Legislature(1999 - 2000)
05/05/1999 01:23 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 5, 1999
1:23 p.m.
MEMBERS PRESENT
Representative Scott Ogan, Co-Chair
Representative Jerry Sanders, Co-Chair
Representative Beverly Masek, Vice Chair
Representative John Harris
Representative Carl Morgan
Representative Ramona Barnes
Representative Jim Whitaker
Representative Reggie Joule
MEMBERS ABSENT
Representative Mary Kapsner
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 134(RLS)
"An Act authorizing the Alaska Oil and Gas Conservation Commission
to determine the amount of and to collect a charge for operating
wells subject to the commission's jurisdiction, and to allocate
expenses of investigation and hearing; authorizing the commission
to employ additional professional staff; repealing the oil and gas
conservation tax; and providing for an effective date."
- MOVED CSSB 134(RLS) OUT OF COMMITTEE
HOUSE BILL NO. 194
"An Act correcting, in the Alaska Disaster Act, a reference to the
former oil and hazardous substance release response fund to
describe that fund by its correct name."
- MOVED HB 194 OUT OF COMMITTEE
HOUSE CONCURRENT RESOLUTION NO. 2
Relating to the sovereignty of the State of Alaska and the
sovereign right of the State of Alaska to manage the natural
resources of Alaska.
- HEARD AND HELD
* HOUSE CONCURRENT RESOLUTION NO. 9
Relating to Take a Kid Hunting Weekend.
- MOVED CSHCR 9(RES) OUT OF COMMITTEE
HOUSE BILL NO. 104
"An Act revising the procedures and authority of the Alaska
Commercial Fisheries Entry Commission, the Board of Fisheries, and
the Department of Fish and Game to establish a moratorium on
participants or vessels, or both, participating in certain
fisheries; and providing for an effective date."
- MOVED CSHB 104(FSH) OUT OF COMMITTEE
* HOUSE BILL NO. 23
"An Act classifying anadromous streams and tributaries; relating to
the designation of riparian areas; establishing buffers on certain
streams and relating to slope stability standards on certain
streams; and requiring retention of low value timber along certain
water bodies where prudent."
- BILL HEARING CANCELED
(* First public hearing)
PREVIOUS ACTION
BILL: SB 134
SHORT TITLE: WELL REGULATORY COST CHARGE/CONS. TAX
SPONSOR(S): SENATOR(S) PEARCE, Halford
Jrn-Date Jrn-Page Action
4/01/99 771 (S) READ THE FIRST TIME - REFERRAL(S)
4/01/99 771 (S) RES, FIN
4/12/99 (S) RES AT 3:00 PM BUTROVICH 205
4/13/99 899 (S) RES RPT CS 4DP 1NR NEW TITLE
4/13/99 900 (S) DP: HALFORD, PETE KELLY, GREEN,
TAYLOR;
4/13/99 900 (S) NR: MACKIE
4/13/99 900 (S) FISCAL NOTE (ADM)
4/23/99 (S) FIN AT 8:00 AM SENATE FINANCE 532
4/23/99 (S) MOVED CS(FIN) OUT OF COMMITTEE
4/23/99 (S) RLS AT 12:25 PM FAHRENKAMP 203
4/23/99 (S) MINUTE(RLS)
4/23/99 1062 (S) FIN RPT CS 4DP 3NR 1DNP NEW TITLE
4/23/99 1062 (S) DP: TORGERSON, GREEN, PETE KELLY,
4/23/99 1062 (S) WILKEN; NR: PHILLIPS, LEMAN, DONLEY;
4/23/99 1062 (S) DNP: ADAMS
4/23/99 1062 (S) PREVIOUS FISCAL NOTE (ADM)
4/23/99 1062 (S) FISCAL NOTE (REV)
4/27/99 (S) RLS AT 12:00 PM FAHRENKAMP 203
4/27/99 (S) MINUTE(RLS)
4/28/99 1150 (S) RULES TO CALENDAR W/CS NEW TITLE
4/28/99
4/28/99 1150 (S) DP: TIM KELLY, MILLER, LEMAN,
4/28/99 1150 (S) PEARCE, ELLIS
4/28/99 1150 (S) FISCAL NOTE TO CS (ADM)
4/28/99 1153 (S) READ THE SECOND TIME
4/28/99 1153 (S) RLS CS ADOPTED UNAN CONSENT
4/28/99 1153 (S) ADVANCED TO THIRD READING
UNAN CONSENT
4/28/99 1153 (S) READ THE THIRD TIME CSSB 134(RLS)
4/28/99 1153 (S) COSPONSOR(S): HALFORD
4/28/99 1154 (S) PASSED Y16 N1 E2 A1
4/28/99 1154 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
4/28/99 1154 (S) ADAMS NOTICE OF RECONSIDERATION
