Legislature(1993 - 1994)
04/22/1994 08:15 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
April 22, 1994
8:15 a.m.
MEMBERS PRESENT
Representative Bill Williams, Chairman
Representative Bill Hudson, Vice Chairman
Representative Con Bunde
Representative Pat Carney
Representative John Davies
Representative David Finkelstein
Representative Joe Green
Representative Jeannette James
Representative Eldon Mulder
MEMBERS ABSENT
None
OTHER LEGISLATORS PRESENT
Senator Mike Miller
COMMITTEE CALENDAR
SB 215: "An Act relating to oil and hazardous substances;
redesignating the oil and hazardous substance
release response fund and relating to it;
repealing the Citizens' Oversight Council on Oil
and Other Hazardous Substances and the authority
in law by which marine highway vessels may be
designed and constructed to aid in oil and
hazardous substance spill cleanup in state marine
water using money in the oil and hazardous
substance release response fund and repealing the
authority of the Department of Environmental
Conservation to levy and collect fees for review
of certain submissions related to oil; altering
requirements applicable to liens for recovery of
state expenditures related to oil or hazardous
substances; terminating the nickel-per-barrel oil
conservation surcharge; levying and collecting two
new oil surcharges; and providing for the
suspension and reimposition of one of the new
surcharges."
HCS CSSB 215(RES) MOVED OUT OF COMMITTEE WITH
INDIVIDUAL RECOMMENDATIONS
SB 310: "An Act relating to the management and sale of
state timber and relating to the administration of
forest land."
HEARD AND HELD FOR FURTHER CONSIDERATION
WITNESS REGISTER
SENATOR MIKE MILLER
State Capitol, Room 423
Juneau, Alaska 99801-1182
Phone: 465-4976
POSITION STATEMENT: Prime Sponsor SB 215
DAVID ROGERS, Special Counsel
Senate Finance Committee
P.O. Box 33932
Juneau, Alaska 99803
Phone: 586-1107
POSITION STATEMENT: Answered questions on SB 215
BOB POE, Director
Division of Information and Administrative Services
Department of Environmental Conservation
410 Willoughby Avenue, Ste. 105
Juneau, Alaska 99801-1795
Phone: 465-5010
POSITION STATEMENT: Answered questions on SB 215
MIKE CONWAY, Director
Division of Spill Prevention and Response
Department of Environmental Conservation
410 Willoughby Avenue, Ste. 105
Juneau, Alaska 99801-1795
Phone: 465-5250
POSITION STATEMENT: Answered questions on SB 215
RICK SOLIE, Aide
Senator Steve Frank
State Capitol, Room 518
Juneau, Alaska 99801-1182
Phone: 465-3709
POSITION STATEMENT: Answered questions on SB 310
CHRIS GATES, Director
Division of Economic Development
Department of Commerce and Economic Development
P.O. Box 110804
Juneau, Alaska 99811-0804
Phone: 465-2017
POSITION STATEMENT: Answered questions on SB 310
PREVIOUS ACTION
BILL: SB 215
SHORT TITLE: OIL/HAZARDOUS SUBS. RELEASE RESPONSE FUND
SPONSOR(S): SENATOR(S) MILLER,Kelly
JRN-DATE JRN-PG ACTION
05/08/93 2207 (S) READ THE FIRST TIME/REFERRAL(S)
05/08/93 2207 (S) RESOURCES, FINANCE
11/19/93 (S) MINUTE(RES)
01/19/94 (S) RES AT 3:30 PM BUTROVICH RM 205
01/19/94 (S) MINUTE(RES)
01/25/94 (S) RES AT 02:00 PM BELTZ ROOM 211
01/26/94 (S) RES AT 3:30 PM BUTROVICH RM 205
01/27/94 (S) RES AT 3:30 PM BUTROVICH RM 205
01/31/94 (S) RES AT 3:30 PM BUTROVICH RM 205
02/03/94 (S) RES AT 3:30 PM BUTROVICH RM 205
02/07/94 (S) RES AT 3:30 PM BUTROVICH RM 205
02/07/94 (S) MINUTE(RES)
02/11/94 (S) RES AT 3:30 PM BUTROVICH RM 205
02/16/94 (S) RES AT 3:30 PM BUTROVICH RM 205
02/16/94 (S) MINUTE(RES)
02/22/94 (S) RES AT 12:00 PM BUTRVICH RM 205
02/22/94 (S) MINUTE(RES)
02/28/94 2987 (S) RES RPT CS 4DP 2NR NEW TITLE
02/28/94 2988 (S) FISCAL NOTE TO SB PUBLISHED
(DEC)
02/28/94 2988 (S) FISCAL NOTE TO CS PUBLISHED
(DEC)
03/01/94 (S) FIN AT 09:00 AM SENATE FIN 518
03/01/94 (S) MINUTE(FIN)
03/03/94 (S) FIN AT 09:00 AM SENATE FIN 518
03/22/94 (S) FIN AT 09:00 AM SENATE FIN 518
03/25/94 (S) FIN AT 09:00 AM SENATE FIN 518
04/07/94 (S) FIN AT 08:00 AM SENATE FIN 518
04/07/94 (S) FIN AT 05:00 PM SENATE FIN 518
04/08/94 3521 (S) FIN RPT CS 5DP 1NR NEW TITLE
04/08/94 3522 (S) ZERO FN TO SB & CS PUBLISHED
(DPS)
04/08/94 3522 (S) ZERO FN TO CS PUBLISHED (DEC)
04/11/94 (S) RLS AT 00:00 AM FAHRENKAMP
ROOM 203
04/12/94 3587 (S) ZERO FN TO SB & CS PUBLISHED
(ADM)
04/12/94 3587 (S) ZERO FN TO CS PUBLISHED (REV)
04/12/94 3587 (S) FN TO SB & CS PUBLISHED (LAW)
04/12/94 3586 (S) RULES RPT 3CAL 1NR 1DNP 4/12/94
04/12/94 3590 (S) READ THE SECOND TIME
04/12/94 3590 (S) FIN CS ADOPTED UNAN CONSENT
04/12/94 3591 (S) AM NO 1 MOVED BY KERTTULA
04/12/94 3592 (S) AM NO 1 FAILED Y9 N11
04/12/94 3592 (S) AM NO 2 MOVED BY KERTTULA
04/12/94 3592 (S) AM NO 2 FAILED Y8 N12
04/12/94 3594 (S) AM NO 3 MOVED BY LINCOLN
04/12/94 3594 (S) AM NO 3 FAILED Y9 N11
04/12/94 3595 (S) AM NO 4 MOVED BY ADAMS
04/12/94 3595 (S) AM NO 4 FAILED Y9 N11
04/12/94 3595 (S) AM NO 5 MOVED BY ADAMS
04/12/94 3598 (S) AM NO 5 FAILED Y9 N11
04/12/94 3599 (S) AM NO 6 MOVED BY ZHAROFF
04/12/94 3599 (S) AM NO 6 FAILED Y10 N10
04/12/94 3599 (S) AM NO 7 BY ZHAROFF/WITHDRAWN
04/12/94 3599 (S) MTN TO ADVANCE TO 3RD READING
04/12/94 3600 (S) ADVANCE MOTION WITHDRAWN
04/12/94 3600 (S) AM NO 8 MOVED BY MILLER
04/12/94 3600 (S) AM NO 8 ADOPTED UNAN CONSENT
04/12/94 3601 (S) AM NO 9 MOVED BY SALO
04/12/94 3601 (S) AM NO 9 FAILED Y9 N10 A1
04/12/94 3602 (S) ADVANCE TO THIRD READING FLD
Y10 N9 A1
04/12/94 3602 (S) THIRD READING 4/13 CALENDAR
04/13/94 3641 (S) ZERO FN TO CS PUBLISHED(LAW)
REPLACES #6
04/13/94 3641 (S) READ THE THIRD TIME CSSB
215(FIN) AM
04/13/94 3641 (S) FAILED PASSAGE Y10 N9 A1
04/13/94 3641 (S) Miller NOTICE OF
RECONSIDERATION
04/14/94 3672 (S) RECON TAKEN UP/IN THIRD READING
04/14/94 3673 (S) PASSED ON RECONSIDERATION Y11
N8 E1
04/14/94 3674 (S) EFFECTIVE DATES FAILED Y13
N6 E1
04/14/94 3689 (S) TRANSMITTED TO (H)
04/15/94 3457 (H) READ THE FIRST TIME/REFERRAL(S)
04/15/94 3458 (H) RESOURCES,STATE AFFAIRS,FINANCE
04/22/94 (H) RES AT 08:15 AM CAPITOL 124
BILL: SB 310
SHORT TITLE: STATE/PRIVATE/MUNI TIMBER OPERATION/SALE
SPONSOR(S): SENATOR(S)FRANK,Taylor,Pearce,Sharp,
Miller,Kelly,Halford; REPRESENTATIVE(S) Olberg
JRN-DATE JRN-PG ACTION
02/14/94 2829 (S) READ THE FIRST TIME/REFERRAL(S)
02/14/94 2829 (S) RESOURCES
03/02/94 (S) RES AT 3:30 PM BUTROVICH RM 205
03/02/94 (S) MINUTE(RES)
03/05/94 (H) MINUTE(ECO)
03/16/94 (S) RES AT 3:30 PM BUTROVICH RM 205
03/16/94 (S) MINUTE(RES)
03/22/94 (S) RES AT 1:30 PM BUTROVICH RM 205
03/24/94 (S) RES AT 03:30 PM FAHRENKAMP
ROOM 203
03/28/94 (S) RES AT 3:30 PM BUTROVICH RM 205
03/30/94 3406 (S) RES RPT CS 4DP 1DNP NEW TITLE
03/30/94 3407 (S) ZERO FN TO SB & CS PUBLISHED
(DNR)
03/30/94 (S) RLS AT 11:35 AM FAHRENKAMP
ROOM 203
03/30/94 (S) MINUTE(RLS)
04/05/94 3448 (S) RULES RPT 3CAL 2NR 4/5/94
04/05/94 3449 (S) HELD TO 4/6/94
04/06/94 3476 (S) READ THE SECOND TIME
04/06/94 3477 (S) RES CS ADOPTED UNAN CONSENT
04/06/94 3477 (S) AM NO 1 MOVED BY LITTLE
04/06/94 3478 (S) AM NO 1 FAILED Y9 N11
04/06/94 3478 (S) AM NO 2 MOVED BY LITTLE
04/06/94 3479 (S) AM NO 2 FAILED Y9 N11
04/06/94 3479 (S) AM NO 3 NOT OFFERED
04/06/94 3479 (S) AM NO 4 MOVED BY LITTLE
04/06/94 3479 (S) AM NO 4 FAILED Y9 N11
04/06/94 3480 (S) AM NO 5 MOVED BY DUNCAN
04/06/94 3480 (S) AM NO 5 FAILED Y8 N12
04/06/94 3480 (S) AM NO 6 MOVED BY DUNCAN
04/06/94 3481 (S) AM NO 6 FAILED Y9 N11
04/06/94 3481 (S) AM NO 7 MOVED BY DUNCAN
04/06/94 3482 (S) AM NO 7 FAILED Y9 N11
04/06/94 3482 (S) AM NO 8 MOVED BY DUNCAN
04/06/94 3482 (S) AM NO 8 FAILED Y9 N11
04/06/94 3483 (S) AM NO 9 MOVED BY LINCOLN
04/06/94 3483 (S) AM NO 9 FAILED Y9 N11
04/06/94 3483 (S) AM NO 10 MOVED BY ZHAROFF
04/06/94 3484 (S) AM NO 10 FAILED Y9 N11
04/06/94 3484 (S) AM NO 11 MOVED BY ZHAROFF
04/06/94 3484 (S) AM NO 11 FAILED Y9 N11
04/06/94 3485 (S) AM NO 12 MOVED BY LINCOLN
04/06/94 3485 (S) AM NO 12 FAILED Y10 N10
04/06/94 3486 (S) AM NO 13 MOVED BY ZHAROFF
04/06/94 3486 (S) AM NO 13 FAILED Y9 N11
04/06/94 3486 (S) AM NO 14 MOVED BY ADAMS
04/06/94 3487 (S) AM NO 14 FAILED Y8 N12
04/06/94 3487 (S) ADVANCE TO THIRD READING FLD
Y11 N9
04/06/94 3487 (S) THIRD READING 4/7 CALENDAR
04/07/94 3506 (S) READ THE THIRD TIME
CSSB 310(RES)
04/07/94 3506 (S) PASSED Y11 N8 E1
04/07/94 3506 (S) Adams NOTICE OF RECONSIDERATION
04/08/94 3527 (S) RECON TAKEN UP/IN THIRD READING
04/08/94 3527 (S) PASSED ON RECONSIDERATION Y11
N7 E2
04/08/94 3531 (S) TRANSMITTED TO (H)
04/08/94 3212 (H) READ THE FIRST TIME/REFERRAL(S)
04/08/94 3212 (H) RESOURCES
04/08/94 3220 (H) CROSS SPONSOR(S): OLBERG
04/15/94 3526 (H) FIN REFERRAL ADDED
04/15/94 (H) RES AT 08:15 AM CAPITOL 124
04/15/94 (H) MINUTE(RES)
04/20/94 (H) RES AT 08:15 AM CAPITOL 124
04/20/94 (H) MINUTE(RES)
04/22/94 (H) RES AT 08:15 AM CAPITOL 124
ACTION NARRATIVE
TAPE 94-60, SIDE A
Number 000
The House Resources Committee was called to order by
Chairman Bill Williams at 8:30 a.m. Members present at the
call to order were Representatives Williams, Hudson, Bunde,
Finkelstein, Green, James, and Mulder. Members absent were
Representatives Carney and Davies.
CHAIRMAN BILL WILLIAMS announced there is a quorum present.
He stated the meeting is on listen only teleconference with
Anchorage, Cordova, Fairbanks, and Kenai/Soldotna. He said
the committee will hear SB 215 for the first time. The
committee has held seven hearings on HB 238 regarding the
same subject. He felt since the committee has had so many
hearings on HB 238 and has taken so many hours of public
testimony, the committee members should be very familiar
with the issues and the public and industry sentiments on
the issues.
CHAIRMAN WILLIAMS told committee members contained in their
folders are copies of several amendments which the
Department of Law (DOL) and the Department of Environmental
Conservation (DEC) propose and two amendments he proposes.
He requested that if committee members have additional
amendments, they should get the amendments to staff in time
to fax them to the teleconference sites.
SB 215 - OIL/HAZARDOUS SUBS. RELEASE RESPONSE FUND
SENATOR MIKE MILLER, PRIME SPONSOR, stated he will give a
history on SB 215 and what has occurred on the 470 fund
since the nickel a barrel tax was instituted. He said the
tax was voted on because there was a desire to build up a
$50 million fund for the purpose of having an amount of
money available for responding in case of another disaster.
