HOUSE RESOURCES STANDING COMMITTEE February 20, 1995 8:10 a.m. MEMBERS PRESENT Representative Joe Green, Co-Chairman Representative Bill Williams, Co-Chairman Representative Scott Ogan, Vice Chairman Representative Alan Austerman Representative John Davies MEMBERS ABSENT Representative Ramona Barnes Representative Pete Kott Representative Eileen MacLean Representative Irene Nicholia COMMITTEE CALENDAR *HB 128:"An Act establishing an exemption to the requirement of obtaining a waste disposal permit for certain activities that yield water and waste material discharges ancillary to those activities." HEARD AND HELD SJR 6:Relating to federally held property in those states, including Alaska, admitted to the Union since 1802. HEARD AND HELD HB 170:"An Act relating to intensive management of identified big game prey populations." SCHEDULED BUT NOT HEARD (* First public hearing) WITNESS REGISTER JACK PHELPS, Aide Representative Bill Williams State Capitol, Room 128 Juneau, AK 99801 Phone: 465-3424 POSITION STATEMENT: Gave Sponsor Statement for HB 128 DEENA HENKINS, Section Chief Drinking Water & Wastewater Section Department of Environmental Conservation 410 Willoughby Ave., Ste 105 Juneau, AK 99801 Phone: 465-5300 POSITION STATEMENT: Suggested changes for HB 128 BEVERLY WARD, Representative ARCO Alaska, Inc. 134 N. Franklin Juneau, AK 99801 Phone: 586-3680 POSITION STATEMENT: Supported concept of HB 128 JOE AMBROSE, Aide Senator Robin Taylor State Capitol, Room 30 Juneau, AK 99801 Phone: 465-3873 POSITION STATEMENT: Gave Sponsor Statement for SJR 6 ACTION NARRATIVE BILL: HB 128 SHORT TITLE: WASTE DISPOSAL PERMIT EXEMPTION SPONSOR(S): REPRESENTATIVE(S) WILLIAMS,Kott,Toohey JRN-DATE JRN-PG ACTION 01/27/95 156 (H) READ THE FIRST TIME - REFERRAL(S) 01/27/95 156 (H) RESOURCES 01/27/95 163 (H) COSPONSOR(S): KOTT, TOOHEY 02/08/95 271 (H) SPONSOR SUBSTITUTE INTRODUCED- REFERRALS 02/08/95 271 (H) RES 02/20/95 (H) RES AT 08:00 AM CAPITOL 124  BILL: SJR 6 SHORT TITLE: TRANSFER FED. LAND TO POST-1802 STATES SPONSOR(S): SENATOR(S) TAYLOR, Halford, Kelly, Sharp, Frank, Green, Pearce JRN-DATE JRN-PG ACTION 01/16/95 11 (S) READ THE FIRST TIME - REFERRAL(S) 01/16/95 11 (S) RESOURCES 02/01/95 (S) RES AT 03:30 PM BUTROVICH ROOM 205 02/01/95 (S) MINUTE(RES) 02/03/95 159 (S) RES RPT CS 5DP NEW TITLE 02/03/95 159 (S) ZERO FISCAL NOTE (S.RES) 02/03/95 (S) RLS AT 12:10 PM BELTZ ROOM 211 02/03/95 (S) MINUTE(RLS) 02/06/95 181 (S) RULES TO CALENDAR 2/6/95 02/06/95 183 (S) READ THE SECOND TIME 02/06/95 183 (S) RES CS ADOPTED UNAN CONSENT 02/06/95 183 (S) ADVANCED TO THIRD READING UNAN CONSENT 02/06/95 183 (S) READ THE THIRD TIME CSSJR 6(RES) 02/06/95 183 (S) COSPONSOR(S): FRANK, GREEN, PEARCE 02/06/95 184 (S) PASSED Y15 N- E4 A1 02/06/95 185 (S) TRANSMITTED TO (H) 02/08/95 263 (H) READ THE FIRST TIME - REFERRAL(S) 02/08/95 263 (H) RES 02/20/95 (H) RES AT 08:00 AM CAPITOL 124  BILL: HB 170 SHORT TITLE: INTENSIVE MANAGEMENT OF GAME SPONSOR(S): REPRESENTATIVE(S) KELLY,Toohey JRN-DATE JRN-PG ACTION 02/10/95 301 (H) READ THE FIRST TIME - REFERRAL(S) 02/10/95 301 (H) RESOURCES 02/20/95 (H) RES AT 08:00 AM CAPITOL 124 TAPE 95-21, SIDE A Number 000 The House Resources Committee was called to order by Co-Chairman Williams at 8:10 a.m. Members present at the call to order were Representatives Green, Williams, Ogan, Austerman and Davies. Members absent were Representatives Barnes, Kott, MacLean and Nicholia. CO-CHAIRMAN BILL WILLIAMS announced there is a quorum present. HRES - 02/20/95 HB 128 - WASTE DISPOSAL PERMIT EXEMPTION CO-CHAIRMAN WILLIAMS said it was not his intention to move HB 128 out of committee today. JACK PHELPS, AIDE, REPRESENTATIVE BILL WILLIAMS, PRIME SPONSOR, stated HB 128 was drafted in response to a recommendation by the Alaska Minerals Commission in their 1995 report, to address a statute which, because of its tremendous breadth, had recently created concern for both the mineral industry and the water well drillers in Alaska. He said HB 128 provides an exemption for drilling and incidental wastes that result from certain industrial activities in the state that hitherto have been treated as minimal and noncontaminating. He noted because the existing statute AS 46.03.100 