4/29/99 1174 (S) RECONSIDERATION NOT TAKEN UP
4/29/99 1175 (S) TRANSMITTED TO (H)
4/30/99 1102 (H) READ THE FIRST TIME - REFERRAL(S)
4/30/99 1102 (H) RES, FIN
5/05/99 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 194
SHORT TITLE: DISASTER ASSISTANCE
SPONSOR(S): REPRESENTATIVES(S) WHITAKER
Jrn-Date Jrn-Page Action
4/13/99 795 (H) READ THE FIRST TIME - REFERRAL(S)
4/13/99 795 (H) O&G, RES
4/20/99 (H) O&G AT 5:00 PM CAPITOL 17
4/20/99 (H) <BILL POSTPONED TO 4/29>
4/22/99 (H) O&G AT 5:00 PM CAPITOL 17
4/22/99 (H) MOVED OUT OF COMMITTEE
4/22/99 (H) MINUTE(O&G)
4/23/99 944 (H) O&G RPT 6DP 2NR
4/23/99 944 (H) DP: KEMPLEN, PHILLIPS, PORTER,
SMALLEY,
4/23/99 944 (H) HARRIS, WHITAKER; NR: OGAN, BRICE
4/23/99 944 (H) 2 ZERO FISCAL NOTES (DEC, DMVA)
4/23/99 944 (H) REFERRED TO RESOURCES
5/05/99 (H) RES AT 1:00 PM CAPITOL 124
BILL: HCR 2
SHORT TITLE: SOVEREIGNTY OF THE STATE; RESOURCES
SPONSOR(S): REPRESENTATIVES(S) COGHILL, Barnes, Green
Jrn-Date Jrn-Page Action
2/24/99 300 (H) READ THE FIRST TIME - REFERRAL(S)
2/24/99 300 (H) WTR, FSH, RESOURCES
3/16/99 (H) WTR AT 5:00 PM CAPITOL 124
3/16/99 (H) MOVED OUT OF COMMITTEE
3/16/99 (H) MINUTE(WTR)
3/17/99 490 (H) WTR RPT 4DP 2DNP
3/17/99 490 (H) DP: MASEK, GREEN, COWDERY, BARNES;
3/17/99 490 (H) DNP: BERKOWITZ, JOULE
3/17/99 490 (H) ZERO FISCAL NOTE (H.WTR)
3/17/99 497 (H) COSPONSOR(S): GREEN
4/12/99 (H) FSH AT 5:00 PM CAPITOL 124
4/12/99 (H) <BILL POSTPONED TO 4/19>
4/19/99 (H) FSH AT 5:00 PM CAPITOL 124
4/19/99 (H) HEARD AND HELD
4/19/99 (H) MINUTE(FSH)
4/26/99 (H) FSH AT 5:00 PM CAPITOL 124
4/26/99 (H) SCHEDULED BUT NOT HEARD
5/03/99 (H) FSH AT 5:00 PM CAPITOL 124
5/03/99 (H) MOVED CSHCR 2(FSH) OUT OF COMMITTEE
5/03/99 (H) MINUTE(FSH)
5/05/99 1177 (H) FSH RPT CS(FSH) 1DNP 3NR
5/05/99 1178 (H) DNP: MORGAN; NR: WHITAKER, HUDSON,
5/05/99 1178 (H) SMALLEY
5/05/99 1178 (H) ZERO FISCAL NOTE (H.WTR) 3/17/99
5/05/99 1178 (H) REFERRED TO RESOURCES
5/05/99 (H) RES AT 1:00 PM CAPITOL 124
BILL: HCR 9
SHORT TITLE: TAKE A KID HUNTING WEEK
SPONSOR(S): REPRESENTATIVES(S) PHILLIPS
Jrn-Date Jrn-Page Action
4/21/99 899 (H) READ THE FIRST TIME - REFERRAL(S)
4/21/99 899 (H) RESOURCES
5/05/99 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 104
SHORT TITLE: ENTRY MORATORIA ON PARTICIPANTS/VESSELS
SPONSOR(S): REPRESENTATIVES(S) HUDSON, Austerman
Jrn-Date Jrn-Page Action
2/19/99 260 (H) READ THE FIRST TIME - REFERRAL(S)
2/19/99 260 (H) FSH, RES
3/08/99 (H) FSH AT 5:00 PM CAPITOL 124
3/08/99 (H) MOVED CSHB 104(FSH)
3/08/99 (H) MINUTE(FSH)
3/10/99 408 (H) FSH RPT CS(FSH) NT 4DP
3/10/99 408 (H) DP: KAPSNER, MORGAN, WHITAKER, HUDSON
3/10/99 408 (H) ZERO FISCAL NOTE (F&G)
3/10/99 408 (H) REFERRED TO RES
4/14/99 (H) RES AT 1:00 PM CAPITOL 124
4/14/99 (H) HEARD AND HELD
4/14/99 (H) MINUTE(RES)
4/21/99 (H) RES AT 1:00 PM CAPITOL 124
4/21/99 (H) HEARD AND HELD
4/21/99 (H) MINUTE(RES)
4/28/99 (H) RES AT 1:00 PM CAPITOL 124
4/28/99 (H) HEARD AND HELD
5/05/99 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
PATRICK CARTER, Legislative Assistant
to Senator Drue Pearce
Alaska State Legislature
Capitol Building, Room 111
Juneau, Alaska 99801
Telephone: (907) 465-4993
POSITION STATEMENT: Presented SB 134 on behalf of sponsor.
JUDY BRADY, Executive Director
Alaska Oil and Gas Association
221 West Fireweed Lane
Anchorage, Alaska 99503
Telephone: (907) 272-1481
POSITION STATEMENT: Testified on SB 134; expressed concerns.
MARK WORCESTER, Counsel
ARCO Alaska, Incorporated
P.O. Box 100360
Anchorage, Alaska 99510
Telephone: (907) 265-6544
POSITION STATEMENT: Testified on SB 134; shared AOGA's concerns.
REPRESENTATIVE JOHN COGHILL, JR.
