Legislature(1999 - 2000)

03/06/2000 02:08 PM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                                                                               
                          March 6, 2000                                                                                         
                            2:08 p.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Bill Hudson, Co-Chair                                                                                            
Representative Beverly Masek, Co-Chair                                                                                          
Representative John Cowdery, Vice Chair                                                                                         
Representative John Harris                                                                                                      
Representative Carl Morgan                                                                                                      
Representative Jim Whitaker                                                                                                     
Representative Reggie Joule                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Representative Ramona Barnes                                                                                                    
Representative Mary Kapsner                                                                                                     
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
HOUSE BILL NO. 204                                                                                                              
"An Act relating to elk farming."                                                                                               
                                                                                                                                
     - MOVED CSHB 204(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 58                                                                                                               
"An Act relating  to certain audits regarding oil  and gas royalty                                                              
and  net  profits  and  to  audits  regarding  costs  relating  to                                                              
exploration  incentive   credits  and  oil  and   gas  exploration                                                              
licenses; and providing for an effective date."                                                                                 
                                                                                                                                
     - MOVED HB 58 OUT OF COMMITTEE                                                                                             
                                                                                                                                
HOUSE BILL NO. 344                                                                                                              
"An Act authorizing a land exchange between the Department of                                                                   
Natural Resources and Alaska Hard Rock, Inc.; and providing for                                                                 
an effective date."                                                                                                             
                                                                                                                                
     - MOVED HB 344 OUT OF COMMITTEE                                                                                            
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: HB 204                                                                                                                  
SHORT TITLE: ELK FARMING                                                                                                        
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 4/20/99       883     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 4/20/99       883     (H)  RES, FIN                                                                                            
 3/06/00               (H)  RES AT  1:00 PM CAPITOL 124                                                                         
                                                                                                                                
BILL: HB  58                                                                                                                  
SHORT TITLE: OIL & GAS AUDITS                                                                                                   
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/22/99        65     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 1/22/99        65     (H)  O&G, RES, FIN                                                                                       
 1/22/99        65     (H)  2 FISCAL NOTES (DNR, REV)                                                                           
 1/22/99        65     (H)  GOVERNOR'S TRANSMITTAL LETTER                                                                       
 3/04/99               (H)  O&G AT 10:00 AM CAPITOL 17                                                                          
 3/04/99               (H)  HEARD AND HELD                                                                                      
 3/04/99               (H)  MINUTE(O&G)                                                                                         
 3/05/99       376     (H)  JUD REFERRAL ADDED AFTER RES                                                                        
 3/11/99               (H)  O&G AT 10:00 AM CAPITOL 17                                                                          
 3/11/99               (H)  -- MEETING CANCELED --                                                                              
 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       943     (H)  O&G RPT  4DP 4NR                                                                                    
 4/23/99       944     (H)  DP: PORTER, SMALLEY, HARRIS,                                                                        
                            WHITAKER;                                                                                           
 4/23/99       944     (H)  NR: OGAN, KEMPLEN, PHILLIPS, BRICE                                                                  
 4/23/99       944     (H)  2 FISCAL NOTES (DNR, REV) 1/22/99                                                                   
 3/06/00               (H)  RES AT  1:00 PM CAPITOL 124                                                                         
                                                                                                                                
BILL: HB 344                                                                                                                  
SHORT TITLE: DEPT NAT RES & AK HARD ROCK LAND EXCHANGE                                                                          
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 2/07/00      2116     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 2/07/00      2117     (H)  RES, FIN                                                                                            
 2/07/00      2117     (H)  ZERO FISCAL NOTE (DNR)                                                                              
 2/07/00      2117     (H)  LAND EXCHANGE AGREEMENT ATTACHED                                                                    
 2/07/00      2117     (H)  GOVERNOR'S TRANSMITTAL LETTER                                                                       
 3/06/00               (H)  RES AT  1:00 PM CAPITOL 124                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
JOHN MANLY, Legislative Aide                                                                                                    
     for Representative John Harris                                                                                             
Alaska State Legislature                                                                                                        
Capitol Building, Room 110                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Introduced HB 204 on behalf of the sponsor.                                                                
                                                                                                                                
BILL WARD                                                                                                                       
Ward Farms                                                                                                                      
P.O. Box 1087                                                                                                                   
Delta Junction, Alaska  99737                                                                                                   
POSITION STATEMENT:  Testified in support of HB 204.                                                                            
                                                                                                                                
