Legislature(1999 - 2000)

04/25/2000 01:09 PM WTR

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             HOUSE SPECIAL COMMITTEE ON WORLD TRADE                                                                             
                   AND STATE/FEDERAL RELATIONS                                                                                  
                         April 25, 2000                                                                                         
                            1:09 p.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Ramona Barnes, Chair                                                                                             
Representative John Cowdery, Vice Chair                                                                                         
Representative Beverly Masek                                                                                                    
Representative Gail Phillips                                                                                                    
Representative Ethan Berkowitz                                                                                                  
Representative Reggie Joule                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Representative Joe Green                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
CS FOR SENATE BILL NO. 273(RLS)(title am)                                                                                       
"An  Act  regarding  oil discharge  prevention,  and  relating  to                                                              
contingency plans  and proof of  financial responsibility  for all                                                              
self-propelled  nontank  vessels  exceeding 400  gross  registered                                                              
tonnage  and for  railroad tank  cars;  authorizing inspection  of                                                              
nontank vessels and trains; and providing  for an effective date."                                                              
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: SB 273                                                                                                                  
SHORT TITLE: OIL SPILL RESPONSE; NONTANK VESSELS & RR                                                                           
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 2/15/00      2305     (S)  READ THE FIRST TIME - REFERRALS                                                                     
 2/15/00      2305     (S)  RES, FIN                                                                                            
 2/21/00               (S)  RES AT  3:00 PM BUTROVICH 205                                                                       
 2/21/00               (S)  Heard & Held                                                                                        
 2/21/00               (S)  MINUTE(RES)                                                                                         
 3/03/00               (S)  RES AT  3:00 PM BUTROVICH 205                                                                       
 3/03/00               (S)  Heard & Held                                                                                        
 3/03/00               (S)  MINUTE(RES)                                                                                         
 3/20/00               (S)  RES AT  3:00 PM BUTROVICH 205                                                                       
 3/20/00               (S)  Moved CS(Res) Out of Committee                                                                      
 3/20/00               (S)  MINUTE(RES)                                                                                         
 3/21/00      2677     (S)  RES RPT CS 5NR  SAME TITLE                                                                          
 3/21/00      2677     (S)  NR: HALFORD, MACKIE, TAYLOR, GREEN,                                                                 
 3/21/00      2677     (S)  PETE KELLY                                                                                          
 3/21/00      2677     (S)  FISCAL NOTES (DEC, DOT)                                                                             
 3/24/00               (S)  FIN AT  9:00 AM SENATE FINANCE 532                                                                  
 3/24/00               (S)  Heard & Held                                                                                        
 3/27/00               (S)  FIN AT  9:00 AM SENATE FINANCE 532                                                                  
 3/27/00               (S)  Moved CS(Fin) Out of Committee                                                                      
 3/27/00      2745     (S)  FIN RPT CS 2DP 6NR  SAME TITLE                                                                      
 3/27/00      2746     (S)  DP: TORGERSON, PARNELL; NR: PHILLIPS,                                                               
 3/27/00      2746     (S)  GREEN, ADAMS, PETE KELLY, WILKEN,                                                                   
                            LEMAN                                                                                               
 3/27/00      2746     (S)  PREVIOUS FISCAL NOTES (DEC, DOT)                                                                    
 3/30/00               (S)  RLS AT 11:45 AM FAHRENKAMP 203                                                                      
 3/30/00               (S)  MINUTE(RLS)                                                                                         
 3/31/00      2814     (S)  RLS TO CAL W/CS  1OR 03/31                                                                          
                            NEW TITLE                                                                                           
 3/31/00      2814     (S)  PREVIOUS FISCAL NOTES (DEC, DOT)                                                                    
 3/31/00      2815     (S)  READ THE SECOND TIME                                                                                
 3/31/00      2815     (S)  RLS CS ADOPTED UNAN CONSENT                                                                         
 3/31/00      2815     (S)  ADVANCED TO THIRD READING                                                                           
                            UNAN CONSENT                                                                                        
 3/31/00      2815     (S)  READ THE THIRD TIME  CSSB 273(RLS)                                                                  
 3/31/00      2816     (S)  AM NO 1(TITLE AM) ADOPTED                                                                           
                            UNAN CONSENT                                                                                        
 3/31/00      2816     (S)  PASSED Y16 N2 E2                                                                                    
 3/31/00      2816     (S)  EFFECTIVE DATE(S) SAME AS PASSAGE                                                                   
 3/31/00      2819     (S)  HALFORD NOTICE OF RECONSIDERATION                                                                   
 3/31/00      2819     (S)  RECON TAKEN UP SAME DAY                                                                             
                            UNAN CONSENT                                                                                        
 3/31/00      2820     (S)  PASSED ON RECONSIDERATION Y17 N1 E2                                                                 
 3/31/00      2820     (S)  EFFECTIVE DATE(S) SAME AS PASSAGE                                                                   
 3/31/00      2821     (S)  TRANSMITTED TO (H)                                                                                  
 4/03/00      2831     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 4/03/00      2831     (H)  RES, WTR, FIN                                                                                       
 4/12/00               (H)  RES AT  1:45 PM CAPITOL 124                                                                         
 4/12/00               (H)  Heard & Held                                                                                        
 4/12/00               (H)  MINUTE(RES)                                                                                         
 4/14/00               (H)  RES AT  1:00 PM CAPITOL 124                                                                         
 4/14/00               (H)  Moved HCS CSSB 273(RES) Out of                                                                      
                            Committee                                                                                           
 4/14/00               (H)  MINUTE(RES)                                                                                         
 4/17/00      3222     (H)  RES RPT HCS(RES) 8NR                                                                                
 4/17/00      3222     (H)  NR: WHITAKER, MORGAN, BARNES,                                                                       
                            COWDERY                                                                                             
 4/17/00      3222     (H)  MASEK, HUDSON, HARRIS, JOULE                                                                        
 4/17/00      3222     (H)  FISCAL NOTE (DCED)                                                                                  
 4/17/00      3222     (H)  2 SEN FISCAL NOTES (DEC, DOT 3/21/00                                                                
 4/25/00      Text     (H)  WTR AT  1:00 PM CAPITOL 120                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
SENATOR DRUE PEARCE                                                                                                             
Alaska State Legislature                                                                                                        
Capitol Building, Room 111                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Sponsor of SB 273.                                                                                         
                                                                                                                                