At that time, it was felt that once the $50 million was
reached, the tax would go away. He noted over the years,
the tax has never gone away because of the accounting
mechanism used. He added that over $100 million has been
collected through the nickel a barrel tax.
SENATOR MILLER said he decided last year to rectify the
problem. He saw the need for an ongoing maintenance of
prevention but at the same time, saw the need to build up
the $50 million fund. He stated the original bill he
introduced in the Senate had 2 cents going into the spill
prevention account and 3 cents going into the response
account. DEC, at that time, said they did not want the
nickel split. A number of hearings were then held in the
Senate Resources Committee and the bill which came out of
that committee provided for a 2.5 cents/2.5 cents split. He
noted at that time, DEC came back with a proposal of
splitting the nickel 3 cents/2 cents.
SENATOR MILLER stated the bill then went to Senate Finance
where several hearings were held and a compromise was
reached. He said industry is not totally happy with the
compromise but he and the department are both satisfied with
the compromise. He explained the current version of SB 215
provides for 3 cents going to the prevention side, 2 cents
going to the response side, and the $37 million which has
been collected going into the response side. He noted there
have been arguments that the $37 million should be split.
He felt the counter-argument is that the split is in fact a
60/40 split, since over $100 million has been collected in
nickels and 40 percent of $100 million is $40 million.
Number 088
REPRESENTATIVE BILL HUDSON said he was at the table
throughout the entire deliberations on the establishment of
the 470 fund and noted there are different recollections of
how the fund developed.
REPRESENTATIVE JOHN DAVIES noted there are 17 specific
enactments which relate to the issue and all of those need
to be looked at together to understand the current
situation.
DAVID ROGERS, SPECIAL COUNSEL, SENATE FINANCE COMMITTEE,
told committee members they have a sectional analysis in
their folders and he will highlight a few of the sections.
He stated Section 2 adds school districts to existing law
authorizing municipal and village assistance for spill
related expenses and limits the applicability of this
section to sudden releases. Section 3 retains the existing
2,500 barrel (or hazardous substance equivalent) threshold
for grant eligibility but eliminates a related requirement
for a declaration of a disaster emergency and certain
findings by the Governor; grant money could come from either
the response or prevention account depending on the type of
spill; and also makes technical, conforming changes.
MR. ROGERS stated Section 13 creates a new section which
levies a 2 cent per barrel surcharge. Section 14 authorizes
the legislature to appropriate that surcharge into the
response account. Section 15 sets up the accounting
mechanics, similar to HB 238. Section 16 provides that the
surcharge not be levied during any fiscal year for which the
legislature fails to appropriate the required amounts to the
response account or the appropriation is vetoed or reduced
by the Governor. He said Article 2A authorizes a second
surcharge of 3 cents per barrel that can be appropriated
into the prevention account. Section 21 revises existing
law to reflect the new names: oil and hazardous substance
release prevention and response fund and the two accounts--
the oil and hazardous substance release prevention account
and the oil and hazardous substance release response
account.
Number 136
MR. ROGERS said Section 23 deletes reference to a provision
that currently allows the commissioner to transfer fund
money to the Department of Transportation (DOT) for purposes
of constructing or refurbishing ferries that can respond to
spills but adds two exceptions to the general rule that the
fund cannot be used for capital improvements: 1) response
depot equipments and 2) the acquisition, repair, or
improvement of assets to be used as preparedness measures
for oil and hazardous substance releases. He stated Section
24 provides for the financing of the prevention account.
The legislature is authorized to appropriate money from the
following sources into the prevention account: Applicable
surcharge proceeds; money from other state, federal, and
private sources; money recovered for reimbursement of
expenditures made out of the prevention account; and all
fines, penalties, damages and interest earned on the various
accounts.
MR. ROGERS stated Section 25 provides for the financing of
the response account. The response account includes
surcharge proceeds; money from other state, federal and
private sources; and money recovered from parties that was
initially paid out of the current fund or the new response
account. Section 26 rewrites existing law to establish the
allowed uses for money in the response and prevention
accounts. Response account uses include: To investigate,
evaluate, contain and clean up and take other necessary
action to address a release or threatened release of oil and
hazardous substances described in Section 29; to provide
certain matching funds in connection with a Section 29
release; and to pay for the costs to the state,
municipality, village or school district for cost recovery
efforts relating to money that was expended from the
response account.
MR. ROGERS explained the prevention account can be used to:
Investigate, evaluate, contain and clean up and take other
necessary action regarding releases not described in Section
29; pay all costs to establish and maintain the response
office, response corps, and response depots; pay all costs
to review contingency plans, conduct training, inspections,
tests and take other action to verify or establish
preparedness for oil and hazardous substance releases, and
to establish proof of financial responsibility; pay
documented expenses incurred by the Alaska State Emergency
Response Commission for staff and response and restoration
support activities; pay all costs incurred to acquire,
repair or improve an asset to be used as an emergency
preparedness measure relating to releases of oil or a
hazardous substance; pay the costs, approved by the
commissioner, incurred by the local emergency planning
committees; provide certain matching funds; provide money to
the storage tank assistance fund; pay for cost recovery
efforts relating to money expended from the prevention
account; prepare, revise and review the master and regional
prevention and contingency plans; and to pay for restoration
efforts.
Number 181
MR. ROGERS stated Section 28 limits the expenditures for
local emergency planning committees to not more than three
percent of the estimated balance of the prevention account.
Section 29 provides that money from the response account can
be used for disaster emergencies relating to oil and
hazardous substance releases and other oil and hazardous
releases. In the latter case, the commissioner has to
report the situation to the Governor and the Legislative
Budget and Audit Committee within 120 hours. The Governor
may at any time approve, disapprove or modify. If no action
is taken by the Governor, the commissioner may continue to
use the account.
MR. ROGERS said Sections 30-34 implement the legislative
auditor's recommendations. Section 42 contains repealers of
note: Repeals existing surcharge; repeals departments user
fee authority for contingency plan and financial
responsibility reviews; repeals provisions relating to
construction of ferries; repeals all provisions regarding
Citizens Oversight Council on Oil and other Hazardous
Substances. He stated Section 44 suspends the response
account surcharge for the next fiscal year if the unexpended
and unobligated balance of the former oil and hazardous
substance release response fund as of June 30, 1994, is not
appropriated to the newly-created response account this
session or the appropriation is vetoed or reduced by the
Governor.
Number 210
REPRESENTATIVE ELDON MULDER referring to Section 26, asked
what the definition of a "threatened release" is.
MR. ROGERS replied "threatened release" is defined on page
25, Section 39 of the bill. He said it is an existing
definition which has been revised. He explained a
threatened release means it is imminent and a release is
imminent if it is impending or on the point of happening or
in the judgment of the commissioner, while it is not
impending, it may be reasonably be expected to culminate in
an actual release and the actual release may reasonably be
expected to cause personal injury, other injury to life, or
loss of or damage to property, including the environment.
REPRESENTATIVE MULDER felt without an enhanced definition as
just described, the word threatened could be very open-
ended.
REPRESENTATIVE MULDER referring to the end of Section 26,
noted the prevention account is allowed to pay for
restoration efforts. He asked if restoration efforts are
provided for in the prevention account because of the funds
coming in from the federal Exxon receipts.
MR. ROGERS responded it is existing law.
BOB POE, DIRECTOR, DIVISION OF INFORMATION AND
ADMINISTRATIVE SERVICES, DEC, stated there is a fine line
between cleanup and restoration--when does cleanup stop and
restoration begin. By including restoration, a full cleanup
effort is allowed.
REPRESENTATIVE MULDER asked if there is any definition
provided for restoration.
MR. POE stated there is no definition but rather there is a
reliance on the history demonstrated thus far and the
department has not had to abuse the use of the word.
Number 258
REPRESENTATIVE HUDSON asked how SB 215 provides for response
depots and corps. He also wondered where the funding comes
from.
MR. ROGERS replied the funding aspect for response depots
and corps is on page 19, line 26 on down and added that the
funding comes from the prevention account in the fund.
REPRESENTATIVE HUDSON clarified the funding will come from
the 3 cents.
MR. ROGERS responded that is correct.
SENATOR MILLER interjected not only will the 3 cents be
coming in but also the money from the Exxon Valdez
settlement will be coming in. He added there is also a
mechanism which provides that the interest from the $50
million fund can be appropriated into the prevention
account. He felt the 3 cents is somewhat misleading because
there are other avenues to get additional funds into the
prevention side.
REPRESENTATIVE HUDSON wondered how much the 3 cents will add
up to in the next couple of years.
Number 286
SENATOR MILLER replied for fiscal year 1995, the 3 cents
will provide approximately $15.6 million and in fiscal year
1999, it will provide $11.34 million, assuming there is no
additional production coming on line. He said the numbers
he mentioned will probably go up because there are
indications that additional production will come on line.
REPRESENTATIVE HUDSON asked if the $15.6 million includes
interest.
SENATOR MILLER said the $15.6 million does not include
interest. He stated the interest on $50 million at 5
percent would be $2.5 million and on the mitigation account
approximately $5.7 million.
REPRESENTATIVE HUDSON wondered if DEC has estimated when the
response depots and corps monies will be needed and how much
is needed.
SENATOR MILLER said the department should answer that
question. He believed there is a real dedication in the
department to ensure the response depots and corps happen.
CHAIRMAN WILLIAMS asked where does the money come from for
the mitigation account.
MR. ROGERS replied the money comes from fines, penalties,
damages, cost recovery moneys, and interest.
CHAIRMAN WILLIAMS asked if the $5.7 million includes the
Exxon Valdez settlement of $28 million, which will be paid
back by the year 2001.
SENATOR MILLER stated that is correct.
CHAIRMAN WILLIAMS asked if the $28 million paid up-front by
the state came from the general fund.
SENATOR MILLER replied the money was up-fronted out of
general fund money. He felt an argument can be made that
many of the prevention efforts are things which should have
done before and should have been funded out of general fund
moneys.
Number 337
REPRESENTATIVE DAVIES recalled it was mentioned earlier that
there are other funds available for prevention and he
wondered if there was a characterization of what the order
of magnitude might be. He also asked about the policy in
the bill which will put the entire $37 million into the
response account. He wondered what the estimated loss of
revenues to the state will be in regard to the 2 cents.
SENATOR MILLER stated it is a philosophical argument. He
said if the original concept would have taken effect, the
nickel tax would have been gone by now. He said it could be
argued the 3 cents is a surplus revenue coming to the state.
REPRESENTATIVE DAVIES asked how much less money will come
into the state as a result of taking that out.
SENATOR MILLER replied the department will have to give that
estimate. He has heard numbers from $38 million to $50
million over the next five years.
Number 366
REPRESENTATIVE DAVID FINKELSTEIN asked where the reference
to restoration is contained in SB 215.
MR. ROGERS replied on page 21, lines 8-9.
REPRESENTATIVE FINKELSTEIN said the previous discussion
implied restoration funding comes from the response account.
MR. ROGERS responded that is incorrect. He said there may
be a question of what is cleanup and what is restoration.
Cleanup can be paid for from either account, depending on
the kind of spill involved and Section 29 delineates the
response account type of spill. He stated there is a very
fine line between cleanup and restoration. He stressed SB
215 and existing law clearly provides for restoration.
Restoration has been plugged into the prevention account
under the new scheme.
REPRESENTATIVE FINKELSTEIN felt restoration should not be a
part of prevention, because restoration is an outcome of
response not prevention.
MR. ROGERS reminded the committee that response can be paid
for out of either account. He stated there is not a clear
dichotomy between response and prevention.
REPRESENTATIVE FINKELSTEIN stated if that approach was being
used, there would not be a plan to split the nickel. He
felt there is a clear differentiation between response and
prevention being made. There have been many discussions
about when cleanup ends and restoration begins but he has
never seen a case being made that restoration is a subset of
prevention.
SENATOR MILLER replied he would need to go back through his
original records to respond.
Number 415
REPRESENTATIVE FINKELSTEIN clarified there was a reference
to a blackmail provision which says that if the money is not
appropriated, the surcharge stops.
MR. ROGERS replied that provision is in Sections 16 and 44.
REPRESENTATIVE FINKELSTEIN clarified Section 44 provides
that the legislature has to separately appropriate the money
and if that does not occur, the 2 cents surcharge stops.
MR. ROGERS stated the 2 cents surcharge is suspended for one
year.
REPRESENTATIVE FINKELSTEIN clarified Section 16 provides
that the surcharge stops for any year in which any of the
conditions listed are not met.
MR. ROGERS stated the surcharge stops if the legislature
does not appropriate the money or the Governor vetoes or
reduces the appropriation. He said the amount is described
in (b), and includes the surcharge and the portion of the
mitigation account relating to cost recovery money.
Number 455
REPRESENTATIVE FINKELSTEIN asked why the provision only
applies to the response account and not the prevention
account.
SENATOR MILLER replied the response account is accumulating.
He said he prefers to call the provision an incentive
clause. He stated the 3 cents surcharge is never going to
shut off and therefore, the legislature does not need a tool
to deal with it.
REPRESENTATIVE FINKELSTEIN asked where in SB 215 is there a
provision for the funds coming in from interest.
MR. ROGERS replied that provision is on page 16, lines 12 -
19, which outlines the funding sources for the prevention
account and includes the interest on all of the accounts,
including the surcharge account, which sits in the general
fund for appropriation.
REPRESENTATIVE FINKELSTEIN asked if the legislature has ever
made these appropriations in the past.
SENATOR MILLER responded the legislature has never
appropriated the interest before because the account was
never set up in this manner. He felt in next year's budget
negotiations, there will be strong lobbying for the
legislature to appropriate the interest to the prevention
account.
Number 508
REPRESENTATIVE FINKELSTEIN stated the legislature has always
had the ability to spend the money and there has always been
a need for the money. He felt the demands on money in the
future are going to be so extreme that there will be a
battle over all interest, even from the small accounts.
SENATOR MILLER agreed that the legislature may or may not
appropriate the interest but the law clearly indicates the
legislature should appropriate the money into the prevention
account.
REPRESENTATIVE PAT CARNEY felt Section 16 puts a lot of
power in the hands of the Governor to stop the surcharge.
He wondered what the amount will be if the surcharge is
stopped for one year.
MR. POE responded it will amount to $10,500,000.
REPRESENTATIVE CARNEY said there may be a situation where
just the Governor can trigger the shutting off of the
surcharge by vetoing one dollar of the appropriation,
causing the loss of potential income.
Number 554
REPRESENTATIVE MULDER, referring to Section 24, asked if the
Senate felt there was not a dedication of funds but rather a
moral commitment by the legislature.
SENATOR MILLER said that is correct. He felt anytime
something is put in statute, there is a moral commitment.
CHAIRMAN WILLIAMS clarified the $2.5 million received in
interest will not necessarily go into the prevention
account.
