Legislature(2003 - 2004)

05/12/2003 02:53 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                          May 12, 2003                                                                                          
                           2:53 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Hugh Fate, Chair                                                                                                 
Representative Beverly Masek, Vice Chair                                                                                        
Representative Carl Gatto                                                                                                       
Representative Cheryll Heinze                                                                                                   
Representative Bob Lynn                                                                                                         
Representative Kelly Wolf                                                                                                       
Representative David Guttenberg                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Carl Morgan                                                                                                      
Representative Sharon Cissna                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 277                                                                                                              
"An Act  relating to the  powers of the Regulatory  Commission of                                                               
Alaska in  regard to intrastate pipeline  transportation services                                                               
and pipeline facilities, to the rate  of interest for funds to be                                                               
paid by pipeline shippers or carriers  at the end of a suspension                                                               
of  tariff   filing,  and  to  the   prospective  application  of                                                               
increased  standards on  regulated  pipeline utilities;  allowing                                                               
the  commission  to  accept  rates   set  in  conformity  with  a                                                               
settlement agreement between  the state and one  or more pipeline                                                               
carriers and  to enforce the  terms of a settlement  agreement in                                                               
regard  to  intrastate  rates; and  providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - MOVED CSHB 277(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 196                                                                                                              
"An Act  relating to carbon  sequestration; and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
SENATE BILL NO. 88                                                                                                              
"An  Act   relating  to  standards   for  forest   resources  and                                                               
practices; and providing for an effective date."                                                                                
                                                                                                                                
     - MOVED HCS SB 88(RES) OUT OF COMMITTEE                                                                                    
                                                                                                                                
HOUSE BILL NO. 246                                                                                                              
"An Act relating to the limitation on upland acreage that a                                                                     
person may take or hold under oil and gas leases; and providing                                                                 
for an effective date."                                                                                                         
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 277                                                                                                                  
SHORT TITLE:PIPELINE UTILITIES REGULATION                                                                                       
SPONSOR(S): REPRESENTATIVE(S)DAHLSTROM                                                                                          
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
04/17/03     1026       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
04/17/03     1026       (H)        O&G, L&C                                                                                     
04/22/03                (H)        O&G AT 3:15 PM CAPITOL 124                                                                   
04/22/03                (H)        -- Meeting Canceled --                                                                       
04/23/03     1081       (H)        COSPONSOR(S): KOHRING                                                                        
04/24/03     1108       (H)        RES REFERRAL ADDED AFTER O&G                                                                 
04/24/03                (H)        O&G AT 3:15 PM CAPITOL 124                                                                   
04/24/03                (H)        Heard & Held                                                                                 
04/24/03                (H)        MINUTE(O&G)                                                                                  
04/29/03                (H)        O&G AT 3:15 PM CAPITOL 124                                                                   
04/29/03                (H)        Scheduled But Not Heard                                                                      
05/01/03                (H)        O&G AT 3:15 PM CAPITOL 124                                                                   
05/01/03                (H)        Moved CSHB 277(O&G) Out of                                                                   
                                   Committee                                                                                    
05/01/03                (H)        MINUTE(O&G)                                                                                  
05/02/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
05/02/03                (H)        Scheduled But Not Heard                                                                      
                                   <Meeting Postponed to 4:00                                                                   
                                   PM>                                                                                          
05/02/03                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
05/02/03                (H)        <Pending Referral> -- Meeting                                                                
                                   Canceled --                                                                                  
05/05/03     1316       (H)        O&G RPT CS(O&G) NT 1DP 6NR                                                                   
05/05/03     1316       (H)        DP: KOHRING; NR: HOLM,                                                                       
                                   ROKEBERG, FATE,                                                                              
05/05/03     1316       (H)        KERTTULA, CRAWFORD, MCGUIRE                                                                  
05/05/03     1317       (H)        FN(S): FORTHCOMING                                                                           
05/06/03     1372       (H)        FN1: ZERO(REV) RECEIVED                                                                      
05/06/03     1372       (H)        FN2: ZERO(DNR) RECEIVED                                                                      
05/07/03                (H)        RES AT 8:00 AM CAPITOL 124                                                                   
05/07/03                (H)        Bill Postponed 1:30 PM --                                                                    
05/07/03                (H)        RES AT 1:30 PM CAPITOL 124                                                                   
05/07/03                (H)        Heard & Held                                                                                 
05/07/03                (H)        MINUTE(RES)                                                                                  
05/09/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
05/09/03                (H)        Scheduled But Not Heard                                                                      
05/09/03                (H)        RES AT 8:00 AM CAPITOL 124                                                                   
05/09/03                (H)        Heard & Held                                                                                 
05/09/03                (H)        MINUTE(RES)                                                                                  
05/12/03                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
                                                                                                                                
BILL: HB 196                                                                                                                  
SHORT TITLE:CARBON SEQUESTRATION                                                                                                
SPONSOR(S): REPRESENTATIVE(S)BERKOWITZ                                                                                          
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/14/03     0541       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/14/03     0541       (H)        RES, FIN                                                                                     
04/23/03     1080       (H)        COSPONSOR(S): GARA                                                                           
05/07/03     1438       (H)        COSPONSOR(S): GUTTENBERG                                                                     
05/09/03                (H)        RES AT 8:00 AM CAPITOL 124                                                                   
05/09/03                (H)        Scheduled But Not Heard                                                                      
05/12/03                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
                                                                                                                                
