Legislature(2021 - 2022)ADAMS 519

03/09/2022 09:00 AM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 209(FIN) Out of Committee
-- Public Testimony --
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 9, 2022                                                                                            
                         9:02 a.m.                                                                                              
9:02:27 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Merrick called the House Finance Committee meeting                                                                     
to order at 9:02 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Steve Thompson (via teleconference)                                                                              
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Ben Carpenter                                                                                                    
Representative Sara Rasmussen                                                                                                   
ALSO PRESENT                                                                                                                  
Representative  Mike Cronk,  Sponsor; Sue  Stancliff, Staff,                                                                    
Representative Mike Cronk; Sean  Clifton, Policy and Program                                                                    
Specialist, Division  of Oil and Gas,  Department of Natural                                                                    
Resources;  Norman McDonald,  Chief  of  Fire and  Aviation,                                                                    
Division of Forestry, Department of Natural Resources.                                                                          
HB 135    GEOTHERMAL RESOURCES                                                                                                  
          HB 135 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HB 209    EMERGENCY FIREFIGHTERS                                                                                                
          CSHB 209(FIN)  was REPORTED out of  committee with                                                                    
          five  "do   pass"  recommendations  and   two  "no                                                                    
          recommendation"   recommendations  and   with  one                                                                    
          previously published zero fiscal note: FN1 (DNR).                                                                     
Co-Chair Merrick reviewed the meeting agenda.                                                                                   
HOUSE BILL NO. 209                                                                                                            
     "An Act relating to emergency firefighters."                                                                               
9:03:11 AM                                                                                                                    
REPRESENTATIVE MIKE CRONK, SPONSOR, introduced the bill                                                                         
with prepared remarks:                                                                                                          
     HB 209  authorizes the  commissioner of  the Department                                                                    
     of  Natural  Resources  to hire  emergency  firefighter                                                                    
     personnel   using   general  fund   appropriations   by                                                                    
     amending AS  41.15.030(b) allowing  the use  of general                                                                    
     funds  to pay  EFF  personnel. They  would  be able  to                                                                    
     perform  nonemergency  work   such  as  hazardous  fuel                                                                    
     reduction,  fuel  break development,  fire  prevention,                                                                    
     habitat restoration, or  improvement activities in fire                                                                    
     prone areas.  In addition, this would  provide economic                                                                    
     opportunities  for Alaskans  to enhance  public safety,                                                                    
     to  empower rural  Alaskans to  responsibly manage  the                                                                    
     state's  natural resources,  and  to  protect and  save                                                                    
     human lives.  Such nonemergency  work could  reduce the                                                                    
     likelihood,  intensity, and  damage  of wildland  fires                                                                    
     near  populated  areas   and  could  bring  significant                                                                    
     reductions in the state cost of fighting future fires.                                                                     
     Steady employment opportunities  for mostly rural based                                                                    
     firefighting  crews  would strengthen  local  economy's                                                                    
     family life  and enhance public safety.  Employing EFFs                                                                    
     during  nonemergency would  provide training,  fitness,                                                                    
     and  readiness  for when  a  wildfire  does occur.  The                                                                    
     number  of  EFF personnel  that  may  be interested  in                                                                    
     applying for  permanent DNR jobs would  increase, which                                                                    
     would  help  with  recruitment.  Based  on  legislative                                                                    
     history, amending AS  41.15.030(b)'s last sentence does                                                                    
     not  appear  to  yield   any  constitutional  or  legal                                                                    
     problems.  In  1996  the  legislature  added  the  last                                                                    
     sentence of  AS 41.15.030(b) to address  concerns about                                                                    
     conflicts  with AS  39.25.195 of  the Alaska  Personnel                                                                    
     Act.   Specifically,   that   short-term   nonpermanent                                                                    
     employees  would become  full-time employees.  However,                                                                    
     in 2000, the legislature  amended AS.39.25.195 to allow                                                                    
     for  long-term  nonpermanent  employees.  Due  to  this                                                                    
     amendment,  the  apparent  concerns  expressed  by  the                                                                    
     legislature  in 1996  warranting the  inclusion of  the                                                                    
    last sentence to AS 41.15.030(b) no longer exists.                                                                          
Representative Cronk  shared that  he had been  an emergency                                                                    
firefighter in college. He detailed  that in the early 1990s                                                                    
there  had been  approximately  70 crews  fighting fires  in                                                                    
rural  Alaska. He  elaborated that  when the  crews finished                                                                    
fighting  fires in  Alaska,  they were  sent  down to  fight                                                                    
fires in the  Lower 48. He believed the number  of crews was                                                                    
down to about 20 at present.  He reported that it had been a                                                                    
concern of  his for the past  10 years during which  time he                                                                    
had been  fighting fires. He  remarked on the  large decline                                                                    
in   the  number   of  crews.   He  recalled   working  with                                                                    
