02/27/2013 09:00 AM Senate FINANCE

SENATE BILL NO. 2                                                                                                             
                                                                                                                                
     "An  Act enacting  the  Interstate  Mining Compact  and                                                                    
     relating  to the  compact; relating  to the  Interstate                                                                    
     Mining  Commission;  and  providing  for  an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
9:39:01 AM                                                                                                                    
                                                                                                                                
SENATOR CATHY GIESSEL,  stated that SB 2  would allow Alaska                                                                    
to become  a full  member of  the Interstate  Mining Compact                                                                    
Commission (IMCC). She explained  that full membership would                                                                    
give the governor an active  vote which would give the state                                                                    
a  broader  voice  on mining  discussions  at  the  national                                                                    
level. She  shared that the  IMCC was a coalition  of mining                                                                    
states  that join  together  to  represent natural  resource                                                                    
development and  environmental protection  as it  related to                                                                    
mining. She  furthered that there  were currently  19 member                                                                    
states  and  that  Alaska  was one  of  6  associate  member                                                                    
states.  She  said  that  the   IMCC  recognized  the  basic                                                                    
importance of the mining industry  and the essential balance                                                                    
between the  country's need for minerals  and the protection                                                                    
of the  environment. She noted  the various elements  of the                                                                    
compact found  in the  bill. She spoke  to the  fiscal note,                                                                    
and  stated  that the  dues  were  based  on the  amount  of                                                                    
minerals that were  produced in each state.  She pointed out                                                                    
that the  highest dues were  paid in West Virginia  and that                                                                    
Alaska  could   experience  annual  dues   of  approximately                                                                    
$35,000 per  year, not including  the provisions  for travel                                                                    
to compact  meetings. She stated  that the  membership could                                                                    
be cancelled at any time.                                                                                                       
                                                                                                                                
9:42:06 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman  remarked  that  it was  odd  that  western                                                                    
states were only associate members.                                                                                             
                                                                                                                                
She explained that  the most prolific mining  states to date                                                                    
had been eastern states. She  said that all of the associate                                                                    
western  states   were  in  the  process   of  gaining  full                                                                    
membership. She  added that  Montana was  evaluating joining                                                                    
the compact as well.                                                                                                            
                                                                                                                                
9:42:55 AM                                                                                                                    
                                                                                                                                
Senator Dunleavy remarked that  the eastern states with full                                                                    
membership were huge coal producers.                                                                                            
                                                                                                                                
9:43:12 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer wondered why a  state would not join. He felt                                                                    
the cost  of joining the  IMCC was minimal when  compared to                                                                    
the benefits of membership in the compact.                                                                                      
                                                                                                                                
Senator Giessel  responded that  she did  not know  why some                                                                    
states were not  yet full members. She  noted that associate                                                                    
members  had  lower  dues.  She  shared  that  some  of  the                                                                    
associate members  had similar legislation in  place to gain                                                                    
full membership in 2013.                                                                                                        
                                                                                                                                
9:44:26 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough wondered  when  the original  compact                                                                    
was formed.                                                                                                                     
                                                                                                                                
Senator Giessel  replied that the  IMCC was formed  in April                                                                    
of 1971.                                                                                                                        
                                                                                                                                
9:45:53 AM                                                                                                                    
                                                                                                                                
Senator Bishop  wondered if full  membership would  give the                                                                    
state  more   standing  against   Mine  Safety   and  Health                                                                    
Administration (MSHA) overreach.                                                                                                
                                                                                                                                
ED  FOGELS,  DEPUTY   COMMISSIONER,  DEPARTMENT  OF  NATURAL                                                                    
RESOURCES  responded  that  full  membership  would  include                                                                    
voting  rights  for  the  state   to  influence  the  policy                                                                    
direction of the compact.                                                                                                       
                                                                                                                                
9:47:51 AM                                                                                                                    
                                                                                                                                
Mr. Fogels  stressed that  mining was  becoming increasingly                                                                    
important to the state; the  state now had 7 operating mines                                                                    
that  were   strong  economic  contributors  to   the  state                                                                    
economy.  He said  that the  state had  a strong  regulatory                                                                    
permitting process  and he gave  assurances that all  of the                                                                    
active  mines had  strong environmental  records. He  shared                                                                    
that the governor had tasked  the department with crafting a                                                                    
more efficient permitting system.  He relayed that work with                                                                    
federal agencies was a key  part of changing the process. He                                                                    
asserted  that  the IMCC  would  foster  a better  and  more                                                                    
productive  relationship  with  the federal  government.  He                                                                    
reiterated the  benefits of joining the  compact. He offered                                                                    
the example of IMCC  pushback against the U.S. Environmental                                                                    
Protection Agency (EPA) concerning  hard rock mining bonding                                                                    
efforts.  He  shared  that he  was  the  governor's  current                                                                    
designee to IMCC and he  believed that full membership would                                                                    
put the state in a stronger position.                                                                                           
                                                                                                                                
9:51:33 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough queried the  travel line in the fiscal                                                                    
note of $20,000.                                                                                                                
                                                                                                                                
