Legislature(2003 - 2004)
05/14/2003 08:15 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
May 14, 2003
8:15 a.m.
MEMBERS PRESENT
Representative Hugh Fate, Chair
Representative Carl Gatto
Representative Cheryll Heinze
Representative Carl Morgan
Representative Kelly Wolf
Representative Sharon Cissna
Representative David Guttenberg
MEMBERS ABSENT
Representative Beverly Masek, Vice Chair
Representative Bob Lynn
COMMITTEE CALENDAR
HOUSE BILL NO. 246
"An Act relating to the limitation on upland acreage that a
person may take or hold under oil and gas leases; and providing
for an effective date."
- MOVED CSHB 246(RES) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 56(FIN)
"An Act relating to sport fishing license fees and anadromous
king salmon tag fees for residents of Yukon, Canada; and
providing for an effective date."
- MOVED CSSB 56(FIN) OUT OF COMMITTEE
HOUSE BILL NO. 196
"An Act relating to carbon sequestration; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 246
SHORT TITLE:OIL & GAS AUDITS & ACREAGE LIMITS
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
04/04/03 0783 (H) READ THE FIRST TIME -
REFERRALS
04/04/03 0783 (H) O&G, RES
04/04/03 0783 (H) FN1: INDETERMINATE(DNR)
04/04/03 0784 (H) GOVERNOR'S TRANSMITTAL LETTER
04/24/03 (H) O&G AT 3:15 PM CAPITOL 124
04/24/03 (H) Scheduled But Not Heard
04/29/03 (H) O&G AT 3:15 PM CAPITOL 124
04/29/03 (H) Moved Out of Committee
04/29/03 (H) MINUTE(O&G)
04/30/03 1200 (H) O&G RPT 5DP
04/30/03 1200 (H) DP: HOLM, KERTTULA, CRAWFORD,
FATE,
04/30/03 1200 (H) KOHRING
04/30/03 1201 (H) FN1: INDETERMINATE(DNR)
05/05/03 (H) RES AT 1:00 PM CAPITOL 124
05/05/03 (H) <Bill Hearing Postponed to
05/07/03>
05/07/03 (H) RES AT 8:00 AM CAPITOL 124
05/07/03 (H) Scheduled But Not Heard
05/07/03 (H) RES AT 1:30 PM CAPITOL 124
05/07/03 (H) Scheduled But Not Heard
05/09/03 (H) RES AT 8:00 AM CAPITOL 124
05/09/03 (H) Scheduled But Not Heard
05/12/03 (H) RES AT 1:00 PM CAPITOL 124
05/12/03 (H) Scheduled But Not Heard
05/14/03 (H) RES AT 8:00 AM CAPITOL 124
BILL: SB 56
SHORT TITLE:SPORT FISHING FEES FOR YUKON RESIDENTS
SPONSOR(S): SENATOR(S) DYSON
Jrn-Date Jrn-Page Action
02/03/03 0106 (S) READ THE FIRST TIME -
REFERRALS
02/03/03 0106 (S) RES, FIN
04/28/03 (S) RES AT 3:30 PM BUTROVICH 205
04/28/03 (S) Scheduled But Not Heard
04/30/03 (S) RES AT 3:30 PM BUTROVICH 205
04/30/03 (S) Moved Out of Committee
04/30/03 (S) MINUTE(RES)
05/01/03 1071 (S) RES RPT 3DP 2NR
05/01/03 1071 (S) DP: WAGONER, SEEKINS, STEVENS
B;
05/01/03 1071 (S) NR: LINCOLN, ELTON
05/01/03 1071 (S) FN1: (DFG)
05/08/03 1245 (S) FIN RPT CS 2DP 1DNP 4NR NEW
TITLE
05/08/03 1245 (S) DP: WILKEN, STEVENS B; NR:
GREEN,
05/08/03 1245 (S) TAYLOR, HOFFMAN, OLSON; DNP:
BUNDE
05/08/03 1245 (S) FN1: (DFG)
05/08/03 (S) FIN AT 9:00 AM SENATE FINANCE
532
05/08/03 (S) Moved CSSB 56(FIN) Out of
Committee
05/08/03 (S) MINUTE(FIN)
05/10/03 1304 (S) RULES TO CALENDAR 5/10/2003
05/10/03 1304 (S) READ THE SECOND TIME
05/10/03 1305 (S) FIN CS ADOPTED Y13 N6 E1
05/10/03 1305 (S) ADVANCED TO THIRD READING
5/11 CALENDAR
05/11/03 1322 (S) READ THE THIRD TIME CSSB
56(FIN)
05/11/03 1323 (S) PASSED Y17 N2 E1
05/11/03 1323 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
05/11/03 1326 (S) TRANSMITTED TO (H)
05/11/03 1326 (S) VERSION: CSSB 56(FIN)
05/12/03 1553 (H) READ THE FIRST TIME -
REFERRALS
05/12/03 1553 (H) RES, FIN
05/12/03 1580 (H) CROSS SPONSOR(S): GRUENBERG
05/14/03 (H) RES AT 8:00 AM CAPITOL 124
WITNESS REGISTER
MARK MYERS, Director
Division of Oil & Gas
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Presented HB 246 and answered questions.
