Legislature(1997 - 1998)
03/30/1998 03:40 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE RESOURCES COMMITTEE March 30, 1998 3:40 P.M. MEMBERS PRESENT Senator Rick Halford, Chairman Senator Lyda Green, Vice Chairman Senator Loren Leman Senator Bert Sharp Senator Robin Taylor Senator John Torgerson Senator Georgianna Lincoln MEMBERS ABSENT All members present COMMITTEE CALENDAR CS FOR HOUSE JOINT RESOLUTION NO. 51(MLV) Relating to support for H.R. 2924, which allows certain Alaska Native Vietnam era veterans and the Elim Native Corporation to select land under the Alaska Native Claims Settlement Act. - MOVED SCSHJR51(RES) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 285(RES) "An Act relating to suspension or revocation of commercial fishing permits, licenses, and privileges; and providing for an effective date." - HEARD AND HELD CS FOR SENATE BILL NO. 330(L&C) "An Act relating to underground facilities." - HEARD AND HELD PREVIOUS SENATE COMMITTEE ACTION HJR 51 - See Resource Committee minutes dated 3/9/98. HB 285 - No previous action to record. SB 330 - See Labor and Commerce minutes dated 3/12/98. WITNESS REGISTER Mr. Don Stolworthy, Aide Representative Beverly Masek State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Commented on HJR 51. Ms. Tom Wright, Aide Representative Ivan Ivan State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Commented on HB 285 for sponsor. Mr. Bruce Twomley, Chairman Limited Entry Commission 8800 Glacier Hwy, Ste. 109 Juneau, AK 99801-8079 POSITION STATEMENT: Commented on HB 285. Mr. Jerry McCune United Fishermen of Alaska 211 Fourth Street #112 Juneau, AK 99801 POSITION STATEMENT: Commented on HB 285. Ms. Annette Krietzer, Aide Senator Loren Leman State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Commented on SB 330. Mr. Jim Rowe, Executive Director Alaska Telephone Association 201 E. 56th Anchorage, AK 99518 POSITION STATEMENT: Supported SB 330. Mr. Randy Nelson Alaska Telephone Association GTE 4300 B St. #303 Anchorage, AK 99503 POSITION STATEMENT: Supported SB 330. ACTION NARRATIVE TAPE 98-23, SIDE A Number 001 HJR 51 - SUPPORT H.R. 2924 CHAIRMAN HALFORD called the Senate Resources Committee meeting to order at 3:40 p.m. and announced HJR 51 to be up for consideration. SENATOR SHARP moved to adopt the CS to HJR 51. There were no objections and it was so ordered. SENATOR LINCOLN asked about the Elim Native Corporation. MR. DON STOLWORTHY, Aide to Representative Masek, explained that they tried numerous times to get answers to some of the questions that were brought up at the first hearing, about why agree to 297,000 acres at first and, now, why another 50,000. Mr. Robert Keith, President of the Corporation, said the 50,000 acres should have been included because it was not withdrawn legitimately by Presidential Executive Order, but he didn't know why the argument wasn't brought up in the ANCSA closure. He asked Mr. Keith how much of the land and money they had received. He said approximately a third of the land, but he was too young to remember how much money they received and there were no elders around to ask. He knows that of the 50,000 acres, only 29,000 would be eligible for selection. There are some minerals and hot springs on some of the land they want to select. When they called Congressman Young's office, they just didn't know what was happening. SENATOR LINCOLN asked if they were leaving in the Elim Native Corporation language. CHAIRMAN HALFORD said the Whereas that describes Congressman Young's HR2429 includes the Elim and Vietnam veteran's issue. The Resolve speaks to the native allotment/Vietnam veteran issue; it doesn't speak to the Elim issue. SENATOR GREEN moved to pass SCS CSHJR 51(RES) out of Committee with individual recommendations. There were no objections and it was so ordered. HB 285 - POINT SYSTEM FOR COMMERCIAL FISH VIOLATION CHAIRMAN HALFORD announced HB 285 to be up for consideration. REPRESENTATIVE IVAN, sponsor, said HB 285 addresses some concerns about illegal fishing activities in his district and others. It seeks to protect honest fishermen. It's been stated that these illegal activities have become a philosophy among some fishermen and they are just the cost of doing business if they are cited for it. The bill establishes a point system against the commercial fishing permit holder for convictions of Title 16 commercial fishing laws. Twelve or more within a 36 month period would result in a one year suspension by the Commercial Fishery Entry Commission, 16 or more within a 48-month period results in two- years, and progresses up to 18 points or more in a 60-month period which results in a three-year suspension of the permit. The assessment of points, the suspension process, noticing, etc. are provided for in the bill. Sections 5 - 9 were suggested by the Commercial Fisheries Entry Commission and are a revision of current statutes. References to forfeiture have been deleted, because