, and WILLIAMS.                  
  The MOTION was DEFEATED 5-3.                                                 
                                                                               
  Number 039                                                                   
                                                                               
  REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as                 
  follows:                                                                     
                                                                               
  Page 4, following line 11:                                                   
                                                                               
       Insert a new paragraph to read:                                         
                                                                               
            "(7) extent to which the proposed agreement                        
  provides for processing in the state of the timber                           
  harvested, to the extent permitted by law;"                                  
                                                                               
  Renumber the following paragraphs accordingly.                               
                                                                               
  Page 5, following line 19:                                                   
                                                                               
       Insert a new subparagraph to read:                                      
                                                                               
            "(F) provisions requiring the processing of the                    
  timber in the state if that is the highest and best use of                   
  the timber as determined by the commissioner and if                          
  permitted by law;"                                                           
                                                                               
  Reletter the following subparagraphs accordingly.                            
                                                                               
  Page 8, following line 23:                                                   
                                                                               
                                                                               
       Insert a new bill section to read:                                      
                                                                               
    "*Sec. 7. SEVERABILITY.  Under AS 01.10.030, if                            
  AS 38.05.122(d)(7) or (g)(2)(F), or the application of those                 
  provisions to any person or circumstance, is held invalid,                   
  the remainder of this Act and its application to other                       
  persons or circumstances shall not be affected."                             
                                                                               
  REPRESENTATIVE MULDER OBJECTED for discussion purposes.                      
                                                                               
  REPRESENTATIVE JAMES said the amendment adds a paragraph                     
  which will provide instructions to the FMA that in-state                     
  processing is desired if possible.  She stated the next part                 
  of the amendment provides for the highest and best use of                    
  the timber.  She noted the third part of the amendment                       
  ensures, that in case either of the first parts of the                       
  amendment are unconstitutional, the rest of the bill will                    
  stand.                                                                       
                                                                               
  REPRESENTATIVE CARNEY agreed with the intent of the                          
  amendment but would like to see an effective date.                           
                                                                               
  REPRESENTATIVE MULDER agreed.  He said there have been                       
  numerous discussions about promoting the work force in the                   
  state and value-added products in Alaska and while there are                 
  restrictions on what can be done, this amendment makes a                     
  strong statement about the desire for this type of economic                  
  development to occur in Alaska.                                              
                                                                               
  REPRESENTATIVE JAMES stated the effective date will be a                     
  given because the bill will probably be challenged.                          
                                                                               
  REPRESENTATIVE DAVIES said the way to make this amendment                    
  happen is to petition the state's Congressional delegation                   
  to exempt the state of Alaska from the interstate commerce                   
  restriction.                                                                 
                                                                               
  Number 084                                                                   
                                                                               
  REPRESENTATIVE JAMES felt that is a separate issue.  She                     
  felt if SB 310 has not done anything else, it has made                       
  Alaskans rally behind that thought and idea.  In the                         
  meantime, she is not willing to hold up the process until                    
  that happens.  She said passing this amendment will give the                 
  DNR commissioner the ability to choose a proposal which                      
  includes in-state processing.                                                
  CHAIRMAN WILLIAMS agreed.                                                    
                                                                               
  REPRESENTATIVE CARNEY made a MOTION to AMEND the AMENDMENT                   
  to CSSB 310(RES) on page 6, line 7, insert a new paragraph                   
  which says, "The commissioner may not enter into a final                     
  agreement until the state receives from the federal                          
  government an exemption from federal law so that the state                   
  may require that timber harvested under the agreement be                     
  processed within the state."                                                 
                                                                               
  REPRESENTATIVES MULDER AND JAMES OBJECTED.                                   
                                                                               
  REPRESENTATIVE DAVIES said he attempted to get an opinion                    
  from the Attorney General about this issue without success,                  
  but it is his understanding that the state cannot put a                      
  requirement in the bill for in-state processing unless the                   
  exemption is received from the federal government.  He noted                 
  the state of Oregon has received an exemption.                               
                                                                               
  Number 123                                                                   
                                                                               
  CHRIS GATES, DIRECTOR, DIVISION OF ECONOMIC DEVELOPMENT,                     
  DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (DCED),                      
  stated there is not much faith that the federal law can be                   
  changed.  However, he encouraged committee members to allow                  
  this tool (the amendment) to exist while there is an attempt                 
  to change the federal law.  He said the ability to choose,                   
  out of several competing proposals, the one which has in-                    
  state processing and a provision to hire Alaskans, allows                    
  the department to do things contractually which they could                   
  never do if it were mandated by law.  He pointed out that                    
  Alaska hire and in-state processing cannot be mandated but                   
  it can be done contractually.                                                
                                                                               