BILL: SB 88                                                                                                                   
SHORT TITLE:FOREST RESOURCES & PRACTICES STANDARDS                                                                              
SPONSOR(S): SENATOR(S) SEEKINS                                                                                                  
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/28/03     0298       (S)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/28/03     0298       (S)        RES                                                                                          
04/25/03                (S)        RES AT 3:30 PM BUTROVICH 205                                                                 
                                   -- Bill Hearing Postponed --                                                                 
04/28/03                (S)        RES AT 3:30 PM BUTROVICH 205                                                                 
04/28/03                (S)        Moved Out of Committee                                                                       
04/28/03                (S)        MINUTE(RES)                                                                                  
04/29/03     1025       (S)        RES RPT 6DP 1NR                                                                              
04/29/03     1025       (S)        DP: OGAN, DYSON, ELTON,                                                                      
                                   WAGONER,                                                                                     
04/29/03     1025       (S)        STEVENS B, SEEKINS; NR:                                                                      
                                   LINCOLN                                                                                      
04/29/03     1025       (S)        FN1: ZERO(DNR)                                                                               
05/03/03     1129       (S)        RULES TO CALENDAR 5/3/2003                                                                   
05/03/03     1129       (S)        READ THE SECOND TIME                                                                         
05/03/03     1129       (S)        ADVANCED TO THIRD READING 5/4                                                                
                                   CALENDAR                                                                                     
05/03/03     1135       (S)        COSPONSOR(S): WILKEN, TAYLOR,                                                                
                                   DYSON,                                                                                       
05/03/03     1135       (S)        WAGONER                                                                                      
05/04/03     1143       (S)        READ THE THIRD TIME SB 88                                                                    
05/04/03     1143       (S)        PASSED Y14 N- E5 A1                                                                          
05/04/03     1144       (S)        EFFECTIVE DATE(S) SAME AS                                                                    
                                   PASSAGE                                                                                      
05/04/03     1144       (S)        COSPONSOR(S): ELTON, COWDERY,                                                                
                                   STEVENS B                                                                                    
05/04/03     1144       (S)        THERRIAULT                                                                                   
05/04/03     1144       (S)        ELTON NOTICE OF                                                                              
                                   RECONSIDERATION                                                                              
05/05/03     1162       (S)        RECONSIDERATION NOT TAKEN UP                                                                 
05/05/03     1164       (S)        TRANSMITTED TO (H)                                                                           
05/05/03     1164       (S)        VERSION: SB 88                                                                               
05/06/03     1343       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
05/06/03     1343       (H)        RES                                                                                          
05/09/03                (H)        RES AT 8:00 AM CAPITOL 124                                                                   
05/09/03                (H)        Scheduled But Not Heard                                                                      
05/12/03                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LISA WEISSLER, Staff                                                                                                            
to Representative Ethan Berkowitz                                                                                               
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on behalf of the sponsor of                                                                      
HB 196, Representative Berkowitz.                                                                                               
                                                                                                                                
JOHN "CHRIS" MAISCH, Regional Forester                                                                                          
Division of Forestry                                                                                                            
Northern Region Office                                                                                                          
Department of Natural Resources                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  During discussion of HB 196, answered                                                                      
questions.                                                                                                                      
                                                                                                                                
SENATOR RALPH SEEKINS                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke as the sponsor of SB 88.                                                                             
                                                                                                                                
BRIAN HOVE, Staff                                                                                                               
to Senator Ralph Seekins                                                                                                        
Alaska State Legislature                                                                                                        
POSITION STATEMENT:  Presented SB 88 on behalf of the sponsor.                                                                  
                                                                                                                                
DOUGLAS HANSON                                                                                                                  
Tanana Chiefs Conference                                                                                                        
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 88.                                                                             
                                                                                                                                
THOMAS (CHRISTOPHER) STARK, Fisheries Seat                                                                                      
Board of Forestry;                                                                                                              
Fisheries Biologist, University of Alaska Fairbanks;                                                                            
Bering Sea Fisherman's Association;                                                                                             
Yukon River Fisheries Development Association                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Expressed his  support for SB 88 because the                                                               
fish will be alright with this type of riparian buffer.                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-44, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  HUGH FATE  called the  House Resources  Standing Committee                                                             
meeting  to order  at  2:53 p.m.    Representatives Fate,  Masek,                                                               
Gatto, Heinze, Lynn, and Wolf were  present at the call to order.                                                               
Representative  Guttenberg   arrived  as   the  meeting   was  in                                                               
progress.                                                                                                                       
                                                                                                                                
The committee took a brief at-ease at 2:54 p.m.                                                                                 
                                                                                                                                
HB 277-PIPELINE UTILITIES REGULATION                                                                                          
                                                                                                                                
CHAIR FATE  announced that the  first order of business  would be                                                               
HOUSE  BILL NO.  277,  "An  Act relating  to  the  powers of  the                                                               
Regulatory Commission of Alaska  in regard to intrastate pipeline                                                               
transportation services  and pipeline facilities, to  the rate of                                                               
interest for  funds to be  paid by pipeline shippers  or carriers                                                               
at  the  end  of  a  suspension of  tariff  filing,  and  to  the                                                               
prospective  application  of  increased  standards  on  regulated                                                               
pipeline utilities;  allowing the commission to  accept rates set                                                               
in conformity with  a settlement agreement between  the state and                                                               
one  or more  pipeline carriers  and to  enforce the  terms of  a                                                               
settlement  agreement   in  regard   to  intrastate   rates;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
Number 0326                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MASEK moved  that the  committee adopt  CSHB 277,                                                               
Version  CSHB  277(RES)  bil.doc,  5/12/2003, as  a  work  draft.                                                               
There being  no objection,  the proposed  CS dated  5/12/2003 was                                                               
before the committee.                                                                                                           
                                                                                                                                
REPRESENTATIVE MASEK pointed out  that the changes encompassed in                                                               
the proposed CS are in the packet.                                                                                              
                                                                                                                                