SENATOR FRED DYSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of SB 56.
GORDY WILLIAMS, Legislative Liaison
Office of the Commissioner
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Testified on SB 56, highlighting fiscal and
public policy issues; answered questions.
ROB BENTZ, Deputy Director
Division of Sport Fish
Alaska Department of Fish & Game
Juneau, Alaska
POSITION STATEMENT: Answered questions relating to SB 56.
ACTION NARRATIVE
TAPE 03-45, SIDE A
Number 0001
CHAIR HUGH FATE called the House Resources Standing Committee
meeting to order at 8:15 a.m. Representatives Fate, Heinze,
Morgan, Wolf, and Cissna were present at the call to order.
Representatives Guttenberg and Gatto arrived as the meeting was
in progress.
HB 246-OIL & GAS AUDITS & ACREAGE LIMITS
Number 0075
CHAIR FATE announced that the first order of business would be
HOUSE BILL NO. 246, "An Act relating to the limitation on upland
acreage that a person may take or hold under oil and gas leases;
and providing for an effective date." [The bill was sponsored
by the House Rules Standing Committee by request of the
governor.]
Number 0275
REPRESENTATIVE MORGAN moved to adopt the proposed committee
substitute (CS), Version 23-GH1135\D, Chenoweth, 5/13/03, as a
work draft. [No objection was stated, and Version D was treated
as adopted.]
Number 0352
MARK MYERS, Director, Division of Oil & Gas, Department of
Natural Resources (DNR), explained that HB 246 has two distinct
parts. First, it expands allowable acreage that can be under
lease by an individual company. Current statute limits this to
500,000 acres of non-unitized upland state lands. Highlighting
a recent history of new exploration programs, he cited
exploration licensing and shallow gas leasing in the North Slope
foothills area, indicating such areas traditionally haven't seen
a lot of interest. It is believed the original intent of the
500,000 acres was from looking at a more restricted statewide
program, but now there are companies at or near their acreage
limitations that are "good explorers," he told members.
MR. MYERS related the belief that if the acreage limitation is
extended, more acreage will be sold, there will be stimulation
of exploration licenses in the Interior basins, and the shallow
gas leasing program potentially will be helped by adding more
"players." He explained that three companies are at or near
their acreage limitations: Anadarko Petroleum Corporation
("Anadarko"); Petro-Canada; and ConocoPhillips Alaska, Inc.
("ConocoPhillips"), which is near 400,000 acres and has at times
been at the limit, as has BP [Exploration (Alaska) Inc.], which
is selling its acreage now. Passing around copies of a map
showing current state leases, he said there remains a lot of
acreage to lease and remarked, "We think this will help."
MR. MYERS explained that the Umiat Meridian is important to the
bill because the additional 250,000 incremental acres given to
companies must be south of that line; there were concerns
relating to the original 500,000 acres about having a
monopolistic approach on the North Slope, and the limitation is
to keep it from being owned by one or two companies. The
additional acreage will be in primarily "frontier exploration
areas" where a company needs a large amount of land to get a
good commercial position in order to justify the "integrated
economics" to develop the infrastructure to actually produce.
He concluded:
So we think it provides the proper balance between ...
preventing potential conflict of ... monopolization of
the central North Slope, the upper, more prospective
oil areas, but allows for more folks to be involved in
exploration licenses, shallow gas leases, and
conventional leases south of that line.
Number 0650
CHAIR FATE referred to the mention of shallow gas and surmised
that this would include other areas of the state south of the
Umiat Meridian, even in Cook Inlet, for example.
MR. MYERS affirmed that. He said it also would allow companies
that have used almost all their acreage on the North Slope to be
able to buy onshore acreage in Cook Inlet. He added:
Again, we don't see a great synergy between Cook Inlet
and the North Slope. They're pretty different basins.