SENATOR MILLER replied the interest will have to be
appropriated into the prevention account by the legislature.
REPRESENTATIVE JOE GREEN commented if the 5 cents surcharge
is not collected for a year, the amount not coming in will
be over $25 million, not $10.5 million.
REPRESENTATIVE MULDER said the trigger only pertains to the
response side not the prevention side. Therefore, the $10.5
million is correct.
REPRESENTATIVE DAVIES felt an alternative approach can be
taken in regard to the interest. He said it could be set up
so the commissioner of the Department of Revenue deposits
the interest directly into the prevention accounts, which
can be justified because the legislature still has to
appropriate the money out of the accounts, similar to the
royalty income.
SENATOR MILLER responded that approach was not discussed.
MR. ROGERS added that the money does go into a mitigation
account so it is identified.
REPRESENTATIVE DAVIES asked which repealer in SB 215
addresses the Citizens' Oversight Council.
MR. ROGERS replied AS 24.20.600 through AS 24.20.630.
SENATOR MILLER stated there was an amendment in Senate
Finance to delete the Citizens' Oversight Council and the
amendment passed 5-1.
MR. ROGERS added that the theory was the Council had not
been funded recently and no longer served a necessary
function.
Number 699
CHAIRMAN WILLIAMS asked what the rationale was for placing
the $27 million Exxon Valdez reimbursement moneys into the
Oil and Hazardous Substance Prevention Account.
SENATOR MILLER replied DEC said they needed the money to
fund their ongoing programs and it was felt DEC should be
able to use those funds for that purpose.
REPRESENTATIVE MULDER asked if mitigation funds are used for
leaking underground storage tank cleanup.
SENATOR MILLER replied a portion of the funds are used for
storage tank cleanup.
TAPE 94-60, SIDE B
Number 000
REPRESENTATIVE HUDSON asked what the source of funding for
bulk field storage sites is in SB 215.
SENATOR MILLER replied there is no money provided for that
purpose. He said the state is under a federal mandate with
the leaking underground storage tanks, unlike the bulk field
storage sites.
REPRESENTATIVE HUDSON asked where the leaking underground
storage tanks cleanup will be funded from.
MR. ROGERS replied those can be funded out of the prevention
account, subject to appropriation.
CHAIRMAN WILLIAMS said DEC has stressed how much money is
needed to take care of the leaking underground storage
tanks. He felt that need will be competing with the 470
fund.
SENATOR MILLER replied there have been several discussions
on how to fund the cleanup of the leaking underground
storage tanks. He stressed at some point the need will have
to be funded, whether the money comes from the Exxon Valdez
reimbursement, general funds, etc. He said once the Exxon
Valdez moneys are gone, it is felt there will be some other
mechanism, such as a 1 cent gasoline tax, to supplement the
funding for the cleanup of the leaking underground storage
tanks.
REPRESENTATIVE HUDSON asked Senator Miller to explain the
addition of school districts.
SENATOR MILLER replied the addition of school districts was
an amendment offered in the Senate Finance Committee because
it was a section of the law which had never been used.
There have never been any grants issued under this section
of the law. However, it was felt that in many places in
rural Alaska, the school district is the government and they
have more problems with leaking underground storage tanks
than perhaps the city. He said the amendment provided that
if there is a spill, the school district will have access to
a grant to clean up the spill.
REPRESENTATIVE CARNEY asked what section specifies
(indiscernible).
MR. ROGERS replied Section 44.
REPRESENTATIVE CARNEY clarified that section does not
specify an amount.
MR. ROGERS said that is correct. He stated the amount is
whatever the unexpended and unobligated amount is as of that
date.
Number 064
REPRESENTATIVE MULDER said the fiscal note for SB 215 says
the beginning balance of the response account for fiscal
year 1995 will be $47.7 million, which is quite different
than what is being talked about in the bill. He wondered
why there is a difference of approximately $10 million.
MR. POE replied because of the 1994 nickels.
REPRESENTATIVE MULDER said when adding the beginning balance
of the response account of $47.7 million to the beginning
balance of the prevention account of $15.5 million plus the
total response surcharge collected in 1995 of $5.2 million,
the resulting amount is about $52.9 million. He wondered
why the ending balance of the response account shows $46.9
million
MR. POE replied the appropriations do not occur until the
beginning of the next fiscal year.
REPRESENTATIVE CARNEY asked if the Administration supports
SB 215 as it is currently written.
MR. POE responded the Administration finds SB 215
acceptable. He stated SB 215 provides a 3 cents/2 cents
split which provides adequate funding on the prevention
side. He said in regard to proposed amendments on splitting
the $37.4 million, the Administration is not lobbying for
that change.
Number 094
REPRESENTATIVE HUDSON noted that SB 215 eliminates any use
of the funds for the development or purchase of new ferries.
His concern for a long time has been what happens if there
is a spill on the West Coast or in Southeast Alaska. He
stated SB 215 does provide for moneys to come from the
prevention account to be used for the creation of depots and
the response capabilities on the coast, but as the bill is
currently written, it precludes using any of the moneys to
enhance or upgrade the communications of a marine highway
vessel, which he felt might be of benefit to any kind of
coastal prevention/response capability. He thought the
depots and coastal response capability will lead to a
collection of private operators, resulting in a consortium
on the West Coast and in Southeast Alaska available to
respond to a non-crude oil spill.
REPRESENTATIVE HUDSON wondered if SB 215 provides for the
use of any funds for whatever it takes, such as a depot in
Sitka and the establishment of materials and response
contracts, etc., for a coastal prevention/response
capability. He asked Mr. Poe how he envisions that
happening and where the funding will come from.
MR. POE stated SB 215 provides that depots and corps can be
funded from the prevention account. He pointed out that
provision (E) on page 20, line 10 says "pay all costs
incurred..." He felt a ferry is an asset with a life over
one year, if the improvement was specifically justified as a
preparedness measure in order to better response to, recover
from, etc., and would fall under this provision. He said SB
215 precludes the new construction of a vessel but if one
goes wild with this provision, a new vessel could be
acquired.
Number 151
MR. ROGERS said that was not the intent of the Senate. The
provision was designed to cover the emergency response
centers. He said the provision could be read as Mr. Poe
indicated.
MR. POE stated the provision does allow the state the
flexibility to do what it takes to be ready.
REPRESENTATIVE HUDSON stressed he is not interested in
acquiring new vessels and felt the ferry system should not
be turned into an oil response fleet for the state. He
believed, however, that a Southeast Alaska Petroleum
Response Organization (SEAPRO) type of protective system
could be established in Southeast Alaska and the Alaska
Marine Highway vessels, which normally transit that route,
could be a part of the response. He stressed it will
require the development of precise types of communications
and equipment, or perhaps slight modifications in the
forward section of a vessel to hold boom materials that will
be carried at all times. He asked if the depots and corps
and the concept just mentioned is maintained in the
integrity of SB 215.
Number 181
MIKE CONWAY, DIRECTOR, DIVISION OF SPILL PREVENTION AND
RESPONSE, DEC, stated that Representative Hudson has
specifically identified a strategy which fits into SB 215.
He said the division's current capital budget request
includes money to install repeaters throughout Cook Inlet,
maintain repeaters already in place in Prince William Sound,
and have the capability in Fairbanks. He said there is a
work group working with the Alaska Marine Highway system on
the design of the current vessel, to ensure that it will be
able to do the things Representative Hudson mentioned. He
noted the new vessel is being designed to serve as a
portable depot. He felt slight modifications on the cargo
capacity of the ferries could be a part of that also.
REPRESENTATIVE HUDSON felt there could also be slight
necessary modifications made to the ferry terminals as an
integral part of the coastal protection. He stated it is
important that a funding source be maintained for those
types of modifications.
MR. CONWAY agreed and said when the near shore demonstration
projects are completed, an overall review will be done to
look at where the gaps are.
Number 214
REPRESENTATIVE HUDSON clarified the current version of SB
215 provides DEC the opportunity for minor acquisitions to
upgrade some of the state facilities, in order to accomplish
the near shore protection system.
MR. CONWAY replied that is correct.
REPRESENTATIVE DAVIES asked if the reason there is not an
operational depots and corps system in place currently is
because there has not been enough money to accomplish that.
MR. CONWAY replied that is part of the reason. He said the
other reason is that the initial fiscal note included about
$20 million and there has only been $2 million available at
the most and less than that at other times in the last four
years for that system. He stated the Department of Military
and Veteran Affairs (DMVA) and DEC realized there was a need
for a strategic plan on what to purchase, etc. That
strategic plan is coming to fruition with the near shore
demonstration projects.
REPRESENTATIVE DAVIES asked Mr. Conway if he is satisfied
that under SB 215 and the 3 cents/2 cents split there will
be enough money in the future to make significant progress
on the depots and corps.
MR. CONWAY said he is satisfied to an extent but it depends
on how rapidly the depots and corps are to be established.
He stated there is a 3 cents limit on the amount paid into
the prevention account to pay for prevention programs. He
noted in the letter which was sent to Representative James
in regard to depots and corps, a sketch was presented on the
amounts required for depots and corps. Those amounts
included $6 million for barge packages, about $5 million
for the high speed vessel response packages, and about $1.25
million for hazardous response teams. He stressed if there
is a desire to buy all of that at once, there is not enough
money to do that in SB 215. However, one package of each a
year could be put in place, but it will take 10-20 years to
get that accomplished or perhaps a source could be found to
come up with the funds all at once. Then there would be a
need to provide for operations and maintenance out of the 3
cents account.
Number 258
REPRESENTATIVE DAVIES noted the total is approximately $12
million and he asked if that amount was for each center.
MR. CONWAY replied the amount is statewide. He said it is
felt what is not prudent public policy is to duplicate
existing industry and coop capability. He stated DEC is
currently negotiating with them to be able to access those
resources through a contract.
REPRESENTATIVE GREEN felt there are perceptions which should
be clarified. He said based on the l.6 million barrels a
day, the nickel surcharge represents $29.2 million and if
the interest and the mitigation account is added, the result
is over $27 million to a department with a $13 million
budget. He felt there is already a large surplus which
could be used for depots and corps. He recalled that in an
earlier discussion regarding HB 238, Mr. Conway was asked
about the dollars already allocated through DMVA to
establish depots and corps and the problem was not funding,
but rather there was no plan. He also recalled that it was
mentioned that the plan will not be finished until after
1995.
REPRESENTATIVE GREEN said it probably will not take many
years to develop the depots and corps and there is not a
desire to reinvent the wheel. Therefore, the Division is
putting in some emergency response equipment in the depots
but not competing with a adequate series of private cleanup
and containment organizations.
REPRESENTATIVE GREEN recalled there was a discussion about
how effective the ferry fleet might be. He said people
interested in seeing the practicality of using a ferry in
responding to an oil spill, should go on one of the oil
spill drills. He did not understand how a ferry going to
and from Washington, with cars and people on it, will be a
part of the activities of containing and cleaning up an oil
spill.
Number 316
CHAIRMAN WILLIAMS noted the people and cars can be taken off
the ferry within an hour.
MR. CONWAY said what has been designed in the new ferry is
the ability to have modules with equipment already loaded
and ready to go. The ferry would proceed to the nearest
port practical to drop off the passengers and cars. He
explained the ferry will serve as a transportation platform
and take equipment out which will be deployed by other
response vessels such as industry vessels, fishing vessels
of opportunity, etc. He noted the other purpose the ferry
will serve is as a floating hotel.
REPRESENTATIVE HUDSON stated he does not envision oil
sucking ferries. He felt Mr. Conway adequately described
what the new vessel will provide.
REPRESENTATIVE GREEN expressed concern that it may take 18
hours for a ferry to respond to a spill. He said the
existing private cleanup and containment associations can be
there in 12 hours. He felt the ferry might be more fringe
than fact. He noted by the time the ferry gets to a spill,
an incident command system will already be in place working
with private equipment, and he was not sure how the ferry
will fit in.
Number 388
MR. POE stated SB 215 does provide that money going into the
mitigation account may be appropriated by the legislature to
the prevention side. He felt that is very good. He said
many of the estimates on the dollar amounts seem to be high
to him. The $2.5 million in interest is probably accurate.
However, there is no knowledge of what the mitigation
account will hold. He explained the Exxon Valdez payments
which will occur between now and the year 2001 can happen in
any amounts, over any period of time. Therefore, there is
no assurance when that money will come into the mitigation
account or in what amounts.
MR. POE said estimates of having $27 million available on
the prevention side in a given year are either inflated or
else there will be a one year blip where all the Exxon money
comes in within a two year period.
REPRESENTATIVE FINKELSTEIN asked what is currently being
spent on prevention activities.
MR. POE responded 1994's budget is about $13.4 million.
REPRESENTATIVE FINKELSTEIN asked if the surcharge is paid on
the royalty oil.
MR. POE replied no surcharge is paid on the royalty oil.
REPRESENTATIVE FINKELSTEIN clarified there is not enough
money to take care of storage tanks and the existing
prevention program.
MR. POE stated SB 215 puts a fair amount of pressure on the
prevention side. He said it is difficult to estimate what
the fiscal impact of the other demands on the prevention
account will be. He said any margin may disappear very
quickly.
REPRESENTATIVE FINKELSTEIN clarified that for the two
programs, and the amount being spent currently, there is
enough money.
MR. POE replied yes, if it is all spent out of the
prevention side.
Number 441
REPRESENTATIVE FINKELSTEIN asked Mr. Poe if restoration has
ever been a part of prevention in the past.
MR. POE responded no.
REPRESENTATIVE FINKELSTEIN wondered if there is a big spill
and a big level of restoration activities is needed, with
funding coming from the 3 cents side, what will happen to
the remaining prevention activities.
MR. POE replied it is a very difficult dollar amount to
estimate.
REPRESENTATIVE FINKELSTEIN pointed out that millions could
be spent in restoration on a good-sized spill.
MR. POE said on a reasonable size spill, the response
account could be used.
REPRESENTATIVE FINKELSTEIN said restoration is only provided
for in SB 215 under the prevention account.
MR. POE said Mr. Rogers will offer an argument for how
restoration is included in the law on the response side and
DEC will also offer an amendment to provide an additional
clarification.
REPRESENTATIVE FINKELSTEIN clarified if there is a
reasonable size spill and restoration money is spent out of
the prevention account, SB 215 as currently written does not
provide for enough money to fund remaining prevention
activities.
MR. POE said probably not.
MR. ROGERS stated restoration could be funded out of the
response account because of the broad wording contained in
SB 215 on the bottom of page 17 and at the top of page 18.
REPRESENTATIVE FINKELSTEIN disagreed. He did not feel the
language provided for any restoration activities to be
funded out of the response account.
Number 518
REPRESENTATIVE GREEN said if restoration is an after the
fact case, the spiller provides the funds. He felt there is
adequate funding.
