Legislature(1999 - 2000)
05/14/1999 01:27 PM House RES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= 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[0]"
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.
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