They produce into different markets. And Cook Inlet
oil, for example, is all refined locally, so it
doesn't really compete with that oil going down TAPS
[Trans-Alaska Pipeline System], which is predominantly
exported.
Number 0699
CHAIR FATE asked whether 250,000 acres is in addition to what
the company would have if it's at or near capacity. He also
asked whether there is enough land in the Cook Inlet area or
enough hydrocarbon basins to facilitate that much acreage.
MR. MYERS said that's a very good question. Referring again to
the map, he pointed out green outlines of sedimentary basins
that would be eligible for licenses or potentially for lease
sales if the department chose to go through the "best interest"
process for leases. Indicating the state has been selling a lot
of exploration licenses, he said a company picks up, under
licenses, up to 500,000 acres in an individual block. For a
company that has bought a license and converted it all to
leases, its entire statewide allotment would be used in that
single license. This bill would allow such a company to pick up
a reasonable portion if it had one license and a reasonably
loose position elsewhere, for example. "So we think it's
balanced, and we think it will help us sell leases," he said.
MR. MYERS pointed out that for this part of the bill, there is
an indeterminate positive fiscal note; he opined that it will
only lead to additional revenue.
Number 0778
REPRESENTATIVE HEINZE asked whether, under the exploration
license, it's 500,000 [acres].
MR. MYERS affirmed that it's a maximum of 500,000. He added:
That does not count against your leases until you
convert to leases. There's a license. ... It's not
leased land. They have no rights of production. They
have exclusive right to convert to leases, though. ...
If they convert, then, that would count against their
statewide [limit].
Number 0813
REPRESENTATIVE CISSNA recalled other leases such as in the
Katalla area and elsewhere. She noted that those aren't marked
[on the map].
MR. MYERS replied that there's a small, privately owned
concession around the Katalla oil field that was selected, to
his belief, by a Native corporation; it's a tiny amount of
acreage specific to that one small field, too small to show on a
map of this scale, and there is no state lease or interest. In
regard to other small, possibly prospective areas, he said:
Basically, there's multiple different ... leasing
programs that are active. One is the federal
government, which looks at the offshore waters - the
Minerals Management Service. So the OCS [outer
continental shelf], they're contemplating ... working
a five-year schedule for Alaska, particularly for the
Beaufort Sea, lower Cook Inlet areas, and looking at
Norton Sound and other areas, to revive interest in
those areas. I think they'll have some interest in
the lower Cook Inlet. They certainly will have some
interest in the Beaufort Sea area - onshore, the
Bureau of Land Management and particularly in NPR-A
[National Petroleum Reserve-Alaska] - and then they
have onshore acreage, federal acreage, in the Cook
Inlet in particular. So ... they have active,
producing [areas] on federal lands ... in the Cook
Inlet [area].
I think other areas that have significant petroleum
potential, particularly for gas, are in the Nenana
basin, Copper River basin, Susitna basin. And those
areas are highlighted by the exploration licenses
already there. In addition, if you look in the
Bristol Bay area, there's both oil and gas potential
onshore as well as offshore. And then as you move to
the north, you can see ... north and east of Fairbanks
there's the Yukon-Kandik basin, which is the one that
kind of hinges over to the Canadian basin; that has
... definitely some oil potential, as well as some gas
potential. And then the Yukon Flats, near the
wildlife refuge to the north of that, is also
(indisc.--papers over microphone) prospective, ...
both oil and gas.
Number 0995
CHAIR FATE noted that those are outlined in green on the map.
He then said this is an extremely important bill to the oil
industry and to the state because the leases not only enhance
exploration, but also provide revenue from the leases.
Number 1025
REPRESENTATIVE GUTTENBERG asked about the difference between
unitized and non-unitized acreage.
MR. MYERS explained:
The entitlement was ... designed for exploration, so
that once it's in a unit, it's typically either in a
plan of exploration or a plan of development. Most of
our units are in a plan of development, so it's
actually in development and the acreage is held by
that plan of development. So it's extended beyond the
primary term of the lease.
Leases that are put into units have a negotiated work
plan with the state. And they have, typically,
production going on in them. So ... that acreage does
not count against the statewide entitlement. So you
put [it] in a unit; it's another way that ... your
credits on exploration acreage goes down.
But there's ... a hook there, which is part of our
responsibility to make sure that once it goes in a
unit, we're extending those leases beyond their
primary terms, that we haven't agreed to work planned
toward development, which typically includes shooting
seismic [data], then drilling wells. So it locks the
land up, but there is a distinct work commitment ...
and a work in progress.
