Legislature(1997 - 1998)
05/01/1997 01:15 PM 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
May 1, 1997
1:15 p.m.
MEMBERS PRESENT
Representative Bill Hudson, Co-Chairman
Representative Scott Ogan, Co-Chairman
Representative Beverly Masek, Vice Chair
Representative Fred Dyson
Representative William K. ("Bill") Williams
Representative Irene Nicholia
Representative Reggie Joule
MEMBERS ABSENT
Representative Ramona Barnes
Representative Joe Green
COMMITTEE CALENDAR
HOUSE BILL NO. 238
"An Act amending the program of exploration incentive credits for
activities involving locatable or leasable minerals or coal
deposits on certain land in the state; and providing for an
effective date."
- HEARD AND HELD
* SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 243
"An Act delaying the repeal of the current law regarding
subsistence use of fish and game; amending the effective date of
secs. 3 and 5, ch. 1, SSSLA 1992; and providing for an effective
date."
- MOVED CSSSHB 243(RES) OUT OF COMMITTEE
* HOUSE BILL NO. 255
"An Act relating to subsistence hunting and fishing; and providing
for an effective date."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 238
SHORT TITLE: MINING EXPLORATION INCENTIVE CREDITS
SPONSOR(S): REPRESENTATIVE(S) VEZEY, Foster, Ivan
JRN-DATE JRN-PG ACTION
04/08/97 1025 (H) READ THE FIRST TIME - REFERRAL(S)
04/08/97 1025 (H) RESOURCES
04/17/97 (H) RES AT 1:00 PM CAPITOL 124
04/17/97 (H) MINUTE(RES)
04/23/97 1308 (H) COSPONSOR(S): FOSTER, IVAN
05/01/97 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 243
SHORT TITLE: EXTEND CURRENT SUBSISTENCE LAW
SPONSOR(S): SPECIAL COMMITTEE ON FISHERIES
JRN-DATE JRN-PG ACTION
04/10/97 1060 (H) READ THE FIRST TIME - REFERRAL(S)
04/10/97 1060 (H) RESOURCES
04/22/97 (H) RES AT 1:00 PM CAPITOL 124
04/22/97 (H) MINUTE(RES)
04/23/97 1293 (H) SPONSOR SUBSTITUTE INTRODUCED-
REFERRALS
04/23/97 1293 (H) READ THE FIRST TIME - REFERRAL(S)
04/23/97 1293 (H) RESOURCES
04/29/97 (H) RES AT 1:00 PM CAPITOL 124
04/29/97 (H) MINUTE(RES)
05/01/97 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 255
SHORT TITLE: SUBSISTENCE HUNTING AND FISHING
SPONSOR(S): REPRESENTATIVE(S) BARNES, Cowdery, Mulder, Austerman,
Green, James, Hodgins, Ryan, Kohring
JRN-DATE JRN-PG ACTION
04/18/97 1171 (H) READ THE FIRST TIME - REFERRAL(S)
04/18/97 1172 (H) RESOURCES, WTR
04/24/97 1332 (H) COSPONSOR(S): KOHRING
05/01/97 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
REPRESENTATIVE AL VEZEY
Alaska State Legislature
Capitol Building, Room 13
Juneau, Alaska 99801
Telephone: (907) 465-3719
POSITION STATEMENT: Testified as sponsor of HB 238.
REPRESENTATIVE IVAN IVAN
Alaska State Legislature
Capitol Building, Room 418
Juneau, Alaska 99801
Telephone: (907) 465-4942
POSITION STATEMENT: Testified as cosponsor of HB 238.
RUDY VETTER
P.O. Box 70342
Fairbanks, Alaska 99707
Telephone: (907) 457-5509
POSITION STATEMENT: Testified on HB 238.
MILT WILTSE, Director
Division of Geological and Geophysical Surveys
Department of Natural Resources
794 University Avenue, Suite 200
Fairbanks, Alaska 99707-3645
Telephone: (907) 451-5005
POSITION STATEMENT: Provided department's position and answered
questions regarding HB 238.
BOB BARTHOLOMEW, Deputy Director
Income and Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, Alaska 99811-0420
Telephone: (907) 465-2320
POSITION STATEMENT: Provided department's position and answered
questions regarding HB 238.
DICK BISHOP, Executive Director
Alaska Outdoor Council
211 Fourth Street, Suite 302A
Juneau, Alaska 99801
Telephone: (907) 463-3830
POSITION STATEMENT: Testified on SSHB 238 and HB 255.
MARY C. PETE, Director
Division of Subsistence
Department of Fish and Game
P.O. Box 25526
Juneau, Alaska 99802-5526
Telephone: (907) 465-2066
POSITION STATEMENT: Provided department's position and answered
questions regarding SSHB 243.
MARK RIEHLE, Legislative Administrative Assistant
to Representative Ramona Barnes
Alaska State Legislature
Capitol Building, Room 403
Juneau, Alaska 99801
Telephone: (907) 465-3438
POSITION STATEMENT: Presented sponsor statement for HB 255.
THEODORE POPELY, Legislative Assistant
to House and Senate Majority
Alaska State Legislature
Capitol Building, Room 116
Juneau, Alaska 99801
Telephone: (907) 465-3439
POSITION STATEMENT: Answered questions on HB 255.
CARL JACK
Rural Alaska Community Action Program
731 East 8th Avenue
Anchorage, Alaska 99501
Telephone: (907) 279-2511
POSITION STATEMENT: Testified in opposition to HB 255.
ART IVANOFF, Subsistence Coordinator
Maniilaq Association
P.O. Box 256
Kotzebue, Alaska 99752
Telephone: (907) 442-7690
POSITION STATEMENT: Testified in opposition to HB 255.
DICK COOSE, Executive Director
Concerned Alaskans for Resources and Environment
P.O. Box 9266
Ketchikan, Alaska 99901
Telephone: (907) 247-9266
POSITION STATEMENT: Testified on HB 255.
CALEB PUNGOWIYI, Subsistence Director
Kawerak, Incorporated
P.O. Box 948
Nome, Alaska 99762
Telephone: (907) 443-4728
POSITION STATEMENT: Testified in opposition to HB 255.
