Legislature(2017 - 2018)BARNES 124

02/05/2018 01:00 PM RESOURCES

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01:10:09 PM Start
01:10:49 PM HB322
02:07:47 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 322 OIL SPILLS/POLLUTION:PENALTIES;PREVENTION TELECONFERENCED
Heard & Held
-- Testimony <Invited/Public> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                        February 5, 2018                                                                                        
                           1:10 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Andy Josephson, Co-Chair                                                                                         
Representative Geran Tarr, Co-Chair                                                                                             
Representative John Lincoln, Vice Chair                                                                                         
Representative Harriet Drummond                                                                                                 
Representative Justin Parish                                                                                                    
Representative Chris Birch                                                                                                      
Representative DeLena Johnson                                                                                                   
Representative George Rauscher                                                                                                  
Representative David Talerico                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Chris Tuck (alternate)                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 322                                                                                                              
"An Act  relating to  penalties for discharges  of oil  and other                                                               
pollution violations;  relating to  oil discharge  prevention and                                                               
contingency  plans  for  commercial motor  vehicles  transporting                                                               
crude oil; and providing for an effective date."                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 322                                                                                                                  
SHORT TITLE: OIL SPILLS/POLLUTION:PENALTIES;PREVENTION                                                                          
SPONSOR(s): RESOURCES                                                                                                           
                                                                                                                                
01/31/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/31/18       (H)       RES, FIN                                                                                               
01/31/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
01/31/18       (H)       Scheduled but Not Heard                                                                                
02/02/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/02/18       (H)       Heard & Held                                                                                           
02/02/18       (H)       MINUTE(RES)                                                                                            
02/05/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
PATTI SAUNDERS, Spokesperson                                                                                                    
Alaska Community Action on Toxics                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During the hearing of HB 322, testified in                                                               
support and urged for an amendment to certain sections of the                                                                   
bill.                                                                                                                           
                                                                                                                                
DOUGLAS MERTZ, Legislative Liaison                                                                                              
Prince William Sound Regional Citizens' Advisory Council                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support during the hearing of                                                               
HB 322.                                                                                                                         
                                                                                                                                
BOB SHAVELSON, Executive Director                                                                                               
Cook Inletkeeper                                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   During the hearing of HB  322, testified in                                                             
support and  urged for  an amendment to  certain sections  of the                                                               
bill.                                                                                                                           
                                                                                                                                
STEVE CATALANO, Spokesperson                                                                                                    
Cook Inlet Regional Citizens Council                                                                                            
Nikiski, Alaska                                                                                                                 
POSITION STATEMENT:   Testified in support during  the hearing of                                                             
HB 322.                                                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:10:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  ANDY  JOSEPHSON  called the  House  Resources  Standing                                                             
Committee  meeting  to  order  at   1:10  p.m.    Representatives                                                               
Josephson, Birch, Parish,  Talerico, Rauscher, Drummond, Johnson,                                                               
Lincoln, and Tarr were present at the call to order.                                                                            
                                                                                                                                
        HB 322-OIL SPILLS/POLLUTION:PENALTIES;PREVENTION                                                                    
                                                                                                                                
1:10:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON announced  that the  first order  of business                                                               
would be  HOUSE BILL NO. 322,  "An Act relating to  penalties for                                                               
discharges  of oil  and other  pollution violations;  relating to                                                               
oil  discharge prevention  and contingency  plans for  commercial                                                               
motor  vehicles  transporting crude  oil;  and  providing for  an                                                               
effective date."                                                                                                                
                                                                                                                                
[CO-CHAIR JOSEPHSON opened invited testimony on the bill.]                                                                      
                                                                                                                                