crewmembers from  Hooper Bay, Chevak, and  Allakaket. He was                                                                    
concerned the  state had  been importing  a large  number of                                                                    
people from the  Lower 48 to fight Alaska's  fires. The bill                                                                    
would get  fire crews  back in rural  Alaska and  would keep                                                                    
the  state's  money in  Alaska  by  using its  residents  as                                                                    
Vice-Chair  Ortiz asked  whether the  Department of  Natural                                                                    
Resources  (DNR) did  not currently  have  the resources  or                                                                    
authority to hire personnel with general funds.                                                                                 
Representative  Cronk replied  that  DNR  did not  currently                                                                    
have the  authority. The bill  would provide  the department                                                                    
with the  needed authority [to  hire personnel  with general                                                                    
Co-Chair Merrick  noted the department was  available online                                                                    
to answer questions.                                                                                                            
Vice-Chair Ortiz  spoke about the  past when there  had been                                                                    
many more  people from  Alaska doing the  work. He  asked if                                                                    
DNR had possessed the authority in the past.                                                                                    
Representative Cronk deferred to his staff.                                                                                     
SUE  STANCLIFF, STAFF,  REPRESENTATIVE  MIKE CRONK,  replied                                                                    
that the  department had the  authority in the past,  but it                                                                    
had been  cut back  in 1996. The  department had  decided to                                                                    
use emergency  firefighters only  under high fire  danger or                                                                    
in  incident related  occurrences. The  department had  been                                                                    
unable to  hire emergency  firefighters for  mitigation. She                                                                    
explained  that  when  the  authority  had  been  lost,  the                                                                    
department   started  charging   incidents   or  high   fire                                                                    
directly. She  clarified if there  had not been a  high fire                                                                    
danger  and  personnel had  been  brought  on as  high  fire                                                                    
responders,   the  department   would   have   to  let   the                                                                    
individuals go if there was  not a high fire likelihood. She                                                                    
elaborated the individuals could be  working for a couple of                                                                    
days    and   then    released.    She    stated   it    was                                                                    
9:08:55 AM                                                                                                                    
Representative LeBon  thought the  bill would allow  for the                                                                    
utilization  of  fire  crews to  help  prepare  and  prevent                                                                    
wildfires. He stated  there would be a fire  season, but how                                                                    
bad the  fire season would be  was unknown. He asked  if the                                                                    
hope was  the bill  would result in  the prevention  of some                                                                    
fires  and the  cost associated  with fighting  those fires;                                                                    
balancing the fiscal impact out as a result.                                                                                    
Representative  Cronk  answered that  it  was  the hope.  He                                                                    
believed the  prevention work would  help. He shared  that a                                                                    
substantial amount  of fire mitigation had  been done around                                                                    
his  community of  Tok.  The bill  would  allow the  state's                                                                    
crews  to be  trained and  it would  mitigate the  chance of                                                                    
fire  or serious  fires that  could  result in  the loss  of                                                                    
9:10:42 AM                                                                                                                    
NORMAN  MCDONALD, CHIEF  OF FIRE  AND AVIATION,  DIVISION OF                                                                    
FORESTRY,    DEPARTMENT    OF   NATURAL    RESOURCES    (via                                                                    
teleconference), read  from prepared  remarks in  support of                                                                    
the legislation:                                                                                                                
     I'm  pleased   to  speak  with  you   today  about  the                                                                    
     division's support  of House Bill  209. This bill  is a                                                                    
     manifestation  of Alaska's  need to  build firefighting                                                                    
     capacity as we face  a rapidly increasing wildland fire                                                                    
     challenge.  House Bill  209  will  help the  division's                                                                    
     fire  program achieve  primary  missions of  protecting                                                                    
     Alaskans  from wildland  fire  and preventing  wildland                                                                    
     fires  through  hazardous  fuels  mitigation  and  fire                                                                    
     breaks. This bill also provides  jobs and trainings for                                                                    
     rural  Alaskans  throughout  fire-prone  areas  of  the                                                                    
     As   Representative  Cronk   explained,  removing   the                                                                    
     funding  impediment of  Alaska  Statute 41.15.030  will                                                                    
     allow  DNR to  use already  allocated general  funds to                                                                    
     pay  emergency   firefighters  for   nonemergency  fire                                                                    
     prevention  work during  periods of  low fire  activity                                                                    
     and shoulder seasons both spring and fall.                                                                                 
     We have  two major benefits. The  first is nonemergency                                                                    
     fire prevention  work. For  example, cutting  trees and                                                                    
     creating  fuel breaks  will provide  a training  ground                                                                    
     for   EFF  employees   to   learn  valuable   crossover                                                                    
     firefighting  skills and  will also  create consistent,                                                                    
     desirable jobs for rural  Alaskans. Currently when fire                                                                    
     danger decreases,  the crews are  laid off and  they go                                                                    
     away  until  we  have  high  fire  danger  again.  This                                                                    
