Legislature(1995 - 1996)
03/08/1995 08:04 AM House RES
| 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
HOUSE RESOURCES STANDING COMMITTEE
March 8, 1995
8:04 a.m.
MEMBERS PRESENT
Representative Joe Green, Co-Chairman
Representative Bill Williams, Co-Chairman
Representative Scott Ogan, Vice Chairman
Representative Alan Austerman
Representative Ramona Barnes
Representative John Davies
Representative Pete Kott
Representative Irene Nicholia
Representative Eileen MacLean
MEMBERS ABSENT
None
COMMITTEE CALENDAR
* HB 195: "An Act repealing the laws authorizing milk
marketing orders and the milk advisory board."
PASSED CSHB 195(RES) OUT OF COMMITTEE
* HB 197: "An Act providing for exploration incentive credits
for activities involving locatable and leasable
minerals and coal deposits on certain land in the
state; and providing for an effective date."
HEARD AND HELD
HB 170: "An Act relating to intensive management of identified
big game prey populations."
HEARD AND HELD
(* First public hearing)
WITNESS REGISTER
REPRESENTATIVE AL VEZEY
Alaska State Legislature
State Capitol, Room 216
Juneau, AK 99801
Phone: 465-3719
POSITION STATEMENT: Prime Sponsor HB 195
NICO BUS, Acting Director
Division of Support Services
Department of Natural Resources
400 Willoughby Ave.
Juneau, AK 99801
Phone: 465-2406
POSITION STATEMENT: No position on HB 195
JOHN WALSH, Aide
Representative Richard Foster
State Capitol, Room 410
Juneau, AK 99801
Phone: 465-3789
POSITION STATEMENT: Gave Sponsor Statement for HB 197
EARL BEISTLINE, Chairman
Alaska Minerals Commission
P.O. Box 80148
Fairbanks, AK 99708
Phone: 479-6240
POSITION STATEMENT: Supported HB 197
AL CLOUGH, Mining Specialist
Division of Economic Development
Department of Commerce & Economic Development
P.O. Box 110804
Juneau, AK 99811
Phone: 465-5463
POSITION STATEMENT: Supported HB 197
STEVE BORELL, Executive Director
Alaska Miners Association
501 W. Northern Lights
Anchorage, AK 99503
Phone: 276-0347
POSITION STATEMENT: Supported HB 197
IRENE ANDERSON, Land Manager
Sitnasuak Native Corporation
P.O. Box 905
Nome, AK 99762
Phone: 443-2632
POSITION STATEMENT: Supported HB 197
TOM SPARKS, Resource Manager
Bering Straits Native Corporation
P.O. Box 1008
Nome, AK 99762
Phone: 443-5252
POSITION STATEMENT: Supported HB 197
BOB BARTHOLOMEW, Deputy Director
Income & Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, AK 99811
Phone: 465-2320
POSITION STATEMENT: Reviewed concerns regarding HB 197
JULES TILESTON, Director
Division of Mining & Water Management
Department of Natural Resources
3601 C Street, Ste. 800
Anchorage, AK 99503
Phone: 762-2163
POSITION STATEMENT: Reviewed concerns & suggestions for HB 197
REPRESENTATIVE PETE KELLY
Alaska State Legislature
State Capitol, Room 513
Juneau, AK 99801
Phone: 465-2327
POSITION STATEMENT: Prime Sponsor HB 170
WAYNE REGELIN, Acting Director
Division of Wildlife Conservation
Alaska Department of Fish and Game
P.O. Box 25526
Juneau, AK 99802
Phone: 465-4190
POSITION STATEMENT: Commented on proposed amendments on HB 170
DICK BURLEY, Chairman
Board of Game
1165 Coppet Street
Fairbanks, AK 99709
Phone: 474-0188
POSITION STATEMENT: Answered questions on HB 170
GEORGE UTERMOHLE, Legislative Counsel
Legislative Affairs Agency
130 Seward Street, Ste. 409
Juneau, AK 99801
Phone: 465-2450
POSITION STATEMENT: Answered questions regarding HB 170
PREVIOUS ACTION
BILL: HB 195
SHORT TITLE: REPEAL MILK MARKETING LAWS
SPONSOR(S): REPRESENTATIVE(S) VEZEY
JRN-DATE JRN-PG ACTION
02/27/95 486 (H) READ THE FIRST TIME - REFERRAL(S)
02/27/95 487 (H) RESOURCES
03/06/95 (H) RES AT 08:00 AM CAPITOL 124
03/06/95 (H) MINUTE(RES)
03/08/95 (H) RES AT 08:00 AM CAPITOL 124
BILL: HB 197
SHORT TITLE: MINERAL EXPLORATION INCENTIVE CREDITS
SPONSOR(S): REPRESENTATIVE(S) FOSTER,Vezey
JRN-DATE JRN-PG ACTION
02/27/95 487 (H) READ THE FIRST TIME - REFERRAL(S)
02/27/95 487 (H) RESOURCES, FINANCE
03/08/95 (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
02/20/95 (H) MINUTE(RES)
02/27/95 (H) RES AT 08:00 AM CAPITOL 124
02/27/95 (H) MINUTE(RES)
03/06/95 (H) RES AT 08:00 AM CAPITOL 124
03/06/95 (H) MINUTE(RES)
03/08/95 (H) RES AT 08:00 AM CAPITOL 124
ACTION NARRATIVE
TAPE 95-29, SIDE A
Number 000
The House Resources Committee was called to order by Co-Chairman
Green at 8:04 a.m. Members present at the call to order were
Representatives Green, Austerman, Davies and Kott. Members absent
were Representatives Williams, Ogan, Barnes, MacLean and Nicholia.
CO-CHAIRMAN JOE GREEN noted a quorum was not present.
HRES - 03/08/95
HB 195 - REPEAL MILK MARKETING LAWS
REPRESENTATIVE AL VEZEY, PRIME SPONSOR, stated last year, the
legislature repealed the milk marketing board along with a number
of other boards and commissions. He said the statute regarding the
state regulating the marketing of milk is still on the books. He
explained HB 195 would simply remove that statute from the books
and relieve the Department of Natural Resources (DNR) of an
obligation to administer another part of the market.
REPRESENTATIVE VEZEY said it was his understanding that there are
people in Alaska opposed to the repeal of this regulation because
they think the state should be in the business of regulating milk
marketing. He felt the statute should be taken off the books.
CO-CHAIRMAN GREEN agreed. He said the committee substitute would
only place a period after the word "orders" in the title of HB 195.
Therefore, the title would read, "An Act repealing the laws
authorizing milk marketing orders."