CHAIR FATE, in response to  Representative Heinze, specified that                                                               
the  proposed  CS  is  the  result  of  questions,  answers,  and                                                               
clarifications  during  a  meeting this  morning  among  himself,                                                               
Representative Dahlstrom, and the Department of Law.                                                                            
                                                                                                                                
Number 0896                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MASEK  moved to  report  CSHB  277, Version  CSHB                                                               
277(RES) bil.doc,  5/12/2003, out  of committee  [with individual                                                               
recommendations and the accompanying fiscal notes].                                                                             
                                                                                                                                
REPRESENTATIVE WOLF  objected for  the purpose of  discussion and                                                               
requested an at-ease.                                                                                                           
                                                                                                                                
The committee took an at-ease from 3:02 p.m. to 3:04 p.m.                                                                       
                                                                                                                                
[Not  on  tape, but  taken  from  the committee  secretary's  log                                                               
notes, was Representative Wolf's withdrawal of his objection.]                                                                  
                                                                                                                                
Number 0668                                                                                                                     
                                                                                                                                
CHAIR FATE remarked  that this legislation, in the  view of many,                                                               
began  as objectionable  and problematic.   However,  after three                                                               
committee substitutes  the legislation  has matured to  the point                                                               
of addressing the issues of  ongoing litigation under [RCA] Order                                                               
151  and  retroactivity.   He  noted  that  there has  been  good                                                               
discussion  and testimony  with  regard to  capacity and  access,                                                               
which is  an element of  the pipeline, although the  Stranded Gas                                                               
Act  will negotiate  those issues.   He  related his  belief that                                                               
this legislation  is important to  the state and has  been worked                                                               
through  thoroughly,  and  therefore  he didn't  fear  its  going                                                               
forward.   Chair Fate emphasized  that there has  been tremendous                                                               
participation   on  this   legislation   in   order  to   fashion                                                               
legislation  that  would  be  helpful  in  the  state's  economic                                                               
development.                                                                                                                    
                                                                                                                                
Number 0996                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG objected  to reporting  the bill  from                                                               
committee.                                                                                                                      
                                                                                                                                
A  roll  call  vote  was taken.    Representatives  Wolf,  Masek,                                                               
Heinze, Lynn, and Fate voted in  favor of reporting the bill from                                                               
committee.     Representative   Guttenberg   voted  against   it.                                                               
Therefore, CSHB 277(RES) was reported  out of the House Resources                                                               
Standing Committee by a vote of 5-1.                                                                                            
                                                                                                                                
Number 1157                                                                                                                     
                                                                                                                                
REPRESENTATIVE   GUTTENBERG  spoke   to   his   objection.     He                                                               
acknowledged  that  this  legislation   is  very  important,  but                                                               
pointed out that there has  been testimony from various people in                                                               
the   oil  industry   who  have   serious  [concerns]   with  it.                                                               
Representative  Guttenberg  highlighted  that  he  hasn't  had  a                                                               
chance to  go through  this new  CS.  He  said, "We've  seen what                                                               
happens when  we pass  legislation on to  other committees  to do                                                               
their work."   For example, when HB 191 was  reported out of this                                                               
committee to the  House Judiciary Standing Committee  to hear the                                                               
legal issues, it was waived  from that committee.  Representative                                                               
Guttenberg related  his belief that the  House Resources Standing                                                               
Committee should do its work.                                                                                                   
                                                                                                                                
CHAIR FATE said this legislation  was discussed and dissected [at                                                               
length]  and the  committee  isn't  avoiding its  responsibility.                                                               
[CSHB 277(RES) was reported from committee.]                                                                                    
                                                                                                                                
The committee was recessed at 3:14 p.m. to a call of the chair.                                                                 
                                                                                                                                
CHAIR   FATE    reconvened   the    committee   at    6:39   p.m.                                                               
Representatives Lynn,  Wolf, Masek, Gatto, Heinze,  and Fate were                                                               
present at the call back to order.                                                                                              
                                                                                                                                
HB 196-CARBON SEQUESTRATION                                                                                                   
                                                                                                                                
Number 1255                                                                                                                     
                                                                                                                                
CHAIR FATE  announced that  the next order  of business  would be                                                               
HOUSE BILL  NO. 196,  "An Act  relating to  carbon sequestration;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
Number 1322                                                                                                                     
                                                                                                                                
LISA WEISSLER,  Staff to  Representative Ethan  Berkowitz, Alaska                                                               
State  Legislature, presented  HB  196  on behalf  Representative                                                               
Berkowitz, sponsor.   She explained that  carbon sequestration is                                                               
the capture  and long-term storage  of carbon in  forests, soils,                                                               
and oceans.   In order to understand why  carbon sequestration is                                                               
important,  one  must  step into  the  international  arena  with                                                               
regard to climate changes and  international interest in limiting                                                               
the amount of  carbon entering the atmosphere.   She informed the                                                               
committee  that the  Kyoto Protocol,  an international  agreement                                                               
establishing an  emissions limit for carbon  and other greenhouse                                                               
gases, is being  drafted.  Although the U.S. isn't  going to sign                                                               
the Kyoto Protocol,  it could impact U.S. companies  and the U.S.                                                               
in general.   Under the  Kyoto Protocol, countries  and companies                                                               
that produce carbon will have  an emissions limit; if they exceed                                                               
the   emissions   limit,   there   are  ways   to   offset   that                                                               
overproduction of carbon and greenhouse gases.                                                                                  
                                                                                                                                