Alaska State Legislature
Capitol Building, Room 416
Juneau, Alaska 99801
Telephone: (907) 465-3719
POSITION STATEMENT: Testified as sponsor of HCR 2.
DICK BISHOP
Alaska Outdoor Council
P.O. Box 73902
Fairbanks, Alaska 99707
Telephone: (907) 463-3830 (Juneau)
(907) 455-4262 (Fairbanks)
POSITION STATEMENT: Testified in support of HCR 2 and HCR 9.
JOANNE GRACE, Assistant Attorney General
Natural Resources Section
Civil Division (Anchorage)
Department of Law
1031 West 4th Avenue, Suite 200
Anchorage, Alaska 99501-1994
Telephone: (907) 269-5100
POSITION STATEMENT: Testified on HCR 2.
JUDITH JORDAN, Legislative Assistant
to Representative Gail Phillips
Alaska State Legislature
Capitol Building, Room 411
Juneau, Alaska 99801
Telephone: (907) 465-2646
POSITION STATEMENT: Presented HCR 9 on behalf of Representative
Phillips.
ACTION NARRATIVE
TAPE 99-30, SIDE A
Number 0001
CO-CHAIR SCOTT OGAN called the House Resources Standing Committee
meeting to order at 1:23 p.m. Members present at the call to order
were Representatives Ogan, Sanders, Masek, Harris, Morgan and
Barnes. Representatives Joule and Whitaker arrived at 1:24 p.m.
and 1:26 p.m., respectively.
CSSB 134(RLS) - WELL REGULATORY COST CHARGE/CONS. TAX
CO-CHAIR OGAN announced that the first item of business would be CS
for Senate Bill No. 134(RLS), "An Act authorizing the Alaska Oil
and Gas Conservation Commission to determine the amount of and to
collect a charge for operating wells subject to the commission's
jurisdiction, and to allocate expenses of investigation and
hearing; authorizing the commission to employ additional
professional staff; repealing the oil and gas conservation tax; and
providing for an effective date."
Number 0105
PATRICK CARTER, Legislative Assistant to Senator Drue Pearce,
Alaska State Legislature, came forward on behalf of the sponsor.
He explained that SB 134 repeals the existing oil and gas
conservation tax, and it institutes a more stable funding source,
to ensure that the Alaska Oil and Gas Conservation Commission
(AOGCC) is capable of carrying out its objective of protecting the
public interest. The primary goal of the AOGCC is to ensure that
no hydrocarbons are wasted, he noted, and that operations are
conducted in a manner that provides maximum recovery of the
resource.
MR. CARTER advised members that the original intent of the
legislature was to have the oil and gas industry pay for regulatory
cost oversight through the oil and gas conservation tax; that tax
is directly proportional to production, with a
four-mills-per-barrel fee rate. Although production is declining,
the workload of the AOGCC is not, and the system is no longer
sufficient to cover the costs associated with its operation.
Therefore, SB 134 creates a program-receipt-type system in which
the regulatory cost charge is directly associated with the total
volume of liquids produced or injected, to more accurately reflect
factors directly associated with AOGCC's workload. Furthermore, SB
134 provides for recovery of costs associated with an investigation
or hearing, which would be allocated to the parties involved if
there were a unitization dispute on the North Slope, for example.
MR. CARTER reported that the AOGCC had experienced budget
difficulties in the past; even when tax proceeds exceeded annual
appropriations, those weren't always appropriated to the AOGCC.
Certain members of the oil and gas industry have raised concerns
that this type of program receipt system wouldn't receive the same
level of scrutiny during budgetary oversight by the legislature.
However, he said, Senator Pearce believes that the oil and gas
industry is quite capable of bringing to the legislature's
attention any excessive budget requests by the AOGCC.
MR. CARTER pointed out that SB [134] also strengthens the AOGCC by
adding four staff. Currently, the level of institutional knowledge
at the commission is one person deep, including one petroleum
engineer, one reservoir engineer and one petroleum geologist.
"Right now, also, they feel that the inspection program is lacking
one inspector," he advised the committee. "We've added one
additional person to each one of those positions." Mr. Carter
concluded by saying SB 134 will create a more stable funding
source, enabling the AOGCC to provide the monitoring services
necessary to protect Alaskan interests into the future.
Number 0426
CO-CHAIR OGAN referred to page 2, line 18, which says, "The
commission shall annually determine regulatory cost charges under
this section." He noted that it goes on to describe that the
amount being collected approximates the appropriations made for the
commission's operating costs. He suggested that some would argue
this gives carte blanche authority to the AOGCC, what he calls the
"Chilkoot Charlie syndrome," cheating the other guy and passing the
savings on. He referred to Mr. Carter's opening remarks,
suggesting the oil companies would have the ability to hold the
legislature's feet to the fire because they have lobbyists
representing them, and they scrutinize the budget closely. He then
asked Mr. Carter to talk about the safeguards.
Number 0582
MR. CARTER explained that under the current system, the budget
would still have to go through the Office of Management and Budget
(OMB), then through the budgetary considerations by the
legislature. He stated, "A good 'for instance' on why Senator
Pearce doesn't share their concerns ... that it won't receive
budget oversight is the APUC [Alaska Public Utilities Commission],
as most people are well-aware, has an enormous backlog of cases.
They came before the legislature recently and requested twelve
additional personnel. The legislature did not approve that; they
approved four personnel, even with the current backlog that they
have. Senator Pearce doesn't share their concerns ... that it
won't have legislative oversight, or the legislative oversight will
be somehow weakened by moving it to a program receipt system, as
opposed to a general fund receipt system."
