Legislature(1997 - 1998)
04/15/1997 08:12 AM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
APRIL 15, 1997
8:12 A.M.
TAPE HFC 97 - 95, Side 1, #000 - end.
TAPE HFC 97 - 95, Side 2, #000 - end.
TAPE HFC 97 - 96, Side 1, #000 - #416.
CALL TO ORDER
Co-Chair Gene Therriault called the House Finance Committee
meeting to order at 8:12 A.M.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Grussendorf Representative Martin
Representative Davis Representative Moses
Representative Foster Representative Mulder
Representative J. Davies was not present for the meeting.
ALSO PRESENT
Senator Lyda Green; Michael Pauley, Staff, Senator Loren
Leman; Susan Schrader, Executive Director, Alaska
Environmental Lobby, Juneau; Tuckerman Babcock, Staff,
Senator Lyda Green; Janice Adair, (Testified via
teleconference), Department of Environmental Conservation,
Anchorage; Mike Crouch, (Testified via teleconference),
Eagles' Ridge Ranch, Delta Junction; Mike Schultz,
(Testified via teleconference), Grain-Farmer, Delta
Junction; Laurie Knopp, (Testified via teleconference),
Knopp Dairy, Delta Junction; Charles Thompson, (Testified
via teleconference), Agriculture Credit Director, Alaska
Farm Service Agency, U.S. Department of Agriculture, Palmer;
Sigmund Restad, (Testified via teleconference), Northern
Pioneer Ranch, Palmer; Ray DeVilbiss, Farmer, Mat-Su; Gene
Williams, (Testified via teleconference), Range Farmer,
Palmer; Harvey Baskin, (Testified via teleconference),
Farmer, Wasilla; Gerhard Groeschez, (Testified via
teleconference), Pt. MacKenize; Harry Wassink, (Testified
via teleconference), Anchorage; Gary Stromberg, (Testified
via teleconference), Farmer, Pt. MacKenize; Bill Ward,
(Testified via teleconference), Farmer, Kenai.
SUMMARY
HB 146 An Act relating to competency testing requirements
for secondary students; and providing for an
effective date.
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HB 146 was rescheduled for a latter hearing.
SB 41 An Act relating to environmental audits and health
and safety audits to determine compliance with
certain laws, permits, and regulations.
HCS CS SB 41 (JUD) was reported out of Committee
with a "do pass" recommendation and with a fiscal
note by the Department of Law and zero fiscal
notes by the Department of Labor dated 3/18/97,
the Department of Health and Social Services dated
3/13/97 and the Alaska Court System.
SB 109 An Act relating to land used for agricultural
purposes and to state land classified for
agricultural purposes or subject to the
restriction of use for agricultural purposes only;
and annulling certain program regulations of the
Department of Natural Resources that are
inconsistent with the amendments made by this Act.
SB 109 was HELD in Committee for further
consideration.
SENATE BILL 41
"An Act relating to environmental audits and health and
safety audits to determine compliance with certain
laws, permits, and regulations."
MICHAEL PAULEY, STAFF, SENATOR LOREN LEMAN, commented that
SB 41 would establish two incentives for businesses and
other regulated entities to conduct voluntary self-audits of
internal operations, in an effort to secure full compliance
with environmental laws and regulations.
The first incentive would be limited immunity. Entities
that conduct voluntary self-audits would be immune from
civil and administrative penalties for violations
discovered, provided several conditions had been met. The
instances of noncompliance must be discovered through a
self-audit and reported promptly to the appropriate
regulatory agency. The regulated entity must take action to
correct the identified problem and prevent its future
recurrence. Immunity is not available for violations
causing substantial off-site damage or serious on-site
injury. In addition, no immunity would be available for
violations that were knowingly committed or that resulted
from recklessness. Immunity can be denied to regulated
entities with a history of similar violations, or a pattern
of disregard for environmental laws.
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The second incentive would be qualified privilege. Certain
portions of the reports generated from voluntary self-audits
will be considered privileged and therefore not admissible
as evidence or subject to discovery in civil or
administrative proceedings. The provision recognizes the
valuative portion of an audit report which is self-
incriminating. Privilege can be overcome if asserted for a
fraudulent purpose or if the regulated entity has failed to
take required actions to correct areas of noncompliance.
SB 41 would create an incentive for companies and
individuals acting in good faith to police themselves and
maintain full compliance with highly complex regulations.
Co-Chair Therriault asked if immunity would need to be
disclosed to the regulatory agency. Mr. Pauley replied that
immunity would only be available for those violations which
are disclosed and discovered through a self-audit.
