Legislature(1995 - 1996)

03/22/1996 08:16 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                              
                         March 22, 1996                                        
                           8:16 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Joe Green, Co-Chairman                                         
 Representative William K. "Bill" Williams, Co-Chairman                        
 Representative Scott Ogan, Vice Chairman                                      
 Representative Alan Austerman                                                 
 Representative John Davies                                                    
 Representative Pete Kott                                                      
 Representative Don Long                                                       
 Representative Irene Nicholia                                                 
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Ramona Barnes                                                  
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 CS FOR SENATE JOINT RESOLUTION NO. 39(RES)                                    
 Relating to the U.S. Environmental Protection Agency draft National           
 Pollutant Discharge Elimination System general permit for placer              
 mining in Alaska.                                                             
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 HOUSE BILL NO. 542                                                            
 "An Act relating to participation in matters before the Board of              
 Fisheries by members of the board."                                           
                                                                               
      - PASSED CSHB 542(FSH) OUT OF COMMITTEE                                  
                                                                               
 (* First Public Hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  SJR 39                                                               
 SHORT TITLE: EPA'S NPDES PERMIT FOR PLACER MINING                             
 SPONSOR(S): RESOURCES                                                         
                                                                               
 JRN-DATE     JRN-PG                  ACTION                                   
 03/11/96              (S)   RES AT  3:30 PM BUTROVICH ROOM 205                
 03/11/96              (S)   MINUTE(RES)                                       
 03/11/96      2686    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 03/11/96      2686    (S)   RESOURCES                                         
 03/11/96      2690    (S)   RES WAIVED 5 DAY & PUB HRG NTC,                   
                             RULE 23                                           
 03/12/96      2705    (S)   RES RPT  CS  4DP 1NR  SAME TITLE                  
 03/12/96      2705    (S)   ZERO FISCAL NOTE TO SJR & CS (S.RES)              
 03/13/96              (S)   RLS AT 11:00 AM FAHRENKAMP RM 203                 
 03/13/96              (S)   MINUTE(RLS)                                       
 03/14/96      2737    (S)   RULES TO CALENDAR  3/14/96                        
 03/14/96      2744    (S)   READ THE SECOND TIME                              
 03/14/96      2744    (S)   RES  CS ADOPTED UNAN CONSENT                      
 03/14/96      2744    (S)   ADVANCE TO THIRD READING FLD Y11 N7 E2            
 03/14/96      2745    (S)   THIRD READING 3/18 CALENDAR                       
 03/18/96      2784    (S)   READ THE THIRD TIME  CSSJR 39(RES)                
 03/18/96      2784    (S)   PASSED Y16 N2 E2                                  
 03/18/96      2785    (S)   Duncan  NOTICE OF RECONSIDERATION                 
 03/20/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 03/20/96              (H)   MINUTE(RES)                                       
 03/20/96      2816    (S)   RECONSIDERATION NOT TAKEN UP                      
 03/20/96      2816    (S)   TRANSMITTED TO (H)                                
 03/21/96      3233    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/21/96      3233    (H)   RESOURCES                                         
 03/22/96              (H)   RES AT  8:00 AM CAPITOL 124                       
                                                                               
 BILL:  HB 542                                                               
 SHORT TITLE: BOARD OF FISH VOTING ETHICS                                      
 SPONSOR(S): COMMUNITY AND REGIONAL AFFAIRS                                    
                                                                               
 JRN-DATE     JRN-PG                  ACTION                                   
 03/13/96      3114    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/13/96      3114    (H)   FISHERIES, RESOURCES                              
 03/20/96              (H)   FSH AT  5:00 PM CAPITOL 124                       
 03/20/96              (H)   MINUTE(FSH)                                       
 03/21/96      3240    (H)   FSH RPT  CS(FSH) 1DP 3NR                          
 03/21/96      3240    (H)   DP: AUSTERMAN                                     
 03/21/96      3241    (H)   NR: OGAN, ELTON, G.DAVIS                          
 03/21/96      3241    (H)   ZERO FISCAL NOTE (H.FSH)                          
 03/22/96              (H)   RES AT  8:00 AM CAPITOL 124                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 ANNETTE KREITZER, Legislative Assistant                                       
   to Senator Loren Leman                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 115                                                    
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-2095                                                    
 POSITION STATEMENT:  Gave sponsor statement for CSSJR 39(RES).                
                                                                               
 STEVE BORELL, Executive Director                                              
 Alaska Miners Association                                                     
 501 West Northern Lights, Suite 203                                           
 Anchorage, Alaska 99503                                                       
 Telephone:  (907) 276-0347                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).                   
                                                                               
 JAMES H. JOHNSON, Vice President                                              
 Northern Testing Laboratories                                                 
 3330 Industrial Avenue                                                        
 Fairbanks, Alaska 99701                                                       
 Telephone:  (907) 456-3116                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).                   
                                                                               
 MICHAEL CONWAY, Chief                                                         
 Industrial Operations, Water Programs                                         
 Division of Air and Water Quality                                             
 Department of Environmental Conservation                                      
 410 Willoughby Avenue, Suite 105                                              
 Juneau, Alaska 99801-1795                                                     
 Telephone:  (907) 465-5298                                                    
 POSITION STATEMENT:  Answered questions regarding water quality               
                      relating to CSSJR 39(RES).                               
                                                                               
 CLARKE MILNE, Civil Engineer                                                  
 3540 Industrial Way                                                           
 Fairbanks, Alaska 99701                                                       
 Telephone:  (907) 456-7892                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).                   
                                                                               
 GEORGE LOUNSBURY                                                              
 P.O. Box 70983                                                                
 Fairbanks, Alaska 99707                                                       
 Telephone:  (907) 479-3058                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).                   
                                                                               
 FRED HEFLINGER                                                                
 P.O. Box 82390                                                                
 Fairbanks, Alaska 99709                                                       
 Telephone:  (907) 479-3213                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).                   
                                                                               
 ROGER BURGGRAF                                                                
 830 Sheep Creek Road                                                          
 Fairbanks, Alaska 99709                                                       
 Telephone:  (907) 479-2596                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).                   
                                                                               
 KATHALEEN "MIKE" DALTON                                                       
 P.O. Box 70681                                                                
 Fairbanks, Alaska 99707                                                       
 Telephone:  (907) 479-6733                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).                   
                                                                               
 HARRY JENKINS                                                                 
 210 Tenth Avenue                                                              
 Fairbanks, Alaska 99701                                                       
 Telephone:  (907) 456-4905                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).DON MAY            
 4545 Woodriver Drive                                                          
 Fairbanks, Alaska 99709                                                       
 Telephone:  (907) 479-8219                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).                   
                                                                               
 EDDIE GRASSER                                                                 
 Alaska Outdoor Council                                                        
 4506 Robbie Road                                                              
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 463-3830                                                    
 POSITION STATEMENT:  Testified in support of CSSJR 39(RES).                   
                                                                               
 SARA HANNAN, Executive Director                                               
 Alaska Environmental Lobby                                                    
 419 Sixth Street                                                              
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-3366                                                    
 POSITION STATEMENT:  Testified on CSSJR 39(RES).                              
                                                                               
 CHERYL SUTTON, Legislative Assistant                                          
   to Representative Bill Williams                                             
 Alaska State Legislature                                                      
 Capitol Building, Room 128                                                    
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-3424                                                    
 POSITION STATEMENT:  Testified on CSHB 542(FSH).                              
                                                                               
 BUD HODSON, Past Chairman                                                     
 Board of Fisheries                                                            
 4852 Hunter Drive                                                             
 Anchorage, Alaska 99502                                                       
 Telephone:  (907) 243-8450                                                    
 POSITION STATEMENT:  Testified in support of CSHB 542(FSH).                   
                                                                               
 TOM ELIAS, Past Chairman                                                      
 Board of Fisheries                                                            
 6800 East Tenth Avenue                                                        
 Anchorage, Alaska                                                             
 Telephone:  (907) 333-9159                                                    
 POSITION STATEMENT:  Testified in support of CSHB 542(FSH).                   
                                                                               
 NICK SZABO                                                                    
 P.O. Box 1633                                                                 
 Kodiak, Alaska 99615                                                          
 Telephone:  (907) 486-3835                                                    
 POSITION STATEMENT:  Testified in support of CSHB 542(FSH).                   
                                                                               
 JEFF STEPHAN                                                                  
 United Fishermen's Marketing Association                                      
 P.O. Box 1035                                                                 
 Kodiak, Alaska 99615                                                          
 Telephone:  (907) 486-3453                                                    
 POSITION STATEMENT:  Testified in support of CSHB 542(FSH).                   
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-39, SIDE A                                                            
 Number 000                                                                    
                                                                               