MARCIA WARD                                                                                                                     
Ward Farms                                                                                                                      
P.O. Box 1087                                                                                                                   
Delta Junction, Alaska  99737                                                                                                   
POSITION STATEMENT:  Testified in support of HB 204 on behalf of                                                                
herself and Scott Miller.                                                                                                       
                                                                                                                                
EDNA ANDERSON, President                                                                                                        
Kenai Peninsula Farm Bureau                                                                                                     
P.O. Box 441                                                                                                                    
Homer, Alaska  99603                                                                                                            
POSITION STATEMENT:  Testified in support of HB 204.                                                                            
                                                                                                                                
GERON BRUCE, Legislative Liaison                                                                                                
Office of the Commissioner                                                                                                      
Alaska Department of Fish and Game                                                                                              
P.O. Box 25526                                                                                                                  
Juneau, Alaska  99802-5526                                                                                                      
POSITION STATEMENT:  Testified on HB 204.                                                                                       
                                                                                                                                
KEVIN BANKS, Petroleum Marketing Analyst                                                                                        
Division of Oil & Gas                                                                                                           
Department of Natural Resources                                                                                                 
550 West Seventh Avenue                                                                                                         
Anchorage, Alaska  99501                                                                                                        
POSITION STATEMENT:  Testified on HB 58.                                                                                        
                                                                                                                                
JIM STRATTON, Director                                                                                                          
Division of Parks & Outdoor Recreation                                                                                          
Department of Natural Resources                                                                                                 
550 West Seventh Avenue                                                                                                         
Anchorage, Alaska  99501                                                                                                        
POSITION STATEMENT:  Testified on HB 344.                                                                                       
                                                                                                                                
RUDY VETTER                                                                                                                     
P.O. Box 70342                                                                                                                  
Fairbanks, Alaska  99707                                                                                                        
POSITION STATEMENT:  Testified in support of HB 344.                                                                            
                                                                                                                                
SCOTT EUBANKS, President                                                                                                        
Alaska Hard Rock, Incorporated                                                                                                  
P.O. Box 2832                                                                                                                   
Wasilla, Alaska  99645                                                                                                          
POSITION STATEMENT:  Testified on HB 344.                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 00-19, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIR  MASEK  called  the House  Resources  Standing  Committee                                                              
meeting to  order at  2:08 p.m.   Members present  at the  call to                                                              
order  were   Representatives  Hudson,  Masek,   Cowdery,  Harris,                                                              
Morgan, Whitaker and Joule.                                                                                                     
                                                                                                                                
HB 204 - ELK FARMING                                                                                                          
                                                                                                                                
Number 0118                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK  announced that the  first order of  business would                                                              
be HOUSE BILL NO. 204, "An Act relating to elk farming."                                                                        
                                                                                                                                
Number 0184                                                                                                                     
                                                                                                                                
JOHN  MANLY,  Legislative  Aide for  Representative  John  Harris,                                                              
Alaska  State  Legislature, explained  HB  204  on behalf  of  the                                                              
sponsor. He  informed members  that HB 204,  a simple  bill, would                                                              
transfer  the   licensing  requirements,  oversight   and  fencing                                                              
requirements for elk farming from  the Alaska Department of Fish &                                                              
Game  (ADF&G)  to  the  Division  of  Agriculture,  Department  of                                                              
Natural Resources  (DNR).  He noted  that elk are being  raised in                                                              
the state as domestic farm animals.                                                                                             
                                                                                                                                
CO-CHAIR MASEK  announced that  the proposed committee  substitute                                                              
(CS) needed to be adopted.                                                                                                      
                                                                                                                                
CO-CHAIR  HUDSON made a  motion to  adopt the  proposed CS  for HB
204,  version 1-LS0528\H,  Utermohle,  1/29/00, as  a work  draft.                                                              
There  being  no  objection,  proposed  CSHB 204  was  before  the                                                              
committee.                                                                                                                      
                                                                                                                                
MR. MANLY addressed the changes in  the proposed CS.  He indicated                                                              
a  request  had  been  received  from  the  Division  of  Wildlife                                                              
Conservation (ADF&G) to insert the language on page 1, line 11:                                                                 
                                                                                                                                