1:12:33 PM                                                                                                                    
                                                                                                                                
PATTI SAUNDERS,  Spokesperson, Alaska Community Action  on Toxics                                                               
(ACAT), informed  the committee  she has  a personal  interest in                                                               
the bill  as she was  one of the  original members of  the Prince                                                               
William  Sound Regional  Citizens'  Advisory  Council, Oil  Spill                                                               
Prevention  and  Response Committee,  and  has  been a  long-time                                                               
volunteer following  the [Exxon Valdez  oil spill in 1989].   She                                                               
opined the  bill contributes  to the  goal of  preventing another                                                               
Exxon Valdez oil  spill by imposing meaningful  penalties for oil                                                               
spills to partially  compensate Alaskans for the  costs of damage                                                               
to habitat and wildlife, and  of restoration.  Ms. Saunders noted                                                               
provisions in the  bill are long overdue, such  as violations for                                                               
spills from tanker trucks and  the requirement that tanker trucks                                                               
have contingency plans.  She also  spoke in support of Section 19                                                               
which  removes  the  prohibition   on  discharges  from  ballast,                                                               
pesticides,  paint,  underground  tanks,  and cruise  ships.    A                                                               
primary goal of  the bill is to adjust penalties  to the value in                                                               
2018 dollars; however, Sections 2 and  6 double the amount of the                                                               
1977 penalty,  but the 2018  equivalent would be four  times that                                                               
of  1977 amounts,  thus doubling  the  amount does  not meet  the                                                               
stated goal found in the  sponsor statement.  Although in support                                                               
of  HB 322,  ACAT  urges  the committee  to  adopt amendments  to                                                               
Sections 2 and 6 to reflect actual 2018 dollars.                                                                                
                                                                                                                                
1:17:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER asked  how  the bill  would stop  future                                                               
events like the Exxon Valdez [oil spill].                                                                                       
                                                                                                                                
MS.  SAUNDERS explained  penalties are  one important  element of                                                               
preventing future oil  spills, and another is  the requirement of                                                               
contingency  plans for  companies transporting  and drilling  for                                                               
oil; planning  for preventing, minimizing, and  cleaning up after                                                               
a spill  is meaningful.   She stressed penalties are  a deterrent                                                               
and  a way  to compensate  for damage  to the  state's resources.                                                               
Ms. Saunders  cautioned if  oil spills have  no economic  cost to                                                               
violators,  there is  no incentive  to  "be the  best and  safest                                                               
company you can be."                                                                                                            
                                                                                                                                
REPRESENTATIVE  BIRCH  expressed  concern about  the  unnecessary                                                               
burden and  regulatory cost the  bill would impose  on commercial                                                               
and business operations.  He  pointed out the aforementioned goal                                                               
of preventing  another Exxon Valdez  oil spill has  been achieved                                                               
and said he is interested to  hear testimony on the bill's impact                                                               
on the everyday life of Alaskans.                                                                                               
                                                                                                                                
MS. SAUNDERS  suggested a comparison  of the price per  gallon of                                                               
gasoline in 2018  with the cost per gallon in  1989; in fact, the                                                               
cost Alaskans pay [now for  gasoline] far exceeds the doubling of                                                               
the  cost of  penalties incurred  by a  violator of  Alaska's oil                                                               
spill statutes and  regulations.  Further, oil  prices have risen                                                               
since  1989 and  profits  are high  for  companies that  produce,                                                               
transport, refine, or sell oil  at retail; in contrast, oil spill                                                               
penalties have  not, thus  realigning penalties  to the  value of                                                               
the  2018 dollar  is not  an undue  burden on  the oil  industry.                                                               
Penalties established in 1977 are  not an effective deterrent and                                                               
do not reflect the cost to repair damage to the environment.                                                                    
                                                                                                                                
