Legislature(1993 - 1994)
04/16/1993 07:55 PM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| * | SB 50 | ||
| SB 165 | |||
| SB 183 | |||
MINUTES
SENATE FINANCE COMMITTEE
April 16, 1993
7:55 p.m.
TAPES
SFC-93, #63, Side 1 (124-end)
SFC-93, #63, Side 2 (575-end)
SFC-93, #65, Side 1 (000-041)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 7:55 p.m.
PRESENT
In addition to Co-chairs Pearce and Frank, Senators Jacko
and Rieger were present. Senators Kelly, Sharp, and
Kerttula did not attend.
ALSO ATTENDING: Senator Lincoln; Senator Little; Attorney
General Charlie Cole; Bruce Campbell, Commissioner, Dept. of
Transportation and Public Facilities; John Sandor,
Commissioner, Dept. of Environmental Conservation; Carl
Rosier, Commissioner, Dept. of Fish and Game; Dusty Kaser,
Chugach Alaska Corporation; Russell Heath, Alaska
Environmental Lobby; Karl Becker, Cordova Commercial
Fishermen in Prince William Sound; Willard E. Dunham,
Chairman, Seward Association for the Advancement of Marine
Science; Chip Thoma, Juneau Activist; and aides to committee
members and other members of the legislature.
PARTICIPATING VIA TELECONFERENCE:
Anchorage - Rick Steiner, resident of Cordova, Alaska
Kodiak - Mayor Jerome Selby
Mary Forbes, Audubon Society
Homer - David Stutzer, Kachemak Bay State Park
System
Advisory Board
Kenai - Tom Wright, United Cook Inlet Drift
Association
Seward - Wayne Carpenter, Director, Seward Chamber
of
Commerce
Larry Johnson, resident of Seward
Valdez - Nancy Lethcoe, Alaska Wilderness Safaris
and Alaska Wilderness Recreation Tour
Association
SUMMARY INFORMATION
SB 165 - APPROP: ALYESKA SETTLEMENT/FY 93 SUPPLMNT
A teleconference and discussion was had in
conjunction with SB 183.
SB 183 - APPRO: EXXON VALDEZ,CAPITAL BUDGET FY 94
Discussion was had with Attorney General
Charlie Cole, Commissioner John Sandor,
Senator Lincoln, those in the audience in
Juneau, and participants from listed
teleconference sites.
Upon convening the meeting, Co-chair Pearce advised of a
teleconference hookup for public testimony on SB 165 and SB
183.
CHARLIE COLE, Attorney General, Dept. of Law, came before
committee in response to a question from Senator Rieger. He
explained that both the Seldovia Native Association and Cook
Inlet Regional Corporation would be warranting title to land
conveyed in the Kachemak Bay State Park purchase. Both
organizations would further attest to the fact that there
are no liens, encumbrances, defects, or third party
interests in the property, except the timber agreement that
is specified in greater detail.
Senator Rieger raised questions regarding the interim
conveyance of the lands from the federal government to the
above-mentioned Native organizations and asked if it was
sufficiently valid. The Attorney General said he was
satisfied that the state would be receiving marketable title
to the lands.
Referring to the proposed visitor center within the park,
Co-chair Frank noted plans for docks, hiking trails, public-
use cabins, public moorings, etc, and suggested that the
proposed $500.0 does not appear adequate for both the
visitor center and other planned projects. He voiced
concern that the state may end up with a park that is not
very accessible or usable. JOHN SANDOR, Commissioner, Dept.
of Environmental Conservation, came before committee
acknowledging that the area could use additional funding.
He explained that the Kachemak Bay Park Visitor Center
Advisory Board has a substantial list of projects. However,
the department has not yet developed a detailed amenities
plan for areas within the spill. The intent is to work with
communities and the visitor industry in developing
facilities over a period of time. Attorney General Cole
suggested that the visitor center should be "reasonably
modest at the outset," because of costs associated with
staffing.
