HOUSE BILL NO. 89 "An Act authorizing the commissioner of natural resources to offer bedload material for disposal for flood control purposes in exchange for a percentage of the profit from the sale of that material." 10:12:02 AM REPRESENTATIVE PAUL SEATON, SPONSOR, explained the legislation. He related that the legislation authorized an alternative sale mechanism for certain gravel, sand, and rock associated with flood plain problems or disasters. The alternative sale must proceed in conjunction with a flood mitigation plan. He pointed out that the most persistent problem was the outflow of river gravel and sediments that built up in streambeds and caused overflow. The overflow tended to accumulate and rechanneled the river. The water travelled through people's properties causing damage. He expounded that current law required bedload material to sell at fair market value. The legislation allowed the commissioner of the Department of Natural Resources (DNR) to consider mitigation of state disaster expenses as part of the fair market value. The percent of profit calculation was set at a minimum of 12.5 percent. The material was not a good quality gravel source and not as desirable on the commercial market. The bill incentivized removal for commercial operators; and enabled the export of the gravel from the problem area. The gravel extractor was required to have an extraction plan certified by a professional engineer. 10:16:10 AM Representative Seaton furthered that the Department of Transportation and Public Facilities (DOT) and DNR would review the plan for approval. The review would ensure safe material extraction. The idea of the legislation was to reduce a hazard by encouraging safe elimination of sediment buildup. He recapped that the bill allowed an alternative mechanism for valuing extracted gravel. The state will still receive value for the bedload material but may consider the value removal offered for disaster mitigation. Co-Chair Thomas supported the legislation. He favored allowing a private entity to remove the gravel instead of the state. He discussed his experience with gravel and river shifting. He asked whether salmon streams were protected. Representative Seaton assured that the legislation would not preclude any Department of Fish and Game (DFG) or DEC processes and permitting. Representative Neuman inquired about the destruction of spawning beds. He wanted assurance that the involved agencies supported the legislation. Representative Seaton repeated that all permits would remain in place under the legislation. He noted that the state was currently authorized to sell bedload material. The sale based on a gross up-front per yard fee was cost prohibitive for commercial operators. The bill allowed the alternative sale of bedload material at 12.5 percent of the profit. 10:20:29 AM Vice-chair Fairclough OPENED public testimony. Representative Gara queried whether the bill would reduce any standards that were required to protect habitat in a fish stream. MARTY PARSONS, DEPUTY DIRECTOR, DIVISION OF MINING, LAND AND WATER, DEPARTMENT OF NATURAL RESOURCES (via teleconference),responded in the negative. He reassured the committee that the legislation does not reduce any DFG requirements. LARRY DEVILBISS, MAYOR, MAT-SU BOROUGH, voiced that the borough supported the legislation. He believed the legislation would help mitigate the borough's flood problems. Vice-chair Fairclough CLOSED public testimony. Representative Guttenberg asked about the cost calculation for extraction. He wondered whether the extraction was contracted with standard calculations or site specific calculated costs. Representative Seaton replied that the sale calculations were site specific. The bill related very specifically to bedload material extracted due to flood mitigation. Representative Guttenberg related a problem in his district that led to competition between two commercial entities extracting gravel. The business that operated under state permits extracted gravel at significantly lower costs than the private entity. Vice-chair Fairclough asked whether the bedload sale was competitive. Representative Seaton replied that both competitive and non-competitive sales were allowed under current law. 10:26:08 AM Co-Chair Stoltze did not believe the legislation presented a loss of revenue for the state. He thought that HB 89 was a win-win situation. The legislation provided important flood mitigation and incentives for private operators. Co-Chair Stoltze MOVED to report CS HB 89 (RES) out of committee with individual recommendations and the accompanying new fiscal notes. CS HB 89 (RES) was REPORTED out of committee with a "do pass" recommendation and with one new indeterminate note from the Department of Transportation and one new indeterminate note from the Department of Natural Resources.