Number 0680
CO-CHAIR OGAN asked whether the APUC has this type of funding
source.
MR. CARTER replied, "Regulatory cost charge. And the oil and gas
industry pays that regulatory cost charge based on tariffs for the
pipeline right now, and they don't currently have that problem.
But we've never heard a concern expressed about the APUC type of
funding system."
CO-CHAIR OGAN noted that on page 3, lines 11-13, it says, "The
legislature may appropriate to the commission for its operating
costs under this chapter for the next fiscal year an amount that is
at least equal to the lapsed amount." On line 15, it further says
that "the commission shall reduce the total regulatory [cost]
charge collected" after they do that. Emphasizing the word
"shall," and noting that leftover receipts could be rolled forward,
he asked for confirmation that the legislature can do that already.
MR. CARTER explained that under the current system, with the
conservation tax, it is actually general fund monies; it is up to
the legislature whether or not to appropriate those monies in their
entirety. Under the system proposed in SB 134, in contrast, if
there were $300,000 left over at the end of the year, that money
would be rolled into the next year's budget. Under the formula,
they take the total volume of liquids produced or injected, as well
as the cost associated with the AOGCC's monitoring of those fluids.
For instance, if the total fluids under last year's operations were
3.3 billion, and Badami made up 1.2 million of that, then 1.2
million would be divided [into] 3.3 billion; that fraction would be
multiplied by the approved budget, and that would be Badami's share
of that budget. If it were rolled into the next year, each person
would receive a percentage of that deducted from the regulatory
cost charge associated with the current year. To remove any
guesswork about current-year production levels for this year's
budget, Mr. Carter explained, Senator Pearce had felt it would be
easier to use the volumes produced last year.
Number 0892
REPRESENTATIVE BARNES commented that the system in place for the
APUC has worked very well. Noting the AOGCC's $200,000 budget
shortfall this year, as yet unaddressed by the legislature, she
expressed belief that this is a good bill; she doesn't see it as a
tax on the oil and gas industry, she said, as it is a service
provided to them. Reminding members of the proposed oil company
merger, she stressed the importance of having the AOGCC continue.
Number 0998
CO-CHAIR OGAN concurred that the AOGCC is important because of the
merger, and he characterized the commission as the policemen of the
field, with quasi-judicial powers. He then asked Mr. Carter if
Section 3 is simply the program receipt authorization.
MR. CARTER affirmed that.
CO-CHAIR OGAN noted that AS 43.57 is the section on the oil and gas
conservation tax. He stated his understanding that Section 4
eliminates those two taxes, and that the rest of the bill replaces
it with program receipts.
MR. CARTER affirmed that, also.
Number 1101
CO-CHAIR OGAN called upon Bob Christenson, chairman of the AOGCC,
who informed members via teleconference from Anchorage that he was
available to answer questions.
Number 1160
JUDY BRADY, Executive Director, Alaska Oil and Gas Association
(AOGA), testified via teleconference from Anchorage, noting that
AOGA is a trade association whose 18 members account for the
majority of oil and gas exploration, production, transportation,
refining and marketing activities in Alaska. She said AOGA had
testified before the Senate Finance Committee regarding concerns
about SB 134, and she indicated she would express continuing points
of concern. Ms. Brady stated:
AOGA supports adequate funding for the AOGCC, and for as long
as AOGCC has been in place, the oil and gas industry has paid,
through a tax, ... for its performance. And, as was pointed
out, for years that tax was more than the legislature
appropriated to the AOGCC. And so, we have always supported
adequate funding for the AOGCC. It is an important
organization for us. We were concerned when the Senate ...
did not appropriate money for it this year. We were concerned
when the Governor's office didn't appropriate the money that
they needed. But we're also concerned that SB 134 creates a
virtually unlimited funding taxing mechanism.
The commission is a regulatory agency which oversees the
underground operations of the oil industry on private and
public lands and waters in Alaska. It is the agency which
regulates drilling and production of oil and gas, to ensure
that physical waste does not occur, to ensure maximum ultimate
recovery of oil and gas resources, and to protect the
correlative rights of all oil and gas interest owners. It is
also the agency authorized by the EPA [Environmental
Protection Agency] to manage the state's underground injection
control program, which is a very important program to the AOGA
members, and for which AOGCC receives, I believe, $100,000 a
year.
It's critical to the oil and gas industry in Alaska that the
AOGCC maintain a continuous ability to issue permits and
decisions that are required for ongoing oil field
explorations. We realize the AOGCC needs adequate funding,
and would remain interested in discussing options that will
assure the AOGCC's budget is appropriate for the work they are
required to do. Some options ... might include a budget cap,
a budget review committee comprised of members of the AOGCC,
the legislature, the industry and the public, or some other
mechanisms.
And I believe if 133 passes, then ... there is an oversight by
Legislative Budget and Audit in this next summer about the
functions of the AOGCC, along with the functions of the APUC,
that the question of what the agency does or does not spend
its time on ... will become clear to everybody.
We're concerned that the funding mechanism embodied in [SB]
134 charges an assessment on oil, gas and water which is
injected, as well as oil and gas produced. AOGA would propose
that a fee be assessed on revenue-generating production of oil
and gas, and that the funding mechanism be less complicated
and, therefore, less subject to controversy. Assessing a fee
based on the volume of production also would be more equitable
to the industry, as it would not overburden low-volume fields.