 CO-CHAIRMAN JOE GREEN called the House Resources Standing Committee           
 meeting to order at 8:16 a.m.  Members present at the call to order           
 were Representatives Williams, Ogan, Austerman, Davies, Kott and              
 Long.  Members absent at the call to order were Barnes and                    
 Nicholai.                                                                     
                                                                               
 CSSJR 39(RES) - EPA'S NPDES PERMIT FOR PLACER MINING                        
                                                                               
 CO-CHAIRMAN GREEN announced the first order of business would be              
 CSSJR 39(RES), "Relating to the U.S. Environmental Protection                 
 Agency draft National Pollutant Discharge Elimination System                  
 general permit for placer mining in Alaska."  He explained the bill           
 has to do with the mixing zone, the dilution and discharge of                 
 fluids from mining operations.  It is a federal discharge permit -            
 the national discharge elimination system."                                   
                                                                               
 Number 119                                                                    
                                                                               
 ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman                
 Alaska State Legislature, came forward to give the sponsor                    
 statement for CSSJR 39(RES).  She indicated the Senate Resources              
 Committee is the sponsor of the resolution.                                   
                                                                               
 MS. KREITZER explained the resolution was introduced by the Senate            
 Resources Committee partly because the committee was concerned                
 about what they see as a trend.  The national level of the                    
 Environmental Protection Agency (EPA) is settling law suits                   
 involving parties who are directly impacted by regulations                    
 promulgated by the agency.  She said in this instance, what has               
 happened is the EPA has issued a new draft National Pollutant                 
 Discharge Elimination System (NPDES) general permit as a result of            
 the settlement of a lawsuit filed by the Sierra Club Legal Defence            
 Fund.  One of the elements of that settlement requires all                    
 dredgers, for the first time ever, to have a NPDES permit, despite            
 the fact that the EPA doesn't have the personnel to process all               
 these newly required permits.  This causes great concern to the               
 Senate Resources Committee.                                                   
                                                                               
 MS. KREITZER stated Alaska has a long solid history of mineral                
 production.  As other regions of the United States have perhaps               
 lost touch with the bounty of their natural resources, the EPA                
 should not subject Alaska to unscientific burdensome reporting and            
 permitting requirements at the whim of somebody who has never had             
 dirt under their fingernails.  The committee members are very                 
 concerned about this trend at the national level.  This resolution            
 was introduced to try to heighten the awareness of the EPA to the             
 concern of at least the Senate and, hopefully, the House to this              
 situation.  She noted Steve Borell was on line to answer any                  
 questions.                                                                    
                                                                               
 CO-CHAIRMAN GREEN asked if there was somebody in attendance from              
 the Department of Environmental Conservation (DEC) to address the             
 bill.                                                                         
                                                                               
 MS. KREITZER said she isn't aware if there is anyone who is in                
 attendance from DEC who is interested in testifying on the                    
 resolution.                                                                   
                                                                               
 Number 324                                                                    
                                                                               
 STEVE BORELL, Executive Director, Alaska Miners Association,                  
 testified via teleconference from Anchorage in support of the                 
 resolution.  He said if the draft NPDES general permit goes into              
 effect, as it is currently written, it will have very serious                 
 adverse consequences on all mining in Alaska and any mining company           
 that needs a discharge permit.  He said this particular draft of              
 the permit references dredge and recreational mining in addition to           
 commercial operations.  It would include the smallest dredgers.               
 Mr. Borell said he believes this is a serious tourism issue in that           
 this permit, as written, would make it illegal for tourist coming             
 up for the celebration of the hundredth year anniversary of the               
 Klondike to bring a 1 1/2 or 2 inch dredge with them and do                   
 dredging in Alaska.  They would have to have the same kind of a               
 permit that a commercial miner having a D-9 and a 245 hoe would               
 have to have.                                                                 
                                                                               
 MR. BORELL said the permit has clearly been written by people who             
 definitely did not have dirt under their fingernails.  It is                  
 written in a way that not only will the small dredging operations             
 be required to have this permit for the first time, it will require           
 that every one of the small dredges have an individual permit and             
 not a general permit.  The EPA has, on one hand, proposed a permit            
 that will increase the number of the public people who has to have            
 a permit by several thousand.  Currently, there are probably about            
 300 of these permits in existence.  They are expanding that to                
 probably several thousand.  Mr. Borell noted his estimate is                  
 between 1,000 and 2,000.  Further, they are requiring that these              
 people would not be able to actually get this permit (indisc.), but           
 they would be forced to get an individual permit which is a long              
 process and much more difficult.                                              
                                                                               
 MR. BORELL said beyond this existing permit, itself, or one piece             
 of this proposed permit is an underlying policy on metals reporting           
 for arsenic.  He said this has a lot of people extremely concerned.           
 Mr. Borell informed the committee members he has had calls from               
 people throughout the United States questioning what is in the                
 permit.  He was also asked if he new that the EPA has allowed                 
 different rules in other states.  Mr. Borell said he does realize             
 that.  It seems that EPA is being more stringent with Region 10               
 then some of the other regions.  He explained the extension of the            
 permit is going to be that if the arsenic reporting protocol policy           
 is allowed in one permit, we're very likely to see it in the future           
 for other permits such as hard rock mining, fish processors, etc.             
                                                                               
 MR. BORELL said he would describe some of the recent events that              
 have been occurring.  Last Friday, at the request of Commissioner             
 Michele Brown, a meeting was organized in Fairbanks.  Four members            
 of the EPA's staff, three of which came from Seattle, attended the            
 meeting.  Department of Environmental Conservation, Department of             
 Fish and Game and Department of Natural Resources were all                    
 represented.  The purpose of the meeting was to see if indeed the             
 Mining Association was willing to sit down and talk to try to work            
 through a modification of this permit.  The answer was, "Yes,                 
 absolutely we're interested."  They had not been a part of the                
 process previously and hadn't been a part of the suit.  Mr. Borell            
 informed the committee members that there have been at least two              
 contacts this week between the Mining Association and the Sierra              
 Club Legal Defense Fund.  He said he is hopeful that something will           
 be beneficial.  We're approaching a critical time which is April 5.           
 Based on the settlement agreement between the Sierra Club Legal               
 Defense Fund and the EPA, on April 5 the EPA must issue a final               
 action.  Mr. Borell explained in no way does he want to do anything           
 that could be seen by (Indisc.) in breaching attempts to make a               
 negotiated settlement.  He said the committee needs to know that              
 the Alaska Miners Association is very concerned about this permit.            
 Mr. Borell said he would answer any questions the committee may               
 have.                                                                         
                                                                               
 Number 774                                                                    
                                                                               
 CO-CHAIR GREEN said Mr. Borell had mentioned arsenic from a                   
 leaching project and he also spoke about the thousands of potential           
 recreational miners.  He asked if it is true that the recreational            
 miners will not be involved in any kind of arsenic or leaching                
 process.                                                                      
                                                                               
 MR. BORELL said that is correct.  He said the permit is entirely              
 placer mining.  The extension is where the Alaska Miners                      
 Association believes where problems will be caused in the future.             
 He referred to policies that are included within the placer permit            
 and said if they are included in the placer permit, they expect it            
 will be impossible to keep them out of another permit at a later              
 date.                                                                         
                                                                               
 Number 839                                                                    
                                                                               
 CO-CHAIR GREEN questioned what the current practice is on                     
 recreational mining as differentiated from a stationary source on             
 turbidity, settling ponds and that sort of thing.  He also asked if           
 there are any recreational mining operations that would be                    
 conducted in a tributary or in an actual anadromous stream.                   
                                                                               
 MR. BORELL referred to the last question and said Title 15, under             
 Fish and Game, makes it very clear that it is not legal to do any             
 mining in anadromous fish streams.  They specify on a person's                
 permit at what times of the year that occurs.  He explained a                 
 recreational dredge miner that has a four inch dredge currently               
 doesn't have the requirement of the NPDES permit.  When a miner is            
 required to apply for a mining permit and not for discharge, the              
 Department of Fish and Game receives a copy of that application for           
 review and they say, "O.K., you're on such and such a stream - that           
 means from May 15th to June 30th, or whatever the particular time             
 frame is, you're not allowed to be on that stream."  He pointed out           
 that stipulation is put in the form of a letter to the dredge miner           
 and it states that he is absolutely not allowed to be there during            
 that time.                                                                    
                                                                               
