Legislature(1999 - 2000)
05/14/1999 01:27 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE May 14, 1999 1:27 p.m. MEMBERS PRESENT Representative Scott Ogan, Co-Chair Representative Jerry Sanders, Co-Chair Representative Beverly Masek, Vice Chair Representative John Harris Representative Carl Morgan Representative Ramona Barnes Representative Jim Whitaker Representative Reggie Joule Representative Mary Kapsner MEMBERS ABSENT All members present COMMITTEE CALENDAR CS FOR SENATE BILL NO. 7(FIN) am "An Act relating to the University of Alaska and university land, and authorizing the University of Alaska to select additional state land." - FAILED TO MOVE OUT OF COMMITTEE SENATE BILL NO. 171 am "An Act relating to the release of certain records and reports required by the Department of Fish and Game regarding fish, shellfish, or fishery products and reports of fish buyers and processors; relating to the transfer of land to the state; and providing for an effective date." - MOVED HCS SB 171(RES) OUT OF COMMITTEE CS FOR SENATE BILL NO. 128(FIN) am "An Act moving the termination date of the Board of Storage Tank Assistance to June 30, 1999; relating to the storage tank assistance fund, to financial assistance for owners and operators of underground petroleum storage tank systems, and to discharges from underground petroleum storage tank systems; and providing for an effective date." - MOVED HCS CSSB 128(RES) OUT OF COMMITTEE HOUSE CONCURRENT RESOLUTION NO. 2 Relating to the sovereignty of the State of Alaska and the sovereign right of the State of Alaska to manage the natural resources of Alaska. - MOVED CSHCR 2(FSH) OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: SB 7 SHORT TITLE: INCREASE LAND GRANT TO UNIV. OF ALASKA SPONSOR(S): SENATOR(S) TAYLOR, Kelly Tim, Donley, Wilken, Leman, Pearce, Mackie, Ward; REPRESENTATIVE(S) Halcro Jrn-Date Jrn-Page Action 1/08/99 14 (S) PREFILE RELEASED - 1/8/99 1/19/99 15 (S) READ THE FIRST TIME - REFERRAL(S) 1/19/99 15 (S) RES, FIN 1/25/99 (S) RES AT 3:00 PM BUTROVICH ROOM 205 1/25/99 (S) HEARD AND HELD 1/25/99 (S) MINUTE(RES) 2/01/99 (S) RES AT 3:00 PM BUTROVICH ROOM 205 2/01/99 (S) SCHEDULED BUT NOT HEARD 2/01/99 (S) MINUTE(RES) 2/03/99 (S) RES AT 3:00 PM BUTROVICH ROOM 205 2/03/99 (S) MOVED CS OUT OF COMMITTEE 2/03/99 (S) MINUTE(RES) 2/05/99 165 (S) RES RPT CS 4DP 3NR SAME TITLE 2/05/99 165 (S) DP: MACKIE, TAYLOR, GREEN, PETE KELLY; 2/05/99 165 (S) NR: HALFORD, PARNELL, LINCOLN 2/05/99 165 (S) FN TO SB (DNR), FNS TO SB & CS (UA, F&G) 2/05/99 165 (S) FN TO CS (DNR) 2/25/99 (S) FIN AT 9:00 AM SENATE FINANCE 532 3/04/99 (S) FIN AT 8:00 AM SENATE FINANCE 532 3/04/99 (S) HEARD AND HELD 3/04/99 (S) MINUTE(FIN) 4/23/99 (S) FIN AT 8:00 AM SENATE FINANCE 532 4/23/99 (S) MOVED CS(FIN) OUT OF COMMITTEE 4/24/99 (S) FIN AT 10:00 AM SENATE FINANCE 532 4/26/99 (S) RLS AT 12:00 PM FAHRENKAMP 203 4/26/99 (S) MINUTE(RLS) 4/26/99 (S) MINUTE(RLS) 4/26/99 1085 (S) FIN RPT CS 5DP 2NR SAME TITLE 4/26/99 1086 (S) DP: TORGERSON, WILKEN, LEMAN, DONLEY, 4/26/99 1086 (S) PETE KELLY; NR: PHILLIPS, ADAMS 4/26/99 1086 (S) PREVIOUS FNS (DNR, UA, F&G) 5/03/99 1202 (S) RULES TO CALENDAR AND 1 OR 5/3/99 5/03/99 1203 (S) READ THE SECOND TIME 5/03/99 1203 (S) FIN CS ADOPTED UNAN CONSENT 5/03/99 1203 (S) AM NO 1 OFFERED BY TAYLOR 5/03/99 1203 (S) AM NO 1 ADOPTED Y11 N9 5/03/99 1204 (S) AM NO 2 OFFERED BY TAYLOR 5/03/99 1204 (S) AM NO 2 ADOPTED UNAN CONSENT 5/03/99 1204 (S) AM NO 3 OFFERED BY TAYLOR 5/03/99 1204 (S) AM NO 3 ADOPTED UNAN CONSENT 5/03/99 1205 (S) ADVANCED TO THIRD READING UNAN CONSENT 5/03/99 1205 (S) READ THE THIRD TIME CSSB 7(FIN) AM 5/03/99 1205 (S) COSPONSOR(S): PEARCE, MACKIE, WARD 5/03/99 1206 (S) PASSED Y15 N5 5/03/99 1206 (S) ELLIS NOTICE OF RECONSIDERATION 5/04/99 1239 (S) RECONSIDERATION NOT TAKEN UP 5/04/99 1239 (S) TRANSMITTED TO (H) 5/05/99 1175 (H) READ THE FIRST TIME - REFERRAL(S) 5/05/99 1175 (H) RESOURCES, FINANCE 5/05/99 1187 (H) CROSS SPONSOR(S): HALCRO 5/12/99 (H) RES AT 1:30 PM CAPITOL 124 5/12/99 (H) HEARD AND HELD 5/14/99 (H) RES AT 1:00 PM CAPITOL 124 BILL: SB 171 SHORT TITLE: FISHERY DATA; LAND REC'D BY STATE SPONSOR(S): SENATOR(S) HALFORD Jrn-Date Jrn-Page Action 5/07/99 1299 (S) READ THE FIRST TIME - REFERRAL(S) 5/07/99 1299 (S) RES 5/10/99 (S) RES AT 3:00 PM BUTROVICH 205 5/10/99 (S) MOVED OUT OF COMMITTEE 5/10/99 1354 (S) RES RPT 2DP 3NR 5/10/99 1354 (S) DP: HALFORD, GREEN; NR: MACKIE, 5/10/99 1354 (S) LINCOLN, PETE KELLY 5/10/99 1354 (S) ZERO FISCAL NOTE (DNR, F&G-2) 5/11/99 (S) RLS AT 12:00 PM FAHRENKAMP 203 5/11/99 1365 (S) RULES TO CALENDAR AND 1 OR 5/11/99 5/11/99 1367 (S) READ THE SECOND TIME 5/11/99 1367 (S) ADVANCED TO THIRD READING UNAN CONSENT 5/11/99 1367 (S) READ THE THIRD TIME SB 171 5/11/99 1368 (S) PASSED Y20 N- 5/11/99 1368 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 5/11/99 1368 (S) HALFORD NOTICE OF RECONSIDERATION 5/12/99 1401 (S) RECON TAKEN UP - IN THIRD READING 5/12/99 1401 (S) RETURN TO SECOND FOR AM 1 UNAN CONSENT 5/12/99 1401 (S) AM NO 1 ADOPTED UNAN CONSENT 5/12/99 1402 (S) AUTOMATICALLY IN THIRD READING 5/12/99 1402 (S) PASSED ON RECONSIDERATION Y20 N- 5/12/99 1403 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 5/12/99 1407 (S) TRANSMITTED TO (H) 5/13/99 1363 (H) READ THE FIRST TIME - REFERRAL(S) 5/13/99 1363 (H) FSH, RES 5/14/99 1423 (H) FSH REFERRAL WAIVED 5/14/99 1423 (H) REFERRED TO RESOURCES 5/14/99 (H) RES AT 1:00 PM CAPITOL 124 BILL: SB 128 SHORT TITLE: STORAGE TANK ASSISTANCE FUND SPONSOR(S): FINANCE Jrn-Date Jrn-Page Action 3/31/99 752 (S) READ THE FIRST TIME - REFERRAL(S) 3/31/99 753 (S) RES, FIN 4/07/99 (S) RES AT 3:00 PM BUTROVICH 205 4/07/99 (S) MOVED CS (RES) OUT OF COMMITTEE 4/07/99 (S) MINUTE(RES) 4/09/99 844 (S) RES RPT CS 1DP 3NR NEW TITLE 4/09/99 845 (S) DP: HALFORD; NR: GREEN, PETE KELLY, 4/09/99 845 (S) TAYLOR 4/09/99 845 (S) FISCAL NOTE TO CS (LAW) 4/09/99 845 (S) FISCAL NOTE TO BILL (DEC) 4/12/99 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/12/99 (S) MINUTE(FIN) 4/12/99 875 (S) FISCAL NOTE TO CS (DEC) 4/19/99 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/19/99 (S) HEARD AND HELD 4/27/99 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/27/99 (S) HEARD AND HELD 4/30/99 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/30/99 (S) MOVED CS(FIN) OUT OF COMMITTEE 4/30/99 1184 (S) FIN RPT CS 3DP 4NR NEW TITLE 5/03/99 (S) RLS AT 11:20 AM FAHRENKAMP 203 5/03/99 1202 (S) FIN CS RECEIVED 4/30/99 1184 (S) DP: TORGERSON, PHILLIPS, DONLEY; 4/30/99 1184 (S) NR: GREEN, PETE KELLY, ADAMS, WILKEN 5/04/99 (S) RLS AT 11:30 AM FAHRENKAMP 203 5/04/99 (S) MINUTE(RLS) 5/04/99 1220 (S) FISCAL NOTE (S.FIN/DEC) 5/04/99 1222 (S) RULES TO CALENDAR AND 1 OR 5/4/99 5/04/99 1226 (S) READ THE SECOND TIME 5/04/99 1226 (S) FIN CS ADOPTED UNAN CONSENT 5/04/99 1226 (S) HELD IN SECOND READING TO 5/5 CAL 5/05/99 1255 (S) AM NO 1 ADOPTED UNAN CONSENT 5/05/99 1255 (S) ADVANCED TO THIRD READING UNAN CONSENT 5/05/99 1255 (S) READ THE THIRD TIME CSSB 128(FIN) AM 5/05/99 1256 (S) PASSED Y18 N2 5/05/99 1256 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 5/05/99 1262 (S) TRANSMITTED TO (H) 5/06/99 1193 (H) READ THE FIRST TIME - REFERRAL(S) 5/06/99 1193 (H) RESOURCES, FINANCE 5/12/99 (H) RES AT 1:30 PM CAPITOL 124 5/12/99 (H) HEARD AND HELD 5/14/99 (H) RES AT 1:00 PM CAPITOL 124 BILL: HCR 2 SHORT TITLE: SOVEREIGNTY OF THE STATE; RESOURCES SPONSOR(S): REPRESENTATIVES(S) COGHILL, Barnes, Green, Masek Jrn-Date Jrn-Page Action 2/24/99 300 (H) READ THE FIRST TIME - REFERRAL(S) 2/24/99 300 (H) WTR, FSH, RESOURCES 3/16/99 (H) WTR AT 5:00 PM CAPITOL 124 3/16/99 (H) MOVED OUT OF COMMITTEE 3/16/99 (H) MINUTE(WTR) 3/17/99 490 (H) WTR RPT 4DP 2DNP 3/17/99 490 (H) DP: MASEK, GREEN, COWDERY, BARNES; 3/17/99 490 (H) DNP: BERKOWITZ, JOULE 3/17/99 490 (H) ZERO FISCAL NOTE (H.WTR) 3/17/99 497 (H) COSPONSOR(S): GREEN 4/12/99 (H) FSH AT 5:00 PM CAPITOL 124 4/12/99 (H) <BILL POSTPONED TO 4/19> 4/19/99 (H) FSH AT 5:00 PM CAPITOL 124 4/19/99 (H) HEARD AND HELD 4/19/99 (H) MINUTE(FSH) 4/26/99 (H) FSH AT 5:00 PM CAPITOL 124 4/26/99 (H) SCHEDULED BUT NOT HEARD 5/03/99 (H) FSH AT 5:00 PM CAPITOL 124 5/03/99 (H) MOVED CSHCR 2(FSH) OUT OF COMMITTEE 5/03/99 (H) MINUTE(FSH) 5/05/99 (H) RES AT 1:00 PM CAPITOL 124 5/05/99 (H) HEARD AND HELD 5/05/99 (H) MINUTE(RES) 5/05/99 1177 (H) FSH RPT CS(FSH) 1DNP 3NR 5/05/99 1178 (H) DNP: MORGAN; NR: WHITAKER, HUDSON, 