Legislature(2015 - 2016)BELTZ 105 (TSBldg)
03/24/2015 01:30 PM Senate LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB86 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 86 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 24, 2015
1:30 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Cathy Giessel, Vice Chair
Senator Kevin Meyer
Senator Gary Stevens
Senator Johnny Ellis
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 86
"An Act relating to a refined fuel surcharge; relating to the
motor fuel tax; relating to a qualified dealer license; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 86
SHORT TITLE: REFINED FUEL SURCHARGE; MOTOR FUEL TAX
SPONSOR(s): SENATOR(s) MICCICHE
03/20/15 (S) READ THE FIRST TIME - REFERRALS
03/20/15 (S) L&C, FIN
03/24/15 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR PETER MICCICHE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 86.
LARRY SEMMENS, Staff
Senator Peter Micciche
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Delivered a sectional analysis of SB 86.
LARRY HARTIG, Commissioner
Department of Environmental Conservation (DEC)
Juneau, Alaska
POSITION STATEMENT: Provided supporting testimony for SB 86.
KRISTIN RYAN, Director
Division of Spill Prevention and Response
Department of Environmental Conservation (DEC)
POSITION STATEMENT: Provided supporting testimony and reviewed
the DEC fiscal note for SB 86.
KEN ALPER, Director
Tax Division
Department of Revenue (DOR)
Juneau, Alaska
POSITION STATEMENT: Reviewed the DOR fiscal note for SB 86.
DOUGLAS MERTZ
Prince William Sound Regional Citizens Advisory Council
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 86.
KARA MOIARTY, President and CEO
Alaska Oil and Gas Association (AOGA)
Anchorage, Alaska
POSITION STATEMENT: Testified that AOGA does not oppose SB 86.
AVES THOMPSON, Executive Director
Alaska Trucking Association
POSITION STATEMENT: Testified in support of SB 86.
ACTION NARRATIVE
1:30:23 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:30 p.m. Present at the call to
order were Senators Giessel, Ellis, and Chair Costello. Senators
Meyer and Stevens joined the committee during the course of the
meeting.
SB 86-REFINED FUEL SURCHARGE; MOTOR FUEL TAX
1:30:55 PM
CHAIR COSTELLO announced the consideration of SB 86. "An Act
Relating to a refined fuel surcharge; relating to the motor fuel
tax; relating to a qualified dealer license; and providing for
an effective date."
1:31:44 PM
SENATOR PETER MICCICHE, Sponsor of SB 86, introduced the
legislation speaking to the following sponsor statement:
The Oil and Hazardous Substance Release Prevention and
Response Fund (Response Fund) was created to provide a
reliable source of funding for the Department of
Environmental Conservation's (DEC) activities related
to oil spill response and prevention.
The Response Fund has been financed with a five cent
per-barrel surcharge on oil produced.
Decreasing oil production has resulted in a decline of
revenue available to pay for spill prevention and
cleanup work. The prevention account which receives
$.04 cents per barrel, no longer has enough revenue to
cover essential activities resulting in the need for
an immediate solution that fixes the problem for
future years as well.
A variety of industries and individuals spill oil and
hazardous substances, including private homeowners,
mines, fuel shippers, boat owners, village tank farms
and the aviation industry to name a few. The majority
of spills the State responds to are refined fuels. For
example, in fiscal year 2014, of the 2,028 spills
reported, 1,525 were refined fuel spills. According to
Kristin Ryan, the Director for the Division of Spill
Prevention and Response, 75-80% of active contaminated
sites in Alaska are also the result of refined fuel
spills. This bill distributes prevention and response
costs across all users of refined fuel that are
causing these response and cleanup efforts.
This bill proposes a surcharge of .8 cents per gallon
on refined fuels distributed in the state. Fuel
distributors already file and pay taxes on motor fuels
each month. This bill anticipates that the surcharge
will be collected from the same distributors and
reported on the same forms, reducing implementation
costs and maximizing efficiency for both the payers
and the State. All funds collected will be deposited
in the Response Fund's Prevention Account.
