MINUTES SENATE FINANCE COMMITTEE April 30, 1999 9:07 AM TAPES SFC-99 #115, Sides A and B CALL TO ORDER Co-Chair John Torgerson convened the meeting at approximately 9:07 A.M. PRESENT In addition to Co-chair Torgerson, Senators Gary Wilken, Lyda Green, Randy Phillips and Al Adams were present when the meeting was convened. Also Attending: DARWIN PETERSON, staff to Senator John Torgerson; JOHN BARNETT, Executive Director, Storage Tank Assistance, Division of Spill Prevention & Response, Department of Environmental Conservation; STEVEN DAUGHERTY, Assistant Attorney General, Department of Law; JIM HAYDEN, Manager, Storage Tank, Department of Environmental Conservation; Senator DRUE PEARCE, Senate President; JIMMY JACKSON, GCI; aides to committee members and other members of the Legislature. Attending via Teleconference: SUMMARY INFORMATION Co-chair Torgerson convened the meeting at approximately 9:14 a.m. He outlined the order in which the committee would hear the bills on the agenda in the following order: SB 128, SB 133; the committee would not hear SB 151, and then they would go to SB 157 and SB 67. SENATE BILL NO. 128 "An Act relating to the storage tank assistance fund; eliminating the grant portion of a program relating to risk assessment, containment, corrective action, and cleanup of underground petroleum storage tank systems and replacing the grant portion with a loan program; relating to discharges from underground petroleum storage tank systems; and providing for an effective date." CS FOR SENATE BILL NO. 128(RES) "An Act moving the termination date of the Board of Storage Tank Assistance to June 30, 1999; relating to the storage tank assistance fund; relating to financial assistance for owners and operators of underground petroleum storage tank systems; relating to discharges from underground petroleum storage tank systems; and providing for an effective date." DARWIN PETERSON, staff to Senator John Torgerson was invited to join the committee. He explained the changes made to the bill that were reflected in the new CS, version "K". (Arrival of Senator Donley noted for the record.) Senator Adams query. Mr. Peterson responded that amendment #2 was intended to clean up the bill. He explained page 7, line 28, the deletion of "or the value of rights to patents or royalties". Senator Wilken referred to page 7, line 22 and asked if this spoke to potential earnings. Mr. Peterson responded. Senator Wilken asked if it anticipated future earnings? Senator Green commented. Co-chair Torgerson said if amendment #2 were to be taken out perhaps that would take care of the matter. He thought this would provide a compromise. Senator Donley commented to amendment #2. Senator Wilken referred to enclosure #2 and explained the original intent at the time. It was to get away from corporate welfare. Senator Phillips referred to amendment #1 and asked if it was incorporated? Co-chair Torgerson said it had already been incorporated into the new CS. Senator Wilken MOVED CSSB 128 "K" and WITHOUT OBJECTION it was ADOPTED as the working draft before the committee. Senator Donley MOVED amendment #2 and WITHOUT OBJECTION it was ADOPTED. Senator Adams said he would like to hear from the department. JOHN BARNETT, Executive Director, Storage Tank Assistance, Division of Spill Prevention & Response, Department of Environmental Conservation was invited to join the committee. In response to Senator Donley he explained section 7, line 12. The language would not change the effective date. Senator Phillips asked about the amendment and if it was supported by the Department of Law. STEVEN DAUGHERTY, Assistant Attorney General, Department of Law was invited to join the committee. Mr. Barnett continued. He suggested the language be looked at to cover additional costs in the loan. He thought approximately $500,000 would be adequate. Mr. Daugherty commented briefly to the committee. Co-chair Torgerson cautioned that the amendment was in place. Patents and royalties are difficult to consider and place values on. It would be much easier to enforce a definition that excluded those nebulous situations. Mr. Barnett commented regarding probable future benefits. Co-chair Torgerson asked if this needed to be cleared up for Senator Wilken. Senator Wilken said if this was the accepted language that it was okay with him. Senator Green commented. She noted that the title included the Board of Storage Tank Assistance. Was it still appropriate to terminate the Board of Storage Tank Assistance? Co-chair Torgerson said he thought that it was. The committee took a brief at ease. Co-chair Torgerson called the meeting back to order at approximately 9:47 a.m. Senator Phillips asked about amendment #3. Mr. Daugherty recognized the amendment. Senator Phillips MOVED amendment #3. Co-chair Torgerson OBJECTED. Mr. Daugherty explained the amendment and said on page one, line eight, the correct date should be June 30, 1999. Senator Phillips MOVED to delete the date of June 20, 1999 and insert the correct date of June 30, 1999 on page one, line eight. WITHOUT OBJECTION it was ADOPTED. Mr. Daugherty