Legislature(1995 - 1996)

04/29/1996 03:42 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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    CSSSHB 191(FIN) MANAGEMENT OF STATE LAND AND RESOURCES                   
                                                                               
  CHAIRMAN LEMAN  brought CSSSHB 191(FIN) before the committee as the          
 next order of business. He noted there was a draft Resources SCS              
 before the committee, but suggested waiting until a quorum was                
 established before going through the entire bill section by                   
 section.                                                                      
                                                                               
  CHAIRMAN LEMAN  asked why the sponsor and the department are                 
 proposing to change the rate for the shore fishery leases from the            
 way it is now, which is a system that recovers the cost of                    
 operating that program, to one in which it not only does that, but            
 goes beyond and establishes a rental rate based on a percentage of            
 the permit value.   SARA FISHER , staff to Representative Gen                 
 Therriault who is prime sponsor of HB 191, said basically there is            
 a use of state land that has a commercial value and the                       
 restructuring of these sections would recognize the commercial use            
 of these sites.  She pointed out that in Section 25 of the new                
 draft Resources SCS, the reference to the term "action" has been              
 removed which restores it to the original language requiring the              
 director to attempt to determine who is the most qualified                    
 applicant for the site.  If one application is received, the                  
 commissioner may issue a lease at a rental rate, as opposed to the            
 administrative rate which is set in regulation and is currently               
 $300.  Many of the leases that had been signed many years ago are             
 still under the old lease rate of $150 per year.                              
                                                                               
  CHAIRMAN LEMAN  pointed out the shore fishery lease program is a             
 voluntary program to help sort out conflicts between adjoining or             
 adjacent shore fishery participants.  His concern is that by                  
 raising the price and going beyond what is taken out to cover the             
 program, it will drive people out.  He wondered if an analysis has            
 been done on what percentage of people will be driven out and what            
 the impact will be on the program if the fee is raised.                       
  CHAIRMAN LEMAN  opened the hearing to public comment.                        
                                                                               
  STEVE BORELL,  Executive Director, Alaska Miners Association,                
 testifying from Anchorage, stated their support for CSSSHB 191(FIN)           
 and in particular Sections 30-35.                                             
                                                                               
 Mr. Borell said earlier in the session, Representative Therriault             
 removed a section from this legislation and place it into CSHB
 331(RES), and he suggested the section be reinserted in HB 191.  He           
 said the issue in HB 331 is to clarify the existing statute and               
 establish in statute the current interpretation of practice that              
 has  been followed by DNR and by industry effectively since                   
 statehood.  The change is needed to ensure that the rights of the             
 state to its subsurface mineral resources where the surface estate            
 has been sold or otherwise transferred to a third party.  Unless              
 specifically closed to mineral entry, this land is still available            
 for staking of mining claims.  It has been the interpretation and             
 practice of the state that claims staking alone can be allowed and            
 without giving permission of the third party surface estate owner.            
 He pointed out that in the Fairbanks area there are various small             
 homesites of a few acres that run the risk of causing existing                
 mining claims to be void.                                                     
                                                                               
 Number 545                                                                    
                                                                               
  BILL BARKER,  a set netter testifying from Kodiak, voiced his                
 opposition to Section 24, 25 & 26.  He said there doesn't appear to           
 be any reason to change the fee structure at this time.  If the               
 basis for the fee structure is placed on the limited entry permit             
 and the value of the limited entry permit, then we have a tax being           
 placed on the fishery resource, not on the land resources.  He                
 suggested if there is going to be a tax placed on the fisheries               
 resource, then it needs to be placed on all of the fishermen.  As             
 far as the operation of the shore fisheries leases and the pursuit            
 of the shore-based gillnet operation, he said everybody understands           
 the rules, and with some of the language being proposed in HB 191,            
 the rules start to change and he can see many problems with                   
 bringing these changes.                                                       
                                                                               
  TAPE 96-68, SIDE B                                                           
 Number 025                                                                    
                                                                               
  CHAIRMAN LEMAN  informed Mr. Barker that the Resources SCS before            
 the committee addresses some of the issues he spoke to.                       
                                                                               