GLORIA STICKWAN
P.O. Box 264
Copper Center, Alaska 99573
Telephone: (907) 822-5241
POSITION STATEMENT: Testified on HB 255.
ANGIE MORGAN
P.O. Box 127
Aniak, Alaska 99557
Telephone: (907) 675-4384
POSITION STATEMENT: Testified in opposition to HB 255.
ACTION NARRATIVE
TAPE 97-48, SIDE A
Number 0001
CO-CHAIRMAN BILL HUDSON called the House Resources Standing
Committee meeting to order at 1:15 p.m. Members present at the
call to order were Representatives Hudson, Ogan, Masek, Dyson and
Williams. Representatives Joule and Nicholia arrived at 1:19 p.m.
and 1:21 p.m., respectively. Also present at the table was
Representative Ivan. Absent were Representative Green, who was
chairing another meeting, and Representative Barnes, who was ill.
HB 238 - MINING EXPLORATION INCENTIVE CREDITS
Number 0077
CO-CHAIRMAN HUDSON announced the first item of business was House
Bill No. 238, "An Act amending the program of exploration incentive
credits for activities involving locatable or leasable minerals or
coal deposits on certain land in the state; and providing for an
effective date." The bill had been heard previously. Co-Chairman
Hudson advised that the sponsor had a proposed committee substitute
(CS), 0-LS0845\F, Chenoweth, 4/21/97.
Number 0122
REPRESENTATIVE AL VEZEY, sponsor, came forward to testify. He said
although the proposed CS looks like a substantial rewrite of the
bill, it is not. It addresses concerns expressed by the Department
of Natural Resources (DNR). Specifically, it provides a means of
evaluating data, giving the DNR explicit authority to use
consulting services paid for by the party wishing to have its data
approved for a tax credit. In effect, it would give the DNR the
necessary resources to accomplish the evaluation task.
REPRESENTATIVE VEZEY advised there are minor changes taking into
account written comments and those received at the previous
hearing. The major change is that they moved a section to another
part of the bill to make it easier to read.
Number 0287
CO-CHAIRMAN SCOTT OGAN referred to Section 1 of the proposed CS,
page 1, line 10, and asked whether the state would be giving more
in credits than it would be getting back in revenue.
Number 0323
REPRESENTATIVE VEZEY replied that the only change in Section 1 is
adding item (5) on page 2, which clarifies that geological mapping
is an allowable cost. To date, $38 million in potential credits
have been filed. By way of comparison, about $700,000 a year in
mining tax is collected; although Representative Vezey does not
know the number of actual credits taken, it is small. The
advantage to the state of these incentives is receiving a
tremendous amount of leverage on its dollars. Representative Vezey
said the state does not really lose any revenue. It grants a
credit when a tax liability is incurred, and that is usually years
after the credit accrues.
Number 0401
CO-CHAIRMAN OGAN questioned the $700,000 worth of revenue per year,
when the state grants millions in credits.
REPRESENTATIVE VEZEY said $38 million in allowable credits have
been certified by the department, but the number actually used is
infinitesimally small in comparison. The credits are "simply
sitting in the bank, waiting for an opportunity to use them."
Number 0454
CO-CHAIRMAN OGAN asked: If only $700,000 in taxes is being
collected in mining taxes, what problem are they trying to fix by
giving additional credits?
REPRESENTATIVE VEZEY stated that the purpose of this bill is two-
fold. First, it adds geological mapping as an allowable expense
for credits; that is a small "tweak" that probably could have been
interpreted as allowed under existing law. Second, they are
creating a new category of tax credits for geophysical, geochemical
and geological surveying work released to the public.
REPRESENTATIVE VEZEY said the current mineral exploration incentive
tax credit only applies to exploration development on a piece of
property. He explained, "In other words, if you do an exploration
and development program over 1,000 square miles and you develop one
square mile of that under the current program, only the cost
associated with the one square mile that goes into development is
an allowable tax credit. Now, the company will undoubtedly file
all the other credits, in the event that they someday become
eligible, but it might be 15 years, or never, that they become
eligible for actual tax deductions. They're just simply filed and
accepted; they're in the bank."
Number 0599
REPRESENTATIVE VEZEY said the airborne geomagnetic survey program
has unquestionably created an economic boom in Alaska, with only
$300,000 to $400,000 in yearly expenditures by the state. As the
legislature is unlikely to provide more money to expand the
program, they had come up with a plan: If a private-sector company
did geophysical surveying, geochemical surveying or geological
mapping and released the data to the public, they would receive a
tax credit for that work.
REPRESENTATIVE VEZEY explained, "And there again, we're getting a
tremendous amount of leverage, because it's not so much that we
expect everybody will take all their data and try to put it in this
bank and get a tax credit, because in the first place, until they
have a tax liability, they have no incentive. What we're trying to
do here is send out a message that `Hey, we are open for business,
and we're going to offer this incentive to you. If you go out and
do an exploration program and it turns up goose eggs, and in your
opinion, the data is worthless, you can release it to the public
and we'll give you a credit against your future mining tax or your
future income tax, if you'll just make it available to the
public.'" Representative Vezey emphasized that where one person
might see no value, somebody else with a different background,
training or objective may see real value.
Number 0705
CO-CHAIRMAN OGAN referred to page 1, lines 10 and 11 of the
proposed CS, which says credits are given "regardless of whether
the land is state-owned land". He asked whether Representative
Vezey believes it is advantageous to continue with that policy.
For example, if exploration was done on private or federal lands,
he assumed the state would not get the revenues.
REPRESENTATIVE VEZEY said that is incorrect. He referred to the
90/10 revenue sharing agreement between the state and federal
governments; mineral severance taxes; and corporate taxes as
sources of revenue regardless of land ownership.
REPRESENTATIVE VEZEY said they had debated that. If a company
surveys private land, he would assume the owner of the land is
interested in having it developed and would act like a prudent
business manager. The company would have first priority to look
this data over. If they do not want to use it, there is an
incentive to make it public, which can be done at no cost to the
department by providing a tax credit against a mining license tax
or income tax. Once the information is public, anyone may evaluate
it and talk to the owner of the land.
Number 0849
CO-CHAIRMAN HUDSON suggested the option for incentives rests with
entities wanting to explore for minerals or develop mineral
properties. If they choose the incentive, they must give back to
the state geological information, for example. He stated, "It
doesn't cost us anything, because they have to come into production
before there's a tax obligation."