     creates   an   unstable   job   and   workforce.   Most                                                                    
     firefighters from  rural villages  have chosen  to find                                                                    
     other certain  employment elsewhere.  The second  is we                                                                    
     can leverage this workforce  to drastically improve our                                                                    
     ability to  install fuel breaks  throughout communities                                                                    
     and prevent and moderate  fires when they occur, saving                                                                    
     potentially tens of millions  of dollars in future fire                                                                    
     suppression costs.                                                                                                         
     Please note while this bill  allows general funds to be                                                                    
     used  for  EFF and  nonemergency  tasks,  we would  use                                                                    
     funds  already  appropriated  to  fuels  reduction  and                                                                    
     prevention work, thus  a zero fiscal note.  In the last                                                                    
     two  years DOF  has received  generous allocations  for                                                                    
     hazard fuel  reduction from  the state,  and additional                                                                    
     federal  funds for  fuels mitigation.  Both sources  of                                                                    
     funding could be  used to pay for EFF  work, which will                                                                    
     be  limited  to  fire   response  and  fire  prevention                                                                    
     related activities.                                                                                                        
     The    DOF   firefighting    mission   had    increased                                                                    
     dramatically  as  Alaska  and   the  nation  face  more                                                                    
     intense and longer  fire seasons, threatening Alaskans,                                                                    
     our home, and our property as  more of us move into the                                                                    
     fire  prone  wildland  urban interface.  DOF  currently                                                                    
     does not  have sufficient  personnel to staff  for both                                                                    
     fire suppression and fuels reduction.  In the past, EFF                                                                    
     crews  supplemented our  permanent workforce.  The lack                                                                    
     of  workforce  and  EFF crews,  however,  have  led  to                                                                    
     drastic  declines in  their number,  from approximately                                                                    
     56 crews  in 2010 to under  8 in 2021. The  division is                                                                    
     now critically  understaffed, and we rely  on importing                                                                    
     Lower  48   crews  to   replace  those   important  EFF                                                                    
     There are several problems  with substituting EFF crews                                                                    
     for  the  imported resources.  The  first  is Lower  48                                                                    
     crews are not readily  available. We compete with every                                                                    
     other state  for these crews  and during  high activity                                                                    
     in the Lower 48 we are  not always able to receive that                                                                    
     help.  Response times  can be  as long  as 72  hours, a                                                                    
     quick aggressive  initial attack  with local  forces is                                                                    
     what limits the fire site  and duration and that's what                                                                    
     reduces the overall fire cost.                                                                                             
9:14:17 AM                                                                                                                    
Mr. McDonald continued to speak to the bill from prepared                                                                       
     The cost to import  firefighters and support staff, far                                                                    
     exceeds using Alaska resources.  For example, on a fire                                                                    
     assignment, a  22-person Alaskan crew costs  $6,500 per                                                                    
     day, while a  22-person Lower 48 crew  costs twice that                                                                    
     at $13,500 a day. Lower  48 crews are not familiar with                                                                    
     Alaska fuel  types and fire behavior.  Alaska crews are                                                                    
     better able  to fight our  fires because they  know the                                                                    
     most  effective tactics  for our  landscape. So,  House                                                                    
     Bill 209  will help  us rebuild our  EFF crews  to help                                                                    
     create  a  self-sufficient Alaskan  firefighting  force                                                                    
     that will reduce the  likelihood, intensity, and damage                                                                    
     of wildland fires near populated  areas and will reduce                                                                    
     the state's firefighting cost.  Where the EFF resources                                                                    
     are the most  benefit will be in  our rural communities                                                                    
     where   access  to   contracted  resources   and  heavy                                                                    
     equipment  is limited.  Without  these  EFF crews,  our                                                                    
     rural  communities may  not receive  the same  level of                                                                    
     prevention  work   and  fire  protection   as  roadside                                                                    
     I  would say  that House  Bill 209  dovetails perfectly                                                                    
     with the  division's request  in the  governor's budget                                                                    
     to  reinstate the  wildland  fire  academy. Our  intent                                                                    
     with  this is  to  focus on  workforce development  and                                                                    
     building   back   Alaska's  wildland   fire   capacity.                                                                    
     Training  firefighters in  rural communities  will help                                                                    
     us  build  our  pool  of  recruits  to  work  on  fuels                                                                    
     projects  and fire  suppression. In  short, House  Bill                                                                    
     209 provides  secure jobs for  rural-based firefighting                                                                    
     crews, it strengthens our  local economies and enhances                                                                    
     public safety.                                                                                                             
9:15:37 AM                                                                                                                    
Representative Wool referenced  the department's zero fiscal                                                                    