 MR. BORELL referred to other aspects and said a commercial scale              
 dredge miner would be that anything above a four inch intake nozzle           
 currently must have a discharge permit and they must do various               
 visual checks down below their operation each day to be able to               
 certify that, "Yes, indeed the affect of my dredging can't be seen            
 500 feet down stream."  Mr. Borell referred to the Forty Mile River           
 and said if you can see anything at all say 50 feet below the                 
 dredge, he would be surprised.  It settles out so rapidly.  He                
 noted he is speaking about a suction dredge and not a mechanical              
 dredge with buckets.  He noted fishing just below the dredge is a             
 good place to fish because the fish come to get the organic                   
 material that has been stirred up as part of the suction dredging.            
                                                                               
 CO-CHAIRMAN GREEN said, "Thank you.  So that kind of getting around           
 to the concerns that I was gunna express is that you don't see and            
 certainly Fish and Game, I imagine, would step in if they felt that           
 there was any affluent settlement on what would otherwise be a fish           
 egg burial area."                                                             
                                                                               
 MR. BORELL indicated that is a correct statement.                             
                                                                               
 Number 1073                                                                   
                                                                               
 REPRESENTATIVE JOHN DAVIES asked Mr. Borell if he is familiar with            
 the recreational dredging permits that are issued in California.              
                                                                               
 MR. BORELL responded he really isn't.  He noted it is his                     
 understanding, from Steve Hurshboc of Alaska Mining and Diving,               
 that in California everything less than eight inches is considered            
 recreational mining.  Mr. Borell said, "He has indicated, and again           
 I have not read this so I'm not certain of it, but he's indicated             
 that in California you just want to buy a fishing license or a                
 hunting license, you go buy a dredging license for $20, or some               
 number, and so long as your dredge is less than eight inches - I              
 think the number is that they've said - with no expected                      
 consequences."                                                                
                                                                               
 REPRESENTATIVE DAVIES asked if California has a particular arsenic            
 level associated with that permit.                                            
                                                                               
 MR. BORELL said in California he doesn't believe they require a               
 permit for an eight inch dredge or less.  He noted he isn't certain           
 about that.  In the discussions he has had with people, that                  
 question had never been asked.  He stated that arsenic is                     
 everywhere and is also in areas that have been highly mineralized.            
 When water which passes across rocks that have arsenic in them will           
 pick up arsenic.  He said he would fully expect that the California           
 arsenic levels would be the same kind of a thing we would see in              
 Alaska.                                                                       
                                                                               
 Number 1190                                                                   
                                                                               
 CO-CHAIRMAN GREEN noted that all members of the committee are                 
 present except Representative Barnes.                                         
                                                                               
 Number 1196                                                                   
                                                                               
 JAMES H. JOHNSON, Vice President, Northern Testing Laboratories,              
 testified via teleconference from Fairbanks.  He informed the                 
 committee they have a laboratory in Fairbanks and one in Anchorage            
 where they do a lot of drinking water, ground water, surface water            
 and NPDES discharge permit regulatory testing (indisc.).  He said             
 he strongly supports CSSJR 39(RES).  Mr. Johnson referred to the              
 language relating to the restrictions on the commercial mines and             
 said those are not the only restrictions in the resolution or in              
 the draft permit.  He suggested that CSSJR 39(RES) be strengthened            
 to include several other points.                                              
                                                                               
 MR. JOHNSON explained the settlement of the law suit has not been             
 settled.  He said he would like to clarify that the NPDES permits             
 that the miners have are valid permits at this point.  The EPA has            
 chosen the route of wanting to settle the law suit with a new                 
 permit, but that is not the only route to go.  He said the process            
 that has been taken is very bad and continues to set a precedence             
 for policy making in the court.  It has implications that go far              
 beyond just general permits for placer miners or dredgers.  It has            
 wide implications for all NPDES permit holders in the state of                
 Alaska and there are many many permit holders.  While this                    
 particular issue relates to the general permit for placer mining,             
 what is being introduced would be very onerous for all NPDES permit           
 holders.  Mr. Johnson said most people are aware of the arsenic               
 levels.  Arsenic is a very controversial issue, nationwide, and is            
 being discussed at most levels of EPA and amongst water                       
 professionals throughout the United States.  There is a wide                  
 disagreement on what really is a hazardous level of arsenic, both             
 to human health and to the environment.  The level of .18, in his             
 mind, has no basis in the evidence he has seen.                               
 MR. JOHNSON said as most people are aware, there is a lot of                  
 arsenic in the Fairbanks district.  He said that the previous day             
 he had reported out a drinking water analysis that had .15 parts              
 per million.  That's almost 1,000 times higher of an arsenic level            
 than what is being proposed for a discharge permit.  Mr. Johnson              
 said he would urge the state of Alaska to go beyond the resolution            
 and make a very active and aggressive effort to get involved in               
 this issue.  He again noted there are issues that are broader than            
 the specific issues of the resolution.                                        
                                                                               
 Number 1448                                                                   
                                                                               
 REPRESENTATIVE DAVIES asked Mr. Johnson if he knows how many                  
 hearings EPA had in Alaska on this proposed rule change.                      
                                                                               
 MR. JOHNSON said there was one in Anchorage and one in Fairbanks              
 that he is aware of.                                                          
                                                                               
 Number 1467                                                                   
                                                                               
 REPRESENTATIVE DON LONG said Mr. Johnson had mentioned to go beyond           
 the resolution and asked him what he would suggest.                           
                                                                               
 MR. JOHNSON said the state should become the lead agency for NPDES            
 permits.  This has been a problem in Alaska for some time and that            
 is one of the things that is a sticky legal issue.  He said if you            
 look at other states that have taken the lead for NPDES permits,              
 they are the states that have discharge limits that are above .18             
 that have 50 parts, per billion, when it was the current dredging             
 water limit.  One of the things that is being intended and it was             
 to the (indisc.), the EPA had adopted permit limits because the               
 state doesn't have primacy in this issue.  The state of Alaska                
 needs to be in control of as much of its own destiny as it possibly           
 can.  This is just another classic example of us being at the mercy           
 of federal regulations, even to a greater extent than we need to              
 be.                                                                           
                                                                               
 Number 1581                                                                   
                                                                               
 MICHAEL CONWAY, Chief, Industrial Operations, Water Programs                  
 Division of Air and Water Quality, Department of Environmental                
 Conservation, was next to come before the committee.  He said                 
 currently, without having this NPDES authority from the federal               
 government, the state is in the role of certifying the federal                
 permits.  The EPA will draft an NPDES permit for a water discharge,           
 then the DEC would have to go through that particular draft permit            
 and look at the water quality standards for the state of Alaska.              
 If there are any provisions that need to be added to have the                 
 permit, as drafted, meet the water quality standards they put that            
 in a certification back to the EPA and they include that as a                 
 condition on the permit.  He referred to the general permit for the           
 placer mining operations and said the EPA had drafted that permit             
 without a whole lot of involvement from the state.  He noted that             
 with some permits, the department has more of an opportunity to               
 participate, but with this one there wasn't the opportunity to                
 participate.  It was drafted with a lot of interaction between the            
 EPA and the trustees.                                                         
                                                                               
 MR. CONWAY informed the committee that the previous week there was            
 a meeting with the resource agencies of the state, DNR, Fish and              
 Game, DEC, in the Fairbanks attorney general's office with the                
 Alaska Miners Association.  The DEC and the other state agencies              
 have some significant problems with that permit as well.  Through             
 the discussions of that particular group of people, a strategy was            
 developed to where the DEC and the other resource agencies will               
 work with the Alaska Miners Association and the public to provide             
 an alternate kind of permit.  The Alaska Miners Association is in             
 the process of asking for a panel hearing with EPA to be able to              
 present information.  Mr. Conway said the department has been in              
 contact with the Sierra Club Legal Defense Fund mining specialists            
 and have talked about the different issues.  He said as recently as           
 the previous day, Commissioner Brown received word that the Sierra            
 Club Legal Defense Fund, representing the trustees, would be                  
 willing to discuss the permit and would try to resolve a lot of the           
 issues that are not suited for the Alaska placer mining situation.            
                                                                               
 Number 1729                                                                   
                                                                               
 REPRESENTATIVE IRENE NICHOLIA asked Mr. Conway what his feelings              
 are on the .18 arsenic level requirements.                                    
                                                                               
 MR. CONWAY said the state has been working with the regional office           
 of the EPA in Seattle to bring that into alignment with some of the           
 other states that have a NPDES determination.  That level is as               
 high as .50 in other states.  He said they have been working with             
 them and they have concurrence with the EPA, Region 10, to go back            
 to the headquarters as this was a Washington, D.C., determination.            
 Commissioner Brown is writing a letter to ask for the level that is           
 in other states.  He noted the arsenic is naturally occurring in              
 Alaskan waters at fairly high levels, but it is still at safe                 
 levels.                                                                       
                                                                               
 REPRESENTATIVE NICHOLIA asked Mr. Conway if he had an estimated               
 number that they may be coming out with for Alaska.                           
                                                                               