REPRESENTATIVE VEZEY said that is correct. He added that the
statute has been on the books since 1962 and to date there has
never been a milk order issued.
Number 094
NICO BUS, ACTING DIRECTOR, DIVISION OF SUPPORT SERVICES, DNR, said
the department is neutral on HB 195. The department currently does
not have any activity in milk marketing orders. He stated the
market is such that milk has to be purchased from the outside. He
noted if that fact would change, this statute would enable the
department to do the milk marketing ordering.
CO-CHAIRMAN GREEN noted attempts at the dairy industry in the state
have not been successful. He wondered if the state re-energized a
local dairy industry, what effect would HB 195 have.
MR. BUS responded with the mental health settlement and the Point
McKenzie properties, some grazing lands might become available for
dairy. He said if that would happen and there was a surplus of
milk, this statute would be useful.
Number 143
CO-CHAIRMAN GREEN clarified that HB 195 is merely a house cleaning
measure to clean up laws no longer applicable.
MR. VEZEY replied the bill is an effort to clean up the statute but
it is also questionable, without a commission, whether or not the
statute can be administered. He also felt the state should not be
regulating commodities.
CO-CHAIRMAN GREEN clarified if the state got a viable dairy
industry going, Representative Vezey feels there is no need for
this statute.
MR. VEZEY replied no. He said the statute was put together at a
time when dairy output was allocated. The idea was the state would
allocate production quotas to different dairies. He stated it is
not an area of commerce the state needs to be regulating. He noted
the sector of the state's economy where agriculture is being
successful is where it has minimal government regulation.
REPRESENTATIVE ALAN AUSTERMAN made a MOTION to AMEND HB 195 to
change the title to read, "An Act repealing the laws authorizing
milk marketing order."
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
Number 188
REPRESENTATIVE AUSTERMAN made a MOTION to MOVE CSHB 195(RES) with
accompanying zero fiscal note with individual recommendations.
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
HRES 03/08/95
HB 197 - MINERAL EXPLORATION INCENTIVE CREDITS
Number 199
JOHN WALSH, AIDE, REPRESENTATIVE RICHARD FOSTER, PRIME SPONSOR,
stated there is a lot of competition for capital in the world
market. The mineral development is a source of wealth generation
in any country as it is in Alaska. He said available capital will
flow to low cost operations often, but added Alaska is not a low
cost operation. Alaska has very high costs due to its geographic
location, labor, logistics, lack of infrastructure in the rural
areas of the state where potential mines are located, and lack of
electricity. He explained the ore bodies in Alaska are understood
but specific bodies are still yet to be discovered. He stressed
exploration is very expensive.
MR. WALSH stated the sponsor would like to encourage additional
exploration in the state which would benefit the communities. He
added that Native corporations have massive land holdings which are
worth an unknown total of dollars, but they need to explore that
land. In an effort to create a hospitable environment in Alaska,
the sponsor proposes an amendment to the tax statutes--basically an
incentive against taxes due for exploration expenses which may
occur. He explained the credit is released only upon the beginning
of production. He said the sponsor feels if there is some
reduction to state revenue, it is only that revenue which would
come as a result of exploration and it is revenue the state does
not currently have. He stressed to close the purse strings will
keep exploration from ever coming to Alaska.
MR. WALSH stated an incentive program, much like what the Governor
is proposing with the oil and gas industry, is a positive step,
gives a strong message to the industry and would yield benefits
greater than just the tax benefits coming from current production.
He stressed HB 197 is an effort to increase the exploration effort
in Alaska and to increase the potential in producing mines that
have to be in compliance with regulatory standards and
environmental and local concerns. Those producing mines will yield
greater than just the tax revenue, which would be a bit lower due
to the credit which is proposed.
Number 284
MR. WALSH said the state has a dependence on oil which is
frightening. In the event that oil drops off, the state needs to
have another source of income or at least blend its dependence so
there are other resources contributing to the health of the
economy. He explained HB 197 asks for a relief against AS 43.20
which is the state income taxes a corporation pays, and AS 43.65
which is the mining license tax, and if on state lands, the credit
could be applied against the production royalty tax and the annual
assessment fee for the claim. The legislation applies to all
lands. If an operation is on state land, there are additional
options on how to apply the credit.
MR. WALSH told committee members there are no fiscal notes attached
at this point, but the departments are pursuing those currently.
There is some hesitation in regard to fiscal notes because HB 197
is a speculative suggestion as to what impact there may be eight
years from now and it is difficult for the departments to assess
that. He pointed out HB 197 is the number one recommendation of
the Alaska Minerals Commission, which is appointed by the Governor.
He said HB 197 is similar to legislation in the Eighteenth
Legislature that passed through both bodies but failed concurrence
in the last waning hours of the legislature. HB 197 parallels the
Governor's efforts. He noted the Governor is clearly advocating
for increased investment dollars in the oil and gas field. HB 197
is a similar effort with respect to the mining industry. He
stressed if the state is going to stay involved in the global
market, it needs to be considerate of the climate for the
investment community.
Number 358
EARL BEISTLINE, CHAIRMAN, ALASKA MINERALS COMMISSION (AMC),
testified via teleconference and stated HB 197 is very important to
Alaska's economy and the utilization of its mineral resources. He
said Alaska is a resource state and its past, present, and future
economy is based on development and utilization of its mineral
resource. He noted the AMC was created by the Fourteenth
Legislature and signed into law on June 6, 1986, and is an 11-
member commission. The AMC is required to make annual reports to
the Governor and legislature on ways to mitigate constraints,
including governmental constraints, on the development of minerals,
including coal, in the state.
MR. BEISTLINE told committee members the 1995 AMC report on
recommendations was submitted to the Governor and the legislature
in January 1995. He said page 1 of the report contains
recommendation 1 which states, "The Governor and Legislature should
create economic incentives that will provide financial
encouragement and help offset some of the real and perceived
problems facing exploration and development in Alaska." He
stressed the AMC enthusiastically endorses HB 197.
Number 398
AL CLOUGH, MINING SPECIALIST, DIVISION OF ECONOMIC DEVELOPMENT,
DEPARTMENT OF COMMERCE & ECONOMIC DEVELOPMENT, stated the
department has submitted a bill analysis with a zero fiscal note.
He emphasized the zero fiscal note is for the Department of
Commerce & Economic Development only. He said the DNR and the
Department of Revenue (DOR) will have fiscal impacts in relation to
HB 197. He reiterated that HB 197 does follow long-standing
recommendations of the AMC. He stressed the overall purpose of HB
197 is to both help attract, and retain minerals exploration
investment in Alaska. Without exploration, there eventually will
be no new mine development.