Additionally, the bill provides a notice provision,
providing a fifteen day in advance notice to the Department
of Environmental Conservation (DEC) explaining the scope of
the audit.
Co-Chair Therriault questioned concerns which had been
expressed in previous committees of referral regarding the
"whistleblower" protection laws. Mr. Pauley explained that
SB 41 neither adds or takes away any rights or protection
currently provided to whistleblowers under applicable State
law. In several places, the text of SB 41 clearly
anticipates the positive role whistleblowers may play in
calling attention to environmental problems.
Certain provisions in the bill will strike a balance between
the rights of employees to testify about what they have
witnessed and the rights of employers to preserve the
confidentiality of audit documents which are typically very
sensitive and costly to produce. SB 41 also provides a
mechanism through which any party can petition to have
privileged audit documents disclosed for serious reasons.
JANICE ADAIR, (TESTIFIED VIA TELECONFERENCE), DEPARTMENT OF
ENVIRONMENTAL CONSERVATION (DEC), ANCHORAGE, spoke to the
sections of the bill which the Department would support,
pointing out that their concerns had been addressed.
She continued, the "privilege of support" which the
legislation would allow is narrow. It applies only to a
portion of the audit addressing the analytical aspect of the
auditor including recommendations. The Department has the
authority to review the privilege portion of the audit and
the confidentiality of the owner/operator. That information
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can be retained in the agency file, not being subject to the
Public Audit Act.
Ms. Adair added that if the audit indicated a violation, it
would need to be addressed by the Department. From that
point forward, the proposed practices are similar to those
currently used by DEC. She reiterated that the bill would
not preclude DEC from seeking damages for cost recovery,
only penalties for violation.
SUSAN SCHRADER, EXECUTIVE DIRECTOR, ALASKA ENVIRONMENTAL
LOBBY (AEL), JUNEAU, testified that AEL supports industry's
efforts towards voluntarily compliance with environmental
regulations, but that they strongly oppose passage of SB 41.
Achieving compliance with regulations will require industry
and government to work together. The broad language of SB
41 will cripple the State's ability to enforce protection of
Alaska's environment and public welfare. She noted that the
legislation would greatly obstruct efforts to find the
balance between incentives for responsible monitoring and
effective enforcement of regulations. Ms. Schrader listed
the reasons that AEL oppose SB 41:
* The legislation is a bill of secrecy. It
would keep vital information regarding the
public's health and safety hidden from review
by the agencies we depend upon to enforce
environmental laws. It would limit the
employees' right to know.
* This is a bill of amnesty to industries that
conceal or condone noncompliance. Immunity
from civil and administrative penalties is
bad public policy and effectively rewards
non-compliance. The bill would let crime go
unpunished and encourages violators to profit
at the expense of law-abiding competitors.
* The legislation would be a full-employment
bill for attorneys. The bill will create
more confusion, litigation and expense
regarding the enforcement of regulations.
Ms. Schrader pointed out that environmental regulations have
been passed out of necessity. She stressed that industry
has a less than admirable record of self-regulating. The
public's health and safety must continue to be protected,
particularly in today's heated competitive climate where
industry is more likely to cut corners for economic
advantages.
In response to Co-Chair Therriault query regarding the "in-
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camera" review, Mr. Pauley explained the procedure was
outlined on Page 7, Line 9, of the Judiciary version of the
bill. In the "in-camera" review, the judge determines if
any of the conditions described in numbers #1 through #5
would require disclosure of audit reports.
Co-Chair Therriault inquired if DEC had offered a fiscal
note. Ms. Adair replied that the financial impact to the
Department would be reflected in the Department of Law's
fiscal note.
Co-Chair Hanley MOVED to report HCS CS SB 41 (JUD) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
HCS CS SB 41 (JUD) was reported out of Committee with a "do
pass" recommendation and with fiscal notes by the Alaska
Court System and the Department of Law, and with a zero
fiscal note by the Department of Labor dated 3/18/97.
SENATE BILL 109
"An Act relating to land used for agricultural purposes
and to state land classified for agricultural purposes
or subject to the restriction of use for agricultural
purposes only; and annulling certain program
regulations of the Department of Natural Resources that
are inconsistent with the amendments made by this Act."
SENATOR LYDA GREEN noted that SB 109 was similar to
legislation passed last year as SB 162. Last year, it was
vetoed by the Governor; the override vote, according to
Judge Weeks of Juneau, came a day late.
She listed the key provisions of the bill:
1. The State of Alaska will be taken off the
title to the land. An essential aspect if
farmers with agricultural land are to have an
opportunity to finance their operations with
private funding.