is extremely broad, the department was faced with moving into a general permit proposal to deal with things hitherto had been ignored. He stressed the intention of HB 128 is to narrow that down somewhat and make it more comfortable for the industry and the Department of Environmental Conservation (DEC) in terms of regulating this activity. MR. PHELPS told committee members there is a proposed committee substitute in their folders. He noted there are significant changes between the sponsor substitute and the proposed committee substitute. He requested that committee members look at page 2 on the committee substitute near the bottom. He said what is now Section 3 is drawn from the original section of the original bill. He explained this section was rewritten based on discussions with DEC and incorporates changes the department requested to clarify the bill more carefully. He stressed the intent and the actual meaning of this section of the bill is not altered by these changes but is made more clear and evident. MR. PHELPS explained the other change between the committee substitute and the previous version of the bill are the additions of Sections 1 and 2. He said these sections transfer the permitting authority for a particular type of disposal that takes place in the oil industry from DEC to the Alaska Oil and Gas Conservation Commission (AOGCC). He stated this change was initiated by comments from the AOGCC indicating there was some preference in both agencies for AOGCC to regulate it because AOGCC has petroleum engineers on their staff and it seemed more appropriate for AOGCC to handle it rather than DEC. He noted in discussions with both agencies, there was an agreement that the transfer of authority needed to take place. The question was whether the transfer could be done through a memo of understanding or in statute, which is an issue the legislature will have to decide. He pointed out the transfer of that authority is proposed to be done statutorily in HB 128. MR. PHELPS stated the new subsection proposed on page 2, lines 13- 17, contains a definition of nonhazardous drilling operation waste. He said there is concern regarding this definition. He told committee members there is a memo in their folders from Blair Wondzell, who is an engineer with AOGCC, which suggests if the Title 46 definition of nonhazardous waste is placed in this subsection, it may create difficulties because AOGCC normally operates under the federal definition for all of their underground injection control permits. AOGCC requested the committee look at possibly using federal language rather than state statutory language. MR. PHELPS stated he had discussed that request with DEC and currently in their regulations, under AS 46.03, they bring their definition under the federal definition. Therefore, it may be appropriate for the committee to roll some reference of the federal definition into this section of the bill. Number 170 REPRESENTATIVE SCOTT OGAN clarified that HB 128 eliminates a duplication of efforts by DEC and AOGCC. MR. PHELPS responded there is no dual permitting process at this time. He said DEC has the authority and has been permitting disposals. He added the department had contemplated using a memorandum of understanding to transfer the authority to AOGCC. He noted AOGCC is currently developing regulations to perform that permitting. He stated HB 128 would make it clear who was going to do the permitting so there would not be a possibility of a dual permitting system and it would clarify who has the authority. He said it was not his understanding that both agencies wanted to do the permitting, but rather the permitting needed to be done by the appropriate agency. REPRESENTATIVE OGAN clarified AOGCC is better qualified to do the permitting. MR. PHELPS replied that would not be the right phrase to use. He said it is more appropriate to say that the agency who has the general authority to deal with oil well activities and does have petroleum engineers on their staff be the permitting agency. REPRESENTATIVE JOE GREEN made a MOTION to ADOPT CSSSHB 128(RES). CO-CHAIRMAN WILLIAMS asked if there were any objections. Hearing none, the MOTION PASSED. Number 227 CO-CHAIRMAN