MR. CLOUGH stated HB 197 defers a short term small monetary gain to
the state to improve the chances for future, much larger monies
which would flow to the state, local governments and Native
corporations. He said HB 197 builds upon current incentives the
state offers for mineral exploration and development, such as the
three and one-half year tax holiday of mining license tax for new
production, the no taxation on resources in place implemented by
the legislature several years ago, and the airborne geophysical
program.
MR. CLOUGH stressed the real utility of HB 197 will be in
facilitating hard rock mineral exploration, which is the highest
risk component of an exploration industry, an industry which is
risky inherently. The incentives offered under HB 197 will allow
exploration dollars to be stretched farther. He pointed out the
$10,000 to $50,000 which could potentially go to the state by
virtue of rents, royalties, etc., deferred by this bill could be
the drill hole money that finds the ore body. He noted these are
not big dollars to the state but are big dollars when an
exploration program is being mounted and the dollars have to go
into the ground. He stated if dollars are not invested in the
ground, they do not qualify for the credits.
MR. CLOUGH stated the presence of exploration credits will allow
Alaska claim owners to be more competitive. A claim owner or
someone who owns a mineral property who has existing mineral
exploration credits would be in a stronger position to negotiate a
joint venture or to bring more investment dollars in to help
further develop a claim and bring it to a viable mine.
Number 450
MR. CLOUGH said this type of activity is one small piece of the
overall program trying to bring in more mineral exploration and
development dollars to Alaska. He noted last year the country of
Peru had over $200 million invested in mineral exploration which
compares to Alaska which had $30 million invested. He stressed if
Alaska is going to continue to be able to attract worldwide mineral
investment dollars, and the state's geology certainly warrants
that, there is a need to develop a climate more favorable for
making high risk type investments. The state needs to be more
competitive and have a permitting system that is based on science,
not emotion. He stressed things such as the explorations credit
program incrementally help that overall goal.
Number 474
REPRESENTATIVE AUSTERMAN recalled that $80 million had been spent
thus far trying to open the mine in Juneau. He clarified that
situation is different than what HB 197 involves.
MR. CLOUGH said that is correct. For example, there is a mine
where exploration has been ongoing for many years. The mine is
currently under exploration and is on both state and private lands.
The company continued to go in joint ventures with various mining
companies, but the joint venture eventually disbands. The company
is looking for a new partner--a major mining company that has the
eventual capital to develop it. He stated if the claim owner can
say there is one-half year's exploration credits which will be
received if the mine ever goes into production from previous work
on the ground, that would be a big incentive for a company to put
more money into the ground in a property that looks good but is
still not there. He explained there has to have been work invested
to get the credits. Once the credits are received, it is an
inducement to bring someone in to spend more money. He noted it is
rare for the claim owner who first starts with the property to be
the one that actually brings the mine into production.
REPRESENTATIVE AUSTERMAN clarified a large amount of money invested
into a mine does not relate to HB 197.
MR. CLOUGH replied no. He said HB 197 will relate to small claim
owners.
REPRESENTATIVE JOHN DAVIES recalled that Mr. Clough had indicated
HB 197 is an incentive to attract new mines and also to retain
mines. He thought the purpose of HB 197 was to generate new
activity. He noted one of the arguments is the state would not be
giving up existing revenues, but would be foregoing a portion of
future revenues the state would not have if there were no
exploration credits. He felt the word retain suggests existing
properties. He asked if HB 197 applies to expanding an existing
mine.
Number 520
MR. CLOUGH said he was trying to imply retaining mineral investment
that XYZ mining company in Alaska is currently exploring. He
stated this type of incentive would give companies more reason to
continue their presence in Alaska rather than going to Peru. He
stressed his hope is that HB 197 will help attract investors to
Alaska who currently are inactive in the state. He noted his
understanding of HB 197 is that within the confines of a defined
mining property under production, the credits would not apply. How
the credits would apply in a satellite ore body is up for
discussion.
REPRESENTATIVE DAVIES asked Mr. Clough if he has any understanding
how that works in regard to HB 197 as is currently.
MR. CLOUGH responded if someone can prove it was a newly discovered
ore body, it may qualify. He said when using the word retain, he
meant retaining companies that are already in Alaska and
encouraging them to stay in Alaska and invest more of their
exploration dollars here rather than elsewhere.
CO-CHAIRMAN GREEN noted for the record that Representatives
NICHOLIA and BARNES had joined the committee. He also recognized
that Representative WILLIAMS was present on the vote for HB 195 and
had to leave again to attend a Finance Committee meeting.
Number 550
STEVE BORELL, EXECUTIVE DIRECTOR, ALASKA MINERS ASSOCIATION,
testified via teleconference and urged passage of HB 197. He
stated HB 197 would mesh into the existing mining license tax
system, would require a minimum of administration and if
successful, would result in new mines that would pay new royalty
streams to the state. He noted these mines will also mean new
jobs, construction, facilities and other economic activity.
MR. BORELL noted HB 197 does only apply to direct exploration
costs. The incentives can be credited against only one-half of the
taxes or royalty payable in any given year and the other one-half,
remaining after the permanent fund amounts are taken out, is still
due to the state. The computation would be the overall royalty is
determined, the permanent fund gets its share, and then of the
remaining portion not taken by the permanent fund, that is where
the one-half credit takes place. He said the credits will be
against new royalties that do not now exist, so there will be no
effect on existing royalties. He told committee members the bill
says that the credits would only accrue for companies with
expenditures occurring after January 1, 1995.
MR. BORELL explained HB 197 applies to all classes of lands (state,
federal, private), just as all classes of lands have the potential
to create new jobs, and just as all classes of lands are subject to
the mining license tax. He said any questions regarding the
definition of the site or applicability of adjacent areas would be
on the same basis as the current mining license tax. If under the
mining license tax a project qualifies as a new project or a new
mine, then it would also qualify under the exploration credit.
Similarly, if the mine does not qualify under the state mining
license tax as a new mine, it would not qualify for the exploration
incentive credit.
Number 597
MR. BORELL stated HB 197 also requires the data generated be given
to the state and after a 36 month period, the data would be open to
the general public that would otherwise remain propriety. He noted
HB 197 allows a company to apply for the credit at its own
schedule. This will result in a minimum amount of paperwork for
both the companies and the state, and a minimum number of
applications will be processed because companies will not apply
until they know their project is going into production.
MR. BORELL stressed it is important HB 197 specifies that the
credits apply to the site where the exploration occurs and the
credits can be transferred to successor interests. He noted one
potential change to HB 197 was recommended by a company and he will
discuss the proposed change with the sponsor. He said the change
relates to one of the definitions relating to consultants and
independent contractors. He again urged passage of HB 197. He
stressed the sooner the bill is passed, the sooner they can begin
spreading the news and provide companies with more reason to come
to Alaska and invest.