 MR. CONWAY said the department is going to ask for up to 50.                  
 Currently, the department's staff is reviewing the information that           
 is available as to where they came up with the numbers for the                
 other states.  He said it will probably be in the neighborhood of             
 25 to 50.                                                                     
                                                                               
 Number 1808                                                                   
                                                                               
 CO-CHAIRMAN GREEN asked if the 50 parts per billion is permissible            
 for human consumption.                                                        
                                                                               
 MR. CONWAY indicated it is.                                                   
                                                                               
 CO-CHAIRMAN GREEN asked what that does over a period of time.  He             
 said he understands that arsenic is a cumulative type of a thing              
 and stays in the body.                                                        
                                                                               
 MR. CONWAY said it does, but noted he would have to get back to the           
 committee regarding the question.  He said he needs to speak to               
 some of the scientists who deals with that.  He said in discussions           
 he has had with scientists, that level is not going to be harmful,            
 even with accumulation.  Again, it occurs at very high background             
 levels throughout Alaska anyway.                                              
                                                                               
 CO-CHAIRMAN GREEN asked if he could assume that the DEC would be              
 sympathetic, if not supportive, of a resolution like SJR 39.                  
                                                                               
 MR. CONWAY explained the DEC is sympathetic to the resolution.  He            
 said they are in the process of being more aggressive to have a               
 permit that will work for Alaskan placer miners.  He said they also           
 agree that what is currently on the table is something that the               
 department cannot certify.                                                    
                                                                               
 CO-CHAIRMAN GREEN referred to the meeting in Fairbanks and asked              
 Mr. Conway if he got the same feeling from the Department of Fish             
 and Game.                                                                     
                                                                               
 MR. CONWAY said he got that same feeling from DNR, Fish and Game              
 and the attorney general's office.  There is no disfunction in                
 their ability to work this out for a statewide resolution.                    
                                                                               
 Number 1898                                                                   
                                                                               
 REPRESENTATIVE DAVIES asked what the drinking water standard is for           
 arsenic.                                                                      
                                                                               
 MR. CONWAY said currently it is .18 in the state of Alaska on the             
 water quality standards.  He said that is driven by the toxins rule           
 that comes out of Washington, D.C.  Mr. Conway said until they get            
 delegation, if they go that route for the NPDES, it defaults to               
 that toxic rule which is .18.                                                 
                                                                               
 REPRESENTATIVE DAVIES referred to the permit which was determined             
 by the settlement and asked if the level of arsenic is at the                 
 discharge level or if it is at the base of a mixing zone.                     
                                                                               
 MR. CONWAY explained that is the level that the discharge would be            
 required to meet.  Mr. Conway said they can grant a mixing zone.              
 He noted "mixing zone" is a technical term that the states are                
 allowed to do in certification where when the waste water comes out           
 of the discharged point, it is allowed to mix with the surrounding            
 water and exceed the state water quality standards, but at some               
 perimeter of that zone, it needs to meet the water quality                    
 standards.  He noted there are also air mixing zones.  Without a              
 state certification in any of these permits, the discharge has to             
 meet the water quality standards at the end of that pipe.  Mr.                
 Conway explained in this particular situation, which they have done           
 in the past and will continue to do with placer mines, is they                
 allow a parameter of mixing.  He said a lot of times you will see             
 visual sorts mixing such as with suspended solids like mud.  In a             
 state certification, it would be up to the state to provide a                 
 mixing zone and there are water quality standards that are laid out           
 as to what they are limited to be able to do for the sizes of those           
 mixing zones.                                                                 
                                                                               
 Number 2018                                                                   
                                                                               
 REPRESENTATIVE DAVIES asked Mr. Conway if he had any particular               
 examples of naturally occurring arsenic levels in rivers.                     
                                                                               
 MR. CONWAY stated he didn't currently have them with him, but he              
 would get them for the committee.  He noted they are working on               
 identifying the constituents in the watersheds that are of concern            
 around the state.                                                             
                                                                               
 Number 2064                                                                   
                                                                               
 CLARKE MILNE, Civil Engineer, testified via teleconference from               
 Fairbanks, in support of CSSJR 39(RES).  He informed the committee            
 he is a registered civil engineer in Alaska, he finished his                  
 masters work at the University of Alaska, Fairbanks, and has worked           
 in Northern Alaska for the last 20 years.  Mr. Milne said he knows            
 there are many issues that come before the committee and the                  
 legislature, but this issue is interesting from the point of view             
 that placer mining can be devastated by the proposed settlement               
 general permit.  Unfortunately, it need not be the case.  There was           
 (indisc.) finding no signification impact that supported the 1994             
 general permit brought by the EPA.  There was an agreement through            
 discussions between the environmental groups and Alaska Mining                
 Association to move ahead with the 1994 general permit.  It then              
 turned out that the environmental groups did sue.  Now the                    
 settlement permit is the result of that chain of reaction.                    
                                                                               
 MR. MILNE said, "Unfortunately, the combination of the arsenic                
 level that's set, the rules about dredging within 1,000 feet within           
 12 months and a number of other things that are mentioned in here -           
  moving your discharge within a mining season - it would basically            
 bind all truthful independent miners into a circumstance that they            
 couldn't adopt a general permit and they'd have to go get an                  
 individual permit.  It is unlikely that they'd be allowed to do               
 things under the individual that they were under the general, so it           
 could shut down placer mining and dredge work.  Unfortunately, I              
 think that would be inappropriate because there was this (indisc.)            
 and, therefore, there really is no driving force to protect human             
 health and environment that the 94 shouldn't again be extended into           
 this year while the (indisc.) go on."                                         
                                                                               
 MR. MILNE said he very much agrees that the state of Alaska, DEC              
 and Fish and Game should sit down in discussions with                         
 representatives of the miners or recreational miners and try to               
 work out a more workable solution that can allow mining.  He                  
 pointed out mining has been going on in Alaska for over 100 years             
 and hasn't devastated Alaska.  He said it can be worked out better            
 than what the permit does which is very unbalanced.                           
                                                                               
 MR. MILNE said he would like to clarify a comment made by Mr.                 
 Conway in that the current requirement is .18 EPB.  He said he                
 thought the thrust of the question was, "What are drinking water              
 standards?"  He said he believes the drinking water standards is              
 .50 EPB.  It is true that through default, because Alaska doesn't             
 have primacy and doesn't administer the Clean Water Act, that it is           
 .184 placer mining.  Mr. Milne said he believes the resolution                
 should move and he encourages better communication.  He said he               
 personally believes the EPA has not well represented the reality in           
 Alaska, especially Northern Alaska, where there is arsenic in the             
 water and the dredging and turbidity requirements.  Background                
 levels would not be allowed in the proposal.                                  
                                                                               
 Number 2257                                                                   
                                                                               
 GEORGE LOUNSBURY was next to testify via teleconference from                  
 Fairbanks.  He said he is a life-long Alaskan and owns a mining               
 operation with his brother in the Koyukuk area.  He said he                   
 supports SJR 39 and hopes it passes.  Mr. Lounsbury said he concurs           
 with Mr. Borell, Mr. Johnson and Mr. Milne with regard to the                 
 (indisc.) of the permit that the EPA has negotiated with the                  
 environmental organizations.  It appears to him that this is a                
 basic attempt to shut down the placer mining industry in Alaska,              
 especially the smaller operators.  He said it is a bad deal when              
 you invest in a bunch of equipment, time and effort and then have             
 somebody swoop in for what he feels is an unjust reason and puts              
 you out of business.  Mr. Lounsbury said he would like to see the             
 state become more involved in this permit process and get the EPA             
 and government, at the federal level, out of our lives.  He urged             
 passage of the resolution.                                                    
                                                                               
 Number 2309                                                                   
                                                                               
 REPRESENTATIVE DAVIES said it has been suggested that perhaps the             
 state should consider taking primacy in this area.  He asked Mr.              
 Lounsbury if he supports that.                                                
                                                                               
 MR. LOUNSBURY indicated he agrees wholeheartedly.                             
                                                                               
 REPRESENTATIVE DAVIES said if it were to be the case that a small             
 increment would have to be added to DEC's budget, would he support            
 that.                                                                         
                                                                               
 MR. LOUNSBURY said he would support it.                                       
                                                                               
 Number 2337                                                                   
                                                                               
 CO-CHAIRMAN GREEN asked MR. CONWAY what would be involved for the             
 state to actually assume or get primacy.  He said he knows that it            
 is done with water injection wells through Alaska Oil and Gas                 
 Conservation Council (AOGCC), but he doesn't know about NPDES.                
                                                                               
