Legislature(1995 - 1996)

03/18/1996 03:12 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 439 - MINING BONDING POOL & ADVISORY COM'N                               
 Number 470                                                                    
 CHAIRMAN KOTT announced the committee would address HB 439,                   
 "An Act relating to minerals, including coal, to the statewide                
 bonding pool for the reclamation activities imposed on mining                 
 operations, and to the statewide bonding pool's use for surface               
 coal mining projects."                                                        
 FRED PASCO, Legislative Secretary to Representative Tom Brice,                
 Alaska State Legislature, read the following statement on behalf of           
 Representative Brice:                                                         
 "House Bill 439 originally sought to open the statewide bonding               
 pool participation of Alaska's coal industry, in addition to                  
 creating a commission to evaluate the Alaska coal program.  The               
 matter of the bonding pool was addressed in a subsequent piece of             
 legislation initiated in the other body and now in the House.                 
 However, there are issues beyond the statewide bonding pool                   
 affecting the coal industry in Alaska                                         
 "The Alaska coal program is currently included in the proposed                
 operating budget for FY 97, but Representative Brice strongly feels           
 that the issues surrounding surface coal mining in Alaska with                
 state regulatory primacy is the most effective approach to them,              
 compel us to look to the long term impact of the state coal program           
 with respect to federal primacy of over this resource.                        
 "The CS proposes to establish a temporary commission tasked with              
 evaluating the Alaska coal program under the state Surface Coal               
 Mining Control and Reclamation Act as it relates to the federal act           
 and the Office of Surface Mining.  This will open discussion on the           
 issue during the life of the commission and enlarge the base for              
 future decisions regarding state primacy with respect to regulation           
 of surface coal mining in Alaska.                                             
 "Once again, Representative Brice thanks you, Mr. Chairman, and the           
 members of the Labor and Commerce Committee for the opportunity to            
 present this legislation."                                                    
 Number 542                                                                    
 REPRESENTATIVE ELTON referred to page 1, line 8, of the proposed              
 committee substitute which said, "The commission shall be composed            
 of individuals not employed by government at any level..."  He                
 asked what the rationale is of having a commission that is                    
 (indisc.) commission exclusively rather than a commission that also           
 has a representative or two on a nine member commission that                  
 understands the application of regulations as well as serving under           
 the regulations.  He questioned why they can't be employed by                 
 government at any level.                                                      
 MR. PASCO said when the commission we first discussed, they were              
 looking at an original fiscal note of $75,000.  Partially, an                 
 approach to this was looked at from the standpoint of the industry            
 hoping to finance some of the undertaking of the commission.  With            
 an arrangement that the Department of Natural Resources, Division             
 of Mining and the Coal Association had discussed, they came to an             
 understanding that through private sector members of the commission           
 being funded, per diem and travel costs by the industry, this is              
 one mechanism which would lower the cost to the state.  In                    
 addition, the publishing of the report would make it available to             
 the division for its analysis.                                                
 REPRESENTATIVE ELTON said he would be a little bit bothered,                  
 whether they're members of the commission or not, if they don't               
 show up they are not going to be assets to the commission from                
 CHAIRMAN KOTT noted there may be somebody on teleconference that              
 could address that issue.                                                     
 Number 661                                                                    
 REPRESENTATIVE SANDERS moved to adopt the proposed committee                  
 substitute for HB 439, Version K, dated 2/22/96.                              
 CHAIRMAN KOTT asked if there was an objection.  Hearing none, CSHB
 439 was before the committee.                                                 
 Number 685                                                                    
 CHARLIE BODDY, Usibelli Coal Mine, Incorporated, testified via                
 teleconference.  He informed the committee he is also                         
 Secretary/Treasurer of the Alaska Coal Association.  Mr. Boddy                
 informed the committee that the bill before the committee is a bill           
 the Alaska Coal Association has worked on through the Minerals                
 Commission for about six years.  The importance of the legislation            
 at this time is that there has been major legislation at the                  
 federal level.  One piece of federal legislation is HR 2372,                  
 sponsored by Wyoming Representative Barbara Cubin.  He said there             
 is another piece of legislation in the Senate.  This legislation              
 would turn control of the surface coal mining and reclamation in              
 states that have primacy programs, which Alaska has, back to the              
 state.  Mr. Boddy noted Usibelli would get together with the state            
 and federal agencies to work through exactly how that role change             
 would occur.  He referred to the composition of the commission and            
 how the appointments would go and said they believe there should be           
 certain members selected from the House and Senate, and the                   
 Governor will have (indisc.) appointed.                                       
 Number 827                                                                    
 REPRESENTATIVE ROKEBERG asked why the pooling was taken out of the            
 committee substitute.                                                         
 CHAIRMAN KOTT said he believes the pooling has been removed because           
 SB 240 is now in the House.  He referred to the selection of the              
 members of the commission and said the current bill indicates that            
 the Governor shall make the appointments to the commission.                   