1:24:07 PM                                                                                                                    
                                                                                                                                
DOUGLAS   MERTZ,  Legislative   Liaison,  Prince   William  Sound                                                               
Regional Citizens' Advisory Council  (Prince William Sound RCAC),                                                               
informed  the  committee  the  Prince William  Sound  RCAC  is  a                                                               
nonprofit  coalition  of interested  parties  who  have a  common                                                               
intent to protect  the assets and people of  Prince William Sound                                                               
including   businesses,   Tribes,   commercial   fisherman,   and                                                               
environmentalists.   He spoke  in support of  HB 322  which would                                                               
adjust  penalties   to  reflect   inflation;  in  fact,   due  to                                                               
inflation, the effective  penalty rates have become  a minor cost                                                               
of  doing business.   As  written,  the bill  would address  this                                                               
issue and the  Prince William Sound RCAC feels  this provision is                                                               
necessary to  maintain effective  deterrents, and  incentives for                                                               
proper  business   practices.    His  experience   in  oil  spill                                                               
enforcement  since the  1970s has  revealed the  following cycle:                                                               
after  a  big  oil  spill,  interest  and  legislative/regulatory                                                               
responses  are  high  for  about  two  years  and  then  decline.                                                               
Therefore,   his    organization   seeks   legislative/regulatory                                                               
provisions  that  maintain  a   constant  level  of  enforcement,                                                               
particularly now  that there is  interest in new  oil exploration                                                               
and  production in  the state  and off  its coast,  and with  the                                                               
absence  of pertinent  federal regulations  and safety  measures.                                                               
Mr. Mertz  stressed businesses  that are  invited into  the state                                                               
must be regulated  to exercise diligence and prevent  spills.  He                                                               
warned against  complacency.  Although  the Prince  William Sound                                                               
RCAC  limits its  scope  of interest  to  oil transportation  and                                                               
handling within Prince William Sound,  his personal experience is                                                               
that  truck rollovers  - though  they are  small spills  - are  a                                                               
constant  problem   because  of   their  frequency;   the  bill's                                                               
requirement  that truckers  and haulers  of oil  products provide                                                               
contingency plans does  not have to add a regulatory  burden.  He                                                               
pointed  out  the  requirement  is   limited  to  crude  oil  and                                                               
cautioned that many types of  refined products are more toxic and                                                               
more common  than crude oil,  and urged the committee  to revisit                                                               
this serious issue.                                                                                                             
                                                                                                                                
1:29:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH inquired as to  whether there have been many                                                               
spills occurring  subsequent to  the Exxon  Valdez that  have not                                                               
been managed or mitigated by the responsible parties.                                                                           
                                                                                                                                
MR.  MERTZ  said  no,  although   there  have  been  near  misses                                                               
involving tankers.   [There  have been no  spills similar  to the                                                               
Exxon Valdez],  because "Prince  William Sound  has the  best oil                                                               
spill prevention  and response  system in  the country,  maybe in                                                               
the world  now, and our  job at RCAC is  to make sure  it's, it's                                                               
maintained that way."                                                                                                           
                                                                                                                                
REPRESENTATIVE   BIRCH  related   his  experience   with  Alyeska                                                               
Pipeline  Service Company  supports the  vigilance of  the Prince                                                               
William  Sound RCAC;  however, close  calls don't  count, and  he                                                               
noted  the absence  of  significant occurrences  in  the past  29                                                               
years.   He pointed out  some fees are quadrupled  [by provisions                                                               
within HB  322], from $5,000  to $25,000 per day,  and questioned                                                               
whether there is a problem with the transportation business.                                                                    
                                                                                                                                
MR. MERTZ  said the larger  increases [to penalties] in  the bill                                                               
are tied  to the responsibility  for spills by operators  who are                                                               
negligent  and do  not take  the  most common  required steps  to                                                               
avoid spills, which justifies higher fees and penalties.                                                                        
                                                                                                                                
REPRESENTATIVE RAUSCHER asked for  the most common required steps                                                               
to avoid spills.                                                                                                                
                                                                                                                                