REPRESENTATIVE VEZEY concurred. He emphasized that the primary
intent is to send a message. "And we can do that," he said.
"There is no value to a tax credit if there's no taxable income.
It doesn't mean they might have income from somewhere else that
might be taxable. It's just this particular property may not have
developed. And that's the big difference between this bill and the
bill that we worked on two years ago, is that this bill, ... the
property doesn't have to go into production. We're trying to
expand this library that catalogs Alaska resources. Because we all
say that we're a rich state, but I defy you to tell me what's
here."
Number 0942
REPRESENTATIVE IVAN IVAN, cosponsor of HB 238, said he comes from
an undeveloped area, the Yukon-Kuskokwim delta region. They need
to look at available resources, including possibilities for shallow
gas wells that could provide cheaper fuel than the diesel currently
used in communities. He believes this legislation will afford
that.
REPRESENTATIVE IVAN said his region contains 6.5 million acres of
private land. Including state lands, it is the size of Oklahoma.
He stated the hope that the incentive will be available for some of
the small operators interested in production of shallow-well gas
and for cataloging the resources.
Number 1064
REPRESENTATIVE VEZEY said he would like to see the committee get
the bill moving. Although he does not believe it will affect
exploration this summer, he believes if the message goes out this
summer, it may affect the amount of exploration activity in Alaska
next year.
Number 1146
RUDY VETTER testified via teleconference from Fairbanks, agreeing
this may provide increased incentive for exploration. He cited a
local example that he believes may ultimately become a mine bigger
than the Fort Knox Mine. He hopes this bill, over the long term,
does not conflict with current law. He noted that it does not
provide penalties nor is it mandatory.
MR. VETTER thanked "all of you people who helped us get the
airborne data that we've had." He emphasized that the mining
industry does not want more taxes or state funding. He said, "Give
us the freedom to operate and we can operate very well, and we can
take care of all of our environmental factors that are necessary."
Number 1320
MILT WILTSE, Director, Division of Geological and Geophysical
Surveys, Department of Natural Resources, testified via
teleconference from Fairbanks. They had reviewed the proposed
committee substitute. While they agree wholeheartedly with the
concept, they still have questions. For example, they see
confusion as to what old data may be eligible. They also have
questions on the definition of "substantial value."
MR. WILTSE said Section 4 is particularly difficult to interpret.
He stated, "It looked like part of that subsection voided some of
the new credits and possibly impacted some of the former bill." It
is also unclear whether the credit has a one-time statewide
limitation for each applicant or would be for any one set of data.
In addition, as the bill is written, he believes most material
would be given to the DNR to evaluate, placing the department in a
contractual situation.
MR. WILTSE agreed with the concept of not building a bureaucracy
within the DNR to evaluate submitted data. He believes this can be
a private-sector-supported, efficient operation. They would like
to work out questions with the sponsor and stakeholders in the
mining industry.
MR. WILTSE said some people had expressed concern, which he feels
may be somewhat valid, that if this is not done correctly, there
may be harm to the existing incentive, which is far from anybody's
intent. He suggested the intent could be placed in a separate bill
to avoid that possibility. He offered to work with others towards
a "consensus-opinion bill to go forward in the next session, that
we could all support with no reservation."
MR. WILTSE stated his belief that the concept is excellent. It may
go beyond anybody's expectations in terms of building a geologic
data base of material that otherwise would not be available. He
stated, "And I'd hate to see us act too much in haste and therefore
create a situation that we don't want to create and maybe lose the
opportunity of actually putting something like this in place for
the long run."
Number 1599
REPRESENTATIVE VEZEY responded, "I do think we have addressed his
legitimate concerns. Some of his concerns just pertain to exactly
what he's talking about. I mean, it takes a lawyer to read some of
our statutes. I believe that the only reason to move this bill
forward is to put the message out there, because people are making
decisions now, and in the next six months, as to how they will
spend money in 1998. And I think this would be a good incentive to
have out there."
REPRESENTATIVE VEZEY suggested a compromise for the "department
folks that are nervous about this" would be simply changing the
retroactive date to 1998 and making the effective date sometime in
1998. As he visualizes it, if the bill became law this year, it
would not produce results for another year. Changing the dates
would provide another year to work on the details, but the message
would still be out there, loud and clear.
Number 1679
CO-CHAIRMAN OGAN expressed concern about the fiscal note for
approximately $260,000 to $270,000 per year. Referring to another
bill, he pointed out the dive fishery was willing to pay costs to
get that fishery going. He asked where this money would come from.
He referred to the analysis section of the fiscal note, which is
extensive, and advised that it discusses similar programs in
Canada.
Number 1753
REPRESENTATIVE VEZEY stated his belief that the fiscal note
addresses the original bill, not the committee substitute. He
stated, "It's assumed in this fiscal note that the DNR would be
handling this data, evaluating it professionally and publishing it.
The committee substitute spells out that it is a third-party
consultant that will do the evaluation, paid for by the person
wishing to take the tax credit, and that the person wishing to take
the tax credit is responsible for the publication of the data. So
it's zero cost. Really the cost is some of the director's time,
because the director has total authority over whether or not to
accept this information."
REPRESENTATIVE VEZEY suggested it will come down to the
relationship between the director and the third-party consultant.
The director would basically either take the advice of the third-
party consultant or not use that consultant. He stated, "So I
believe that we've eliminated this, for all practical purposes, to
a zero fiscal note." He asked Mr. Wiltse, who had prepared the
fiscal note, to comment.
Number 1808
MR. WILTSE responded, "What Representative Vezey says is partially
true. And I'm sure that that is his intent." He said his own
intent is that when the DNR finally puts a program like this into
place, it will function along the lines that Representative Vezey
is talking about. However, as the CS is written, it provides for
an applicant to either submit material to the DNR or go the route
that Representative Vezey has articulated. If they do the latter,
the cost is theirs. But if they submit it to the DNR, the cost is
the department's. The DNR had to prepare a fiscal note for the
bill as written, even though they know the intent, as the language
does not hit the intent.