REPRESENTATIVE JEANNETTE JAMES said restoration is down the
road and cleanup is important. She agreed that the
definition between cleanup and restoration is a fine line.
She believed that by the time restoration efforts begin,
money in the prevention account does not necessarily have to
be available as there will be other funds coming into the
mitigation account to cover those costs. She felt
comfortable with the language contained in SB 215. She
stressed what is not available in SB 215 is funding for
continuing restoration which should be funded some other
way.
REPRESENTATIVE FINKELSTEIN said to achieve what
Representative James suggested, funding would have to be
taken out of the prevention account because it is not just
in the response account, restoration has been moved to the
prevention side.
SENATOR MILLER stated many things happening in cleanup, some
people might feel are restoration efforts but those efforts
would be funded out of the response account because of the
threat to public health or the environment, etc. He felt
the concerns expressed are answered in SB 215.
REPRESENTATIVE FINKELSTEIN noted Senator Miller's point is
that restoration could be allowed under cleanup. He felt
language should be added to SB 215 which says that.
REPRESENTATIVE JAMES stated the response fund is to be used
for response to an emergency situation before anyone else is
involved. She stressed by the time restoration takes place,
response has been completed. Therefore, the funding for
restoration should come from a different source.
REPRESENTATIVE FINKELSTEIN felt restoration should not be
funded from the prevention account.
REPRESENTATIVE GREEN said restoration sounds like mitigation
and mitigation dollars go into the prevention account. He
felt since the dollars go into the prevention account,
funding for restoration should come out of the prevention
account. He felt a lot of time was being wasted on debate
with personal attitudes.
REPRESENTATIVE CARNEY disagreed and said the committee is
getting educated on SB 215. He said he would like to
understand SB 215 before voting to move it out of committee.
REPRESENTATIVE FINKELSTEIN challenged anyone on the
committee, including himself, to describe what SB 215
actually does.
Number 647
CHAIRMAN WILLIAMS said SB 215 will be heard again at 3:30
p.m. and he would like to move the bill out of committee at
that time.
REPRESENTATIVE FINKELSTEIN asked if he could explain his
amendments so the committee can think about them. The first
amendment he will be offering is to restore the Citizens'
Oversight Council and the other will be on the restoration
issue.
CHAIRMAN WILLIAMS said DEC has several amendments they would
like to discuss.
TAPE 94-61, SIDE A
Number 000
MR. POE said the first amendment deals with Section 19, on
page 14, lines 7-16. This amendment addresses cost
recovery. He explained SB 215, as currently written,
provides that costs paid from the response account and are
recovered should go back to the response account. The
amendment provides that cost recoveries from expenditures
from the fund in the past would go into the prevention
mitigation account. He added that sometimes cost recoveries
are mixed. He stated the second portion of the amendment
says that portion which came from the prevention account
would go back into the prevention account.
REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)
am (efd fld) as follows:
Section 19, page 14, lines 7-16 replace with:
(1) the oil and hazardous substance release response
mitigation account established under AS 46.08.025(b);
the amount required to be deposited under this
paragraph shall represent the proportion of the
expenses recovered that were originally paid for from
the oil and hazardous substance release response
account established under AS 46.08.010(a)(2); or
(2) [A SPECIAL ACCOUNT CALLED] the ["] oil and
hazardous substance release prevention mitigation
account established under AS 46.08.020(b); the amount
required to be deposited under this paragraph is the
amount of money recovered that exceeds the amount
payable to the response mitigation account under (1) of
this section ["].
CHAIRMAN WILLIAMS asked if there were any objections to the
motion.
REPRESENTATIVE GREEN OBJECTED. He said there has been
restoration ongoing since the large spill and money has come
back in. While the funds may not have been appropriated to
prevention, they have been returned to the state. He stated
that money has either paid off or has gone a long way toward
the amount of money paid by the state. He felt to now
specifically say this amount of money will be allocated back
to the prevention account is overfunding.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES JAMES,
FINKELSTEIN, DAVIES, CARNEY, MULDER, WILLIAMS. Voting
against the amendment was REPRESENTATIVE GREEN. The MOTION
PASSED 6-1.
Number 041
MR. POE said the second amendment is related to Section 26,
page 21, line 9. This amendment was recommended by the
Attorney General's office. He stated since these grants are
allowed in the beginning part of the bill, they needed to be
an authorized use of the prevention account.
REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)
am(efd fld) as follows:
Section 26, page 21, line 9 add a new subsection L
(L) pay for grants under AS 29.60.510 and impact
assessments under AS 29.60.560 made by the commissioner
of community and regional affairs.
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION PASSED.
MR. POE stated the third amendment deals with Section 26,
page 17, line 31, and relates to the previous debate on
restoration. He said this amendment will make it clear that
restoration is included in possible cleanup activities.
REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB
215(FIN) am(efd fld) as follows:
Section 26, page 17, line 31, replace with:
contain, cleanup, including restoration of the
environment, and take other necessary action, such as
monitoring and
REPRESENTATIVE JAMES OBJECTED. She said earlier discussion
on this subject made her feelings on the subject clear.
REPRESENTATIVE DAVIES reiterated there is a very fine line
between what is cleanup and what is restoration. He felt
this amendment will allow the state to proceed to do those
things which are necessary without getting hung up on the
difference between the two. He agreed there will be other
funds available for restoration and when those funds become
available, they will be used for restoration and the logical
transition from cleanup to restoration will be made.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES MULDER, GREEN,
FINKELSTEIN, DAVIES, CARNEY, and WILLIAMS. Voting against
the amendment was REPRESENTATIVE JAMES.
Number 103
MR. POE said the fourth amendment relates to Section 31,
page 23, line 4. He explained there are two kinds of cost
recoveries--cost recoveries to the response account and cost
recoveries to the prevention account. This amendment allows
for both kinds of cost recoveries to occur.
MR. ROGERS said this amendment is consistent with the intent
and is truly a technical amendment.
REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)
am(efd fld) as follows:
Section 31, page 23, line 4 add a new subsection (D) between
"cost recoveries" and "[AS SPECIFIED...":
(D) AS 46.08.020(a)(3) (cost recoveries)
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION PASSED.
MR. POE stated the fifth amendment deals with page 25, lines
24-25. This amendment removes the definition of
catastrophic oil discharge. He said this definition is no
longer needed in the bill.
REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)
am(efd fld) delete lines 24-25, page 25 and renumber
remaining subsections accordingly.
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION PASSED.
Number 154
REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB
215(FIN) am(efd fld) as follows:
Page 21, following line 27:
Insert a new bill section to read:
*Sec. 29. AS 46.08.040(d) is amended to read:
(d) Upon a request from
[(1)] the Alaska Legislative Council, the
commissioner shall use money from the
prevention account in the fund to reimburse
the Alaska Legislative Council for
expenditures that it makes for the operation
of the Citizens' Oversight Council on Oil and
Other Hazardous Substances, established under
AS 24.20.600 [;] AND
(2) THE COMMISSIONER OF TRANSPORTATION AND
PUBLIC FACILITIES, THE COMMISSIONER SHALL
TRANSFER MONEY FROM THE FUND TO THE
DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES TO PAY FOR THE CONSTRUCTION OR
REFURBISHMENT OF ONE OR MORE VESSELS OF THE
ALASKA MARINE HIGHWAY SYSTEM THAT HAVE THE
CAPABILITY TO ASSIST IN RESPONDING TO SPILLS
OF OIL AND HAZARDOUS SUBSTANCES; IN EXPENDING
MONEY IN THE FUND WHOSE USE FOR VESSELS OF
THE MARINE HIGHWAY SYSTEM IS AUTHORIZED BY AS
19.65.025 AND THIS PARAGRAPH, THE
COMMISSIONER SHALL GIVE PRIORITY TO
CONSTRUCTION OF ONE OR MORE NEW VESSELS THAT
HAVE THE CHARACTERISTICS REQUIRED BY THIS
PARAGRAPH]."
Renumber the following bill sections accordingly.
Page 26, line 14:
Delete "AS 24.20.600, 24.20.610, 24.20.620, 24.20.630;"
Page 26, lines 15-16:
Delete ", 46.08.040(d)"
REPRESENTATIVE FINKELSTEIN said the Citizens' Oversight
Council came out of the Oil Spill Commission. The
Commission's conclusion was that while there are specific
oversight bodies tied to specific parts of the state, there
was not an overall body to address the issue of how to get
ahead of some of the problems. He stressed the Citizens'
Oversight Council did that. He stated there was some
political unhappiness with the council's activities because
of its coverage of areas outside of oil such as hazardous
waste issues, but there was never any unhappiness in the
work which the council did in the field of oil. He felt the
council was a productive body. He added that the
legislature did make a decision not to fund the council in
the current fiscal year. However, SB 215 completely
eliminates the council from the statute, which he did not
feel is necessary or appropriate.
Number 174
REPRESENTATIVE DAVIES said he was previously the state's
seismologist and one of the clear things he learned in that
experience was that society's response to catastrophes,
either man-made or natural, follows a predictable pattern.
When a catastrophe occurs, a lot of money is thrown at it
and then over time the problem is forgotten and money for
the problem dwindles until the next catastrophe occurs. He
stated if there was a more even approach, the state would
spend less money overall and do a better job. He pointed
out that one of the major functions of an Oversight Council
is to keep the problem before the state, ensuring that the
state's guard is not allowed to drop too far. He felt the
Citizens' Oversight Council can actually save the state
money and save the state heartache in the long run. He
expressed support for the amendment.
REPRESENTATIVE MULDER said as Chair of the Legislative
Council, he objects to the amendment. He stated the
Legislative Council feels the Citizens' Oversight Council is
redundant and the work they are doing should be done by DEC.
He pointed out the reason the Citizens' Oversight Council
was not funded was because of an abuse of the funds by the
council. He said there were over a dozen contracts given
out to so-called friends of individuals involved with,
participating on, or running the council. He stressed there
have not been any problems with the deletion of the
Citizens' Oversight Council.
REPRESENTATIVE GREEN also objected to the amendment. He
felt the amendment may be unconstitutional.
REPRESENTATIVE FINKELSTEIN WITHDREW his MOTION.
Number 217
CHAIRMAN WILLIAMS said the committee meeting will reconvene
at 3:30 p.m. He stated the committee will also discuss SB
310 at that time.
THE MEETING RECESSED AT 10:15 A.M.
TAPE 94-62, SIDE A
Number 000
THE MEETING RECONVENED AT 3:58 P.M.
CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVES
HUDSON, BUNDE, MULDER, AND JAMES are present.
CHAIRMAN WILLIAMS stated the committee will again take up
CSSB 215(FIN) am(efd fld). When the committee recessed, the
committee was discussing an amendment proposed by
Representative Finkelstein, which was withdrawn because
there was a need for the committee to get to the floor.
REPRESENTATIVE JAMES made a MOTION to MOVE CSSB 215(FIN)
am(efd fld), out of committee with INDIVIDUAL
RECOMMENDATIONS.
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION PASSED.
A brief at-ease was taken.
(CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVES
CARNEY, DAVIES, FINKELSTEIN, and GREEN had joined the
committee.)
REPRESENTATIVE HUDSON made a MOTION to RESCIND the
committee's action in adopting and moving CSSB 215(RES) out
of committee.
REPRESENTATIVES JAMES AND BUNDE OBJECTED.
REPRESENTATIVE BUNDE said the amendments will be seen again
on the floor and felt it is an academic exercise to go
through them, hear them now and again on the floor.
Number 031
REPRESENTATIVE DAVIES stated unlike the previous speaker, he
sat through the entire morning meeting and in the course of
that discussion, he came up with an amendment that the
sponsor of SB 215 had no objection to. He said he asked
Representative William's staff to contact him when the
meeting was going to begin.
REPRESENTATIVE MULDER said the Chairman did not railroad
anything through. He did not feel the burden of presence
should be placed on a staff person to get the committee
members to the meeting. He felt it is the responsibility of
each legislator to be at the meeting on time.
REPRESENTATIVE CARNEY agreed that the burden should not be
placed on staff if the meeting starts on time. He said many
committee members were available and waiting for the
chairman to start the meeting. He felt it was proper to
expect some notification as to when the meeting was going to
start. He stressed if the meeting started on time, the
committee members would have been there.
REPRESENTATIVE JAMES stated it is the legislator's
responsibility to get to a meeting. She was on time for the
meeting and waited for the meeting to begin. She WITHDREW
her OBJECTION.
CHAIRMAN WILLIAMS asked if there were any objections to
rescinding the committee's action. Hearing none, the MOTION
PASSED.
Number 082
REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB
215(FIN) am(efd fld) as follows:
Page 21, following line 27:
Insert a new bill section to read:
"*Sec. 29. AS 46.08.040(d) is amended to read:
(d) Upon a request from
[(1)] the Alaska Legislative Council, the
commissioner may [SHALL] use money from the
prevention account in the fund to reimburse the
Alaska Legislative Council for expenditures that
it makes for the operation of the Citizens'
Oversight Council on Oil and Other Hazardous
Substances, established under AS 24.20.600 [; AND
(2) THE COMMISSIONER OF TRANSPORTATION AND PUBLIC
FACILITIES, THE COMMISSIONER SHALL TRANSFER MONEY
FROM THE FUND TO THE DEPARTMENT OF TRANSPORTATION
AND PUBLIC FACILITIES TO PAY FOR THE CONSTRUCTION
OR REFURBISHMENT OF ONE OR MORE VESSELS OF THE
ALASKA MARINE HIGHWAY SYSTEM THAT HAVE THE
CAPABILITY TO ASSIST IN RESPONDING TO SPILLS OF
OIL AND HAZARDOUS SUBSTANCES; IN EXPENDING MONEY
IN THE FUND WHOSE USE FOR VESSELS OF THE MARINE
HIGHWAY SYSTEM IS AUTHORIZED BY AS 19.65.025 AND
THIS PARAGRAPH, THE COMMISSIONER SHALL GIVE
PRIORITY TO CONSTRUCTION OF ONE OR MORE NEW
VESSELS THAT HAVE THE CHARACTERISTICS REQUIRED BY
THIS PARAGRAPH]."
Renumber the following bill sections accordingly.
Page 26, line 14:
Delete "AS 24.20.600, 24.20.610, 24.20.620, 24.20.630;"
Page 26, lines 15-16:
Delete ", 46.08.040(d)"
REPRESENTATIVE FINKELSTEIN said this amendment provides to
not delete the Citizens' Oversight Council. He stated it
may be the choice of the legislature to not fund the council
again in the future, but he felt the council is a logical
product of the Oil Spill Commission's deliberations on the
impact of the oil spill and remains an important action. He
pointed out the change in this amendment from the previous
amendment (offered and withdrawn at the morning hearing) is
changing the word "shall" to "may".