     Before issuing or renewing an elk farming license, the                                                                     
     commissioner shall conduct a physical inspection of the                                                                    
     elk   farming   facilities   and  determine   that   the                                                                   
     facilities  are  in  good repair  and  comply  with  the                                                                   
     fencing   standards  established   under  (d)  of   this                                                                   
     section.                                                                                                                   
                                                                                                                                
MR. MANLY noted that along with transferring  the responsibilities                                                              
from ADF&G  to the Division  of Agriculture  (DNR), the  bill also                                                              
provides  that fencing  standards would  no longer  be managed  by                                                              
ADF&G.  Instead, the Division of  Agriculture would consult ADF&G.                                                              
In response to  questions from members, he specified  that the elk                                                              
are being  farmed only for  the meat and  the antlers.   The farms                                                              
are in Delta Junction and in Kodiak.                                                                                            
                                                                                                                                
CO-CHAIR  HUDSON  wondered where  the  original  breed stock  come                                                              
from.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  HARRIS  indicated  that people  on  teleconference                                                              
could probably answer that question.                                                                                            
                                                                                                                                
Number 0593                                                                                                                     
                                                                                                                                
BILL WARD,  Ward Farms,  testified via  teleconference from  Delta                                                              
Junction.   He  indicated that  he had  requested the  legislation                                                              
through Representative Harris.  He  explained that presently there                                                              
are  nine elk  licenses  in Alaska,  with  ranches scattered  from                                                              
Kodiak clear  up through  Delta Junction;  he estimates  there are                                                              
300  to 350  elk in  the state.   The  first elk  were brought  to                                                              
Alaska  in 1990  after the  original legislation;  some came  from                                                              
Montana and some  from Canada, and all of the elk  that are in the                                                              
state currently came out of their  herd, except for a few animals.                                                              
                                                                                                                                
MR.  WARD   explained   that  he  had   requested  the   [current]                                                              
legislation because when the legislation  first passed in 1988, it                                                              
was also happening  in other states; it was a  new growth industry                                                              
in the United States and Canada.   At that time, everyone followed                                                              
the  same pattern  that  brought  the dual  administration  about.                                                              
Other states  have found, however,  that the administration  works                                                              
cleaner and easier when it is all transferred to one entity.                                                                    
                                                                                                                                
MR. WARD  noted that in  Alaska the two  agencies have had  a good                                                              
relationship,  but  ADF&G really  has  no authority  with  fencing                                                              
regulations,  for example.   A couple  of years  back, he  had met                                                              
with Wayne Regelin,  Director, Division of  Wildlife Conservation,                                                              
ADF&G; Bert  Gore, State  Veterinarian, Division of  Environmental                                                              
Health    Animal   Industries,    Department   of    Environmental                                                              
Conservation;  and the  director of the  Division of  Agriculture.                                                              
He explained  that they had discussed  the whole concept,  and out                                                              
of it came this legislation.                                                                                                    
                                                                                                                                
MR. WARD indicated that they are  trying to get in line with other                                                              
states.   The  bill transfers  responsibility to  the Division  of                                                              
Agriculture,  where  the  regulatory  authority really  is.    The                                                              
United States Department  of Agriculture (USDA) is  in the process                                                              
of identifying elk as domestic livestock;  for the purpose of meat                                                              
inspection, elk will  be an identified species.   Therefore, it is                                                              
necessary to have  the Division of Agriculture as  the lead agency                                                              
to do  USDA inspections.   Mr. Ward concluded  that he  is pleased                                                              
with HB 204 and really has no problems with it.                                                                                 
                                                                                                                                
Number 1075                                                                                                                     
                                                                                                                                
REPRESENTATIVE COWDERY  wondered if most  of the meat is  sold in-                                                              
state.                                                                                                                          
                                                                                                                                
MR. WARD replied  yes.  They are doing mostly  private sales where                                                              
people contact them to purchase the elk meat.                                                                                   
                                                                                                                                
REPRESENTATIVE COWDERY  wondered how much  it costs per  pound and                                                              
where in Anchorage it could be purchased.                                                                                       
                                                                                                                                
MR. WARD  replied that  it is  sold on  a hanging-weight  basis at                                                              
about $4 to $5 per pound of hanging  weight.  He indicated that if                                                              
elk meat  can be found  in Anchorage, it  is most likely  from New                                                              
Zealand.  He explained  that he can sell elk meat  directly to the                                                              
consumer for more money than he can sell it to the wholesaler.                                                                  
                                                                                                                                