 MR. CONWAY informed the committee members the department is                   
 currently working with the EPA in looking at the staffing levels              
 that would be required for us to have primacy.  It becomes a matter           
 of having permitting staff.  He noted there are rules that are                
 approved for our water quality standards, so that hurdle has been             
 over come.  Mr. Conway said the department has an EPA staff person            
 on loan for a year to look at what it would take for us to get the            
 NPDES primacy.                                                                
                                                                               
 CO-CHAIRMAN GREEN said he would presume that would include the                
 authority to establish regulations, etc., as well as administer               
 them.                                                                         
                                                                               
 MR. CONWAY explained they currently have the authority to salvage             
 the regulations.  He said they would have to have permittees who              
 have been through the training process on the Clean Water Act.                
 Currently, his staff focuses in on the Alaska water quality                   
 standards, but they would then have responsibility for the whole              
 Clean Water Act on all of the issues which would require staffing             
 and training.                                                                 
                                                                               
 Number 2400                                                                   
                                                                               
 CO-CHAIRMAN GREEN said, "If we had primacy, the state of Alaska had           
 primacy and decided that .50 would be the number that we wanted               
 use, we would have that ability rather than have to stay with                 
 something that came to us from EPA."                                          
                                                                               
 MR. CONWAY said that is correct.  They would just go through and              
 amend the water quality standards.                                            
                                                                               
 Number 2430                                                                   
                                                                               
 FRED HEFLINGER testified via teleconference from Fairbanks.  He               
 informed the committee he has property in Fairbanks and he mines in           
 the forty mile district.  He said, "First of all I know that the              
 drinking water limit is 50 parts per billion and the arsenic limits           
 they are setting for us is .18 part per billion, which is 277 times           
 lower the standard that is allowed for drinking water.  It's funny            
 that 25 other states are allowed 50 parts per billion as there is             
 for 50 micrograms per liter, whichever way we want to put it, is              
 their standard.  It's kind of funny when they have a permit that              
 was good for five years, there has been an environmental assessment           
 done on it and then there is an agreement made behind closed doors            
 because the environmentalists are mad about it.  When the                     
 environmental EPA lawyer came up here from Seattle, Region 10                 
 lawyer, he admitted that he was a member of a couple of                       
 environmental organizations.  I believe we haven't had due process            
 on this and I believe that the lawyers for the EPA are                        
 environmentalists and that this is the thing that is done with all            
 our representation and it's completely unfair, but of course I know           
 the law is unfair.  (Indisc.) decided it is too expensive to go               
 into litigation on this issue, although there are some miners that            
 (indisc.--coughing) in Fairbanks that has an agreement with EPA               
 that they will defend his position in general permit and any court            
 cases, and they have not...."[END OF TAPE]                                    
                                                                               
 TAPE 96-39, SIDE B                                                            
 Number 001                                                                    
                                                                               
 MR. HEFLINGER continued, "...because the city drinking water                  
 standard if 50 parts per million - billion I mean - and dump it               
 into the Chena River - pollutes it.  Why that's probably the                  
 conclusion that probably the City of Fairbanks is polluting the               
 Tanana River with the out fall from the sewage treatment plant too.           
 There are a lot of problems on all the permits and everything and             
 I think that this is a real raw deal.  I'm sticking mostly to what            
 the placer miners want and I'm not worried about the dredgers, but            
 if the dredgers have to have a permit maybe everybody that runs a             
 jet boat should have a permit on the Kenai River and everywhere               
 else in Alaska because a jet boat is just a suction dredge that               
 produces propulsion.  O.K., then also on this EPA permit they want            
 us to estimate seepage  which is a big problem for me.  If I keep             
 my pond at the same level all summer, it's in - it's a sad                    
 situation, but there is always seepage and it's been (indisc.) by             
 EPA before.  They can't measure, they're gunna hold me liable to              
 measure in seepage, which I don't even know what it is.  I think              
 when you have things you can't measure -- are gunna hold people.              
 I think you would have a real problem."                                       
                                                                               
 Number 074                                                                    
                                                                               
 ROGER BURGGRAF was next to testify via teleconference from                    
 Fairbanks in support of SJR 39.  He said he believes in working               
 together with people to resolve issues, but this proposed permit              
 did not receive input from those who are being effected by the                
 proposed changes.  This proposed modified general NPDES permit is             
 a back door deal cooked up by the EPA attorneys, who previously               
 worked for environmental (indisc.) groups, without the input of               
 industry.  Mr. Burggraf said if this is not a conflict of interest,           
 he doesn't know what is.  Other witnesses have given good testimony           
 which he hopes the committee will consider.  He said the 1994                 
 general permit was issued for five years.  If the (indisc.) permit            
 is approved by EPA, those who presently hold valid general permits            
 will lose them.  Many operations will have to apply for new general           
 permits.  Others are going to have apply for individual permits.              
 This will probably occur right in the middle of the mining season.            
 Mr. Burggraf said it puts the whole industry in jeopardy.  Many               
 miners have borrowed money, have large investments and have based             
 their next five year mining operation on this general permit.  To             
 yank it out from under them and place them under a new permit, if             
 they're able to issue it, will jeopardize their ability to mine.              
 Mr. Burggraf said SJR 39 needs to be approved and the message needs           
 to be sent to the EPA.                                                        
                                                                               
 Number 188                                                                    
                                                                               
 KATHALEEN MIKE DALTON testified via teleconference from Fairbanks.            
 She said she doesn't think it was a knee jerk reaction to require             
 the .18 per billion, but was a well calculated move.  Ms. Dalton              
 said she suspects a sub-rosa agreement between the Northern Alaska            
 Environmental Center, the American Rivers Association, the Sierra             
 Club Legal Defense and agent or agents in the EPA.  She said she              
 understands that Alaska and one other state does have primacy in              
 EPA matters.  She said Commissioner Brown spoke the miners the                
 previous week and talked about the primacy issue.  Ms. Dalton said            
 we should look at that, as a legislature, and seek that primacy.              
 The .18 parts per billion is an outlandish exurbanite requirement.            
 Ms. Dalton informed the committee her family background is in                 
 mining.  She urged the committee to look into the primacy issue as            
 it could solve a lot of problems.                                             
                                                                               
 Number 258                                                                    
                                                                               
 HARRY JENKINS was next to address the committee via teleconference            
 from Fairbanks.  He stated he doesn't believe in holding the                  
 miner's heads under water forever.  Mr. Jenkins urged the committee           
 to pass SJR 39.                                                               
                                                                               
 Number 277                                                                    
                                                                               
 DON MAY gave his testimony via teleconference from Fairbanks.  He             
 stated he is the founder of Polar Mining and has since turned that            
 operation over to his sons.  He read from a letter written by Dan             
 May, President, Polar Mining, "As a second generation Alaska placer           
 miner and president of Polar Mining, Inc., I'm very concerned about           
 the current water quality standards revision and their effects on             
 our industry.  Further, I must protest the timing of the public               
 comment period and would request these regulations, revisions be              
 delayed.  Whereas the current Alaska placer mining general permit             
 modifications proposed by EPA, as a result of the Sierra Club                 
 lawsuit, their effects on placer miners have been contested by the            
 Alaska Miners Association.  The outcome of the federal charges is             
 unclear at this time.  Since the Alaska DEC water quality standards           
 are interrelated with those of the EPA I would request an extension           
 of the Alaska DEC water standards revision process in order to                
 first resolve the uncertainties arising from the EPA Sierra Club              
 law suit.  Once the EPA general permit issues are resolved, we will           
 need additional time to study the revision in light of the federal            
 regulations outcome.  I would further request that if the EPA                 
 issues excessively restrictive regulations, as are currently                  
 proposed, the Alaska DEC take a good look at what state regulations           
 it could modify or even implement in order to allow and encourage             
 the continuation of our industry.  Our mining company strives to              
 maintain a good reputation and has struggles to adapt to many                 
 regulation changes faced over the past ten years; however, there              
 comes a point in which it will no longer be possible to comply with           
 these unreasonable regulations.  As the current EPA proposal to               
 require a miner to discharge water with affluent limitations based            
 on drinking water status while the natural receiving water is unfit           
 for human consumption is absurd, superfluous and lacks a scientific           
 basis.  From where I stand, these proposed changes appear by                  
 designed, by environmental extremists with a purpose of eliminating           
 placer mining in Alaska.  For the past ten years Polar Mining has             
 provided year around jobs, near Fairbanks, with a work force of 43            
 employees.  During that time this one company has produced in                 
 excess of $40 million in new revenue, which is turned over and over           
 again in our community.  Given the chance to continue our mining              
 operations, I see a 10 to 20 year life future for our employees               
 just within a 20 mile radius of this town.  I applaud the Alaska              
 State Legislature for passing an act allowing for a mineral                   
 exploration incentive credit designed to stimulate and encourage              
 mineral exploration and development.  I want to thank you very much           
 for listening to us."                                                         
                                                                               