LARRY V. DIETRICK, Director                                                                                                     
Division of Spill Prevention and Response                                                                                       
Department of Environmental Conservation                                                                                        
410 Willoughby Avenue, Suite 105                                                                                                
Juneau, Alaska 99801-1795                                                                                                       
POSITION STATEMENT:  Testified on SB 273.                                                                                       
                                                                                                                                
BRECK TOSTEVIN, Assistant Attorney General                                                                                      
Environmental Section                                                                                                           
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
1031 West 4th Avenue, Suite 200                                                                                                 
Anchorage, Alaska  99501-1994                                                                                                   
POSITION STATEMENT:  Testified on SB 273.                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 00-5, SIDE A                                                                                                               
Number 0059                                                                                                                     
                                                                                                                                
CHAIR RAMONA  BARNES called the  House Special Committee  on World                                                              
Trade and  State/Federal Relations meeting  to order at  1:09 p.m.                                                              
Members present at the call to order  were Representatives Barnes,                                                              
Cowdery,  Masek, Phillips,  and Joule.   Representative  Berkowitz                                                              
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
SB 273-OIL SPILL RESPONSE; NONTANK VESSELS & RR                                                                               
                                                                                                                                
Number 0096                                                                                                                     
                                                                                                                                
CHAIR  BARNES  announced that  the  committee  would hear  CS  FOR                                                              
SENATE  BILL  NO.  273(RLS)(title   am),  "An  Act  regarding  oil                                                              
discharge prevention, and relating  to contingency plans and proof                                                              
of  financial   responsibility  for  all  self-propelled   nontank                                                              
vessels exceeding  400 gross registered  tonnage and  for railroad                                                              
tank cars; authorizing  inspection of nontank vessels  and trains;                                                              
and providing for an effective date."                                                                                           
                                                                                                                                
                                                                                                                                
CHAIR BARNES  explained  that the  purpose of  the meeting  was to                                                              
hear from  Senator Drue  Pearce, sponsor, who  was offering  a new                                                              
proposed committee substitute  (CS).  She noted that  since SB 273                                                              
was  last heard  in the  House Resources  Standing Committee,  the                                                              
House had passed  House CS for Senate Concurrent  Resolution No. 1                                                              
(RUL) to the  Senate.  She called  attention to a new  fiscal note                                                              
provided by the Department of Environmental Conservation (DEC).                                                                 
                                                                                                                                