When you buy [an] exploration lease, typically in the
preliminary stages of exploration ... you may have
some seismic data; you typically don't have any well
data. ... So, in that case, you need a lot more
acreage. When you get to the unitization, you have to
have distinct exploration prospects in their outline.
We won't approve the unit acreage beyond what we
believe ... is the potential reservoir, based on the
seismic and well data. So you can get more acreage
... than the 500,000 if it's within units, but units
have very specific work requirements and they're very
defined hydrocarbon plays or known producing or
commercial fields.
Number 1160
MR. MYERS addressed the second part of the bill, which moves
royalty audit authority back to DNR from the Department of
Revenue (DOR). It's strictly for royalty matters, he said, and
the purpose is efficiency. He explained:
In 1980 the law was changed to put it all in the
Department of Revenue, thinking the same auditors
would do ... the audits and there was efficiency
there. But then the state entered the settlements,
the Amerada Hess case. So each oil and gas company
has a separate settlement distinct for royalties,
different than taxes. So, in fact, audits aren't held
at the same time; they're not done in conjunction.
Not only that, but the settlements are ... commonly
different on the two sides. So the working knowledge
of that, really, and the negotiating part of that was
done within the DNR, with the Department of Law. So
there isn't any, really, commonality in the audits.
Currently, DNR has ... four positions for audits, but
those audits are initiated and supervised by DOR, and
they have two supervising folks to do it. ... What we
found is that it's a fairly inefficient way to work.
Both DOR and DNR are in concurrence that it's more
efficient to move that function back to DNR; it takes
a statutory change. With that, DOR would transfer
about $237,000 to DNR. We'd pick up two additional
audit positions. So it's just an efficiency bill. We
know of no opposition to it, and it's supported by the
administration from both departments.
Number 1259
REPRESENTATIVE GUTTENBERG referred to page 4, Section [6],
noting that it deletes language relating to payment for oil or
gas royalty. He asked whether redundancy is being removed or
whether it takes out audits for royalty.
MR. MYERS said this basically just transfers authority to do the
audits from the DOR statutes and into the DNR statutes.
Number 1316
REPRESENTATIVE CISSNA sought clarification about the history of
this portion and whether this audit change will affect the
industry, for example.
MR. MYERS answered that the majority of the audit work is
accomplished by DNR now. Because the authority exists in DOR,
however, the head auditor for the issue must be within DOR.
Noting that the settlements are still evolving, he said that as
they change or go through "reopeners" and so forth, [DNR] finds
that having the commercial knowledge in the organization doing
the renegotiation is much better. He said, "It makes us more
effective in the negotiations, and I think it makes us fairer,
more knowledgeable." He suggested this is a benefit for the
industry because of wanting negotiations to be based on
knowledge when reopening a settlement. He told members:
The settlements do set the framework. ... You just
renegotiate ... changes in the marketplace, changes in
the way petroleum's evaluated, or changes in
transportation charges, basically. And they go up and
down. The companies can reopen this, equal [the]
playing field. ... So those commercial negotiations
are very much linked to the auditing, because it's
through the auditing that you find out whether or not
you're getting out of line with the valuation.
So we ... definitely gain efficiency on the commercial
side to get true market value for our oil, based on
the settlement, if that authority ... is within DNR.
Again, we've had a good, cooperative working
relationship with DOR; they recognize that it's
inefficient as well, and that, again, envisioned was
that tax and royalty audits would be done
simultaneously and you would gain efficiency. When we
reevaluate, given the current budget standards, we're
always reevaluating ways to make the department more
efficient. ... We're swamped with the increase in
operations; this ... clearly makes us more efficient.
REPRESENTATIVE CISSNA asked whether there were testifiers from
the industry. She pointed out that the proposed CS had just
been provided to members the previous evening.
CHAIR FATE called a recess at 8:35 a.m.
Number 1500
CHAIR FATE called the meeting back to order at 9:23 a.m. and
announced that he was ready to move the bill. He related his
understanding that Representative Cissna had discussed the bill
in the meantime and was satisfied with it. He pointed out that
it has an indeterminate fiscal note.
Number 1530
REPRESENTATIVE GATTO moved to report CSHB 246, Version 23-
GH1135\D, Chenoweth, 5/13/03, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 246(RES) was reported from the House
Resources Standing Committee.