 Number 431                                                                    
                                                                               
 EDDIE GRASSER, Alaska Outdoor Council, came before the committee to           
 give his testimony in support of SJR 39.  He said one of the                  
 council's main bylaws is public access to public resources and                
 there are a large amount of people in Alaska that do recreational             
 mining activities.  He said they concur with comments made by Mr.             
 Johnson and Mr. Borell.  Mr. Grasser said they are looking at the             
 issue as an access issue and there are a lot of people that would             
 like access to the public resources for their utilization.                    
                                                                               
 Number 472                                                                    
                                                                               
 SARA HANNAN, Executive Director, Alaska Environmental Lobby, came             
 forward to address CSSJR 39(RES).  She read a couple of excerpts of           
 a position paper from the Sierra Club Legal Defense Fund written by           
 Dave Chambers, Ph.D. Geophysicists, and primary negotiator in the             
 settlement agreement that CSSJR 39 speaks to.                                 
                                                                               
 "The EPA was in a weak legal position in defending its case before            
 the court.  If the EPA loses in court, the court may require more             
 stringent standards that have been negotiated under the settlement            
 agreement.  For example, the appellants have asked that a complete            
 set of metals, approximately ten metals, not just arsenic as in the           
 case in the settlement agreement, be required for testing - and the           
 testing (indisc.) will be once a week as required in the NPDES                
 permit for other mine discharges rather than three times per year             
 as required in the settlement agreement.                                      
                                                                               
 "The arsenic level of .18 parts per billion is not related to the             
 settlement agreement.  The permit arsenic level was not an issue              
 discussed during the settlement negotiations.  Moreover, if there             
 is no settlement agreement, the arsenic standard for permits issued           
 under the 1994 general permit will still be .18 part per billion.             
 This is not an issue that is relevant to the settlement agreement.            
                                                                               
 "All dischargers, currently under law, including small section                
 dredges are required by the Clean Water Act to have an NPDES                  
 permit.  Under the settlement agreement small section dredgers must           
 apply, by mail, for a permit they're obliged to read and abide by             
 which contains a set of simple best management practices the EPA              
 sends to them.  There is no monitoring, no reporting and no fee for           
 this permit.                                                                  
                                                                               
 "The EPA has agreed to conduct studies to quantify the effects of             
 discharges from large section dredges greater than eight inches and           
 to analyze the qualities of metals being discharged from all placer           
 operations so that both miners and environmentalist will know                 
 whether these operations are causing metals pollution or damaging             
 stream beds in Alaska.  As with most settlement agreements, there             
 are many compromises leading to the settlement agreement that this            
 resolution speaks to, but there should be a distinguishing factor             
 made between what is part of the settlement agreement and what is             
 EPA process."                                                                 
                                                                               
 MS. HANNAN read from testimony given to the Senate Resources                  
 Committee.                                                                    
                                                                               
 "At the beginning of the settlement agreement process, the Miners             
 Association chose not to intervene in the legal challenge to the              
 general permit.  In addition, they were offered an opportunity to             
 comment on the settlement agreement when it was in its final stages           
 and they declined.  The appellants are still willing to hear                  
 substantive concerns from the miners and to approach the EPA about            
 modifications in the settlement agreement if the changes requested            
 will preserve the integrity of the settlement agreement.                      
                                                                               
 "Secondly, currently the state of Alaska, under its water quality             
 regulations, allows for site specific exemptions which is something           
 that the state of Alaska has worked towards in the environmental              
 community in Alaska has cooperated with the mining constituency to            
 make sure we're pertinent because we have different mineralogy in             
 Alaska then you find in many places."                                         
 MS. HANNAN thanked the committee for time to give testimony.                  
                                                                               
 CO-CHAIRMAN GREEN asked if there were any other comments.  Hearing            
 none, he closed the public hearing.  He noted he would keep the               
 record open for written comments.                                             
                                                                               
 CO-CHAIRMAN GREEN turned the gavel over to Co-Chairman Williams.              
                                                                               
 HB 542 - BOARD OF FISH VOTING ETHICS                                        
                                                                               
 Number 638                                                                    
                                                                               
 CO-CHAIRMAN BILL WILLIAMS said the committee would address CSHB
 542(FSH), "An Act relating to participation in matters before the             
 Board of Fisheries by members of the board."  He noted it is his              
 intent to move the bill from committee.                                       
                                                                               
 Number 660                                                                    
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN informed the committee that HB 542              
 was introduced after a meeting held in Anchorage on February 15 and           
 16, 1996, between the Board of Fisheries' chairmen.  He noted the             
 minutes from the meeting are in the committee member's files.                 
 Representative Austerman said past chairmen of the Board of                   
 Fisheries were contacted and six were able to attend.  One of the             
 main things that came out of that meeting was the problem with the            
 conflict of interest that the board members were having when it               
 came to dealing with issues before the Board of Fish.  He gave an             
 example where a board member held a salmon permit in Bristol Bay,             
 1 of 800, and was deemed to have a conflict of interest and could             
 not speak or vote on an issue dealing with the salmon permits in              
 the Bristol Bay area.  Representative Austerman said the problem              
 with that is the fact that we have what we call a "lay board."  The           
 lay board is supposed to be made up of people who are involved in             
 the industry so that you have the knowledge and expertise to make             
 decisions based upon  the layman's perspective of what's going on             
 in that industry.                                                             
                                                                               
 REPRESENTATIVE AUSTERMAN explained that part of the problem with              
 the way the current law is set up is that the option of an advisory           
 opinion from the attorney general is allowed in state law.  If                
 somebody has a conflict of interest or has stated a conflict of               
 interest, the chairman of the board then has the option of going              
 and getting an opinion from the attorney general as to whether                
 there is a true conflict or not.  That comes back to the issue of             
 an attorney general's opinion in reference to the permit holder in            
 Bristol Bay.                                                                  
                                                                               
 REPRESENTATIVE AUSTERMAN said the bill would change the law so that           
 it states that the Board of Fish members are required, whether they           
 have a conflict of interest or not, to sit on the board and make              
 decisions.  They cannot opt of not making a decision and they                 
 cannot be told that they can't make a decision.  As a lay board,              
 we're trying to set it up so that those lay people that have opted            
 to permit themselves to be placed in that position that they do               
 have to vote.                                                                 
                                                                               
 REPRESENTATIVE AUSTERMAN referred to when the House Fisheries                 
 Committee had hearings on HB 547, the Department of Law was in                
 attendance.  They reviewed the bill and a small amendment was made            
 to Section 3 of the bill which satisfied the Department of Law.  He           
 said he hasn't received a position from the Administration or the             
 Department of Fish and Game.  He stated the bill has a zero fiscal            
 note.                                                                         
                                                                               
 Number 843                                                                    
                                                                               
 REPRESENTATIVE DAVIES questioned what the disclosure requirements             
 are.                                                                          
                                                                               
 REPRESENTATIVE AUSTERMAN said if he understands it correctly, and             
 there are some Board of Fish chairmen connected via teleconference            
 that can speak to this, they have to file a financial conflict of             
 interest statement with the Alaska Public Offices Commission                  
 (APOC).  He said the way the bill is drafted, it says they have to            
 declare at every meeting if they have a conflict of interest on any           
 subject before them.                                                          
                                                                               
 Number 855                                                                    
                                                                               
 REPRESENTATIVE SCOTT OGAN said he had articulated some concerns in            
 the previous committee.  He said, "If we're going to allow members            
 of the Fish Committee, Fish Board - excuse me, to vote despite a              
 conflict of interest, would it not be prudent to designate so many            
 positions on the board say to commercial fishermen, so many to                
 sport fishermen, to many to public members - possibly a more of a             
 professional member or some kind of a structure similar to what the           
 Big Game Commercial Services Board had when there was a -- they               
 would allow so many guides, outfitters, transporters, public                  
 members and they had one representative from the Board of Game.               
 This precluded them from disclosing and allows them to vote on any            
 issue, even though they had a vested interest in it because there             
 was a structured balance on the board.  And I was wondering if you            
 would be willing to possibly -- I'm not prepared with amendments              
 today.  Unfortunately, this came up a little bit faster than I                
 anticipated.  It seems like just -- if you would entertain working            
 on that concept or like maybe put that concept on the table for               
 discussion."                                                                  
                                                                               