Number 0247                                                                                                                     
                                                                                                                                
REPRESENTATIVE PHILLIPS moved to  adopt proposed HCS for CSSB 273,                                                              
Version  Z  [1-LS1464\Z,  Chenoweth,   4/25/00],  as  the  working                                                              
document before the  committee.  There being no  objection, it was                                                              
so ordered.                                                                                                                     
                                                                                                                                
Number 0247                                                                                                                     
                                                                                                                                
SENATOR PEARCE explained that Version  Z makes a number of changes                                                              
from  [HCS CSSB  273(RES)],  which  was passed  out  of the  House                                                              
Resources Standing Committee.  She told members:                                                                                
                                                                                                                                
     The financial  responsibility portions  of the  bill are                                                                   
     still  there,  so  that both  nontank  vessels  and  the                                                                   
     railroad    would    meet    financial    responsibility                                                                   
     requirements  on   the  effective  date  of   the  bill.                                                                   
     However,  while we  lay out  the  planning standards  in                                                                   
     statute,  the effective date  of meeting those  planning                                                                   
     standards for  nontank vessels  and the railroad  is not                                                                   
     in the bill.                                                                                                               
                                                                                                                                
     Instead, we  have [Senate] Concurrent Resolution  No. 1.                                                                   
     The Senate has failed to concur  on the language because                                                                   
     the financial  responsibility piece is no  longer needed                                                                   
     in the resolution,  but upon completion of  a conference                                                                   
     committee on that resolution,  it is coming back over to                                                                   
     you [the  House] today [so that  the House can]  fail to                                                                   
     recede and  we can go  to conference [committee].   Upon                                                                   
     completion of  that, SCR 1 would  pass, which sets  up a                                                                   
     task force  that this fall would  meet to set  the rules                                                                   
     for  how the contingency  planning  portion of the  bill                                                                   
     would be put into effect to  meet the planning standards                                                                   
     that are in the statute.                                                                                                   
                                                                                                                                
     Those would be  brought back to us [the  legislature] on                                                                   
     or before  the first day  of the legislative  session in                                                                   
     2001, at which  time legislation would have  to pass the                                                                   
     next legislature  that would  put that rule  making into                                                                   
     law and "turn  on" the contingency planning  process for                                                                   
     both  the  nontank  vessels   and  the  railroad.    The                                                                   
     resolution itself lays out the  same planning standards,                                                                   
     and  that  is what  the  task  force would  work  toward                                                                   
     meeting.  Frankly, that is the big change. ...                                                                             
                                                                                                                                
     There is transition  language in the [Z]  version of 273                                                                   
     that you have  before you, and it does speak  in Section                                                                   
     7 about  the task force, and  that the task force  is to                                                                   
     deliver  a  report back  to  the  legislature.   So  the                                                                   
     concurrent  resolution  and the  bill  would now  travel                                                                   
     together, so to speak.                                                                                                     
                                                                                                                                
SENATOR PEARCE explained that she  had in hand a rough markup from                                                              
Mr. Chenoweth of  Legislative Legal Services, who had  not yet had                                                              
time to prepare  a sectional analysis.  She then  reviewed for the                                                              
committee what Mr. Chenoweth has done to the bill:                                                                              
                                                                                                                                
     Sections 1 and 2 of the Resource  Committee version have been                                                              
     deleted.                                                                                                                   
                                                                                                                                
     Section 3 has been renumbered.                                                                                             
                                                                                                                                
     Subsection  (1) of the  previous Section  3, which  said that                                                              
     effective  April  1,  2002,   the  oil  discharge  prevention                                                              
     contingency plans go into effect, is no longer there.                                                                      
                                                                                                                                
     The  word   "only"  has   been  changed  to   "predominantly"                                                              
     persistent  product,  a clarification  that  had been  agreed                                                              
     upon.                                                                                                                      
                                                                                                                                
     On the  former page  3, the language  that had been  on lines                                                              
     15-17  has been  deleted.   That had  specified an  effective                                                              
     date of April 1, 2001, for the  contingency plan section that                                                              
     is no longer going into effect under the bill.                                                                             
                                                                                                                                
     The proof of financial responsibility  remains the same.                                                                   
                                                                                                                                
     Another effective  date has been  dropped in relation  to the                                                              
     railroad, but  the standards [for the railroad]  are laid out                                                              
     in the actual bill.                                                                                                        
                                                                                                                                