it is believed suspension and revocation of fishing privileges by the Entry Commission are more consistent with the legislature's prior determination that fishing privileges are use privileges and not property. This legislation is strongly supported by the Department of Public Safety and the Commercial Fisheries Entry Commission. He has worked with the lending institutions, namely CFAB and the Division of Investments, the Commercial Fisheries Entry Commission, Public Safety, and attorneys well-versed in commercial fishing laws. Number 165 SENATOR LEMAN asked if he had worked with the Division of Investments on loan obligations and valuation of the permits since the January 26, 1998 letter was written. REPRESENTATIVE IVAN answered that they were concerned because as a lending institution, they make loans secured by pledges of limited entry permits. Pursuing the individual permit holder alleviated some of their concerns. CHAIRMAN HALFORD noted when the legislature tried this a few years ago, they attached it to the permits and it was successful in getting out of the Senate, but it died in the House. MR. TOM WRIGHT, Staff to Representative Ivan, said initially the points were going to be attached to the permit, but Mr. Cameron Jenson, an attorney well-versed in commercial fishing lending laws, said if a permit was going to be revoked after a certain number of points accumulated, they ran into the questions of takings, due process, and equal protection laws. They would have had to rewrite a number of statutes for CFAB and the Division of Investments in order to do the revocation. That's why they came up with the suspension for one, two or three years with the thought being if someone has their permit suspended for a two-year period, they are going to get out of the fishery, because they couldn't afford to sit on the beach for two years. SENATOR LEMAN said he thought this was a good idea, but he is concerned about an accumulation of points for a series of pretty minor violations, like trailer buoys. MR. WRIGHT said they had discussed this with the Department of Public Safety and they usually take those things into consideration before issuing a citation. SENATOR LEMAN asked in the case of trailer buoys, each buoy wouldn't be a separate violation. MR. WRIGHT answered that would be his impression from conversations with Colonel Glass. Number 267 CHAIRMAN HALFORD asked if the individuals who have to "sit out" would have an opportunity to do an emergency transfer of their permit, and then crew on that boat. MR. WRIGHT answered if the license is suspended, they cannot transfer it. CHAIRMAN HALFORD asked what happens if they have a violation, but not a conviction and while they are waiting to go to court, they transfer the permit. MR. BRUCE TWOMLEY, Commercial Fisheries Entry Commission, answered if he hasn't reached the point where the permit is suspended, and with it the transferability of the permit which would stop that process cold, he would need to make an independent showing that he is qualified for an emergency transfer under the existing law. He could get one with that showing. One of the provisions in the bill may address that in part. If there is a violation during an emergency transfer, the demerit points are assessed against both the permit holder and the transferee. CHAIRMAN HALFORD said there is a lot of time after a violation before a sentence or final disposition during which a person could just do a straight transfer to his brother or his best friend, or to whomever. He asked how can they could stop that. MR. TWOMLEY answered the points are going to track the individual, so if he's caught in a subsequent violation, the points are going to build up against him. He didn't see that as being a real opportunity to escape the effect of this bill. Number 350 CHAIRMAN HALFORD said for example, there are three brothers from California who come up here every year and fish Bristol Bay; they are high-line line fishermen who are not popular with the locals and do very well. They work the line as the cost of doing business and the first year they get a violation and brother A has the permit in his name. The second year, they get another violation and are cited (it's on video, so they know they are going to get caught), but it hasn't been to court, yet. So brother A transfers the permit to brother B. The third year, they go out and fish again. Brother A is now a crew member on his own boat with his brother now carrying the permit. The permit isn't suspended because it was transferred before it had 12 points against it. MR. TWOMLEY said he thought this question points out the virtue of this bill and the fact that the demerit points track the individual. If that individual has a case pending against him, those points are going to apply to him if he's convicted. Even during this period, if he's caught in another violation while his brother holds the permit and is cited, those points will be