continued saying this would keep from having to address all the regulations. There followed a brief conversation between Senators Donley and Phillips. Mr. Daugherty advised that if some of the regulations were repealed there would be a potential for litigation without this amendment. Co-chair Torgerson referred to line three of amendment #3. Mr. Daugherty said there were regulations that were adopted directly by the board. This authority was to the board. Senator Donley said it might be more prudent to adopt regulations to the department since they were the ones who had to live with it, especially since Storage Tank was going out of business, but the department would remain. Mr. Daugherty briefly responded. Senator Donley said he was not asking about legal problems but rather public policy problems. Mr. Daugherty again responded. Mr. Barnett explained the relationship of the board to the department. The industry did not want full authority to draft hostile regulations. Their intent was to have a board made up to actually develop financial assistance. The board was to act as an appeal board to resolve disputes. The board's authority was over the department. Co-chair Torgerson said his intent was to take the department away and not the board. Same as with Harborview. Senator Green said she has heard great concern over the loss of the board rather than the department. Senator Phillips asked that wherever the words "DEC" appeared they should be deleted from amendment #3 on lines 3, 4 and 11. Senator Wilken would like to hear from the department if there would be any problems created by this. Mr. Daugherty explained that under current statutes there were authorities that need to be exercised that were not granted under this bill. The board has primary authority over finance and the department primary authority over the "job". Senator Wilken would like the department's comments on amendment to amendment #3. JIM HAYDEN, Manager, Storage Tank, Department of Environmental Conservation was invited to join the committee. He explained the association between the board and the department. The department adopts regulations that cover everything except finance matters which is covered by the board. If the language were changed it would be inconsistent and further, be unworkable. Co-chair Torgerson said the only one who could adopt regulations would be the Storage Tank Assistance who has responsibility over this matter. The department would not be excluded. However, Mr. Hayden said it would still be inconsistent. He deferred to the Department of Law. By a roll call vote of 4 yeas (Torgerson, Donley, Green, Phillips) and 3 nays (Wilken, Adams, Kelly) (Parnell, Leman absent) amendment to amendment #3 was ADOPTED. By a roll call vote of 6 yeas (Torgerson,Donley, Wilken, Kelly, Green, Phillips) and 1 nay (Adams) (Parnell, Leman absent) amendment #3 was ADOPTED. Senator Donley asked that the record reflect that Senator Leman was excused due to broken ribs. Co-chair Torgerson ordered the record to so reflect. Senator Donley MOVED amendment #4. There was miscellaneous discussion between the members regarding this conceptual amendment. Senator Donley explained the maximum cap on loans. By a roll call vote of 4 yeas (Torgerson, Donley, Adams, Phillips) and 3 nays (Wilken, Kelly, Green) (Parnell, Leman absent) amendment #4 was ADOPTED. Senator Phillips MOVED CSSB 128 (FIN) and WITHOUT OBJECTION it was REPORTED OUT with individual recommendations and accompanying fiscal notes. The committee took a brief at ease. Co-chair Torgerson recalled the committee back to order. He called SB 133 and asked the sponsor to come forward. SENATE BILL NO. 133 "An Act creating and providing for the Alaska Energy Conservation Commission and transferring to it the powers and duties of the Alaska Public Utilities Commission and the Alaska Oil and Gas Conservation Commission; repealing the Alaska Public Utilities Commission and the Alaska Oil and Gas Conservation Commission; relating to regulation of waste collection and disposal; relating to the powers of the chair of the Alaska Energy Conservation Commission; relating to the appellate procedures of the Alaska Energy Conservation Commission; and providing for an effective date." CS FOR SENATE BILL NO. 133(RES) "An Act creating and providing for the Alaska Energy Conservation Commission and transferring to it certain powers and duties of the Alaska Public Utilities Commission; transferring regulation of pipelines to the Alaska Oil and Gas Conservation Commission; repealing the Alaska Public Utilities Commission; relating to regulation of waste collection and disposal; relating to the powers of the chair of the Alaska Energy Conservation Commission; relating to the appellate procedures of the Alaska Energy Conservation Commission; and providing for an effective date." Senator Drue Pearce was invited to join the committee. She explained the changes in the work draft. Page 1 was now the regulatory commission of Alaska. The refuse section had been deleted from the title. On page two, lines 22 through 24 regarding the removal of a commissioner, additional