MS.   WEISSLER   explained   that   one  way   to   offset   that                                                               
overproduction is to  trade with companies below the  limit.  The                                                               
other  is   carbon  sequestration,  an  active   method  used  to                                                               
sequester more carbon in the land,  soil, forests, and ocean.  In                                                               
the case of  carbon sequestration, capitalism is  taking over and                                                               
a  carbon   credit-trading  market  is  being   created.    [This                                                               
legislation]  looks  to  Alaska  benefiting  from  this  emerging                                                               
market  because Alaska  holds great  potential for  sequestration                                                               
activities.   For example, on the  Kenai there are a  lot of dead                                                               
trees due to  the spruce bark beetle infestation.   Thus there is                                                               
the  possibility of  eliminating the  dead trees  and reforesting                                                               
the  area.   Such  active  management  could potentially  produce                                                               
credits that Alaska would be able  to place in the carbon credit-                                                               
trading  market for  money.   She acknowledged  that some  of the                                                               
money could go  towards reforestation, while some of  it could be                                                               
placed in the state's general fund.                                                                                             
                                                                                                                                
MS.  WEISSLER explained  that the  legislation isn't  designed to                                                               
put  Alaska in  the  market  right away  because  there are  many                                                               
questions to  answer.   It follows what  Idaho and  Nebraska have                                                               
already implemented,  requesting that their state  departments of                                                               
natural resources  review the  matter in  order to  determine how                                                               
the  state might  participate  and  what is  going  on with  this                                                               
market,  and  establishing  an advisory  committee  to  help  the                                                               
department with the process.   Therefore, this legislation merely                                                               
places  the state  in  a  position to  benefit  from the  [carbon                                                               
credit-trading  market].   However,  this market  can be  limited                                                               
because  the  number of  credits  could  be  limited due  to  the                                                               
emissions  limit.   Therefore,  those  states  and countries  not                                                               
ready to  enter the market  could be  left behind.   Ms. Weissler                                                               
noted  that  the Alaska  Reforestation  Council  has looked  into                                                               
this.    She passed  around  a  pamphlet entitled  "Reforestation                                                               
Needs and Opportunities for Carbon Sequestration in Alaska."                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA provided  the  committee  with an  article                                                               
entitled "Carbon Sequestration - Terrestrial Approaches."                                                                       
                                                                                                                                
Number 1628                                                                                                                     
                                                                                                                                
REPRESENTATIVE HEINZE asked how these carbon credits are traded.                                                                
                                                                                                                                
MS. WEISSLER answered  that she believes its just  like any other                                                               
commodity.   She recalled that  when limits were  established for                                                               
sulfur  dioxide, a  market  was  created for  it.   Ms.  Weissler                                                               
specified that  when quantifying  how much is  being sequestered,                                                               
the unit of tons is used.                                                                                                       
                                                                                                                                
REPRESENTATIVE  HEINZE  asked if  Ms.  Weissler  meant a  ton  of                                                               
carbon molecules                                                                                                                
                                                                                                                                
MS. WEISSLER replied yes; it's  actually the gas emitted into the                                                               
atmosphere.                                                                                                                     
                                                                                                                                
Number 1748                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG asked  how the  value of  a forest  is                                                               
measured.                                                                                                                       
                                                                                                                                
MS.  WEISSLER  said  that's  one  of  the  questions  yet  to  be                                                               
answered.                                                                                                                       
                                                                                                                                
REPRESENTATIVE GUTTENBERG pointed  out that the last  page of the                                                               
document, entitled  "Opportunities for Carbon Offset  Programs in                                                               
Alaska,"  specifies:   "A  carbon  credit is  one  metric ton  of                                                               
carbon or  CO2 equivalent  that is  captured from  the atmosphere                                                               
and stored in plants and organic matter."                                                                                       
                                                                                                                                
Number 1851                                                                                                                     
                                                                                                                                
JOHN "CHRIS"  MAISCH, Regional Forester, Northern  Region Office,                                                               
Division  of Forestry,  Department  of  Natural Resources  (DNR),                                                               
confirmed  that carbon  would  be  traded per  ton.   Although  a                                                               
number of formulas  could be used for wood,  essentially it's the                                                               
wood volume and the amount of  carbon that is created through the                                                               
photosynthetic  process of  the tree  or  plant.   The carbon  is                                                               
locked up  as the  wood or the  biomass of the  plant.   He noted                                                               
that the actual certification process needs work.                                                                               
                                                                                                                                
CHAIR FATE asked  if the fact that the U.S.  isn't a signatory to                                                               
the  Kyoto Protocol  would  influence what  happens  in the  U.S.                                                               
relative to this.                                                                                                               
                                                                                                                                
MR. MAISCH replied yes.  He  explained that many of the companies                                                               
that are part of the  Kyoto Protocol do business worldwide; those                                                               
counties that  have signed and  ratified the Kyoto  Protocol have                                                               
programs  in which  carbon needs  to be  reduced in  the country.                                                               
Therefore, a  worldwide company such  as BP could trade  and sell                                                               
carbon credits anywhere in the  world and obtain credits for that                                                               
in a country that has ratified the Kyoto Protocol.                                                                              
                                                                                                                                
Number 1938                                                                                                                     
                                                                                                                                
CHAIR FATE  pointed out that there  are a lot of  forest fires in                                                               
Alaska,  fires that  cause  large  areas of  the  Interior to  be                                                               
covered  with smoke  to  the  extent that  someone  can't fly  an                                                               
airplane.  Of course, the smoke  is carbon.  Chair Fate asked how                                                               
this  natural  phenomenon  would  come  into  play  with  gaining                                                               
credits in this sequestration program.                                                                                          
                                                                                                                                