assessed against him and build a record against him which could lead the Commission to suspending his fishing privileges. CHAIRMAN HALFORD said it seems to him that three brothers could keep this thing moving for a long time. He asked, suppose he's a crew member on the boat and his brother's running the boat and they are over the line again, is he going to get a violation as a crew member? Is he going to get cited? He didn't see them citing all the crew members. MR. WRIGHT answered the point is if he transfers the permit to Brother B, he is still the owner of that permit. CHAIRMAN HALFORD said no, as far as the law is concerned, he sold the permit to his brother. So the first two years are covered by the first brother, then the second brother has it on the third year and gets caught and again the fourth year. So he transfers the permit before the second conviction in the fourth year to Brother C. Brother C is in charge for the fifth and sixth years and then they are getting close to where they can go back to Brother A and start all over again. If there are four brothers, he knows they can do it. He noted a letter from CFAB and said maybe one of the benefits the legislature wants out of this is that violations would result in a financial disadvantage to the offending permit holder in the event of a sale of permit during the period in which there are points effectively outstanding by being worth significantly less money. MR. WRIGHT pointed out that there are opportunities for the permit holder to duck this thing, assuming the points track the permit. He can unload the permit when he sees the prices of permits falling and buy one back that is free and clear of any points. CHAIRMAN HALFORD wants to catch them both ways. He said he is very pleased to see this bill because he thought it could do some good in the worst kinds of line fisheries. Number 409 SENATOR SHARP asked if it was possible to make it statutorily binding that if there's a pending violation that may result in suspension, they cannot transfer the permit until the result of the court case. CHAIRMAN HALFORD said he thought that would slow it down, at least. MR. WRIGHT said it would be possible to do that, although the premise of the bill is different than that. The demerit points are not to be assessed until there was due process because you wouldn't know if a conviction would stick or not. The bill operates from the point of conviction rather than citation. They have found that not everything is recorded through the computer system. MR. TWOMLEY said they have learned through work on this bill that there isn't one unified computer system for the courts right now. CHAIRMAN HALFORD asked if the Department could give it to you when they file the charge outside of the court system. MR. TWOMLEY said they could give the citations to him, but a number of those wash out for any number of reasons. CHAIRMAN HALFORD said he wanted to work with CFAB and the sponsors and pass this bill. MR. WRIGHT added that Division of Investments had an interest as well. CHAIRMAN HALFORD asked if they make direct loans. MR. WRIGHT said he understands that they make loans for commercial fishing permits. CHAIRMAN HALFORD asked if they are currently doing that or are they old loans. MR. JERRY MCCUNE, United Fishermen of Alaska, said one of the loan programs is for residents only. CHAIRMAN HALFORD said he didn't think it was a bad idea if a permit with some points on it was worth a little less. This is the kind of thing that the bandits who work the lines the hardest understand. MR. WRIGHT said they had that conversation with Colonel Glass and that's one of the things you try to find your way around. MR. MCCUNE said they wanted to attach the points to permits, but the reason they didn't was because of conversations with Division of Investments and CFAB indicating that people use their permits as collateral for their purchase. CHAIRMAN HALFORD said one of the impacts of CFAB's exposure would be that they would be very careful when they looked at someone's record as to whether they would make them a loan to buy a permit in the first place. MR. MCCUNE said they run afoul of some federal and state lending laws if they try to do something to the permits, like assess them to devalue them. CHAIRMAN HALFORD said they have to be consistent with the State's IRS case which says that permits are really worthless. REPRESENTATIVE IVAN said he would like to help them work through the issues. SB 330 - LOCATING UNDERGROUND FACILITIES CHAIRMAN HALFORD announced SB 330 to be up for consideration. MS. ANNETTE KREITZER, Aide to Senator Leman, sponsor, explained currently there are no statewide standards for locating underground facilities, so SB 330 was introduced at the request of the Alaska Telephone Association to provide an understanding of the standards and responsibilities for locating and excavating underground facilities throughout the State. It amends AS 42.30, but