MR. WILTSE said Representative Vezey is correct that the DNR would
seek outside review. What separates state data from other types of
mining data is the former undergoes independent peer review. He
envisioned initiating a procedure, for example, with a panel of
certified reviewers that would meet criteria acceptable to all
parties; it would be codified not in legislation but in some
procedure equitable to everyone. Somebody submitting data for
credit could select a panel, probably of at least three
professionals, to review it and pass on a recommendation or summary
of their findings to the director or someone else in the DNR.
MR. WILTSE said Representative Vezey is also correct that under
that scenario, the cost would not be borne by the state. The
actual mechanism of retaining consultants, for example, can be
worked out. However, the committee substitute leaves open the very
real possibility that people would opt to put those costs on the
DNR. That is why the amounts in the fiscal note are still there.
Number 1969
CO-CHAIRMAN HUDSON said as he hears it, Mr. Wiltse believes this
bill can be worked out so as not to harm the current exploration
incentives program. However, they need additional time and effort
to ensure nothing harms that.
MR. WILTSE agreed and stated, "I think a safer way to do it would
be in a separate bill. I think if there's a lot of effort put into
it, we can probably not do any damage to the original bill."
Number 2025
BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division,
Department of Revenue, came forward to testify. He indicated he
had provided questions to the sponsor on issues needing
clarification. He agreed the dollar impact is small initially,
although it may grow in the future. This bill is for costs of an
activity that never goes into production, but there are time lags.
Something may not go into production for eight years. He asked:
What happens if a company takes credits currently and the mine goes
into production?
MR. BARTHOLOMEW said these are technicalities. However, if put
into law, these technicalities are what the private industry must
work with when their tax advisors decide what to do. He cautioned,
"And so, if you put it out before it's ready, and you risk a bill
getting through next year to correct the technicalities, you may be
living with those; you may not get a correction through."
MR. BARTHOLOMEW indicated his intention of having the sponsor and
the DNR resolve the program. Then the Department of Revenue could
say what works on the tax schemes, helping to achieve the goals.
He does not believe the tax schemes should drive the legislation.
"And so we really haven't taken a position other than there are
some issues now that have not been worked out on how the current
tax credit would work and how the new program would ferret into
that," he explained. "And I think what DNR has been saying is you
may want to do it in a completely separate section of the tax code.
You may just want to say, `Do it this way' and not merge them."
Number 2146
CO-CHAIRMAN HUDSON said he was looking at the concerns of both Mr.
Wiltse and Mr. Bartholomew. He asked them whether it was possible
to do any rapid determination with the prime sponsor to clean this
up. "But absent that, I'm not inclined to move this bill forward,"
he stated. He asked for input from the committee.
Number 2187
CO-CHAIRMAN OGAN commented that the state is not currently saying
it is unfriendly to mining. He expressed support for the concept
of this legislation. He asked Mr. Wiltse how the fiscal note
relates to the committee substitute.
Number 2229
MR. WILTSE explained, "The note that is attached to the bill right
now is one that I drafted up yesterday. I went back to the
original one that we had drawn up, put dollar figures to it and
left it the same, because the way the bill is written, this would
apply right now. And the reason for that is because there is the
choice, you know; there is a choice that people can submit their
data right to the department."
Number 2248
CO-CHAIRMAN HUDSON announced he was holding HB 238 over. He said
he sensed vagueness on the part of testifiers, not displeasure with
the bill. He suggested if the departments could meet with
Representative Vezey about their major concerns, it would give him
a better feeling for the legislation. (Note: The proposed
committee substitute was not adopted as a work draft.)
CO-CHAIRMAN HUDSON turned the gavel over to Co-Chairman Ogan.
SSHB 243 - EXTEND CURRENT SUBSISTENCE LAW
CO-CHAIRMAN OGAN announced the next order of business was Sponsor
Substitute for House Bill No. 243, "An Act delaying the repeal of
the current law regarding subsistence use of fish and game;
amending the effective date of secs. 3 and 5, ch. 1, SSSLA 1992;
and providing for an effective date." He said this bill simply
extends the existing subsistence law.
Number 2301
REPRESENTATIVE ALAN AUSTERMAN, Chairman of the House Special
Committee on Fisheries, which sponsored the bill, came forward to
testify. He said Co-Chairman Ogan had stated the extent of this
bill, in that it extends the effective date of the subsistence laws
to 1999.
Number 2317
CO-CHAIRMAN OGAN said he has concerns about "piece-mealing" the
subsistence issue and somewhat side-stepping it. However, until
there is a cohesive plan, it may behoove them to move this.
Number 2357
REPRESENTATIVE BILL WILLIAMS noted that extending the 1992 law is
something the legislature has done for the past two sessions. This
just gets them through for the next two years.
Number 2376
REPRESENTATIVE REGGIE JOULE indicated he has heard that the
majority is working on the larger subsistence issue. He suggested
extending the current law is probably necessary until something
else is done. Otherwise, it reverts to the 1986 law. He asked:
Would we be able to repeal this if we came to a resolution?
CO-CHAIRMAN OGAN affirmed they could do so, provided they had the
votes. He asked whether Representative Joule is comfortable with
the 1992 subsistence law as it was written.
REPRESENTATIVE JOULE asked whether that question specifically
related to SSHB 243.
CO-CHAIRMAN OGAN said yes.
REPRESENTATIVE JOULE stated, "I would be in favor of extending
this. In terms of the larger issue of subsistence, of course, I
think that's a whole different discussion. But in context of this
particular extension, yeah, ... I think we can go ahead and extend
this bill."
Number 2461
CO-CHAIRMAN OGAN noted that the bill sunsets October 1.
TAPE 97-48, SIDE B
Number 0006
REPRESENTATIVE IRENE NICHOLIA suggested taking this up after the
proposed special session.
CO-CHAIRMAN OGAN responded that although he agrees in principle, he
is worried that if there is no special session and the law sunsets,
they will go back to the old law. He asked whether they should
consider repealing the old law and staying with the more current
one.
Number 0034
REPRESENTATIVE FRED DYSON suggested there are too many variables to
count on this being unnecessary. Unless they want to go to the
"significantly monumental task of rewriting or repealing," the only
question is: Do we want the 1986 subsistence rules to go into
effect in October, or do we want to do this?