5/05/99 1178 (H) SMALLEY 5/05/99 1178 (H) ZERO FISCAL NOTE (H.WTR) 3/17/99 5/05/99 1178 (H) REFERRED TO RESOURCES 5/07/99 (H) RES AT 1:00 PM CAPITOL 124 5/07/99 (H) SCHEDULED BUT NOT HEARD 5/07/99 1246 (H) COSPONSOR(S): MASEK 5/14/99 (H) RES AT 1:00 PM CAPITOL 124 WITNESS REGISTER JANE ANGVIK, Director Division of Land Department of Natural Resources 3601 C Street, Suite 1122 Anchorage, Alaska 99503-5947 Telephone: (907) 269-8503 POSITION STATEMENT: Testified in opposition to CSSB 7(FIN) am; testified on SB 171 am that Administration had no opposition after bill was amended in committee to remove Section 4. MEL KROGSENG, Legislative Assistant to Senator Taylor Alaska State Legislature Capitol Building, Room 30 Juneau, Alaska 99801 Telephone: (907) 465-3873 POSITION STATEMENT: Offered information on CSSB 7(FIN) am. WENDY REDMAN, Vice President Statewide University of Alaska System University of Alaska P.O. Box 755200 Fairbanks, Alaska 99775 Telephone: (907) 474-7582 POSITION STATEMENT: Answered questions regarding the university's land holdings and development process. BRETT HUBER, Legislative Assistant to Senator Rick Halford Alaska State Legislature Capitol Building, Room 121 Juneau, Alaska 99801 Telephone: (907) 465-4958 POSITION STATEMENT: Presented SB 171 am on behalf of sponsor. GERON BRUCE, Legislative Liaison Office of the Commissioner Alaska Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 Telephone: (907) 465-6143 POSITION STATEMENT: Testified on SB 171 am. STEPHEN WHITE, Assistant Attorney General Natural Resources Section Civil Division (Juneau) Department of Law P.O. Box 110300 Juneau, Alaska 99811-0300 Telephone: (907) 465-3600 POSITION STATEMENT: Answered questions regarding SB 171 am. GARY WEBER, Secretary Alaska Underground Tank Owners and Operators Association PO Box 871216 Wasilla, Alaska 99687 Telephone: (907) 376-5900 POSITION STATEMENT: Discussed concerns with the definition of "net worth." DARWIN PETERSON, Legislative Administrative Assistant and Senate Finance Committee Aide to Senator John Torgerson Alaska State Legislature Capitol Building, Room 516 Juneau, Alaska 99801 Telephone: (907) 465-2138 POSITION STATEMENT: Discussed CSSB 128(FIN)am. STEVEN DAUGHERTY, Assistant Attorney General Natural Sections Division Civil Division Department of Law PO Box 110300 Juneau, Alaska 99811-0300 Telephone: (907) 465-3600 POSITION STATEMENT: Discussed proposed amendments from the Department of Law. ANNETTE KRIETZER, Legislative Assistant and Senate Finance Committee Aide to Senator Leman Alaska State Legislature Capitol Building, Room 115 Juneau, Alaska 99801 Telephone: (907) 465-2095 POSITION STATEMENT: Answered questions. JOHN BARNETT, Executive Director Board of Storage Tank Assistance Division of Spill Prevention & Response Department of Environmental Conservation 410 Willoughby Avenue, Suite 105 Juneau, Alaska 99801-1795 Telephone: (907) 465-5219 POSITION STATEMENT: Discussed problems with CSSB 128(FIN)am. LARRY DIETRICK, Acting Director Division of Spill Prevention & Response Department of Environmental Conservation 410 Willoughby Avenue, Suite 105 Juneau, Alaska 99801-1795 Telephone: (907) 465-5220 POSITION STATEMENT: Discussed his concerns with CSSB 128(FIN)am. JAMES HAYDEN, Program Manager Storage Tank Program Division of Spill Prevention & Response Department of Environmental Conservation 410 Willoughby Avenue, Suite 105 Juneau, Alaska 99801-1795 Telephone: (907) 465-5200 POSITION STATEMENT: Discussed the aboveground storage tank program. ACTION NARRATIVE TAPE 99-35, SIDE A Number 0001 CO-CHAIR JERRY SANDERS called the House Resources Standing Committee meeting to order at 1:27 p.m. Members present at the call to order were Representatives Sanders, Masek, Harris, Morgan and Whitaker. Representatives Joule, Kapsner, Ogan and Barnes arrived at 1:33 p.m., approximately 1:40 p.m., 1:59 p.m. and 2:16 p.m., respectively. SB 7-INCREASE LAND GRANT TO UNIV. OF ALASKA CO-CHAIRMAN OGAN announced that the first order of business before the committee would be CS FOR SENATE BILL NO. 7(FIN) am, "An Act relating to the University of Alaska and university land, and authorizing the University of Alaska to select additional state land." Number 0095 JANE ANGVIK, Director, Division of Land, Department of Natural Resources, testified via teleconference from Anchorage. She informed the committee that the Administration is opposed to SB 7. This legislation places the university in competition with municipal governments for access to land. There is also concern that the pattern of use for the state lands will be significantly altered as a result of the University Lands Act. Ms. Angvik believed in the full funding of the university and encouraged that, however, this legislation is viewed as an appropriation of state lands and the revenue of those lands directly to the university. She indicated that this legislation would remove the land from the management of the best interest of all Alaskans. This legislation will further complicate land ownership which would increase the difficulties with resource development and public access. She explained that the university has different rules than those required by Title 38. State lands are required to have a public process while the university's policies are unknown. Furthermore, the Board of Regents would establish those policies under which the same public process is not required. Similarly, the university is not required to follow the same intended use of public lands that are described by the area land use plans which have been prepared for the use of state lands. MS. ANGVIK specified that this legislation places the university in competition with municipalities that have not yet finished or need to revise their municipal entitlements. She noted that the Alaska Municipal League (AML) is concerned about this proposal. While this legislation was amended on the Senate floor to provide municipal governments with the first right of refusal on land, the university's pool for land selection is much larger than that of municipal governments. Therefore, the AML has requested that the pool for municipal governments be expanded to include all the lands from which the university can select or limit the university's selection pool to the same as that available to the municipalities. Number 0381 MS. ANGVIK expressed concern that the Division of Lands' capacity to fulfill the municipal entitlements for existing municipalities would be significantly impaired by this bill. She pointed out that one of the major policy effects of this legislation is that should future boroughs try to be established, those municipal governments would be precluded from having access to the best lands which the university is predicted to choose. MS. ANGVIK stressed that although as currently written, the bill would require the university to pay the cost of the selection and conveyance of the lands, the bill will be expensive to administer. She believed that much money would be spent up-front and the university would not accrue revenues for some time. The university would be better served, if the legislature provided direct appropriations for the management of the university as opposed to the appropriation of lands. She believed that the university can select rights-of-way, gravel deposits, and land planned for disposal in order that revenues from those sources would benefit the university rather than the programs of the rest of the state. She indicated that there would be a limiting effect on the ability of the state to sell lands in the immediate future because the lands most likely to be disposed or available for sale by the Division of Lands are the lands most likely to be pursued by the university for selection. Number 0570 MS. ANGVIK noted that at the last meeting, the university testified that it was able to generate $32 million in the time that it has held the land it had transferred compared to the $590,000 generated by the state in the same time period. She pointed out that the vast majority of the university's funds are derived from the timber resources in Yakataga. The state still owns that land, but the university has the right to harvest the timber resources in Yakataga. Furthermore, the university is in a position to have more up-front funding for the development of lands than are general state