doesn't tie this to the Public Utilities Commission. Mr. Bob Loher, Executive Director, said they have reviewed the legislation and think it's a good idea, but they don't deal with contractors. CHAIRMAN HALFORD said the bill doesn't really look at the small contractor and somehow they end up with an unfair result. One of the places it looked like that to him was on page 3 where an excavator discovers an underground facility that was not field marked or was inaccurately field marked and has to stop working even though he still has to pay for the rent of his machine. Another area of concern is the excavator being liable for treble damages for intentional or "knowing" damage. He didn't know what the "knowingly" standard meant. TAPE 98-23, SIDE B Number 580 MS. KREITZER responded that treble damages is proposed amendment three. She had spoken with the Alaska Telephone Association who had no problem with deleting "knowingly" from intentionally damaging a facility. They would also want to delete the definition of "knowingly" on page 6. Also, amendment two should read, "An excavator shall not be liable for inadvertent damage caused to an inaccurately field marked underground facility." She thought that might address his concern. She had talked to Mr. Row of ATA about how to recover down time and how much is the nature of doing business. She didn't know how much they could prevent in a bill like this. CHAIRMAN HALFORD said for example the operator/owner of the underground facility is required to make a locate marking once, but, if in the process of a project, they lose the locate markings and have to do it again, the excavator is responsible for paying for the second time around. If something is improperly marked and that stops the project and causes a great deal of delay for the excavator, there should be some standard at which point the operator's mismarking causes them to share in that cost. Number 472 MR. JIM ROWE, Director, Alaska Telephone Association (ATA), said Alaska has no state utility locate standards and its efficiency, uninterrupted service, and public safety will benefit by having standards. In 1996, the ATA discussed uncertainties about responding to a request for a locate from an excavator and their expectations for response from the excavator. Comments were received from ORICA, the National Utility Locating Contractors Association, Locate Call Center of Alaska, NL&P, Anchorage Area Utility Association, Enstar, Alaska Building Contractors, Associated General Contractors of Alaska, and the Anchorage Homebuilders Association. He said they have no problem with deleting "knowlingly." The treble damages is only to address very intentional damage. The other aspect is Section (h), page 3, and the small contractors might view this as being unbalanced and that is not their intention. They are trying to be up front about this and are receptive to anything that's palatable. Number 453 SENATOR SHARP said he had terrible problems with treble damages being very severe. He didn't know how many contractors were out there who are sizeable enough to understand this, let alone get involved in treble damages if they don't. CHAIRMAN HALFORD said he was glad that the Homebuilders were involved because they employ a lot of the little dirt work guys. SENATOR SHARP asked what happens if at night, a customer calls an excavator and says he has water flowing all over his backyard, does the excavator say he can't come until tomorrow. He couldn't see how an excavator could perform an emergency service for a homeowner on a city lot. MR. ROWE said that was only for intentional damages. SENATOR SHARP said he didn't really understand the difference between knowingly and intentionally. SENATOR GREEN said knowingly is a lesser level. SENATOR SHARP said if you are excavating on a city block, you probably know that there are utilities all over the place. He thought the little guy was going to really get hung out to dry on this bill. CHAIRMAN HALFORD said he still has those concerns, too. MR. RANDY NELSON, Alaska Telephone Association, said he also represents GTE Alaska, his employer and supported SB 330. He has been both an excavator and a utility owner. The emphasis in the bill from his point of view is that they move employees from one location to another and will have uniform and well defined areas of responsibility from all the utilities. He thought the intent of the treble damages was to resolve the concern about an excavator cutting through small laterals, because it would be cheaper to repair them than to hold up construction. It's not to penalize anyone in an emergency situation. The intent when the operator finds an unmarked utility is to stop and find out what it is. They do not want them to stop and wait for hours and hours for a locate. As a utility, they would just want it identified as quickly as possible. Number 410 CHAIRMAN HALFORD asked if the questions in the letter from Chugach Electric