note.  He observed  the bill  would add  full-time crews  to                                                                    
perform mitigation  work when they were  not fighting fires.                                                                    
He assumed  the positions  would be year-round.  He surmised                                                                    
the funds to pay for  the mitigation work, including cutting                                                                    
down  fuel  lines to  protect  populated  areas from  fires,                                                                    
would come  out of  emergency funding.  He thought  it would                                                                    
mean less funding  would be available when  there were fires                                                                    
to  fight. He  remarked  that  in the  past  there had  been                                                                    
supplemental funds  required for the  emergency firefighting                                                                    
budget due  to fires.  He commented on  the unpredictability                                                                    
of  where  wildland  fires  would   occur  as  a  result  of                                                                    
lightning strikes.  He asked  if the  bill would  take funds                                                                    
away from  the emergency  firefighting budget. He  asked for                                                                    
verification that the mitigation  work would not necessarily                                                                    
prevent  fires, but  it would  prevent  damage to  populated                                                                    
Mr. McDonald answered that  the emergency firefighting crews                                                                    
were  brought on  when needed  and would  not operate  year-                                                                    
round. He  detailed that  the crews would  be paid  from two                                                                    
sources. The  first was a  suppression component,  which was                                                                    
used  when  crews  were  assigned to  a  wildland  fire.  He                                                                    
elaborated that the fund source  would also be used if crews                                                                    
were  on standby  during high  fire  danger to  be ready  to                                                                    
respond  to a  fire. The  second component  was part  of the                                                                    
fuel CIP,  which was provided  two years ago. The  funds had                                                                    
already  been   allocated  and  were  in   place  for  fuels                                                                    
reduction work.  Additionally, there  were several  types of                                                                    
federal grants allocated for fuels  work. The department was                                                                    
anticipating  the  availability  of millions  of  additional                                                                    
dollars   available   to    states   through   the   federal                                                                    
infrastructure bill in the next couple of years.                                                                                
Mr.  McDonald clarified  that crews  would not  work on  the                                                                    
suppression  component  unless  they  were  on  a  fire.  He                                                                    
explained  that  the  suppression  component  was  only  for                                                                    
wildland firefighting.  When crews  operated on  fuels, they                                                                    
would be paid for with  state funds via a pre-authorized CIP                                                                    
or with two different federal grants.                                                                                           
Mr.  McDonald addressed  the second  part of  Representative                                                                    
Wool's question related to the  placement of the fuel breaks                                                                    
that crews would  work on. He confirmed  that fuels projects                                                                    
did not reduce  the number of fire starts.  He explained the                                                                    
placement of  fuel breaks in strategic  locations around the                                                                    
state saved the state money in  the long run. For example, a                                                                    
fuel  break had  been used  in Fairbanks  behind the  Murphy                                                                    
Dome subdivisions  in 2019 to protect  the subdivisions from                                                                    
a wildland  fire that originated  in the drainage  below. He                                                                    
detailed  that the  cost  would  have been  in  the tens  of                                                                    
millions   of  dollars   if  the   fire   had  reached   the                                                                    
subdivisions.  He noted  the number  did not  factor in  the                                                                    
cost associated with damage to  homes and infrastructure. He                                                                    
explained the placement  of the fuel breaks was  key and had                                                                    
resulted in  success from Fairbanks  to Kenai.  The division                                                                    
planned to continue the successful model.                                                                                       
9:19:30 AM                                                                                                                    
Representative Wool  recalled the 2019 Murphy  Dome incident                                                                    
and  others. He  observed that  the current  model had  been                                                                    
successful. He  appreciated the desire  to keep  more people                                                                    
employed  for  longer.  He  asked for  detail  on  what  the                                                                    
workers' schedules would be.                                                                                                    
Mr.   McDonald  answered   that   currently  the   emergency                                                                    
firefighters  were  called  when needed  for  wildland  fire                                                                    
only.  He   detailed  the  individuals  worked   on  a  crew                                                                    
suppressing a  fire or when  there was high fire  danger. He                                                                    
explained  the individuals  were released  once the  weather                                                                    
changed  and  it  rained. The  emergency  firefighters  were                                                                    
considered  an on  call  type of  resource  and the  current                                                                    
statute stated the  department could only bring  them on for                                                                    
fire suppression  or preparedness,  which was  limiting. The                                                                    
intent  of the  bill  was related  to  the fuels  component,                                                                    
which the department currently did  not have. He stated that                                                                    
the  bill   dovetailed  very  nicely  with   the  division's                                                                    
training  program. He  elaborated the  division intended  to                                                                    
begin training  crews in April to  have them ready by  May 1                                                                    
when the  fire season  began. The  individuals would  not be                                                                    