We are very interested in working on an acceptable proposal in
the next few days, which would provide funding certainty for
the AOGCC and would also provide a level of equity and
certainty for the industry. We reiterate our continuing
support for a fully functional, adequately funded, independent
AOGCC. We remain committed to working with the legislature
and the Administration to develop an appropriate and
accountable way to fund the AOGCC.
Number 1414
CO-CHAIR OGAN declared that the committee's purview is to make sure
that bills are in the best interests of resource development in the
state. He suggested that funding questions and sources might be
better handled by the House Finance Committee.
REPRESENTATIVE BARNES commented that the legislature is under
tremendous pressure to get their fiscal house in order, and she
looks upon this bill as one way to do that. She expressed
dissatisfaction with hearing that this bill needs to be rewritten
at this late date. She pointed out that there would be oversight
because the legislature oversees all state agencies. Furthermore,
she said, she believes that the legislature would be the first to
step in, if there were exorbitant fees or no justification for what
was being charged.
Number 1516
MS. BRADY reported that AOGA is trying to discuss with the bill
sponsor another approach to the funding mechanism. If they are
able to work out a compromise on that, it will be presented to the
House Finance Committee.
CO-CHAIR OGAN restated his belief that the House Finance Committee
is the appropriate venue for the funding sources.
Number 1585
MARK WORCESTER, Counsel, ARCO Alaska, Incorporated (ARCO),
testified via teleconference from Anchorage, stating that generally
ARCO supports, and obviously is a supporter of, AOGA, and they
endorse the statement that Judy Brady gave. Emphasizing a few
points, he told members:
We, as AOGA, support full and adequate funding for the AOGCC,
... and it seems to be a consensus on the committee, as well,
that this is an important agency, and it should have adequate
funding. We share the concerns articulated by AOGA about the
funding sources, and how the appropriation process works. We
believe that there are a number of ways that could potentially
address our concerns.
One would be ... if we used a tax on production, putting a ...
per-mill limit, with a cap. ... Another way would be some sort
of oversight committee, comprised of a variety of input
sources - from the Administration, legislature, industry,
public, or whatever is deemed appropriate - to review the
budget before it's submitted. And we're prepared to consider
any other options, and to work cooperatively and
constructively to get something that serves everyone's
interests and meets all the concerns.
And, finally, ARCO supports these comments that were made just
in recent discussions that this is an appropriate issue for
the Finance Committee. And we are quite committed to working
with the sponsor, interested members of the legislature, the
commission, and the Finance Committee to find an appropriate
resolution to everyone's concerns.
Number 1697
CO-CHAIR OGAN asked if anyone else wished to testify, then closed
public testimony.
REPRESENTATIVE BARNES indicated her belief that whatever work a
committee feels is necessary, including work on financial issues,
should be addressed before moving a bill forward. Having said
that, she stated that she believes SB 134 is technically correct
and fiscally relevant.
Number 1779
REPRESENTATIVE BARNES made a motion to move CSSB 134(RLS) from the
committee with individual recommendations and accompanying fiscal
notes; she asked unanimous consent.
CO-CHAIR OGAN clarified that his own statements about the funding
didn't reflect a belief that the bill is flawed. However, people
had testified to the contrary, and he believes it is appropriate
that the House Finance Committee look at it. Co-Chair Ogan asked
if there was any objection to moving the bill. There being no
objection, he announced that CSSB 134(RLS) was moved from the House
Resources Standing Committee.
HB 194 - DISASTER ASSISTANCE
CO-CHAIR OGAN announced that the next item of business would be
House Bill No. 194, "An Act correcting, in the Alaska Disaster Act,
a reference to the former oil and hazardous substance release
response fund to describe that fund by its correct name."
Number 1920
REPRESENTATIVE WHITAKER, sponsor, advised fellow members that HB
194 is a housekeeping bill. As noted in the sponsor statement, the
language change has no effect other than ensuring that the statutes
read as they should.
CO-CHAIR OGAN asked if anyone had questions or wished to testify;
there was no response.
Number 1934
REPRESENTATIVE BARNES made a motion to move HB 194 out of committee
with individual recommendations and attached [zero] fiscal notes;
she asked unanimous consent. There being no objection, HB 194
moved from the House Resources Standing Committee.
HCR 2 - SOVEREIGNTY OF THE STATE; RESOURCES
CO-CHAIR OGAN announced that the next item of business would be
House Concurrent Resolution No. 2, relating to the sovereignty of
the State of Alaska and the sovereign right of the State of Alaska
to manage the natural resources of Alaska. Before the committee
was CSHCR 2(FSH).
Number 1971
REPRESENTATIVE JOHN COGHILL, JR., Alaska State Legislature, prime
sponsor, explained that HCR 2 calls for this legislature to ask the
Governor to appeal to the United States Supreme Court for
resolution of an issue about which there is strong disagreement in
Alaska. He suggested that many hard feelings in Alaska may have
been stirred up by an impasse caused by the federal government.
REPRESENTATIVE COGHILL noted that HCR 2 begins with a short history
of Alaska's admission to the Union under the Equal Footing
Doctrine, and mentions how the submerged lands give the state the
exclusive right to manage its fisheries. It also talks about the
state constitution in several places, including that the resources
are for the common use of the people.