REPRESENTATIVE MULDER OBJECTED to the motion.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES CARNEY, DAVIES,
AND FINKELSTEIN. Voting against the amendment were
REPRESENTATIVES GREEN, HUDSON, BUNDE, JAMES, MULDER, AND
WILLIAMS. The MOTION was DEFEATED 6-3.
Number 105
REPRESENTATIVE CARNEY made a MOTION to AMEND CSSB 215(FIN)
am(efd fld) as follows:
Page 26, line 21, through page 27, line 1:
Delete all material and insert:
"*Sec. 44. CONDITIONAL SUSPENSION OF SURCHARGE IMPOSED BY
AS 43.55.201 - 43.55.231. In addition to the circumstances
set out in AS 43.55.231, the surcharge authorized by AS
43.55.201 is not levied on and after the effective date of
this section and until June 30, 1995, if
(1) the Eighteenth Alaska State Legislature does not,
during the Second Regular Session or during any special
session held before the effective date of this section,
(A) appropriate to the oil and hazardous substance
release prevention and response fund established by AS
46.08.010(a), as amended by sec. 21 of this Act, the
balance, as of July 1, 1994, of the account established
under former AS 43.55.210 to receive the proceeds of
the conservation surcharge; the appropriation required
by this subparagraph must be allocated as follows:
(i) 40 percent of that balance to the
response account established by AS 46.08.010(a)(2), as
amended by sec. 21 of this Act; and
(ii) 60 percent of that balance to the
prevention account established by AS 46.08.010(a)(1),
as amended by sec. 21 of this Act; and
(B) appropriate at least an amount equal to the
estimated amount, as of the day before the effective
date of this section, of the unexpended and unobligated
balance of the former oil and hazardous substance
release response fund, exclusive of the amount
appropriated under (A) of this paragraph, to the oil
and hazardous substance release prevention and response
fund; the appropriation required by this subparagraph
must be allocated as follows:
(i) 40 percent of that balance to the
response account established by AS 46.08.010(a)(2), as
amended by sec. 21 of this Act; and
(ii) 60 percent of that balance to the
prevention account established by AS 46.08.010(a)(1),
as amended by sec. 21 of this Act, to be appropriated
for purposes described in AS 46.08.040(a)(2)(C)(i) and
(ii), added by sec. 26 of this Act, and for purposes
described in AS 46.08.100 - 46.08.190; or
(2) the governor vetoes or reduces any of the amounts
appropriated or allocated under (1) of this section."
Page 27, lines 2-4:
Delete APPLICABLE TO CONSERVATION SURCHARGE ON OIL
IMPOSED BY AS 43.55.200 AFTER JUNE 30, 1994, AND BEFORE THE
EFFECTIVE DATE OF THIS SECTION."
Insert ". (a)"
Page 27, line 18:
Delete "section"
Insert "subsection"
Page 27, following line 20:
Insert a new subsection to read:
"(b) On the effective date of this section, if so
appropriated by the legislature, the commissioner of
administration shall transfer to the oil and hazardous
substance release prevention and response fund established
by AS 46.08.010(a), as amended by sec. 21 of this Act, an
amount equal to the estimated amount, as of the day before
the effective date of this section, of the unexpended and
unobligated balance of the former oil and hazardous
substance release response fund; the appropriation required
by this subparagraph must be allocated as follows:
(1) 40 percent of that balance to the response account
established by AS 46.08.010(a)(2), as amended by sec. 21 of
this Act; and
(2) 60 percent of that balance to the prevention
account established by AS 46.08.010(a)(1), as amended by
sec. 21 of this Act."
CHAIRMAN WILLIAMS asked if there were any objections to the
motion.
REPRESENTATIVE JAMES OBJECTED.
Number 115
REPRESENTATIVE FINKELSTEIN noted he intends to move the
Letter of Intent because it makes it clear that the
amendment is attempting to ensure funding for the depots and
corps. He said unless the reserve is split, there is not
going to be funding available to get the depots and corps
going. He stated the Letter of Intent will indicate an
interest in accomplishing that goal.
REPRESENTATIVE DAVIES stated the amendment is important
because in earlier discussions, DEC said if the depots and
corps money has to be taken out of the declining prevention
account, it will be 15-20 years before the depots and corps
are in place. He felt that is too long to wait. He
stressed if the amendment is passed and funds are designated
for depots and corps, they might be in place in a couple of
years instead of a couple of decades.
REPRESENTATIVE JAMES expressed support for getting the
depots and corps on line also but she is concerned about
spending a lot of money out of the prevention account for
things which should not be paid for from the tax on the
crude oil industry. She is more interested in finding
another source of funds.
Number 145
REPRESENTATIVE HUDSON said he did not recall DEC saying the
depots and corps will take 15-20 years. He recalled there
was a discussion about what the balance will be and what
effect that balance will have on the accomplishment of
putting some of the near shore depots and corps in place.
MR. CONWAY replied there is going to be too many items on
the plate to fund from the 3 cents revenue. He said in the
letter to Representative James, there was a strategic plan
included on what the depots and corps will cost. He stated
with all the demands on the prevention account, along with a
desire to pay for depots and corps out of that account, it
could take 15-20 years to get them in place, depending upon
the will of the legislature in looking at all of the demands
and all things which need to be funded.
MR. POE explained approximately $15.7 million will be
available the first year, and that decreases in the years
thereafter. He stressed one of the good things SB 215 does
is make several funding sources available for the prevention
mitigation account. He pointed out the legislature may
appropriate the money from the mitigation account to the
prevention account. He felt the $2.5 million is a
reasonable estimate on interest earned one year from now.
Additionally, there is $28 million in Exxon money which will
come in sometime between now and the year 2000. He noted
the payment amounts and time are not specified.
MR. POE stated the word "may" is an important aspect because
the legislative history thus far has shown the mitigation
moneys not being appropriated to the response fund. The
moneys have been appropriated to storage tank assistance,
etc. He said it is important to recognize there is an
amount of money, with unlimited wants going after that
money. He said there is nothing preventing the legislature
from treating the mitigation moneys as general funds. He
felt when legislators are gaging on what they positively
will have for depots and corps and a prevention program, it
will probably be the $15.7 million plus whatever the will of
that particular legislature is to get the money out of the
mitigation account to the prevention account.
Number 207
REPRESENTATIVE FINKELSTEIN clarified without the amendment,
the 2 cents surcharge shuts off within the year and with the
amendment, the 2 cents surcharge shuts off within 2 1/2
years.
MR. POE replied that is correct.
REPRESENTATIVE FINKELSTEIN said at that point, until there
is a major spill, there is no reason to assume there will be
a significant amount of assessment on the 2 cents.
MR. POE stated DEC has been using about $250,000 annually in
the substantial threat (indiscernible) and that amount would
come from the response account.
REPRESENTATIVE FINKELSTEIN pointed out that the assessment
has been in place for a number of years and if it is
continued for another year or two, there will be enough
money to complete the program.
REPRESENTATIVE CARNEY asked who drafted the amendment.
CHAIRMAN WILLIAMS replied he drafted the amendment.
REPRESENTATIVE CARNEY asked Chairman Williams if the
amendment is something the committee should not do now.
CHAIRMAN WILLIAMS replied he chose not to bring the
amendment before the committee.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES DAVIES,
FINKELSTEIN, and CARNEY. Voting against the amendment were
REPRESENTATIVES GREEN, MULDER, BUNDE, HUDSON, JAMES, and
WILLIAMS.
Number 242
REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSSB
215(FIN) am(efd fld) as follows:
Page 9, lines 30-31:
Delete "the oil and hazardous substance release"
Insert "a [THE OIL AND HAZARDOUS SUBSTANCE RELEASE]"
Page 10, line 3:
After "prevention"
Insert "mitigation"
After "in"
Insert "AS 46.08.020(b)"
Page 10, line 5:
Delete "OR] AS 46.08.020"
Insert "OR AS 46.08.020]"
Page 20, lines 25-27:
Delete all material.
Page 20, line 28:
Delete "(I)"
Insert "(H)"
Page 21, line 1:
Delete "(J)"
Insert "(I)"
Page 21, line 8:
Delete "(K)"
Insert "(J)"
REPRESENTATIVE FINKELSTEIN said the amendment removes the
reference to underground storage tanks.
REPRESENTATIVE JAMES OBJECTED.
REPRESENTATIVE FINKELSTEIN stated leaking underground
storage tanks are a cleanup operation but the funding is
coming from the prevention side. He said he would not
object to funding the cleanup of these tanks from the
prevention side if there was enough money. He felt the
proper funding source for the cleanup of leaking underground
storage tanks is a gasoline tax. He stressed the last place
the funding should come from is the assessment on the oil
companies because they are not the cost causer and should
not be the cost payer.
Number 280
REPRESENTATIVE JAMES said she would like more explanation of
the amendment. She agrees with the statement that leaking
underground storage tanks should be funded from another
source and thought sufficient funds should be funneled to
the prevention account to accomplish that.
REPRESENTATIVE FINKELSTEIN explained the key point of the
amendment page 20, lines 25-27 is removing the cleanup of
leaking underground storage tanks as a use of the prevention
fund. He said currently funding is taken from the
mitigation account, which is basically general funds. His
preference is a gasoline tax in the future rather than the
current approach or this proposed approach of taking the
funding out of the 470 fund, which is the contribution from
the oil companies.
REPRESENTATIVE MULDER stated the reason the prevention
account is identified as the source of funding for the
cleanup of leaking underground storage tanks is because an
earlier part of the bill says mitigation funds can be put
into the prevention account. He pointed out that mitigation
funds have been the primary source of funding for this
cleanup program in the past.
REPRESENTATIVE JAMES is happy with Representative Mulder's
explanation and will not support the amendment.
REPRESENTATIVE FINKELSTEIN recalled Representative Mulder's
point about the ability of putting the mitigation account
into the prevention account and pointed out that has always
been allowed but has never been done. He said no changes
have been made on the ability of the legislature to put the
mitigation money into the prevention account. He explained
what has occurred is that there have been additions made to
the list of allowed prevention account uses. He stressed
the list is a long way from what many believe should be done
on the prevention side.
Number 345
REPRESENTATIVE DAVIES asked DEC if the amendment is adopted,
will it be more likely that the depots and corps will be put
in place sooner.
MR. POE replied the amendment will mean less potential
pressure on the $15.7 million.
REPRESENTATIVE DAVIES recalled earlier that Mr. Conway had
stated one of his concerns is that if the cleanup of the
leaking underground storage tanks has to be taken from the
prevention side, it will take longer to get the depots and
corps in place.
MR. POE responded that is not an unreasonable inference to
draw. He pointed out that if there is $15.7 million
available and the program has cost about $13.5 million, that
leaves approximately $2.2 million to do many of the things
which have been added to the prevention account use list.
REPRESENTATIVE DAVIES stated the minimum amount needed to
accomplish the depots and corps was approximately $12
million.
REPRESENTATIVE HUDSON stressed there is also $28 million
coming in from the Exxon Corporation between now and the
year 2000, which will flow into this account as well and
will be available for whatever the legislature in the future
decides to do with it. That is one of the reasons he is not
convinced the fund should be split because he felt it is
important to get to the $50 million. He asked if SB 215
provides for a leaking underground storage tanks cleanup
appropriation.
MR. POE replied it does.
REPRESENTATIVE HUDSON clarified the amendment will remove
the cleanup of the leaking underground storage tanks
language.
MR. POE said the amendment will remove the language relating
to allowed uses for the prevention account. The amendment
does not mean the legislature could not still use the
mitigation account to pay for the cleanup program.
Number 410
REPRESENTATIVE HUDSON clarified if the amendment is adopted,
the pressure is reduced on the funds in the prevention
account, providing more money for depots and corps.
MR. POE said that is correct.
MR. ROGERS stated he is not in a position to speak on the
amendment for his client because there has been no
discussion about it. He said the Senate Finance Committee
would probably oppose the amendment.
REPRESENTATIVE BUNDE clarified if the amendment passes, the
legislature can still use the money for the cleanup of
leaking underground storage tanks so the amendment is not
that significant.
REPRESENTATIVE DAVIES stated the amount which really needs
to be appropriated to the leaking underground storage tanks
cleanup program is $4-5 million annually, so if the
amendment is passed, there will be $2 million potentially
available for depots and corps. He pointed out if the
amendment is not passed, potentially $4-5 million will be
taken out of the account.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES FINKELSTEIN,
DAVIES, AND CARNEY. Voting against the amendment were
REPRESENTATIVES BUNDE, JAMES, MULDER, GREEN, HUDSON, and
WILLIAMS. The MOTION was DEFEATED 6-3.
Number 462
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 215(FIN)
am(efd fld) as follows:
Page 16, line 11, after "substance;":
Insert "and"
Page 16, lines 14-19:
Delete ";and
(6) the interest earned on the balances of each of
the following:
(A) the prevention account;
(B) the prevention mitigation account;
(C) the response account; and
(D) the response mitigation account"
Page 16, line 20:
Delete "(a)(2) - (6)"
Insert "(a)(2) - (5)"
Page 16, line 25:
Delete "(a)(2) - (6)"
Insert "(a)(2) - (5)"
Page 16, following line 26:
Insert a new bill section to read:
"*Sec. 25. AS 46.08.020 is amended by adding a new
subsection to read:
(c) The interest earned on the balances of
each of the following accounts shall be deposited into the
general fund and credited to the prevention account in the
fund:
(1) the prevention account;
(2) the prevention mitigation account;
(3) the response account; and
(4) the response mitigation account."
Renumber the following bill sections accordingly.
Page 26, line 19:
Delete "sec. 42"
Insert "sec. 43"
Page 27, line 21:
Delete "Section 27"
Insert "Section 28"
REPRESENTATIVE JAMES OBJECTED.
REPRESENTATIVE DAVIES stated this amendment will accomplish
the direct deposit of the interest from the various accounts
through the general fund, into the prevention account and
would obviate the necessity for legislative action to put
the funds in the account. The money will still have to be
appropriated out of the prevention account.
REPRESENTATIVE MULDER stated the concept is good but he
wondered if there is a constitutional problem with the
amendment.
REPRESENTATIVE FINKELSTEIN said funds can be designated to
go to a particular place. The constitutional problem is
when the legislature is required to appropriate the money
out of a particular place for a particular purpose. He
pointed out the amendment still requires the legislature to
appropriate the money out.
MR. POE stated the amendment does accomplish what has been
debated throughout the discussion, which is using the
interest from the funds on the prevention side. He said DEC
supports the amendment.
REPRESENTATIVE JAMES asked if a large amount of money
accumulates in the account, can the legislature appropriate
the money for use other than what is listed.
MR. POE replied yes.
REPRESENTATIVE HUDSON stated he has always wanted the
interest to flow to the prevention account. He said if the
amendment makes that more specifically stated, he will
support the amendment.
REPRESENTATIVE GREEN expressed concern about the direct
manner. He felt there may be a constitutional problem.
