Legislature(1997 - 1998)

03/30/1998 03:40 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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              
     - 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                                                   
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            
       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               
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               
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                       
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                 
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            
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                 
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                 
SENATOR TAYLOR said he got this information from a developer in                
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.                            

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