  DUNCAN FIELDS,  testifying from Kodiak, concurred that it is the             
 consensus of his community that the shore fishery lease program is            
 paying for itself, in fact current information shows that revenues            
 in excess of expenditures in FY 95 is about $150,000.  He                     
 questioned why the lease rate for set net leases is being increased           
 when the program is paying for itself.  He pointed out many of the            
 current lease holders pay a rate of $150, and with the current                
 language in the bill, that will jump to approximately $556, which             
 is approximately a $400 increase per permit holder.  He believes              
 this will drive people away from the program, and the net result              
 will be less revenue than the program currently enjoys.  He also              
 suggested a lease rate of a definite amount makes much more sense             
 than a sliding scale based on a percentage of permit value.                   
                                                                               
 Number 086                                                                    
                                                                               
  CHAIRMAN LEMAN  commented that it appears that the only section              
 that's really in conflict in the bill is the new Section 26.  He              
 said Sections 25 and 27 were reworked to accommodate the concerns             
 that were expressed by a lot of people.                                       
                                                                               
  ROBERT PURPURA,  representing the Katsitsna Bay Salmon Producers and         
 testifying from Homer, stated their objection to the language in              
 Section 26, namely the 0.6 percent assessment on limited entry                
 permits with a $600 cap.  They believe it is unfair to target a               
 small group of other set netters, and they do not feel that any               
 extra cost at this time is warranted in their fishery.  He urged              
 that the committee not support the language to determine the fee of           
 the leases be tied in with the permit.                                        
                                                                               
  MS. LAUREN CARLTON , a setnetter testifying from Homer, referred to          
 language on page 12, line 2, which provides that the rental rate              
 shall be adjusted annually, and she said she would like to see it             
 only adjusted every five years, which would provide the opportunity           
 to look at the long-term values and how they have changed.  She               
 said their permit value might be high because they are part of Cook           
 Inlet, but their sites are not valued as high, so just going on a             
 permit value is not really being equitable to those who do not have           
 a valuable site.  She pointed out her area has seen a drastic                 
 decline in their salmon runs.  She also pointed out that when                 
 someone goes in to buy a permit at a set net price, they are paying           
 for the right to use that area, and there are also added costs that           
 are not seen up front.                                                        
                                                                               
 Number 240                                                                    
                                                                               
  CHAIRMAN LEMAN  said his recommendation is that Section 26 be                
 deleted in its entirety which would mean that there would be no               
 change to the existing system.                                                
                                                                               
  JULES TILESTON , Director, Division of Mining & Water Management,            
 Department of Natural Resources, testified from Anchorage that he             
 was present to respond to questions dealing with the amendments               
 associated with mining when they came before the committee.                   
                                                                               
  RON SWANSON , Division of Land, Department of Natural Resources,             
 said after a hearing earlier in the session, he thinks the concerns           
 relating to the bidding war were addressed by taking care of the              
 problem of the department having to try to figure out who is most             
 qualified, and if they can't, they would then draw the name out of            
 the hat.  It was also made clear that somebody with an existing               
 lease would get a preference to renew.                                        
                                                                               
 Mr. Swanson said the shore fishery lease is the only voluntary                
 program that the Division of Land administers, and they consider it           
 a commercial use of state land, so they believe that the                      
 compensation rate should go up rather than just covering the                  
 administrative cost.  He said when it comes to budget cuts, the               
 first thing that they have to look at is non-voluntary programs.              
 He sated the Administration is neutral on what the compensation               
 rate should be.                                                               
                                                                               
  CHAIRMAN LEMAN  asked if it would be acceptable to the department to         
 delete that section which would leave it as it is now which says              
 that it must cover administrative costs.   MR. SWANSON  responded             
 that the department would not oppose the deletion of that section.            
                                                                               
  REED STOOPS , testifying on behalf of AJ Associates and speaking to          
 a proposed amendment dealing with the right of entry on private               
 land by a party for the sake of filing mining claims, said the                
 reason for the amendment is the result of a Superior Court decision           
 in a lawsuit that AJ Associates is involved with.  There is a                 
 dispute over whether mining claims were validly filed on property             
 that AJ                                                                       
 Associates is the surface owner of.  Judge Jahnke, in his decision,           
 interpreted existing law to mean that anybody that's going to file            
 a mining claim on land that has been conveyed by the state to a               
 private party either has to have the permission of the land owner             
 or alternatively permission of the Department of Natural Resources            
 in order to file that claim.  He said if the Legislature were to              
 adopt the amendment the way it's drafted, it is not only                      
 prospective but retroactive, and by making it retroactive, it would           
 have a direct impact on their case which is pending before the                
 Supreme Court.  He added if the Supreme Court overturns Judge                 
 Janke's ruling, the amendment may not be necessary.  Their                    
 preference would be to not have to go litigate the case again                 
 because it will have effectively changed the decision is that case.           
 For that reason, he said he would recommend that if the Legislature           
 thinks it is good policy, it ought to do it prospectively at this             
 pint, at least until the Supreme Court has rendered a decision.               
                                                                               