Number 0110
DICK BISHOP, Executive Director, Alaska Outdoor Council, came
forward to testify. He said the council supports SSHB 243. He
said, "The whole matter of how to address the subsistence issue is
certainly in a state of flux, as you know better than most. While
a new strategy is being sought, we think it is essential that state
law retain the statutory provisions regulating subsistence and
nonsubsistence uses that were enacted in 1992. Principal among
these includes the nonsubsistence areas, the definition of
`reasonable opportunity' as it relates to subsistence uses, a
systematic process by which the Boards of Fisheries and Game decide
upon subsistence use and other use regulations, and the definitions
of `customary and traditional' and `customary trade.' Those were
important provisions that were put in the '92 law, and we feel they
should remain."
MR. BISHOP stated, "We support HB 243 even though, as the
discussion has already indicated, we recognize that the existing
state law relating to subsistence uses of fish and game is
imperfect, and you are looking at possible changes. We see the
extension of provisions of the '92 law as necessary for
conservation and reasonable allocation while the whole issue is
undergoing yet another review."
MR. BISHOP continued, "The Alaska Outdoor Council strongly supports
personal consumptive uses of fish and game and subsistence
lifestyles. However, we have stated that we do not believe that a
constitutional or statutory priority is necessary to adequately
provide for subsistence uses, and we have consistently opposed an
arbitrary and discriminatory closed-class priority based on zip
code, culture or ethnicity. Nevertheless, the council has been
willing to compromise in order to support ... Governor Hickel's
bill in 1992 and again, recently, in support of HJR 21. As you
know, Governor Hickel's bill did not pass the legislature due to
opposition from the Alaska Federation of Natives."
MR. BISHOP concluded, "In summary, the council is willing to
support SSHB 243 as an interim measure while needed changes to
federal law and, if necessary, to state law or our constitution,
are considered. However, a one-year extension is probably
preferable to the two-year that is listed in the bill, just to keep
it kind of warm. Frankly, the council continues to be perplexed
and frustrated by the widespread apparent indifference to the
constitutional provisions providing for equal rights and equal
protection with respect to fish and game uses. That indifference
to the protection of individual rights, upon which the United
States and the state of Alaska were founded, tests our patience and
our willingness to consider compromises which diminish or revoke
those provisions in Alaska's constitution. Although this issue
addresses uses of fish and game, it is in fact an issue of civil
rights, and we don't know how long we're willing to continue to be
willing to compromise on these issues that are so basic to people's
individual rights and protections."
Number 0262
CO-CHAIRMAN OGAN asked whether the committee had questions for Mary
Pete from the Division of Subsistence or Ron Somerville, technical
consultant to the leadership of the House and Senate. Both Ms.
Pete and Mr. Somerville came forward to the witness table.
REPRESENTATIVE DYSON requested their opinions on whether this bill
should pass.
Number 0287
MARY C. PETE, Director, Division of Subsistence, Department of Fish
and Game (ADF&G), stated support for SSHB 243. She said as
committee discussion shows, unless there is another way to address
subsistence, this bill would keep consistency in how the
subsistence law is implemented. It retains important provisions
relating to nonsubsistence use areas, as well as definitions that
the public has become accustomed to and that have eased the board's
work in managing subsistence hunting and fishing.
Number 0324
REPRESENTATIVE BEVERLY MASEK asked Ms. Pete to expound on the issue
of what the public has become accustomed to. She asked whether
that is dealing with customary, traditional or cultural aspects,
for example.
Number 0331
MS. PETE said definitions put in place by the 1992 law are key in
implementing subsistence hunting and fishing; one is "customary and
traditional" and the other is "customary trade and barter." She
believes the stricter definitions of the latter in the 1992 bill
provide a wider sense of comfort regarding subsistence statewide,
primarily in the commercial fishing industry.
Number 0364
REPRESENTATIVE MASEK asked for clarification about what the public
has become accustomed to.
MS. PETE said if this bill did not pass, on October 1, 1997, the
state would revert to the 1986 law, parts of which are
unconstitutional under the state constitution. She said, "The
flip-flop that the state has taken in terms of subsistence
management, especially since 1986, I think has frustrated users in
the state, because some years, it's rural residency; some years it
isn't. Some years, we have nonrural areas; some years we don't.
And the 1992 law established nonsubsistence areas, which
essentially mirror the nonrural areas prior to ... 1992. And
another flip-flop, I think, will just lead the public to assume
that the state really can't manage subsistence, that there's been
so much flux and unrest regarding subsistence, that, you know, this
is just another example of where we haven't been able to maintain
consistency until the issue is resolved."
MS. PETE advised that the Governor has a resolution, HJR 10, to
provide a constitutional amendment ballot to put the constitution
in line with ANILCA, which is one option for the legislature. She
said the other option is the Lieutenant Governor's three-tiered
package.
Number 0455
REPRESENTATIVE MASEK responded that Governor Hickel had worked on
a plan, to which the Alaska Federation of Natives (AFN) said no.
In addition, the AFN stand on Lieutenant Governor Ulmer's plan was
a "no-net loss policy." Representative Masek mentioned HJR 21,
which she sponsored and which would divert the problem back to
ANILCA, where the problem began. She said right now, the state
does not have control over defining customary, traditional or rural
preference. She asked what Ms. Pete envisions as a way of
resolving this.
Number 0521
REPRESENTATIVE NICHOLIA stated what was in front of the committee
was to extend the 1992 law, not to discuss visions for resolving
the subsistence question.
Number 0539
CO-CHAIRMAN OGAN called a brief at-ease at 2:17 p.m. He called the
meeting back to order at 2:18 p.m., saying he would allow
Representative Masek some latitude.
REPRESENTATIVE DYSON suggested witnesses should feel free to opt
out when questions are expanded beyond the exact bill on the table.
Number 0610
REPRESENTATIVE MASEK asked Ms. Pete's opinion on how to resolve
this problem if the bill did not pass.
MS. PETE said state law defines "customary and traditional" and
"customary trade and barter." She explained, "And as you well
know, we can't enact rural preferences, so we did have a definition
of `rural' as well, prior to the McDowell decision. So the state
has defined those terms, and we've used those definitions to
implement the law. You know, certainly, the federal government,
they manage subsistence on federal lands; they have their own
definitions. But we have defined those terms."