It is very important to the protection of Alaska's
human and environmental health to have adequate funds
available for spill prevention and response
activities. This is the right time to broaden the base
of support for this critical program. An eight tenths
of a cent per gallon surcharge is a reasonable price
to pay to fund these activities. Please join me in
passing this bill.
1:34:03 PM
SENATOR MEYER joined the committee.
SENATOR MICCICHE reported that there is intent language in the
budget to cover the FY15 $800,000 shortfall by allowing a one-
time switch between funds.
1:35:09 PM
LARRY SEMMENS, Staff, Senator Peter Micciche, read the following
sectional analysis written by Legislative Legal Services:
Section 1 amends AS 43.05.230(g) by adding qualified
dealer license information to the list of license
information that is public.
Section 2 adds a new surcharge, a refined fuel
surcharge, to AS 43.40, lists exemptions to the
surcharge, and states that legislature may appropriate
the balance of the surcharge to the oil and hazardous
substance release prevention account of the oil and
hazardous substance release prevention and response
fund.
Section 3 amends AS 43 .40.010(a), the motor fuel tax,
to conform to the addition of the refined fuel
surcharge in sec. 2.
Section 4 amends AS 43.40.010(b), the motor fuel tax,
to conform to the addition of the refined fuel
surcharge in sec. 2.
Section 5 amends AS 43.40.010(e) to specify that AS
43.40.010(e) applies only to the motor fuel tax and
not to the refined fuel surcharge.
Section 6 replaces repealed AS 43 .40.010(c), that
applied only to the motor fuel tax, with a new
statutory section AS 43.40.0 13, that sets the
schedule for remittance of the refined fuel surcharge
and the motor fuel tax, and allows a deduction from
the amount owed for the expense of filing a return.
Section 7 amends AS 43.40.015(c) to specify that the
certificate of use requirement in 43 .40.015 applies
only to the motor fuel tax.
Section 8 amends AS 43.40.015(d) to specify that the
certificate of use requirement in AS 43.40.015 applies
only to the motor fuel tax.
Section 9 amends AS 43.40.030, related to the refund
of the motor fuel tax for nonhighway use, to clarify
that AS 43.40.03 0 applies only to the motor fuel tax.
Section 10 amends AS 43.40.035(a), relating to refunds
for resales, to include the new refined fuel surcharge
in AS 43.40.
Section 11 amends AS 43 .40.035(c), relating to
federal fuel purchase with a credit card to include
the new refined fuel surcharge in AS 43.40.
Section 12 amends AS 43.40.050(b), relating to the
timing and waiver of a tax or surcharge refund to
include the new refined fuel surcharge in AS 43.40.
Section 13 amends AS 43.40.060, relating to the
issuance of separate invoices related to a refund
claim, to include the new refined fuel surcharge in AS
43.40.
Section 14 amends AS 43.40.070, related to the refund
of the motor fuel tax from the highway fuel tax
account, to clarify that AS 43.40.070 only applies to
the motor fuel tax.
Section 15 adds a new subsection to AS 43.40.070
requiring that the department refund the refined fuel
surcharge from the oil and hazardous substance release
prevention account of the oil and hazardous substance
release prevention and response fund.
Section 16 amends AS 43.40.080(a), relating to
determining the validity of a refund claim to include
the new refined fuel surcharge in AS 43.40.
Section 17 amends AS 43.40.085, requiring dealers and
users of fuel to maintain records relating to sales of
fuel for three years, to include the new refined fuel
surcharge in AS 43.40.
Section 18 amends AS 43.40.092(a), relating to a motor
fuel exemption for certain jet fuels, to specify that
the subsection applies only to the motor fuel tax.
Section 19 adds a new section, AS 43.40.094, creating
a qualified dealer license in statute.
Section 20 amends the definition of "dealer' AS
43.40.100(1) to include the new refined fuel surcharge
in AS 43.40.