 Chairman Kott said he doesn't see anything that indicates some of             
 the members will be from the Senate or House.                                 
 MR. BODDY clarified that as those individuals are selected,                   
 possibly there should be a division in that the Governor should not           
 be selecting all nine members.  He suggested that maybe the                   
 Governor, the House and the Senate should all select three members.           
 Number 909                                                                    
 JULES TILESTON, Director, Division of Mining and Water Management,            
 Department of Natural Resources, was next to testify via                      
 teleconference from Anchorage.  He said he has reviewed the                   
 committee substitute.  The Administration has proposed returning              
 primacy of the Alaska Coal Program to the federal government.  As             
 a result of that DNR has been working very closely with                       
 representatives of the Alaska Coal Association and the federal                
 government to make sure something doesn't drop through the cracks             
 should that primacy shift actually take place.  This included a               
 series of informal discussions at which time they identified                  
 several processing of decision points that needed fine tuning.  He            
 said they held a two day coal reclamation workshop with members of            
 the industry, consultants and Alaskan scientists who are familiar             
 with reclamation practices in Alaska.  There is a follow up meeting           
 scheduled for next week.  Mr. Tileston explained that last week the           
 Administration amended its proposed fiscal 97 budget to retain in             
 the state primacy of the coal program.  He said he would give the             
 committee a "What if" scenario.  If you assume that the Alaska Coal           
 Program is to be retained, then we have already underway a series             
 of steps that would do that and then the issue becomes one of what            
 do we gain in relationship and there is a modest cost that goes               
 with it.  However, if you assume that the Alaska Coal Program                 
 cannot be funded, and that is a budget decision, then a sunsetted             
 organization appointed by the Governor would serve a useful                   
 mechanism to ensure that the federal government listens to and                
 fairly considers the specific challenges of producing coal in                 
 Arctic and SubArctic environments.  Alaska is not like Canada or              
 West Virginia and that is how the federal program is presently                
 Number 1032                                                                   
 REPRESENTATIVE ELTON said it seems odd to him that we are creating            
 a commission of nine members to study this issue and to deal with             
 primacy issues, none of whom would end up being agency people who             
 were the applicators of the regulation.  He asked if it would be              
 helpful to have one or two members of this nine member commission             
 actually be the people who apply regulations instead of industry              
 MR. TILESTON said the basic thing they did in concert with the                
 Alaska Coal Association at Representative Brice's request is take             
 a very hard look at the fiscal note.  A large percentage of that              
 cost is when you start adding commissioners or these sorts of                 
 levels of staff.  He said they were looking at a program that would           
 assure industry the opportunity to pull together what they thought.           
 He noted this is very similar to the way the way the Alaska                   
 Minerals Commission now operates.  The costs go up as you add state           
 government officials to the commission.                                       
 REPRESENTATIVE ELTON questioned whether there would be agency                 
 people in attendance when the commission meets.                               
 MR. TILESTON said the fiscal note does contemplate that there would           
 be staff support.  He said he anticipates that one month of staff             
 support would be required for each of the two years that the                  
 commission would be in operation.  Mr. Tileston said they are                 
 working daily and his presumption at this point is that the coal              
 program primacy will remain in the state.  He said the department             
 works daily with the various coal organizations and lessees.                  
 Number 1143                                                                   
 REPRESENTATIVE ELTON said it has been noted that this is a two year           
 project.  The committee substitute says it sunsets on July 1, 1999.           
 He said the way he reads it, it would be three years.                         
 MR. TILESTON said Representative Elton is correct.                            
 Number 1256                                                                   
 REPRESENTATIVE ROKEBERG said in the sponsor statement there is an             
 indication that there would be as much as $1.6 million with a                 
 $123,000 match.  He asked what is happening in terms of the funds             
 and what impact the bill has on those funds as well as the                    
 Governor's amended budget recommendation.                                     