REPRESENTATIVE JAMES stated even though the interest is
deposited directly, the legislature still has to appropriate
the money.
REPRESENTATIVE BUNDE asked if it is determined that the
amendment is unconstitutional, is the amendment severable or
is the entire bill thrown out.
REPRESENTATIVE HUDSON replied the amendment is severable.
REPRESENTATIVE FINKELSTEIN pointed out that Jack Chenoweth
would not have drafted an amendment that was
unconstitutional.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES HUDSON, CARNEY,
MULDER, DAVIES, JAMES, FINKELSTEIN, and WILLIAMS. Voting
against the amendment were REPRESENTATIVES GREEN and BUNDE.
The MOTION PASSED 7-2.
Number 615
REPRESENTATIVE JAMES made a MOTION to MOVE CSSB 215(FIN)
am(efd fld), as amended, out of committee with INDIVIDUAL
RECOMMENDATIONS.
CHAIRMAN WILLIAMS asked if there were any objections.
REPRESENTATIVE FINKELSTEIN OBJECTED.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the motion were REPRESENTATIVES JAMES, BUNDE,
MULDER, GREEN, HUDSON, and WILLIAMS. Voting against the
motion were REPRESENTATIVES DAVIES, CARNEY, and FINKELSTEIN.
The MOTION PASSED 6-3.
TAPE 94-62, SIDE B
Number 000
SB 310 - STATE/PRIVATE/MUNI TIMBER OPERATION/SALE
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 1, line 4:
Delete "AS 38.05.112(c)"
Insert "AS 38.05.112"
Page 1, following line 4:
Insert new material to read:
"Sec. 38.05.112. FOREST LAND USE PLANS. (a) The
department may not [SELL OR] harvest timber, except for
isolated sales of less than 50,000 board feet [PERSONAL
USE TIMBER HARVEST], until a site-specific forest land
use plan has been adopted. A forest land use plan is
required whether or not a regional or area land use
plan under AS 38.04.065(a) or a forest management plan
under AS 41.17.230 has been adopted.
(b) The commissioner shall base a forest land use
plan on the best available data, including information
provided by other agencies [DESCRIBING THE IMMEDIATE
AND LONG-TERM EFFECTS OF INDIVIDUAL AND COLLECTIVE
FOREST ACTIVITIES ON THE TIMBER BASE AND ON OTHER
RESOURCES AND USES]."
Page 2, following line 14:
Insert a new subsection to read:
"(d) A management plan prepared by the
commissioner under AS 41.17.230 or AS 38.04.065 must
consider and permit the uses described in (c) of this
section. If the commissioner finds that a permitted use is
incompatible with one or more other uses in a portion of a
state forest, the commissioner shall, consistent with AS
41.17.200, affirmatively state in the management plan that
finding of incompatibility for the specific area where the
incompatibility is anticipated to exist and the time period
when the incompatibility is anticipated to exist together
with the reasons for each finding. If the commissioner
finds that the use described in (c)(1) of this section is
incompatible, or otherwise restricts that use, the
commissioner must also document the finding with sound
scientific data that clearly proves the incompatibility and
the benefits of the restriction."
REPRESENTATIVE JAMES stated the amendment was requested by
the Interior Alaska Forest Association in Fairbanks and
contains the needed changes to provide options for the
"little guy" to be able to continue in the timber industry.
The first part of the amendment allows for sales of less
than 50,000 board feet. She said that size of timber sales
is not being done currently because the Division of Forestry
feels those size sales are more trouble than what they are
worth. The amendment will allow salvage sales and sale of
timber which has been stacked, without going through the
planning process.
REPRESENTATIVE JAMES explained the other portion of the
amendment provides that if the commissioner finds the
permitted use is incompatible with one or more uses in a
portion of a state forest, that there will be scientific
evidence proving the incompatibility and the benefits of the
restriction.
Number 062
REPRESENTATIVE GREEN asked if a person has a hunting lodge
with a vast panoramas, which is part of the reason the lodge
is in a certain location, and a clearcut is allowed by a
forest management agreement (FMA) affecting the lodge's
view, will the proposed amendment have any impact.
REPRESENTATIVE JAMES replied if trees have a direct relation
to the person's livelihood, cutting the trees down is
scientifically deteriorating to the business. She felt that
person would be protected. She stated the intent of the
language is to ensure that decisions are not made
subjectively or politically.
REPRESENTATIVE GREEN expressed concern about what is
determined to be scientific and what is determined to be
aesthetic.
REPRESENTATIVE JAMES reiterated the amendment says if a
permitted use is incompatible with one or more of the uses
in the state forest. She gave several examples.
Number 117
REPRESENTATIVE DAVIES made a MOTION to AMEND the AMENDMENT
to CSSB 310(RES) on page 2, line 5, after the word
"scientific" insert the words "or economic".
REPRESENTATIVE MULDER OBJECTED for the purpose of
discussion.
REPRESENTATIVE DAVIES, referring to Representative Green's
example of a hunting lodge, stated if the trees are cut down
it is a scientific fact the trees are gone, but it would not
be a scientific issue as to whether it impacted the value of
the lodge. Rather, it would be an economic issue.
REPRESENTATIVE JAMES stated she does not object to the
amendment to the amendment.
REPRESENTATIVE MULDER WITHDREW his OBJECTION.
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION PASSED.
REPRESENTATIVE FINKELSTEIN clarified the amendment says if
the commissioner finds commercial logging to be incompatible
with any other use in the forest, or if any other use even
restricts commercial logging, the finding must be made with
scientific data clearly proving the incompatibility. He
felt that is a burden of proof which is nearly
insurmountable. He stressed the state forests were set up
not only for the timber value but also because of public
use. He said currently, the commissioner is able to sell
timber sales and only has to deal with local objections.
REPRESENTATIVE JAMES stated Representative Finkelstein is
assuming that FMAs are going to involve huge pieces of land,
which is not necessarily true. She said a forest management
plan could be a small parcel of timber land. The benefits
and advantages of a forest management plan is it is a
management plan as opposed to a timber sale, whereby
reforestation and all of the other identified conditions
needed to be maintained in that forest are the
responsibility of the person who has the forest management
plan. She felt there is a need to ensure that subjective
information does not stop every sale. She pointed out it
would be possible in a FMA to have a fishing or hunting
lodge within the agreement, thereby protecting that lodge.
Number 307
REPRESENTATIVE FINKELSTEIN stated the previous discussion
assumes the amendment is a provision which affects FMAs and
he felt it is not. He said the amendment is inserting a
provision in the complete overall process and he felt the
amendment is not restricted to FMAs.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES GREEN, MULDER,
BUNDE, JAMES, CARNEY, HUDSON, and WILLIAMS. Voting against
the amendment were REPRESENTATIVES DAVIES and FINKELSTEIN.
The MOTION PASSED 7-2.
CHAIRMAN WILLIAMS noted for the record that proposed
amendments X21 and X23 have been withdrawn.
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 2, line 31, following "land.":
Insert "The commissioner shall identify the forest land
included in the solicitation of proposals. The land
identified may include land covered by a cooperative
resource management or development agreement under AS
38.05.027, subject to the approval of the owner of any land
than state land."
Page 6, line 10, following "commissioner.":
Insert "If the forest management agreement covers non-
state land under an agreement authorized under AS 38.05.027,
the owner of the land must approve the agreement."
REPRESENTATIVE GREEN OBJECTED for discussion purposes.
REPRESENTATIVE JAMES stated this amendment allows a FMA to
include land owned by several other owners. The amendment
also provides that everyone will know what land is being
discussed through the commissioner identifying the forest
land in the solicitation of proposals. She said the sponsor
of SB 310 feels the amendment is fine.
REPRESENTATIVE HUDSON said the key language in the amendment
is "the owner of the land must approve the agreement."
REPRESENTATIVE GREEN WITHDREW his OBJECTION.
CHAIRMAN WILLIAMS stated no objections being heard, the
MOTION PASSED.
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 8, following line 23:
Insert a new bill section to read:
"*Sec. 7. AS 41.17.230(a) is amended to read:
(a) The commissioner shall prepare a management
plan consistent with AS 38.04.005 and this chapter for each
state forest and for each unit of a state forest to assist
in meeting the requirements of this chapter. An operational
level forest inventory shall be completed before a
management plan for the state forest or the unit of a state
forest is adopted. The management plan shall be adopted,
implemented, and maintained within three years of the
establishment of a state forest by the legislature. The
management plan shall set a total amount of the harvestable
timber of the forest or unit, not to exceed 75 percent, that
may be the subject of forest management agreements under AS
38.05.122."
REPRESENTATIVE MULDER OBJECTED.
REPRESENTATIVE DAVIES stated the important part of the
amendment is the underlined portion at the bottom. He said
the amendment addresses one of the basic concerns people
have in regard to large FMAs, which is there is incomplete
information about the inventory. If there is an
overestimation on what is available and the state commits to
an offering based on that overestimate and is locked in for
20 years, there is no way to make an adjustment. He noted
the other concern is by allowing a large fraction of the
potential harvestable timber to go into an FMA, smaller
operators are being eliminated. He stressed there are
enough small operators in the Tanana Valley currently to
take care of all the spruce there and there is no need for
another plant in the Tanana Forest.
REPRESENTATIVE DAVIES stated he does not want to prescribe
for the entire state what the percentage of the allowable
cut for FMAs should be. Rather, he wants the allowable cut
to be set on a region by region basis in the management
plan, which is consistent with the way SB 310 sets up the
relationship between the FMA and the management plan--every
FMA has to be consistent with the existing management plan.
Number 330
REPRESENTATIVE JAMES felt the protections are already in the
bill but she asked the sponsor to speak on the amendment.
RICK SOLIE, AIDE, SENATOR STEVE FRANK, stated there is no
need to further restrict a FMA by requiring a certain
percentage of harvest because there is already a sustained
yield requirement in law and the Division of Forestry has to
maintain the requirement. He said there is no need to
rewrite all of the Alaska statutes in SB 310 as there is the
Forest Practices Act (FPA). The Division of Forestry is not
going to allow a FMA until there is a sufficient inventory
to determine that the sustained yield can be maintained. He
felt the amendment is inappropriate and will hurt the spirit
of giving the Department of Natural Resources (DNR)
flexibility to do good FMAs, allowing for responsible
sustained yield harvest.
REPRESENTATIVE JAMES added that one of the requirements for
a FMA is that existing operations be considered. She is not
comfortable with including certain amounts in the bill.
REPRESENTATIVE DAVIES stated it could be consistent with the
sustained yield philosophy to allocate the entire forest
under a FMA, because a FMA has to operate under sustained
yield. The sustained yield requirement in the FPA does not
restrict the percentage of the forest to be allocated to a
FMA. He felt it is a philosophical question as to whether
one wants to allow the entire forest to be harvested by one
large operator or to preserve some portion of the forest for
small operators. He agreed that SB 310 does protect
existing small operators but does not protect future small
operators.
REPRESENTATIVE DAVIES pointed out that testimony suggests
spruce are not even being discussed, but rather the
development of a new forest operation in the Tanana Valley
relating to low quality hardwoods. He stressed the issue is
the allocation between large FMAs and small operators. He
felt the management plan should address that issue.
Number 404
REPRESENTATIVE JAMES thought there could be a FMA which
includes some small operators. She said since existing
small operators are already protected in the bill, she would
like to leave that up to the decision of the FMA proposal
and the public can respond during the public comment period.
She did not feel there is a need for a further restriction.
REPRESENTATIVE DAVIES stated SB 310 only protects existing
small operators and does not preserve a niche for small
operators to bid on the forest in the future.
MR. SOLIE pointed out that the protection for existing
operators is located on page 4, line 22, subsection (1). He
said the bill does address consistency with management plans
both on page 2, line 26 and page 4, line 26, subsection (2).
He felt the amendment restricts more than necessary.
REPRESENTATIVE FINKELSTEIN reiterated the lines referred to
do not speak to any future base for the small operators and
their ability to run their small mills.
REPRESENTATIVE DAVIES agreed SB 310 does provide for
protection of existing operators and does require that a FMA
operate under existing land use plans but his concerns are
still not addressed. First, there is a possibility of an
error in the inventory. Second, the bill does not protect
the niche for small operators. Finally, the land use plans
are not required to consider the percentage of forest to be
allocated to FMAs.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES DAVIES, CARNEY,
and FINKELSTEIN. Voting against the amendment were
REPRESENTATIVES MULDER, JAMES, GREEN, BUNDE, HUDSON, and
WILLIAMS. The MOTION was DEFEATED 6-3.
Number 525
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 2, line 29, following "yield.":
Insert "The commissioner may only enter into one forest
management agreement that covers land within each state
forest in a three-year period. The commissioner may only
enter into one forest management agreement in a three-year
period in each region of the state for which a regional land
use plan has been adopted or is to be adopted for land
outside of state forests. In this subsection, "state
forest" has the meaning given in AS 41.17.950."
REPRESENTATIVE MULDER OBJECTED for purposes of discussion.
REPRESENTATIVE DAVIES stated this amendment addresses the
concern regarding the forest being tied up in a series of
large agreements and being renewed for a long period of
time, with no possibility of responding to changing
circumstances in the forest. He said this amendment limits
the number of FMAs entered into in any three year period.
He pointed out that because the prior amendment was not
passed, there is still a possibility of having the entire
forest tied up in FMAs but with this amendment, every three
years, there would be an opportunity to revisit at least one
agreement.
REPRESENTATIVE JAMES stated this amendment also assumes the
FMAs are going to be large. She pointed out that the bill
provides for an annual solicitation. She did not feel
comfortable binding the department. She felt it should not
be assumed that because a solicitation is put out, there
will be response. She added there may also be unsolicited
FMAs. She commented just because the state is ready to sell
timber, does not mean there will be a buyer and to put
restrictions on the commissioner, may close the door to some
opportunities. Based on that, she objected to the
amendment.
REPRESENTATIVE MULDER felt there will be two adverse affects
in adopting the proposed amendment. He stated a bind will
be put on the small companies as the amendment will not just
involve big companies being bound to one contract, but also
the small companies. He said there may be a niche requiring
several small companies for different needs. He also felt
the amendment puts further restraint on the economic
feasibility. He stressed the purpose of SB 310 is to
promote economic diversity and opportunity and the amendment
hinders that opportunity.
MR. SOLIE stated the amendment will limit the time of the
certainty of a FMA to three years. He stressed it is
fundamental to have some certainty in order for a company to
be able to get financing to construct the value-added
facilities, which will create long-term stable jobs. The
sponsor opposes the amendment.