SENATOR GEORGIANNA LINCOLN next came before committee. She
acknowledged that numerous individuals seeking to speak via
teleconference had been waiting since early morning, and she
said she would be brief. She referred to earlier introduced
legislation for restoration projects and noted that it
resulted from numerous teleconferences and input from those
in oil-spill impacted areas in an attempt to ascertain their
wishes for expenditure of the $50 million. SB 183 was later
introduced. It does not include many of the projects of
importance to residents of oil-spill areas. Co-chair Pearce
observed that SB 183 is sponsored by the Governor. Projects
therein were selected by the trustee council. Senator
Lincoln reiterated that the list of projects developed by
residents of the area does not mesh with projects selected
by the trustees.
Senator Lincoln referenced documentation evidencing that
most of the injury from the EXXON VALDEZ oil spill occurred
within Prince William Sound. Yet, an inordinate amount of
funding in SB 183 would be expended elsewhere.
Senator Lincoln further pointed to the $4.5 million in
interest that has accumulated on the $50 million. Noting
that the interest is not included within the bill, Senator
Lincoln asked how it would be spent. She then questioned SB
183 expenditure of funds on both the oyster hatchery and sea
life center at Seward. Further, sport and commercial
fishermen have indicated opposition to the proposed Ft.
Richardson Hatchery. There are sites within the spill area
for hatchery operations.
In her closing remarks, Senator Lincoln questioned whether
SB 183 meets legal restrictions and the intended use of
restoration funds.
TELECONFERENCE
Co-chair Pearce noted the limited, three-hour teleconference
window, asked that those wishing to testify keep their
testimony brief, and advised of a fax number for
transmission of written testimony.
JEROME SELBY, Mayor, Kodiak, Alaska, first testified via
teleconference. He explained that soon after the settlement
was reached, the city established a committee that
subsequently assembled a list of restoration projects. That
document was submitted to the trustees and has essentially
been ignored since only two projects have been funded. Mr.
Selby cited need for $7.5 million for a fisheries industry
technology center for analysis of the impact of the spill,
$1.0 million for purchase of Dept. of Fish and Game weir
sites in the Kodiak area, and $9 million for acquisition of
critical habitat in the Afognak area. The $17.5 million
total is a modest request from an area that absorbed in
excess of 50% of the damage from the oil spill. The spill
also impacted 17 of the 22 publicly owned cultural resource
sites in the Kodiak Island Borough. The area also lost a
$100 million fishery.
In his closing remarks, Mayor Selby noted that projects for
the Kodiak area contained within SB 165 and SB 183 amount to
$3.2 million out of a total of $102 million. He then asked
if it is appropriate that the area that absorbed over 50% of
the spill receives only 3% of the funds. He further
questioned whether research grants contained within SB 183
were needed or could legally be funded. Mayor Selby
suggested that the only thing that approaches the damage
caused by the spill is the treatment the area is presently
receiving by way of exclusion from restoration funding.
DAVID STUTZER, Kachemak Bay State Park Citizens' Advisory
Board, next testified from Homer, Alaska. He explained that
the board passed a resolution in support of the $7 million
for the buy-back of park land and timber and mineral rights.
Speaking to the proposed $500.0 for a visitor center, Mr.
Stutzer asked that the committee consider appropriating the
funding to other capital improvement projects. The state
division of parks does not have funding to man and maintain
the facility.
TOM WRIGHT, United Cook Inlet Draft Association, next spoke
from Kenai, Alaska. He said that the Association,
consisting of 585 permit holders, does not support the
majority of the projects within SB 183 since little would be
spent to restore resources impacted by the spill. SB 183 is
not the result of public input. Most of the proposed
expenditures are directed toward tourism/recreation
projects. Mr. Wright voiced support for sections of SB 183
that are duplicated in HB 10, pointing specifically to the
$3 million for acquisition of conservation easements along
the Kenai River and the fishery industrial technology center
at Kodiak. The Association also supports the $7 million for
Kachemak Bay State Park as well as the Main Bay Hatchery
upgrade.
Mr. Wright next reiterated comments by Senator Lincoln that
the Ft. Richardson Hatchery is not supported by commercial
fishermen nor is it totally supported by sport fishermen.