MR. MERTZ  acknowledged there are differences  between pipelines,                                                               
wells, trucks, and tankers; for  all entities, the most important                                                               
primary  general requirement  is  for contingency  plans so  that                                                               
knowledgeable parties can plan for  prevention and response.  The                                                               
absence of advance  planning is playing games  with resources and                                                               
livelihoods.   In  further response  to Representative  Rauscher,                                                               
Mr. Mertz  opined advance planning  is not happening  with tanker                                                               
trucks, which is a problem.                                                                                                     
                                                                                                                                
REPRESENTATIVE RAUSCHER said, "So you  figure that this bill will                                                               
create that?"                                                                                                                   
                                                                                                                                
1:34:35 PM                                                                                                                    
                                                                                                                                
MR.  MERTZ  stated  contingency planning  for  fleets  of  tanker                                                               
trucks  would  help.    In  further  response  to  Representative                                                               
Rauscher, he  said the bill  would require  contingency planning.                                                               
He  advised contingency  plans  do  not need  to  be onerous,  or                                                               
extremely costly, if the operator  of a fleet of trucks contracts                                                               
with an oil spill cleanup service company.                                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON questioned whether  spills are ignored for                                                               
economic reasons as is implied by the bill.                                                                                     
                                                                                                                                
MR.  MERTZ  said no,  but  spill  preventive measures  and  spill                                                               
planning are ignored for economic reasons.                                                                                      
                                                                                                                                
CO-CHAIR  JOSEPHSON  suggested the  question  is  related to  the                                                               
economic benefit  of noncompliance,  which is  a provision  of HB                                                               
322.                                                                                                                            
                                                                                                                                
MR.  MERTZ stated  the state  should avoid  a situation  in which                                                               
spills and  spill responses are a  cost of doing business,  and a                                                               
company  can choose  not  to  be diligent  and  save  money.   He                                                               
remarked:                                                                                                                       
                                                                                                                                
     But, I don't think we  see anywhere where it's actually                                                                    
     been  applied in  any  rigorous way  where  a court  or                                                                    
     other decider actually looks at  how much they saved by                                                                    
     not complying.                                                                                                             
                                                                                                                                
REPRESENTATIVE  BIRCH recalled  previous testimony  that trucking                                                               
companies  already  have  contingency  plans.    He  observed  in                                                               
Anchorage most residents heat with  natural gas and in Juneau, he                                                               
personally  does not  have fuel  oil delivery,  but in  Fairbanks                                                               
many   residents  do,   and  cautioned   against  unintentionally                                                               
multiplying the  cost of essential  services to certain  areas of                                                               
the state.                                                                                                                      
                                                                                                                                
1:40:08 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON asked:                                                                                                       
                                                                                                                                
     You're not  suggesting that we can't  enhance penalties                                                                    
     because some people would be  impacted more than others                                                                    
     based on how  they consume fuel.  Because  then we just                                                                    
     could never  enhance penalties, we  would have  to wait                                                                    
     [until] everyone's on the same system.                                                                                     
                                                                                                                                
REPRESENTATIVE BIRCH said  exactly.  In a  community which relies                                                               
on fuel  products that  are transported by  rail, truck,  or snow                                                               
machine  - if  penalties  are  added -  the  cost  of fuel  would                                                               
increase:    regulation adds  cost.    He  noted the  absence  of                                                               
testimony that  oil spills  are happening  in the  Prince William                                                               
Sound area, and restated the Exxon  Valdez oil spill was 29 years                                                               
ago.  He opined responsible  operators are acting responsibly and                                                               
restated his dissatisfaction that HB 322 is a committee bill.                                                                   
                                                                                                                                
REPRESENTATIVE  PARISH requested  further information  related to                                                               
the toxicity of  refined fuel products compared to  that of crude                                                               
oil.                                                                                                                            
                                                                                                                                
MR. MERTZ  related his experience  is there is a  constant series                                                               
of truck rollovers that contaminate streams, rivers, and lakes.                                                                 
                                                                                                                                
REPRESENTATIVE  PARISH directed  attention to  Section 13,  which                                                               
read:                                                                                                                           
                                                                                                                                