lands. For example, Ms. Angvik informed the committee that it costs about $4 per acre for the university to manage its land while the Division of Lands operates on a thirty cents per acre management fund. In conclusion, Ms. Angvik encouraged the committee to consider the land development patterns in the state which will compound and conflict with resource development. Ms. Angvik reiterated the Administration's opposition to this legislation. She also noted that similar legislation has been vetoed by Governor Knowles twice before and once before by Governor Egan. MEL KROGSENG, Legislative Assistant to Senator Taylor, Alaska State Legislature, requested that Ms. Redman join her at the table and address the process by which the Board of Regents determines how its land will be managed. She also requested that Ms. Redman discuss how much of the university's land is currently being actively managed. Number 0861 WENDY REDMAN, Vice President, Statewide University of Alaska System, informed the committee that currently the university has 112,000 acres of land and an additional interest in another 85,000 acres. As noted earlier, the university was given the rights to a single cut in the Yakataga region. Of the total land and interest in land of the university, a little over half is currently in active management. She pointed out that the remaining portion, about 80,000 acres, includes about 36,000 acres which are not developable. The remaining 50,000 acres are either very remote or viewed by the university as a long-term investment. MS. KROGSENG reiterated her question regarding the management plan and the public process utilized to develop that plan. MS. REDMAN pointed out that the university's public process is specified in the board's policy. Part of that policy is included in the legislation itself in order to ensure the public process. She acknowledged that the university's public process is slightly different than the state's process. The university's public process is extensive at the local level and the university is subject to the same local laws in terms of development. Ms. Redman clarified her statement from the previous hearing regarding the university's land managment. She said that DNR has not had the staff or the resources to develop the lands of the state, while the university has had those resources necessary for the development of the university's land. All of the development costs are covered by the resources derived from the land, therefore the university does not spend any general funds on its properties. MS. REDMAN explained that she believed transferring land to the university is a good idea because the university is able to develop the land. If the state was able to place the appropriate resources into DNR to develop the lands for the good of all Alaskans, Ms. Redman said she might not believe this to be appropriate. However, that does not look as if it will happen. She viewed this as an alternative allowing a small portion of state land to be given to the university to be placed in active management for the good of the state. MS. KROGSENG reiterated her comments from the previous hearing. If this bill is passed into law, the congressional university lands bill is also likely to pass. The congressional legislation contains a provision for 250,000 acres for the state university system with no strings attached. The congressional legislation also provides an additional 250,000 acres for the university if the state matches that amount with state land which the bill before the committee would satisfy. She utilized a map with an overlay to illustrate that the amount of land being discussed is one-half of one percent of the entire state entitlement. Ms. Krogseng encouraged the committee's support of this legislation. She acknowledged that the university is not going to realize returns for up to three years. The university will probably not have its hands on this land for another four to five years, after which the university will have to develop a plan for the development of the land. This is a long-term plan. CO-CHAIRMAN SANDERS asked if there were any further questions or comments from anyone. There being none, the public testimony was closed. Number 1292 REPRESENTATIVE MASEK moved to report CSSB 7(FIN)am out of committee with individual recommendations and the accompanying fiscal notes; she asked unanimous consent. REPRESENTATIVE JOULE objected. Upon a roll call vote, Representatives Whitaker, Harris and Masek voted in favor of the motion to report CSSB 7(FIN) am out of committee. Representatives Joule, Morgan, Kapsner and Sanders voted against the motion to report CSSB 7(FIN) am out of committee. Representatives Barnes and Ogan were not present. Therefore, the motion to report CSSB 7(FIN) am out of committee failed with a vote of 4-3. CO-CHAIR SANDERS called an at-ease at 1:44 p.m. and turned the gavel over to Vice Chair Masek. VICE CHAIR MASEK called the meeting back to order at 1:52 p.m., noting that there was a quorum. SB 171 - FISHERY DATA; LAND REC'D BY STATE VICE CHAIR MASEK announced that the next item of business would be Senate Bill No. 171 am, "An Act relating to the release of certain records and reports required by the Department of Fish and Game regarding fish, shellfish, or fishery products and reports of fish buyers and processors; relating to the transfer of land to the state; and providing for an effective date." Number 1407 BRETT HUBER, Legislative Assistant to Senator Rick Halford, Alaska State Legislature, came forward on behalf of the sponsor. He explained that SB 171 was introduced at the request of the Alaska Department of Fish and Game (ADF&G). It amends AS 16.05.815, the statute governing confidentiality of fishery records and information, to allow the ADF&G to share the records documenting commercial fishery landings, fish buying and processing activities within Alaska. These amendments would allow transfer of this information to the Commercial Fisheries Entry Commission (CFEC), the Alaska Fisheries Information Network (AKFIN), the National Marine Fisheries Service (NMFS) and the National Oceanic and Atmospheric Administration (NOAA). Mr. Huber noted that representatives from the ADF&G and other agencies were present to answer questions about the specific records transfers and their uses. MR. HUBER pointed out that some members of the public have expressed concern that the bill may impact the "COAR reports" [Commercial Operators Annual Reports, to the Department of Revenue]. However, nothing in the bill deals with that issue, and nothing would change in those reports. In addition, provisions in the bill ensure that state-selected land within the McNeil River Wildlife Refuge would be free of encumbrance or unauthorized use at the time of transfer. MR. HUBER informed members that an amendment on the Senate floor to the final section of the bill added legislative approval of any land transferred to the state that is found to have - or is suspected to have - significant environmental contamination or pollution. Some Bureau of Land Management (BLM) transfers of Bureau of Indian Affairs (BIA) school sites may have storage tanks or contamination problems, as may some military reservations. The idea is for the legislature to ensure that lands aren't accepted which have an economic encumbrance greater than their value. Number 1539 REPRESENTATIVE JOULE said he recognizes that the title includes the last section of the bill [Section 4]. However, he wonders how that relates to the rest of the bill. MR. HUBER responded that he had talked with the drafter from Legislative Legal Services, asking that same question before the amendment was added on the Senate floor. The drafter feels that the title accurately depicts the contents of the bill. Furthermore, the single-subject rule has been determined to be quite broad in the past, including issues like "water" as a single subject. The drafter believes it is supportable that the single subject is "as pertaining to natural resources." Number 1628 REPRESENTATIVE JOULE asked if anybody from the ADF&G had requested Section 4. MR. HUBER said no. Number 1648 VICE CHAIR MASEK called an at-ease at 1:51 p.m. and called the meeting back to order at 1:52 p.m. Number 1678 GERON BRUCE, Legislative Liaison, Office of the Commissioner, Alaska Department of Fish and