assigned  to fires,  they would  work on  fuels projects  to                                                                    
protect  communities.  Additionally, the  individuals  would                                                                    
build  skills  that crossed  over  to  wildland fires  using                                                                    
chainsaws,   manual  labor,   and   physical  fitness.   The                                                                    
individuals  would  be  ready  and  available  for  a  fire;                                                                    
therefore,  if  a  fire  began,  the  individuals  would  be                                                                    
transition  from  a fuels  project  directly  to an  initial                                                                    
attack or  new start  to quickly suppress  the fire.  He was                                                                    
concerned that  without the  resources available,  the state                                                                    
had to rely  on importing Lower 48 crews  during the season.                                                                    
He  detailed  that  it  resulted   in  a  delay  in  getting                                                                    
resources  to fires,  which caused  larger, more  expensive,                                                                    
and complex incidents.                                                                                                          
9:21:57 AM                                                                                                                    
Representative  Wool stated  his understanding  of the  work                                                                    
the crew would  do. He asked if the  firefighters would stay                                                                    
on full-time for  an entire season instead of  being on call                                                                    
for fire  emergencies only. He  asked if the  funding source                                                                    
would switch when the individuals  were working on fires and                                                                    
fuel lines.                                                                                                                     
Mr.  McDonald   agreed.  He  relayed  there   was  currently                                                                    
substantial  federal  and  state CIP  funding  available  to                                                                    
perform the work.  He characterized it as  an opportunity to                                                                    
strike while  the iron was hot.  The intent was to  have the                                                                    
individuals working during spring  and fall shoulder seasons                                                                    
and working  on fuels  projects during fire  season, meaning                                                                    
they would  be ready  and available on  short notice  for an                                                                    
initial  response  to a  wildland  fire.  He furthered  that                                                                    
while  the workers  were on  a fuels  project they  would be                                                                    
funded  and  paid  with  allocated  funding  for  the  fuels                                                                    
project via  state CIP or  federal funds. He  expounded that                                                                    
if  the  individuals were  assigned  to  an incident,  their                                                                    
charge code would change.                                                                                                       
Representative  Wool began  to  ask about  a scenario  where                                                                    
federal or fuel remediation funds ran out.                                                                                      
Co-Chair Merrick noted the committee  would come back to Mr.                                                                    
McDonald due to audio problems.                                                                                                 
9:23:56 AM                                                                                                                    
Representative  LeBon  remarked  there  were  a  substantial                                                                    
number of  dead trees  due to spruce  beetle kill.  He cited                                                                    
locations in Kenai and Mat-Su  as examples. He asked if part                                                                    
of the  program was aimed  at reducing the fire  risk caused                                                                    
by  dead trees.  He understood  there were  too many  to cut                                                                    
Representative Cronk replied that  the question was best for                                                                    
Mr. McDonald. He believed part  of the goal of building fire                                                                    
breaks was to  remove fire hazards including  dead trees. He                                                                    
highlighted the  bill would enable  the departments  to work                                                                    
together. He detailed that Mat-Su  was trying to get logging                                                                    
companies to harvest  the trees for use. He  noted there was                                                                    
an  individual in  the area  who was  milling the  trees and                                                                    
building homes with the lumber.                                                                                                 
Representative LeBon recalled  a supplemental budget request                                                                    
four years earlier as a  result of a substantial fire season                                                                    
the prior  summer. He remarked  that it was not  possible to                                                                    
know what  kind of  fire season there  would be.  He thought                                                                    
the work enabled by the bill  was money well spent if it was                                                                    
an insurance policy to prevent the extreme from happening.                                                                      
9:25:58 AM                                                                                                                    
Representative LeBon  restated his earlier question  for Mr.                                                                    
McDonald.  He remarked  there were  a substantial  number of                                                                    
dead trees due to spruce  beetle kill. He cited locations in                                                                    
Kenai  and Mat-Su  as  examples.  He asked  if  part of  the                                                                    
program was aimed  at reducing the fire risk  caused by dead                                                                    
Mr.  McDonald  answered that  beetle  kill  was one  of  the                                                                    
targets. The  division used a  couple of different  types of                                                                    
fuel  breaks.  He  detailed  crews  cut  traditional  swaths                                                                    
through  trees   and  shaded  fuel   breaks,  which   was  a                                                                    
successful model  for beetle  kill around  specific tactical                                                                    
areas.  For   example,  there  was  a   project  around  the                                                                    
university in  Kenai where  the dead  and downed  trees were                                                                    
removed,  and healthy  trees  were limbed  up  to provide  a                                                                    
healthy forest and reduce the fire hazard.                                                                                      
Representative  LeBon  asked  for verification  the  program                                                                    
would enable the  department to get ahead of the  work in an                                                                    
