03/13/2012 04:00 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB204 | |
| SB152 | |
| SB157 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| = | SB 204 | ||
| = | SB 152 | ||
| = | SB 157 | ||
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 13, 2012
4:05 p.m.
MEMBERS PRESENT
Senator Donald Olson, Chair
Senator Thomas Wagoner
Senator Albert Kookesh
Senator Linda Menard
Senator Johnny Ellis
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 204
"An Act relating to loans for the purchase of fishing quota
shares by certain community quota entities; and providing for an
effective date."
- MOVED SB 204 OUT OF COMMITTEE
SENATE BILL NO. 152
"An Act requiring legislative approval before the issuance of an
authorization, license, permit, or approval of a plan of
operation for a large-scale metallic sulfide mining operation
that could affect water in or flowing into or over the Bristol
Bay Fisheries Reserve."
- HEARD & HELD
SENATE BILL NO. 157
"An Act allowing an insurer to cancel an insurance policy if
property becomes unoccupied and the vacancy increases the hazard
insured against."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 204
SHORT TITLE: LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS
02/21/12 (S) READ THE FIRST TIME - REFERRALS
02/21/12 (S) CRA, FIN
03/01/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
03/01/12 (S) Heard & Held
03/01/12 (S) MINUTE(CRA)
03/13/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
BILL: SB 157
SHORT TITLE: CANCEL INSUR. ON CERTAIN VACANT PROPERTY
SPONSOR(s): LABOR & COMMERCE
01/17/12 (S) READ THE FIRST TIME - REFERRALS
01/17/12 (S) L&C, CRA
01/26/12 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
01/26/12 (S) Heard & Held
01/26/12 (S) MINUTE(L&C)
02/23/12 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/23/12 (S) <Bill Hearing Postponed>
02/28/12 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/28/12 (S) Moved CSSB 157(L&C) Out of Committee
02/28/12 (S) MINUTE(L&C)
02/29/12 (S) L&C RPT CS 5DP NEW TITLE
02/29/12 (S) DP: EGAN, GIESSEL, DAVIS, PASKVAN,
MENARD
03/05/12 (S) CORRECTED L&C CS RECEIVED NEW TITLE
03/05/12 (S) BILL REPRINTED 3/5/12
03/06/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
03/06/12 (S) -- MEETING CANCELED --
03/13/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
BILL: SB 152
SHORT TITLE: LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE
SPONSOR(s): FRENCH
01/17/12 (S) PREFILE RELEASED 1/13/12
01/17/12 (S) READ THE FIRST TIME - REFERRALS
01/17/12 (S) CRA, RES
02/28/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
02/28/12 (S) Heard & Held
02/28/12 (S) MINUTE(CRA)
03/01/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
03/01/12 (S) Heard & Held
03/01/12 (S) MINUTE(CRA)
03/13/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
DAVID SCOTT, Staff
Senator Donald Olson and
Community and Regional Affairs Committee aide
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 204 on behalf of the Senate
Community and Regional Affairs Committee.
WANETTA AYERS, Director
Division of Economic Development
Department of Commerce, Community and Economic Development,
Anchorage, Alaska
POSITION STATEMENT: Did not state a position on SB 204.
DUNCAN FIELDS, Council Member
North Pacific Fishery Management Council
Kodiak, Alaska
POSITION STATEMENT: Testified in support of SB 204.
DONALD M. BULLOCK JR., Legislative Counsel
Division of Legal and Research Services
Legislative Affairs Agency
Juneau, Alaska,
POSITION STATEMENT: Addressed the legislative legal review for
SB 152.
SENATOR HOLLIS FRENCH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 152.
KRISTEN PETERSON, Staff
Senator French
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information on letters of support
for SB 152.
DANA OWEN, Staff
Senator Dennis Egan and
Aide, Senate Labor and Commerce Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 157 on behalf of the Senate
Labor and Commerce Committee.