Number 0681
CO-CHAIRMAN OGAN read from state statute, saying, "Customary and
traditional means noncommercial, long-term and consistent taking
of, use of and reliance on fish and game". He noted it goes on
from there. He said, "Customary trade, a limited noncommercial
exchange for minimal amounts of cash, as restricted by the
appropriate board of fish and game resources." He said it does not
go into birds or fur-bearers. Co-Chairman Ogan noted that HJR 21
calls for Alaskans to decide what those definitions are. He asked
Ms. Pete whether, under current law, she finds that residents using
subsistence are comfortable with these definitions and whether
these definitions of "rural" and "customary and traditional" work.
Number 0731
MS. PETE said they work in that the ADF&G has not heard of problems
with them. There has been no public outcry as the boards have used
those definitions in managing fish and game, although probably not
everyone is happy with them.
Number 0754
CO-CHAIRMAN HUDSON made a motion to adopt SSHB 243 for discussion
and asked unanimous consent. There being no objection, it was so
ordered.
Number 0795
CO-CHAIRMAN HUDSON made a motion to amend SSHB 243 on page 1, line
7, by changing "1999" to "1998". He said that would place
responsibility on the current legislature to conclude the work on
this issue to the extent practical and possible. He asked
unanimous consent.
REPRESENTATIVE AUSTERMAN advised that he had no problem with it.
Number 0856
REPRESENTATIVE WILLIAMS asked whether it would need to be brought
up again in 1998, then.
CO-CHAIRMAN HUDSON said absolutely; that is his intention. He
stated, "If we don't amend this, if we leave it to 1999, it
essentially gives this legislature an opportunity to walk away from
the subject. If we put it in 1998, it forces this legislature to
deal with it in the next session, and I believe that that is our
responsibility."
Number 0894
CO-CHAIRMAN OGAN concurred. He asked if there was any objection to
the motion. There being none, the amendment was adopted.
Number 0919
CO-CHAIRMAN HUDSON made a motion to move SSHB 243, as amended, from
the committee with individual recommendations and zero fiscal note.
He asked unanimous consent.
CO-CHAIRMAN OGAN asked if there was an objection. There being
none, CSSSHB 243(RES) moved from the House Resources Standing
Committee.
HB 255 - SUBSISTENCE HUNTING AND FISHING
Number 0943
CO-CHAIRMAN OGAN announced the next item of business was House Bill
No. 255, "An Act relating to subsistence hunting and fishing; and
providing for an effective date." He advised that he had no
intention of moving the bill that day, as the sponsor was absent
due to illness, but would take brief public testimony after the
bill was presented.
Number 0980
MARK RIEHLE, Legislative Administrative Assistant to Representative
Ramona Barnes, read the sponsor statement into the record:
"House Bill 255 was crafted using Alaska's constitution as its
basis.
"As you know, the legislature is mandated by the constitution to
provide for the utilization, development and conservation of all
natural resources belonging to the state, including the land and
waters, for the maximum benefit of the people.
"Further, wherever occurring in their natural state, the fish,
wildlife and waters of the state are reserved to the people for
common use.
"Under the Alaska constitution, no exclusive right or special
privilege of fishery shall be created or authorized in the natural
waters of the state.
"The laws and regulations which govern the use or disposal of
natural resources under the constitution, the state constitution,
shall apply equally to all persons similarly situated with
reference to the subject matter and purpose to be served by the law
or regulation.
"Replenishable resources belonging to the state shall be utilized,
developed and maintained on a sustained yield basis, subject to
preferences among beneficial users.
"HB 255 would establish an allocation mechanism and ensure the
allocation for the various uses of the fish and game resources,
including subsistence use, to be consistent with the principles of
sustained yield and will be the result of decisions by the
respective boards of fish and game.
"The boards are empowered to adopt criteria upon which to base the
allocation decisions, including the allocation for subsistence.
The boards will provide regulations to determine who may
participate in subsistence hunting and fishing during times of
abundance as well as of shortage.
"The subsistence allocation will be determined as a percentage of
the stock or population that is available, based upon sustained
yield. The percentage must provide a preference to satisfy
subsistence use.
"The boards of fish and game shall distinguish among those provided
a subsistence use on the basis of need, customary use and one's
ability to obtain food by other means, should restrictions become
necessary.
"Under the provisions of HB 255, commercial sale of subsistence-
taken fish or game is prohibited; however, customary trade, barter
or sharing for personal use or family use is authorized."
Number 1106
CO-CHAIRMAN OGAN stated that "customary trade and barter" is
defined in state law. He asked how this bill changes that.
MR. RIEHLE deferred to Ted Popely.
Number 1157
THEODORE POPELY, Legislative Assistant to House and Senate
Majority, came forward to testify. He stated, "I don't believe
that HB 255 does change the existing definition of customary and
traditional, the '92 law."
Number 1176
REPRESENTATIVE WILLIAMS asked, "How does it stand up to ANILCA?"
MR. POPELY replied that the problem with the state law complying
with ANILCA is the rural preference provision. He said, "What HB
255 attempts to do, in a nutshell, is to redefine the priority from
one that is based on rural residency, as dictated through ANILCA,
to one that is based on actual dependence on the resource for
family food consumption. Specifically, there are two factors used
generally: the customary and direct dependence on the resource for
human consumption and the ability to obtain food if subsistence use
is restricted or eliminated."
MR. POPELY continued, "I certainly can't speak for the court as to
how this would be viewed in light of ANILCA's requirement for rural
preference. I suspect that there is an argument to be made that
the result of the application of [HB] 255 would be to restrict
subsistence preference to a rural resident priority. I suspect
that's probably part of the intent. I can't speak for the sponsor
on that. And as to whether or not that resulting rural preference,
sort of a de facto rural preference, would satisfy the requirements
of ANILCA, I cannot say."
Number 1254
REPRESENTATIVE WILLIAMS asked whether, other than "rural," all
other areas in the bill are pretty close to ANILCA's
interpretation.