Game (ADF&G), came forward. He told members that the ADF&G had taken Section 1 to Senator Halford, who introduced it on the department's behalf. He expressed appreciation for that, noting that he would confine his remarks primarily to that section. MR. BRUCE characterized this as a housekeeping-type bill. He explained that the ADF&G wanted to make sure that they could share data with agencies authorized to use confidential data to develop nonconfidential reports that could be shared with the North Pacific Fishery Management Council (NPFMC) and other entities. Two types of financial information here are confidential because they tie back to individual fishers or processors, he said. This bill tightly limits to whom that confidential data can go. MR. BRUCE said in addition to the limitations in statute, confidentiality agreements will be drawn up between ADF&G and the entities that would receive the data, including the Pacific States Marine Fisheries Commission and a project they have called AKFIN; they will combine the confidential data with other confidential data from the federal offshore fisheries, and then produce reports that give a picture of offshore fisheries. Referring to NMFS and NOAA, he said this would authorize them to release confidential data and use it in court actions, without going through the administrative process of getting a court order to do so. He mentioned the staff of the North Pacific Fishery Management Council, as well. Number 1820 VICE CHAIR MASEK turned the gavel over to Co-Chair Ogan, who had joined the meeting. MR. BRUCE pointed out that two documents in committee packets add more detail: a memorandum to Earl Krygier of the ADF&G from Stephen White of the Department of Law, who was present that day; and a summary prepared by Mr. Bruce titled, "Need for and Purpose of Amendments to AS 16.05.815." He noted that a representative from AKFIN was present to answer questions about their role. Number 1897 REPRESENTATIVE JOULE alluded to the fact that Sections 1, 2 and 3 address Title 16, whereas Section 4 addresses Title 38; he said he was having a hard time making the connection. He asked if the ADF&G has any concerns at all regarding the last part of the bill. MR. BRUCE replied that he could speak to Sections 2 and 3, but not to Section 4, as he had no knowledge of it beyond what Mr. Huber had stated; he would therefore defer to the Department of Natural Resources regarding that section. He then specified that the ADF&G has no objection to the sponsor's addition of Sections 2 and 3 to the provisions requested by the ADF&G. He also indicated that if the sponsor is comfortable with the title, the ADF&G is comfortable with it, as well. Number 1980 STEPHEN WHITE, Assistant Attorney General, Natural Resources Section, Civil Division (Juneau), Department of Law, came forward, noting that he had worked on Section 1 with the ADF&G. He offered to answer questions but said he had no further comments. Number 2016 REPRESENTATIVE JOULE asked Mr. White about Section 4. MR. WHITE explained that the constitution says every bill should be confined to one subject, but the courts have read that very broadly. Although some legislation has been challenged, the courts have never struck legislation down as containing subjects that aren't somewhat related; if there is any way to connect all the subjects within a bill, the courts have allowed the legislation to proceed. One title, for example, said, "An Act relating to land," and the bill encompassed changes to the Uniform Land Sales Act, dealing with sales of land, as well as to the Alaska Land Act, dealing with disposals of land; the court said those two, because they were related to land, were not so far off under the single-subject rule as to be stricken. Mr. White referred to testimony that the subjects in the bill before the committee generally relate to natural resources and, therefore, have a connecting tie. "Whether it would violate that rule, it's hard to say," he added. "All we know is the courts have never struck down, at this point, any legislation under that constitutional provision." Number 2111 JANE ANGVIK, Director, Division of Land, Department of Natural Resources (DNR), testified via teleconference from Anchorage. She referred to Section 4 and expressing concern about what may be required of the Division of Land in receiving conveyance of the remaining 16 million acres of land that the state has yet to receive from the federal government. She said she understood what Mr. Huber had said about Section 4 but is concerned about the intent. The division doesn't physically go and inspect all the land they receive, Ms. Angvik explained. For example, they didn't go and physically inspect the 90 million acres already received from the federal government, nor do they intend - unless so directed by statute - to inspect the balance of the 16 million acres yet to be received. She added, "We are feverishly working on a fiscal note right now to tell you what that would cost to have us go actually inspect the lands." MS. ANGVIK reported that Department Order 137, adopted in 1994 by then-commissioner Harry Noah, was prepared in anticipation of the final push for acquisition of state lands from the federal government. Department Order 137 says the state can take land with known contamination if the overriding value for which the land was selected exceeds the cleanup cost; a good example is the North Slope. Ms. Angvik added, "In normal real estate practices, if we were to comply with this version of the law, [a] future owner is generally expected to inspect the land to be purchased, donated or conveyed, ... and it would be exceedingly expensive for us to do that." MS. ANGVIK explained that they currently use tools available without going physically on the land, such as historical records showing previous federal mining claims. However, the very reason that the state selected an area may be the cause for the potential contamination, as in the case of mineral areas. They have worked out a system so that formal federal mining claims go immediately through the state to the existing claimant, without a break in the chain in title. Ms. Angvik emphasized that a primary reason for selecting land is its high mineral potential. In those cases, in particular, there has been a mining operation for multiple years, it is highly probable that it is contaminated, and the same operator chooses to become a state mineral claimant. Ms. Angvik told members, "We don't need to reclaim the land, so long ... as they enter into a mining lease with the specific stipulations about their bonding requirements when the mining is all done." MS. ANGVIK pointed out that the state generally doesn't want contaminated parcels. However, there are exceptions, including airports, schools and mining claims, the latter being the high-priority selections that the state is asking the federal government to convey. If the legislature wants oversight on whether the state takes known contaminated sites, Ms. Angvik said the DNR could provide information. "But if we're going to require an evaluation by the federal government, we're going to have to incur the cost of inspecting the land ourselves," she concluded. She offered to work with the bill sponsor to try to achieve his goals, if she understood them correctly, but restated that the DNR doesn't want to incur the prohibitive cost of physically having to go and inspect every piece of land received. She also referred committee members to Department Order 137, to see whether that achieves the goals that Senator Halford had in mind. Number 2386 REPRESENTATIVE JOULE asked about the zero fiscal note for SB 171, dated May 10, 1999, supplied by Ms. Angvik on behalf of the Division of Land. MS. ANGVIK pointed out that the zero fiscal note doesn't reflect the amendment made on the Senate floor, which is Section 4 of SB 171 am. She said she is working on a revised fiscal note in the neighborhood of $700,000 to physically inspect for contaminants the balance of the lands which the state is to receive from the federal government. She offered to talk to the sponsor's representative if she had misunderstood what the bill prescribes or its intention. Number 2446 MR. HUBER responded that Ms. Angvik had raised a legitimate concern. As late as it is in the process, he said he believes