Number 1260                                                                                                                     
                                                                                                                                
MARCIA WARD, Ward  Farms, testified via teleconference  from Delta                                                              
Junction.   She indicated  that she  was testifying  on behalf  of                                                              
Scott Miller,  who is president of  the Delta Farm Bureau  and who                                                              
presides over the  elk subcommittee.  She said he  supports HB 204                                                              
and  believes that  the  consolidation  of regulations  under  one                                                              
heading in the Division of Agriculture  will be a lot smoother for                                                              
new operators coming into the business.   She noted that for those                                                              
same reasons she also supports the bill.                                                                                        
                                                                                                                                
CO-CHAIR MASEK pointed  out that Scott Miller's  letter of support                                                              
had been included in the committee packet.                                                                                      
                                                                                                                                
REPRESENTATIVE  COWDERY wondered  what kind of  a diet  the farmed                                                              
elk utilize.                                                                                                                    
                                                                                                                                
Number 1368                                                                                                                     
                                                                                                                                
MR.  WARD replied  that elk  are both  browsers and  grazers.   He                                                              
explained that they  are a little bit seasonal in  their diet.  In                                                              
the spring they eat a lot of brush  and boughs; in the summer they                                                              
graze on short  grasses; in the fall  they eat leaves;  and in the                                                              
winter they  are fed  hay, which  is supplemented  with oats.   He                                                              
pointed out that  they do adapt well to captivity  in that regard.                                                              
He also  noted that  three elk can  be put in  the same  amount of                                                              
pasture as one beef cow.                                                                                                        
                                                                                                                                
REPRESENTATIVE JOULE wondered about the size of the farms.                                                                      
                                                                                                                                
MR.  WARD indicated  that  elk  farming  lends itself  to  smaller                                                              
farms,  because they  don't  need quite  as  much area  as a  beef                                                              
operation.  He explained  that elk do need enough  space to go out                                                              
and  roam, because  they are  still wild  animals.   He said  that                                                              
people have started  out with as little as 10 acres  and have gone                                                              
up from there.  He noted that [his  farm] has about 150 to 160 elk                                                              
about 300 acres of fenced ground.                                                                                               
                                                                                                                                
CO-CHAIR  HUDSON  wondered  if  they have  to  be  concerned  with                                                              
natural predators, such as wolves and bears.                                                                                    
                                                                                                                                
MR. WARD  said that they  do have to  be concerned,  because those                                                              
are their natural  predators, but [elk] are herd  animals and work                                                              
in  a  tight  social  unit,  so  they  band  together  to  protect                                                              
themselves from predators.                                                                                                      
                                                                                                                                
Number 1630                                                                                                                     
                                                                                                                                
EDNA ANDERSON,  President, Kenai Peninsula Farm  Bureau, testified                                                              
via  teleconference  from Homer.    She stated  that  she and  her                                                              
husband have  been in Alaska  for 42  years, and they  started out                                                              
with cattle.  She  said her husband died in 1995,  and she and her                                                              
sons decided  to buy some elk, so  they went to Ward  Farms.  They                                                              
started  out with about  6 elk,  and they  have 25  elk now.   She                                                              
explained that  [elk] eat  far less than  the cattle did,  and she                                                              
certainly supports HB 204.                                                                                                      
                                                                                                                                
GERON  BRUCE, Legislative  Liaison,  Office  of the  Commissioner,                                                              
Alaska Department of Fish and Game,  thanked Representative Harris                                                              
for working  with  them on  HB 204 and  stated that  they have  no                                                              
problem with the bill.                                                                                                          
                                                                                                                                
Number 1755                                                                                                                     
                                                                                                                                
CO-CHAIR  HUDSON made  a motion to  move CSHB  204 from  committee                                                              
with  individual recommendations  and  attached  fiscal notes;  he                                                              
asked  for unanimous  consent.   There  being  no objection,  CSHB
204(RES) was moved out of the House  Resources Standing Committee.                                                              
                                                                                                                                
HB 58 - OIL & GAS AUDITS                                                                                                      
                                                                                                                                
Number 1771                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK announced that the  next order of business would be                                                              
HOUSE BILL  NO. 58, "An Act  relating to certain  audits regarding                                                              
oil and gas royalty and net profits  and to audits regarding costs                                                              
relating  to  exploration  incentive   credits  and  oil  and  gas                                                              
exploration licenses; and providing for an effective date."                                                                     
                                                                                                                                