 REPRESENTATIVE AUSTERMAN agreed that discussion took place at the             
 House Fisheries Committee meeting.  He said he doesn't think he is            
 ready to try to come up with a whole new way of structuring the               
 Board of Fish as it would be very contentious and a political "hot            
 potato" that the whole state of Alaska would jump into.  They way             
 it currently is set up, as far as the appointments to the board are           
 concerned, it is the Governor's option in how he appoints.  The               
 intent of the way the board is supposed to be appointed is that it            
 is done on some kind of a balancing because of the different users            
 of the resource.  The Governor currently has the control and the              
 option of how it's done.  Representative Austerman said to come up            
 with a different way of doing it would take a lot of public input             
 and if that happened within HB 542, it would put the bill off for             
 a year.  He urged the committee to read the minutes from the                  
 meeting held in Anchorage and noted there were three chairmen from            
 the commercial fishing industry and three from the sport industry.            
 He said unanimously between the six chairmen, this was the main               
 issue that threatens the integrity and the operations of the Board            
 of Fish.  Representative Austerman said if we are going to continue           
 to have a lay board, it is just about mandatory that we come up               
 with a system that allows them to take action and be involved in              
 the decision making of the whole industry.  He said he would be               
 more than willing to hold Fish Committee hearings during the                  
 interim to look at how the board's structure is currently done and            
 take input from the rest of the state to try and come up with                 
 another plan.  Obviously, the system currently has fault and he               
 believes it will always have faults because of the vastness of the            
 industry and what it really means to the state of Alaska.  He noted           
 there are currently bills that have been introduced that do suggest           
 regionalizing the state, etc.                                                 
                                                                               
 Number 1119                                                                   
                                                                               
 REPRESENTATIVE OGAN said, "I read the minutes from the meeting and            
 I recognize it is a problem.  We also read the statute that - to              
 provided in the packet that talks about misuse of official position           
 and how you - if you have a conflict of interest you have to                  
 disclose them.  I believe right now the board members aren't                  
 allowed to vote on an issue.  That's the issue now that they're not           
 allowed to vote on the issue because if they have a conflict of               
 interest..."                                                                  
                                                                               
 REPRESENTATIVE AUSTERMAN said, "Not necessarily, the problem is               
 that if there is a conflict of interest that's been stated, the               
 option of going to the attorney general and having the attorney               
 general say that `you do have a conflict and you can't vote,' is              
 probably the biggest part of this is that any of the boards that              
 you sit on in the state of Alaska you have to declare a conflict of           
 interest.  We're just trying to get a working board in and there's            
 a lot of boards that serve in the state of Alaska and the Game                
 Board is another one, but I've -- everybody that I've talked to               
 that have dealt with any of the other boards will tell you that the           
 problems facing the Fish Board are surmount compared to what any              
 other problems of any other board in the state of Alaska have and             
 that's what we're trying to fix."                                             
                                                                               
 Number 1187                                                                   
                                                                               
 REPRESENTATIVE OGAN said, "Ya, I would say that's probably because            
 - you know, like on the Game Board we don't have the commercial               
 exploitation of game, obviously that we have with fisheries and               
 so...."                                                                       
                                                                               
 REPRESENTATIVE AUSTERMAN said, "I would say the commercial                    
 exploitation should be commercial use because when you're -- you're           
 talking about a number of different users.  You're correct though,            
 there is a commercial use versus the game which is not necessarily            
 so much of a commercial use as the fisheries are, but again,                  
 fisheries are the number one tax base in the state of Alaska.                 
 Commercial fishing is compared to oil and has been the number one             
 tax base for the state of Alaska before oil ever to her - before              
 they started exploiting it.  So, you know, there is a lot more                
 going on in the industry than there are in any of the other                   
 industries that have boards attached to it."                                  
                                                                               
 Number 1247                                                                   
                                                                               
 REPRESENTATIVE DAVIES said he agrees with Representative Austerman            
 in that he thinks that the issue that Representative Ogan raised is           
 an important issue that needs to be resolved, but it is far more              
 complicated to deal with it in an amendment to this particular                
 bill.  He said he would note that at least the last two governors             
 have spent a lot of time in consideration of the various balances,            
 both regional and gear types, etc., so it's not an issue that is              
 ignored.  The whole extreme range needs to be considered and                  
 perhaps it should even go to a professional board.  It is much more           
 of a complicated issue and he believes the committee should move on           
 to passing the bill out of committee.                                         
                                                                               
 Number 1308                                                                   
                                                                               
 CHERYL SUTTON, Legislative Assistant to Representative Bill                   
 Williams, Alaska State Legislature, came before the committee to              
 giver her testimony.  She said she is testifying from a different             
 perspective as she was one of the privileged to serve on a Board of           
 Fisheries Review Committee appointed by Governor Cowper.  She said            
 this issue has been discussed for some time.  Ms. Sutton said the             
 Board of Fisheries Review Committee issued an official report to              
 the Governor, which was distributed to the legislature and others.            
 She read from the report so that the committee might have some                
 background on the discussion of this issue.  She noted there are at           
 least two former chairmen, who are both sports fishermen, on                  
 teleconference who she knows will support what she is going to                
 read.  She quoted from the report:                                            
                                                                               
 "Other major concerns voiced in regard to conduct of the board                
 relate to conflict interest, special interest biased and influence            
 by special interest advocates.  While it is recognized by the                 
 committee that conflict of interest and special interest bias can             
 be and has, at times, been a problem with board members.  The                 
 unanimous view of the committee and the majority of view received             
 from the public supports appointments to the board of persons with            
 hands on knowledge of and experience with fisheries resources and             
 sport, commercial, subsistence and personal use fisheries.  The               
 feeling of the committee is that even with a full-time board                  
 divested of financial interest in the industry, persons of                    
 sufficient knowledge and experience to qualify for appointment will           
 bring with them, by definition, certain views commensurate with               
 their experience and background.  Conflict of interest and special            
 interest bias is not necessarily limited to commercial or financial           
 interests, but also extends to sport fishing, subsistence and                 
 personal use.  Any broad interpretation of conflict of interest or            
 special interest would, therefore, tend to severely limit the                 
 number of qualified and knowledgeable person available for                    
 appointment to the board.  This does not mean, however, that both             
 the Governor and the legislature should not use reasonable care in            
 avoiding the appointment of persons perceived as advocates of                 
 special interest groups.  Divestiture of fisheries interest by                
 persons appointed to the board was carefully considered and                   
 ultimately rejected by the majority of the committee."                        
                                                                               
 MS. SUTTON continued reading from another excerpt of the report.              
                                                                               
 "The committee unanimously reaffirmed that assessee for full and              
 clear disclosure by appoint is of any all financial interest in               
 fisheries or fishery related business is as well in membership in             
 organizations.  The committee also considered a proposal which                
 would require board members to abstain from discussing or voting on           
 issues in which the member has any economic interest, including               
 subsistence or personal use.  It was decided that such a                      
 requirement would seriously hinder the board's ability to                     
 function."                                                                    
                                                                               
 MS. SUTTON explained the legislative process is not unlike the                
 Board of Fish process in that the members create law.  The Board of           
 Fisheries has rule making authority and there are conflicts that              
 all the members of the legislative body carry with them, you work             
 at other jobs and have other interests.  Yet when the legislators             
 are on the floor to vote on an issue, those issues are disclosed              
 and the member asks to be excused from voting on an issue and yet             
 is compelled by the body to vote.  That is for a specific purpose             
 in which there is experience and expertise that is brought forward            
 by each of those members and you have an obligation to vote on                
 matters that are before you.  Ms. Sutton said the Board of                    
 Fisheries is no different in that regard.                                     
                                                                               
 Number 1560                                                                   
                                                                               
 REPRESENTATIVE AUSTERMAN said to follow up on Ms. Sutton's                    
 statement, it gets back to how you balance a decision that has been           
 made on a fishing issue.  You have to have a balance, you have to             
 have the balance of the sport industry, the commercial industry and           
 subsistence.  If you don't, then you end up with a lopsided                   
 decision.  Representative Austerman stressed that balance is needed           
 for decision making.                                                          
                                                                               
 REPRESENTATIVE AUSTERMAN pointed out a current problem is there are           
 a number of attorneys that attend the board meetings and they fight           
 tooth and nail to get somebody disqualified on a conflict of                  
 interest because it then weighs the side of the other aspects of              
 this industry.  Again, it is such a big important industry to this            
 state that we have to have some kind of balance to it.                        
                                                                               