GREEN wondered if the AOGCC is already doing this type of activity currently. MR. PHELPS stated the AOGCC is the agency that does the permitting for oil wells. He said DEC is currently permitting for annular pumping. He explained AOGCC is in the process of developing regulations under which they would regulate it and the contemplated move was the memorandum of understanding between DEC and AOGCC enabling AOGCC to take over that activity. He noted HB 128 proposes that transfer in statute rather than through a memorandum of understanding. CO-CHAIRMAN GREEN said the reason he brought that up is because there is an activity done in an oil well drilling process called cementing. He asked if that portion of the oil well completion is governed by AOGCC. MR. PHELPS responded cementing, which is a form of annular pumping, is currently regulated under AOGCC. Number 270 DEENA HENKINS, SECTION CHIEF, DRINKING WATER & WASTEWATER SECTION, DEC, said she appreciated Mr. Phelps working with the department to try and clarify the language of the proposed exemptions. She stated excavation dewatering type processes have been excluded from subsection (B) on page 3. She said excavation dewatering can produce a huge amount of muddy water and the department has regulated those discharges usually with general permits. A lot of the water coming out of excavations is groundwater. MS. HENKINS said the department suggests on page 3, line 17 that "groundwater" be added to the kinds of water being removed from excavations which are not exempt from permits. Therefore, it would include groundwater, stormwater, or wastewater run-off. She stated the other concern expressed to her about the exclusions is that as the bill is written, drilling wastes can be put on the land without requiring any permit. The department is concerned that there may be some drilling additives, particularly in mineral drilling operations, that possibly could contaminate a shallow aquifer that might be used as drinking water. She stated the department would like to further discuss these concerns with Mr. Phelps this week. Number 322 BEVERLY WARD, REPRESENTATIVE, ARCO ALASKA, stated ARCO fully supports the concept of AOGCC having the authority to regulate the annular pumping. However, she said once ARCO looked at the specific wording of how that is being proposed to be done, they did have some suggested changes but has not had the chance to work with the staff on those changes. She felt before the bill is moved from committee, ARCO will have a chance to work with AOGCC, DEC and staff to determine the appropriate language. CO-CHAIRMAN WILLIAMS announced HB 128 would be held. HRES - 02/20/95 SJR 6 - TRANSFER FEDERAL LAND TO POST-1802 STATES Number 348 JOE AMBROSE, AIDE, SENATOR ROBIN TAYLOR, PRIME SPONSOR, stated the Founding Fathers recognized that land was power and that a centralized federal government with a substantial land base would eventually overwhelm the states. That is why the original 13 colonies and the next 5 states admitted to the Union were given fee title to all land within their borders. He said the Constitution even includes a provision allowing for the donation of land to the federal government for the creation of the District of Columbia. The Founders guarded land ownership jealously, writing into the Constitution's first article, a provision allowing the federal government to purchase, with the consent of the state legislatures, land it needed for the erection of forts, magazines, arsenals, dock yards and other needful buildings. MR. AMBROSE explained the opening of the West, with its wealth of resources, led an envious federal government to begin to withhold for itself large portions of land within the borders of newly admitted states under the guise of public domain. The result of this doctrine was the creation of what SJR 6 refers to as land poor states, admitted to the Union as unequal, federally dominated entities. He stated SJR 6 calls upon Congress to right this wrong and release to the states all federal holdings within their borders. The action proposed by this resolution would make land use decisions now being decided by the Congress moot and empower the states to settle those