Legislature(2003 - 2004)
05/16/2003 01:35 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 196-CARBON SEQUESTRATION Number 1664 CHAIR FATE announced that the final order of business would be HOUSE BILL NO. 196, "An Act relating to carbon sequestration; and providing for an effective date." CHAIR FATE asked whether anyone wished to testify. [Lisa Weissler, staff to Representative Berkowitz, sponsor, offered to answer questions.] Chair Fate informed members that he likes the idea of the bill. Number 1600 CHAIR FATE brought attention to Amendment 1, which was two amendments stapled together. The first page read [original punctuation provided]: Page 2, line 13-16: delete all material. Page 2, line 27: delete ", the Bureau of Land Management," Renumber subsections accordingly. The second page read [original punctuation provided]: Page 4, line 13: Delete "On or before January 31, 2004" Insert "Within nine months after the effective date of this section" Page 4, line 15, following "prepare": Insert "and submit" Page 4, line 30: Delete all material. Insert new bill sections to read: "*Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to read: DIRECTION TO SEEK FUNDING SOURCES. (a) The Department of Natural Resources shall immediately seek and apply for funding of the activities that would be authorized by secs. 2 and 3 of this Act by contacting the federal Department of Energy, the Pew Charitable Trust, and other appropriate federal and private sources. (b) The Department of Natural Resources shall notify the revisor of statutes of the day on which the department receives approval of an application or applications under (a) of this section that would result in receipt of $85,000 or more from federal or private sources. *Sec. 5. Sections 1 and 4 of this Act take effect immediately under AS 01.10.070(c). *Sec. 6. Sections 2 and 3 of this Act take effect on the day on which the department receives approval of an application or applications under sec. 4(a) of this Act that would result in receipt of $85,000 or more from federal or private sources for the activities that would be authorized by secs. 2 and 3 of this Act." [NOTE: Representative Berkowitz's staff later informed the committee off record that the foregoing was the wrong amendment. Although Amendment 1 ultimately was adopted, it is Chair Fate's concept, discussed during this hearing, that ended up in CSHB 196(RES).] CHAIR FATE explained that the board will be expensive, even though there is a zero fiscal note. He reported that he'd talked with Representative Berkowitz about this. Chair Fate said he himself thinks it will be just as efficient and will provide just as much information if the Department of Environmental Conservation (DEC) and the Department of Natural Resources (DNR) study this and give every legislator a report prior to the convening of the second session of the 23rd legislature. He indicated the amendment goes along somewhat with Representative Berkowitz's proposal, which had a little bit different time range. CHAIR FATE said he believes this has merit. One of the big things about the amendment is to give information to every member of the legislature, not just this committee. Thus when the report comes from DEC and DNR, and probably from the Division of Forestry through DNR, it will be disseminated to provide information to every [legislator]. He mentioned the need for an effective date at the beginning of the second session of the 23rd legislature, which he said he didn't believe was in this amendment. Number 1420 REPRESENTATIVE HEINZE moved to adopt Amendment 1 [text provided previously, but see note following the amendment]. REPRESENTATIVE WOLF objected for discussion purposes. Number 1368 CHAIR FATE said the wording would have to include "within nine months after the effective date of this section" on the second page, relating to page 4, line 13. He suggested putting in the language "at the beginning of the second session of the 23rd legislature". REPRESENTATIVE GUTTENBERG asked which day it would be. CHAIR FATE said that would be determined, but [the first day of session] is already on the calendar. REPRESENTATIVE WOLF said the amendment would include "an $85,000 federal or private-source fund" that he surmised was for doing the study. He expressed concern that there is "a devil tied to this one," which is the Kyoto Protocol, a pollution-control treaty that the United States hasn't adopted. He said the principle looks great, but highlighted Alaska's vastness and wildfires that could cause loss of carbon credits until the trees are replanted. He specified that his concern with the amendment is that moving forward will cause $85,000 to be spent just to see whether it works. CHAIR FATE pointed out that there isn't a fiscal note to reflect the $85,000. He asked Mr. Maisch how these huge forest fires and the resulting smoke will be handled with regard to carbon sequestration. Number 1106 JOHN "CHRIS" MAISCH, Regional Forester, Division of Forestry, Northern Region Office, Department