Legislature(1993 - 1994)
02/22/1994 12:00 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CHAIRMAN MILLER called the Senate Resources Committee meeting to order at 12:00 p.m. and announced SB 215 (OIL/HAZARDOUS SUBS. RELEASE RESPONSE FUND) to be up for consideration. He explained there was a proposed CS, dated 2/15/Resources/U version. They briefly discussed the changes from the "O" version. Number 97 SENATOR LEMAN moved to adopt the U version. There were no objections and it was so ordered. REPRESENTATIVE MIKE NAVARRE spoke in opposition to SB 215 and gave the history of the 470 Fund. He said he was co-sponsor of the original bill. He said because of lack of detailed records many times it was hard to determine who was responsible for oil spills. It will be impossible to find the responsible party for a number of contaminated sites and the burden of cleaning will fall on the state. The estimate was significant. He was looking for a way to provide for eventual cleanup and protection from ground water. At the time, there was a lot of concern about who was going to be ultimately liable for an independent contractor who had accepted hazardous waste for disposal. He explained the 470 Fund was passed before Exxon Valdez spill and it wasn't funded adequately before then. His primary concern was what if there was another big spill. Had the nickel been split at the time, it would have been adequate, but the legislature substantially changed what can be appropriated out of that fund with respect to prevention, monitoring, contingency plans, etc. Some of the things that might save money haven't been enacted. For instance, if there was one contingency plan, instead of having numerous ones. The legislature recognized there would be an on/off provision. He thought the accounting was flawed. He also noted they did not know all the expenses involved in an adequate prevention program. He concluded that there is a legitimate concern that this has been made an additional nickel per barrel tax to the industry. On the other hand, the fund is appropriated by the legislature. The focus of the debate should not be how to limit spending specifically, but what is needed to provide the programs that we want to monitor and have proper oversite for oil and hazardous substance. He thought, given the philosophy of the current administration regarding ANWR, it would be good for Alaska to have proper oversite. He also noted that at the time they established the catastrophic fund, the $50 million was a goal; although they realized it wouldn't be adequate for a catastrophic spill. Number 298 SENATOR ZHAROFF proposed the following amendments for Senator Adams who was not able to attend. He noted they were based on the "O" version of the bill. SENATOR ZHAROFF moved amendment #1. SENATOR MILLER objected for purposes of discussion. This removes "the big stick" meaning if the legislature doesn't appropriate funds the surcharge would be suspended, SENATOR ZHAROFF explained. SENATOR DONLEY asked if the subcommittee got a legal opinion on the constitutionality of such a "dedication of funds" provision? SENATOR MILLER responded that Mr. Chenoweth, who drafted the legislation, did not raise that as an issue. He would get an opinion on it, however. SENATOR ZHAROFF moved the amendment and asked for unanimous consent. SENATOR MILLER maintained his objection. SENATOR ZHAROFF just moved the amendment then. Senators Zharoff and Donely voted yes; Senators Leman and Miller voted no and the amendment failed to pass. Number 376 SENATOR ZHAROFF moved amendment #2 which would allow the fund to be tapped to provide a safe drinking water source should the existing source be polluted. He said this issue has come up and sometimes it is cheaper and faster to drill a new well than to clean up the existing source. MARLA BERG, Aide to Senator Adams, said since the 470 Fund can't be used for capital projects, and if a community didn't have enough money to drill a new water source themselves, they would go through village safe water to get funding and clean up the existing water source which would cost a lot of money. It would be a lot cheaper to just drill a new well if they could have access to the 470 Fund. SENATOR MILLER said he supported the amendment, but it was just a little too broad. Senators Donley and Zharoff voted yes; Senators Leman and Miller voted no and the amendment failed. Number 420 SENATOR ZHAROFF moved amendment #3 which puts hazardous substances back into the catastrophic fund. Senators Donley, Zharoff, and Leman voted yes; Senator Miller voted no and the amendment passed. Number 431 SENATOR ZHAROFF moved amendment #4 which deletes the accrued interest from being part of the contingency and abatement account. Senator Miller said he would get an opinion on the dedicated funds issue. Senator Zharoff voted yes; Senators Donley, Leman, and Miller voted no and the amendment failed. Number 480 SENATOR ZHAROFF moved amendment #5. SENATOR MILLER objected. Senators Donley and Zharoff voted yes; Senators Leman and Miller voted no and the amendment failed. Number 493 SENATOR DONLEY said he also had some amendments at Senator Adams' request. He moved amendment #9 which deletes section 9 from the bill. SENATOR MILLER objected for discussion purposes. ROBERT POE, Department of Environmental Conservation, said