the sponsor would be comfortable with removing Section 4. He indicated the desire to work with the Division of Land on this question and perhaps bring back subsequent legislation in the following session that will make it more workable. MS. ANGVIK replied that the division would be pleased to work with Senator Halford on this aspect of land acquisitions. Number 2485 REPRESENTATIVE MASEK made a motion to remove Section 4 and renumber the bill accordingly; she asked unanimous consent. There being no objection, it was so ordered. Number 2542 MS. ANGVIK specified that the Administration has no opposition to the bill. CO-CHAIR OGAN asked if anyone else wished to testify; there was no response. Number 2575 REPRESENTATIVE MASEK made a motion to move SB 171 am, as amended, from committee with the attached fiscal notes; she asked unanimous consent. There being no objection, HCS SB 171(RES) moved from the House Resources Standing Committee. CO-CHAIRMAN OGAN called an at-ease at 2:15 p.m. He called the committee back to order at 2:16 p.m. SB 128-STORAGE TANK ASSISTANCE FUND CO-CHAIRMAN OGAN announced that the next order of business would be CS FOR SENATE BILL NO. 128(FIN) am, "An Act moving the termination date of the Board of Storage Tank Assistance to June 30, 1999; relating to the storage tank assistance fund, to financial assistance for owners and operators of underground petroleum storage tank systems, and to discharges from underground petroleum storage tank systems; and providing for an effective date." Number 2630 GARY WEBER, Secretary, Alaska Underground Tank Owners and Operators Association, testified via teleconference from Wasilla. CO-CHAIRMAN OGAN informed Mr. Weber that he has a proposed amendment which would increase the limit on the net worth to $1.5 million. MR. WEBER said that he did not know if that was appropriate or not. These service stations carry high asset values. What is located above ground at a service station amounts to about $250,000, while below ground amounts to about $1 million. Mr. Weber noted that this depends upon the size of the station, the type of the investment required to build the facility to which he could not speak. Mr. Weber said that he would like to here from Senator Torgerson's office regarding why net worth needed to be redefined. CO-CHAIRMAN OGAN commented that he was interested in helping small, independent operators which led to his idea to create a single-site exemption, however there were some difficulties. He asked if Mr. Weber could address that issue. In response to Representative Barnes, Co-Chairman Ogan said that a "mom and pop" operation would be a single site location in which an individual bases his/her entire livelihood. REPRESENTATIVE BARNES pointed out that on that single site there might be a motel, a grocery store, and the gas station all of which could be tied together. She expressed the need to make the "mom and pop" definition more narrow. CO-CHAIRMAN OGAN recognized that as one of the struggles being faced. Number 2815 DARWIN PETERSON, Legislative Administrative Assistant and Senate Finance Committee Aide to Senator John Torgerson, Alaska State Legislature, said that he would address Mr. Weber's question regarding the current definition of net worth. Mr. Peterson explained that Senator Torgerson and the Senate Finance Committee did not want owners or operators of underground petroleum storage tanks to use other business ventures or liabilities for other business ventures for inclusion in this definition of "tangible net worth." If the state is going to provide grants to these owners and operators, the liabilities associated with the contamination should be only the liabilities deducted for their tangible net worth. CO-CHAIRMAN OGAN asked if there was a way to craft language to address that issue. MR. PETERSON hesitated to make any recommendations because Senator Torgerson is reluctant to make any changes to the bill as crafted. He offered to respond to suggested amendments with regard to how Senator Torgerson may view such amendments. REPRESENTATIVE BARNES asked if Mr. Peterson had reviewed the proposed analysis to the proposed amendment. MR. PETERSON acknowledged that he was shown a copy of that, but he had not had a chance to review it or have Senator Torgerson review it. CO-CHAIRMAN OGAN asked if the reference to "department" referred to the Department of Law. MR. PETERSON said he believed that to be referring to the Department of Law. TAPE 99-35, SIDE B STEVEN DAUGHERTY, Assistant Attorney General, Natural Sections Division, Civil Division, Department of Law, explained that the department's first amendment would provide additional authority by allowing the Department of Environmental Conservation to adopt regulations. Currently, the bill allows the board to adopt regulations. He pointed out the way the authorities are split between the department and the board, a full regulations package would not be provided. Without the amendment, the Department of Law does not believe it possible to place regulations into effect for the 1999 season under the current legislation. CO-CHAIRMAN OGAN noted that the 1999 season is upon us. Is there even the possibility of getting regulations in place? He commented that it took three years for one of his bills to receive regulations from the Department of Natural Resources. Number 2878 MR. DAUGHERTY stated that there will be much money sitting until the regulations are in place. He believed there will be quite a bit of motivation to get the regulations in place. Under the Administrative Procedures Act (APA), the minimum amount of time to produce regulations is about two-and-a-half months. That would include the 30 day public notice and regulation review. If this amendment were adopted, the regulations could be started as soon as the bill is passed, however the regulations would not be effective until the rest of the bill becomes effective. Even still, Mr. Daugherty projected late July or early August for the regulations to be in place. That time frame would be sufficient to allow some work to proceed during the 1999 season. He noted that even when the regulations are in place, interested persons would have to apply and the department would have to act on those applications. Therefore, he projected that about a month of work would occur. MR. DAUGHERTY cited the second problem with the legislation. The current legislation only looks at the net worth of the owner, not the operator. The department views that as a large loop hole. The department has suggested language which would require certification from the owner and the operator that their net worth is below $1 million. He pointed out that the amendment provides one exception for tanks owned by the state or municipality. Under the current legislation, if a tank is owned by the state or a municipality, even with an individual operator with a negative net worth, that operator is responsible for that tank. However since the state is the owner, that operator would not be allowed to receive a grant or a loan. MR. DAUGHERTY pointed out that under the current bill, the net worth certification requires regulation. He noted that the third insertion of Amendment 2 provides an exception to the Administrative Procedures Act for adoption of the certification of the net worth form. The department has to develop a form for that. He stressed that the department would still be required to provide public notice. He informed the committee that the department would probably use the seven day notice and may only notice those on the list for these grants rather than going through newspaper publication. Therefore, the regulations would be adopted as non-APA regulations which would allow grants to proceed quickly for probably most of the season, if not the entire season. Number 2685 MR. DAUGHERTY identified the fourth problem as the definition of "net worth" which is not consistent with its definition elsewhere. The common understanding of "net worth" is assets minus liability. The department's Amendment 3 would change the definition by inserting, ",including liability" after the word "liability." Therefore the definition of "net worth" would be assets minus liability, including liabilities associated with cleanup. Under the existing legislation, the definition is unenforceable. He explained that in