Instead of spending $4 million for a hatchery to raise trout
for interior Alaska, the Association requests that funding
be used for summer workers in the Cook Inlet System and a
long-term research program for the Susitna River system.
RICK STEINER, a resident of Cordova, next testified from
Anchorage.
He noted that expenditure of settlement moneys has enormous
implications. The world is watching to see how the state
will attempt to restore resources impacted by the most
damaging oil spill in human history. Mr. Steiner said he
was awed by his initial reading of SB 183 since it has
little to do with environmental restoration. He suggested
that the U.S. Dept. of Justice, which collected the
settlement on behalf of the state, should closely monitor
expenditure. He stressed that SB 183 should move no
further. Mr. Steiner acknowledged that upgrades to the Main
Bay Hatchery as well as the oyster hatchery are legitimate
projects. Many projects, however, such as the Seward Sea
Life Center and the Ft. Richardson Hatchery, have little to
do with restoration.
WAYNE CARPENTER, Director, Seward Chamber of Commerce,
Seward, Alaska, next spoke via teleconference. He advised
of substantial inquiry and assessment associated with the
drafting of SB 165 and SB 183. Governor Hickel and his
staff visited the Seward area to assess needs relating to
the sea life center. Mr. Carpenter recommended support for
the bill. He cited the deaths of thousands of sea birds,
disappearance of sea lions (70% are gone from Resurrection
Bay and the Gulf of Alaska), and lack of salmon returning to
spawning grounds as indications that the impact of the spill
and other environmental degradation on marine environments
is unknown. The marine mammal research and rehabilitation
center will provide a much needed facility. Mr. Carpenter
commended inclusion of the fishery industrial technology
center at Kodiak. He then urged support for the
legislation.
LARRY JOHNSON, local businessman, Seward Alaska, next
testified in support of SB 183. He attested to need for a
responsible balance between capital investment and land
acquisition. He indicated that the proposed Seward Sea Life
Center meets both the language and intent of the settlement.
NANCY LETHCOE, Valdez, Alaska, next spoke on behalf of
Alaska Wilderness Safaris (a business operated by Mrs.
Lethcoe and her husband). She voiced opposition to SB 183
and the fact that no hearings on the bill were had by Senate
Resources or Senate Judiciary. Mrs. Lethcoe further
attested to the lengthy wait associated with testifying,
noting that many who had been waiting since morning left
prior to commencement of the current meeting.
End, SFC-93, #63, Side 1
Begin, SFC-93, #63, Side 2
Mrs. Lethcoe explained that she and her husband have
operated their business for 18 years. They were operating
in Valdez before the pipeline terminal opened. Independent
travelers pay hundreds of dollars a day for a truly
wilderness experience--wild land with no manmade structures.
Prince William Sound is one of the few coastal areas of
undeveloped wilderness in the United States that is
accessible to the boating public. Today, it looks much the
same as it did when the Revolutionary War was fought. Its
purity is a scarce and valuable resource.
Prior to the spill, the Lethcoes operated a small,
profitable, family-operated business. The spill changed
that. Income from the business was down 50%. Last year, it
recovered to approximately 80%.
Mrs. Lethcoe said that federal courts have consistently
ruled in favor of oil companies and against tourism
businesses. For that reason, and because of the hours,
emotional toll, and effort involved, the Lethcoes elected
not to pursue a suit against Exxon but to devote their
energies to ensuring that restoration projects did not hurt
their business more than the spill. Mrs. Lethcoe termed the
proposed legislation "one of our worst nightmares." It
would deprive the business of access to the natural
resources upon which the business was built. It does not
advance but reduces wilderness tourism by introduction of
marinas, cabins, and other development within Prince William
Sound. Mrs. Lethcoe voiced objection to use of restoration
funds for elimination of the wilderness resource upon which
their business depends.
Mrs. Lethcoe further suggested that the proposed road to
Whittier would not be built for Alaskans but for mass out-
of-state tourism companies. She urged that the legislation
not pass from committee.