MR. MAISCH explained that since a  forest fire would be a natural                                                               
event, it wouldn't  impact the actual program  of sequestering of                                                               
carbon.  However, it might impact  the state if the state quickly                                                               
reforests and  revegetates burned acreage.   Currently, it's rare                                                               
that the  state does the  aforementioned.   He said that  [if the                                                               
state  quickly reforests  and  revegetates  burned acreage],  the                                                               
state would be speeding up  the rate at which reforestation would                                                               
naturally  occur  in   a  burned  area;  thus   the  state  could                                                               
potentially produce  a saleable  carbon credit  for the  time the                                                               
state sped up  the reforestation of the burned area.   In further                                                               
response, Mr. Maisch specified that  the landowner would bear the                                                               
cost of  reforestation.  However, the  idea is that the  price of                                                               
the carbon credit would offset the reforestation cost.                                                                          
                                                                                                                                
CHAIR  FATE interjected  that  would  be the  case  if the  quota                                                               
wasn't already filled.                                                                                                          
                                                                                                                                
MR. MAISCH  acknowledged that there  is a quota, but  pointed out                                                               
that as more companies become  interested in those credits, those                                                               
credits will trade  at a higher price.  With  the proposed quota,                                                               
there is some merit in being the first in, rather than the last.                                                                
                                                                                                                                
CHAIR FATE  asked if Mr.  Maisch feels [carbon  sequestration] is                                                               
worth review, as requested in HB 196.                                                                                           
                                                                                                                                
MR. MAISCH  replied yes,  in order  to evaluate  whether it  is a                                                               
tool for land managers to  leverage more reforestation activities                                                               
or other activities to produce these saleable credits.                                                                          
                                                                                                                                
CHAIR FATE asked if this would  be leverage to entice the U.S. to                                                               
sign the Kyoto Protocol.                                                                                                        
                                                                                                                                
MR. MAISCH  replied no.  He  said that the U.S.  wouldn't have to                                                               
ratify the Kyoto  Protocol in order to participate  in the carbon                                                               
[credit-trading] market.                                                                                                        
                                                                                                                                
Number 2118                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HEINZE asked  if  the carbon  molecules would  be                                                               
traded, bartered, or sold.                                                                                                      
                                                                                                                                
MR. MAISCH answered that the  carbon [credits] would be sold like                                                               
any other  commodity on the  commodities market, such  as lumber,                                                               
corn,  or  oil.    Currently,   credits  for  sulfur  dioxide,  a                                                               
pollutant emitted by electric utilities,  are traded; an exchange                                                               
sells  credits to  offset excess  emissions  of sulfur  dioxides.                                                               
The  aforementioned program  has been  in the  U.S. for  a number                                                               
years; the  [sulfur dioxide credit]  prices are set per  ton, and                                                               
the market  bids it up or  down based on the  availability of the                                                               
credits.  Carbon credits would work in the same way.                                                                            
                                                                                                                                
REPRESENTATIVE HEINZE asked if [carbon  credits] are being traded                                                               
elsewhere in the world, and if so, at what price.                                                                               
                                                                                                                                
MR. MAISCH responded  that the price varies based on  a number of                                                               
factors.   The largest variable  is whether the carbon  credit is                                                               
actually  certified.    There  is  a  third-party  certifier  who                                                               
certifies how much  carbon a project is going to  produce so that                                                               
can  be taken  to the  marketplace and  a potential  purchaser of                                                               
that credit  is assured the  specified amount of carbon  is being                                                               
produced.   Although there are  projects worldwide, most  of them                                                               
aren't  traded through  an exchange  because  the exchange  isn't                                                               
running.  Mr.  Maisch informed the committee  that several Native                                                               
organizations in the  Lower 48, such as the Nez  Perce, have done                                                               
carbon projects  with utilities.   He  characterized most  of the                                                               
projects  that  have  occurred  thus  far to  be  from  a  public                                                               
relations  standpoint, rather  than an  actual trade  through the                                                               
exchange.                                                                                                                       
                                                                                                                                
REPRESENTATIVE HEINZE  said she was  trying to determine  how the                                                               
sponsor  could forecast  [that this  market  could provide]  $400                                                               
million in revenue if the exchange isn't running.                                                                               
                                                                                                                                
MR. MAISCH  suggested that projection  could be based  on private                                                               
projects elsewhere.   He said he'd have to  perform some research                                                               
in order to verify that projection.                                                                                             
                                                                                                                                
Number 2284                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CISSNA asked  if there  are other  ways in  which                                                               
carbon sequestration could benefit Alaska.                                                                                      
                                                                                                                                
MR. MAISCH  pointed out  that Alaska's  being involved  in carbon                                                               
sequestration could  provide some public relations  benefits.  He                                                               
returned  to  the  paper by  the  Alaska  Reforestation  Council,                                                               
written in 2000,  and suggested that it might  be worth reviewing                                                               
in detail.   Mr. Maisch pointed  out that in terms  of the global                                                               
warming  concept, many  have embraced  this carbon  sequestration                                                               
program to help reduce global warming.                                                                                          
                                                                                                                                
CHAIR  FATE, upon  determining  no one  else  wished to  testify,                                                               
closed public testimony.   He announced that he  had no objection                                                               
to forwarding HB 196 to the next committee of referral.                                                                         
                                                                                                                                
Number 2368                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MASEK directed  attention to  page 3,  lines 2-4,                                                               
which specifies  that members of  the advisory  committee created                                                               
by this legislation are entitled to per diem and travel.                                                                        
                                                                                                                                
The committee took an at-ease from 7:00 p.m. to 7:02 p.m.                                                                       
                                                                                                                                
CHAIR FATE  informed the  committee that  each member  should now                                                               
have a  copy of  the fiscal  note.   He directed  the committee's                                                               
attention to the analysis included in the fiscal note.                                                                          
                                                                                                                                