  CHAIRMAN LEMAN  said he was not sure he wanted to take that issue up         
 in this bill, that it is something that should fly on its own, but            
 he wanted to discuss that with the bill's sponsor.                            
                                                                               
  CHAIRMAN LEMAN  recessed the meeting at 5:05 p.m. until a quorum             
 could be established.  The meeting was called back to order at 5:50           
 p.m. with a quorum of committee members present.                              
                                                                               
 Number 455                                                                    
                                                                               
  SENATOR PEARCE  moved the adoption of SCS CSSSHB 191(RES), version           
 "W" dated 4/26/96.  Hearing no objection, the motion carried.                 
  REPRESENTATIVE THERRIAULT , speaking to deleting Section 26 in the           
 Resources SCS, explained an agreement had been reached on Section             
 26, that instead of trying to attach the lease fee to a sliding               
 scale, they were agreeable to just go to a flat $300 fee.  He                 
 suggested deleting all the language in Section 26 and replacing it            
 with language saying that the annual rental rate shall be set at              
 $300.   CHAIRMAN LEMAN  added that the understanding is that existing         
 leases do not shift to the rate until they expire.   RON SWANSON              
 added that their current fee is $300, although a lot of the leases            
 are at $150, and this would fix them all at $300 and bring in a               
 revenue to the state of a little over $400,000.  It costs about               
 $250,000 to administer the program.                                           
                                                                               
 Number 515                                                                    
                                                                               
  SENATOR PEARCE  moved as Amendment No. 1 to delete the language in           
 Section 26 and replace it with language saying that the annual                
 rental rate shall be set at $300.  Hearing no objection, the                  
 Chairman stated the amendment was adopted.                                    
                                                                               
  RON SWANSON , speaking to the issue in HB 331 relating to access for         
 mining staking, explained that the proposed Amendment No. 2 is to             
 exclude private land until the Supreme Court rules.  It would make            
 it very clear that a bond does not have to be posted before the               
 claim is staked.                                                              
                                                                               
  SENATOR TAYLOR  moved to adopt Amendment No. 2.  Hearing no                  
 objection, the amendment was adopted.                                         
                                                                               
  CHAIRMAN LEMAN  said he would like to have a conceptual amendment to         
 the amendment stating that this would apply only to municipal and             
 state lands and would not get into the private land dispute right             
 now.   SENATOR TAYLOR  moved the conceptual amendment.  Hearing no            
 objection, it was adopted.                                                    
                                                                               
 Number 600                                                                    
                                                                               
  SENATOR PEARCE  noted Section 21 of CSSSHB 191(FIN) was not in the           
 Resources SCS, and she asked if this means we are now going back to           
 the mandatory preference right that is in current law about                   
 agricultural land.   RON SWANSON  explained that originally if you            
 were an adjacent farmer you would not have a preference to pick up            
 the land next to you, even if you needed it for expansion of your             
 facility, and this will allow that to happen.  It only goes to an             
 Alaskan bidder, and it gives them a first preference to meet high             
 bid.                                                                          
                                                                               
  SENATOR LINCOLN  referred to page 18, line 29, and the language "an          
 operated exclusively."  She said she had an amendment which would             
 delete the word "exclusively."  She said the reason for the                   
 amendment was because of an old school that was no longer in use in           
 one of the communities, and the community wanted to use it but they           
 couldn't under present law.  By deleting "exclusively" they would             
 then be able to utilize the abandoned school.   MR. SWANSON  stated           
 the department would support the amendment.                                   
                                                                               
  TAPE 96-69, SIDE A                                                           
 Number 025                                                                    
  SENATOR LINCOLN  moved the adoption of Amendment No. 3, which would          
 delete the word "exclusively."  Hearing no objection, the amendment           
 was adopted.                                                                  
                                                                               