KEVIN BANKS, Petroleum  Marketing Analyst, Division of  Oil & Gas,                                                              
Department   of    Natural   Resources   (DNR),    testified   via                                                              
teleconference  from Anchorage.    He said  he had  worked on  the                                                              
interagency project team that recommended  the transfer created by                                                              
HB 58,  and had  helped draft the  language of  the bill  with the                                                              
Department  of Revenue  and the Department  of  Law.  A  technical                                                              
bill,  HB  58  transfers  the authority  to  audit  royalties  and                                                              
revenues from net profits that are  created in the leases from the                                                              
Department of Revenue to the DNR;  in transferring that authority,                                                              
the  bill   also  imposes   on  DNR   staff  the   same  kind   of                                                              
confidentiality  requirements  that  now  govern  the  information                                                              
gathered in  audits conducted  by the Department  of Revenue.   He                                                              
explained  that  they are  recommending  HB 58  for  consideration                                                              
because of  the efficiencies  that it should  achieve for  DNR and                                                              
for the government.                                                                                                             
                                                                                                                                
Number 1961                                                                                                                     
                                                                                                                                
CO-CHAIR  MASEK agreed  that HB  58 is  a simple,  straightforward                                                              
transfer of authority from the Department  of Revenue to DNR.  She                                                              
closed public testimony on HB 58.                                                                                               
                                                                                                                                
REPRESENTATIVE COWDERY made a motion  to move HB 58 from committee                                                              
with individual  recommendations and the attached  fiscal note; he                                                              
asked for unanimous consent.  There  being no objection, HB 58 was                                                              
moved out the House Resources Standing Committee.                                                                               
                                                                                                                                
HB 344 - DEPT NAT RES & AK HARD ROCK LAND EXCHANGE                                                                            
                                                                                                                                
Number 2045                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK announced that the  next order of business would be                                                              
HOUSE BILL  NO. 344, "An Act  authorizing a land  exchange between                                                              
the Department of Natural Resources and Alaska Hard Rock, Inc.;                                                                 
and providing for an effective date."                                                                                           
                                                                                                                                
Number 2107                                                                                                                     
                                                                                                                                
JIM STRATTON, Director, Division of Parks & Outdoor Recreation,                                                                 
Department of Natural Resources, testified via teleconference                                                                   
from Anchorage.  He stated:                                                                                                     
                                                                                                                                
     For   those  of   you  that   are   not  familiar   with                                                                   
     Independence  Mine State Historical  Park, it's  located                                                                   
     about 90 minutes  from Anchorage, up past  Palmer in the                                                                   
     Hatcher Pass  region.  It's a historic  mining operation                                                                   
     that was  closed down during  World War II, and  it came                                                                   
     to "Parks"  as a state  historical park from  the mining                                                                   
     interests in about 1980.                                                                                                   
                                                                                                                                
     Independence  Mine  State  Historical   Park  has  about                                                                   
     52,000  visits a  year; it's  road-accessible, and  it's                                                                   
     accessible  year-round when  the snow  is plowed in  the                                                                   
     winter,  and it's  near  the new  proposed  ski area  at                                                                   
     Hatcher Pass.   So, we're talking  about a park  that is                                                                   
     already   a  well-identified   and   well-used   visitor                                                                   
     destination.  It is one of the  most significant tourist                                                                   
     attractions for  the [Matanuska-Susitna] Borough,  as it                                                                   
     sits on  one of the few  roads off of the  major highway                                                                   
     system,  and provides  Alaskans  and  visitors alike  to                                                                   
     drive above treeline for hiking  and historical tours in                                                                   
     the summer and skiing and snowmobiling in the winter.                                                                      
                                                                                                                                
     The  main  attraction at  the  park are  the  historical                                                                   
     mining  structures  and  the  beginning of  one  of  the                                                                   
     mining tunnels that goes into  the side of the mountain.                                                                   
     But  maintaining  these  historical  buildings  is  very                                                                   
     expensive,  and we are  not able to  do that, given  our                                                                   
     current  capital authorization.   So,  we held a  public                                                                   
     meeting  in March  of '97  to discuss  options with  the                                                                   
     community  for   how  we  could  adaptively   reuse  the                                                                   
     buildings  at  Independence Mine  in  a way  that  would                                                                   
     provide  an income  flow to  ensure  that the  buildings                                                                   
     would remain standing.                                                                                                     
                                                                                                                                