Mr. Fogels responded  that a key component  to membership in                                                                    
the  IMCC was  attending meetings  which required  travel to                                                                    
various  locations.  He  noted   that  travel  expenses  for                                                                    
associate  membership  had   been  covered  in  departmental                                                                    
budget to this point. He felt  that it was important to show                                                                    
a  commitment  that in  the  long-term  the state  would  be                                                                    
represented at all meetings.                                                                                                    
                                                                                                                                
9:52:50 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough if  DNR  had expended  all the  money                                                                    
that was  currently assigned for travel  in the department's                                                                    
budget.                                                                                                                         
                                                                                                                                
Mr.  Fogels referred  the question  to another  staff member                                                                    
within the department.                                                                                                          
                                                                                                                                
9:53:14 AM                                                                                                                    
                                                                                                                                
Senator Dunleavy  understood that Alaska had  more coal than                                                                    
any other state in the country.                                                                                                 
                                                                                                                                
Mr. Fogels replied in the affirmative.                                                                                          
                                                                                                                                
9:54:27 AM                                                                                                                    
                                                                                                                                
DEANTHA   CROCKETT,   EXECUTIVE  DIRECTOR,   ALASKA   MINERS                                                                    
ASSOCIATION, (AMA)  testified in support  of SB 2.  She said                                                                    
that it  was increasingly difficult for  mineral development                                                                    
to  happen  under  federal constraints.  She  believed  that                                                                    
having  regulators   engaged  with   IMCC  would   give  the                                                                    
association  a better  understanding of  how to  communicate                                                                    
with federal  agencies. She felt that  full membership would                                                                    
give  Alaska  greater  access to  expertise  in  the  mining                                                                    
field. She said  that miners in the state were  having a lot                                                                    
of trouble with MSHA issues  and oversight and that the IMCC                                                                    
had been helpful.                                                                                                               
                                                                                                                                
9:57:51 AM                                                                                                                    
                                                                                                                                
MICHAEL  SATRE,   EXECUTIVE  DIRECTOR,  COUNCIL   OF  ALASKA                                                                    
PRODUCERS, spoke in support of SB  2. He said that the state                                                                    
should join  as a full  member in  order to ensure  a smooth                                                                    
permitting  process  and  to   join  with  other  states  in                                                                    
fighting  against  federal  overreach.   He  said  that  the                                                                    
council believed that  the state was a  leader in permitting                                                                    
of all resources.  He believed that the  state's process was                                                                    
rigorous,  science based,  transparent  and predictable.  He                                                                    
felt  that  the  state  needed   to  go  out  and  benchmark                                                                    
permitting procedures  with other states. He  concluded that                                                                    
a combined voice was always better than a single voice.                                                                         
                                                                                                                                
10:00:57 AM                                                                                                                   
                                                                                                                                
GREG CONRAD,  EXECUTIVE DIRECTOR, INTERSTATE  MINING COMPACT                                                                    
COMMISSION (via teleconference), testified  in support of SB
.  He  stated  that  Alaska  had  joined  the  IMCC  as  an                                                                    
associate member in  2006. He said that  the legislative and                                                                    
regulatory  climate on  the  federal  level highlighted  the                                                                    
importance  for the  state to  maintain a  strong voice.  He                                                                    
pointed  out  that  IMCC was  recognized  and  respected  in                                                                    
Washington D.C. as an expert  on mining issues. He said that                                                                    
the act of participation and  commitment of the full members                                                                    
carried  the organization  forward in  terms of  support and                                                                    
leadership. He  relayed that full  membership would  put the                                                                    
state in  a position  that would  be favorable  for resource                                                                    
development.  He stated  that  the  state's full  membership                                                                    
would be recognized by those  who worked with the compact on                                                                    
a regular  basis and would  bring about a greater  degree of                                                                    
recognition and  influence regarding  Alaska's participation                                                                    
in the compact.                                                                                                                 
                                                                                                                                
10:05:43 AM                                                                                                                   
                                                                                                                                
Vice-Chair Fairclough  wondered what  the dues were  for the                                                                    
associate membership.                                                                                                           
                                                                                                                                
Mr. Conrad replied that Alaska's  associate member dues were                                                                    
$15,000 annually.                                                                                                               
                                                                                                                                
10:07:03 AM                                                                                                                   
                                                                                                                                
Vice-Chair Fairclough  queried the number of  times the IMCC                                                                    
met each year.                                                                                                                  
                                                                                                                                
Mr. Conrad replied  that there were two  formal meetings per                                                                    
year, with the possibility of other meetings.                                                                                   
                                                                                                                                
10:07:43 AM                                                                                                                   
                                                                                                                                
Senator Hoffman wondered whether other states had                                                                               
considered joining the associate member status.                                                                                 
                                                                                                                                
Mr. Conrad replied that Montana, Arizona, and Idaho were                                                                        
considering associate membership.                                                                                               
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
10:09:42 AM                                                                                                                   
                                                                                                                                
Vice-Chair Fairclough MOVED to REPORT SB 2 out of committee                                                                     
with individual recommendations and the accompanying fiscal                                                                     
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
SB 2 was REPORTED out of committee with a "do pass"                                                                             
recommendation and with previously published fiscal notes:                                                                      
FN1 (DEC), FN2 (DNR), and FN3 (LAW).