2. Numerous regulations will be repealed that
provide for micro-management of private farms
by the State. The Department of Natural
Resources (DNR) has no objection to repealing
those regulations.
3. An original agricultural parcel can now be
subdivided into any number of parcels as long
at they are no smaller than 40 acres. The
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subdivisions do not include the ability to
build a home on the property. However,
current law provides for a home site to go
along with any subdivision of an original
parcel as long as the parcel is at least 640
acres.
4. For a subdivided parcel which includes a home
site, must be under 640 acres, and conveyed
to someone outside the owners immediate
family. There will be two options:
* Option #1 would provide an increased
value fee of $6 thousand dollars payable
to the State.
* Option #2 would allow for the owner to
do an appraisal and pay the difference
in the increased value from agricultural
land with a home site and without a home
site.
5. Agricultural use would be protected by a
perpetual covenant running with the land.
Any citizen, municipality or the State could
bring suit in civil court to enforce the
covenant. The process should reduce or
eliminate frivolous suits.
6. A limited liability report would be required
to indemnify the State during the transfer of
title.
7. Existing requirements for a survey before the
State can offer agricultural land to allow
the Commissioner of the Department of Natural
Resources to waive the expensive process.
The legislation will remove unnecessary regulations, promote
family farming, allow farmers the option of private
financing, promote more offerings of agricultural land,
allow a limited number additional home sites on agricultural
land and guarantee continued agricultural use of the land.
Co-Chair Therriault asked when the $6 thousand dollar charge
would be made. Senator Green explained that the fee was
determined as the cost of building a second home and would
be revenue for the State. She suggested to establish a flat
fee would discourage the small 40 acre parcel farmer from
building. She clarified that family members would be
exempted from paying the $6 thousand dollars. There would
be no fee coming back to the State until the parcel was sold
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out of the family. The definition of "family" is the same
as that indicated in the Legislative Ethics Bill. Senator
Green pointed out that language was being reconsidered and
would be changed to $4 thousand dollars.
Co-Chair Therriault questioned the "limited liability"
provision. Senator Green explained that in the process of
changing the title from agriculture rights to the perpetual
covenant, a limited liability policy would be offered,
provided to Department of Natural Resources (DNR), who would
then provide a new "deed of conveyance". In the period of
time that the farmer conveys his land back to the State for
the purposes of the transaction, the State did not want to
have liability over actions occurring on the farmers land
during that period. The State requested a "limited
liability" clause to protect them during the time of the
transaction.
In response to Representative Grussendorf's question,
Senator Green explained that a 40 acre plot could not be
subdivided into smaller parcels for another family member.
If the person owned 80 acres, there would be no fee to the
State to divide it for a family member. If it was given
outside the family, a fee would be charged.
(Tape Change HFC 97-95, Side 2).
Representative Grussendorf asked the average size of the
agricultural plots. Senator Green replied that every size
parcel imaginable exists. There will be no net loss of land
for agriculture use.
Representative Martin spoke to the "family farm" concept.
He asked if the bill had provisions to keep the farmers from
selling-out to the federal government. Senator Green
explained that SB 109 did not address that concern. She
commented that the 40 acre parcel was the minimum below
which you can go, although, would allow a retention within a
family which would allow for a family farm member to have a
homesite on that plot.
Co-Chair Therriault questioned language included on Page 7,
Line 4: "Housing for the landowner and farm laborers".
Senator Green advised that seasonal workers could need a
bunk-house to live in; that would be tied to the appropriate
use for agricultural purposes. She stressed that language
of the bill would not permit building a condo.
Representative G. Davis asked how the Department would
monitor the area once the parcel was conveyed. He voiced
concern implementing the legislation with the current budget
cuts. Senator Green reiterated that anyone in the State
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would have the authority to address when farm land was not
being used as it should be. The change of title should
reflect any restriction possibilities.
TUCKERMAN BABCOCK, STAFF, SENATOR LYDA GREEN, added, last
year, the bill only allowed the State authority to initiate
civil action; in response to the Department's concern,
Senator Green included authority for the municipalities to
file civil action. He believed sufficient oversight exists
in the legislation.
MIKE CROUCH, (TESTIFIED VIA TELECONFERENCE), EAGLES' RIDGE
RANCH, DELTA JUNCTION, spoke in support of the legislation.
Aspects of the legislation which he specifically embraced
were:
* The right of the individual to farm their
lands as deemed necessary to make a living
without micro-management by the State
agencies; and
* The ability of current law to appeal any
process when in violation.