  REPRESENTATIVE JAMES stated FMAs may not include white                       
  spruce going to Japan but in fact might involve hardwoods.                   
  She said to hold up the entire FMA process until a federal                   
  exemption can be received will be taking a step backward.                    
                                                                               
  REPRESENTATIVE DAVIES reminded everyone SB 310 applies                       
  statewide, not just in the Tanana Valley.  He stated if a                    
  process is set up and bids are evaluated with a selection                    
  made based on the in-state processing requirement, that                      
  process would be unconstitutional and could be challenged.                   
  He said a change in federal law is not required, as the                      
  federal law allows for these exemptions currently, the state                 
  just needs to ask for the exemption and get it.                              
                                                                               
  REPRESENTATIVE CARNEY asked if there is any way to stipulate                 
  that the contract contain the requirement for in-state                       
  processing.                                                                  
                                                                               
  MR. GATES replied the state cannot mandate primary                           
  manufacture but it can be accomplished contractually.                        
                                                                               
  REPRESENTATIVE DAVIES agreed as long as the price remains                    
  the same, but as soon as someone offers one cent less for                    
  the materials and the contract is not granted because of in-                 
  state processing, the state will lose in court.                              
                                                                               
  REPRESENTATIVE JAMES speaking against the amendment to the                   
  amendment, said subsection (F) in the amendment says ..."the                 
  processing of the timber if that is the highest and best use                 
  of the timber" and she felt decisions can be made on what                    
  benefits the state the best.  She stated the price itself                    
  may not necessarily be the determining factor.                               
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the motion were REPRESENTATIVES FINKELSTEIN,                        
  DAVIES, and CARNEY.  Voting against the motion were                          
  REPRESENTATIVES MULDER, HUDSON, JAMES, and WILLIAMS.  The                    
  MOTION was DEFEATED 4-3.                                                     
                                                                               
  Number 209                                                                   
                                                                               
  REPRESENTATIVE DAVIES made a MOTION to AMEND the AMENDMENT                   
  to CSSB 310(RES) deleting the severability clause.  He                       
  stated the clause is redundant with existing statutes.                       
                                                                               
  REPRESENTATIVES HUDSON and WILLIAMS OBJECTED.                                
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the motion were REPRESENTATIVES DAVIES, CARNEY, and                 
  FINKELSTEIN.  Voting against the motion were REPRESENTATIVES                 
  MULDER, JAMES, GREEN, HUDSON and WILLIAMS.  The MOTION was                   
  DEFEATED 5-3.                                                                
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote on the motion                   
  to amend.  Voting in favor of the motion were                                
  REPRESENTATIVES DAVIES, HUDSON, JAMES, MULDER, FINKELSTEIN,                  
  GREEN, CARNEY, and WILLIAMS.  The MOTION PASSED 8-0.                         
                                                                               
  Number 235                                                                   
                                                                               
  REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as                 
  follows:                                                                     
                                                                               
  Page 2, line 30:                                                             
                                                                               
       Delete "shall"                                                          
                                                                               
       Insert "may"                                                            
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections to the                  
  motion.  Hearing none, the MOTION PASSED.                                    
                                                                               
  REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as                 
  follows:                                                                     
                                                                               
  Page 8, line 6, following "industry;":                                       
                                                                               
       Delete "and"                                                            
                                                                               
       Insert "[AND]"                                                          
                                                                               
  Page 8, line 7, following "habitat":                                         
                                                                               
       Insert new material to read:                                            
                                                                               
       "; and                                                                  
                                                                               
                 (8) to the fullest extent practicable,                        
  harvested forest land shall be reforested, naturally or                      
  artificially, so as to result in a sustained yield of                        
  merchantable timber from that land; if artificial planting                   
  is required, silviculturally acceptable seedlings must first                 
  be available for planting at an economically fair price"                     
  Page 8, following line 7:                                                    
                                                                               
       Insert a new bill section to read:                                      
                                                                               
    "*Sec. 5.  AS 41.17.060 is amended by adding a new                         
  subsection to read:                                                          
                                                                               
                 (d) With respect to private forest land only,                 
       to the fullest extent practicable, harvested forest                     
  land shall be reforested, naturally or artificially.   If                    
  artificial planting is required,silviculturally   acceptable                 
  seedlings must first be available for   planting at an                       
  economically fair price."                                                    
                                                                               
  Renumber the following bill sections accordingly.                            
                                                                               
  Page 8, following line 23:                                                   
                                                                               
       Insert a new bill section to read:                                      
                                                                               
    "*Sec. 8  AS 41.17.060(b)(4) is repealed."                                 
                                                                               