SHELDON WINTERS, Lobbyist
State Farm Insurance
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 157.
ACTION NARRATIVE
4:05:37 PM
CHAIR DONALD OLSON called the Senate Community and Regional
Affairs Standing Committee meeting to order at 4:05 p.m. Present
at the call to order were Senators Wagoner, Kookesh, Ellis and
Chair Olson.
SB 204-LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS
4:06:01 PM
CHAIR OLSON announced the consideration of SB 204 and noted that
the committee heard it once before.
4:06:12 PM
DAVID SCOTT, Staff, Senator Donald Olson and Aide to the CRA
committee, sponsor of the legislation, reminded the committee
that during the previous hearing he described how the bill would
change current law. He noted that Wanetta Ayers and Duncan
Fields were available for questions. Responding to a question
from the Chair, he confirmed that there had been no phone calls,
in support or opposition to the bill.
SENATOR WAGONER referenced the side-by-side document in the
packets that compared current law to the provisions in SB 204.
He asked if there was a specific reason for reducing the maximum
loan amount from $2 million to $1 million. It seems
counterintuitive.
4:08:54 PM
WANETTA AYERS, Director, Division of Economic Development,
Department of Commerce, Community and Economic Development
(DCCED), asked if he was referring to the comparison with the
quota financing currently available for commercial fisheries.
CHAIR OLSON said the current law has a loan limit of $2 million
and SB 204 reduces the maximum to $1 million.
MS. AYERS explained that under the commercial fishing revolving
loan fund, which is for individuals operating in the open access
halibut fishery for quota share, the loan limit is $2 million.
She acknowledged that proponents of the bill were concerned that
the $1 million loan limit may preclude some of the nonprofit
organizations that would be financed under the Community Quota
Entity (CQE) revolving loan fund from achieving that 50,000
pound limit, but the decision when the bill was initially
drafted was that a $1 million loan limit would be sufficient.
SENATOR WAGONER asked if each entity has the ability to buy up
to 50,000 pounds.
4:09:32 PM
SENATOR MENARD joined the committee.
MS. AYERS answered that was correct. She added that DCCED
believes that the structure of the fisheries enhancement
revolving loan fund was more appropriate for these nonprofit
CQEs.
4:12:53 PM
DUNCAN FIELDS, Council Member, North Pacific Fishery Management
Council, reviewed the comparative relationship between a
nonprofit community organization like a CQE and an individual
that has an individual load limit. He then explained that 45
communities were qualified to form a nonprofit CQE to acquire
IFQ shares and the thinking was that with a $1 million limit the
program could be funded with $45 million. If the limit was $2
million, it would be a substantially larger amount. In the
balance was funding a program that all 45 communities could
participate in versus the $2 million limit offered to
individuals in the commercial loan program.
SENATOR MENARD commented that this would help commerce in those
Gulf of Alaska communities.
MR. SCOTT echoed the comments of Senator Menard.
SENATOR WAGONER asked where the quota came from.
4:15:43 PM
MR. SCOTT said his understanding was that the communities would
purchase IFQ shares from the current bank.
SENATOR WAGONER asked if the communities could purchase his
IFQs.
MR. SCOTT said yes.
SENATOR WAGONER said the math does not work; his IFQ shares were
worth $37.50 per pound so either he'd get just $20 per pound or
the $1 million would buy approximately half the quota.
SENATOR KOOKESH pointed out that the lower limit provides an
opportunity for more communities to get a foot in the door.
MS. AYERS confirmed that was correct. She added that as funds
revolve through the loan fund and entities are able to go back
and obtain subsequent loans, DCCED believes it will be a
successful program.
CHAIR OLSON thanked Ms. Ayers and Mr. Fields.
4:18:22 PM
SENATOR WAGONER moved to report SB 204 from committee with
individual recommendations and attached fiscal note(s).