of Natural Resources, said it's not an issue that would be affected by this carbon sequestration bill. He explained: Those are either natural or man-caused fires that certainly release a lot of atmospheric CO2 when they burn, but that would not affect a company's ability to sell carbon credits. The state would not have to ... try and put these fires out in a more rapid manner or do something to prevent those ... occurrences of emission. Simply, this bill would allow people that can sequester carbon through reforestation programs or other programs - such as offsets of burning other fossil fuel, such as substituting wood for fuel-oil consumption, which would create an offset - you could trade that carbon credit to a company that needs a credit to reduce their emissions somewhere in the world. Number 1041 CHAIR FATE advised Mr. Maisch that the committee was discussing an amendment that has to do with asking DEC and DNR to write a report about future potential and what the program is about, "an educational piece." He noted that there is lack of familiarity with carbon sequestration throughout the legislature. Rather than having a board of 14, he said this would ask just DEC and DNR to provide the legislature a report at the start of the next session. He asked, "Do you think that's a doable thing?" MR. MAISCH said he couldn't comment, that it is a department- level matter, and that the department hasn't taken a position on whether to support this legislation or not. CHAIR FATE said he wasn't asking for support, but about an educational report and what the department would think about that. He mentioned time limitations for departmental personnel and so forth. "We would much rather do it this way because it seems much simpler than to have ... a very large board that even though we don't have a fiscal note on that board, could be very expensive," he added. Number 0912 REPRESENTATIVE GATTO noted that an entity would first have to own carbon credits in order to sell them. He asked where they come from and who would declare that the entity owns them. MR. MAISCH said it would be part of the certification and verification process. A third-party company would have to certify that the entity had sequestered carbon through some type of project such as reforesting on the Kenai Peninsula where spruce-bark beetles have destroyed the natural forest cover. REPRESENTATIVE GATTO clarified his question: "Last year, I didn't know I had them. This year, I have a whole bunch and I'm allowed to sell them to somebody that I don't even know. Where did I get them from?" MR. MAISCH replied that they've always been here, but suddenly they have an associated economic value because of the Kyoto Protocol. In further response, he said: Essentially, because of that treaty, even though the United States has not ratified that treaty but other countries have, multinational corporations that do business in those other countries could sell and trade carbon anywhere in the world. And so projects in the U.S. could be purchased; those carbon credits could be purchased by companies that do business in these other jurisdictions, and they can get credit in those jurisdictions for those credits. Number 0794 REPRESENTATIVE GATTO asked whether it's necessary to belong to the [Kyoto Protocol] in order to do this, since it may give an unfair advantage otherwise. MR. MAISCH answered that one doesn't need to belong to the treaty under the current protocols to participate. Number 0740 REPRESENTATIVE GUTTENBERG offered his assessment that the amendment would narrow the fiscal note to zero, since it says to go out and raise the money. He indicated all it does it request a report to be provided on the first day of the next session. If the legislature doesn't authorize it or keep something moving, then nothing happens. Number 0670 REPRESENTATIVE WOLF maintained his objection. A roll call vote was taken. Representatives Cissna, Gatto, Heinze, Morgan, Guttenberg, and Fate voted in favor of Amendment 1. Representative Wolf voted against it. Therefore, Amendment 1 was adopted by a vote of 6-1. [See note following the text of Amendment 1.] Number 0606 REPRESENTATIVE HEINZE moved to report HB 196, as amended, out of committee with individual recommendations and accompanying fiscal notes. REPRESENTATIVE WOLF objected. A roll call vote was taken. Representatives Guttenberg, Cissna, Gatto, Heinze, Morgan, and Fate voted in favor of reporting HB 196, as amended, from committee. Representative Wolf voted against it. Therefore, CSHB 196(RES) was reported out of the House Resources Standing Committee by a vote of 6-1. Number 0543 REPRESENTATIVE WOLF, noting that the committee also had just passed SB 149 concerning the state's timber, remarked, "This one requires that we cut our old-growth forests." CHAIR FATE offered that HB 196 just enables a report and doesn't authorize any program. He indicated he'd like to learn more about this. [CSHB 196(RES) was reported from committee.]
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