Section 21 amends the definition of "qualified dealer
AS 43.40.100(3) to include the new refined fuel
surcharge in AS 43.40.
Section 22 amends the definition of "user" AS
43.40.100(4) to include the new refined fuel surcharge
in AS 43.40.
Section 23 adds a definition for "refined fuel" to AS
43.40.100.
Section 24 repeals AS 43 .40.010(c).
Section 25 provides transition language for
regulations related to qualified dealer licenses.
Section 26 provides an effective date of July 1, 2015.
1:40:14 PM
SENATOR MEYER noted that oil production is dropping and
suggested raising the surcharge from .8 cent to a penny to avoid
having to address the matter again in the next several years.
SENATOR MICCICHE offered his belief that the funding is more
than adequate at .8 cents, even taking into account the
exemptions that will likely occur. The hope is that production
will increase but if it doesn't the surcharge is adequate for a
few years. "We don't believe in providing more than adequate
funding for the program," he said.
SENATOR MEYER suggested that any surplus from a one cent
surcharge could perhaps be used to maintain roads. He referenced
the number of refined fuel spills last year and asked what other
types of spills occur.
SENATOR MICCICHE replied there are many types of spills
including dry cleaning solution, battery acid and glycol. He
explained that SB 86 is about providing a solution to the short
funding of the Spill Prevention and Response (SPAR) fund. It's a
surcharge, not a tax for transportation.
SENATOR MEYER offered his belief that the spill causer should
pay for the cleanup and observed that the state either isn't
collecting from those who are creating spills or it isn't
collecting enough or it doesn't know who is causing the spill.
He asked which it is.
SENATOR MICCICHE responded that the Department of Environmental
Conservation (DEC) has the authority to hold responsible the
person that caused the spill, but the fund is most useful in
smaller spills where people do not have the ability to pay or
it's unclear who created the spill. He cited examples.
He reminded the committee that the five cent per-barrel
assessment was based on the level of risk for the industry in
1990 when the Oil Spill Prevention Act passed. Since then the
level of risk has dropped dramatically for several reasons
including increased pipe inspection, double-hulled tankers,
enhanced sea plans, and lower production. At the same time the
industry initiated spill response measures like the Prince
William Sound Regional Citizens Advisory Council and Cook Inlet
Regional Citizens Advisory Council to respond to spills and
their annual investment is about $170 million.
1:46:12 PM
SENATOR MEYER asked who is causing the spills that aren't being
collected.
SENATOR MICCICHE said the majority come from things like boat
storage yards, home heating spills, dry cleaning spills, and
mines. He said these funds are used for those types of spills as
well as prevention. He expressed the desire for DEC to increase
awareness to the small things that can be done to reduce the
likelihood of a spill.
1:48:09 PM
SENATOR STEVENS joined the committee.
CHAIR COSTELLO, noting that the SPAR fund has been underfunded
for some time, asked if there have been past efforts to address
the shortfall and why they weren't successful.
SENATOR MICCICHE said his understanding is that previous
legislation asked for an increase in per-barrel charges and that
might have to do with the resistance. He said he calls the .8
cents per gallon a surcharge because it will likely trickle down
from the distributor level. This matter came to his attention
this year because he wanted the re-appropriations to go back
into the general fund. He said the state is not causing the
spills and he believes the surcharge should target the people
who are responsible for the spills.
CHAIR COSTELLO asked if the rationale for the bill is that the
people responsible for the spills should be contributing to the
fund, which hasn't happened since the SPAR fund was created.
SENATOR MICCICHE agreed and reiterated that the fund pays for
spills where people don't have the ability to pay or are long
gone. Everybody contributes so the cost is spread fairly across
all users of refined fuels in the state.
CHAIR COSTELLO asked if he calculated the .8 [cents per gallon]
surcharge based on the overall usage in Alaska.
SENATOR MICCICHE offered his belief that .8 cents delivers
between $7-8 million per year with exemptions for international
flights and state purchases.