CO-CHAIRMAN GREEN noted that Representative MACLEAN had joined the
committee.
Number 619
REPRESENTATIVE DAVIES asked Mr. Borell to briefly describe how the
mining license tax regulations work in relation to the issue of
defining a new mine.
MR. BORELL responded there are three different tests including a
geologic test, a mining system test and a how you approach...for
example, if you have been mining underground for several years and
you can do a bulk service mine because you had proved there is a
low grade area adjacent, that would likely qualify. He noted it is
not a straightforward approach. There are approximately four tests
and three of the four have to be met. He said this information is
based on his discussion with several companies who have been
through the process such as Usibelli.
CO-CHAIRMAN GREEN recalled that Mr. Borell had indicated that data
would become a public matter. He noted in the oil arena, if there
is unleased acreage next to acreage which has been developed or
explored, there can be a request made to keep the data confidential
until the acreage is leased. He wondered if HB 197 would provide
the same or will the data automatically go public.
MR. BORELL stated the data would automatically go into the public
arena. He said companies have asked him about that fact and his
reply is, "Well if you do not want the data to become public, do
not apply for the credit."
Number 650
IRENE ANDERSON, LAND MANAGER, SITNASUAK NATIVE CORPORATION,
testified via teleconference and stated the village corporation in
Nome selected land under the Alaska Native Claims Settlement Act
(ANCSA) about 20 years ago. In the last ten years, they have been
working with the regional corporation, Bering Straits, to allow
large companies to explore for lode gold. She said over a period
of time, they have seen the benefits provided by this exploration
for the people in the community and region. There has been very
good success with employment. She noted they have also supported
the mining training program at the University.
MS. ANDERSON stated HB 197 is an incentive to further explore
Native lands and also further educate her own people in the region
to meet the jobs available for drilling, geological work, and
potential mill work. She noted her husband is a gold miner. She
said the patented property he is working on is about six miles long
and is a very narrow stream. She stressed it would take him years
and years of placer mining to mine the property. This bill would
allow him to consider looking at drilling, trenching or bulk
sampling on this property. She expressed support for HB 197.
TAPE 95-29, SIDE B
Number 000
TOM SPARKS, RESOURCE MANAGER, BERING STRAITS NATIVE CORPORATION,
testified via teleconference and stated HB 197 focuses on
production. He noted the Bering Straits Native Corporation owns
approximately 1.2 million acres of land currently. When all of the
entitlements from the federal government are received, they will
own about 2.3 million acres. The corporation currently has
approximately 30,000 acres under an exploration agreement with
Kendicott.
MR. SPARKS said the royalty and rental fees do not apply to Native
lands, but the mining license tax does. While there is a grace
period on the mining license tax on production, he felt anything
the state can do to provide more incentives for companies to put
hard rock into production, the better off everyone will be. He
expressed concerns with HB 197. He stated one concern relates to
the satisfactory documentation of exploration activity. His
understanding is that a representative skeleton core or selected
cuttings would be required according to HB 197. He voiced problems
with that concerning the confidentiality segments of the agreements
they form. He noted there had been testimony on the geophysical
work.
MR. SPARKS stated the Bering Straits Native Corporation formed a
cooperative agreement with the Division of Geophysical and
Geological Surveys last year and the corporation felt they could
share nonsensitive geophysical data and geo-chemical analytical
data. However, the corporation did not supply any representative
core cuttings or samples from bulk samples or trenching. He felt
there are ways to address his concern.
Number 080
BOB BARTHOLOMEW, DEPUTY DIRECTOR, INCOME & EXCISE AUDIT DIVISION,
DEPARTMENT OF REVENUE, said the department is currently working on
a fiscal note but has not completed it. He summarized issues which
have not been raised. He stated HB 197 does not apply to oil and
gas properties. The division had questions as to whether the bill
applies to current mines as opposed to only new ones. He told
committee members if the process the DNR puts applications through
to determine whether or not a site is going to qualify is
specifically tied into the statute reference, that would relieve
the division's concern of existing mines applying for the incentive
credits.
MR. BARTHOLOMEW stated the department is in favor of the objective
of encouraging exploration in Alaska. This legislation attempts to
meet the objective by offering a credit against four separate
revenue measures the state currently has -- two which are
administered by the DNR and two which are administered by the DOR.
He said he would only speak to the impacts on the DOR. He said the
department's concern relates to why the fiscal note is not yet
available. He pointed out that HB 197 impacts numerous legal,
administrative, and technical tax issues and those tax issues have
to be individually addressed for each of the programs.
MR. BARTHOLOMEW said the department has concerns about the
mechanics of trying to implement HB 197. Currently, the process
which corporations or businesses go through to prepare tax returns
would be different than the process they would go through as they
qualify for this credit. Each year the gap between those two
separate processes would have to be closed. He pointed out the
department is not sure what all the hoops are or how complicated
that will be. He noted there would be considerable issues with
some of the large operations which may be involved. He stated the
department feels additional work needs to be done at the staff
level and the department is willing to be a part of that to ensure
an administrative headache is not created.
Number 143
REPRESENTATIVE EILEEN MACLEAN asked Mr. Bartholomew to be more
specific.
MR. BARTHOLOMEW responded he could give an example on the corporate
income tax. The companies provide information on what is called a
combined basis. All of their businesses and operations get grouped
into one set of numbers on one tax return, which is provided to the
DOR. Under the exploration incentive credits, all the
qualification of costs and how the dollar amount of the credit is
determined would be done at a site specific location. He stated
the only way those credits could be taken against a tax return
would be based on the revenue earned at a site specific location.
Currently, there is no information provided which takes the
combined number and takes it back to site specific. Therefore, the
issues involve how that can be accomplished and how much additional
work would be involved by the DOR or by the businesses applying for
the credit. He stressed there needs to be input from industry to
determine if they are going to be able to provide information that
gets from the tax return back to the individual mine.
Number 171
MR. BARTHOLOMEW stated a similar piece of legislation was debated
last year in both the House and Senate. As a result of that
debate, one of the two DOR programs, the corporate income tax
AS 43.20, was removed from being eligible for the credit. He said
the DOR encourages similar action be considered this year. He
stressed that is one of the most complex areas the DOR would be
trying to resolve. The other mining license tax, AS 43.65 -- the
legislature has provided an incentive in the past which gives a new
operation a three and one-half year exemption from the mining
license tax. He felt that was a good encouragement and that
encouragement could be continued by allowing companies tax credits
against that once they went into operation.