     The "innocent passage" language has been modified.                                                                         
                                                                                                                                
     All of subsection  (f) was deleted, and  everything following                                                              
     it has been renumbered.                                                                                                    
                                                                                                                                
     The transition language changes because of the new                                                                         
     resolution regarding the task force.                                                                                       
                                                                                                                                
Number 0600                                                                                                                     
                                                                                                                                
SENATOR PEARCE  said this  is virtually the  same as what  she had                                                              
proposed last week.  She concluded:                                                                                             
                                                                                                                                
     We  do financial  responsibility  now.   We've  put  the                                                                   
     planning standards for nontank  vessels and the railroad                                                                   
     into the  statute, but we don't  turn them on  until the                                                                   
     task  force   has  a  chance  to  report   back  to  the                                                                   
     legislature.  That's it, in a nutshell.                                                                                    
                                                                                                                                
Number 0627                                                                                                                     
                                                                                                                                
REPRESENTATIVE COWDERY asked if financial  responsibility could be                                                              
satisfied in bond form.                                                                                                         
                                                                                                                                
SENATOR PEARCE  said she  would rather  have the Department  (DEC)                                                              
answer that, and that Mr. Dietrick of DEC was present.                                                                          
                                                                                                                                
Number 0674                                                                                                                     
                                                                                                                                
LARRY  V. DIETRICK,  Director, Division  of  Spill Prevention  and                                                              
Response, Department of Environmental  Conservation, rephrased the                                                              
question as, "What  forms may be accepted by the  state?"  He said                                                              
it  would be  the  same forms  of  insurance the  state  currently                                                              
accepts;  there  is   a  menu  of  forms,  "everything   from  P&I                                                              
[protection and  indemnity] clubs  to self-insurance  to financial                                                              
guarantors to various forms of insurance."                                                                                      
                                                                                                                                
Number 0703                                                                                                                     
                                                                                                                                
REPRESENTATIVE COWDERY  asked about self-insurance  in relation to                                                              
the  railroad, mentioning  that the  railroad is  now having  some                                                              
problems.                                                                                                                       
                                                                                                                                
Number 0731                                                                                                                     
                                                                                                                                
CHAIR BARNES directed attention to  a letter [included in members'                                                              
packets] she  had received  from the  railroad regarding  what the                                                              
railroad has  been doing  and speaking to  its support  of Senator                                                              
Pearce's initial legislation.  Chair  Barnes said she believes the                                                              
railroad  had  testified  before   the  House  Resources  Standing                                                              
Committee that it  has either insurance or an amount  of money set                                                              
aside.  She read from the letter:                                                                                               
     Over  the  last  several  years,   the  Alaska  Railroad                                                                   
     Corporation has  had in place  two $10 million  lines of                                                                   
     credit, one to meet self-insurance  requirements and one                                                                   
     to meet  operational requirements.   These credit  lines                                                                   
     are  [with]  two  separate national  banks.    They  are                                                                   
     currently for  one year and are renewable  annually.  At                                                                   
     this time,  the lines of credit  are whole and  have not                                                                   
     been drawn upon.                                                                                                           
                                                                                                                                
CHAIR  BARNES noted  that it  goes on  to say  how [the  railroad]                                                              
would lay out its portion of the contingency.                                                                                   
                                                                                                                                
REPRESENTATIVE COWDERY indicated that had answered his question.                                                                
                                                                                                                                
REPRESENTATIVE  BERKOWITZ raised a  question relating  to language                                                              
that  states,  "A person  cannot  cause  or permit  the  operation                                                              
unless the  person has furnished  to the Department  certification                                                              
...."   He said  that frequently  the vessel  operator is  not the                                                              
same as  the vessel owner,  and the vessel  operator might  not be                                                              
the individual who had supplied proof.                                                                                          
                                                                                                                                
SENATOR PEARCE  said that language  is the same as  that presently                                                              
in the  laws pertaining  to tanker vessels.   She noted  that this                                                              
bill has  not changed who is  responsible to the  department; that                                                              
it is still the owner.                                                                                                          
                                                                                                                                