CHAIR COSTELLO asked him to list the exemptions.
1:51:42 PM
MR. SEMMENS read the following exemptions listed in Section 2 on
page 2, lines 1 - 7.
(1) fuel sold to a federal government agency for
official use;
(2) fuel refined and used outside the United States;
(3) liquefied petroleum gas;
(4) fuel sold for use in jet propulsion aircraft
operating in flights
(A) to foreign countries; or
(B) that continue from foreign countries;
(5) fuel sold or transferred between qualified
dealers.
CHAIR COSTELLO asked if the record keeping requirement in
Section 17 is onerous.
SENATOR MICCICHE replied his office worked extensively with
Department of Environmental Conservation (DEC) and the
Department of Revenue (DOR) on the forms to avoid a fiscal note.
"This just adds an extra box for the fuel that will be paying
the .8 cents."
CHAIR COSTELLO asked if there is any resistance to the
legislation and who he reached out to when working on the bill.
SENATOR MICCICHE replied he has not heard any objection and
letters of support are on the way from the response
organizations. They spoke to the Alaska Oil and Gas Association
(AOGA) and the State Chamber of Commerce and both wanted a
little more information before commenting on the bill.
1:54:56 PM
SENATOR STEVENS asked if he expects the $7-8 million to remain
consistent over the years.
SENATOR MICCICHE explained that it is not based on the price of
fuel, it's a per gallon charge so it should be fairly stable. He
suggested the department might have a different view.
SENATOR MEYER asked if the military would be exempt.
MR. SEMMENS confirmed that the military would qualify under the
federal government exemption.
SENATOR MEYER asked if the sponsor or DEC came up with the
exemptions.
MR. SEMMENS replied it was in cooperation with DEC and the
drafters.
SENATOR MEYER questioned why the federal government should be
exempted.
MR. SEMMENS offered his understanding that any fuel delivered to
the federal government is not eligible for this surcharge.
1:57:08 PM
SENATOR GIESSEL asked why the state isn't listed in the
exemptions because it was mentioned in the introduction.
MR. SEMMENS replied the forthcoming CS will address that issue.
1:57:46 PM
LARRY HARTIG, Commissioner, Department of Environmental
Conservation (DEC), stated that there has been a need for years
to make the SPAR fund sustainable otherwise it will be necessary
to severely cut services. Services to villages will be cut and
training reduced. The timing is critical because the budget does
not address the $7 million shortfall for next year.
KRISTIN RYAN, Director, Division of Spill Prevention and
Response, Department of Environmental Conservation (DEC), said
DEC is doing what it can to improve cost recovery efforts,
including an automated billing system to bill monthly. There are
situations where DEC is unable to recover costs, but it does
recover all its costs associated with industry-related oil spill
incidents. DEC recovers all its costs from any entity that the
state regulates or has the financial responsibility to have an
insurance policy to cover recovery costs. The issue is the small
community that DEC does not regulate and the small spills by
entities that don't have the financial responsibility to carry
an insurance policy for a home heating oil tank. DEC is working
to resolve this issue so that people can get the coverage they
need for those situations. SB 86 targets these situations.
CHAIR COSTELLO asked for an explanation of the fiscal note.
MS. RYAN said DEC submitted a zero fiscal note because
implementing the legislation will not increase costs to the
division. She deferred to Mr. Alper to discuss the fiscal note
that addresses the revenue that would be generated and the one
to implement the legislation.
2:02:09 PM
KEN ALPER, Director, Tax Division, Department of Revenue (DOR),
explained that the DOR revenue fiscal note estimates the dollar
value of what would be generated by the bill beginning in FY16.
The analysis explains the mechanism that was used to come up
with the figures. He apologized that while the fiscal note was
prepared and received by the companion legislation, he didn't
see it here today.
CHAIR COSTELLO said he could explain it when the fiscal note is
in front of the committee.