Number 1283
MR. POPELY said he understood the question to be a comparison
between the bill and ANILCA. He said, "Of course, as a state
statutory provision, it doesn't affect ANILCA per se, as federal
legislation. It can't change ANILCA, as a state statute. There
are a number of provisions that are not addressed that ANILCA
includes. The definitions section, of course, provides a number of
different problems. You've discussed `customary and traditional,'
`customary trade.' There is a provision in ANILCA that may be of
some interest to those sponsoring the bill, dealing with the
federal court oversight that has been raised over and over as a
problem, with some proponents. That's not addressed in this bill."
Number 1349
REPRESENTATIVE WILLIAMS asked whether Mr. Popely was saying the
bill does not come too close to ANILCA's definitions.
MR. POPELY said that is a difficult question. "There are so many
definitions provided in ANILCA," he commented.
REPRESENTATIVE WILLIAMS handed Mr. Popely a copy of the ANILCA
provisions and noted that Mr. Popely is an attorney. He asked the
differences between ANILCA today "as it is written in front of you
there" and HB 255.
CO-CHAIRMAN OGAN advised that Mr. Popely was testifying on short
notice.
Number 1407
MR. POPELY said he would be glad to try to address that.
REPRESENTATIVE WILLIAMS said he would be happy to wait.
Number 1431
REPRESENTATIVE NICHOLIA asked whether HB 255 eliminates the sunset
provisions adopted earlier that day in CSSSHB 243(RES).
MR. POPELY replied, "Yes, I believe it does, in Section 12 of the
bill."
Number 1463
CO-CHAIRMAN OGAN asked whether this allows out-of-state hunters to
practice subsistence hunting.
MR. POPELY referred to page 4, lines 15 and 16, 20 and 21, and 25
and 26, under Sections 8 through 10, items (30), (31) and (32). He
said looking at the definitions section, technically it allows
nonresidents to partake in subsistence activities by eliminating
language referring to residents.
Number 1545
CO-CHAIRMAN OGAN asked whether Mr. Riehle knew the motivation
behind that.
MR. RIEHLE said he would have to defer to the sponsor.
Number 1595
CARL JACK, Rural Alaska Community Action Program, testified via
teleconference from Anchorage in opposition to HB 255. He said the
only legal protection for subsistence users is ANILCA. The trade-
offs proposed in HB 255 will be far too great because it would
completely dismantle the current status and replace it with an
economic-based and individual-based, welfare-type program that
would require individuals to demonstrate significant dependence for
direct and family consumption. The eligibility criteria would be
set by the boards, which would have total discretion and would
"impose this very questionable allocation on some kind of
percentage to take care of those needs." He said this allocation
would not necessarily require all subsistence uses to be fully
satisfied before other consumptive uses are allowed.
MR. JACK said the bill completely ignores the cultural aspect of
subsistence, effectively repealing the requirement that "customary
and traditional" subsistence use be given priority. He said
looking at implementation of the individual permitting system and
given how the majority has substantially reduced the budget for the
Division of Subsistence, it will be next to impossible to enforce
the permitting system.
MR. JACK said finally, the bill does nothing to bring state
subsistence into compliance with ANILCA or forestall the federal
takeover of subsistence fishing effective October 1, 1997. He
stated, "If anything, this bill will only increase the deep
difference that already exists between the federal and state law."
Number 1827
REPRESENTATIVE MASEK asked whether Mr. Jack could provide an
example or further define why he feels his legal protection is
greater under ANILCA than if the state had authority over its fish
and game.
MR. JACK replied, "I think while we would like to see the return of
fish and game management to the state of Alaska, the court
decisions in certain cases have proven that, for the most part, the
subsistence users have to rely on the ANILCA provisions as the only
means to find it legal to continue the way of life that they have
lived for thousands of years."
Number 1950
REPRESENTATIVE MASEK said she grew up in the bush, in Anvik on the
Yukon River, although now she lives in Willow and is unable to hunt
or fish because of problems with the subsistence issue. She said,
"And it seems to me that trying to create the hunting and fishing
rights for where you live and what race you are, there are so many
Native people that live out of the rural areas, how are they going
to be able to hunt and fish and continue their customary and
traditional way of life?"
Number 2003
MR. JACK said he is also an Alaska Native, born and raised in
Kipnuk but residing in Anchorage. He said he would be more than
willing to give that up so those with no other means of supporting
themselves could harvest fish and game to meet their subsistence
needs. He suggested in rural Alaska, people live 70 percent off
the land and sea and 30 percent through cash. He discussed the
high cost of living.
Number 2111
REPRESENTATIVE MASEK said she knew of no case in Alaska where a
Native had been denied the right to hunt or fish. She said she was
trying to find out more about protection for subsistence hunting
and fishing. "Because the state could offer the same as what the
federal law is doing," she commented.
Number 2169
CO-CHAIRMAN OGAN referred to page 4, line 23, under Section 10,
which states that "`subsistence uses' means the noncommercial,
customary and traditional uses of wild, renewable resources by an
individual who significantly depends on the resource". He said
that seems to fit people in rural Alaska and elsewhere. He noted
that barter and trade are also discussed in that section. He did
not see this as a threat of lesser protection.
MR. JACK replied, "I think further review should be given, at least
on the part of those that promote or feel that the provisions of
ANILCA gives us that protection. Since you have just adopted [HB]
243 and this bill would sunset what you have acted on, I would ...
recommend that you not move this bill out of the committee." He
noted there had been talk about a special session and suggested
that might be a time to look at this.
Number 2361
DICK BISHOP, Executive Director, Alaska Outdoor Council, came
forward to testify, saying the council has no position on HB 255.
However, based on initial review, there were several factors to be
considered by the legislature. The principle, critical difference
between this bill, or the 1992/1986 bill, and the federal ANILCA
law is that state law does not have "rural" in it.
MR. BISHOP said worthy aspects of this bill include that it does
not eliminate most of the critical definitions in existing law,
such as "customary and traditional," "customary trade" and
"reasonable opportunity." It does redefine subsistence, with which
the council agrees, putting the subsistence priority on an
individual basis.
TAPE 97-49, SIDE A
Number 0006
MR. BISHOP referred to the Alaska residency requirement; he
suggested that was inadvertently omitted and should be put back in.
This bill does not arbitrarily discriminate on the basis of zip
code or "some other closed-class criteria," which he believes is
important. He stated, "We think it probably has the potential of
significantly reducing the difficulties with the Tier 2 provisions
under existing law, and that may be something to consider in the
whole mix of options that the legislature may be looking at."