REPRESENTATIVE PETE KOTT wondered if the DOR had consulted or
checked with other states who have mining operations happening in
their states to determine if some of their methods could be
utilized in Alaska.
MR. BARTHOLOMEW replied the DOR has not done that yet but had
talked briefly about it. He said the DOR does not have a good
comparison of how it is handled in other states and that
information would be sought from industry who may be doing business
in multiple states.
Number 205
JULES TILESTON, DIRECTOR OF MINING & WATER MANAGEMENT, DNR, stated
the department has several concerns regarding HB 197. He recalled
in previous meetings there were several questions raised about
revenues involved and he encouraged people to look at the Alaska
Mineral Industry Report 1993 and special report 48, pages 39-41
which summarizes the royalties paid to the state during 1991-1993.
The report also identifies exploration expenditures. He said the
report is a capsule but does not include the corporation income tax
or the municipal taxes paid to municipal governments. He stressed
next year's version will include the municipal information. He
noted the report also explains, in lay terms, the production
royalty tax, the mining license tax, and the rents and royalties.
MR. TILESTON told committee members in 1993, there was a total of
$3.4 million paid to the state from all mineral productions,
excluding the corporate income taxes and taxes paid to
municipalities. He noted of that $3.4 million, $720,000 was gravel
sales. He said at the same time for the last three years,
statewide for all activities, there was an expenditure of
approximately $30.2 million each year. He pointed out when the
life of a mine is being looked at, a very long period of time is
involved and HB 197 sets a date to begin for which certain things
can be credited. Therefore, some very hard looks need to be given
to how the system is set up.
Number 263
MR. TILESTON said some of the assumptions he made after consulting
with several people is that the incentive credits will apply to
only future mining ventures and will apply to primarily large
mining ventures where there is some sort of trade-off between
keeping documents which can be audited on actual exploration costs
and the future anticipated combination of taxes, licenses, rents
and royalties. He noted the credits would apply only to a mineral
property at the time it went into production. He pointed out that
of the $30 million expenditures each year relating to exploration,
a good portion of that might never go to production. Therefore,
the fact it is a big dollar figure does not necessarily mean it is
a big write-off at some point in time.
MR. TILESTON explained once a mine goes into production, whatever
that definition is, the exploration incentives and credits would no
longer apply. However, that begins to raise a series of questions
such as what happens if the mine suspends, what happens if a mine
was actually in production in 1929, suspended the operation, went
back in and started an intensive exploration program based on new
money, technology, new markets, a different mineral combination.
He stated there will be a trade-off between creating new jobs and
a future long-term reduction in direct revenue to the state
treasury. He said the prediction on the number, the location, and
new jobs from the mine development and the costs and revenue of the
economic stream associated with a mine is purely speculative. He
felt the past is a good starting point to look at.
Number 310
MR. TILESTON said present decisions and procedures used to
implement the mining license tax, the production royalty tax, the
corporate income tax and the lease and rental fees involving all
three departments probably provides a good starting point. He
noted as indicated by the other two departments, there is not an
understanding as to how the pieces piece together. He stated
having worked as a manager without some of those pieces and not
having strong guidance, there is an administrative nightmare which
tends to involve the commissioner, the attorney general, etc. at
some time in the future and everyone ends up in court or the issue
ends up back in the legislature for clarification.
MR. TILESTON told committee members he would make specific
suggestions. He said the department suggests the exploration
incentive credits under AS 27.30.010 (a) in HB 197 be preauthorized
for credit before the work is done. The department recommends the
data associated with cores, chemical and analytical data, and other
things spelled out in the bill be provided to the department, in a
timely manner, once the incentive credit has been applied for and
approved. He stressed if that is done, there are things which
should be reviewed such as whether or not the 36 month period of
confidentiality is the right period of time. He stated the
information is very valuable and a company should not be put at
risk.
REPRESENTATIVE OGAN joined the committee.
MR. TILESTON stated the definition of term "site" on page 2, lines
8, 10, and 12, and page 3, line 10, should be clear on the intent.
He said some mining companies hold numerous 40-acre claims and some
mining leases are also 40 acres in size but many of them are
substantially larger. The department believes it is not
appropriate to suddenly have a large area of mining claims when the
developable property is a smaller core.
Number 359
MR. TILESTON said the requirement under AS 27.30.030 that the
credit be used within 15 years after it is granted should be
evaluated in terms of whether or not it is prudent to periodically
preapprove credits. He wondered if it should be the first 15 years
after a mine goes to production or if it should be the first 15
years of production, excluding any shut-down which is not the
direct fault of the mining operator.
MR. TILESTON emphasized there are other important things the
legislature can and is doing to also encourage and promote the long
term investment of mineral capital in the state. He said the first
step is getting a handle on the state's long-range fiscal policy.
There is nothing more upsetting to a large company coming in to
spend a lot of money over a long period of time than to try to
guess and suddenly be confronted with a large tax increase to make
up the budget or to lose the key services from local and state
agencies, which they must have in order to continue to operate.
MR. TILESTON said there are other issues including the mental
health issue, legislation which may create similar problems,
outstanding unconveyed selections for the Native corporations,
unconveyed selections to the state, access RS 2477, uncertain
ownership of navigable waters, etc.
Number 400
REPRESENTATIVE DAVIES stated something left off of Mr. Tileston's
list was the problematic surveys which is something that can be
done to further encourage mineral development. He noted there is
a fair amount of money going out of the state treasury to
accomplish those surveys. He wondered if Mr. Tileston has any
suggestions on how things can be structured to get revenue back
into the treasury, relating to mining activity, to help pay for
those surveys.
MR. TILESTON said his understanding is that in Nome, those surveys
were in part funded and actively participated in by the Native
corporations there, as well as several companies. He stated
industry has participated in funding those studies and based on
what is being seen in the Fairbanks area, industry will be more
interested because there are some real and new things coming out of
those studies. He noted that subject brings up another question--a
person has a mine property and contributes $60,000 to a geographic
area survey. Does that person get an incentive credit for that?
He felt there were many unanswered questions regarding HB 197 and
stressed there needs to be more guidance.
HRES - 03/08/95
HB 170 - INTENSIVE MANAGEMENT OF GAME
Number 438
REPRESENTATIVE PETE KELLY, PRIME SPONSOR, felt the committee should
first consider the amendments before them.
REPRESENTATIVE SCOTT OGAN made a MOTION to AMEND CSHB 170(RES),
version G, page 2, line 5: Delete "from historic high levels".
REPRESENTATIVE OGAN WITHDREW his MOTION because he did not have his
folder with him.
REPRESENTATIVE BARNES made a MOTION to AMEND CSHB 170(RES), version
G, page 1, after line 7: Insert a new bill section to read: "Sec.