MR. ALPER stated agreement with the sponsor that the FY16
estimated revenue stream is $7.7 million. When it is revised to
include the exemption of sales to state entities it could be in
the range of $7.5 million.
2:03:42 PM
SENATOR MEYER asked Ms. Ryan if the division sends DEC employees
to clean up spills or relies on contractors.
MS. RYAN replied it depends on the event. For example, the
division is sending a responder to the truck rollover on the
Dalton Highway. The trucking firm that is responsible for the
spill has an insurance policy and already has a contract with a
responder so the division is taking an oversite role to ensure
that the contractor is cleaning the spill adequately. She noted
that spills over creeks are more serious situations than over
dry land, and spills on the pipeline right of way are also
sensitive. Every incident is different. Small spills in villages
may be treated without the division going to the scene, but for
larger spills the division has to send a response person/team
and sometimes hire a contractor. If there is imminent threat to
the environment or human health and a responsible party can't be
found, DEC has the authority to take over the cleanup. She
emphasized that that is not the preferred approach.
CHAIR COSTELLO asked Ms. Ryan to provide the overview that was
given to the Resources Committee because it will help give the
history of the fund.
2:05:31 PM
SENATOR MEYER asked how many employees are dedicated to spill
response.
MS. RYAN said there are about 160 employees in the Division of
Spill Prevention and Response. They are currently divided into
three units but will be consolidated into two main units. One
will deal with contaminated sites, which is long term and can
take years to resolve. The other is the emergency response unit.
This unit will also do contingency planning, work with the
regulated companies to be prepared in the event of a spill, and
help unregulated entities through the process.
SENATOR MEYER surmised that spills do not occur all the time and
asked if it wouldn't be wise to contract services for spill
response instead of using state employees who may or may not be
busy all the time.
MS. RYAN clarified that DEC does contract and tries to rely on
the private sector to the extent possible. She explained that
she is combining the planning unit with the responding unit
because she wants the responders to be working on planning
efforts when they are not responding. She continued to explain
that, "We've reduced five positions and $500,000 from our budget
in the FY16 budget cycle as a reflection of the efficiencies
we're going to gain by combining my planning unit with my
response unit."
2:07:43 PM
SENATOR STEVENS asked if the estimated $7-8 million per year is
sustainable and if it will be enough as production declines.
MR. ALPER clarified this surcharge is based on oil consumption
in the state, not oil production from the North Slope. This bill
amends the existing AS 43.40, Alaska's motor fuel excise tax.
This surcharge applies to the four motor fuels that are
currently taxed and adds the broader spectrum of refined fuels.
SENATOR STEVENS deduced that the $7-8 million will be sustained.
MR. ALPER said the expectation is for small growth over time as
the economy grows. The fiscal note estimates 2 percent growth
per year. He advised that the amount of refined fuel on which
the taxes are currently paid is a little over 600 million
gallons per year. Taxes are not paid on another billion gallons
a year due to existing exemptions in statute so somewhere in
between is the tax base for this new surcharge.
CHAIR COSTELLO asked if he is confident that the estimate will
satisfy the need.
MR. ALPER pointed out that DOR's job is to collect and
administer the taxes. He believes the fiscal note is correct,
but he isn't the best person to say whether it is sufficient to
meet the needs of the SPAR fund multiple years from now.
MS. RYAN said the current fund deficit is $7 million and this
legislation will generate that amount. Oil production is the
division's other source of revenue so she may be back if
production continues to decline. However, she is motivated to do
whatever possible to reduce costs and extend the life of this
increment.
CHAIR COSTELLO asked if she sees the state being responsible for
the group of users that are exempt from this surcharge.
MS. RYAN answered yes; there are spills and contaminated sites
associated with those user groups. The federal government spills
and federal funds are used to recover most but not all costs.
The state also owns many contaminated sites and causes many
spills. She said the sponsor, DOR and DEC worked to keep the
exemptions to a minimum, most are required by law.
CHAIR COSTELLO asked what percent of the division's budget is
represented by the $7 million.