He urged Committee members to move the bill from Committee.
Representative Martin inquired what Mr. Crouch would think
about a prohibition on the small family farmer selling-out
to the federal government. Mr. Crouch replied that decision
should be the right of the individual to determine the
future of his operations and then make that consideration.
He believed that would create a conservation program and
would be based on placing marginal farm land to better use.
MIKE SCHULTZ, (TESTIFIED VIA TELECONFERENCE), PRODUCER-
GRAIN FARMER, DELTA JUNCTION, noted his support for the
legislation, agreeing that Pt. MacKenzie should be treated
separately. He explained that Pt. MacKenzie has local, not
statewide, problems. The proposed legislation addresses
concerns experienced by the farming industry which have
existed for twenty years when the original ag-title was
created. He urged Committee members to support the
legislation.
LAURIE KNOPP, (TESTIFIED VIA TELECONFERENCE), KNOPP DAIRY,
DELTA JUNCTION, testified in support of the legislation.
She spoke to her concern regarding a employee housing unit
on her property. Co-Chair Therriault clarified that there
would be no added assessment to the employee house on her
property.
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Ms. Knopp read testimony from Scott Miller in support of SB
109. Mr. Miller elaborated the legislation would keep the
State from micro-managing farms, concluding that farm land
must be protected.
CHARLES THOMPSON, (TESTIFIED VIA TELECONFERENCE),
AGRICULTURE CREDIT DIRECTOR, ALASKA FARM SERVICE AGENCY,
U.S. DEPARTMENT OF AGRICULTURE, PALMER, noted that the
Alaska Farm Service Agency's interest in the bill would
favor the fee-simple title passed on through the bill. The
U.S. Department of Agriculture shares a loan program with
bankers of Nationwide. Including the guarantee loan
incentive, the loan process could be expedited and be more
responsive to the needs of farmers. To date, the banks have
not been willing to accept title as it currently exists. He
recommended passage of the legislation.
SIGMUND RESTAD, (TESTIFIED VIA TELECONFERENCE), NORTHERN
PIONEER RANCH, PALMER, voiced appreciation for the Senator's
consideration of previous voiced concerns with the
legislation. He spoke to the 40 acre subdivision clause, a
parcel size which would not lend itself to a practical
operation. A profitable farm must allow itself a
substantial rotation process.
(Tape Change HFC 97-96, Side 1).
RAY DEVILBISS, (TESTIFIED VIA TELECONFERENCE), FARMER,
PALMER, suggested that the legislation would increase the
price of agricultural land. He added that SB 109 would
allow present owners of ag-right titles to apply for and
receive the new title without value being hindered, whereas,
new purchasers of that land from the State in future sales,
must pay for it at that time. Such an action could make
some owners more "equal" than others.
Mr. Devilbiss questioned how long would it take before a
concern surfaces over the loss of ag-land turning into
primary residence for off-farm wage earners. He suggested
there would be pressure at that time for the State to buy-
back the developed lands.
HARVEY BASKIN, (TESTIFIED VIA TELECONFERENCE), DAIRY FARMER,
WASILLA, stated that any farmer making a living in Alaska
can not afford to subdivide. The State is the major land
holder and current laws are not logical.
GERHARD GROESCHEZ, (TESTIFIED VIA TELECONFERENCE), FARMER,
PT. MACKENIZE, spoke to the fiasco the State has created in
the dairy industry at Pt. MacKenzie. He recommended that
the State continue to keep the covenant with the dairy
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facility on that land. Mr. Groeschez spoke to his support
for passage of SB 109.
GENE WILLIAMS, (TESTIFIED VIA TELECONFERENCE), RANGE FARMER,
PALMER, informed Committee members of the difficulty of
farming in Alaska where the weather conditions and the
shortness of the season dramatically affect the growing
season. She admitted that many people have made a "go" of
it. Ms. Williams encouraged for more people to have that
opportunity, requires subdividing to 40 acres parcels. She
supported keeping it "ag-only land" and urged passage of the
legislation.
HARRY WASSINK, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE,
commented that SB 109 provides a good title for farmers in
Alaska. He noted his support for the legislation.
GARY STROMBERG, (TESTIFIED VIA TELECONFERENCE), FARMER, PT.
MACKENIZE, testified in support of SB 109.
BILL WARD, (TESTIFIED VIA TELECONFERENCE), FARMER, KENAI,
spoke in support of the proposed legislation. The intent of
the bill would diversify the economy and help the farming
industry grow successfully. He urged members to move the
bill from Committee.
SB 109 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 10:00 A.M.
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