  REPRESENTATIVE HUDSON OBJECTED for discussion purposes.                      
                                                                               
  MR. SOLIE stated this amendment will amend the reforestation                 
  statute in the FPA and clarify what was intended when the                    
  statute was drafted.  He said existing law pertains to state                 
  and municipal forest lands and this new Section 5 pertains                   
  to private lands.  The section clarifies that private land                   
  harvest is not on a sustained yield basis as required by                     
  law.  He noted that private landowners wanted this                           
  clarification in statute.                                                    
                                                                               
  REPRESENTATIVE MULDER asked what is the definition of                        
  silviculturally.                                                             
                                                                               
  CHAIRMAN WILLIAMS stated it means tree planting.                             
                                                                               
  Number 282                                                                   
                                                                               
  REPRESENTATIVE GREEN wondered if "economically fair price"                   
  is an understood term or is it subject to conflict.                          
                                                                               
  MR. SOLIE replied he did not think so.  He said the                          
  amendment is existing law except for the deletion of the                     
  words "sustained yield".                                                     
                                                                               
  REPRESENTATIVE DAVIES asked where the words "sustained                       
  yield" appear in the amendment.                                              
                                                                               
  CHAIRMAN WILLIAMS said the wording is in the FPA and was put                 
  in inadvertently.  He indicated that attached to the                         
  amendment is a copy of current law.                                          
                                                                               
  MR. SOLIE said the underlined portion of the amendment is a                  
  repeat of existing law and the words "so as to result in a                   
  sustained yield" was deleted from the section below.  He                     
  noted at the end of the sentence in existing law, the words                  
  "in the state" was deleted in the new law that only applies                  
  to private forest land.  He stated there was concern it                      
  might require the purchase of trees.  He explained existing                  
  law stands for state and municipal and this change is only                   
  to private lands.                                                            
  Number 334                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN stated he does not fully                          
  understand the impact of repealing (b)(4).  He clarified the                 
  end result is eliminating the application of sustained yield                 
  to private timber lands.                                                     
                                                                               
  MR. SOLIE said that is incorrect.  He explained currently                    
  there is no state requirement for sustained yield harvest on                 
  private forest lands.  The amendment makes existing law                      
  consistent with that and the reforestation part of the FPA.                  
                                                                               
  REPRESENTATIVE FINKELSTEIN felt he must be missing something                 
  because the wording is exactly the same as existing law.                     
                                                                               
  REPRESENTATIVE JAMES said on page 8, line 7, after the word                  
  "habitat", the new material is to be inserted.   (8) is                      
  added which is precisely the language in existing (4).  She                  
  explained (4) is being moved to (8).                                         
                                                                               
  REPRESENTATIVE FINKELSTEIN stated the impact of moving the                   
  language is to say it does not apply to private lands which                  
  is what it applies to now.  He felt this amendment is a                      
  major change.  He said if there is an existing sustained                     
  yield requirement on private lands and that is going to be                   
  removed, he is concerned there has been no testimony                         
  regarding the change.                                                        
                                                                               
  MR. SOLIE said existing law relates to sustained yield                       
  harvest for state and municipal.  He stressed reforestation                  
  is different than harvesting.  Reforestation is something                    
  done after the trees are cut down.  He stated sustained                      
  yield does not relate to reforestation.  In this change, the                 
  language will remain the same for state and municipal land.                  
  For private land, the language is kept as it should apply,                   
  which does not require any sustained yield harvest.  He                      
  pointed out this amendment clarifies existing law.                           
                                                                               
  Number 430                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN felt he is getting different                      
  answers.  He stated now it sounds like the reforestation                     
  requirement for private lands is being removed.                              
                                                                               
  REPRESENTATIVE JAMES pointed out that the new Section 5                      
  contains the word "reforested".                                              
                                                                               
  REPRESENTATIVE FINKELSTEIN said the point of the amendment                   
  is to eliminate any inference of sustained yield on private                  
  lands.                                                                       
                                                                               
  REPRESENTATIVE JAMES responded that is correct.                              
                                                                               
  REPRESENTATIVE FINKELSTEIN stated he will have to oppose the                 
  amendment because there has been no discussion or public                     
  testimony regarding this change.  He said perhaps sustained                  
  yield on private lands was the intent of the FPA and has                     
  been an issue in the past.                                                   
                                                                               
  REPRESENTATIVE DAVIES agreed with Representative                             
  Finkelstein's comments and added that the Division of                        
  Forestry has not commented on this amendment.  He also noted                 
  that existing law says "to the fullest extent practicable",                  
  so if someone has private land and wants to use it for                       
  agriculture purposes, reforestation is not practicable.  He                  
  said the law is only saying that if someone has private land                 
  and is managing it as a forest, to the extent practicable,                   
  the sustained yield principle should be followed.  He did                    
  not understand why a change is needed.                                       
                                                                               
