Legislature(1993 - 1994)

03/31/1993 08:00 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HB 197:  APPROP: ALYESKA SETTLEMENT                                          
                                                                               
  Number 029                                                                   
                                                                               
  REPRESENTATIVE HARLEY OLBERG, PRIME SPONSOR OF HB 197,                       
  explained that the bill would appropriate approximately                      
  $28.2 million from the Alyeska settlement.  He referred to                   
  the agreement and consent decree dated November 25, 1992,                    
  entered into between the United States, the State of Alaska                  
  and Alyeska.  Of that amount, he said that $14.5 million                     
  would go toward docks and storage facilities, $6 million                     
  would be for construction of a road from Cordova to Shepherd                 
  Point, $7.5 million would be for the acquisition of land for                 
  Kachemak Bay State Park, and $200,000 would purchase                         
  communications equipment.                                                    
                                                                               
  REPRESENTATIVE OLBERG noted that the original request was                    
  over $31 million, and the difference is accounted for by $2                  
  million paid to the federal government for expenses incurred                 
  in the lawsuit.  He noted further that $1.5 million has                      
  already been paid to the state of Alaska as reimbursement                    
  for lost raw fish taxes.  The key elements in the settlement                 
  agreement he said were:  1) the way the money is to be used                  
  is specified; and 2) a blackmail clause is included so that                  
  if the projects are not authorized by September 15, 1993,                    
  the funds revert to the trustees.                                            
                                                                               
  REPRESENTATIVE OLBERG also noted that the trustees had spent                 
  approximately $200 million with no visible sign of it in                     
  Prince William Sound or any other spill-affected area.                       
                                                                               
  Number 102                                                                   
                                                                               
  REPRESENTATIVE DAVID FINKELSTEIN asked Representative Olberg                 
  to describe the difference between the amount in the House                   
  State Affairs committee substitute (CS) and the original                     
  version of HB 197.                                                           
                                                                               
  REPRESENTATIVE OLBERG noted that he was working off the                      
  original version and not the State Affairs CS.                               
                                                                               
  Number 120                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN asked if the committee might also                 
  see a copy of the settlement agreement.                                      
                                                                               
  REPRESENTATIVE OLBERG offered to briefly read from the                       
  settlement agreement:  "If the acquisition [of Kachemak Bay                  
  State Park] is rendered impossible because these funds have                  
  not been appropriated for the purpose specified by December                  
  31, 1993, the funds allocated for this project will be                       
  phased into the joint trust fund."  He then described the                    
  allocation of funds for the other projects if they did not                   
  materialize, and said those monies also would revert to the                  
  joint trust fund.                                                            
                                                                               
  REPRESENTATIVE FINKELSTEIN referred to the State Affairs CS                  
  and asked if the difference resulted from that committee                     
  taking out the Kachemak Bay buy-back.                                        
                                                                               
  REPRESENTATIVE OLBERG answered that this was correct.  He                    
  noted that after the State Affairs committee adopted its CS,                 
  the House Special Committee on Oil and Gas re-adopted the                    
  original version of HB 197.                                                  
                                                                               
  REPRESENTATIVE FINKELSTEIN asked about the legal effect on                   
  the settlement if the distribution of the monies was                         
  tampered with, and whether that would render it moot.                        
                                                                               
  Number 169                                                                   
                                                                               
  REPRESENTATIVE OLBERG answered that if the agreement were                    
  tampered with, it was his understanding it would be rendered                 
  moot, and the funds would revert to the trustees.                            
                                                                               
  REPRESENTATIVE FINKELSTEIN suggested the committee seek the                  
  advice of legislative legal counsel on the issue of what                     
  happens if any changes are made.                                             
                                                                               
  REPRESENTATIVE OLBERG noted that Crag Tillery of the                         
  Attorney General's office had testified at the State Affairs                 
  committee hearing and related the same opinion.  He also                     
  clarified for Representative Bunde that the original version                 
  of HB 197 mirrored the settlement agreement.                                 
                                                                               
  REPRESENTATIVE FINKELSTEIN was still curious about what                      
  would happen if the distribution of funds were tampered with                 
  or changed.                                                                  
                                                                               