issues on their own. He noted that copies of the draft of SJR 6 were sent to members of the congressional delegations from the land poor states as well as to groups and individuals interested in this issue. MR. AMBROSE told committee members they had a copy of an article from the Ketchikan Daily News in their folders. In that article Representative Don Young was asked directly about SJR 6 and Representative Young said, "Senator Taylor's resolution is already being seriously discussed in Washington." He said Senator Taylor is hoping that SJR 6 will be passed in a timely manner so that Alaska will be the first of the states to send this message to Congress. Number 400 CO-CHAIRMAN GREEN made a MOTION to MOVE SJR 6 out of committee with accompanying zero fiscal note with individual recommendations. REPRESENTATIVE JOHN DAVIES OBJECTED for the purpose of discussion. He said it was his understanding that SJR 6 would not be passed out today. CO-CHAIRMAN WILLIAMS said he had announced at the beginning of the meeting that he did not plan to move HB 128. CO-CHAIRMAN GREEN WITHDREW his MOTION. Number 423 REPRESENTATIVE DAVIES said if the federal government had not retained control of some large acreages of land, the national forest system would not be in place. He added if those lands were in very small ownership patterns it would be difficult to put together long term contracts. MR. AMBROSE responded who is better suited to manage the land resource, the state or federal government. He said the implication is the state would not make the same decisions. He stated there is talk in Congress now of dismantling the U.S. Forest Service because it is failing to manage the national forests for the intended purpose, take the productive land and turn it over to the Bureau of Land Management (BLM), and from there to the states. At the time of statehood, what land was seeded to the state of Alaska was seeded in such a way to guarantee a chance to have an economy. He pointed out that if the decision had gone the other way, the state would not be paying any royalties to the federal government now on the North Slope. REPRESENTATIVE DAVIES noted the resolution urges the 104th Congress to transfer to the states, by fee title, all federally controlled property. He wondered if this includes wilderness areas, parks, etc. MR. AMBROSE replied the intent of the resolution is to transfer all federally held land within the 22 states admitted to the Union since 1802. He said the resolution also suggests at that point, anything the federal government feels it needs it could buy from the states which the Constitution says it must do with the permission of the legislatures. He noted Congressman Young is discussing taking the productive land, turning it over to the states, and making the rest of it into parks. Number 473 REPRESENTATIVE DAVIES wondered if the state was to take over all the federal lands, including parks and wilderness areas, would the state be responsible for managing those parklands. MR. AMBROSE stated that is the intent. REPRESENTATIVE DAVIES questioned if there would be a significant fiscal impact on the state. MR. AMBROSE replied yes, but by the same token, the federal budget could be reduced and the state would not have to be sending as much money in that direction. REPRESENTATIVE DAVIES said the money sent in that direction is primarily through individual income taxes. Therefore, the state treasury, unless an income tax was enacted to divert that flow to the state treasury instead of the federal treasury, would not have adequate resources to manage those lands. MR. AMBROSE felt that was too speculative to discuss at this point. Number 485 REPRESENTATIVE DAVIES felt there would be a substantial fiscal impact in connection with SJR 6 and he questioned the zero fiscal note. Number 499 CO-CHAIRMAN GREEN suggested, in light of the question raised, holding the resolution until the next meeting to determine if a positive fiscal note should be attached. CO-CHAIRMAN WILLIAMS announced SJR 6 would be held until Wednesday, February 22. ADJOURNMENT There being no further business to come before the House Resources Committee, Co-Chairman Williams adjourned the meeting at 8:38 a.m.