  Number 473                                                                   
                                                                               
  REPRESENTATIVE JAMES did not feel the state should be                        
  telling private landowners what they should do with their                    
  land.  She will support the amendment because the Tanana                     
  Chiefs Conference wants this amendment and should be                         
  supported.                                                                   
                                                                               
  REPRESENTATIVE DAVIES pointed out the FPA was enacted after                  
  a huge amount of public involvement and consensus debate.                    
  He felt this amendment is not a trivial aspect of the                        
  debate.  He also felt that making this change without having                 
  an adequate amount of debate is bad public policy.                           
                                                                               
  CHAIRMAN WILLIAMS stated during the negotiations on the FPA,                 
  it was determined that nothing would be done with the FPA                    
  unless everyone agreed.  He said he is willing to hold this                  
  amendment and amendment X38 until the Alaska Forest                          
  Association and DNR can testify.                                             
                                                                               
  REPRESENTATIVE DAVIES stated the amendment is amending the                   
  FPA and is not required by SB 310.  He said if the amendment                 
  is such a good idea, it should be introduced as a bill by                    
  itself.                                                                      
                                                                               
  REPRESENTATIVE JAMES WITHDREW her MOTION.                                    
                                                                               
  Number 605                                                                   
                                                                               
  REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)                   
  as follows:                                                                  
                                                                               
  Page 7, line 4, after "(1)":                                                 
                                                                               
       Insert "The commissioner shall conduct biennial                         
  performance reviews of the agreement throughout the term of                  
  the agreement."                                                              
                                                                               
  Page 7, line 9, after "operator.":                                           
                                                                               
       Insert "The operator shall pay the reasonable cost of                   
  all reviews conducted under this subsection."                                
                                                                               
  REPRESENTATIVE JAMES OBJECTED.                                               
                                                                               
  REPRESENTATIVE DAVIES said this amendment will require the                   
  commissioner to perform biennial performance reviews and                     
  determine whether or not the contract is being followed.  He                 
  stated one of the criticisms of the FPA is it is difficult                   
  to catch up to violations.  One of the major justifications                  
  for the FPA is the state does not have the resources to                      
  plan, design, lay out, and monitor a lease sale.  Much of                    
  the costs will be shifted from the state to the person who                   
  has the FMA with the state.  He pointed out that if the                      
  agreement is not audited regularly, there will be no way to                  
  know whether or not the terms of the agreement are being                     
  followed.                                                                    
  REPRESENTATIVE JAMES agreed there is a need to review but                    
  felt "conduct biennial performance reviews" does not                         
  necessarily have any definition.  She hoped there will be                    
  monitoring but that does not necessarily mean every two                      
  years.  She expected there will be some method by which the                  
  FMAs will be monitored.  She stressed ongoing monitoring is                  
  needed.                                                                      
                                                                               
  REPRESENTATIVE DAVIES felt uncomfortable discussing                          
  amendments when no representatives from the department are                   
  present.                                                                     
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote on the motion.                  
  Voting in favor of the amendment were REPRESENTATIVES                        
  FINKELSTEIN, DAVIES, and CARNEY.  Voting against the                         
  amendment were REPRESENTATIVES HUDSON, JAMES, MULDER, and                    
  WILLIAMS.  The MOTION was DEFEATED 4-3.                                      
                                                                               
  Number 713                                                                   
                                                                               
  REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)                   
  as follows:                                                                  
                                                                               
  Page 5, line 6, after "agreement":                                           
                                                                               
       Insert "and the final agreement"                                        
                                                                               
  Page 5, line 12, after "timber":                                             
                                                                               
       Insert ", which may not be less than fair market value                  
  and shall be adjusted annually by the commissioner using a                   
  nationally recognized index that is suitable for measuring                   
  inflation or deflation in the cost of comparable stumpage"                   
                                                                               
  Page 5, line 19, after "agreement;":                                         
                                                                               
       Insert "the cost of construction and maintenance of                     
  necessary access roads and other necessary infrastructure                    
  shall be paid by the operator;"                                              
                                                                               
  Page 6, line 5:                                                              
                                                                               
       Delete "may"                                                            
                                                                               
       Insert "must"                                                           
                                                                               
  REPRESENTATIVES WILLIAMS and JAMES OBJECTED.                                 
                                                                               
  TAPE 94-63, SIDE B                                                           
  Number 000                                                                   
                                                                               