MARY FORBES, Audubon Society, Kodiak, Alaska, next voiced
disappointment in the proposed legislation. While some
projects are supported, by and large the legislation appears
to be an "inappropriate way of using restoration money."
She suggested that reimbursement moneys to be used for
construction of the road to Whittier would be better placed
within the Dept. of Environmental Conservation or Dept. of
Fish and Game where resource-related budgets have been
slashed.
Ms. Forbes voiced support for the Kachemak Bay buy-back but
suggested that other pieces of legislation (SB 53 and HB 76)
would accomplish the same.
Ms. Forbes expressed further disappointment that the
consensus work from last year and efforts relating to HB 10
and SB 98 have been ignored by the Governor. She further
voiced her understanding that while the trustees are to
oversee disbursement of civil settlement moneys, use of
criminal settlement moneys is left to state determination.
Co-chair Pearce called for additional teleconference
testimony. There was no indication from the various sites
that additional people wished to speak. The Co-chair
directed that testimony be taken from those in the audience
in Juneau.
DUSTY KASER, Chugach Alaska Corporation, came before
committee in support of SB 165, particularly the docks at
Tatitlek and Chenega and the road from Cordova to Shepard
Point. In discussions with the Governor, Native
organizations agreed it made sense for the Dept. of
Transportation and Public Facilities to build the Shepard
Point road. All projects within the bill are badly needed
and wanted by communities involved. Mr. Kaser noted that
Tatitlek and Chenega were heavily impacted by the spill.
Part of the intent behind the Alyeska settlement is to
alleviate the impact by providing needed facilities and
direct economic benefit via jobs.
SB 165 provides grant funds to Chugach Alaska Corporation to
construct the proposed docks. Chugach and impacted village
corporations share common shareholders--all tied to local
councils. All have vested interested in timely, economical,
and environmentally safe completion of the projects.
Chugach Alaska is better able to meet community needs,
desires, and priorities because it works directly with those
impacted by the spill. Further, the facilities are to be
built on Native land. That includes the road from Cordova
to Shepard Point.
Mr. Kaser explained that Chugach Alaska would serve only as
project manager on the dock construction. Since funding
would flow as a grant, it would not be necessary for Chugach
to follow the state procurement code. That provides
flexibility; the process will move faster; and each dollar
will go further. It is hoped that construction can begin
this year, providing the permitting process does not delay
the effort. Mr Kaser said there would also be less
administrative cost. Engineering and construction would be
accomplished by recognized industry leaders. Chugach can be
selective in terms of who bids on projects while the state
would not be able to do so. It will also maximize the use
of local hire and subcontracting to ensure that the largest
portion of funds remains within the community. Further, if
the $7.2 million for each of the projects is not totally
utilized on one, excess funds can be utilized on the other.
Construction of the docks will be to state standards.
Chugach is agreeable to state review of design and
construction inspection to ensure that those standards are
met.
RUSSELL HEATH, Alaska Environmental Lobby, next came before
committee, voicing opposition to SB 183. He suggested that
it violates both the intent and spirit of the Exxon criminal
settlement in that the purpose of settlement moneys is
"exclusively for restoration projects." SB 183 makes only a
token nod to that intent because only $15 million would be
expended on such projects. Most of the money would be spend
on concrete.
Mr. Heath stressed that the EXXON VALDEZ oil spill was a
crime against nature. The criminal settlement was paid in
restitution for that crime to, in a small way, repair the
catastrophic damage done to animals, plants, land, and sea
in the oil impacted area. The best and most effect way to
return Prince William Sound and other impacted areas to pre-
spill health is to protect them from further threats and
damage. Nature is the best restorer. The natural working
of the ecosystem will replenish plant and wildlife
populations. There is nothing that can be done, at this
point, that would be more effective than letting nature take
its course. For nature to do that, critical and productive
habitat must be protected from further destruction. If
additional habitat is lost, it will be more difficult for
wildlife populations to recover. For that reason,
environmental and other groups statewide overwhelmingly
support acquisition of habitat as the best use of criminal
settlement moneys.