order to prove perjury, it would have to be proven that someone knew he/she was making an incorrect statement which would be difficult. There is also a problem in that the liabilities associated with cleanup are varied and indeterminate. Those costs are unknown until an initial release investigation is completed. That initial release provides a rough estimate of the cleanup costs. He explained that someone could be approved and qualified, work could begin, and a site assessment could result in discovering that the contamination is not as bad as thought or worse than predicted. If the contamination is not as bad as originally predicted, that individual could be ineligible half way through the process. The same scenario could occur during the corrective action process. Mr. Daugherty stated that those problems would be greatly reduced with a straight definition of net worth. CO-CHAIRMAN OGAN requested that Mr. Peterson speak to the department's amendments. He asked if Amendment 3 was adopted and the threshold of the net worth was lowered somewhat, would that alleviate part of the net worth concern. MR. PETERSON commented that Amendment 2 is the least contentious of the three amendments. Mr. Peterson believed that the Senate Finance Committee would oppose Amendments 1 and 3. The Senate Finance Committee took out the language in Amendment 1. MR. PETERSON informed the committee that he was speaking on behalf of one member of the Senate Finance Committee. He pointed out that Annette Krietzer, staff to Senator Leman, is present and may have comments. Number 2451 ANNETTE KRIETZER, Legislative Assistant and Senate Finance Committee Aide to Senator Leman, Alaska State Legislature, commented that she is in the oddest position she has ever found herself. CO-CHAIRMAN OGAN asked how this problem could be fixed. He commented that he understood and supported what the Senate is doing. He expressed concern that perhaps, large companies have benefitted from this, while some honest, hard-working people have suddenly found themselves with a large liability. Therefore, he requested comments on how to make this user friendly for the smaller operator while staying within the parameters of the constitution. MS. KRIETZER informed the committee that the program has been going on for 10 years and there were no income limits initially. The upgrading closure lists and the cleanup lists are included in the committee packet. No one else can be added to those lists. Ms. Krietzer stated that the Board of Storage Tank Assistance has done a good job ensuring that the true "mom and pop" operations have already received grants or worked through the system. She pointed out that all upgrades and closures had to be completed by December 22, 1998. The fiscal year (FY) 2000 completes the upgrade and closure program. Therefore, what is at hand is mainly the cleanup program. MS. KRIETZER pointed out that there is $24 million worth of cleanup remaining in addition to the money already spent. There is a $1 billion deficit which is what the Senate was reviewing. With regard to the $1 million net worth, that is the amount the Senate Finance Committee agreed upon, although there was one amendment to increase that amount which failed. CO-CHAIRMAN OGAN commented testimony has indicated the $1 million net worth amount to be unenforceable and not from traditional accounting means. MS. KRIETZER said that discussion occurred in the Senate Finance Committee. The Senate Finance Committee reported the legislation out of committee with that language. There were amendments which attempted to change the language which were not adopted. With regard to the Department of Law's Amendment 1, she noted that the Senate Finance Committee specifically removed the Department of Environmental Conservation (DEC) language. Ms. Krietzer indicated that the Department of Law's Amendment 2 would be consistent with Senator Leman's understanding of how this legislation would work. One of the concerns is regarding how the grant portion of this program can be least effected which the Department of Law's Amendment 2 would accomplish. The Department of Law's Amendment 3 was not accepted by the Senate Finance Committee. Number 2108 CO-CHAIRMAN OGAN inquired as to what would happen if this legislation does not pass. MS. KRIETZER stated, "I don't want to mislead the committee. The Senate Finance Committee and the Senate together have made a determination. There was a motion on the floor to remove the funding, the actual transfer of the money from the Oil and Hazardous Substance Response Fund into the Storage Tank Assistance Fund. So, it no longer appears in the front section of the operating budget." She understood that on the House side the money remains. The Senate views this legislation as the funding for the storage tank program. In response to Co-Chairman Ogan, Ms. Krietzer affirmed that the Conference Committee has not yet made that decision. CO-CHAIRMAN OGAN inquired as to what would happen if the Conference Committee does not put in the money and the bill does not move. MS. KRIETZER said in that case there would be no money for the Storage Tank Assistance Program. There would be no grants and no capitalization for the loans because the $5 million transfer from the Oil and Hazardous Substance Fund which capitalizes the Storage Tank Assistance Fund is encompassed in a fiscal note that accompanies this bill. REPRESENTATIVE JOULE asked if this bill has a Finance committee referral where some of these questions could be better addressed. Number 1958 JOHN BARNETT, Executive Director, Board of Storage Tank Assistance, Division of Spill Prevention & Response, Department of Environmental Conservation, noted that he testified on Wednesday regarding the faults encompassed in this legislation. Mr. Barnett informed the committee that he has been involved in the business end of regulations during his 20 years in the mining industry. He noted that he is essentially the drafter of the regulations and therefore, he expressed the need to have regulations that are at least workable. MR. BARNETT said that he did some research and determined that the definition of "net worth" in this legislation is contrary to every definition currently on the books. He found definitions of "net worth" in statute and regulations which he provided to the committee. Mr. Barnett said, "I see that as a dangerous precedent to define tangible net worth as two completely diverse different definitions within the state regulations." He urged the committee to change the definition of "net worth." Furthermore, he did not know how the liability associated with contamination would be defined. There are 250 sites on the cleanup list and it is unknown who will fall off the list, however all of those listed will submit information. Mr. Barnett said that it will be difficult to estimate these numbers. That could be solved with a simple "net worth" definition. MR. BARNETT indicated that putting the regulations into place would be a problem. Although there have been indications that all the "mom and pop" organizations have been taken care of, that is not necessarily the case. As Mr. Weber's seven years of cleanup illustrates, it takes a long time to cleanup contamination. There are a number of ongoing cleanups as well as a number of cleanups that have not even started. Mr. Barnett informed the committee that when this legislation was first proposed, he offered language that would have reduced the list in half. With the current language, Mr. Barnett said that he would not really know who needs assistance. Mr. Barnett believed that it would have been appropriate to receive input from the tank owners before this bill was drafted. This legislation, SB 128, was introduced the last day of March without any input from the industry or the consulting industry. There are enough flaws in the current legislation to make it difficult for this program to work. Mr. Barnett supported the Senate's concept of the elimination of large companies from the program. He indicated that the bill appears to be on its way. Therefore, he requested that the "net worth" definition be made consistent with existing state and federal law. REPRESENTATIVE BARNES inquired as to the content of existing law. MR. BARNETT reiterated that he provided the committee with information regarding the