REPRESENTATIVE COGHILL explained that the legitimate dispute now
between Congress and the state is because Title VIII of the Alaska
National Interest Lands Conservation Act (ANILCA) causes the state
to manage resources against its own constitution. The state cannot
simply amend the constitution to get out of it. Rather, it would
require revising the entire constitution, which would necessitate
calling for a constitutional convention. Therefore, he believes
the state has legitimate grounds to appeal to the U.S. Supreme
Court, based on original jurisdiction.
Number 2104
REPRESENTATIVE JOULE requested clarification about the need for a
constitutional convention.
REPRESENTATIVE COGHILL replied that the changes that would be
demanded of Alaska right now would change the constitution in
several places, constituting a revision. The Alaska Supreme Court
decision in the Bess case says that the state cannot just amend the
constitution in one area, but that it would constitute a revision.
Even without that, however, it would have to be amended in no less
than eight different places, he noted, in order to conform with
what is being required.
REPRESENTATIVE COGHILL pointed out that the Alaska Supreme Court
and Congress have already spoken on the matter. "We have a real
problem in Alaska trying to decide how we're going to answer that,"
he added. Noting that this deals with rights guaranteed by our
constitution, which the people formed, he said Alaska entered in
good faith into the United States under the Equal Footing Doctrine,
and signed off on the requirements to become a state. There is a
legitimate appeal, therefore, and the revision of the state
constitution mandated by congressional action needs to be reviewed
by the U.S. Supreme Court.
Number 2203
REPRESENTATIVE JOULE asked if Representative Coghill thinks
Governor Knowles would do this, when he has said he wouldn't.
REPRESENTATIVE COGHILL replied, "That is not for me to decide. He
may or may not. ... That's his response. Our response should be to
uphold our constitution, defend it as best we can, and, at this
particular point, I think an appeal to the [U.S.] Supreme Court is
probably one of our last places of appeal. I think we need to do
it. We have a jurisdictional ground, based on original
jurisdiction. I think we're well within our grounds on a
constitutional basis."
Number 2249
REPRESENTATIVE JOULE commented that the objection to conforming to
Title VIII [of ANILCA] seems to do with equality, common use and
people in some parts of Alaska wanting to be equal to others in
rural parts of the state. He sometimes gets a little frustrated
that that equality seems to be a one-way street in the larger
scheme of legislative appropriations and policy, he said, when
other parts of the state are crying out for equity in other kinds
of state policies that the legislature passes. He finds that to be
an interesting argument.
REPRESENTATIVE COGHILL suggested the question of how to equitably
take care of the urban versus rural areas is a frustration that
everyone feels. However, this particular resolution deals not with
that, but with the Department of the Interior's mandate that Alaska
revise its constitution. He added, "To me, at this point, the only
answer that we can give is 'no,' and we take it to the supreme
court for the answer to that. That really doesn't have to do with
the equality of the citizens within Alaska. It has more to do with
the equality of Alaska within the 50 United States."
Number 2360
CO-CHAIR OGAN indicated he would be interested in somebody doing a
study about per capita expenditures by region, to perhaps settle
some of the arguments.
Number 2386
REPRESENTATIVE HARRIS noted that he'd heard HCR 2 in the House
Special Committee on Fisheries, as well. He asked if it is
Representative Coghill's intention to ask Governor Knowles to bring
the state back "to where we were when Governor Hickel was here and
had actually filed the lawsuit and asked that the supreme court
hear this, and then the present Governor removed that."
REPRESENTATIVE COGHILL said no, the intention is to use original
jurisdiction as the basis for appeal. During the days
Representative Harris mentioned, it was in a circuit court.
Because there is a time line mandate, he believes this is a
legitimate appeal, he added.
REPRESENTATIVE HARRIS responded that he believes it was the
intention in that previous case to have it go through the system,
to the U.S. Supreme Court, if it went that far.
REPRESENTATIVE COGHILL stated his belief that the appeal for
original jurisdiction puts the U.S. Supreme Court in a position
where it has to respond.
Number 2458
CO-CHAIR OGAN commented that the Bess case certainly got his
interest. He noted that the amendment drafted last year, for
example, which the Department of the Interior requested, on its
surface affected just one area of the constitution, Article VIII,
Section 3, the common use provision, by adding a rural preference.
When he had asked the legislative drafters to draft an amendment
and show him the different areas of the constitution that it
actually affected, however, they drafted a conservative amendment
of five sections affected: common use, equal protection, no
exclusive right to a fishery, uniform application and one other, as
well as possibly sustained yield. Co-Chair Ogan asked what eight
areas Representative Coghill believes would be affected.
Number 2518
REPRESENTATIVE COGHILL acknowledged that some may be open to
interpretation, then said the eight areas are: Article I, Section
1, which talks about equal rights; Article I, Section 15, "no law
making any irrevocable grant of special privileges or immunities";
Article VIII, Section 3, "reserved for common use"; Article VIII,
Section 4, "subject to preferences among the beneficial users,"
which he said may be a stretch; Article VIII, Section 13, "all
surface and subsurface waters reserved to the people for common
use"; Article VIII, Section 14, "free access to navigable waters or
public [waters] of the state of Alaska, as defined by the
legislature, shall not be denied any citizen"; [Article VIII,
Section 15], "no exclusive right of fishery ... shall be created";
and Article VIII, Section 17, "laws and regulations governing use
[or] disposal of natural resources shall apply equally to all
persons."
Number 2595
CO-CHAIR OGAN asked whether Representative Coghill has legal
documentation backing up the fact that there would probably be a
revision required.