     Sec. 13. AS 46.04.030(d) is amended to read:                                                                               
          (d)   Upon  approval  of a  contingency plan,  the                                                                    
     department   shall  issue   to   the   plan  holder   a                                                                    
     certificate stating that the  contingency plan has been                                                                    
     approved  by  the   department.  The  certificate  must                                                                    
     include  the  name  of  the  facility,  pipeline,  tank                                                                    
     vessel,  commercial motor  vehicle,  or  oil barge  for                                                                    
     which  it   is  issued,  the  effective   date  of  the                                                                    
     contingency   plan,  and   the   date   by  which   the                                                                    
     contingency  plan  must  be submitted  for  renewal.  A                                                                    
     contingency plan  must be  submitted for  renewal every                                                                    
     five years.                                                                                                                
                                                                                                                                
REPRESENTATIVE  PARISH  suggested the  addition  of  "a fleet  of                                                               
motor vehicles."                                                                                                                
                                                                                                                                
CO-CHAIR JOSEPHSON  urged for  the use  of well-defined  terms in                                                               
any forthcoming amendments.                                                                                                     
                                                                                                                                
1:44:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TARR acknowledged  the  Exxon Valdez  oil  spill was  a                                                               
number of  years ago; however, [in  2010] one of the  three major                                                               
owner-operators  on  the North  Slope  was  the [lessee]  of  the                                                               
Deepwater  Horizon  drilling rig  that  exploded  and leaked  oil                                                               
resulting  in over  $4  billion in  fees,  fines, penalties,  and                                                               
restoration costs.   The lessee  was found guilty of  14 criminal                                                               
counts, and  lives were  lost.   Co-Chair Tarr  said [HB  322] is                                                               
part  of safety  planning  - not  just  to address  environmental                                                               
damages -  and she warned  against waiting for  another disaster.                                                               
She asked  Mr. Mertz  whether it is  common for  jurisdictions to                                                               
review fees  and penalties -  which would only be  assessed after                                                               
an  operator makes  a mistake  or  is criminally  negligent -  in                                                               
order to protect human lives and the environment.                                                                               
                                                                                                                                
MR.  MERTZ  restated the  high  and  then declining  interest  in                                                               
penalties  and  preparedness  methods,  following  the  Deepwater                                                               
Horizon  disaster,  are  part  of  the  aforementioned  cycle  of                                                               
interest;  in   fact,  after  the  Deepwater   Horizon  disaster,                                                               
residents sought  to create  RCAC organizations  for the  Gulf of                                                               
Mexico and for the North Slope.   Also, the federal government is                                                               
disinterested in  enforcing safety regulations in  well blowouts,                                                               
and the state may need  to fulfill the federal government's role,                                                               
or an accumulating lack of interest will lead to spills.                                                                        
                                                                                                                                
REPRESENTATIVE  DRUMMOND clarified  that the  bill seeks  to only                                                               
regulate trucks  that transport  crude oil  - not  that transport                                                               
refined fuel  oil that is  delivered to Fairbanks  and elsewhere;                                                               
she reminded  the committee ExxonMobil was  forgiven $4.5 billion                                                               
of its $5 billion penalty  originally assessed, "and thousands of                                                               
Alaskans suffered as a result."                                                                                                 
                                                                                                                                
REPRESENTATIVE BIRCH  asked for  information as to  the frequency                                                               
of truck rollovers.                                                                                                             
                                                                                                                                
CO-CHAIR JOSEPHSON  offered to provide the  requested information                                                               
from DEC.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  DRUMMOND  returned  attention to  the  PowerPoint                                                               
presentation   entitled,  "Division   of  Spill   Prevention  and                                                               
Response," dated 2/2/18,  that was presented to  the committee on                                                               
2/2/18, and  said slide  4 indicated 4.5  million gallons  of oil                                                               
were spilled in 1997.                                                                                                           
                                                                                                                                