current "net worth" definitions found in Alaska's statutes and regulations. Those definitions seem to be consistent with the common use of "net worth" in the banking industry and general accounting principles which is assets minus liabilities. REPRESENTATIVE BARNES commented that there are many different definitions for various terms depending upon the statute being reviewed. MR. BARNETT recognized that, but "net worth" is utilized by everyone and he indicated the need to be consistent. In further response to Representative Barnes, Mr. Barnett clarified that he presented the Senate with the federal definition of "net worth" as a proposed amendment. That original language was briefly in the Senate Finance Committee, but was amended by Senator Torgerson to eliminate the language "minus liabilities." Number 1520 LARRY DIETRICK, Acting Director, Division of Spill Prevention & Response, Department of Environmental Conservation, remarked that he has been working on the legislation to make it acceptable. He understood the policy call of trying to define the threshold in the "mom and pop" operations which the department fully supports in concept. He explained that there are three components that are necessary which are the legislation, the operating budget for implementation, and the capital budget to capitalize the grant and loan program. He pointed out that the department has attached a fiscal note. The department's fiscal note indicates that the department can implement the legislation without an increase in the DEC proposed budget. However, there have been substantial cuts proposed for this program to the department's proposed budget. Those cuts would amount to 33 percent of the program or 10 of 33 of the existing positions in the program. The reduction is substantial enough that there will be a significant impact to the implementation of SB 128 as well as to the ongoing cleanups. MR. DIETRICK explained that such cuts have the effect of allowing the contamination of the existing sites to migrate and continue creating larger areas of contamination. Therefore, there would be a significantly higher cleanup cost later since such cleanup would be deferred into the future. That is particularly difficult for the smaller operators that are already facing a substantial burden to deal with this problem. Mr. Dietrick pointed out that the reduction also would decrease the engineering staff who have been in this program for some 10 years and are very well versed in the complexities of underground contamination. This staff reviews and closes out the cleanups and are responsible for issuing the "no further action" letters which are critical for lending institutions, property transfers and returning these properties to economic reuse. Therefore, the cuts the program faces would impact SB 128 as well as those operators, the majority of which are cleaning up without financial assistance. Basically, the legacy of abandoned service stations in Alaska will continue. MR. DIETRICK concurred with the statements made at the last meeting with regard to accomplishing this work without the use of general funds. He confirmed that the funding is coming from the prevention account which he indicated was a good use for the fund. Mr. Dietrick identified the following four technical issues: the "net worth" definition, the transitional provisions which need to be in place in order to do the rule making, the board retention to June 30, 2000, and the effective date of July 1, 2000. Number 1270 MR. DIETRICK mentioned the impacts of these cuts should the transfer not occur. Of the current cleanups, about 30 receive financial assistance while 250 do not. The small operators who are doing cleanup without financial assistance are those who will be impacted. He identified the three people in rural Alaska who are working on aboveground storage tanks as an inadvertent reduction in these cuts. These three people are attempting to keep aboveground storage tanks in compliance until the tanks can be upgraded. He also noted that the last of the grants are being processed under the 1999 program. These operators, upgrades, and close outs are operating under a compliance order by consent issued by the state that keep the Environmental Protection Agency (EPA) in Seattle until the upgrade and closure is complete. With those reductions, the EPA would assume enforcement in the last year and the department would not be able to audit the grants of about $4 million for work which will continue in 2000. REPRESENTATIVE BARNES requested that Mr. Dietrick review his comments regarding the rural Alaska positions. MR. DIETRICK explained that under the Oil Pollution Act two years ago, the Coast Guard threatened to shut down fuel deliveries on Alaska's inland waterways to facilities with aboveground storage tanks. Aboveground storage tanks are mainly utilized in the interior of Alaska. He informed the committee that he and the Division of Energy worked to estimate the total cost to upgrade those facilities which is estimated to be $200 million. The new Denali Commission has taken on that issue. Mr. Dietrick anticipated receiving federal dollars through that route and to place it towards upgrades to those rural facilities. Therefore, the attempt is to hold the federal government at bay in order to make permanent corrections to avoid the discontinuance of fuel deliveries. REPRESENTATIVE BARNES recalled that the problem with those storage tanks was identified about six to eight years ago and at that time there was federal money available. Are the same problems remaining today? MR. DIETRICK explained that the Division of Energy completed a survey of the number of tanks that existed in the state was completed about two years ago. Since that time, the Division of Energy has put in a capital budget from the prevention account. He believed that the division is on its third allocation of $1.6 million per year in order to actually do capital improvements at some of the selected sites. He said that $3 to $4 million has been appropriated to date for that problem which just scratches the surface. CO-CHAIRMAN OGAN passed the gavel to Vice Chair Masek. REPRESENTATIVE BARNES informed the committee that when the legislature rewrote the energy legislation, there was about $200 million worth of existing problems with storage tanks. She said, "Since that time when we rewrote it and got rid of all those employees that was living off the rural Alaska Division of Energy...the Division of Energy has now put themselves back another eleven employees that's coming directly out of energy appropriations,...." She was appalled by the fact that all the time and money spent thus far in this area has only accomplished an inventory of the tanks. Number 0920 JAMES HAYDEN, Program Manager, Storage Tank Program, Division of Spill Prevention & Response, Department of Environmental Conservation, noted that he worked directly with the Department of Community & Regional Affairs in implementing the limited aboveground storage tank program which is included in this funding. He acknowledged that a small amount of state dollars has been expended in the last three or four years, however that money has been utilized to match federal dollars, about $10 million. The Division of Energy has made it a high priority to obtain federal funding in larger amounts which appears to have been accomplished this year through the Denali Commission. REPRESENTATIVE BARNES emphasized that the Denali Commission has just begun. She said that she was referring to all the money it received prior to this of which she indicated there were large amounts. She reiterated that she was appalled at this situation and intended to determine how much money was spent and where that money went. MR. DIETRICK said, to his knowledge, there have been three allocations of $1.6 billion from the capital budget. Beyond that, Mr. Dietrick was unfamiliar with the Division of Energy's budget or positions. Therefore, to date, there has been a capital contribution of about $3 million to $4 million. Mr. Dietrick said that the [division's] assistance has focused on technical assistance because of it's contingency plan expertise. There is a federal requirement for those facilities to have a contingency plan. The operators are worked with in order to overcome the violations with their