effective way.                                                                                                                  
Mr. McDonald agreed.                                                                                                            
9:27:52 AM                                                                                                                    
Representative  Wool   referenced  Mr.   McDonald's  earlier                                                                    
statement  about  striking  while   the  iron  was  hot.  He                                                                    
highlighted the  federal or state CIP  funding available for                                                                    
the  fuel  remediation  work. He  stated  his  understanding                                                                    
there  would still  be  funding  for emergency  firefighting                                                                    
available if the  funding sources dried up.  He believed the                                                                    
bill allowed  for one kind of  funding to pay for  the crews                                                                    
for  non-firefighting purposes.  He  asked for  verification                                                                    
that a loss  of the federal and state CIP  funding would not                                                                    
impact the funding source for firefighting itself.                                                                              
Mr.  McDonald  agreed.  He  elaborated  that  if  the  fuels                                                                    
funding was  no longer  available, it  would not  change the                                                                    
firefighting  component, which  would still  be allowed  and                                                                    
Representative Wool  asked who was currently  doing the fuel                                                                    
Representative Cronk  speculated that  much of the  work was                                                                    
likely mechanical  removal. He deferred the  question to Mr.                                                                    
Representative Wool restated his question for Mr. McDonald.                                                                     
Mr.  McDonald  responded   that  the  plan  was   to  use  a                                                                    
multifaceted approach including  private contracts and local                                                                    
contractors for  some of  the work.  The division  had three                                                                    
agency  crews that  did fuels  work  when they  were not  on                                                                    
fires. He noted the time  the agency crews were available to                                                                    
perform  fuels  work  was  becoming less  and  less  due  to                                                                    
lengthening fire  seasons in  Alaska and  the Lower  48. The                                                                    
division  used two  contract crews  with TCC  [Tanana Chiefs                                                                    
Conference] and Chugachmiut for  fires and fuels. He relayed                                                                    
the  aforementioned resources  were not  sufficient for  the                                                                    
fire seasons and fuels. The  bill would augment the existing                                                                    
9:32:04 AM                                                                                                                    
Co-Chair Merrick OPENED and CLOSED public testimony.                                                                            
9:32:27 AM                                                                                                                    
AT EASE                                                                                                                         
9:37:22 AM                                                                                                                    
Representative  LeBon  MOVED  to   ADOPT  Amendment  1,  32-                                                                    
LS0929\A.1 (Bullard/Radford, 3/1/22) (copy on file):                                                                            
     Page 1, line 1, following "firefighters":                                                                                  
     Insert "; and providing for an effective date"                                                                             
     Page 2, following line 1:                                                                                                  
     Insert a new bill section to read:                                                                                         
     "*Sec.2. This Act takes effect immediately under AS                                                                        
Co-Chair Merrick OBJECTED for discussion.                                                                                       
Representative  LeBon explained  the amendment  provided for                                                                    
an  effective  date,  which would  take  effect  immediately                                                                    
after passage of the bill.                                                                                                      
Co-Chair Merrick WITHDREW her OBJECTION.                                                                                        
There being NO further OBJECTION, Amendment 1 was ADOPTED.                                                                      
9:38:06 AM                                                                                                                    
AT EASE                                                                                                                         
9:38:25 AM                                                                                                                    
Vice-Chair  Ortiz  MOVED  to REPORT  CSHB  209(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
CSHB 209(FIN)  was REPORTED out  of committee with  five "do                                                                    
pass"   recommendations   and    two   "no   recommendation"                                                                    
recommendations  and  with  one  previously  published  zero                                                                    
fiscal note: FN1 (DNR).                                                                                                         
9:38:59 AM                                                                                                                    
AT EASE                                                                                                                         
9:39:29 AM                                                                                                                    
HOUSE BILL NO. 135                                                                                                            
     "An Act relating to geothermal resources; relating to                                                                      
     the   definition   of   'geothermal   resources';   and                                                                    
     providing for an effective date."                                                                                          
9:39:33 AM                                                                                                                    
SEAN  CLIFTON, POLICY  AND PROGRAM  SPECIALIST, DIVISION  OF                                                                    
OIL  AND GAS,  DEPARTMENT OF  NATURAL RESOURCES,  provided a                                                                    
PowerPoint   presentation   titled    "HB   135   Geothermal                                                                    
Resources:  House Finance  Committee," dated  March 9,  2022                                                                    
(copy  on file).  He  began  on slide  4  and explained  the                                                                    
bill's primary purpose was  to modernize Alaska's geothermal                                                                    
exploration  program.  He  explained   there  had  not  been                                                                    
significant  interest and  experience in  geothermal leasing                                                                    