REPRESENTATIVE COGHILL answered that it is the Alaska Supreme Court
case, Bess.
CO-CHAIR OGAN clarified that he was asking about what is being
requested by the Department of the Interior.
REPRESENTATIVE COGHILL replied, "Just the supreme court, Bess. And
with regard to the Governor making the case, he was also asked to
uphold this constitution. ... If he calls for a constitutional
convention, that's within his right. But in this particular case,
to amend our constitution, to acquiesce to Title VIII, I think we
would be out of bounds."
Number 2629
CO-CHAIR OGAN said he doesn't mean to impugn the Governor's
intentions here at all. He then expressed hope that if this
resolution is successful and the Governor decides to litigate, it
would be done correctly, so as not to establish poor case law,
especially in the U.S. Supreme Court.
REPRESENTATIVE COGHILL remarked that he himself hasn't been taught
to do what is right based on what other people will do. He
restated his belief that the appeal is legitimate, expressing hope
that the legislature could change Governor Knowles' mind, as he
believes this is one of the best answers coming forward now.
CO-CHAIR OGAN commented, "Regardless of which side of the issue you
fall on, on the subsistence issue, I think if we did get our day in
the supreme court, it would settle it. It may settle it in one
party's favor over another, but it would certainly bring closure to
it."
Number 2871
JOANNE GRACE, Assistant Attorney General, Natural Resources
Section, Civil Division (Anchorage), Department of Law, testified
via teleconference from Anchorage. She emphasized that she doesn't
believe that Governor Knowles will follow the resolution's
suggestion to file an original action in the U.S. Supreme Court,
challenging the constitutionality of Title VIII of ANILCA. She
reminded members that Governor Knowles has consistently stated,
since taking office, that he doesn't believe litigation is the
answer to Alaska's subsistence dilemma.
MS. GRACE cautioned that even in the unlikely event that the
Governor were to change his mind, this case would face
insurmountable jurisdictional problems, such as res judicata and
the running of the statute of limitations. The U.S. Supreme Court
doesn't have to take an original action, she pointed out. The
state would have to petition the court, and the United States would
unquestionably raise the jurisdictional problems and the statute of
limitations, which was the basis of the court's dismissal of the
Legislative Council's lawsuit on Title VIII of ANILCA. Therefore,
she doesn't believe that the court would take the case. However,
if the legislature wants to pass the resolution anyway, she
believes there are problems with some of its supporting language.
She asked if the committee wanted to hear testimony on that.
Number 2808
REPRESENTATIVE BARNES stated that she feels personally offended
that a member of the Administration would come forward on a
resolution and testify that the Governor absolutely won't do this,
even before the legislation wings it way through. She next
referred to the question raised about the Legislative Council
lawsuit and stated that she doesn't believe Judge Robinson's (ph)
ruling was correct, or else the legislature wouldn't have appealed.
She disagreed that the statute of limitations has run, saying that
otherwise the Department of the Interior wouldn't still be
implementing regulations. She proposed that it is fluid and
changing.
Number 2871
MS. GRACE responded that she hadn't meant to offend, but she
believes it is her responsibility to reiterate the Governor's
position on litigating this issue. However, her main purpose is to
testify about the legal basis of the lawsuit and the supporting
language in the resolution. She explained that the statute of
limitations would depend on the basis of the challenge. As she
understands the resolution, it would be a constitutional challenge
to Title VIII [of ANILCA], which would be a facial challenge,
essentially saying that Title VIII violates the U.S. constitution
and therefore is invalid. Ms. Grace pointed out that the statute
of limitations isn't fluid on such a challenge; it starts to run
when the law takes effect and therefore would expire six years
later. A different kind of challenge, such as a challenge to the
regulations, however, wouldn't have that same rigid six-year
statute of limitations.
Number 2942
REPRESENTATIVE BARNES replied that we are just now feeling the most
onerous effects of that regulatory scheme, and obviously there is
a legal challenge that can still be taken before the courts.
TAPE 99-30, SIDE B
Number 2955 [Numbers run backwards because of tape machine]
DICK BISHOP, Alaska Outdoor Council (AOC), came forward, advising
committee members that the AOC supports HCR 2. He agreed that
there is a real dispute over the respective jurisdiction and
authority of the federal and state governments, which he believes
is fundamental to a number of resource management issues. Unless
and until it is resolved, he said, either politically or in the
courts, it will be difficult - if not impossible - to reach a
workable, long-lasting solution to Alaska's resource management
questions, including conservation and allocation. He believes it
is important for the legislature to highlight that controversy and
to urge resolution of it, by whatever means is at its disposal.
Certainly, one means is pressing for resolution in the courts, with
the ultimate resolution being in the U.S. Supreme Court.
MR. BISHOP recounted that the AOC was very disappointed when the
lawsuit filed by then-Governor Hickel was dropped by the current
Governor, who believed the case was counter to the interests of
subsistence users and that it offended 15 percent of the people of
Alaska. "He didn't at that time mention whether it was in the best
interests of the 85 percent of ... the people of the state," Mr.
Bishop added. He acknowledged that it is history now, but the
controversy and conflict in interpretation of jurisdiction remain.
MR. BISHOP referred to discussion of HCR 2 in the House Special
Committee on Fisheries. There, he said, it was pointed out that
there is a conflict between the Alaska Supreme Court ruling in the
Totemoff case that the federal government had no authority in
navigable waters, and, very shortly thereafter, the 9th Circuit
Court of Appeals ruling in the Katie John case that the federal
government did have authority in federal reserve waters. Mr.