  SENATOR PEARCE  asked if anything in the bill changes the liability          
 that the purchaser or recipient of state lands would have for                 
 previous hazardous substance releases on state lands.   MR. SWANSON           
 responded that there are a couple of sections in the bill saying              
 that the holder of the lease at the time the problem occurred is              
 responsible for cleaning up anything.   SENATOR PEARCE  pointed out           
 that AIDEA can't lease lands that they got back from Mark Air after           
 the bankruptcy because DOT is trying to force AIDEA to do all the             
 cleanup from even pre-Mark Air days.   MR. SWANSON  acknowledged that         
 there is nothing in the bill that changes the liability standard if           
 somebody leases state land.                                                   
                                                                               
  CHAIRMAN LEMAN  directed attention to a memorandum from the                  
 legislative drafter suggesting technical changes to page 25, lines            
 13 & 14 relating to effective dates.  Hearing no objection, he                
 stated the drafter would be instructed to make the changes.                   
                                                                               
  SENATOR TAYLOR  moved as Amendment No. 4, on page 14, line 5 delete          
 "private residential" and delete all references to "residential" in           
 subsection (f).                                                               
                                                                               
  SENATOR HALFORD  directed attention to Section 29, and said to make          
 it conforming under (a) it would necessitate deleting (2) which is            
 all buildings and fixtures including gravel pads, foundations and             
 slabs not belonging to the state within 60 days of termination of             
 the lease.  He also suggested in subsection (c) deleting "buildings           
 and fixtures" on lines 23, 25, 27 & 28.  The effect of these                  
 changes would be there would still be the cleanup requirements and            
 the requirements regarding everything but essentially the real                
 property improvements that can't be removed, and then they are                
 treated in the same way that (f) would treat them for a residence.            
                                                                               
  SENATOR LINCOLN  asked if the effect of the amendment was just               
 removing "private residential" and "residential" in subsection (f).           
  SENATOR HALFORD  responded that it was, so that condition and that           
 method still applies to commercial improvements.  All of the                  
 cleanup requirements still apply to everything but buildings and              
 fixtures, which are the permanent fixtures.                                   
                                                                               
  SENATOR TAYLOR  suggested as part of Amendment No. 4, on page 14,            
 line 7 to insert the words "shall be leased or purchased."                    
                                                                               
 After extensive discussion relating to Amendment No. 4 as outlined            
 by Senator Taylor and Senator Halford,  CHAIRMAN LEMAN  stated the            
 amendment was adopted.                                                        
                                                                               
 Number 305                                                                    
                                                                               
  SENATOR HALFORD  moved as a conceptual Amendment No. 5 to insert             
 exactly the same language in exactly the same way in whatever title           
 deals with DOT on airports.  He explained the amendment would fit             
 into the title of the bill and it would fix an area where there are           
 numerous problems for rural airports all across the state.                    
  REPRESENTATIVE THERRIAULT  said he made a commitment that he would           
 not allow a lot of different issues to be added to this bill, and             
 he also pointed out that Representative Hanley has done a lot of              
 work on a House bill that is in the system.   SENATOR HALFORD  stated         
 he would withdraw the amendment.                                              
                                                                               
 Number 459                                                                    
                                                                               
  SENATOR HALFORD  moved as Amendment No. 5 to page 5, line 19, to             
 delete the word "should" and insert "may" in its place.  He said              
 the change would take out at least some of the preload of the                 
 section toward anything but sale to private ownership.  Hearing no            
 objection, the Chairman stated Amendment No. 5 was adopted.                   
                                                                               
  SENATOR HALFORD  said Sections 16, 17 and others which repeal the            
 bidder must appear in person at the auction provisions are contrary           
 to a general intent of the Legislature to always try and load any             
 of these programs to be the most beneficial to Alaska residents.              
  MR. SWANSON  explained these provisions relate to a Superior Court           
 case dealing with a Kodiak land disposal six years ago, and this              
 brings the statute into compliance with that decision.                        
                                                                               
 After further questions and discussion on section of the bill, the            
 committee took a brief at ease at 6:50 p.m., coming back to order             
 at 7:19 p.m.                                                                  
                                                                               
  CHAIRMAN LEMAN  asked for the pleasure of the committee on HB 191.           
                                                                               
  SENATOR PEARCE  moved SCS CSSSHB 191(RES) be passed out of committee         
 with individual recommendations.  Hearing no objection, it was so             
 ordered.                                                                      

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