Number 2419                                                                                                                     
                                                                                                                                
REPRESENTATIVE LYNN asked how the  size of the advisory committee                                                               
was determined.                                                                                                                 
                                                                                                                                
MS.  WEISSLER explained  that  the size  came  about because  the                                                               
sponsor was  looking for a  list of folks  able to assist  in the                                                               
development of  the report.  Furthermore,  the advisory committee                                                               
follows the models in Idaho and Nebraska.                                                                                       
                                                                                                                                
REPRESENTATIVE LYNN  remarked that if  any voting is  required of                                                               
this advisory  committee, then  its membership  should be  an odd                                                               
number.                                                                                                                         
                                                                                                                                
MS. WEISSLER related  that she didn't believe there  would be any                                                               
voting  because  the  advisory committee  is  really  to  develop                                                               
recommendations and assist the department.                                                                                      
                                                                                                                                
Number 2482                                                                                                                     
                                                                                                                                
REPRESENTATIVE MASEK  asked why an  advisory committee has  to be                                                               
created, when DNR  can handle this with its existing  staff.  She                                                               
offered  her belief  that  most of  the  legislation passed  this                                                               
session has had no fiscal impact.                                                                                               
                                                                                                                                
CHAIR FATE related  his understanding from the  sponsor that this                                                               
legislation was merely  a request to look into  this; however, it                                                               
seems to  go further  and seems to  be partially  responsible for                                                               
some sort of implementation.                                                                                                    
                                                                                                                                
MS.  WEISSLER  clarified that  the  intent  is for  the  advisory                                                               
committee to  advise the  department.  There  is no  intention to                                                               
put anything  into motion.  With  regard to the fiscal  note, she                                                               
said she suspects  that the costs could  be substantially reduced                                                               
through  use of  the teleconference  network and  existing staff,                                                               
which  was the  intention  of  the sponsor.    She mentioned  the                                                               
possibility of grant  opportunities that could be  more likely if                                                               
this legislation is in place.                                                                                                   
                                                                                                                                
Number 2606                                                                                                                     
                                                                                                                                
CHAIR  FATE announced  that  HB  196 would  be  held for  further                                                               
consideration.   He related his  view that  this is a  good idea,                                                               
although more  study seems to be  required on the fiscal  note as                                                               
well  as the  specific duties  of the  board.   [HB 196  was held                                                               
over.]                                                                                                                          
                                                                                                                                
SB 88-FOREST RESOURCES & PRACTICES STANDARDS                                                                                  
                                                                                                                                
CHAIR FATE  announced that the  final order of business  would be                                                               
SENATE  BILL NO.  88, "An  Act relating  to standards  for forest                                                               
resources and practices; and providing for an effective date."                                                                  
                                                                                                                                
Number 2656                                                                                                                     
                                                                                                                                
SENATOR  RALPH  SEEKINS,  Alaska State  Legislature,  sponsor  of                                                               
SB 88,  began by  informing the  committee that  this legislation                                                               
has been around  for some time and heard in  many committees over                                                               
the last few years; it is the  work of many.  He highlighted that                                                               
this is  one of the few  pieces of legislation that  doesn't have                                                               
anyone saying  he/she doesn't want  to do  it.  He  recalled that                                                               
last year this legislation moved  through the House and went over                                                               
to the  Senate, where at  the end it just  didn't make it  to the                                                               
Senate floor.                                                                                                                   
                                                                                                                                
Number 2799                                                                                                                     
                                                                                                                                
BRIAN HOVE, Staff to Senator Ralph Seekins, Alaska State                                                                        
Legislature, paraphrased the sponsor statement, which reads as                                                                  
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     This Bill revises the  riparian management standards of                                                                    
     the Forest  Resources Practices  Act (FRPA)  for Region                                                                    
     III by  strengthening protection  for fish  habitat and                                                                    
     water  quality in  a manner  that continues  to support                                                                    
     both the timber and fishing industries.                                                                                    
                                                                                                                                
     The current  standards for Region  III were  adopted as                                                                    
     an interim  measure in  the 1990  revision of  the Act.                                                                    
     Under these  standards, harvesting can occur  up to the                                                                    
     back  of  the  anadromous  waters on  both  public  and                                                                    
     private land under some conditions.   With the proposed                                                                    
     Bill,  all  anadromous  and  high-value  resident  fish                                                                    
     waters  are  classified   and  riparian  standards  are                                                                    
     established for each classification.                                                                                       
                                                                                                                                
     The  requirements are  tailored to  the characteristics                                                                    
     and  fish habitat  need of  each  stream type.   A  no-                                                                    
     harvest buffer will be required  on most anadromous and                                                                    
     high-value  resident  fish   waters.    However,  along                                                                    
     glacial rivers  where some of the  most valuable timber                                                                    
     occurs, the standards  allow harvest of up  to half the                                                                    
     large white spruce in the  landward half of the buffer.                                                                    
     This allows landowners to capture  some of the economic                                                                    
     value within  the riparian  areas while  keeping enough                                                                    
     large trees to provide woody debris.                                                                                       
                                                                                                                                
     This bill is  not a wholesale revision of the  Act.  It                                                                    
     has   substantive  changes   for  riparian   management                                                                    
     standards  applying   to  Region   III  only.     Other                                                                    
     technical  revisions include  changes to  the statewide                                                                    
     nomenclature   for   waterbody   classes   to   prevent                                                                    
     confusion   between   waterbody  types   in   different                                                                    
     regions.   The bill also moves  definitions of regional                                                                    
     boundaries from the regulations to  the Act and makes a                                                                    
     minor  change to  the regional  boundary  on the  Kenai                                                                    
     Peninsula  to  better   match  the  difference  between                                                                    
     forest types.  Most forestland  in the affected area is                                                                    
     in federal  ownership, so there will  be minimal impact                                                                    
     on other landowners.                                                                                                       
                                                                                                                                