1:49:52 PM                                                                                                                    
                                                                                                                                
BOB SHAVELSON, Advocacy Director,  Cook Inletkeeper, informed the                                                               
committee Cook Inletkeeper is a  public interest group, supported                                                               
by  Alaskans,  that works  for  clean  water and  healthy  salmon                                                               
around Southcentral Alaska.  Further,  he has been a board member                                                               
of the  Cook Inlet Regional  Citizens' Advisory Council and  is a                                                               
board  member representing  the  Oil  Spill Region  Environmental                                                               
Coalition,  Prince  William  Sound  Regional  Citizens'  Advisory                                                               
Council.   Mr. Shavelson  expressed general  support for  HB 322.                                                               
He said during  his 22 years of experience  with Cook Inletkeeper                                                               
he  has  seen  hundreds  of  spills  from  pipelines,  platforms,                                                               
trucks, and  storage tanks;  unfortunately, penalties  for spills                                                               
have become  a cost  of doing  business in  Alaska.   He reported                                                               
after a spill a  company brings in a contractor -  who may or may                                                               
not clean  up the spill  - and a  relatively small fine  is paid;                                                               
afterward,  there  is  a  return  to  business  as  usual.    Mr.                                                               
Shavelson said the  current penalty regime does  not deter future                                                               
violations  and  has  been  eroded   due  to  inflation,  so  the                                                               
penalties need  to be  inflation-proof.  Also,  he agreed  with a                                                               
previous speaker  that Sections 2 and  6 need to be  more robust.                                                               
Regarding  oil trucking,  he  expressed  support for  contingency                                                               
plans for trucking  and observed BlueCrest is  producing from the                                                               
Cosmopolitan  unit  adjacent  to  Stariski  Creek  on  the  Kenai                                                               
Peninsula.  Because there is  no pipeline to the Tesoro Refinery,                                                               
BlueCrest  is  running  several  trucks  per  day  north  on  the                                                               
Sterling  Highway.   He said  BlueCrest  has been  open with  its                                                               
plans and  has generally done a  good job reducing risk,  but the                                                               
riskiest  part of  BlueCrest's business  plan is  moving the  oil                                                               
north  and crossing  several  important  salmon streams,  namely,                                                               
Stariski Creek,  Deep Creek, Ninilchik River,  Kasilof River, and                                                               
Kenai River; driving  on icy roads is challenging  and stream and                                                               
river  crossings are  especially risky.   Mr.  Shavelson reviewed                                                               
the importance of  the streams and rivers to  the tourism, sport,                                                               
commercial,  and   subsistence  economies,   therefore  [trucking                                                               
companies]  need  a  rapid response  contingency  plan  in  place                                                               
should there  be a spill  in a river.   He pointed out  there are                                                               
costs  to producing,  moving, and  using oil,  and he  questioned                                                               
whether  the cost  would  be borne  by  the publicly-owned  land,                                                               
water, and fishery resources, or by oil producers and society.                                                                  
                                                                                                                                
1:53:54 PM                                                                                                                    
                                                                                                                                
STEVE  CATALANO,  Spokesperson,   Cook  Inlet  Regional  Citizens                                                               
Advisory  Council (CIRCAC),  informed the  committee CIRCAC  is a                                                               
nonprofit corporation organized and  federally mandated under the                                                               
provisions of Section 5002 of the  Oil Pollution Act of 1990 [OPA                                                               
90], exclusively  for the  oversight, monitoring,  assessing, and                                                               
evaluation  of oil  spill prevention  safety and  response plans,                                                               
terminal and oil tanker operations,  and environmental impacts of                                                               
oil tanker and  oil terminal operations in Cook  Inlet.  [CIRCAC]                                                               
consists  of thirteen  members from  seven communities  including                                                               
Alaska  Native   groups,  commercial  fishing   and  aquaculture,                                                               
tourism, recreational,  and environmental interest groups  all of                                                               
which have a  significant stake in the  environment and resources                                                               
at risk  from oil  production and  transportation in  the region.                                                               
[CIRCAC] supports HB  322 in its current form,  including the use                                                               
of  a  mechanism to  annually  increase  penalties based  on  the                                                               
Anchorage  consumer price  index  for January  2018  as the  base                                                               
index.   Further,  CIRCAC supports  enhanced  civil penalties  to                                                               
deter future  noncompliance due the importance  to discourage oil                                                               
discharges and  to encourage  oil spill  prevention and  a proper                                                               
response when prevention measures fail.                                                                                         
                                                                                                                                