 Number 1671                                                                   
                                                                               
 BUD HODSON, Past Chairman, Board of Fisheries, testified via                  
 teleconference from Anchorage.  He informed the committee he served           
 on the Board of Fisheries for five years.  He also participated               
 with other past chairmen in the two day meeting discussing issues             
 that pertain to the Board of Fisheries.  Mr. Hodson said the single           
 most important thing that the chairmen thought needed to be                   
 addressed was conflict of interest.  Mr. Hodson said, "The current            
 chairman, Larry Engle, was also in attendance and we had a lengthy            
 discussion on not so much changing the Board of Fisheries, but                
 keeping it the way it was prior to some of the AG opinions and the            
 way the subsistence law is being interpreted and applied.  And,               
 again, Mr. Austerman said correctly, if we're going to have a lay             
 board - people who participate in the industry, we have to allow              
 people to be able to participate in Board of Fisheries meetings               
 even though they may have somewhat of a conflict of interest or, in           
 some cases, maybe even a direct conflict of interest.  If we don't,           
 what will happen through a period of time is that we will not have            
 anybody who actively participates in the industry.  You're gunna              
 end up with people who do not commercial fish, do not participate             
 in the sport fish industry.  In effect, you're not gunna have a lay           
 board.  They may not be a professional board as we would consider             
 it, but you'll end up going to a professional board because people            
 who do not participate in the industry, frankly, it's hard for them           
 to have the time or the will power to serve on a board like the               
 Board of Fisheries, and you'll evolve into a professional board.              
 So if it's the goal of the state to keep a lay board for the Board            
 of Fisheries this action, in my opinion, is necessary."                       
                                                                               
 MR. HODSON continued, "There is one other comment at the end there            
 where it says, `A Board of Fisheries person must participate.'  I             
 apologize for not seeing this earlier, but when I was on the Board            
 of Fisheries the way that it worked is we would disclose our                  
 conflict of interest and it was up to the board and Robert's Rules            
 of Order, the board would determine whether or not, you know, the             
 individual should participate or not.  And I personally left a                
 board meeting once because there was only four people that                    
 participated in a fishery and I was one of em and I did not want to           
 participate.  I didn't feel it was fair.  On this where it says               
 `must,' I guess in that situation I would've just abstained.  I               
 would be staying within the new law here that I did participate               
 just by abstaining.  That's pretty much all I have other than just            
 that I support it.  If we're gunna keep it the way it was, at least           
 when I was chairman, this is necessary.  Thank you."                          
                                                                               
 CO-CHAIRMAN WILLIAMS indicated there are four more people to                  
 testify on the measure.  He noted he would like to move the                   
 legislation.                                                                  
                                                                               
 Number 1898                                                                   
                                                                               
 TOM ELIAS, Past Chairman, Board of Fisheries, testified via                   
 teleconference from Anchorage.  He informed the committee members             
 he served on the board from 1991 to 1994.  Mr. Elias stated he                
 echoes Mr. Hodson's and Ms. Sutton's comments.  He referred to                
 abstaining from a vote and said we have done this as far back as he           
 can remember.  He said people who serve on the board are various              
 people from various sections of the state and in different                    
 industries such as sport, commercial, personal use or subsistence.            
 We need that expertise because some of the board members may not be           
 up to speed in a certain area.  To disallow that person by                    
 conflicting them out, they cannot even participate other than the             
 two or three minutes they give each testifier to testify.  That is            
 a great disservice of the board and a great disservice to the                 
 state.  Mr. Elias said whether it be sport or commercial, he found            
 a certain higher level of ethics between the board members than               
 what is being perceived by the legislature, governor's office, the            
 general public and the attorneys.  He said to keep the lay board,             
 this bill is extremely necessary.  This is the only way to do it.             
                                                                               
 Number 2073                                                                   
                                                                               
 NICK SZABO testified via teleconference from Kodiak.  He noted he             
 was a member of the Board of Fisheries from 1975 until 1982.  Mr.             
 Szabo said he has been involved with the fishing industry in Alaska           
 for the last 30 years and is in support of HB 542.  Mr. Szabo                 
 informed the committee members he also attended the meeting with              
 the past chairmen and those who attended spanned a 20 year period             
 of board service and all were in full agreement that this change              
 was most needed.  Fisheries management and allocation decisions are           
 very important to Alaska's economy.  We need the full participation           
 of members who are highly knowledgeable and widely experienced in             
 a variety of different fishery uses.  The issues are too complex              
 and too important to risk decisions by a board that doesn't fully             
 understand all the implications of their decisions.  People with a            
 lot of knowledge and experience are likely to have both a financial           
 and a personal interest in an issue; however, the Executive Branch            
 Ethics Act prohibits participation by a member with a personal or             
 financial interest and, thus, frustrates the intent of having a               
 board composed of members with knowledge and experience.  The seven           
 member Fisheries Board requires four votes to pass an action,                 
 regardless of how many members are actually participating.  At one            
 time the board had four members who held Bristol Bay salmon                   
 permits.  Under the present legal opinion, that board couldn't                
 function on any action that dealt with Bristol Bay.  Mr. Szabo                
 pointed out that there have been other situations where only four             
 or five members have been ruled eligible to participate.  In one              
 particular situation, an action to change the status quo failed on            
 a vote of three to two, yet a motion to approve findings in support           
 of that vote also failed because only a portion of the membership             
 was allowed to vote.  The board's actions to maintain the status              
 quo was nullified by its inability to approve findings.  [END OF              
 TAPE]                                                                         
                                                                               
 TAPE 96-40, SIDE A                                                            
 Number 001                                                                    
                                                                               
 MR. SZABO said by requiring the board to document their reasons for           
 an action by findings of fact, the public can be assured that board           
 members are voting based on their expertise rather than their                 
 conflict.  These findings will give the public a written basis for            
 controversial board decisions.  Possibly each board member could              
 additionally be required to produce personal findings explaining to           
 the public their individual reasons for a particular vote.  These             
 additional obligations would require increased staff support, but             
 if the board is to regain the confidence of the public then they              
 are very much needed and long overdue.                                        
                                                                               
 Number 116                                                                    
                                                                               
 JEFF STEPHAN, United Fishermen's Marketing Association (UFMA),                
 testified via teleconference from Kodiak.  He explained UFMA                  
 represents commercial fishermen who are affected by the Board of              
 Fisheries process.  The UFMA supports HB 542 and applauds the                 
 committee's efforts and Representative Austerman's efforts for                
 taking the time to address this issue.  He said they hope that the            
 Governor and the legislature are very careful in the appointment              
 and confirmation process of board members.  They also hope that the           
 board is made up of persons who are capable of conducting the                 
 public business in a manner that doesn't exercise any personal or             
 financial conflict of interest that they may have.  Mr. Stephan               
 said, "We know, however, that it has been quite frightening in the            
 past on occasion when it is quite obvious that a board members has            
 an obvious predetermined biased with regard to a particular                   
 regulatory matter.  We note, however, that these predetermined                
 attitudes and bias may or may not be based on financial conflicts             
 of interest.  The board process can and has been hamstrung because            
 of the current status of the ethics rulings by the attorney                   
 general.  Additionally, we have concern that the current process              
 leaves the option open for any administration to direct or control            
 the policies regulatory economy of the board through the offices of           
 the attorney general by virtue of the authority that the AG holds             
 to disqualify board members from voting.  The AG can hold an                  
 exercise (indisc.) of control over the board regulatory process               
 through this power that the own.  While you can take actions to               
 modify the board's process by changing the ethics requirements or             
 otherwise making drastic changes to the structure of the board, you           
 are not getting to the root of the problem entirely.  The                     
 underlying process of the board should be addressed.  The board               
 should be required to produce findings on significant regulatory              
 issues, and specifically with regard to any regulatory action where           
 the board's allocation policy is required to be considered.                   
 Written findings should be required.  They should be required to              
 address issues of cost and benefit and significant and substantive            
 matters.  They should be required to consider alternative                     
 regulatory options and before the board adopts, amends or repeals             
 a regulation, the board should be required to produce findings that           
 prove that the board substantively and reasonably considered at the           
 basis of regulatory action, the economic impact, the cost of                  
 benefits, the environmental impact and the conservation impact of             
 their action.  In conclusion, we support HB 542 as a first step in            
 improving the board process and we note that it is the structure              
 that is not in so much of need of fixing as the process itself.               
 Thank you very much."                                                         
                                                                               
 Number 301                                                                    
                                                                               
 CO-CHAIRMAN WILLIAMS informed the committee that Mr. Dean Paddock             
 supports HB 542.  He then said he would like to entertain a motion            
 to move the bill from committee.                                              
                                                                               
 AN UNIDENTIFIED COMMITTEE MEMBER said, "So moved."                            
                                                                               
 CO-CHAIRMAN WILLIAMS asked if there was an objection.  Hearing                
 none, CSHB 542(FSH) was moved out of the House Resources Committee.           
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business, CO-CHAIRMAN WILLIAMS adjourned the           
 House Resources Standing Committee meeting at 9:52 a.m.                       
                                                                               

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