  REPRESENTATIVE DAVIES stated there is nothing in SB 310                      
  requiring any resemblance between the final agreement and                    
  the proposed final agreement.  He pointed out former                         
  Attorney General Charlie Cole's principal concern is too                     
  much power is being given to the DNR commissioner.  He said                  
  the first part of the amendment provides that the final                      
  agreement contain the elements which have been said should                   
  be in the proposed final agreement.                                          
                                                                               
  REPRESENTATIVE DAVIES explained the second part of the                       
  amendment is an attempt to address a concern regarding long-                 
  term FMAs--throughout the years of the agreement, inflation                  
  goes up, and at the end of the time period, timber is being                  
  sold at a low rate.  He stated this amendment says the                       
  initial sale should be at fair market value and there should                 
  be some type of index, so inflation can be taken into                        
  consideration.  He said the third part of the amendment                      
  provides that the cost and maintenance of roads and other                    
  infrastructure be paid by the operator.  He felt any                         
  agreement should be self sustaining.  Representative Davies                  
  stated the final part of the amendment provides for a                        
  requirement of bonding.                                                      
                                                                               
  MR. GATES said most FMAs do anticipate a consumer price                      
  index (CPI) (indiscernible).  The issue is whether or not                    
  that should be mandatory.  He stated there is a small                        
  argument for having the flexibility to not require a CPI                     
  escalator as a tool of negotiating.  He cannot envision                      
  entering into a FMA without a CPI escalator.  However, the                   
  question becomes why compel a CPI escalator as a tool for                    
  every FMA.  He was not sure it is valid for every agreement.                 
                                                                               
  MR. GATES said in regard to the last part of the amendment,                  
  there can be small and customized FMAs.  He felt it might be                 
  wise not to mandate bonding in those situations and to limit                 
  the flexibility.  He stated for large agreements, it is                      
  anticipated there will be bonding.                                           
                                                                               
  REPRESENTATIVE CARNEY asked Mr. Gates to speak to the costs                  
  of roads.                                                                    
                                                                               
  MR. GATES replied normally, the cost of road construction                    
  will always be included in the operator's costs.  However,                   
  if a new part of the state is being accessed and it is                       
  important to provide access, the market cannot tolerate the                  
  costs of access to a big region.  He said the state may want                 
  to put the road in as an economic development effort.  The                   
  individual roads would then be paid for by the operator.  He                 
  pointed out the amendment provides that even the major roads                 
  would have to be paid for by the FMA operator.                               
                                                                               
                                                                               
  Number 093                                                                   
                                                                               
  REPRESENTATIVE JAMES said although she agrees with all that                  
  is contained in the amendment, she is not willing to support                 
  it.  She stated in regard to the cost of construction and                    
  maintenance of necessary access roads, part of the provision                 
  is that the proposed final agreement must include provisions                 
  regarding the responsibilities for construction and                          
  maintenance of the access road.  She has always had a                        
  problem with the term fair market value.  She felt it means                  
  the biggest price anyone is willing to pay and she was not                   
  sure there is any place to get a nationally recognized index                 
  suitable for measuring inflation or deflation in the cost of                 
  comparable stumpage.  She pointed out the determining factor                 
  of whether or not something is financially feasible depends                  
  on the end product.  In many cases where there is bidding on                 
  federal forest timber, there will be a minimum bid and she                   
  supports including a minimum bid in the bill.                                
                                                                               
  REPRESENTATIVE JAMES stressed a FMA is being discussed and                   
  that presumably there is some best interest in the state                     
  which is going to be devised out of the agreement.  She                      
  expected the operator will pay full price for the timber.                    
  REPRESENTATIVE DAVIES made a MOTION to DIVIDE the QUESTION                   
  and offer the first part of the amendment (Page 5, line 6,                   
  after "agreement":) and the second part would be the rest of                 
  the amendment (Page 5, line 12, after "timber":).                            
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
  Hearing none, the MOTION TO DIVIDE PASSED.                                   
                                                                               
  Number 156                                                                   
                                                                               
  MR. SOLIE expressed support for the first amendment.                         
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections to the                  
  first part of the amendment.  Hearing none, the MOTION                       
  PASSED.                                                                      
                                                                               
  REPRESENTATIVE MULDER OBJECTED to the second part of the                     
  amendment.                                                                   
                                                                               
  REPRESENTATIVE GREEN made a MOTION to AMEND the AMENDMENT,                   
  on the first line, changing the word "shall" to "may".                       
                                                                               
  REPRESENTATIVE HUDSON said he is not convinced there should                  
  be a requirement in the law to annually adjust the stumpage                  
  prices in the contract because if the desire is to lure                      
  corporations into investing in a factory, there may be a                     
  need to have flexibility.                                                    
                                                                               