REPRESENTATIVE  PARISH  asked  whether mitigations  completed  by                                                               
responsible parties after  a spill are sufficient  to reverse the                                                               
damage to fisheries.                                                                                                            
                                                                                                                                
MR. CATALANO related the operators  in Cook Inlet are responsible                                                               
and  with  good  oversight  by  the state  there  is  a  complete                                                               
response.                                                                                                                       
                                                                                                                                
REPRESENTATIVE PARISH questioned whether  CIRCAC is familiar with                                                               
the occurrences  totaling about 15,000 gallons  that were spilled                                                               
last year.                                                                                                                      
                                                                                                                                
1:57:10 PM                                                                                                                    
                                                                                                                                
MR. CATALANO said he is familiar with the crude oil spills.                                                                     
                                                                                                                                
CO-CHAIR  JOSEPHSON   expressed  his  understanding   the  Prince                                                               
William Sound Regional Citizens' Advisory  Council is funded as a                                                               
caretaker of  Prince William  Sound, and  CIRCAC is  similar, but                                                               
without staffing and resources.                                                                                                 
                                                                                                                                
MR.  CATALANO  explained  both organizations  were  formed  under                                                               
[Section  5002] of  OPA  90 and  both are  tasked  with the  same                                                               
responsibilities;  however,  CIRCAC has  a  smaller  staff and  a                                                               
different metric for funding.                                                                                                   
                                                                                                                                
CO-CHAIR  TARR asked  Mr. Catalano  to describe  the process  for                                                               
contingency plans.                                                                                                              
                                                                                                                                
MR. CATALANO advised  spill contingency plans are  on a five-year                                                               
renewal  cycle;  after  five  years, a  plan  holder  submits  an                                                               
application to  the state for  review and public comment.   After                                                               
public  comment,  the  state  comments  and  requests  additional                                                               
information  from  the company  in  response  to both  state  and                                                               
public comments.                                                                                                                
                                                                                                                                
CO-CHAIR TARR observed there are requirements for live drills.                                                                  
                                                                                                                                
MR. CATALANO said companies are  required to hold an annual drill                                                               
which may  occur over multiple  days; in addition, after  a major                                                               
change, a contingency plan can be amended after public review.                                                                  
                                                                                                                                
REPRESENTATIVE BIRCH  directed attention to  the bill on  page 9,                                                               
[lines 2-3], which read:                                                                                                        
                                                                                                                                
         (2)  "oil" means crude oil, petroleum, and any                                                                         
     substance refined from petroleum.                                                                                          
                                                                                                                                
REPRESENTATIVE BIRCH surmised the aforementioned definition                                                                     
includes asphalt and any product refined in Alaska.                                                                             
                                                                                                                                
2:02:08 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
2:03:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON noted the abovementioned definition applies                                                                  
to [HB 322] Section 12:  Administrative penalties for discharges                                                                
of oil and crude oil.                                                                                                           
                                                                                                                                
2:03:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON opened public testimony.  After ascertaining                                                                 
no one wished to testify, public testimony was left open.                                                                       
                                                                                                                                
[HB 322 was held over.]                                                                                                         
                                                                                                                                
CO-CHAIR JOSEPHSON made announcements.                                                                                          
                                                                                                                                
2:07:47 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at [2:07]                                                                    
p.m.                                                                                                                            

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