 MR. TILESTON said the Administration originally deleted the coal              
 program and that was for general funding.  There was a very                   
 substantial federal (indisc.) program that went with it.  He said             
 Representative Brice's figures were indeed in the Administration's            
 original budget.  Last week, the Administration adjusted that                 
 budget and the adjustments were made from other agencies within the           
 Department of Natural Resources to come up with the general fund              
 match money.  The coal program, as far as the Administration, has             
 been restored to its budget.  The general fund amount was                     
 approximately $123,000 and in return, there was a combination of              
 funds not only from federal match but from another entirely                   
 separate program called the Abandon Mine Lions Program.  That has             
 about $4 million, 100 percent federal kitty that is currently                 
 available to the state.  He said right now they'll be contracting             
 for "dirt work" to reclaim former areas mined by coal, (indisc.)              
 track will be up in the Sutton area.                                          
 REPRESENTATIVE ROKEBERG said this isn't all related to the Healey             
 MR. TILESTON explained that the only producing coal mine today is             
 at healey, the reclamation is not.                                            
 REPRESENTATIVE ROKEBERG questioned whether Usibelli benefit from              
 this federal money.                                                           
 MR. TILESTON said he would say the state as a whole benefits from             
 it because part of it deals with the permitting, which is done in             
 his shop, as opposed to Denver if the federal government takes it             
 on.  The fact that areas which are currently being used for                   
 recreation in the Sutton area have high walls that do indeed pose             
 health hazards.  They'll be reduced as a result of the AML program.           
 Number 1352                                                                   
 CHAIRMAN KOTT referred to the issue of the sunsetting clause and              
 asked if that was a typographical error.                                      
 MR. TILESTON said it was an improper addition on his part.                    
 CHAIRMAN KOTT said we're giving them two years and on the third               
 year, if they need it, they're on their own.  He referred to                  
 testimony given in the House Resources Committee, and said                    
 according those who testified in the industry, two years was                  
 sufficient enough.                                                            
 MR. TILESTON said the wrong fiscal year was inadvertently inserted.           
 Number 1394                                                                   
 REPRESENTATIVE ELTON moved on page 2, line 6, substitute 1998 for             
 REPRESENTATIVE PORTER objected for the purpose of discussion.  He             
 said if it is that the committee wants to entertain the notion of             
 putting three, three and three rather than all nine coming from               
 Governor, they might need this time for that process to fully be              
 completed.  He said we wouldn't be able to make our appointments              
 until next year.                                                              
 REPRESENTATIVE ROKEBERG questioned why the Senate President and               
 House Speaker make the appointment.                                           
 REPRESENTATIVE PORTER said, "Because they generally would like to             
 check with us."                                                               
 Number 1394                                                                   
 REPRESENTATIVE ELTON said if there is going to be an amendment to             
 change the appointment process, he would withdraw his amendment.              
 CHAIRMAN KOTT said the amendment is withdrawn and asked if there              
 was further discussion.                                                       
 Number 1465                                                                   
 REPRESENTATIVE PORTER moved that on page 1, line 11, the committee            
 delete the phrase, "The governor shall appoint the member of the              
 commission.  Each member serves at the pleasure of the governor."             
 and insert "Three members of the commission shall be appointed by             
 the governor, three by the Speaker of the of the House and three by           
 the Present of the Senate whose members shall serve at the pleasure           
 of their appointer."                                                          
 REPRESENTATIVE ELTON objected for the purpose of discussion.  He              
 said, "A guess the only concern that I have, I don't know frankly             
 if it is a valid concern or not, but we've got a commission in                
 which we're requiring that the people all have knowledge of the               
 surface coal mining industry.  My guess is there is not an awful              
 lot of -- not a large pool of people out there that may be                    
 available.  I guess we're making an assumption also that this will            
 bring balance to it.  I don't know that it does.  I guess somebody            
 would have to convince me that we're going to end up with                     
 appointees that are better or worse under the old system.  It just            
 doesn't make an awful -- essentially what we're saying is we don't            
 trust the Governor to do this so we're going to complicate the                
 process and I don't know if that's a fair assumption."                        
 REPRESENTATIVE PORTER said what he is saying by the amendment is              
 that regardless of who is in office at this particular time when              
 these kinds of commissions are appointed, they are either confirmed           
 or made by the legislature in balance with appointments made by the           
 Executive Branch.  Since there are no provisions for confirmation,            
 he would offer the alternative of appointments from both groups.              