SB 56-SPORT FISHING FEES FOR YUKON RESIDENTS
CHAIR FATE announced that the final order of business would be
CS FOR SENATE BILL NO. 56(FIN), "An Act relating to sport
fishing license fees and anadromous king salmon tag fees for
residents of Yukon, Canada; and providing for an effective
date."
Number 1608
SENATOR FRED DYSON, Alaska State Legislature, sponsor, explained
that Yukon, Canada, whose population now is just below 30,000,
is struggling economically and yet has worked with Alaska
enthusiastically to extend the railroad, put in a gas line, and
so forth. Its government has passed legislation to provide
reciprocity on fishing licenses to allow Alaskans to fish there
for arctic char, grayling, and trout, for example, and works
closely [with the State of Alaska] on managing caribou herds.
SENATOR DYSON noted that committee packets include letters from
the State Chamber of Commerce and from Haines and Skagway, the
two communities that see the most Yukoners taking advantage of
saltwater fishing there; both communities see this bill as
perhaps a bit of an economic boon.
SENATOR DYSON informed members that the bill allows Yukon
residents to pay resident Alaskan rates for licenses; however,
they won't be classified as residents when it comes to managing
the [fish]. Thus nothing gives them equal access in times of
shortage. Rather, this allows a small privilege of buying
licenses at resident rates. He indicated Yukoners he'd spoken
with are delighted with this concept. He said the bill's
language is permissive, allowing the commissioner to extend this
courtesy to Yukon residents if the commissioner so chooses.
Number 1833
REPRESENTATIVE GATTO said he is excited about this. He pointed
out that when floating down the Yukon River starting in Canada,
a person must stop and look for where the border is, since it is
seamless. He characterized Yukon residents as Alaskans'
brothers and sisters, and applauded whoever came up with the
idea of the bill.
SENATOR DYSON suggested applauding former Senator Randy
Phillips.
CHAIR FATE agreed it's a good idea, long overdue. He surmised
that technicalities such as whether the licenses are a different
color would be taken care of by the department.
Number 1930
REPRESENTATIVE WOLF said he didn't have problems with the bill,
but expressed concern that "we have nonresident Alaskans
influencing management of Alaska's fish and game at this time
already, and they're U.S. citizens." Agreeing that the Yukoners
are like brothers and sisters, he questioned why they won't be
allowed [to participate in management], while he said
"nonresident Alaskans" are allowed to.
CHAIR FATE responded that he thinks that is conjecture and
arguable. Indicating he didn't want to address that issue, he
said this particular legislation has to stand on its own merit,
which he interpreted to be the cost and authority to allow Yukon
residents to come to Alaska to fish [for a nonresident fee].
Number 2007
REPRESENTATIVE MORGAN said he's delighted to see the bill, since
he represents a district that borders Canada and he knows people
in Gakona, for example, who have dual citizenship, and knows
people in Aniak who have relatives from Fort Yukon. He said
this has been a long time coming. "The more we can open up our
arms ... and try to be good neighbors, it's good for the
country, it's good for my village, it's good for the urban area,
it's good for the world," he told members.
Number 2098
REPRESENTATIVE GATTO moved to report CSSB 56(FIN) out of
committee with individual recommendations and the accompanying
fiscal notes.
[Attention was brought to a testifier from the department, whom
Chair Fate invited to speak; the motion was left pending.]
Number 2129
GORDY WILLIAMS, Legislative Liaison, Office of the Commissioner,
Alaska Department of Fish & Game (ADF&G), noted that as the
sponsor statement says, this concept had been before the
legislature previously but didn't pass. He agreed Canadians and
Yukoners are good neighbors, but suggested it is important to
put on the record some public policy and fiscal issues. Drawing
attention to the fiscal note and accompanying explanation sheet,
he offered his understanding that the sponsor believes people
coming over [from the Yukon] will spend money in Alaskan
communities. However, Mr. Williams highlighted the potential
loss in state revenue: $46,000 to the fish and game fund
through the projections in the fiscal note.
MR. WILLIAMS addressed public policy issues. He told members:
We think this could set a bit of a precedent. And the
Senator doesn't necessarily agree, and says that ...
others haven't come forth and said they would give us
this reciprocity. But we do share a long border with
British Columbia. And, for example, the primary sport
fishing locations for the Yukoners are Haines and
Skagway, to a large degree, because they have access
to salt water there and to salmon and halibut and
things that they don't have elsewhere. ... And if you
drive out of either Haines or Skagway, you're in
British Columbia for the first hour or so that you
drive out of there. And ... we're not offering this
to British Columbia and, as the Senator will point
out, they're not offering it to us either.