CHAIR OLSON announced that without objection, SB 204 moved from
the Senate Community and Regional Affairs Standing Committee.
At ease from 4:18 p.m. to 4:20 p.m.
SB 152-LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE
4:20:32 PM
CHAIR OLSON announced the consideration of SB 152.
4:21:23 PM
DONALD M. BULLOCK, Legislative Counsel, Legislative Legal
Services, Legislative Affairs Agency, said he looked at whether
SB 152 conflicted with either Article I, sec. 15 or Article II,
sec. 19 of the Constitution of the State of Alaska.
Article I, sec. 15 has to do with prohibited state action. In
part, it says:
No law impairing the obligation of contracts, and no
law making any irrevocable grant of special privileges
or immunities shall be passed.
The issue is that there is no information on whether there would
be any contracts in place that would be voided or could not be
carried out as a result of this legislation.
Article II, sec. 19 has to do with local or special acts. In
part, it says:
The legislature shall pass no local or special act if
a general act can be made applicable.
Although the bill only identifies the specific headwaters of
Bristol Bay, it would probably survive a challenge under the
local and special prohibition because of the statewide interest
in the Bristol Bay fishery.
MR. BULLOCK said the requirement of legislative approval is
probably the most significant provision in the bill. It is a
separation of powers issue. The legislature has enacted laws and
same with the federal government that relate to permits and what
has to be done to receive a permit, license, authorization, or
the approval of a plan of operation. The executive branch
carries out that function, and the bill would effectively give
the legislature the opportunity to veto an executive branch
decision that presumably was made within the authority received
from the legislature. Article II, sec. 1 and Article III, sec. 1
describes the powers that the legislature has and the powers
that the executive has.
4:23:57 PM
SENATOR MENARD questioned whether he was cautioning the
committee about going forward with the bill.
MR. BULLOCK said he couldn't talk about the outcome; he could
talk about the constitutional issues.
The other issue raised by the bill relates to the risk to the
state if there was legislation or a regulation that effectively
prohibited the development of vested mineral rights. This is a
property interest that is protected by the takings clause under
both the Alaska and U.S. Constitution. If there is a taking by
the government, there may be a risk that the state would have to
compensate the company or person that can no longer economically
develop their claim.
If SB 152 were to pass and the legislature vetoed something that
DNR had approved, a challenge from the mineral interest owner
could be expected under the separation of powers. Even without
this legislation, if there was a change in the regulation that
related to a vested mining interest, there is a risk that the
state may have to compensate the owner of the mineral interest
if the economic value has been effectively taken. It would
probably be a question for a jury or other fact finder as to
what the value would be.
4:27:57 PM
CHAIR OLSON asked if other states have similar legislation with
regard to legislative approval.
MR. BULLOCK answered that virtually every state has a separation
of powers issue, and the legislature can deal with this
situation in other ways, such as appropriation. He explained the
administrative process for classifying land that is and is not
open to mining. If an area is open to mining, a company can come
in and discover the mineral, locate and set the boundaries, and
record it. That company has acquired a right to mine, and that
is similar to the federal mining laws that date back to the 19th
century. He said the concept of regulatory taking has come up in
other states so there would be that issue as well as the
separation of powers regarding who makes the decision as to
whether something can go forward.
He noted that a bill currently in the legislature would in the
future close some land in the Alyeska area to mining. That does
not present a problem when it's done ahead of time; it's after
the rights have been vested that the risks and problems arise.
CHAIR OLSON asked if the bill would conflict with either federal
law or the U.S. Constitution.
MR. BULLOCK said this would probably be limited to state action;
the state does not have any power over any agency decision of
the federal government.
4:30:29 PM
SENATOR MENARD asked what mine project since the 19th century
was held up the longest due to regulatory requirements.