MR. BISHOP said another major difference between existing state law
and HB 255 is that many responsibilities and definitions currently
outlined in statute would be transferred to the Board of Fisheries
and the Board of Game, including setting of standards. That has
both positive and negative aspects. For example, it may spawn a
whole new cycle of debate over terms, issues or definitions.
MR. BISHOP concluded by saying the Alaska Outdoor Council
recommends consideration of HB 255 along with other alternatives in
looking at the whole subsistence picture. They believe it has
certain strong elements from the standpoint of maintaining the
potential of conforming to the Alaska constitution and the supreme
court observation that "a definition of subsistence uses that went
to individuals was much more likely to be consistent with the
constitution than something like `rural'."
Number 0187
REPRESENTATIVE NICHOLIA asked Mr. Bishop whether he believes this
bill regains state management of federal lands.
MR. BISHOP replied, "No, I don't see where it would."
CO-CHAIRMAN OGAN asked Mr. Popely whether he could confirm that
opinion.
Number 0280
MR. POPELY said, "My professional opinion is that it probably would
not. I agree with Dick Bishop that the user preference that is
provided in the bill would not satisfy the rural preference that's
dictated by ANILCA. But I wouldn't foreclose that there's a
reasonable argument and that reasonable minds could disagree about
that."
Number 0351
ART IVANOFF, Subsistence Coordinator, Maniilaq Association,
testified via teleconference from Kotzebue, saying he opposes HB
255 for reasons cited by Carl Jack. He said the bill is based on
economics and focuses on a welfare-type program, not taking into
consideration cultural aspects of the Native people in rural
Alaska. Furthermore, there is no opportunity for people to
participate in policy decisions, as it gives the Board of Game and
the Board of Fisheries discretionary authority.
MR. IVANOFF responded to Representative Masek's question to Carl
Jack about whether the state had denied anyone the opportunity to
subsistence hunt or fish. He cited Moses Point and the Nome River
as examples where, "based on politics," the Board of Fisheries has
not allowed people to fish, based on "an interception problem we
have" in Area M. He said scientific data indicates 60 percent of
the chum salmon caught are destined for Northwest Alaska,
identified as stretching from the Arctic to Bristol Bay. He said
60 percent of 700,000 chum is nearly 420,000, a significant number
when talking about small rivers.
Number 0544
DICK COOSE, Executive Director, Concerned Alaskans for Resources
and Environment (CARE), testified via teleconference from
Ketchikan. He said CARE is a grass-roots organization that
addresses loss of access to public resources. With others, they
are forming a statewide coalition that wants the legislature, the
Governor and the congressional delegation to act immediately to
prevent federal takeover of state fisheries management and return
management of game to the state.
MR. COOSE acknowledged solutions will not be easy. While CARE has
no position for or against HB 255, they would like to see the bill
achieve their goal of full and effective state management of fish
and game. He said the federal government is slowly but surely
destroying "the livelihood and economy of Alaska." They have
divided the state into classes of user groups and then implemented
restrictions to the point that a user group or business is no
longer viable; he cited destruction of the Southeast Alaska timber
economy as an example. He said the question is whether Alaskans
will unite and prevent federal takeover of fisheries management, or
whether they will allow the federal government to take over and
destroy commercial and sport fisheries, as well as the related
local economies, followed by possible loss of tourism and mining.
Number 0839
REPRESENTATIVE OGAN commented that it appears the whole idea behind
federal intervention is to turn Alaska into a "big eco-tourist
park." He suggested if some of the problems with ANILCA are not
resolved, especially the commercial sale of fish, the very
existence of commercial fishing will be threatened, which he
believes is in no one's best interest. He called commercial
fishing "the biggest employer in the bush."
Number 0893
CALEB PUNGOWIYI, Subsistence Director, Kawerak, Incorporated,
testified via teleconference from Nome in opposition to HB 255. He
suggested it would require an enormous amount of administrative
work to implement. Referring to requirements for qualifying for
subsistence, he stated, "I think it's also very demeaning and
perhaps, in a way, sickening." He suggested it would be a law
enforcement nightmare. He said he is getting to where he no longer
cares whether the state gets management of fish and game back. He
concluded by questioning whether there is intelligent life in the
legislature.
Number 1056
GLORIA STICKWAN testified via teleconference from Glennallen,
saying she wanted to reiterate Carl Jack's comments; she did so.
In response to Representative Masek's conversation with Mr. Jack,
she briefly discussed a lawsuit filed against the state, which
resulted from fishing being closed except for weekends in 1976, and
the time for moose hunting being reduced to five days one year.
She said the state was not providing protection.
CO-CHAIRMAN OGAN suggested when seasons and bag limits are reduced,
it protects the resource for future use. He asked whether Ms.
Stickwan was saying subsistence use of those resources had been cut
back or whether it was general hunting and fishing seasons.
MS. STICKWAN said yes to the latter. The people of Copper River
had filed a lawsuit against the state because of it.
CO-CHAIRMAN OGAN asked what the outcome was.
MS. STICKWAN said she believes they got the fishing back. She said
the state does not really protect them. She does not see it as
protection when they cannot fish, which they depend on for a
living.
CO-CHAIRMAN OGAN commented that he does not know the exact
particulars of that case; however, many of those are resource
management decisions rather than allocative decisions towards
groups.
Number 1311
ANGIE MORGAN testified via teleconference from Aniak in opposition
to HB 255. She said much of what she wanted to say was already
stated by Carl Jack, Art Ivanoff and "all the others that were
opposing it." She said the river is a highway for people living in
the villages. For example, right now, everyone is anxious for the
ice to move so they can get fresh fish. They also use the river as
a highway in the winter to enable them to hunt moose. In addition,
people feel that House bills are "always against subsistence users
here." In her area, people look at subsistence as their lifestyle.
She had lived in Anchorage before; now living in Aniak, she is
beginning to see the importance of keeping the customary and
traditional lifestyle.
Number 1494
CO-CHAIRMAN OGAN asked if anyone else wished to testify, then
concluded the hearing. (House Bill 255 was held over.)
ADJOURNMENT
Number 1504
CO-CHAIRMAN OGAN adjourned the House Resources Standing Committee
meeting at 3:15 p.m.
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