  MR. GATES expressed concern about the fair market value part                 
  of the amendment because there may be a desire to encourage                  
  people to put in plants and give lower rates for 2-3 years                   
  while they are building their plant or getting financing.                    
  He felt a major tool is being taken away through this                        
  amendment by compelling the fair market value on trees                       
  always.  He said it is a tremendous amount of flexibility to                 
  encourage investment if a period of time of forgiveness can                  
  be given or 50 percent of fair market value rate of stumpage                 
  as an inducement.                                                            
                                                                               
  REPRESENTATIVE HUDSON mentioned it is not an unknown tool                    
  which has been used in the state.  He pointed out the state                  
  would never have had the oil industry on the Kenai Peninsula                 
  if there had been no flexibility to encourage those kinds of                 
  investments into that area.                                                  
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections to the                  
  motion.  Hearing none, the MOTION PASSED.                                    
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote on the                          
  amendment (2nd part).  Voting in favor of the motion were                    
  REPRESENTATIVES CARNEY, DAVIES, and FINKELSTEIN.  Voting                     
  against the motion were REPRESENTATIVES MULDER, HUDSON,                      
  JAMES, GREEN, and WILLIAMS.  The MOTION FAILED 5-3.                          
                                                                               
                                                                               
  REPRESENTATIVE GREEN made a MOTION to AMEND CSSB 310(RES) as                 
  follows:                                                                     
                                                                               
  Page 5, line 19, after "agreement;":                                         
                                                                               
       Insert "the cost of construction and maintenance of                     
  necessary access roads and other necessary infrastructure                    
  shall be paid by the operator;"                                              
  CHAIRMAN WILLIAMS OBJECTED.                                                  
                                                                               
  MR. GATES stated roads must be considered in the FMA plan                    
  but this amendment will require the operator to pay costs                    
  for all roads, which may not give the flexibility desired.                   
                                                                               
  CHAIRMAN WILLIAMS ruled the MOTION OUT OF ORDER.  He said                    
  the amendment has already been discussed and voted on.                       
                                                                               
  REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)                   
  as follows:                                                                  
                                                                               
  Page 5, line 19, after "agreement;":                                         
                                                                               
       Insert "the cost of construction and maintenance of                     
  necessary temporary access roads and other necessary                         
  infrastructure shall be paid by the operator;"                               
                                                                               
  REPRESENTATIVE WILLIAMS OBJECTED.                                            
                                                                               
  REPRESENTATIVE DAVIES said this amendment will eliminate the                 
  concerns expressed by Mr. Gates.  This amendment will allow                  
  the state to construct the permanent roads and the FMA will                  
  only be required to incur the costs of the temporary roads.                  
                                                                               
  MR. GATES stated the amendment is still limiting the                         
  commissioner's flexibility to do the best job possible to                    
  craft a good FMA.                                                            
                                                                               
  REPRESENTATIVE JAMES stated amendments such as this are                      
  detrimental to the process because it identifies what the                    
  operator is going to pay for.  She hoped the operator will                   
  pay for all the roads.  She stressed if the word "temporary"                 
  is used, it could be assumed the operator only has to pay                    
  for the temporary roads, when in fact there may be                           
  sufficient value in the timber to pay for all of the roads.                  
                                                                               
                                                                               
  Number 354                                                                   
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES CARNEY, DAVIES,                  
  and FINKELSTEIN.  Voting against the amendment were                          
  REPRESENTATIVES JAMES, HUDSON, MULDER, and WILLIAMS.  The                    
  MOTION FAILED 4-3.                                                           
                                                                               
  REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)                   
  as follows:                                                                  
                                                                               
                                                                               
  Page 7, after line 12:                                                       
                                                                               
       Insert a new subsection to read:                                        
                                                                               
            "(n) Notwithstanding any other provision of this                   
       section, the operator under an agreement that includes                  
       timber harvesting on land within the Tanana Valley                      
  drainage may not harvest timber on that land under the                       
  agreement if the harvest would result, during a   calendar                   
  year, in timber harvest operations                                           
                                                                               
                 (1) on more than 6,000 acres of land, public                  
       and private, in the Tanana Valley drainage; or                          
                 (2) that harvested more than 1,000 acres of                   
  white spruce in the Tanana Valley drainage."                                 
                                                                               
  Reletter the following subsection accordingly.                               
                                                                               
  CHAIRMAN WILLIAMS OBJECTED.                                                  
                                                                               
  REPRESENTATIVE DAVIES said this amendment will apply                         
  specifically to the Tanana Valley drainage and not                           
  statewide.  The amendment will limit the total amount of                     
  acreage of land contained in a single FMA.                                   
                                                                               