Number 0899                                                                                                                     
                                                                                                                                
BRECK   TOSTEVIN,  Assistant   Attorney   General,   Environmental                                                              
Section, Civil Division (Anchorage),  Department of Law, testified                                                              
via teleconference  from Anchorage.   He told  members that  as he                                                              
understood  the  question,  it  related  to  the  wording  of  who                                                              
actually applies for the certificate  of financial responsibility.                                                              
He specified  that this  proposed legislation  doesn't change  who                                                              
applies for the  certificate.  The prohibition in  the law is that                                                              
the  vessel -  or the  railroad,  in this  case  - cannot  operate                                                              
without having  that certificate.   Basically, one applies  to the                                                              
department,  showing the  proof of  financial responsibility,  and                                                              
the certificate  is issued.  That  certificate is then  shown when                                                              
loading  fuel  or  otherwise  operating,  as  proof  of  financial                                                              
responsibility.                                                                                                                 
                                                                                                                                
CHAIR BARNES asked Representative  Berkowitz whether that answered                                                              
his question.                                                                                                                   
                                                                                                                                
REPRESENTATIVE BERKOWITZ  replied that it explains  the situation,                                                              
and he understands what is going on.                                                                                            
                                                                                                                                
Number 0973                                                                                                                     
                                                                                                                                
REPRESENTATIVE  PHILLIPS referred  to page 3,  line 5,  Section 3.                                                              
She requested  an explanation  of Section 3,  relating it  back to                                                              
the previous paragraph.                                                                                                         
                                                                                                                                
SENATOR PEARCE  deferred to Mr. Tostevin,  noting that it  is part                                                              
of the financial responsibility section.                                                                                        
                                                                                                                                
MR. TOSTEVIN expressed confusion about that section.                                                                            
                                                                                                                                
SENATOR PEARCE suggested that Mr.  Tostevin probably didn't have a                                                              
copy of the proposed CS [Version Z].                                                                                            
                                                                                                                                
REPRESENTATIVE  PHILLIPS [referring to  an unspecified  version of                                                              
the bill]  informed Mr.  Tostevin that the  language can  be found                                                              
under Section 1, [subsection] (d),  and then the third [paragraph]                                                              
under (d).                                                                                                                      
                                                                                                                                
Number 1029                                                                                                                     
                                                                                                                                
MR.  TOSTEVIN responded  that this  language  has to  do with  the                                                              
financial  responsibility  requirements.   He  indicated that  the                                                              
version  from the  House Resources  Standing  Committee [HCS  CSSB                                                              
273(RES)]   had   provided   an  exemption   from   the   existing                                                              
requirements in  Alaska law that  an insurer agreed to  be subject                                                              
to direct  action in Alaska courts  with respect to  the financial                                                              
responsibility,  and  also to  appoint  an  agent for  service  of                                                              
process.  This  language carries forward that  exemption, he said.                                                              
Subsection (d) provides  three exemptions under existing  law.  He                                                              
stated:                                                                                                                         
                                                                                                                                
     It says, "Notwithstanding the  requirements of .040(e),"                                                                   
     which  is  in  the  existing   financial  responsibility                                                                   
     requirements, which  (indisc.) direct action,  (indisc.)                                                                   
     service of process, ... (l)  is a similar provision with                                                                   
     respect to tank  vessels, and .047 has a  provision with                                                                   
     nontank vessels.   And then  the section goes on  to say                                                                   
     that  the applicant  can provide  evidence of  financial                                                                   
     responsibility   through  proof  of   entry  in   a  P&I                                                                   
     [protection and indemnity] [club]  or other insurer, and                                                                   
     then it  goes on to say ...  that the insurer has  to be                                                                   
     financially solvent,  have a favorable history  of claim                                                                   
     handling.  It provides coverage  against exclusion risks                                                                   
     in  at  least the  amount  required  under (a)  of  this                                                                   
     section,  without any  special enforcement.   And  these                                                                   
     endorsements,  requirements,  [are] something  that  DEC                                                                   
     currently has in its regulations for tank vessels.                                                                         
                                                                                                                                
     And  then  (3), ...  doesn't  have  to agree  to  direct                                                                   
     action  in  court  or  appointment  of  (indisc.)  in  a                                                                   
     service  of process;  that  has to  do  with the  actual                                                                   
     insurer.   And then  (4) is,  again, a provision  that's                                                                   
     already  allowed in existing  law.   A P&I club  doesn't                                                                   
     actually  have to  be registered  to  sell insurance  in                                                                   
     this  state   as  long  as   they  aren't  ...   on  the                                                                   
     "disapproved"  list [of] the  Department of Community  &                                                                   
     Economic Development.   That's  an overview of  ... what                                                                   
     that section does.                                                                                                         
                                                                                                                                