     SB 88 helps ensure that  FRPA continues to be certified                                                                    
     for  compliance  with  federal   Clean  Water  Act  and                                                                    
     coastal zone management requirements.   This means that                                                                    
     the Act  continues to  provide "one-stop  shopping" for                                                                    
     the timber  industry with respect to  state and federal                                                                    
     non-point  source  pollution   and  coastal  management                                                                    
     standards.                                                                                                                 
                                                                                                                                
     This  bill is  founded  on the  best science  available                                                                    
     including an extensive review  of existing research and                                                                    
     recommendations  of  an   interdisciplinary  Science  &                                                                    
     Technical   Committee.       The   committee   included                                                                    
     experienced  field   staff  from  the   state  resource                                                                    
     agencies and  private sector as  well as  University of                                                                    
     Alaska and federal scientists.                                                                                             
                                                                                                                                
     An Implementation  Group that  included representatives                                                                    
     of   the   timber   and  fishing   industries,   Native                                                                    
     corporations and environmental  groups drafted language                                                                    
     to  implement  the  scientists'  recommendations  in  a                                                                    
     practical manner  that works in  the field.   This bill                                                                    
     is unanimously  endorsed by the  Board of  Forestry and                                                                    
     has support from a broad array of interest groups.                                                                         
                                                                                                                                
TAPE 03-44, SIDE B                                                                                                            
Number 2904                                                                                                                     
                                                                                                                                
SENATOR  SEEKINS pointed  out that  the  committee packet  should                                                               
include an amendment  that is necessary to  bring the legislation                                                               
into  compliance with  the  recent transfer  of  the Division  of                                                               
Habitat [per EO 107].                                                                                                           
                                                                                                                                
The committee took an at-ease from 7:14 p.m. to 7:15 p.m.                                                                       
                                                                                                                                
Number 2846                                                                                                                     
                                                                                                                                
REPRESENTATIVE MASEK moved to adopt Amendment 1, which reads as                                                                 
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     Page 1, line 5:                                                                                                            
          Delete "commissioner"                                                                                                 
          Insert "state forester"                                                                                               
                                                                                                                                
     Page 3, line 17:                                                                                                           
          Delete "department"                                                                                                   
          Insert "state forester"                                                                                               
                                                                                                                                
     Page 3, line 18:                                                                                                           
          Delete "Department of Fish and Game"                                                                                  
          Insert "deputy commissioner"                                                                                          
                                                                                                                                
     Page 3, line 19:                                                                                                           
          Delete "commissioner"                                                                                                 
          Insert "state forester"                                                                                               
                                                                                                                                
     Page 4, line 8:                                                                                                            
          Delete "department"                                                                                                   
          Insert "state forester"                                                                                               
                                                                                                                                
     Page 4, lines 8-9:                                                                                                         
          Delete "Department of Fish and Game"                                                                                  
          Insert "deputy commissioner"                                                                                          
                                                                                                                                
     Page 4, line 16:                                                                                                           
          Delete "department"                                                                                                   
          Insert "state forester"                                                                                               
                                                                                                                                
     Page 4, line 17:                                                                                                           
          Delete "Department of Fish and Game"                                                                                  
          Insert "deputy commissioner"                                                                                          
                                                                                                                                
     Page 4, line 24:                                                                                                           
          Delete "department"                                                                                                   
          Insert "state forester"                                                                                               
                                                                                                                                
     Page 4, line 25:                                                                                                           
          Delete "Department of Fish and Game"                                                                                  
          Insert "deputy commissioner"                                                                                          
                                                                                                                                
     Page 5, line 8:                                                                                                            
          Delete "commissioner"                                                                                                 
          Insert "state forester [COMMISSIONER]"                                                                            
                                                                                                                                
There being no objection, Amendment 1 was adopted.                                                                              
                                                                                                                                
Number 2809                                                                                                                     
                                                                                                                                
DOUGLAS HANSON, Tanana Chiefs Conference (TCC), provided the                                                                    
following testimony:                                                                                                            
                                                                                                                                
     Tanana  Chiefs  Conference supports  this  legislation.                                                                    
     Mainly, it'll provide set  guidelines for protection of                                                                    
     important subsistence and  commercial use fish habitat.                                                                    
     The bill is the result  of a long process involving the                                                                    
     science  and  tech  committee that  utilizes  the  best                                                                    
     available science to  develop riparian buffer standards                                                                    
     that apply to the Alaska Interior region situations.                                                                       
                                                                                                                                
     The  bill also  is  the product  of the  implementation                                                                    
     group that  had support  from industry  as well  as the                                                                    
     Native landowners.  The standards  that are proposed in                                                                    
     the bill  will be simple  to enforce, easy  to initiate                                                                    
     and  are understood  by the  general public,  the rural                                                                    
     village  areas as  well as  the professional  forester.                                                                    
     Passage  of the  bill will  avoid uncertainties  in the                                                                    
     application   of   previous  sometimes-vague   riparian                                                                    
     standards.                                                                                                                 
                                                                                                                                
      Also, the bill pertains to  the analysis of the Tanana                                                                    
     Valley State Forest Management  Plan and the amendments                                                                    
     for the Unit 2 area.   In that area, which is the Lower                                                                    
     Tanana region,  the issues of riparian  protection were                                                                    
     agreed on  that would ... use  these interim guidelines                                                                    
     in  the  buffer  standards.    So  with  that,  they're                                                                    
     already part  of the Tanana  Valley State  Board's plan                                                                    
     update, using some of these  interim guidelines.  So, I                                                                    
     think it's  time to pass  this legislation and  move on                                                                    
     with good forest management standards.                                                                                     
                                                                                                                                