  REPRESENTATIVE JAMES clarified the limit is being put on not                 
  necessarily a single FMA but any FMA in the Tanana Valley                    
  drainage.                                                                    
                                                                               
  Number 383                                                                   
                                                                               
  REPRESENTATIVE DAVIES noted the amendment says "the operator                 
  under an agreement" and "a calendar year."                                   
                                                                               
  REPRESENTATIVE JAMES recalled in Mr. Pagh's testimony, he                    
  had indicated in regard to spruce, there is the capability                   
  of harvesting 5,000 acres a year and currently 1,000 acres a                 
  year is being harvested.  She said this amendment does not                   
  make any provision for hardwoods.  She felt uncomfortable                    
  including any kind of limits in the bill.  However, she                      
  would like to send a message that there is a desire not to                   
  have all of the timber gone in a year but she is not                         
  comfortable with the numbers contained in the amendment.                     
                                                                               
  REPRESENTATIVE DAVIES noted the amendment says a single                      
  agreement and pointed out there are two distinctions:  a                     
  total of 6,000 acres and a subtotal of acres in white                        
  spruce.                                                                      
                                                                               
  REPRESENTATIVE HUDSON asked how much general timber land is                  
  available in the Tanana Valley drainage.                                     
                                                                               
  REPRESENTATIVE DAVIES replied approximately 1.5 million                      
  acres.                                                                       
                                                                               
  REPRESENTATIVE HUDSON asked how may acres of white spruce                    
  are available.                                                               
                                                                               
  REPRESENTATIVE DAVIES replied there are approximately 5,000                  
  acres of white spruce available per year and this amendment                  
  would limit a single agreement to one-fifth of that total.                   
                                                                               
  Number 443                                                                   
                                                                               
  MR. GATES stated DCED tried to advance the concepts of                       
  sustained yield, multiple use, good scientific evidence and                  
  a balancing of values as controlling the amount of acreage                   
  in a given area and the types of things which could be done.                 
  He felt to set truly arbitrary limits goes away from those                   
  types of principles and takes away the flexibility.                          
                                                                               
  REPRESENTATIVE DAVIES stressed the numbers are not arbitrary                 
  but were based on an estimate of the total amount of acreage                 
  available and what was considered to be a reasonable maximum                 
  for the total acreage to be allowed in a FMA.  He stated he                  
  has received 275 public opinion messages on SB 310 and they                  
  are running 4-1 opposed to SB 310.  One of the fundamental                   
  reasons why people are opposed to the bill is size.  Most                    
  people want the scale of a FMA to be limited.  He noted most                 
  people are not opposed to a long-term contract.  Most people                 
  are opposed to having a big operation requiring huge amounts                 
  of acreage every year to be clearcut.  He stressed this                      
  amendment attempts to look at a reasonable amount of the                     
  forest, which could be set aside for long-term agreements,                   
  yet is big enough to enable some small plants to be                          
  capitalized but not so big that it will allow the                            
  capitalization of big plants.                                                
                                                                               
                                                                               
  Number 503                                                                   
                                                                               
  REPRESENTATIVE JAMES said she shares the concerns which                      
  Representative Davies mentioned.  She also expressed concern                 
  that when restrictions are put in statute, the hands of a                    
  solicited bid from someone are being tied.  She stated when                  
  a proposal goes out to the public, there is an opportunity                   
  for the public to determine that an amount is more than what                 
  they are willing to support.  She felt the public will be                    
  listened to.  She noted there are 30 million acres in the                    
  Tanana Valley basin and she is not comfortable with the                      
  numbers in the amendment, even though she does understand                    
  the concerns.                                                                
                                                                               
  MR. GATES stated all concerns mentioned are valid.  However,                 
  this amendment is eliminating the possibility that an                        
  operator could propose something that is acceptable to the                   
  public and contains more acres.  He felt the operator should                 
  be given the chance to convince the public, through the                      
  public hearing process, that a cut is appropriate at a                       
  higher level.                                                                
                                                                               
  CHAIRMAN WILLIAMS recalled someone had asked how long it                     
  would take to cut 6,000 acres.  He said the cut could be                     
  done in a season.                                                            
                                                                               
                                                                               
  Number 557                                                                   
                                                                               
  MR. SOLIE stated since DNR is not represented, he will offer                 
  some statistics they provided.  There are approximately 30                   
  million acres of land in the Tanana basin, with about 3.4                    
  million acres classified as forest land or is in the Tanana                  
  Valley State Forest, and the sustained yield estimate                        
  harvests are between 16,000-20,000 acres a year.  He pointed                 
  out this amendment is proposing 6,000 acres which is 25-33                   
  percent of the sustained yield harvest as a cap.  He said                    
  there are approximately 95,000 acres (indiscernible).                        
                                                                               