were addressed in Labor and Commerce. MS. KREITZER answered no. The first question in the letter was charges for locate services and she explained that they are trying to keep this bill simple and away from the Public Utilities Commission who approves all fees. However, there is nothing in the bill that prohibits a facility or utility from charging for a locate. The second item, the definition of repair, if the Committee wants to adopt one, they should look at what accepted industry standards are. There is some debate about whether a splice in a cable is actually a weakening of the cable or not and should it have to be replaced for 150 ft. for a small ding. They chose not to put that in the bill. They tried to keep the definition of operator that is currently in law. The definition here (number 3) means a person who owns, manages, or controls, which is not the definition that is in AS 42.05.990. It is a much longer definition, so she didn't see any benefit to using it. Regarding the exposure of energized cables (number 4), there are currently specific provisions in the National Electric Safety Code and the Federal regulations that require exposed, high-voltage facilities be monitored and handled by qualified personnel. SENATOR LEMAN asked if these comments were shared with anyone from the Alaska Telephone Association or other people who have participated in this bill. MS. KREITZER answered she didn't know if anyone had seen them. SENATOR LEMAN asked Mr. Rowe if he had seen the letter from Chugach Electric. MR. ROWE answered that he saw the original draft about a week ago. He explained they tried not to make this bill specific to any particular utility; it's not a telephone bill, although they are the industry that got it going. He is comfortable with Ms. KREITZER's comments. CHAIRMAN HALFORD said the letter has an interesting approach to liability instead of the treble damages section. It could be modified to take their last paragraph and instead of the treble damages section, to say if an underground facility or an excavator is damaged by failure to fulfill an obligation under this law, the party failing to perform the obligation is liable to the other party for damages resulting from the failure to perform. He didn't want to set something up where he expects people to go back and forth to court on, but if everyone knows what the court would be deciding if they did end up there, they usually perform to that standard. This could be a way to make sure they have the kind of balance they need. He didn't know how to deal with the question of down time, locate costs, values, etc. The term "industry standards" sounds good to him as far as values and repairs. There is potentially another side of it from the excavator's point of view. There could be another side of it from Senator Sharp's homeowner's point of view. MR. ROWE said during the many discussions with the Engineering Planning Committee one of the comments that impressed him was when a locate is requested, it's a customer service and we're there to serve our customers. The excavators are also customers. It's not an adversarial position. Their real job is to keep the utility service working on a safe and dependable basis for the customers. He wanted any changes that would be made to go along with that goal. SENATOR TAYLOR asked if it was correct that in Anchorage, if you're putting in a subdivision building or a couple of lots and want utilities put in, you can only have them put in by a contractor that is on an approved list with the utility company, and the only contractors on that approved list are union contractors. CHAIRMAN HALFORD said he wasn't bound by that in Chugiak/Eagle River. SENATOR TAYLOR said he got this information from a developer in Anchorage. SENATOR SHARP commented that approved list might the one that is certified by the State as authorized to install. SENATOR TAYLOR said his understanding was that you are limited to two or three contractors and whatever they set for the price. You couldn't get hooked up otherwise. CHAIRMAN HALFORD said the utility was very rapid in their response when he dug up his own utilities. He is concerned with adding liability and then having what is an emergency in the eye of the constituent, a job in the eye of the excavator and a problem in the eye of the utility. SENATOR TAYLOR said he was concerned that it becomes an opportunity in the eye of someone else. CHAIRMAN HALFORD said the Committee would work on trying to come up with something that deals with these issues. He asked Senator Sharp and Senator Leman to work with him on it. SENATOR TAYLOR said he had a question about responsibility of construction project owners and wanted to delete "the project owner knows" on page 3, line 30 and delete "does not" on the next page, because the owner should know what's in their land. SENATOR LEMAN said that wasn't necessarily true, though. CHAIRMAN HALFORD adjourned the meeting at 5:10 p.m.