Most of the moneys allocated by SB 183 will be spent on
tourist facilities and hatcheries. Building tourist
facilities is not restorative, and there are more cost
effective ways of restoring damaged fish populations than
hatcheries that will require subsidies for many years.
The Kachemak buy-back, habitat acquisition on the Kenai, and
restoration of subsistence resources fulfill the intent of
the settlement and are the only projects the environmental
community supports.
Mr. Heath voiced objection to the lack of public process
associated with the bill. Few of the people, organizations,
and communities affected by the spill were consulted in
development of the legislation. Opportunity for the people
of Alaska to review and influence the bill has been
extremely limited by the fact that it was waived from two
prior committees and rapidly scheduled in Senate Finance.
In his closing remarks, Mr. Heath reiterated statewide
support for habitat acquisition and requested that the bill
be redrafted to comply with the true intent of the criminal
settlement.
KARL BECKER, a commercial fisherman in Prince William Sound,
next came before committee. He advised of many individuals
in Cordova who wished to speak via teleconference. However,
due to the lateness of the hour, many had to leave the site
to provide for their families. He asked that an additional
day of testimony be scheduled for SB 183. Mr. Becker
stressed that the bill reflects little public input from oil
impacted areas and contains little to restore damaged
resources and services. He observed that SB 98 conforms
closely to the needs and interests of those living in the
region affected by the spill. It does so because of the
lengthy public process by which it was developed. Mr.
Becker urged committee members to respect that history of
public input through passage of SB 98.
Senator Kelly asked who introduced SB 98, and Senator
Lincoln advised that it is her bill.
WILLARD E. DUNHAM, Chairman, Seward Association for the
Advancement of Marine Science, next came before committee.
He voiced support for the Alaska Sea Life Center at Seward.
Much time and effort was spent by the Governor in
development of the project. Mr. Dunham also pointed to
multiple hearings on the subject as part of last year's
legislation. He further noted that Seward is the only
first class city that received oil on its beaches as the
spill traversed along the west side of Prince William Sound,
along the Kenai Peninsula up to Cook Inlet, out to Kodiak,
and then along the Aleutian Chain. The facility has been in
the planning stage for over twenty years and has undergone
much evolution in response to documented scientific need.
There is no place to study marine mammals (or a holding lab)
north of Santa Cruz, California. The sea life center would
provide the opportunity to conduct both research and
rehabilitation as well as public education. The aquarium
would be fully funded and require no additional moneys from
the state.
An exhibit for the sea life center at the great Alaska
sportsman show in Anchorage gathered 504 names in support of
the facility.
CHIP THOMA, Juneau Activist, next came before committee. He
voiced objection to the administration's handling of both
the Exxon and Alyeska settlements, suggesting that the state
settled for between 10 to 50 cents on the dollar. Speaking
to the Alyeska settlement contained within SB 165, Mr. Thoma
suggested that it is approximately $450 million short in
terms of Alyeska's liability. He further suggested that the
administration has taken a "cavalier attitude" toward
settlement without investigating actual damage to resources.
The result of inappropriate settlements is a cynical bill--
SB 183--which does not address damage to Prince William
Sound and Kodiak.
Mr. Thoma suggested that Governor Hickel has a naive
attitude toward natural resources. He then voiced support
for the Kachemak Bay buy-back but suggested that it
represents a visual back-drop for the ride to Homer rather
than primary habitat. He stressed that habitat should be
acquired for fish and wildlife purposes rather than for
visual effect.
In his closing remarks, Mr. Thoma termed SB 183 a concrete
bill rather than restoration or preservation legislation.
It is not in the spirit of settlement terms calling for
acquisition of equivalent resources. He suggested that the
Clinton administration would ensure acquisition of valuable
migratory resources within Alaska and the Lower Forty-eight
states.
At this point in the hearing, Co-chair Pearce redirected
attention to the teleconference network and advised of
additional testimony.
NANCY LETHCOE again testified from Valdez, Alaska, speaking
as president of the Alaska Wilderness Recreation Tour
Association which represents over 300 members. She said
that the Association board supports SB 98 and HB 10. It
does not support SB 183. She stressed that the proposed
road to Whittier does not represent restoration. It is,
instead, a road for the out-of-state cruise ship industry.