contingency plans because fuel delivery stops when an operator is in violation of the contingency plan. Mr. Dietrick pointed out that it is a small staff of three that work with those rural tank farms to bring them into compliance. VICE CHAIRMAN MASEK returned the gavel to Co-Chairman Ogan. CO-CHAIRMAN OGAN called an at-ease at 3:07 p.m. and called the meeting back to order at 3:08 p.m. CO-CHAIRMAN OGAN announced that Amendment 1 by the Department of Law would be left up to the discretion of the committee. Amendment 1 was not offered. CO-CHAIRMAN OGAN called an at-ease at 3:09 p.m. and called the meeting back to order at 3:10 p.m. Number 0530 REPRESENTATIVE HARRIS moved that the committee adopt Amendment 2 which reads as follows: Page 5, lines 9-12 Delete all material and insert: "(4)certifies under oath and subject to penalty for perjury, on a form required by the department, that the tangible net worth of the operator is &1,000,000 or less as of the effective date of this section, and unless the tank is owned by the state or a municipality, that the net worth of the owner is &1,000,000 or less as of the effective date of this section." Page 7, lines 25-28: Delete all material and insert: "(2)unless the owner or operator certifies under oath and subject to penalty for perjury, on a form required by the department, that the tangible net worth of the operator is $250,000 or less as of the effective date of this section, and unless the tank is owned by the state or a municipality, that the net worth of the owner is $250,000 or less as of the effective date of this section;" Page 9, following line 7: Insert a new subsection to read: "(c)AS 44.62(Administrative Procedure Act) does not apply to the development of the form for certification of net worth required under AS 46.03.420(c) enacted by section 8 of this Act, and AS 46.03.430(c) enacted by section 11 of this Act" REPRESENTATIVE WHITAKER objected in order to review Amendment 2. MR. DAUGHERTY explained that Amendment 2 closes a loophole by requiring a statement of net worth of both the owner and operator of a facility. Under the current language, only the owner's net worth is reviewed. Amendment 2 would also eliminate the statement from the APA regarding net worth. Therefore, the department would be allowed to adopt regulations without going through the APA to receive certification mentioned in these two amendments. MR. BARNETT explained, in response to Co-Chairman Ogan, that joint and several liability speaks to everyone, therefore, the owner and the operator would both be liable. The original federal program has always been owner and operator. If there is an operator, the operator would be as liable as the owner. REPRESENTATIVE BARNES asked if the tort reform law negates the problem with joint and several liability. MR. BARNETT said he was not sure that it does, but on the federal level the owner and the operator are liable. REPRESENTATIVE BARNES asked then if the federal law was being utilized versus state law. MR. BARNETT indicated that the federal law would be followed for liability for pollution. MR. DAUGHERTY noted that he did not deal with much tort law, but rather with strict liability. Under state law, both the owner and operator are liable. Number 0246 CO-CHAIRMAN OGAN asked if there was objection to Amendment 2. There being no objection, Amendment 2 was adopted. REPRESENTATIVE KAPSNER moved that the committee adopt Amendment 3 which reads as follows: Page 8, line 5: Following "liabilities": Insert ",including liabilities" REPRESENTATIVE HARRIS objected. MR. DAUGHERTY explained that Amendment 3 would change the definition of "net worth" to the standard definition: assets minus liability. REPRESENTATIVE BARNES requested that the prime sponsor's representative respond. MS. KRIETZER informed the committee that Senator Torgerson, prime sponsor, is opposed to Amendment 3. REPRESENTATIVE HARRIS inquired as the reasoning behind Senator Torgerson's opposition to Amendment 3. MS. KRIETZER indicated that Mr. Peterson spoke to that earlier. TAPE 99-36, SIDE A MS. KRIETZER said, "...talking about the state giving grants to cleanup contamination caused by an underground storage tank." REPRESENTATIVE WHITAKER requested clarification of Representative Harris' objection. MS. KRIETZER explained that the program was specifically established to deal with contamination and now it is being changed to a loan program. The legislature has the expectation that when someone's assets are reviewed (indisc.). Number 0076 REPRESENTATIVE WHITAKER indicated his agreement. He asked if the current legislation, restricts assets to only those assets adherent to the cleanup. MS. KRIETZER clarified that it would be the liabilities to the cleanup. REPRESENTATIVE WHITAKER inquired as to Mr. Barnett's thoughts on Amendment 3. Number 0184 MR. BARNETT posed the scenario of a gas station with $1.2 million in assets for that facility. That gas station has $150,000 worth of cleanup. Under this definition, only the total assets of that facility and the estimated cleanup cost can be considered. Therefore, subtracting the $150,000 from the $1.2 million in assets and that individual would not qualify under this legislation. However, under the "net worth" definition they may have $400,000 and $500,000 in notes and mortgages which would normally be deducted and allow the individual to qualify. REPRESENTATIVE WHITAKER asked if that would be adherent to the property in question only. MR. BARNETT said that was correct. REPRESENTATIVE WHITAKER surmised then that the preference would be to adopt Amendment 3. MR. BARNETT supported Amendment 3. REPRESENTATIVE KAPSNER withdrew Amendment 3. Number 0360 REPRESENTATIVE WHITAKER moved that the committee adopt Amendment 3. REPRESENTATIVE BARNES objected. CO-CHAIRMAN OGAN inquired as to Mr. Daugherty's interpretation of the liability of assets. MR. DAUGHERTY understood that this refers to all assets, not just assets connected with the contaminated property. Upon a roll call vote, Representatives Whitaker, Joule, Kapsner and Masek voted in favor of the adoption of Amendment 3. Representatives Morgan, Barnes, Harris, and Ogan voted against the adoption of Amendment 3. Representative Sanders was not present. Therefore, Amendment 3 failed to be adopted by a vote of 4-4. Number 0544 CO-CHAIRMAN OGAN moved that the committee adopt Amendment 4 which reads as follows: Page 5, line 12: Delete "$1,000,000" Insert "$1,500,00" CO-CHAIRMAN OGAN explained that Amendment 4 would increase the total assets from $1 million to $1.5 million. REPRESENTATIVE BARNES objected. Upon a roll call vote, Representatives Kapsner, Joule, Masek, Morgan, Harris, Whitaker, and Ogan voted in favor of the adoption of Amendment 4. Representative Barnes voted against the adoption of Amendment 4. Representative Sanders was not present. Therefore, Amendment 4 was adopted by a vote of 7-1. Number 0642 REPRESENTATIVE BARNES moved that HCS CSSB 128 be reported out of committee with individual recommendations and attached fiscal note(s); she asked unanimous consent. There being no objection, HCS CSSB 128(RES) was reported out of committee. HCR 2-SOVEREIGNTY OF THE STATE; RESOURCES CO-CHAIRMAN OGAN announced that the final order of business before the committee would be HOUSE CONCURRENT RESOLUTION NO. 2, Relating to the sovereignty of the State of Alaska and the sovereign right of the State of Alaska to manage the natural resources of Alaska. REPRESENTATIVE BARNES noted that HCR 2 was heard at a previous hearing during which the bill, CSHCR 2(FSH) was held at the bottom of the agenda and was never taken up. Number 0650 REPRESENTATIVE BARNES made a motion to move CSHCR 2(FSH) from the committee with individual recommendations and accompanying fiscal note(s); she asked unanimous consent. REPRESENTATIVE JOULE objected. Upon a roll call vote, Representatives Masek, Barnes, Harris, Whitaker, and Ogan voted in favor of the motion to report CSHCR 2(FSH) out of committee. Representatives Joule, Morgan and Kapsner voted against the motion to report CSHCR 2(FSH) out of committee. Representative Sanders was not present. Therefore, CSHCR 2(FSH) was reported out of committee by a vote of 5-3. ADJOURNMENT There being no further business before the committee, the House Resources Standing Committee meeting was adjourned at 3:23 p.m.