     Through  that meeting  we found that  adaptive reuse  of                                                                   
     the structures  as a visitor destination  was acceptable                                                                   
     by   everybody  who   was   there,  and   that   visitor                                                                   
     destination   could   include  things   like   overnight                                                                   
     lodging, food  service, gift shop  and tours.   We found                                                                   
     that  this was compatible  with the  purposes for  which                                                                   
     the park was established, in  a finding that I signed in                                                                   
     June of  1998, but during  that process we  learned from                                                                   
     prospective  private partners -  who were interested  in                                                                   
     coming  into  Independence  Mine and  working  with  the                                                                   
     division to reuse the buildings  in Independence Mine as                                                                   
     a visitor  destination  - that there's  not enough  cash                                                                   
     flow in  the lodging and  food service alone  to support                                                                   
     the investment needed to adapt  and protect the historic                                                                   
     buildings.                                                                                                                 
                                                                                                                                
     Three things needed  to occur:  there needed  to be some                                                                   
     improvements to  the roads, and we've been  working with                                                                   
     the [Department  of Transportation & Public  Facilities]                                                                   
     and the  Mat-Su Borough  to make  that occur; the  state                                                                   
     needed to make  as much investment as they  could in the                                                                   
     area,  and  this summer  we  have  a TRAAK  [Trails  and                                                                   
     Recreational   Access  for   Alaska]  project  that   is                                                                   
     rebuilding  the elevated  walkway  to  the mine  tunnel,                                                                   
     rebuilding the  tunnels through the historical  building                                                                   
     and  providing  ADA [Americans  with  Disabilities  Act]                                                                   
     access  to visitors center;  and there  needed to  be an                                                                   
     opportunity for underground mine tours.                                                                                    
                                                                                                                                
     Underground  mine  tours  were  seen as  the  cash  flow                                                                   
     opportunity   to   make   this    whole   public-private                                                                   
     partnership work.   The problem is the state  didn't own                                                                   
     beyond the first few hundred  feet of the tunnel; Alaska                                                                   
     Hard Rock,  Incorporated, owned the tunnel,  but we knew                                                                   
     that they  were interested in  pursuing an exchange  for                                                                   
     property that  the state owns  on the Willow  Creek side                                                                   
     of  Hatcher  Pass that  Alaska  Hard Rock  is  currently                                                                   
     using for their mining operations.                                                                                         
                                                                                                                                
     So,  we signed  a  preliminary exchange  agreement  last                                                                   
     June.   We spent last summer  doing the surveys  and the                                                                   
     appraisals; the  costs were split between the  state and                                                                   
     Alaska  Hard Rock,  and  in  the end,  the  state is  to                                                                   
     receive 118  acres of underground mine tunnel  valued at                                                                   
     $87,000,  and Alaska  Hard Rock will  receive 107  acres                                                                   
     valued at  $66,500.  And  because of the unequal  values                                                                   
     involved   in  this   exchange,   we  need   legislative                                                                   
     approval, and we would ask that today.                                                                                     
                                                                                                                                
Number 2314                                                                                                                     
                                                                                                                                
RUDY VETTER testified via teleconference from Fairbanks.  He                                                                    
stated that he supports HB 344.  He said there needs to be a lot                                                                
more diversification,  and more  state land needs  to be  put into                                                              
operation.                                                                                                                      
                                                                                                                                
Number 2387                                                                                                                     
                                                                                                                                
SCOTT  EUBANKS,   President,  Alaska   Hard  Rock,   Incorporated,                                                              
testified  via teleconference  from  Wasilla.   He  asked for  the                                                              
committee's support  on HB 344.   He pointed out that if  the bill                                                              
passes, it will allow [the company]  to protect a large investment                                                              
that it already  has in the area.   He stated that he  believes it                                                              
is good for both parties involved.                                                                                              
                                                                                                                                
CO-CHAIR MASEK closed public testimony on HB 344.                                                                               
                                                                                                                                
REPRESENTATIVE  COWDERY  made  a   motion  to  move  HB  344  from                                                              
committee with individual recommendations  and the attached fiscal                                                              
note; he asked  for unanimous consent.  There  being no objection,                                                              
HB 344 was moved out of the House Resources Standing Committee.                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK  adjourned the  House Resources Standing  Committee                                                              
meeting at 2:45 p.m.                                                                                                            
                                                                                                                                

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