  Number 200                                                                   
                                                                               
  VICE CHAIRMAN BILL HUDSON arrived late and asked for an                      
  explanation of the difference in appropriation amounts                       
  between the State Affairs CS and the original version of                     
  HB 197.                                                                      
                                                                               
  REPRESENTATIVE OLBERG explained the amounts again for                        
  Representative Hudson's benefit.                                             
                                                                               
  CHAIRMAN WILLIAMS noted for the record that Representatives                  
  Hudson and Green had joined the meeting.                                     
                                                                               
  REPRESENTATIVE JOHN DAVIES asked if there was a reason the                   
  State Affairs committee had removed the funding for the                      
  Kachemak Bay State Park.                                                     
                                                                               
  Number 217                                                                   
                                                                               
  REPRESENTATIVE OLBERG replied that yes, there was a reason.                  
                                                                               
  VICE CHAIRMAN HUDSON asked if the administration had taken a                 
  stand on HB 197.                                                             
                                                                               
  REPRESENTATIVE OLBERG told him that HB 197 was the                           
  administration's bill, and that they had no hint of                          
  reservation.  He added that the attorney general had drafted                 
  the settlement on which the bill was based.                                  
                                                                               
  REPRESENTATIVE FINKELSTEIN asked why the site at Shepherd                    
  Point had been selected, and how that site fits into oil                     
  spill response plans.                                                        
                                                                               
  REPRESENTATIVE OLBERG said its significance is that it is                    
  the nearest physical location to Cordova where a deep water                  
  port could be built which could accommodate a large vessel.                  
                                                                               
  Number 250                                                                   
                                                                               
  VICE CHAIRMAN HUDSON added to that explanation, and said                     
  that most waterways around Cordova are shallow and, in fact,                 
  after the earthquake in 1964 the area went dry.  Shepherd                    
  Point, he said, was a good place to position equipment for                   
  response to any spill that might occur at Knoll's Head or                    
  other locations.  He also remarked that this would be an                     
  excellent economic development opportunity for Cordova,                      
  because the port could be used by tour ships.  He liked the                  
  idea of a port at Shepherd Point.                                            
                                                                               
  Number 268                                                                   
                                                                               
  REPRESENTATIVE CON BUNDE offered a MOTION to move HB 197                     
  from committee with individual recommendations.                              
                                                                               
  Number 280                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN still had concerns about the                      
  Shepherd Point Road site and how it fits into the state's                    
  overall spill response plan.  He wanted the legislature to                   
  hear from the Department of Environmental Conservation and                   
  from Crag Tillery of the Department of Law, but said that he                 
  would not object to the motion.                                              
                                                                               
  Number 302                                                                   
                                                                               
  PAUL FUHS, COMMISSIONER OF THE DEPARTMENT OF COMMERCE AND                    
  ECONOMIC DEVELOPMENT (DCED), testified that the                              
  administration supports the Kachemak Bay State Park                          
  purchase.  The interest there is not in the timber, he said,                 
  but rather in the recreation and tourism potential.  In the                  
  Senate version of HB 197, he said, money would go to Chugach                 
  Corporation through the DCED, and that would have to be                      
  resolved somehow with HB 197.  The rationale on the Senate                   
  side, he explained, was to reduce overhead to the Department                 
  of Transportation.                                                           
                                                                               
  MR. FUHS added that another reason was that the DCED had                     
  been working closely with the communities involved in dock                   
  and storage development, tourism, and other economic                         
  development.  The DCED has also worked with the City of                      
  Cordova on the Shepherd Point project, he said.                              
                                                                               
  Number 320                                                                   
                                                                               
  REPRESENTATIVE FINKELSTEIN asked how Chugach Corporation                     
  enters the picture.  He said they were not mentioned in                      
  HB 197.                                                                      
                                                                               
  MR. FUHS noted that the regional corporation has an                          
  agreement with some of the village corporations to do the                    
  projects included in HB 197.                                                 
                                                                               
  Number 337                                                                   
                                                                               
  CHAIRMAN WILLIAMS asked if there were any objections to the                  
  motion to move HB 197 from committee.  Hearing none, the                     
  MOTION PASSED.                                                               
                                                                               
  CHAIRMAN WILLIAMS announced that the committee would next                    
  take up HB 239.                                                              
                                                                               

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