MS. RYAN replied the total division budget is about $19 million;
$8 million is federal funds that come from oversite of
contaminated sites and the remainder is the response fund. The
department uses a portion of the response fund for
administrative overhead.
SENATOR MEYER asked if the division is monitoring the legacy
wells on the North Slope that have been there since the 1940s
and haven't been cleaned up.
MS. RYAN said the division is working with the Bureau of Land
Management (BLM) to get resolution on those sites. Fortunately,
federal law requires federal agencies to comply with state law.
That distinction gives the state considerable power and they try
to use it as effectively as possible.
2:15:47 PM
SENATOR GIESSEL highlighted that the Senate Resources Committee
last year coined the term travesty wells as opposed to legacy
wells.
SENATOR ELLIS recognized that this is the anniversary of the
Exxon Valdez hitting Blight Reef. He spoke to the tragedy, the
discussion in the legislature about a modest adjustment in the
economic limit factor (ELF) tax regime. The other factor that
affects this discussion is the five cent per-barrel surcharge on
production for a response fund. The oil industry lobbyists and
oil executives basically said they have insurance to deal with
spills. He extended credit to the sponsors for the effort to
broaden the tax base. He said he appreciates being here today
and being given the opportunity to replenish the spill response
fund, which is long overdue.
CHAIR COSTELLO opened public testimony.
2:19:00 PM
DOUGLAS MERTZ, Prince William Sound Regional Citizens Advisory
Council (PWSRCAC), advised that this organization came about in
the wake of the 1989 Exxon Valdez oil spill, and has since
become a leading expert in this area. He related his work
specializing in oil spill response including representing the
administration on the working group that came up with the
strategy that places the burden on the crude industry when
there's a spill. This was eventually implemented in statute.
MR. MERTZ said PWSRCAC's position is that it is essential to
address the funding shortfall in the SPAR fund. Lessons from the
Exxon Valdez made it clear that it is imperative to have a
robust system in place to prevent spills and to respond
immediately when one occurs. Twenty-five years later it makes
sense to spread the burden for spill prevention and recovery to
the refined industry because refined products are a large part
of the problem. He reminded the members that prevention is
funded by the surcharge on refined fuel and response is funded
by another surcharge that created a $50 million fund. However,
$50 million in 1991 is roughly equivalent to $32 million or $33
million today due to inflation. "So we are in a less capable
position now to respond to major spills than we were 25 years
ago," he said. Over time that will get worse if the $50 million
is not inflation adjusted. For that reason PWSRCAC recommends
either inflation proofing the response fund or increasing the
corpus of that fund so it is equivalent to what the legislature
intended in 1990 and 1991. He acknowledged that is not part of
this bill.
MR. MERTZ concluded that SB 86 is a good and necessary bill for
spill prevention and PWSRCAC supports it wholeheartedly.
SENATOR MEYER asked if the $50 million fund is drawing interest.
MR. MERTZ answered yes, but the interest is deposited in the
prevention fund.
SENATOR MEYER suggested instead depositing the interest in the
response fund.
MR. MERTZ responded that it's a zero sum game because the
prevention fund would lose the money.
SENATOR MEYER said he understands.
2:24:17 PM
KARA MOIARTY, President and CEO, Alaska Oil and Gas Association
(AOGA), stated that AOGA is the professional trade association
whose mission is to foster the long-term viability of the oil
and gas industry for the benefit of all Alaskans. She clarified
that AOGA was not involved in crafting SB 86, but had frequent
conversations with Commissioner Hartig and Director Ryan. She
explained that because this is a tax matter she needed unanimous
consent from AOGA members before she could appear before the
committee to testify. She listed the members noting that it
includes both the producers and the refineries in the state of
Alaska.