Number 1156                                                                                                                     
                                                                                                                                
CHAIR BARNES  thanked Mr.  Tostevin and  asked whether  there were                                                              
additional  questions.   She  then asked  Senator  Pearce how  the                                                              
economic  impact  on the  businesses  affected  by this  would  be                                                              
addressed.  She further inquired  about the overlap of federal and                                                              
state laws.                                                                                                                     
                                                                                                                                
SENATOR PEARCE addressed the second  question first.  She said the                                                              
resolution, in  the form to be  proposed, will say that  one thing                                                              
the task force needs to do - "as  it does its rule making and then                                                              
makes the  recommendations of  those rules  to the legislature  to                                                              
make another statutory  change" - is to make  recommendations that                                                              
concern Alaska Statutes  and regulations which are  not subject to                                                              
preemption  by  federal  law;  those will  be  "layered"  to  work                                                              
together, rather  than just adding  costs, state  compliance being                                                              
different from federal compliance.   Turning attention to concerns                                                              
about any financial obligations and potential costs, she stated:                                                                
                                                                                                                                
     We  don't have  an effective  date  for the  contingency                                                                   
     planning portion,  so that will have to come  back.  The                                                                   
     task force, as a part of the  process, will lay out what                                                                   
     the  actual  rules  would  be  for  meeting  contingency                                                                   
     plans, and we will be able to  cross those out, probably                                                                   
     specifically,  now that  we have  planning standards  in                                                                   
     the law,  so you know  what your  plan [would fit].   So                                                                   
     before  anybody could  come  back with  recommendations,                                                                   
     those  would be "costed  out," and  I would expect  that                                                                   
     you will  see perhaps  not a fiscal  note to the  state,                                                                   
     but a clear understanding of  what the costs would be to                                                                   
     the   railroad  and   the   nontank   vessels  as   that                                                                   
     legislation  is brought  back  to the  legislature  next                                                                   
     year.                                                                                                                      
                                                                                                                                
Number 1300                                                                                                                     
                                                                                                                                
CHAIR BARNES thanked Senator Pearce  but asked that she add to the                                                              
explanation.    To  her,  she  said,  it  is  important  what  the                                                              
financial  effect  is  of  adopting   this  type  of  legislation,                                                              
including  effects on  the export  of fish,  timber and  minerals.                                                              
Those are  affected by how this  is implemented, and  she believes                                                              
the question must have an answer.                                                                                               
                                                                                                                                
SENATOR PEARCE answered:                                                                                                        
                                                                                                                                
     The  task force  will  be, as  a  part of  the  process,                                                                   
     putting  the  rules  together.    I  think  one  of  the                                                                   
     intents, even, is that there  not be ... an adverse cost                                                                   
     to the  different industries.  ... So, those  costs will                                                                   
     be developed.  We will figure  out what it would be, and                                                                   
     then we'll  have to  look at  each industry and  decide,                                                                   
     "Is that  going to  be adverse to  our resources  on the                                                                   
     worldwide  market?"    If  the  costs,  frankly,  Madame                                                                   
     Chairman, end  up being what I suspect they'll  be, from                                                                   
     just going through the rough  drafts, I don't think that                                                                   
     we're going  to impact any single industry  sufficiently                                                                   
     to be  able to  say that it  adversely impacts  Alaska's                                                                   
     resources  on worldwide markets.   But that's  something                                                                   
     that we'd be looking at.                                                                                                   
                                                                                                                                
     If  any  industry   feels  that  they  are   being  that                                                                   
     adversely impacted,  I would expect that they  - all the                                                                   
     industries will  be a part of  the task force  already -                                                                   
     ... will  come back  with either  not agreeing with  the                                                                   
     recommendations of the task  force, and come back to the                                                                   
     legislature and  say, "Here are the specific  costs, and                                                                   
     here is  why this will  adversely impact our  ability to                                                                   
     sell  our  resource  in world  markets,"  whatever  that                                                                   
     resource might  be.  So, we will be looking  at those on                                                                   
     the task force.                                                                                                            
                                                                                                                                
Number 1398                                                                                                                     
                                                                                                                                
CHAIR BARNES restated  that she thinks it is crucial  to know what                                                              
those  costs are.    Noting that  she  had provided  this  example                                                              
before, and that she believes it is pertinent, she stated:                                                                      
                                                                                                                                