Number 2725                                                                                                                     
                                                                                                                                
THOMAS (CHRISTOPHER)  STARK, Fisheries  Seat, Board  of Forestry;                                                               
Fisheries Biologist,  University of Alaska Fairbanks;  Bering Sea                                                               
Fisherman's  Association;   Yukon  River   Fisheries  Development                                                               
Association;   explained  that   he   couldn't   speak  for   the                                                               
university.  However, for the  other entities for which he works,                                                               
this  legislation is  a good  thing that  should get  done.   Mr.                                                               
Stark said  that the  fish will  be all right  with this  type of                                                               
riparian buffer.                                                                                                                
                                                                                                                                
Number 2678                                                                                                                     
                                                                                                                                
JOHN  "CHRIS" MAISCH,  Regional Forester,  Division of  Forestry,                                                               
Northern   Region  Office,   Department  of   Natural  Resources,                                                               
announced support for SB 88.                                                                                                    
                                                                                                                                
CHAIR FATE  said he's learned  from several people in  the forest                                                               
products industry that  erosion along a stream  often takes place                                                               
where a  heavy forest is  undercut.   When those trees  fall, the                                                               
root structure  is so large  that it  takes large pieces  of bank                                                               
and the  erosion process  is increased.   He  asked if  there has                                                               
been  any  research  that  allows  for  those  large-trunk  trees                                                               
connected to a stream to be  cut within a certain distance of the                                                               
stream in  order to keep  those trees  from falling over  so that                                                               
the  root  structure becomes  part  of  the materials  inhibiting                                                               
erosion.                                                                                                                        
                                                                                                                                
MR. MAISCH said he wasn't  familiar with any specific research of                                                               
that on the  Tanana River.  However, this issue  was discussed in                                                               
the  finance  and technical  committee,  half  of whom  felt  the                                                               
Tanana  River  isn't controlled  by  vegetation  from an  erosion                                                               
standpoint,  while  the  other  half  felt  there  was  no  clear                                                               
evidence  to  support the  notion  that  cutting the  tree  would                                                               
prevent erosion any faster than leaving  the tree in place on the                                                               
bank.   However,  Mr. Maisch  indicated this  legislation has  an                                                               
accompanying  regulation  that  allows  continued  customary  and                                                               
traditional use  for wood gathering and  fish-related log floats.                                                               
In fact, up to 30,000 board of  feet of logs can be taken without                                                               
invoking  the   Forest  Resources  and  Practices   Act  ("Forest                                                               
Practices Act").   Therefore, folks  can continue to cut  logs on                                                               
the  riverbanks in  a fashion  similar  to what  Chair Fate  just                                                               
mentioned.                                                                                                                      
                                                                                                                                
REPRESENTATIVE HEINZE  indicated this  is good legislation.   She                                                               
recalled  working  as  the  assistant  commissioner  of  DNR  and                                                               
remarked that the  work behind the FRPA,  riparian standards, and                                                               
buffer zones  took years.   She informed the committee  that this                                                               
legislation was originally HB 131  and SB 98, which moved through                                                               
the House  Special Committee on  Fisheries, the House  and Senate                                                               
Resources Standing  Committees, and the Senate  Finance Committee                                                               
without opposition.                                                                                                             
                                                                                                                                
CHAIR  FATE, upon  determining  no one  else  wished to  testify,                                                               
closed the public testimony.                                                                                                    
                                                                                                                                
Number 2520                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO  asked  if  this  legislation  would  cover                                                               
[Regions] I, II, and III.                                                                                                       
                                                                                                                                
SENATOR SEEKINS clarified that  this legislation basically covers                                                               
[Region]  III,  with some  minor  boundary  changes below  Seward                                                               
toward the Homer area.  He  noted that [Region] III can basically                                                               
be described as north of the Alaska Range.                                                                                      
                                                                                                                                
REPRESENTATIVE GATTO,  upon reviewing the definitions,  asked why                                                               
this wouldn't  simply be  a state issue;  he surmised  that there                                                               
must be  some reason that  prevents applying this  legislation to                                                               
other areas.                                                                                                                    
                                                                                                                                
SENATOR  SEEKINS pointed  out that  there are  riparian standards                                                               
for different  areas.  Region  III is  the last and  probably the                                                               
most  current  and  best  [of   the  riparian  standards].    The                                                               
standards attempt  to meet  the types  of conditions  existing in                                                               
the region.  He related his  belief that the definitions [for the                                                               
different riparian standards]  would be fairly uniform.   He said                                                               
he would  prefer [including  the definitions  for each  region] -                                                               
even if  that meant  redundancy -  in order  to have  an accurate                                                               
definition.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO surmised  that Southeast  Alaska, with  its                                                               
fast-moving  streams, waterfalls,  and  large-trunk trees,  would                                                               
require different  regulations than  would the Yukon  Flats, with                                                               
its  meandering river.   Representative  Gatto related  that he'd                                                               
read  the legislation  to be  all encompassing,  although he  now                                                               
understood it not to be.                                                                                                        
                                                                                                                                
SENATOR SEEKINS  said it's  customized, as  much as  possible, to                                                               
the terrain and type of growth in the region.                                                                                   
                                                                                                                                
Number 2373                                                                                                                     
                                                                                                                                
REPRESENTATIVE HEINZE moved  to report SB 88, as  amended, out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There being  no  objection, HCS  SB 88(RES)  was                                                               
reported from the House Resources Standing Committee.                                                                           
                                                                                                                                
The committee took an at-ease from 7:25 p.m. to 7:26 p.m.                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 7:28 p.m.                                                                 

Document Name Date/Time Subjects