Legislature(1993 - 1994)

01/31/1994 08:15 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HB 384 - FINANCIAL REQMTS: NONCRUDE OIL OPERATIONS                           
  Number 011                                                                   
  committee members he was appreciative that they were hearing                 
  HB 384 which was before the Oil and Gas Committee the                        
  previous week.  He asked his chief of staff to come forward                  
  and give background information on HB 384.                                   
  FOSTER'S OFFICE, stated HB 384 is simple and                                 
  straightforward.  It eliminates the sunset clause in the                     
  current statute which requires direct action insurance for                   
  noncrude operators.  He said after the current legislation                   
  became law, noncrude operators could not get $150 million                    
  direct action insurance.  Direct action means the insurer is                 
  sued, not the perpetrator of the action.                                     
  MR. LaBOLLE said the insurance companies for several reasons                 
  were unwilling to write the type of insurance policy                         
  required.  He mentioned the Department of Natural Resources                  
  (DNR) did get waivers on the requirement before the                          
  legislation allowed it.  He said at that time, Senator Lyman                 
  Hoffman asked for the current exemption which sunsets on                     
  July 1, 1994.                                                                
  MR. LaBOLLE told committee members that HB 384 removes the                   
  sunset provision from the statute.  He stated there was                      
  testimony at the Oil and Gas Committee meeting from                          
  operators who cannot get the insurance, and added that DNR                   
  also testified at the meeting saying the department was in                   
  support of HB 384, since operators still would be required                   
  to show financial responsibility.                                            
  Number 036                                                                   
  (VICE CHAIRMAN HUDSON noted for the record that                              
  REPRESENTATIVE FINKELSTEIN had joined the meeting at 8:25                    
  p.m. and a QUORUM was not present).                                          
  REPRESENTATIVE CON BUNDE asked if HB 384 speaks only to                      
  direct action insurance and not insurance at another level                   
  which operators have.                                                        
  MR. LaBOLLE responded HB 384 speaks only to the direct                       
  action insurance requirement and still does not provide any                  
  type of waiver from DNR oversight.                                           
  VICE CHAIRMAN HUDSON asked if there still is a federal                       
  requirement for insurance.                                                   
  Number 050                                                                   
  MR. LaBOLLE replied the requirement for insurance still                      
  exists on the federal level, but the problem is not the                      
  requirement for insurance, the problem lies in the                           
  requirement for direct access.                                               
  VICE CHAIRMAN HUDSON recalled when the current statute was                   
  enacted, there was a lot of concern about whether or not the                 
  insurance industry would be able to provide the type of                      
  insurance required, and whether or not small operators would                 
  be able to afford it if it were available.                                   
  REPRESENTATIVE JOE GREEN made a motion to MOVE HB 384 from                   
  committee with INDIVIDUAL RECOMMENDATIONS.                                   
  VICE CHAIRMAN HUDSON asked if there were any objections.                     
  Hearing none, the MOTION PASSED.                                             
  VICE CHAIRMAN HUDSON advised the committee they would meet                   
  on Wednesday, February 2 at 8:00 a.m. for a briefing on the                  
  federal wetlands policy in Alaska.  He said the presentation                 
  will be given by Alvin Ewing of the United States                            
  Environmental Protection Agency.  Paul Rusanowski of the                     
  Governor's Office, Division of Governmental Coordination,                    
  will give a briefing on the administration's perspective on                  
  wetlands policy and federal activity in this area.                           
  REPRESENTATIVE GREEN asked if there will be any                              
  representatives from the Corps of Engineers at the meeting.                  
  MARY McDOWELL, HOUSE RESOURCES COMMITTEE AIDE,                               
  REPRESENTATIVE BILL WILLIAMS, responded the Corps of                         
  Engineers declined the invitation.  She met with Paul                        
  Rusanowski earlier and he planned to ask them again.                         
  There being no further business to come before the House                     
  Resources Committee, Vice Chairman Hudson adjourned the                      
  meeting at 8:30 a.m.                                                         

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