     For example, you take a barge  that's laden with barrels                                                                   
     of  fuel.  That's  affected by  this legislation,  those                                                                   
     barrels  of  fuel,  because  if it  were  carried  in  a                                                                   
     tanker,  it would already  be covered.   But since  it's                                                                   
     being carried  in barrels for  home heating fuel  or for                                                                   
     cooking,  for those  sorts of things  that are  directly                                                                   
     related to  rural Alaska, ...  you need to  address what                                                                   
      that impact would be on those types of fuels that are                                                                     
     being carried to Western Alaska or wherever they might                                                                     
     be.                                                                                                                        
                                                                                                                                
Number 1456                                                                                                                     
                                                                                                                                
SENATOR PEARCE said  she understood what Chair  Barnes was saying.                                                              
However,  she  was trying  to  figure  out  whether the  bill,  as                                                              
written, would cover those anyway.   It says "self-propelled," she                                                              
indicated,  so barges are  not covered  but a self-propelled  ship                                                              
carrying those would  be included.  Fuel delivery  to the villages                                                              
is already covered under present law, she added.                                                                                
                                                                                                                                
CHAIR BARNES asked, "If it was a tanker-type?"                                                                                  
                                                                                                                                
SENATOR PEARCE responded,  "In a fuel barge."  She  said she isn't                                                              
sure what  happens at  the moment  to onboard  tanks, but  onboard                                                              
tanks on barges  are not in this bill, so they  won't be affected.                                                              
"We took that out on the Senate side," she added.                                                                               
                                                                                                                                
CHAIR BARNES said she was talking  about self-propelled types such                                                              
as boats  that would carry home  heating fuel.  She  restated that                                                              
it does  have an impact,  "and we need  to know what  those things                                                              
are."                                                                                                                           
                                                                                                                                
Number 1506                                                                                                                     
                                                                                                                                
REPRESENTATIVE PHILLIPS pointed out  that there is a weight factor                                                              
also; some of  those smaller landing craft, for  example, wouldn't                                                              
be covered under this.                                                                                                          
                                                                                                                                
CHAIR  BARNES said  that [exclusion]  is [for  vessels] under  400                                                              
tons.                                                                                                                           
                                                                                                                                
SENATOR PEARCE  agreed, saying the  small ones are not  covered by                                                              
the bill.                                                                                                                       
                                                                                                                                
CHAIR  BARNES reiterated  that  all  of those  things  need to  be                                                              
looked at "because we can't afford  to drive up the cost of living                                                              
in Alaska,  especially in the rural  areas of the state."   As for                                                              
fish,  if  the  cost  of  doing   businesses  is  driven  up,  and                                                              
[fishermen] cannot  compete with  the Norwegian salmon  being pen-                                                              
reared, "we need to know that too."                                                                                             
                                                                                                                                
CHAIR BARNES  asked whether  there were  additional questions  for                                                              
Senator Pearce; none were offered.   She announced that no further                                                              
testimony  would  be taken  that  day,  and  she noted  that  [Mr.                                                              
Tostevin]   of  the  Department   of  Law   and  Michelle   Brown,                                                              
Commissioner, Department  of Environmental Conservation,  had been                                                              
standing  by to  answer questions.   She  suggested that  everyone                                                              
needed an  opportunity to  study the proposed  CS before  the next                                                              
hearing.   Rather than  adjourn, she would  recess the  meeting to                                                              
the call of the chair in order to  provide some time to study this                                                              
and determine  exactly what issues  need to be brought  forward to                                                              
the sponsor.                                                                                                                    
                                                                                                                                
REPRESENTATIVE PHILLIPS  requested that the committee  be provided                                                              
a copy of the sectional analysis as soon as it was done.                                                                        
                                                                                                                                
Number 1589                                                                                                                     
                                                                                                                                
CHAIR BARNES affirmed  that her staff would distribute  it to each                                                              
member as soon as possible.                                                                                                     
                                                                                                                                
ADJOURNMENT/RECESS                                                                                                              
                                                                                                                                
CHAIR BARNES recessed  the meeting of the Special  House Committee                                                              
on World Trade and Federal Relations  at 1:34 p.m., to the call of                                                              
the chair.                                                                                                                      
                                                                                                                                
                                                                                                                                

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