and exploration  on Alaska state lands.  He highlighted that                                                                    
the state had done substantial  updating of statutes for oil                                                                    
and gas,  meanwhile the geothermal statutes  had languished.                                                                    
The bill  would bring  the geothermal  statutes up  to date,                                                                    
which   the  administration   hoped   would  encourage   new                                                                    
exploration and  development of  geothermal projects  to get                                                                    
new resources to rural communities and create jobs.                                                                             
Mr.  Clifton  explained the  bill  would  align the  state's                                                                    
geothermal licensing  program with the existing  oil and gas                                                                    
exploration  license  program,   which  had  been  receiving                                                                    
significant  attention  over  the past  several  years.  The                                                                    
administration believed  the model  would be  successful for                                                                    
geothermal  as  well.  He  explained  that  the  bill  would                                                                    
provide  companies a  bit more  time to  identify and  prove                                                                    
resources. Additionally,  the bill would expand  the acreage                                                                    
a party would  have to explore, secured  within the license.                                                                    
He  highlighted   the  importance  of  the   update  because                                                                    
geothermal systems  typically covered very large  areas. The                                                                    
bill would revise the definition  of geothermal resources to                                                                    
focus on  commercial use.  He noted it  had been  implied in                                                                    
the  past, but  the  goal  was to  make  it  clear that  the                                                                    
Department  of Natural  Resources (DNR)  had no  interest in                                                                    
requiring  the regulation  of  private  users of  geothermal                                                                    
9:43:10 AM                                                                                                                    
Mr. Clifton turned  to slide 5 and  discussed DNR geothermal                                                                    
leasing/permitting  history. He  relayed  that  DNR had  not                                                                    
given   substantial   attention  to   geothermal   resources                                                                    
historically.  The department  had  held  three lease  sales                                                                    
between  1983 and  2008 in  the Mount  Spur area.  There had                                                                    
been some leases  issued. He noted there  was information on                                                                    
the department's website related  to some drilling that took                                                                    
place in  2008. He expounded that  in 2013 a tract  had been                                                                    
issued  in a  lease sale  for Augustine  Island. There  were                                                                    
currently two geothermal prospecting  permits issued for the                                                                    
Mount Spur area in addition  to an application for Augustine                                                                    
Island  under  review.  He explained  that  the  bill  would                                                                    
extend  the  prospecting permits  and  include  them in  the                                                                    
exploration licensing program enabled by the legislation.                                                                       
Representative Josephson referenced  the definitional reform                                                                    
addressed on  slide 4.  He did  not have  a visual  sense of                                                                    
what  it  would  take  to  stop  regulating  domestic,  non-                                                                    
commercial,  or small  scale industrial  use.  He asked  for                                                                    
Mr.  Clifton  answered  that the  state  did  not  currently                                                                    
regulate  any  geothermal  activity   on  state  lands.  The                                                                    
administration  was  seeking  to  make  the  commercial  use                                                                    
aspect explicit,  but it was  already implied  under current                                                                    
statutes. The  goal was to  make it  clear that DNR  did not                                                                    
want to interfere  with people trying to use  hot springs or                                                                    
ground   source  heat   pumps  to   heat  their   cabins  or                                                                    
potentially generate electricity.  The administration wanted                                                                    
to  clarify the  focus  was on  commercial grade  geothermal                                                                    
resources  that   were  typically   much  deeper   and  more                                                                    
expensive  to develop  (in  the range  of  many millions  of                                                                    
dollars).  He noted  the bill  did not  change anything  for                                                                    
existing development.                                                                                                           
9:45:54 AM                                                                                                                    
Mr.  Clifton  turned  to  slide   6  and  reviewed  the  DNR                                                                    
leasing/permitting  process.  He   detailed  that  when  the                                                                    
department  received an  application  it issued  a call  for                                                                    
competing proposals.  He explained  it was a  typical public                                                                    
notice to seek any other companies  that may want to bid for                                                                    
the same  prospect. He elaborated  that DNR was  required to                                                                    
issue a  lease sale if  any interest was received.  He noted                                                                    
the process was the same for  oil and gas. He expounded that                                                                    
if DNR did not receive  any competing proposals, it issued a                                                                    
best  interest  finding  for  the  prospecting  permit.  The                                                                    
information  was put  out for  public notice  throughout the                                                                    
process. The  department also conducted  interagency reviews                                                                    
in order for  other state and federal  agencies and boroughs                                                                    
to participate in  the process. He noted  that DNR solicited                                                                    
the  participation   before  the  preliminary   finding  was                                                                    
issued. Once  the finding was issued,  DNR received comments                                                                    
and  revised  the  finding  as   needed,  resulting  in  the                                                                    
issuance of  a final  finding. After  the final  finding was                                                                    