Mrs. Lethcoe further voiced opposition to additional
sections of the bill including the Alaska Sea Life Center,
saying that it represents another "type of mass-tourism
development project that benefits out-of-state companies"
rather than in-state Alaskans.
Further, the Association's sport fishing membership has
expressed opposition to the Ft. Richardson Hatchery.
The Association supports provisions for the buy-back in
Kachemak Bay. That project is also included in SB 98 and HB
10. The Association also supports acquisition of habitat
along coastal areas and Afognak Island. Acquisition of Seal
Bay was included in three previous bills dealing with
criminal settlement moneys, but it is not included in SB
183. Mrs. Lethcoe urged that SB 183 not pass from
committee.
RICK STEINER, resident of Cordova, Alaska, again testified
from Anchorage. He reiterated earlier comments that many
who wished to testify via teleconference lost out by
attrition. He further advised that the process behind the
proposed bill is flawed. The moneys were collected by the
U.S. Dept. of Justice in federal court for a specific
purpose--compensation for environmental damage inflicted by
the spill. Expenditure of those moneys is to be for
environmental restoration rather than sea life centers,
hatcheries, etc. He stressed that SB 183 should not go any
further.
At the request of Co-chair Pearce, ATTORNEY GENERAL CHARLIE
COLE again came before committee. The Co-chair asked if
projects to be funded within SB 165 and SB 183 meet consent
decree requirements. Mr. Cole responded, "Yes." He
acknowledged considerable testimony in favor of acquisition
of habitat. The trustee council is interested in acquiring
threatened habitat and has looked at a number of parcels,
including a 21,000 acre tract at Seal Bay. The reply to
inquiries relating to the purchase price brought a response
of more than $50 million. The state would thus not be able
to acquire much habitat if it spent the entire $50 million,
plus interest.
Attorney General Cole next directed attention to proposed
amendments. Co-chair Pearce noted an initial amendment,
designated Amendment No. 1, by Co-chair Frank. Mr. Cole
referenced Amendment No. 2 which he explained would place
oversight of feasibility documentation for the Alaska Sea
Life Center at Seward in the "Office of the Governor, Office
of Management and Budget" rather than the Dept. of
Administration. Co-chair Pearce voiced concern that
construction not commence prior to preparation of a
financing package as well as information on how the center
will be operated. She further suggested that placing
oversight over a project sought by the Governor within his
office makes the arrangement "awfully close." Co-chair
Pearce suggested that the committee work with the Attorney
General on appropriate language.
Pointing to Amendment No. 3, the Attorney General explained
that it would delete "substantial, ongoing" from language
calling for a lapse of moneys back into the fund if
substantial, ongoing work on the grants for the Alaska Sea
Life Center, Main Bay Hatchery, and restoration of
subsistence resources in unincorporated rural communities
has not begun by December 1, 1994.
Referencing Amendment No. 4, Co-chair Pearce noted that it
reflects language worked out between Co-chair Frank and the
Dept. of Environmental Conservation. It would add "or
public research institutions" to language relating to
research funding for private entity programs directed toward
prevention, containment, cleanup, and amelioration of oil
spills.
Attorney General Cole explained that Amendment No. 5 would
add "and related facilities" to language providing for the
Kachemak Bay State Park visitor center.
Senator Kelly voiced concern that projects may enter the
actual construction phase before they are fully funded. He
specifically pointed to the Alaska Sea Life Center and noted
past requests for $36 million. He then asked if
construction is expected to commence based on the $12.5
million appropriated in SB 183.
End, SFC-93, #63, Side 2
Begin, SFC-93, #65, Side 1
Co-chair Pearce noted lack of continued availability of
teleconference lines for further discussion at this time.
She then announced that the committee would again meet at
9:00 a.m. tomorrow. Bills to be heard at that time have
been posted.
ADJOURNMENT
The meeting was adjourned at approximately 9:15 p.m.
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