REPRESENTATIVE DAVIES said he is not proposing limiting the
length of a FMA. The amendment only says a FMA can be
entered into every three years. The purpose is to stagger
the FMAs in time and serves as a management tool for the
department. He stated no one is going to go through the
process to establish a FMA for a small sale. The purpose of
a FMA is to capitalize a new plant and a new plant is not
going to be built based on a small sale. Rather, the sale
will involve a large portion of the forest, guaranteeing a
large resource in the future in order to get financing for a
value-added plant. He said there is a need to preserve some
operations for small operators and preserve the ability for
DNR to manage the forest in the best way possible. He
stressed whether or not SB 310 is passed, there will
continue to be small lease sales and small plants. He
reiterated that FMAs are not directed at small operations.
REPRESENTATIVE GREEN asked if the amendment precludes the
Native associations.
TAPE 94-63, SIDE A
Number 000
REPRESENTATIVE DAVIES replied the amendment does not apply
to private land, but to state land only.
REPRESENTATIVE GREEN noted the amendment says "land outside
of state forests."
REPRESENTATIVE DAVIES said the regional land use plan may
cover portions of state land that are not classified as
state forests. Timber sales can be offered on land which is
not classified as state forests.
REPRESENTATIVE HUDSON stated the earlier amendment by
Representative James which was adopted does include private
land within the forest (indiscernible). He said whatever is
done with the proposed amendment will couple with the
private operator.
REPRESENTATIVE DAVIES noted the previous amendment addressed
FMAs and cooperative land sales. The portions under the
state forests would satisfy the requirement that it was a
sale on state land within a regional land use area. He
pointed out that what is being discussed is a regional land
use plan not under the FMA.
Number 030
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES FINKELSTEIN,
DAVIES, and CARNEY. Voting against the amendment were
REPRESENTATIVES JAMES, BUNDE, MULDER, HUDSON, and WILLIAMS.
The MOTION was DEFEATED 5-3.
Number 039
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 4, following line 11:
Insert a new paragraph to read:
"(7) extent to which the proposed agreement
provides for processing in the state of the timber
harvested, to the extent permitted by law;"
Renumber the following paragraphs accordingly.
Page 5, following line 19:
Insert a new subparagraph to read:
"(F) provisions requiring the processing of the
timber in the state if that is the highest and best use of
the timber as determined by the commissioner and if
permitted by law;"
Reletter the following subparagraphs accordingly.
Page 8, following line 23:
Insert a new bill section to read:
"*Sec. 7. SEVERABILITY. Under AS 01.10.030, if
AS 38.05.122(d)(7) or (g)(2)(F), or the application of those
provisions to any person or circumstance, is held invalid,
the remainder of this Act and its application to other
persons or circumstances shall not be affected."
REPRESENTATIVE MULDER OBJECTED for discussion purposes.
REPRESENTATIVE JAMES said the amendment adds a paragraph
which will provide instructions to the FMA that in-state
processing is desired if possible. She stated the next part
of the amendment provides for the highest and best use of
the timber. She noted the third part of the amendment
ensures, that in case either of the first parts of the
amendment are unconstitutional, the rest of the bill will
stand.
REPRESENTATIVE CARNEY agreed with the intent of the
amendment but would like to see an effective date.
REPRESENTATIVE MULDER agreed. He said there have been
numerous discussions about promoting the work force in the
state and value-added products in Alaska and while there are
restrictions on what can be done, this amendment makes a
strong statement about the desire for this type of economic
development to occur in Alaska.
REPRESENTATIVE JAMES stated the effective date will be a
given because the bill will probably be challenged.
REPRESENTATIVE DAVIES said the way to make this amendment
happen is to petition the state's Congressional delegation
to exempt the state of Alaska from the interstate commerce
restriction.
Number 084
REPRESENTATIVE JAMES felt that is a separate issue. She
felt if SB 310 has not done anything else, it has made
Alaskans rally behind that thought and idea. In the
meantime, she is not willing to hold up the process until
that happens. She said passing this amendment will give the
DNR commissioner the ability to choose a proposal which
includes in-state processing.
CHAIRMAN WILLIAMS agreed.
REPRESENTATIVE CARNEY made a MOTION to AMEND the AMENDMENT
to CSSB 310(RES) on page 6, line 7, insert a new paragraph
which says, "The commissioner may not enter into a final
agreement until the state receives from the federal
government an exemption from federal law so that the state
may require that timber harvested under the agreement be
processed within the state."
REPRESENTATIVES MULDER AND JAMES OBJECTED.
REPRESENTATIVE DAVIES said he attempted to get an opinion
from the Attorney General about this issue without success,
but it is his understanding that the state cannot put a
requirement in the bill for in-state processing unless the
exemption is received from the federal government. He noted
the state of Oregon has received an exemption.
Number 123
CHRIS GATES, DIRECTOR, DIVISION OF ECONOMIC DEVELOPMENT,
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (DCED),
stated there is not much faith that the federal law can be
changed. However, he encouraged committee members to allow
this tool (the amendment) to exist while there is an attempt
to change the federal law. He said the ability to choose,
out of several competing proposals, the one which has in-
state processing and a provision to hire Alaskans, allows
the department to do things contractually which they could
never do if it were mandated by law. He pointed out that
Alaska hire and in-state processing cannot be mandated but
it can be done contractually.
REPRESENTATIVE JAMES stated FMAs may not include white
spruce going to Japan but in fact might involve hardwoods.
She said to hold up the entire FMA process until a federal
exemption can be received will be taking a step backward.
REPRESENTATIVE DAVIES reminded everyone SB 310 applies
statewide, not just in the Tanana Valley. He stated if a
process is set up and bids are evaluated with a selection
made based on the in-state processing requirement, that
process would be unconstitutional and could be challenged.
He said a change in federal law is not required, as the
federal law allows for these exemptions currently, the state
just needs to ask for the exemption and get it.
REPRESENTATIVE CARNEY asked if there is any way to stipulate
that the contract contain the requirement for in-state
processing.
MR. GATES replied the state cannot mandate primary
manufacture but it can be accomplished contractually.
REPRESENTATIVE DAVIES agreed as long as the price remains
the same, but as soon as someone offers one cent less for
the materials and the contract is not granted because of in-
state processing, the state will lose in court.
REPRESENTATIVE JAMES speaking against the amendment to the
amendment, said subsection (F) in the amendment says ..."the
processing of the timber if that is the highest and best use
of the timber" and she felt decisions can be made on what
benefits the state the best. She stated the price itself
may not necessarily be the determining factor.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the motion were REPRESENTATIVES FINKELSTEIN,
DAVIES, and CARNEY. Voting against the motion were
REPRESENTATIVES MULDER, HUDSON, JAMES, and WILLIAMS. The
MOTION was DEFEATED 4-3.
Number 209
REPRESENTATIVE DAVIES made a MOTION to AMEND the AMENDMENT
to CSSB 310(RES) deleting the severability clause. He
stated the clause is redundant with existing statutes.
REPRESENTATIVES HUDSON and WILLIAMS OBJECTED.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the motion were REPRESENTATIVES DAVIES, CARNEY, and
FINKELSTEIN. Voting against the motion were REPRESENTATIVES
MULDER, JAMES, GREEN, HUDSON and WILLIAMS. The MOTION was
DEFEATED 5-3.
CHAIRMAN WILLIAMS asked for a roll call vote on the motion
to amend. Voting in favor of the motion were
REPRESENTATIVES DAVIES, HUDSON, JAMES, MULDER, FINKELSTEIN,
GREEN, CARNEY, and WILLIAMS. The MOTION PASSED 8-0.
Number 235
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 2, line 30:
Delete "shall"
Insert "may"
CHAIRMAN WILLIAMS asked if there were any objections to the
motion. Hearing none, the MOTION PASSED.
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 8, line 6, following "industry;":
Delete "and"
Insert "[AND]"
Page 8, line 7, following "habitat":
Insert new material to read:
"; and
(8) to the fullest extent practicable,
harvested forest land shall be reforested, naturally or
artificially, so as to result in a sustained yield of
merchantable timber from that land; if artificial planting
is required, silviculturally acceptable seedlings must first
be available for planting at an economically fair price"
Page 8, following line 7:
Insert a new bill section to read:
"*Sec. 5. AS 41.17.060 is amended by adding a new
subsection to read:
(d) With respect to private forest land only,
to the fullest extent practicable, harvested forest
land shall be reforested, naturally or artificially. If
artificial planting is required,silviculturally acceptable
seedlings must first be available for planting at an
economically fair price."
Renumber the following bill sections accordingly.
Page 8, following line 23:
Insert a new bill section to read:
"*Sec. 8 AS 41.17.060(b)(4) is repealed."
REPRESENTATIVE HUDSON OBJECTED for discussion purposes.
MR. SOLIE stated this amendment will amend the reforestation
statute in the FPA and clarify what was intended when the
statute was drafted. He said existing law pertains to state
and municipal forest lands and this new Section 5 pertains
to private lands. The section clarifies that private land
harvest is not on a sustained yield basis as required by
law. He noted that private landowners wanted this
clarification in statute.
REPRESENTATIVE MULDER asked what is the definition of
silviculturally.
CHAIRMAN WILLIAMS stated it means tree planting.
Number 282
REPRESENTATIVE GREEN wondered if "economically fair price"
is an understood term or is it subject to conflict.
MR. SOLIE replied he did not think so. He said the
amendment is existing law except for the deletion of the
words "sustained yield".
REPRESENTATIVE DAVIES asked where the words "sustained
yield" appear in the amendment.
CHAIRMAN WILLIAMS said the wording is in the FPA and was put
in inadvertently. He indicated that attached to the
amendment is a copy of current law.
MR. SOLIE said the underlined portion of the amendment is a
repeat of existing law and the words "so as to result in a
sustained yield" was deleted from the section below. He
noted at the end of the sentence in existing law, the words
"in the state" was deleted in the new law that only applies
to private forest land. He stated there was concern it
might require the purchase of trees. He explained existing
law stands for state and municipal and this change is only
to private lands.
Number 334
REPRESENTATIVE FINKELSTEIN stated he does not fully
understand the impact of repealing (b)(4). He clarified the
end result is eliminating the application of sustained yield
to private timber lands.
MR. SOLIE said that is incorrect. He explained currently
there is no state requirement for sustained yield harvest on
private forest lands. The amendment makes existing law
consistent with that and the reforestation part of the FPA.
REPRESENTATIVE FINKELSTEIN felt he must be missing something
because the wording is exactly the same as existing law.
REPRESENTATIVE JAMES said on page 8, line 7, after the word
"habitat", the new material is to be inserted. (8) is
added which is precisely the language in existing (4). She
explained (4) is being moved to (8).
REPRESENTATIVE FINKELSTEIN stated the impact of moving the
language is to say it does not apply to private lands which
is what it applies to now. He felt this amendment is a
major change. He said if there is an existing sustained
yield requirement on private lands and that is going to be
removed, he is concerned there has been no testimony
regarding the change.
MR. SOLIE said existing law relates to sustained yield
harvest for state and municipal. He stressed reforestation
is different than harvesting. Reforestation is something
done after the trees are cut down. He stated sustained
yield does not relate to reforestation. In this change, the
language will remain the same for state and municipal land.
For private land, the language is kept as it should apply,
which does not require any sustained yield harvest. He
pointed out this amendment clarifies existing law.
Number 430
REPRESENTATIVE FINKELSTEIN felt he is getting different
answers. He stated now it sounds like the reforestation
requirement for private lands is being removed.
REPRESENTATIVE JAMES pointed out that the new Section 5
contains the word "reforested".
REPRESENTATIVE FINKELSTEIN said the point of the amendment
is to eliminate any inference of sustained yield on private
lands.
REPRESENTATIVE JAMES responded that is correct.
REPRESENTATIVE FINKELSTEIN stated he will have to oppose the
amendment because there has been no discussion or public
testimony regarding this change. He said perhaps sustained
yield on private lands was the intent of the FPA and has
been an issue in the past.
REPRESENTATIVE DAVIES agreed with Representative
Finkelstein's comments and added that the Division of
Forestry has not commented on this amendment. He also noted
that existing law says "to the fullest extent practicable",
so if someone has private land and wants to use it for
agriculture purposes, reforestation is not practicable. He
said the law is only saying that if someone has private land
and is managing it as a forest, to the extent practicable,
the sustained yield principle should be followed. He did
not understand why a change is needed.
Number 473
REPRESENTATIVE JAMES did not feel the state should be
telling private landowners what they should do with their
land. She will support the amendment because the Tanana
Chiefs Conference wants this amendment and should be
supported.
REPRESENTATIVE DAVIES pointed out the FPA was enacted after
a huge amount of public involvement and consensus debate.
He felt this amendment is not a trivial aspect of the
debate. He also felt that making this change without having
an adequate amount of debate is bad public policy.
CHAIRMAN WILLIAMS stated during the negotiations on the FPA,
it was determined that nothing would be done with the FPA
unless everyone agreed. He said he is willing to hold this
amendment and amendment X38 until the Alaska Forest
Association and DNR can testify.
REPRESENTATIVE DAVIES stated the amendment is amending the
FPA and is not required by SB 310. He said if the amendment
is such a good idea, it should be introduced as a bill by
itself.
REPRESENTATIVE JAMES WITHDREW her MOTION.
Number 605
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 7, line 4, after "(1)":
Insert "The commissioner shall conduct biennial
performance reviews of the agreement throughout the term of
the agreement."
Page 7, line 9, after "operator.":
Insert "The operator shall pay the reasonable cost of
all reviews conducted under this subsection."
REPRESENTATIVE JAMES OBJECTED.
REPRESENTATIVE DAVIES said this amendment will require the
commissioner to perform biennial performance reviews and
determine whether or not the contract is being followed. He
stated one of the criticisms of the FPA is it is difficult
to catch up to violations. One of the major justifications
for the FPA is the state does not have the resources to
plan, design, lay out, and monitor a lease sale. Much of
the costs will be shifted from the state to the person who
has the FMA with the state. He pointed out that if the
agreement is not audited regularly, there will be no way to
know whether or not the terms of the agreement are being
followed.
REPRESENTATIVE JAMES agreed there is a need to review but
felt "conduct biennial performance reviews" does not
necessarily have any definition. She hoped there will be
monitoring but that does not necessarily mean every two
years. She expected there will be some method by which the
FMAs will be monitored. She stressed ongoing monitoring is
needed.
REPRESENTATIVE DAVIES felt uncomfortable discussing
amendments when no representatives from the department are
present.
CHAIRMAN WILLIAMS asked for a roll call vote on the motion.
Voting in favor of the amendment were REPRESENTATIVES
FINKELSTEIN, DAVIES, and CARNEY. Voting against the
amendment were REPRESENTATIVES HUDSON, JAMES, MULDER, and
WILLIAMS. The MOTION was DEFEATED 4-3.