issued and the  applicant was satisfied with  the terms, DNR                                                                    
would issue the permit.                                                                                                         
9:47:08 AM                                                                                                                    
Representative   Josephson  asked   about  the   notice  and                                                                    
opportunity to  be heard  by the public  on lease  sales. He                                                                    
asked  if  the  public  had   an  opportunity  to  speak  in                                                                    
opposition to a proposed lease sale at a public hearing.                                                                        
Mr.  Clifton answered  that public  hearings were  not held.                                                                    
The  department  issued  public notices  and  solicited  for                                                                    
written comment.  He elaborated  the comments could  come in                                                                    
the form of a letter, email, and via telephone.                                                                                 
Representative  Josephson  asked  if  it  was  the  way  DNR                                                                    
typically  dealt with  other proposals  and  lease sales  on                                                                    
state land.                                                                                                                     
Mr.  Clifton replied  affirmatively.  He  noted that  public                                                                    
hearings  were not  required by  statute or  regulation. The                                                                    
department  provided  public   notice  and  opportunity  for                                                                    
Mr. Clifton briefly  looked at a sectional  summary on slide                                                                    
7.  He addressed  Section 2,  the private  use exemption  on                                                                    
slide 9.  He explained that  a prospecting license  or lease                                                                    
was not required under the  section to explore for, develop,                                                                    
or use  geothermal resources if the  geothermal resource was                                                                    
intended   for  domestic,   noncommercial,  or   small-scale                                                                    
industrial  use.   He  pointed   out  that   the  definition                                                                    
explicitly  excluded  private   geothermal  users  from  the                                                                    
requirement to apply for a lease license.                                                                                       
Representative  Wool  asked  how  to  differentiate  between                                                                    
commercial and small scale industrial.                                                                                          
Mr. Clifton answered that it  was not currently defined. The                                                                    
goal  was  to have  the  language  vague  for a  reason.  He                                                                    
explained the  need for flexibility  in order to  assess the                                                                    
nuances of a situation.  He provided a hypothetical scenario                                                                    
where a  fish processing  plant or logging  processing plant                                                                    
had  a remote  operation and  were able  to tap  into a  hot                                                                    
spring  for  the  purpose  of  power  generation  for  their                                                                    
plants. He  stated that perhaps  the plants also  had cabins                                                                    
nearby. He detailed that perhaps  the plants were generating                                                                    
10  megawatts to  fuel  their operation  and  they sold  0.8                                                                    
megawatts  to  the  neighboring cabins.  He  explained  that                                                                    
under  the scenario  it would  not  be in  the state's  best                                                                    
interest  to try  to regulate  the plants  and extract  very                                                                    
miniscule  royalties. He  classified  the  example as  small                                                                    
scale industrial  and explained  it would  not be  worth the                                                                    
state's time.                                                                                                                   
9:52:37 AM                                                                                                                    
Representative Wool  asked if  the regulation  of geothermal                                                                    
purposes was primarily for situations  where power was being                                                                    
sold and  not for  situations where  the resource  was being                                                                    
used for internal consumption by a user.                                                                                        
Mr. Clifton  answered that part  of the problem  with trying                                                                    
to develop  a definition was due  to the fact the  state did                                                                    
not have any experience  in regulating geothermal resources.                                                                    
There  were not  many examples  of industrial  or commercial                                                                    
geothermal  operations globally.  He  stated  that most  was                                                                    
explicitly commercial  (i.e., run  by a  power company  or a                                                                    
government such as Iceland). He  explained that if the state                                                                    
tried to  minutely define the  details, it would have  to be                                                                    
arbitrary simply  because the information was  not known. He                                                                    
explained  it was  the reason  the administration  wanted to                                                                    
leave it open  for specifying in regulations later  on or to                                                                    
have the ability to handle nuances  in the context of a best                                                                    
interest finding where the  commissioner could determine the                                                                    
definition based on a situation.                                                                                                
Co-Chair Merrick relayed that  the committee would hear from                                                                    
the testifier at a future meeting.                                                                                              
HB  209  was  HEARD  and   HELD  in  committee  for  further                                                                    
Co-Chair  Merrick reviewed  the schedule  for the  following                                                                    
9:53:54 AM                                                                                                                    
The meeting was adjourned at 9:54 a.m.                                                                                          

Document Name Date/Time Subjects
HB 209 Letter of Support 2.9.22.pdf HFIN 3/9/2022 9:00:00 AM
HB 209
HB 209 Sponsor Statement.pdf HFIN 3/9/2022 9:00:00 AM
HB 209
HB 135 Sectional Analysis, Version B 2.22.22.pdf HFIN 3/9/2022 9:00:00 AM
HB 135
HB 135 Sponsor Statement 3.9.21.pdf HFIN 3/9/2022 9:00:00 AM
HB 135
HB 135 Summary of Changes, Version B 2.22.22.pdf HFIN 3/9/2022 9:00:00 AM
HB 135
_HB 135 Geothermal Resources PP 2022-03-09_HFIN.pdf HFIN 3/9/2022 9:00:00 AM
HB 135
HB 135 letter GeoAlaska 030922.pdf HFIN 3/9/2022 9:00:00 AM
HB 135