Legislature(1995 - 1996)
03/22/1996 08:16 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.