  REPRESENTATIVE FINKELSTEIN said this amendment does not                      
  place a cap.  This amendment only specifies the amount of                    
  acres which can be put in each agreement.                                    
                                                                               
  REPRESENTATIVE JAMES expressed concern that if this                          
  amendment is not intended to put a cap on the cut but rather                 
  a cap on each single FMA, this amendment is limiting a FMA                   
  on what kinds of operations it could have.  She felt the                     
  amendment might eliminate a large FMA.  She pointed out that                 
  the whole purpose of SB 310 is to encourage FMAs for future                  
  development and in-state processing.  She stressed it would                  
  be defeating if an amendment is passed which discourages                     
  FMAs.                                                                        
  Number 612                                                                   
                                                                               
  REPRESENTATIVE DAVIES stated that is exactly what the                        
  amendment does.  It would eliminate large FMAs in the Tanana                 
  Valley.  He pointed out that overwhelming testimony has                      
  indicated there is a desire to not limit the use of the                      
  forest as long as it is used in an appropriate scale.                        
  People fear clearcuts in their backyards.                                    
                                                                               
  CHAIRMAN WILLIAMS stated view sheds are important.  However,                 
  one of the things happening in the Tongass is the timber                     
  industry is continually being told in a critical manner that                 
  they are being subsidized.  He said a lot of money is                        
  involved in determining view sheds.                                          
                                                                               
                                                                               
  TAPE 94-64, SIDE A                                                           
  Number 000                                                                   
                                                                               
  CHAIRMAN WILLIAMS stated the people asking for the view                      
  sheds are also speaking against the timber industry because                  
  of the industry being subsidized.                                            
                                                                               
  MR. GATES said there has been a lot of limited thinking in                   
  regard to what a FMA is.  He stated there is a concept of a                  
  FMA which may or may not be true.  FMAs may come with a                      
  package of incentives from a company to a community saying                   
  there is an understanding of the impact and the possible                     
  negative things and offer a package of good things such as                   
  restoration to streams, building bridges, and community                      
  centers.  This amendment keeps the operator from attempting                  
  to convince the public that a larger scale FMA might be in                   
  the community's best interest.                                               
                                                                               
  REPRESENTATIVE DAVIES said the only experience people have                   
  had in this state similar to a FMA is the Haines Forest                      
  experience.  People were upset, a lot of money was lost, an                  
  inventory still is not in hand, etc.  The track record                       
  leaves room for skepticism.  He felt small FMAs should be                    
  tried first and then later consider larger FMAs.  He                         
  stressed there are a lot of people concerned statewide.  He                  
  reiterated people in Fairbanks do not oppose the timber                      
  industry but are concerned about a large scale timber                        
  industry.                                                                    
                                                                               
  CHAIRMAN WILLIAMS asked for a roll call vote.  Voting in                     
  favor of the amendment were REPRESENTATIVES FINKELSTEIN,                     
  DAVIES, and CARNEY.  Voting against the amendment were                       
  REPRESENTATIVES JAMES, HUDSON, MULDER, and WILLIAMS.  The                    
  MOTION FAILED 4-3.                                                           
                                                                               
  Number 058                                                                   
                                                                               
  REPRESENTATIVE HUDSON felt the last proposed amendment was                   
  an attempt to address the concern expressed by the public.                   
  He thought perhaps another approach is language such as, "To                 
  the extent practicable, the commissioner shall seek                          
  agreements that include timber harvesting in the Tanana                      
  Valley drainage that do not exceed..."  He stated some                       
  reasonable limitations would be placed at the end.  He                       
  thought that approach would be constructive and not tie the                  
  hands of the commissioner in regard to FMAs but rather would                 
  guide the commissioner.                                                      
  REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as                 
  follows:                                                                     
                                                                               
  Page 4, following line 13:                                                   
                                                                               
       Insert "(8) timber inventory;"                                          
                                                                               
  Renumber the following text accordingly.                                     
                                                                               
  REPRESENTATIVE JAMES said the amendment provides for an                      
  addition  of "timber inventory" to the list of what the                      
  commissioner considers when reviewing and evaluating a                       
  proposed agreements.                                                         
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections.                        
  Hearing none, the MOTION PASSED.                                             
                                                                               
  ANNOUNCEMENTS                                                                
                                                                               
  CHAIRMAN WILLIAMS announced the committee will meet on                       
  Monday, April 25 at 8:15 a.m. to hear SB 306 and SB 374.                     
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  There being no further business to come before the House                     
  Resources Committee, Chairman Williams adjourned the meeting                 
  at 7:35 p.m.                                                                 

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