Bishop stated, "That case was appealed; it was not heard. So, that
disagreement between those two August bodies of legal
interpretation still stands. ... It simply emphasizes the
importance of continuing to seek resolution. So, we strongly
support this. We think it is the appropriate thing to urge both
the legislature and the Governor to carry forward with this."
Number 2804
CO-CHAIR OGAN pointed out that he believes resolving this issue is
in the best interests of 100 percent of the people of the state.
He expressed hope that both equal protection and subsistence
interests can be accommodated.
MR. BISHOP agreed, indicating he wished the Governor had
characterized the issue that way in the first place.
Number 2716
REPRESENTATIVE BARNES made a motion to move CSHCR 2(FSH) from the
committee with individual recommendations and accompanying fiscal
note(s); she asked unanimous consent.
CO-CHAIR OGAN announced that he would like to put off moving the
resolution from committee until the end of the meeting.
Number 2690
REPRESENTATIVE BARNES, without objection, withdrew her motion.
CO-CHAIR OGAN turned the gavel over to Co-Chair Sanders. [End of
this portion. At tape number 2142, Co-Chair Ogan announced that
HCR 2 would be held over until Friday, May 7, 1999.]
HCR 9 - TAKE A KID HUNTING WEEK
CO-CHAIR SANDERS announced that the next item of business would be
House Concurrent Resolution No. 9, relating to Take a Kid Hunting
Weekend.
Number 2639
JUDITH JORDAN, Legislative Assistant to Representative Gail
Phillips, Alaska State Legislature, read the following sponsor
statement:
HCR 9 seeks to name the second weekend in September each year
as "Take a Kid Hunting Weekend." Such an event would greatly
assist in preserving our hunting heritage and to encourage
Alaskan hunters to become knowledgeable in the areas of
sportfishing and hunting. Naming a special weekend would
complement the Hunter Education and Shooting Sports program
funded last year by the legislature.
Representative Phillips is hopeful that the members of this
committee are willing to dedicate a special weekend where
experienced hunters can pass along to our children hunting
skills, gun safety awareness and the contributions of
responsible and ethical hunter behavior.
REPRESENTATIVE JOULE said he supports HCR 9 and wishes more people
would be encouraged to follow the intent. He noted that one
reason for wanting more adults to take children out is because
Alaska has an abundance and variety of fish and wildlife resources;
however, that is not referenced in HCR 9.
Number 2411
REPRESENTATIVE JOULE made a motion to adopt Amendment 1, which adds
the following language to line 3, and then renumbers accordingly:
WHEREAS Alaska's abundance and variety of natural resources
are unmatched in the United States; and
There being no objection, Amendment 1 was adopted.
Number 2452
REPRESENTATIVE MASEK made a motion to adopt Amendment 2 to page 1,
line 1, which changes the title to "Take a Kid Hunting Week" and
further reads:
Page 2, line 2:
delete "Weekend" after "Hunting" and insert week.
Page 2, line 6:
delete "Weekend" after "Hunting" and insert week.
There being no objection, Amendment 2 was adopted.
Number 2280
REPRESENTATIVE JOULE made a motion to adopt Amendment 3, which
changes "kid" to "child" throughout. There being no objection,
Amendment 3 was adopted.
Number 2260
DICK BISHOP, Alaska Outdoor Council, came forward again to testify
in support of HCR 9, noting that it is a step in the right
direction. He said he also believes there is not enough emphasis
on getting young people out to experience that, which certainly is
the message. He also agrees with changing "weekend" to "week"
because the children can get more out of it in the course of a
week. He pointed out, technically and ecologically, that other
states have a greater variety and abundance of wildlife and natural
resources; however, Alaska's is still unmatched. Mr. Bishop urged
the committee to move HCR 9.
Number 2191
REPRESENTATIVE BARNES moved to report CSHCR 9 out of committee with
individual recommendations and the accompanying zero fiscal note.
There being no objection, CSHCR 9(RES) moved from the House
Resources Standing Committee.
CO-CHAIR SANDERS called for an at-ease at 2:28 p.m. Upon the
return of Co-Chair Ogan, he turned the gavel over to him.
CO-CHAIR OGAN called the meeting back to order at 2:31 p.m. [He
informed the committee that HCR 2 would be held over until Friday,
May 7, 1999, as noted in the section on HCR 2.]
HB 104 - ENTRY MORATORIA ON PARTICIPANTS/VESSELS
CO-CHAIR OGAN announced that the final item of business would be
House Bill No. 104, "An Act revising the procedures and authority
of the Alaska Commercial Fisheries Entry Commission, the Board of
Fisheries, and the Department of Fish and Game to establish a
moratorium on participants or vessels, or both, participating in
certain fisheries; and providing for an effective date." Before
the committee was CSHB 104(FSH), heard by the committee previously.
Number 2120
REPRESENTATIVE HARRIS made a motion to move [CSHB 104 (FSH)] out of
committee with individual recommendations and any attached fiscal
notes.
CO-CHAIR SANDERS objected.
CO-CHAIR OGAN requested a roll call vote. Voting to move the bill
from committee were Representatives Whitaker, Joule, Harris, Morgan
and Ogan. Voting against it was Representative Sanders.
Representatives Kapsner, Masek and Barnes were absent. Therefore,
CSHB 104(FSH) moved from the House Resources Standing Committee by
a vote of 5-1.
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:33 p.m.
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