Number 713
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 5, line 6, after "agreement":
Insert "and the final agreement"
Page 5, line 12, after "timber":
Insert ", which may not be less than fair market value
and shall be adjusted annually by the commissioner using a
nationally recognized index that is suitable for measuring
inflation or deflation in the cost of comparable stumpage"
Page 5, line 19, after "agreement;":
Insert "the cost of construction and maintenance of
necessary access roads and other necessary infrastructure
shall be paid by the operator;"
Page 6, line 5:
Delete "may"
Insert "must"
REPRESENTATIVES WILLIAMS and JAMES OBJECTED.
TAPE 94-63, SIDE B
Number 000
REPRESENTATIVE DAVIES stated there is nothing in SB 310
requiring any resemblance between the final agreement and
the proposed final agreement. He pointed out former
Attorney General Charlie Cole's principal concern is too
much power is being given to the DNR commissioner. He said
the first part of the amendment provides that the final
agreement contain the elements which have been said should
be in the proposed final agreement.
REPRESENTATIVE DAVIES explained the second part of the
amendment is an attempt to address a concern regarding long-
term FMAs--throughout the years of the agreement, inflation
goes up, and at the end of the time period, timber is being
sold at a low rate. He stated this amendment says the
initial sale should be at fair market value and there should
be some type of index, so inflation can be taken into
consideration. He said the third part of the amendment
provides that the cost and maintenance of roads and other
infrastructure be paid by the operator. He felt any
agreement should be self sustaining. Representative Davies
stated the final part of the amendment provides for a
requirement of bonding.
MR. GATES said most FMAs do anticipate a consumer price
index (CPI) (indiscernible). The issue is whether or not
that should be mandatory. He stated there is a small
argument for having the flexibility to not require a CPI
escalator as a tool of negotiating. He cannot envision
entering into a FMA without a CPI escalator. However, the
question becomes why compel a CPI escalator as a tool for
every FMA. He was not sure it is valid for every agreement.
MR. GATES said in regard to the last part of the amendment,
there can be small and customized FMAs. He felt it might be
wise not to mandate bonding in those situations and to limit
the flexibility. He stated for large agreements, it is
anticipated there will be bonding.
REPRESENTATIVE CARNEY asked Mr. Gates to speak to the costs
of roads.
MR. GATES replied normally, the cost of road construction
will always be included in the operator's costs. However,
if a new part of the state is being accessed and it is
important to provide access, the market cannot tolerate the
costs of access to a big region. He said the state may want
to put the road in as an economic development effort. The
individual roads would then be paid for by the operator. He
pointed out the amendment provides that even the major roads
would have to be paid for by the FMA operator.
Number 093
REPRESENTATIVE JAMES said although she agrees with all that
is contained in the amendment, she is not willing to support
it. She stated in regard to the cost of construction and
maintenance of necessary access roads, part of the provision
is that the proposed final agreement must include provisions
regarding the responsibilities for construction and
maintenance of the access road. She has always had a
problem with the term fair market value. She felt it means
the biggest price anyone is willing to pay and she was not
sure there is any place to get a nationally recognized index
suitable for measuring inflation or deflation in the cost of
comparable stumpage. She pointed out the determining factor
of whether or not something is financially feasible depends
on the end product. In many cases where there is bidding on
federal forest timber, there will be a minimum bid and she
supports including a minimum bid in the bill.
REPRESENTATIVE JAMES stressed a FMA is being discussed and
that presumably there is some best interest in the state
which is going to be devised out of the agreement. She
expected the operator will pay full price for the timber.
REPRESENTATIVE DAVIES made a MOTION to DIVIDE the QUESTION
and offer the first part of the amendment (Page 5, line 6,
after "agreement":) and the second part would be the rest of
the amendment (Page 5, line 12, after "timber":).
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION TO DIVIDE PASSED.
Number 156
MR. SOLIE expressed support for the first amendment.
CHAIRMAN WILLIAMS asked if there were any objections to the
first part of the amendment. Hearing none, the MOTION
PASSED.
REPRESENTATIVE MULDER OBJECTED to the second part of the
amendment.
REPRESENTATIVE GREEN made a MOTION to AMEND the AMENDMENT,
on the first line, changing the word "shall" to "may".
REPRESENTATIVE HUDSON said he is not convinced there should
be a requirement in the law to annually adjust the stumpage
prices in the contract because if the desire is to lure
corporations into investing in a factory, there may be a
need to have flexibility.
MR. GATES expressed concern about the fair market value part
of the amendment because there may be a desire to encourage
people to put in plants and give lower rates for 2-3 years
while they are building their plant or getting financing.
He felt a major tool is being taken away through this
amendment by compelling the fair market value on trees
always. He said it is a tremendous amount of flexibility to
encourage investment if a period of time of forgiveness can
be given or 50 percent of fair market value rate of stumpage
as an inducement.
REPRESENTATIVE HUDSON mentioned it is not an unknown tool
which has been used in the state. He pointed out the state
would never have had the oil industry on the Kenai Peninsula
if there had been no flexibility to encourage those kinds of
investments into that area.
CHAIRMAN WILLIAMS asked if there were any objections to the
motion. Hearing none, the MOTION PASSED.
CHAIRMAN WILLIAMS asked for a roll call vote on the
amendment (2nd part). Voting in favor of the motion were
REPRESENTATIVES CARNEY, DAVIES, and FINKELSTEIN. Voting
against the motion were REPRESENTATIVES MULDER, HUDSON,
JAMES, GREEN, and WILLIAMS. The MOTION FAILED 5-3.
REPRESENTATIVE GREEN made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 5, line 19, after "agreement;":
Insert "the cost of construction and maintenance of
necessary access roads and other necessary infrastructure
shall be paid by the operator;"
CHAIRMAN WILLIAMS OBJECTED.
MR. GATES stated roads must be considered in the FMA plan
but this amendment will require the operator to pay costs
for all roads, which may not give the flexibility desired.
CHAIRMAN WILLIAMS ruled the MOTION OUT OF ORDER. He said
the amendment has already been discussed and voted on.
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 5, line 19, after "agreement;":
Insert "the cost of construction and maintenance of
necessary temporary access roads and other necessary
infrastructure shall be paid by the operator;"
REPRESENTATIVE WILLIAMS OBJECTED.
REPRESENTATIVE DAVIES said this amendment will eliminate the
concerns expressed by Mr. Gates. This amendment will allow
the state to construct the permanent roads and the FMA will
only be required to incur the costs of the temporary roads.
MR. GATES stated the amendment is still limiting the
commissioner's flexibility to do the best job possible to
craft a good FMA.
REPRESENTATIVE JAMES stated amendments such as this are
detrimental to the process because it identifies what the
operator is going to pay for. She hoped the operator will
pay for all the roads. She stressed if the word "temporary"
is used, it could be assumed the operator only has to pay
for the temporary roads, when in fact there may be
sufficient value in the timber to pay for all of the roads.
Number 354
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES CARNEY, DAVIES,
and FINKELSTEIN. Voting against the amendment were
REPRESENTATIVES JAMES, HUDSON, MULDER, and WILLIAMS. The
MOTION FAILED 4-3.
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSB 310(RES)
as follows:
Page 7, after line 12:
Insert a new subsection to read:
"(n) Notwithstanding any other provision of this
section, the operator under an agreement that includes
timber harvesting on land within the Tanana Valley
drainage may not harvest timber on that land under the
agreement if the harvest would result, during a calendar
year, in timber harvest operations
(1) on more than 6,000 acres of land, public
and private, in the Tanana Valley drainage; or
(2) that harvested more than 1,000 acres of
white spruce in the Tanana Valley drainage."
Reletter the following subsection accordingly.
CHAIRMAN WILLIAMS OBJECTED.
REPRESENTATIVE DAVIES said this amendment will apply
specifically to the Tanana Valley drainage and not
statewide. The amendment will limit the total amount of
acreage of land contained in a single FMA.
REPRESENTATIVE JAMES clarified the limit is being put on not
necessarily a single FMA but any FMA in the Tanana Valley
drainage.
Number 383
REPRESENTATIVE DAVIES noted the amendment says "the operator
under an agreement" and "a calendar year."
REPRESENTATIVE JAMES recalled in Mr. Pagh's testimony, he
had indicated in regard to spruce, there is the capability
of harvesting 5,000 acres a year and currently 1,000 acres a
year is being harvested. She said this amendment does not
make any provision for hardwoods. She felt uncomfortable
including any kind of limits in the bill. However, she
would like to send a message that there is a desire not to
have all of the timber gone in a year but she is not
comfortable with the numbers contained in the amendment.
REPRESENTATIVE DAVIES noted the amendment says a single
agreement and pointed out there are two distinctions: a
total of 6,000 acres and a subtotal of acres in white
spruce.
REPRESENTATIVE HUDSON asked how much general timber land is
available in the Tanana Valley drainage.
REPRESENTATIVE DAVIES replied approximately 1.5 million
acres.
REPRESENTATIVE HUDSON asked how may acres of white spruce
are available.
REPRESENTATIVE DAVIES replied there are approximately 5,000
acres of white spruce available per year and this amendment
would limit a single agreement to one-fifth of that total.
Number 443
MR. GATES stated DCED tried to advance the concepts of
sustained yield, multiple use, good scientific evidence and
a balancing of values as controlling the amount of acreage
in a given area and the types of things which could be done.
He felt to set truly arbitrary limits goes away from those
types of principles and takes away the flexibility.
REPRESENTATIVE DAVIES stressed the numbers are not arbitrary
but were based on an estimate of the total amount of acreage
available and what was considered to be a reasonable maximum
for the total acreage to be allowed in a FMA. He stated he
has received 275 public opinion messages on SB 310 and they
are running 4-1 opposed to SB 310. One of the fundamental
reasons why people are opposed to the bill is size. Most
people want the scale of a FMA to be limited. He noted most
people are not opposed to a long-term contract. Most people
are opposed to having a big operation requiring huge amounts
of acreage every year to be clearcut. He stressed this
amendment attempts to look at a reasonable amount of the
forest, which could be set aside for long-term agreements,
yet is big enough to enable some small plants to be
capitalized but not so big that it will allow the
capitalization of big plants.
Number 503
REPRESENTATIVE JAMES said she shares the concerns which
Representative Davies mentioned. She also expressed concern
that when restrictions are put in statute, the hands of a
solicited bid from someone are being tied. She stated when
a proposal goes out to the public, there is an opportunity
for the public to determine that an amount is more than what
they are willing to support. She felt the public will be
listened to. She noted there are 30 million acres in the
Tanana Valley basin and she is not comfortable with the
numbers in the amendment, even though she does understand
the concerns.
MR. GATES stated all concerns mentioned are valid. However,
this amendment is eliminating the possibility that an
operator could propose something that is acceptable to the
public and contains more acres. He felt the operator should
be given the chance to convince the public, through the
public hearing process, that a cut is appropriate at a
higher level.
CHAIRMAN WILLIAMS recalled someone had asked how long it
would take to cut 6,000 acres. He said the cut could be
done in a season.
Number 557
MR. SOLIE stated since DNR is not represented, he will offer
some statistics they provided. There are approximately 30
million acres of land in the Tanana basin, with about 3.4
million acres classified as forest land or is in the Tanana
Valley State Forest, and the sustained yield estimate
harvests are between 16,000-20,000 acres a year. He pointed
out this amendment is proposing 6,000 acres which is 25-33
percent of the sustained yield harvest as a cap. He said
there are approximately 95,000 acres (indiscernible).
REPRESENTATIVE FINKELSTEIN said this amendment does not
place a cap. This amendment only specifies the amount of
acres which can be put in each agreement.
REPRESENTATIVE JAMES expressed concern that if this
amendment is not intended to put a cap on the cut but rather
a cap on each single FMA, this amendment is limiting a FMA
on what kinds of operations it could have. She felt the
amendment might eliminate a large FMA. She pointed out that
the whole purpose of SB 310 is to encourage FMAs for future
development and in-state processing. She stressed it would
be defeating if an amendment is passed which discourages
FMAs.
Number 612
REPRESENTATIVE DAVIES stated that is exactly what the
amendment does. It would eliminate large FMAs in the Tanana
Valley. He pointed out that overwhelming testimony has
indicated there is a desire to not limit the use of the
forest as long as it is used in an appropriate scale.
People fear clearcuts in their backyards.
CHAIRMAN WILLIAMS stated view sheds are important. However,
one of the things happening in the Tongass is the timber
industry is continually being told in a critical manner that
they are being subsidized. He said a lot of money is
involved in determining view sheds.
TAPE 94-64, SIDE A
Number 000
CHAIRMAN WILLIAMS stated the people asking for the view
sheds are also speaking against the timber industry because
of the industry being subsidized.
MR. GATES said there has been a lot of limited thinking in
regard to what a FMA is. He stated there is a concept of a
FMA which may or may not be true. FMAs may come with a
package of incentives from a company to a community saying
there is an understanding of the impact and the possible
negative things and offer a package of good things such as
restoration to streams, building bridges, and community
centers. This amendment keeps the operator from attempting
to convince the public that a larger scale FMA might be in
the community's best interest.
REPRESENTATIVE DAVIES said the only experience people have
had in this state similar to a FMA is the Haines Forest
experience. People were upset, a lot of money was lost, an
inventory still is not in hand, etc. The track record
leaves room for skepticism. He felt small FMAs should be
tried first and then later consider larger FMAs. He
stressed there are a lot of people concerned statewide. He
reiterated people in Fairbanks do not oppose the timber
industry but are concerned about a large scale timber
industry.
CHAIRMAN WILLIAMS asked for a roll call vote. Voting in
favor of the amendment were REPRESENTATIVES FINKELSTEIN,
DAVIES, and CARNEY. Voting against the amendment were
REPRESENTATIVES JAMES, HUDSON, MULDER, and WILLIAMS. The
MOTION FAILED 4-3.
Number 058
REPRESENTATIVE HUDSON felt the last proposed amendment was
an attempt to address the concern expressed by the public.
He thought perhaps another approach is language such as, "To
the extent practicable, the commissioner shall seek
agreements that include timber harvesting in the Tanana
Valley drainage that do not exceed..." He stated some
reasonable limitations would be placed at the end. He
thought that approach would be constructive and not tie the
hands of the commissioner in regard to FMAs but rather would
guide the commissioner.
REPRESENTATIVE JAMES made a MOTION to AMEND CSSB 310(RES) as
follows:
Page 4, following line 13:
Insert "(8) timber inventory;"
Renumber the following text accordingly.
REPRESENTATIVE JAMES said the amendment provides for an
addition of "timber inventory" to the list of what the
commissioner considers when reviewing and evaluating a
proposed agreements.
CHAIRMAN WILLIAMS asked if there were any objections.
Hearing none, the MOTION PASSED.
ANNOUNCEMENTS
CHAIRMAN WILLIAMS announced the committee will meet on
Monday, April 25 at 8:15 a.m. to hear SB 306 and SB 374.
ADJOURNMENT
There being no further business to come before the House
Resources Committee, Chairman Williams adjourned the meeting
at 7:35 p.m.
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