She reminded the members that Alaska has had some sort of
cleanup fund in place since 1976. During the construction of the
Trans Alaska Pipeline System (TAPS) it was called the Coastal
Protection Fund. Over time the fund became the Oil Spill
Mitigation account, the Oil Spill Response account, and in 1986
it was enshrined in statute as the Oil and Hazardous Substance
Prevention and Relief Response Fund. The industry refers to it
as the 470 Fund, which was the number of the bill.
MS. MOIARTY highlighted that AOGA has long supported fair and
equitable efforts to ensure that the state of Alaska is
financially prepared in the event of a spill. She said the oil
and gas industry, as well as some others, repay costs associated
with the response if an incident occurs, but the oil and gas
industry is the only industry that has been assessed a specific
surcharge for the purposes of the 470 Fund. Over the last 25-26
years the oil and gas industry has contributed, through the
surcharge, more than $350 million to the 470 Fund. She reported
that in 1984 AOGA supported the legislation that split the
surcharge into the separate prevention and response accounts,
and did not oppose the modification to the surcharge in 2005
because the tax remained five cents per barrel.
MS. MOIARTY pointed out that despite the stated purpose of the
surcharge, previous administrations and legislatures allowed the
fund to be used for things that were not spill related. She
listed the examples of campgrounds, state airports, tank farm
remediation, privately-owned green houses, and new ferries. She
commended DEC and this legislature for no longer appropriating
those types of expenditures, but posited that the corpus of the
fund may have been unnecessarily reduced by those past
appropriations.
MS. MOIARTY emphasized that the oil and gas industry spends a
great deal of money to prevent oil spills. It is required by
state and federal regulations to have contingency plans in
place; spill response equipment is available and properly
prepared and drills are conducted. The industry also supports
organizations like PWSRCAC and nonprofit response cooperatives
in Cook Inlet, the North Slope, and Prince William Sound.
MS. MOIARTY stated that AOGA endorses the position that the Oil
and Gas Transition Team adopted in November 2014, which
advocated for the state to utilize other revenue sources before
increasing the surcharge on the oil and gas industry. SB 86 does
that by broadening the contributing efforts of others that use
the fund services. AOGA advocates for DEC to continue to
identify efficiencies and will work with the department to find
reductions without diminishing the state's strong oversight and
regulation of the industry. She said AOGA also encourages the
state to fine tune policies to assist the state in recovering
costs from other users, because only 30 percent of those costs
are currently recovered.
MS. MOIARTY concluded that AOGA is not opposed to SB 86.
2:31:50 PM
AVES THOMPSON, Executive Director, Alaska Trucking Association
(ATA), stated that ATA is a statewide organization that
represents the interests of its 200 member companies that truck
freight statewide from Barrow to Ketchikan. He reviewed the
provisions of SB 86 and stated that ATA supports the bill
because the surcharge will be used as a specific stated purpose
and not absorbed into the general fund. He clarified that he was
speaking only for the trucking mode of transportation, not any
others.
CHAIR COSTELLO closed public testimony and stated she would hold
SB 86 in committee awaiting a committee substitute and the
complete fiscal note package.
2:35:12 PM
There being no further business to come before the committee,
Chair Costello adjourned the meeting at 2:35 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 86.PDF |
SL&C 3/24/2015 1:30:00 PM |
SB 86 |
| SB 86 - Sponsor Statement.pdf |
SL&C 3/24/2015 1:30:00 PM |
SB 86 |
| SB 86 - Sectional Analysis.pdf |
SL&C 3/24/2015 1:30:00 PM |
SB 86 |
| SB 86 - Fiscal Note.pdf |
SL&C 3/24/2015 1:30:00 PM |
SB 86 |
| Supporting Documents - DEC Active Contaminated Sites.pdf |
SL&C 3/24/2015 1:30:00 PM |
SB 86 |
| Supporting Documents - DEC All Products Spilled FY10-14.pdf |
SL&C 3/24/2015 1:30:00 PM |
SB 86 |
| Supporting Documents - DEC All Products Spilled FY14.pdf |
SL&C 3/24/2015 1:30:00 PM |
SB 86 |