they supported the original language stating that a responsible party would have to actually contain or clean up and not just take containment "action." Deleting section 9 would accomplish that. SENATOR LEMAN commented he thought the language in section 9 meant that action would have to be taken to mitigate a spill which would be substantial. SENATOR DONLEY said the Department of Environmental Conservation supports the status quo, but he asked to hear why someone wanted to change it. SENATOR MILLER removed his objection and the amendment passed. Number 590 SENATOR DONLEY said the next amendment requested by Senator Adams was to delete sections 26 and 28 which was requested by the DEC. MR. POE said these two items define when a release is imminent. This part of the law is acted upon a couple of times a week. TAPE 93-11, SIDE B Number 590 MR. POE said the further refinements of the definition of imminent release could call into question a lot of suits after the fact. SENATOR MILLER said he thought the new language gave them more flexibility. SENATOR LEMAN agreed. MR. POE reiterated that for DNR, generally worded guidance has been best. SENATOR FRANK asked for specific examples of this situation. MIKE CONWAY, Director, Division of Spill Prevention and Response, said they deal with many times with the potential for a spill, for example a fishing vessel on the rocks whose tank has not been punctured, but given the weather you take action to pump off the tanks. And then the weather changes and it never happens. The new language would allow more "Monday morning quarterbacking" which would imply bad judgement was used. SENATOR LEMAN said he would consider the example he cited as an imminent release. SENATOR DONLEY asked if they had engaged in any litigation over the existing statute? MR. CONWAY answered that he hadn't while he worked for the state, but as Federal On-Scene Coordinator with the Coast Guard whenever they took action to mobilize gear and then go back to the responsible party, yes, they had that problem. REPRESENTATIVE GREEN asked if that was before or after the Exxon Valdez? MR. CONWAY said it was before. REPRESENTATIVE GREEN said he didn't think that after the Exxon Valdez it would be a problem to err on the side of prevention. SENATOR ZHAROFF asked for another example. MR. CONWAY couldn't think of one at the moment. SENATOR PEARCE said she thought the new language gave them increased flexibility by expanding the definition to reasonably expect there could be a problem instead of saying it's going to happen. MR. CONWAY said with the discussion on the intent of this issue as a matter of record, the language would be acceptable. SENATOR DONLEY withdrew amendment #7. Number 418 SENATOR LEMAN moved amendment #8 and asked for unanimous consent. SENATOR MILLER objected for purposes of discussion. SENATOR LEMAN explained this is the inflation proofing provision for the catastrophic oil release response account in which the $50 million will be placed. Senators Donley, Zharoff, Frank, Pearce, and Leman voted yes; Senator Miller voted no and the amendment passed from Committee. Number 395 SENATOR ZHAROFF moved to adopt amendment #9. SENATOR MILLER objected for purposes of discussion. SENATOR ZHAROFF explained a report from the Commissioner is to be submitted in the first 120 hours, then the Governor does not need to do anything to let the efforts continue. However, by administrative order he could suspend use of the fund. Now the Governor has to respond with an executive order allowing the work to continue. Senators Donley and Zharoff voted yes; Senators Frank, Pearce, Leman, and Miller voted no and the amendment failed. SENATOR ZHAROFF moved amendment #10 which lets some of the funds be used for the part of the construction of the ferries that have spill equipment. Senators Donley and Zharoff voted yes; Senators Frank, Pearce, Leman, and Miller voted no and the amendment failed. SENATOR ZHAROFF moved amendment #11 which puts hazardous materials back in and restores the mechanism by which municipal grants can be made from the fund. He said he is not certain what they did to rural communities and the funding they need to be able to respond to a spill. SENATOR MILLER said this issue did need clarification. However, the drafter couldn't be here today. SENATOR ZHAROFF asked to have this amendment forwarded. SENATOR MILLER agreed. Number 272 SENATOR DONLEY pointed out that SB 215 is essentially a very large spending bill, because it removes a source of revenue from the state. He is very concerned about how it is going to be rolled into an overall spending plan that hasn't been developed, yet. According to testimony, the tax is approximately 1% of the profit for the industry and all kinds of Alaskans are going to have to take very significant reductions in state assistance to them. He stated that there are conflicting opinions about the uses of the fund and a lot of people have testified that it is being used exactly they way they intended it to be used. Number 200 SENATOR LEMAN moved to discharge CSSB 215 U version, as amended, with individual recommendations and accompanying fiscal notes. Senators Donley and Zharoff voted no; Senators Frank, Pearce, Leman, and Miller voted yes and CSSB 215 passed from Committee.
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