MR. BULLOCK said the Kennecott project in Juneau was delayed
because of environmental concerns about the drainage from the
mine tailings. The matter went to the U.S. Supreme Court because
there was a conflict in the interpretation of laws administered
by the Corps of Engineers and the Department of Environmental
Conservation. He noted that environmental litigation has to be
anticipated in any mining project.
4:33:19 PM
SENATOR HOLLIS FRENCH, sponsor of SB 152, Alaska State
Legislature, said he would first like to address the idea that
the legislature's action could constitute a taking of a vested
right. He said he would like Mr. Bullock to explain further how
the agency's action is any different from the legislature's. He
asked if it would be a taking if DNR ultimately denies a permit
to Pebble because the legislature's action would be exactly the
same.
He said it is possible that the action is an encroachment on the
executive function, but the legislature already exercises power
in many blended areas. The governor's nominations of
commissioners and attorney general is a blended area where the
legislature exercises a check on his authority. The governor has
some blended legislative authority as well. He can veto the
legislature's capital appropriations.
CHAIR OLSON opined that those were different than the separation
of powers in the specific action that Mr. Bullock addressed.
SENATOR FRENCH pointed out that there has been a law on the
books since the mid-70s on the same topic with respect to oil
and gas in Bristol Bay. Although the constitutionality of that
statute has not been challenged, it has some precedential value.
4:35:35 PM
SENATOR WAGONER asked who provided the maps.
SENATOR FRENCH answered he got them from Rick Halford.
SENATOR WAGONER said the exploration license area depicted on
the maps was between 125 and 150 miles away from the proposed
site of the Pebble Mine.
SENATOR FRENCH reviewed the map and thanked Senator Wagoner for
the correction; he agreed completely.
CHAIR OLSON asked for a corrected map and Senator French agreed
to provide one accurate map to all committee members.
CHAIR OLSON asked what kind of support the bill had elicited.
4:38:15 PM
KRISTEN PETERSON, Staff for Senator French, said the office had
received a fair number of letters of support from members of the
Renewable Resources Coalition.
CHAIR OLSON held SB 152 in committee.
SB 157-CANCEL INSUR. ON CERTAIN VACANT PROPERTY
4:38:55 PM
CHAIR OLSON announced the consideration of SB 157.
4:39:19 PM
DANA OWEN, Aide, Senate Labor and Commerce Committee, sponsor of
SB 157, explained that the purpose of the bill was to correct
what some insurance companies believe is a shortcoming in the
statute. This amendment would clarify that an insurance company
is able to cancel an insurance policy if the risk that is
insured against increases.
The Labor and Commerce Committee deleted the reference to
"unoccupied" property because so many Alaskans leave their
dwellings for long periods. The new language on page 2, lines 6-
9, [which amends AS 21.36.210(f)] adds the following reason that
an insurer may cancel a policy of personal insurance:
(6) vacancy of the insured property that
increases a hazard insured against; in this paragraph,
"vacancy" means entire abandonment of the property by
the insured and the property does not contain contents
of substantial utility.
CHAIR OLSON questioned the urgency of the bill.
MR. OWEN responded that insurance companies saw the ambiguity in
the statutes and wanted clarification.
SENATOR WAGONER commented on the downturn in the Alaska economy
in 1980s when people dropped their keys at the bank and left
their homes full of items that were of substantial utility. He
said he understood the concern, but had a problem with the
language.
4:46:22 PM
SHELDON WINTERS, Lobbyist, State Farm Insurance, said he would
address previous questions. He agreed with Senator Wagoner that
the language in the CS was very restrictive, but it was better
than the current statute. With regard to the question about
urgency, he said this is an effort to keep rates as low as
possible. All other states have adopted a similar provision with
no opposition.
SENATOR MENARD confirmed that the Labor and Commerce Committee
deliberated on the language.
CHAIR OLSON announced he would hold SB 157 in committee.
4:50:06 PM
There being no further business to come before the committee,
Chair Olson adjourned the Senate Community and Regional Affairs
Standing Committee at 4:50 p.m.
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