2. AS 16.05.020 is amended to read: Sec. 16.05.020. FUNCTIONS OF
COMMISSIONER. The commissioner shall (1) supervise and control the
department, and may appoint and employ division heads, enforcement
agents, and the technical, clerical, and other assistants necessary
for the general administration of the department; (2) manage,
protect, maintain, improve, and extend the fish, game and aquatic
plant resources of the state in the interest of the economy and
general well-being of the state; (3) have necessary power to
accomplish the foregoing including, but not limited to, the power
to delegate authority to subordinate officers and employees of the
department; (4) cooperate with and assist the Board of Fisheries
and the Board of Game by implementing regulations as requested by
either board." Renumber the following bill sections accordingly.
CO-CHAIRMAN GREEN asked if there were any objections.
REPRESENTATIVE BARNES said she discussed the amendment with the
sponsor and the sponsor concurs. She stated this amendment will
return the bill to the provisions that the function of the
commissioner is to include implementation of regulations approved
by the board. She felt the provision seems obvious--namely the
administrative regulations adopted by the board are to be
implemented by the department. The department cannot decide to
ignore the administrative regulations created by a board. She
stressed if the department disagrees with the regulations filed by
the board, it can follow the appeals procedure in the
Administrative Procedures Act just like anyone else. She stated
the Supreme Court recently ruled the department does not have the
discretion to chose which regulations it wishes to implement.
CO-CHAIRMAN GREEN read the amendment for the benefit of those who
were on teleconference.
Number 496
REPRESENTATIVE DAVIES said he understands the intent of the
amendment. He stated his first reaction was it seemed completely
obvious because that is what the commissioner is supposed to do.
He noted in reading the statutes, the commissioner also has the
statutory authority to manage fish and game under sustained yield
principles. He wondered if there is some inherent conflict built
into the statutes, as the Board of Game is also assigned the
responsibility to establish seasons, bag limits, etc. for the
purpose of managing fish and game under a sustained yield principle
as well. He felt the responsibility has been assigned twice--
independently to the commissioner and to the Boards of Game and
Fisheries.
REPRESENTATIVE BARNES pointed out that the Constitution very
clearly lays out the sustained yield principle, which is how the
state's fish and game resources will be managed for the human uses
of those resources. She felt it is very clear in the minutes of
the constitutional convention as to how sustained yield and maximum
use is to be achieved. Therefore, she sees no conflict whatsoever
by saying both the commissioner, the boards, and the legislative
branch of government must ... and the legislature delegates its
authority to the Boards of Fisheries and Game, who then become a
regulatory body the commissioner works for. She stated if the
commissioner chooses not to live up to the regulations, the Boards
of Fisheries and Game should fire that commissioner immediately.
Number 526
REPRESENTATIVE MACLEAN pointed out that the state is under the
Alaska National Interest Land Conservation Act (ANILCA) and
management of the federal government. She stressed the legislature
prefers the management of the federal government rather than the
state management of fish and game.
REPRESENTATIVE BARNES recognized there is a federal law which has
been passed, ANILCA, and ANILCA does fly in the face of the state's
Constitution. She stated that situation is an unsolved problem at
this time and until such time the problem is solved as it relates
to the state's Constitution, the Supreme Court has ruled the
state's Constitution is superior and the state has not turned over
its land and waters to the federal government to say they can
manage them. She felt it is an ongoing discussion not yet
resolved.
REPRESENTATIVE IRENE NICHOLIA felt Representative Davies brought up
a good point and said she would like to hear comments from the
Alaska Department of Fish and Game (ADF&G).
REPRESENTATIVE DAVIES said the notes under that section indicate
there is an Attorney General's Opinion and perhaps even a Supreme
Court case which concurred that the commissioner had the authority
to issue emergency orders, on his own authority, when he thought
sustained yield was at jeopardy. He stated when passing a statute,
it is important to be clear on the intent. He felt the intent of
the statute was to allow the commissioner to have that kind of
emergency authority. He stressed there is a significant issue
needing to be resolved.
Number 566
WAYNE REGELIN, ACTING DIRECTOR, DIVISION OF WILDLIFE CONSERVATION,
ADF&G, said the language (the amendment) being discussed appears in
CSHB 170(RES) in three different places. He noted it was removed
earlier from the functions of the commissioner but the same
language also appears in the duties and powers of the commissioner.
He stated the language would require the commissioner to implement
regulations passed by the board, such as predator control or a
variety of other regulations, and in implementing some regulations,
would require the expenditure of funds.
MR. REGELIN noted if the Governor orders the commissioner not to
implement a program, this law would require him to do so and would
also require the commissioner to spend funds even if the
legislature did not appropriate monies to implement a program such
as predator control. He felt the amendment puts the commissioner
in a very difficult position. He thought the amendment also
provides a lot greater authority to the boards and reduces the
authority of the legislature because it could force the spending of
dollars by the commissioner to implement regulations that do not
fund the priorities approved by the legislature.
MR. REGELIN said in the past, the boards primary function was
allocative. In other places in the statutes, it says the boards do
not have any fiscal budgetary administrative authority and gives
those duties to the commissioner. He stated the department prefers
this language not be deleted from CSHB 170(RES) where it currently
appears. He stressed the department feels the language should not
be included in the sections on the functions of the commissioner or
the duties and powers of the commissioner.
MR. REGELIN reiterated the language is also included in the section
on delegation of authority to the commissioner by the Board of Game
and in that section it says if there is a difference in opinion,
that difference goes to the Governor for resolution after a public
hearing. He thought that was the way the law reads now and noted
a slight change had been suggested where in the current law it
talks about proposed regulations and probably what is always meant
is the implementation of regulations.
Number 601
REPRESENTATIVE BARNES said she is always amazed at some of the
remarks put before the legislative branch of government, when in
fact the legislature does not delegate its power to manage fish and
game to the Governor, but delegates that power to the Boards of
Fisheries and Game. She stated when the boards adopt regulations
through the Administrative Procedures Act and the commissioner does
not implement and carry out those regulations, he should be fired
and the department should be fired as well.
REPRESENTATIVE MACLEAN asked Representative Barnes what she is
referring to in her amendment where it talks about the interest of
the economy and general well-being of the state. She wondered what
the definition is of the interest of the economy. She asked if it
is for sport fishing or commercial fishing.
REPRESENTATIVE BARNES responded the new language she added was (4)
cooperate with and assist the Board of Fisheries and the Board of
Game by implementing regulations as requested by either board.
REPRESENTATIVE MACLEAN said within the Native communities there is
not much trust in either the Board of Fisheries or the Board of
Game for management of fish and game.