language was adopted from HB 183 as suggested by the Administration. Page three, line 23, would allow for contractual arrangements. Page five would establish a separate public advocacy section. Also on page five, lines 10 through 13 the requirement for the commission to adopt matters regarding time frames was added. Noting a technical correction on page five, line 10 the date should be 1999 rather than 2000. Page seven, lines 19 through 21 was the decision to grant appeals at the discretion of the commission. Page seven, lines 30 through 31 set out formal hearings to be heard by arbitrators for a specific reason. Page eight, lines 10 through 13, concerned a time management system. This had always been the intent of the Legislature. Page nine dealt with refuse. Pages ten and eleven were the name change to the commission. Page twelve, lines 2 through 5 indicated that the management information system was to be available to the public. Also on page twelve, lines 24 through 28 outlined the change of terms for the commissioners. It also included further name changes. Going back to page three, lines 11 through 15, section 42.04.040 (a) she requested to delete "the legal counsel provided by the Department of Law is subject to the approval of the commission." She also advised that the Department of Law would like (b) to also be deleted. However, she requested the committee to not consider that request at this point. They will continue discussion with the Department of Law. She explained briefly the fiscal note from the Department of Administration. Senator Green MOVED the adoption of work draft CSSB 133FIN) "K". Senator Kelly OBJECTED. The committee took a brief at ease. Senator P. Kelly MOVED exclusion language on page three, lines 25 and 26, lines 14 and 15. Senator Torgerson OBJECTED. Senator Pearce commented briefly. She noted that there had always been the ability to hire outside expertise. Senator P. Kelly briefly commented. Senator Donley said this bill was incredibly complicated and would like to have further input. He referred specifically to lines 25 and 26 of page three. Senator Pearce said the Department of Law was present and could testify to this. Senator P. Kelly removed his OBJECTION. Senator Donley MOVED to amend the CS to delete lines 14 and 15. Co-chair Torgerson and Senator Green OBJECTED. By a roll call vote 2 yeas and 4 nays amendment to the main motion to adopt the CS FAILED. Therefore, WITHOUT OBJECTION CSSB 133(FIN)"K" was adopted as the working draft before the committee. Amendments 11 and 12 were adopted WITHOUT OBJECTION. Senator Donley commented on page four. Senator Adams said a big problem was that there was no professional background on the commissions and boards. This should be considered. In a response to a question posed by Senator P. Kelly Senator Pearce said they could not figure out a way to define what they wanted regarding the AOGCC. They have asked the different utilities to advise what they would like for specific qualifications to be a member of the APUC. Suggested language had been provided by ARECA however she was not satisfied with it. The House took an innovative approach but she did not agree with that, either. Senator Pearce indicated that she was open to suggestions at this time to try and iron this out. Senator Donley asked what happened to the existing personnel at APUC and how was their role preserved within this new CS? Senator Pearce said there were structural provisions made. She also explained the transition. Up until now staff was hired and fired under the commission but that will change under this bill. (There followed a brief pause on record.) (Tape changed from #115, Side B to #116, Side A.) JIMMY JACKSON, GCI was invited to join the committee. He told the committee that they suggested the transfer date be September. There was concern about the commissions' staff and do they just disappear. He strongly urged that the present structure be retained. The system works so why change it. He noted vague allegations about abuse. Some states have advocacy, some combine functions. Alaska, however, is not an exception and the system works very well. He further suggested that they do not pass the section that sets up specific advocacy. It should be left as is. The role of the commissions' staff would remain unchanged. Senator Donley requested time to consider the public advocacy section. He felt that it was very significant. He still has concerns about not having some sort of final deadline for the new agency to make decisions. It should not be left totally open for them to decide. Co-chair Torgerson said this was the first body to hear the bill and there was still time to fix matters. Senator Adams MOVED CSSB 133. Senator Donley OBJECTED. By a roll call vote of 4 yeas and 1 nay (Donley) CSSB 133(FIN) was REPORTED OUT with individual recommendations and accompanying fiscal note from the Department of Administration; $330.4. ADJOURNMENT Senator Torgerson said he would announce the committee schedule on the floor. He adjourned the committee at approximately 11:07 a.m. SFC-99 (1) 04/30/99