 These kinds of commissions should, as much as possible, represent             
 a balance of philosophies and points of view in addition to the               
 requirement of a particular expertise.                                        
 CHAIRMAN KOTT asked Mr. Boddy to comment as to how many applicants            
 we really have out there and how difficult it would be to acquire             
 the nine members.                                                             
 Number 1650                                                                   
 MR. BODDY said he believes that there would be a sufficient number            
 of people probably to commission three or four times depending on             
 the expertise you wanted to draw from.                                        
 REPRESENTATIVE ROKEBERG said he still isn't clear on the amendment            
 in terms of the appointments by the House and Senate.  He asked if            
 that is the Speaker and President, and then without confirmation so           
 there wouldn't be a problem with that.                                        
 REPRESENTATIVE PORTER said as the bill currently stands, it would             
 be a three year commission.                                                   
 REPRESENTATIVE ROKEBERG said given the short duration of this                 
 commission, they should be appointed and get to work right away               
 rather than wait for the next session to be confirmed.                        
 Number 1734                                                                   
 REPRESENTATIVE ELTON said we're recreating a situation where we're            
 recreating the same problem we've had with other appointments.                
 Representative Elton pointed out the effective date of the bill is            
 July 1, and asked if the existing Speaker and the existing Senate             
 President would the ones that are going to be allowed to appoint              
 six members of the committee despite the fact that their term in              
 office goes for another three or four months.  He said he isn't               
 sure that makes sense, yet he doesn't want get into the situation             
 where we wait until there is a new Speaker and Senate President to            
 do the appointments.                                                          
 REPRESENTATIVE ROKEBERG said he wasn't aware that they lost their             
 titles and positions until the end of the year.                               
 REPRESENTATIVE ELTON pointed out the new legislature will elect the           
 new presiding officers.                                                       
 CHAIRMAN KOTT said there is still a motion before the committee and           
 asked for a roll call vote.  Representatives Sanders, Masek, Porter           
 Rokeberg and Kott were in favor of the motion.  Representative                
 Elton was against the motion.  Representative Kubina was absent.              
 So the amendment was adopted.                                                 
 REPRESENTATIVE PORTER explained he was anticipating that there                
 would be discussion about confirmation and we'd end up that way.              
 He said that is why he wanted to leave that option open.                      
 Representative Porter said he wouldn't be opposed to an amendment             
 to shorten this time period considering the method for appointment            
 the committee just adopted.                                                   
 REPRESENTATIVE ROKEBERG said he would support Representative                  
 Elton's motion.                                                               
 REPRESENTATIVE ELTON said he just withdrew it.  He said if somebody           
 offers it, he may vote for it.  He said we've created a situation             
 in which we may have delayed the appointment process.                         
 Number 1897                                                                   
 REPRESENTATIVE ROKEBERG moved on page 2, line 6, to substitute 1998           
 for 1999.                                                                     
 CHAIRMAN KOTT said there is a motion to change the sunset date from           
 July 1, 1998, to 1999.  He asked if there was objection.  Hearing             
 none, the motion was adopted.                                                 
 Number 1931                                                                   
 REPRESENTATIVE ELTON made a motion to move HB 439, as amended, with           
 the attached new fiscal note, out of committee with individual                
 CHAIRMAN KOTT said there is a motion before the committee to move             
 CSHB 439 out of committee with individual recommendations and the             
 attached fiscal note.  He said the motion needs to be amended as              
 there is a draft fiscal note.  Chairman Kott said the committee has           
 to adopt the draft fiscal note.                                               
 REPRESENTATIVE ROKEBERG made a motion to adopt the fiscal note                
 attached to CSHB 439(L&C), as amended, before the committee.                  
 CHAIRMAN KOTT said there is a motion to adopt the draft fiscal note           
 as the fiscal note that will be forwarded to House Finance.  He               
 asked if there was an objection.  Hearing none, the draft fiscal              
 note was adopted.                                                             
 Number 1143                                                                   
 REPRESENTATIVE ELTON moved that CSHB 439, as amended, with the new            
 fiscal note, out of committee.  Hearing no objection, CSHB 439, as            
 amended, was moved out of the House Labor and Commerce Committee.             

Document Name Date/Time Subjects