TAPE 95-30, SIDE A
Number 000
REPRESENTATIVE KELLY said Dick Burley was on teleconference and
might want to explain the difference between the boards and the
commissioner.
DICK BURLEY, CHAIRMAN, BOARD OF GAME, testified via teleconference
and said the volume on the teleconference was so low, he could not
hear much of the discussion.
REPRESENTATIVE DAVIES said his question concerned the apparent
conflict in the existing statutes between the delegation of
authority to the commissioner and to the Board of Game, both of
which are delegated the authority to manage game under the
sustained yield principle. He stated it would seem this amendment
would effectively remove the existing delegation of authority to
the commissioner. He expressed concern because he felt it was
appropriate the commissioner have the authority to issue emergency
orders.
MR. BURLEY responded he does not read anything into the amendment
which would take away the commissioner's ability to issue an
emergency regulation if there was a biological reason to either
stop or extend a season.
Number 074
REPRESENTATIVE MACLEAN asked Mr. Burley if he is also a member of
the Alaska Outdoor Council.
MR. BURLEY replied he is a member and is a member of numerous other
organizations throughout the state.
REPRESENTATIVE BILL WILLIAMS said in talking with other members of
the fishing community, it was said that having the Governor's
office involved in the Board of Fisheries gets very cumbersome. He
stated last year at a Board of Fisheries meeting, the Governor's
office wanted to cap the Area M fisheries at 300,000 and the board
said a cap was not needed. He pointed out that the Chairman of the
Board at that time was Kay Andrew and she went against the
Governor's wishes, stepping on a few toes. He noted she did not
get confirmed to the board. He expressed concern about the
Governor getting more involved with the boards.
Number 130
REPRESENTATIVE BARNES clarified the issue raised by Representative
Williams is that under the function of the commissioner and the
language she has added, he is concerned that the Governor would
become more involved. She felt the amendment removes the Governor
more from the process, as it should be in her opinion. The
legislative branch delegates to the Boards of Fisheries and Game
the authority to manage the resources as directed by statute. She
said the Boards of Game and Fisheries and the commissioner has the
authority, on a sustained yield principle, to execute emergency
regulations. Generally speaking, when a regulation is adopted, it
requires long and extensive public hearings, with the exception of
emergency regulations, which are only good for a short period of
time.
REPRESENTATIVE BARNES felt it was not in the interest of the
legislative branch or the people of the state, who the legislature
represents, to allow a commissioner of the ADF&G to thwart the will
of the appointed people, the legislature confirms, to manage the
resources. She said that is why her amendment is good. She does
not believe the Governor should be involved in the management of
the state's resources, making political decisions. Rather, it
should be done by the board who is taking testimony and
implementing the laws passed by the legislative branch of
government.
CO-CHAIRMAN WILLIAMS agreed, but the amendment says under functions
of the commissioner, "the commissioner shall." He said the
commissioner is appointed by the Governor and he felt the
commissioner listens to his boss. He felt this is another step to
get control by the Governor's office and take away the intent of
the Board of Fisheries and Game.
Number 195
REPRESENTATIVE BARNES felt just the opposite is true. She said the
commissioner is hired by the board and the tool the legislative
branch has is the laws and the confirmation process. She stated
the legislature not only confirms the members of the Boards of
Fisheries and Game, but also eventually confirms the commissioner
as well. Unlike other departments, the ADF&G commissioner is
hired. She felt the amendment was a modest statement, to cooperate
and assist the Boards of Fisheries and Game by implementing
regulations. She stressed that is the commissioner's job. She
stressed the commissioner should not be deciding which regulations
he is going to regulate and which regulations he will not
implement, unless he can clearly show, through an adoption of
emergency regulations, that those regulations would hamper the
effective management under the sustained yield principle, subject
to beneficial uses among mankind.
REPRESENTATIVE AUSTERMAN wondered why this amendment is needed if
the commissioner is supposed to be doing what she described.
REPRESENTATIVE BARNES replied it is needed because the commissioner
sometimes does not pay attention.
REPRESENTATIVE DAVIES asked if he could address his question to the
drafter of the amendment. He expressed concern about the impact of
the amendment on the ability of the commissioner to make his own
determination on whether or not fish and game is being managed
under the sustained yield principle. In addition, he expressed
concern about the commissioner's ability to issue emergency orders.
For example, if the Board of Game promulgates a certain set of
regulations, it seems this amendment would require the commissioner
to implement those specific regulations. He asked how much
discretion of the commissioner is being taken away by this
amendment to make his own determination about how the regulations
might impact the harvest of game under the sustained yield
principle.
GEORGE UTERMOHLE, LEGISLATIVE COUNSEL, LEGISLATIVE AFFAIRS AGENCY,
said he finds it difficult to quantify the amount of impairment on
the commissioner's discretion that this particular amendment might
cause. He stated both the commissioner and the Boards of Fisheries
and Game exercise wildlife management responsibilities and each
entity is subject to the provisions of the Constitution. He
explained to the extent that the parties reach a disagreement,
there is a provision under existing law for taking that dispute to
the Governor and having the Governor resolve the dispute.
MR. UTERMOHLE stated as to this particular language, he does not
see it putting that much of a burden on the commissioner or
restricting his authority that much, except that the language
resolves an ambiguity as to the relationship between the
commissioner and the boards. He pointed out it is already expected
that the commissioner is cooperating with his boards in
implementing regulations because the boards have that
responsibility in their area of management and the commissioner has
other responsibilities, particularly the administrative and the
actual on-the-grounds resource management.
Number 293
REPRESENTATIVE NICHOLIA asked if this amendment mandates
cooperation by the commissioner.
MR. UTERMOHLE said the amendment uses the word "shall" meaning it
will be a duty of the commissioner to cooperate with the boards.
REPRESENTATIVE NICHOLIA clarified the amendment does mandate
cooperation by the commissioner.
MR. UTERMOHLE responded that is correct.
REPRESENTATIVE MACLEAN asked what implications would the amendment
have on ANILCA.
MR. UTERMOHLE said this amendment would operate only within the
realm of state authority and would have no impact on ANILCA.
REPRESENTATIVE DAVIES asked when a law mandates the implementation
of certain regulations, does Mr. Utermohle interpret that to mean
requiring the commissioner to expend funds in order to implement
those regulations.
MR. UTERMOHLE responded to the extent that anything the
commissioner does requiring expenditure of funds, that would be
implied in the cooperating with the boards. He added the
commissioner will not be able to spend funds if he has not received
an appropriation or for a purpose he has not received authority
for.
Number 318
REPRESENTATIVE KELLY asked Mr. Utermohle to address a 1993 court
decision that ADF&G was involved in and a settlement where ADF&G
gave up management to the commissioner.
MR. UTERMOHLE responded he was not aware of that particular case.
REPRESENTATIVE NICHOLIA asked what kind of flexibility, under this
amendment, does the commissioner have to not implement regulations
if he does not have the financial resources to do so.
MR. UTERMOHLE replied as with any department given a legislative
mandate or a mandate under regulations, the department's ability to
carry those out is limited by the availability of funds. He said
it is common for an agency to have a mandate to perform a
particular function, but never does perform the function because
the funds are not available.
REPRESENTATIVE NICHOLIA clarified if the amendment does mandate the
commissioner to do something and he does not have the funds to do
that, the flexibility would be that he would not have to cooperate
with the boards.
MR. UTERMOHLE responded he would not say the commissioner is in a
position to avoid cooperating with the boards due to the lack of
funds. He said the commissioner may be held to a good faith effort
to cooperate with the boards to the extent he has the funds and to
the extent of his other obligations.
CO-CHAIRMAN GREEN asked if there were any objections to the
amendment.
REPRESENTATIVE MACLEAN OBJECTED.
CO-CHAIRMAN GREEN asked for a roll call vote. Voting in favor of
the motion were Representatives Austerman, Kott, Ogan, Barnes, and
Green. Voting against the motion were Representatives MacLean,
Davies, Nicholia and Williams. The MOTION PASSED 5-4.
Number 365
REPRESENTATIVE BARNES made a MOTION to AMEND CSHB 170(RES), version
G, on page 3, after line 13: Insert a new bill section to read:
"*Sec. 8. AS 16.05.050(1) is repealed."
REPRESENTATIVE BARNES said this amendment repeals the provisions of
state law requiring the ADF&G commissioner to enforce federal laws
and regulations. She stated the federal government and the ADF&G
may still develop memorandums of understanding, cooperative
agreements, and other joint programs. This amendment protects the
commissioner from lawsuits in state court if state regulations
conflict with federal regulations. This part of the code is
Alaska's voluntary assumption of federal regulations with or
without funding.
REPRESENTATIVE MACLEAN OBJECTED to the amendment.
REPRESENTATIVE AUSTERMAN clarified the amendment would only involve
(1) of AS 16.05.050.
REPRESENTATIVE BARNES said that is correct.
REPRESENTATIVE AUSTERMAN clarified the remaining sections would be
renumbered accordingly.
REPRESENTATIVE BARNES stated that was correct.
REPRESENTATIVE OGAN asked Representative Barnes to repeat the
amendment.
Number 403
REPRESENTATIVE MACLEAN asked if the amendment repeals the entire
section.
CO-CHAIRMAN GREEN responded only (1).
MR. REGELIN stated the department probably does not have a problem
with the amendment. He said it is a part of the statute which has
been there since the 1960s when the state took over the management
of wildlife and fisheries from the U.S. Fish and Wildlife Service.
He stressed the department does have cooperative agreements with
the federal law enforcement agencies and protection divisions. He
noted when he talked to the Department of Law, they did not
understand why there would be a desire to restrict it. Their
concern was that it could be construed by someone who was issued a
ticket by a state law enforcement officer for a federal violation,
that could be used as a defense because it was the intent of the
legislature to not allow that to happen due to the removal of the
language. He noted the department felt it would not cost or hurt
anything to leave it there, but it might have detrimental effects
if it were removed.
MR. UTERMOHLE said there is an issue of ambiguity. He stated if
this language is repealed, it will be unclear whether the effect is
to completely take away all authority of the commissioner to
cooperate in the enforcement of federal regulations or if it is
merely to delete it from the duties and functions but leave the
authority under his other discretionary powers to enter into the
various memorandums of understanding and agreements entered into
with the federal agencies for a joint or cross enforcement of
regulations.
CO-CHAIRMAN GREEN clarified that is because if the language is not
there, it would not be a problem other than the fact that an overt
act is made to do it and that record trails it.
MR. UTERMOHLE responded that is correct.
Number 446
REPRESENTATIVE KELLY stated even though there is some ambiguity
which can be construed, the purpose of the amendment is to protect
the commissioner so there are no conflicts in court by statute.
What is being created is the possibility of a conflict by statute.
He said what is desired, through the removal of the language, is to
make it clear that the commissioner of ADF&G is working to enforce
the laws of Alaska and he is left with the duties of the memorandum
of understanding, which are the day-to-day functions he can carry
on with. However, in the case of a court conflict, the
commissioner stands for the state of Alaska. This says the
commissioner's first duty is to enforce the laws of the federal
government.
REPRESENTATIVE MACLEAN recalled that Mr. Utermohle had talked about
protecting the commissioner from liability. She wondered what the
liability would be.
MR. UTERMOHLE said the liability of the commissioner would come
from someone arguing that this language requires the commissioner
to cooperate with federal agencies in implementing their
regulations. Therefore, the commissioner would be required to go
out and enforce federal regulations. In not doing so, someone
might argue in court that the commissioner had a duty to go out
there and was derelict in his duties if he did not do that.
REPRESENTATIVE MACLEAN asked what the implications are of repealing
AS 16.05.050(1).
MR. UTERMOHLE responded by repealing it, the statement of the duty
of the commissioner to go out and cooperate with the U.S. Fish &
Wildlife Service and enforce their regulations would be removed.
Any cooperation between the U.S. Fish & Wildlife Service and the
department would arise under a memorandum of understanding rather
than under this statute.
Number 485
REPRESENTATIVE KELLY said some crazy things have happened with the
courts and the federal government regarding fish and game and the
state's resources. He asked if a judge somewhere or the Interior
Secretary decided that intensive game management was illegal, what
would the commissioner at that point have to do.
MR. UTERMOHLE replied if a court mandated the department not to
participate in intensive game management, the commissioner would be
bound. He stated as to some decision or regulation of the Interior
Secretary binding the department is another issue altogether.
CO-CHAIRMAN GREEN asked the people on teleconference if they could
be available for the House Resources Committee meeting on Friday,
March 10. He said the committee would hear HB 170 again at that
time.
CO-CHAIRMAN GREEN asked for a roll call vote on the motion. Voting
in favor of the motion were Representatives Ogan, Barnes, Kott, and
Green. Voting against the motion were Representatives Nicholia,
Davies, Austerman, MacLean, and Williams. The MOTION FAILED 5-4.
CO-CHAIRMAN WILLIAMS asked if the amendment could be reconsidered
at Friday's hearing on HB 170.
ADJOURNMENT
There being no further business to come before the House Resources
Committee, Co-Chairman Green adjourned the meeting at 10:00 a.m.
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