But it ... is a little bit of a precedent. What if
British Columbia does come to us and say that they
would like to do a similar thing? We have
significantly different sport fishing regulations in
Alaska and bag limits, versus what they have in the
Yukon or what they have in British Columbia. For
example, I think in the Yukon [they're] allowed to
keep either 2 or 4 salmon a day. And in Alaska the
total amount would be 27, but that would mean you'd
have to ... catch the maximum of all the species, but
certainly you could be reasonably expected to catch 6
to 8 salmon a day when the cohos are around, plus the
halibut and the bottomfish.
MR. WILLIAMS concluded by saying this is a nice thing to give
people, but the department wants the committee to be aware of
the foregoing issues.
Number 2282
REPRESENTATIVE GATTO remarked that sales generally increase
whenever a discount is given. He asked about the effects.
MR. WILLIAMS referred to the spreadsheet and said it's hard to
predict. Right now, the annual nonresident license is $100.
This shows 2,700 Yukon participants; he surmised that many are
the same people because it's cheaper now to buy a series of one-
day or multi-day licenses than to buy the annual one. If the
annual license dropped to $15, however, people no longer would
buy shorter-term licenses.
Number 2334
CHAIR FATE asked whether the aggregate revenues from sport
fishing licenses offset the costs, no matter what length of time
the licenses are for.
MR. WILLIAMS deferred to Mr. Bentz, but noted that sport fish
license fees are a significant component because no general fund
dollars go into sport fish. He asked whether Chair Fate was
talking about costs for management and running the fishery.
CHAIR FATE mentioned the cost of licenses, protection, and
running the [Division of Sport Fish].
Number 2408
ROB BENTZ, Deputy Director, Division of Sport Fish, Alaska
Department of Fish & Game, responded:
It does offset the costs. We match federal monies,
Dingell-Johnson, Wallop-Breaux federal funds. We
match those with ... the revenues from the fish and
game fund that are license fees and king salmon tags.
And we pay for, with a combination of funds, our
entire sport fish division budget. ... There are more
things that we could do, that we'd like to do, but it
does fund our program.
CHAIR FATE surmised, then, that ADF&G hasn't "peeled off" the
amount of revenue derived from state sources to create a
spreadsheet or record of that particular income from the state.
MR. BENTZ said [the department] knows what the license revenue
is. The amount of federal funding is learned after the fact
every year.
MR. WILLIAMS pointed out that king salmon tags are sold more
like duck stamps. The department knows how much money is raised
yearly from king salmon tags, but not how many tags are
generated by Yukon residents or other people. The department
knows all the revenue raised from sport fish licensing and can
track that by state or person, except for the king salmon tags.
Number 2515
REPRESENTATIVE WOLF asked whether the department is taking a
wild guess about the number of licenses.
MR. WILLIAMS indicated the department had looked at the period
when the annual license fee was raised to $100 and found that
participation from the Yukon remained pretty static.
MR. BENTZ, in response to a question from Representative Wolf,
said the foregoing was in the mid-1990s, perhaps 1995 or 1996.
Number 2569
REPRESENTATIVE HEINZE asked about the potential loss of $46,000.
MR. WILLIAMS referred to the spreadsheet, noting that the
explanation sheet shows the different categories. The
spreadsheet shows 2002 revenues. The 2,700 [specifically,
2,741, the total licenses sold to Yukon Territory residents] is
hard to predict, since many of the figures above on the
spreadsheet are from people who bought one-day, three-day, or
seven-day licenses because that's cheaper than buying an annual
license. Although it isn't 2,700 discrete individuals, the
department hasn't reviewed how many are repeat customers and so
forth. He indicated 2,700 was used as the base number and
carried through.
Number 2626
REPRESENTATIVE HEINZE asked how much the $46,000 would affect
ADF&G's Division of Sport Fish.
MR. BENTZ said one could multiply the $46,000 from the fish and
game fund by three, for about $120,000, since the department
matches 25 percent state funds - these fish and game funds -
with 75 percent federal funds. Therefore, closer to $170,000
wouldn't be in the fish and game fund, or there would be federal
funds that the state couldn't match with this $46,000. Thus
about $170,000 would be lost from the annual operating budget,
which equates to several significant field projects.
Number 2697
CHAIR FATE said he's a bit bothered by the fiscal note and some
of the spreadsheet numbers because everything seems
indeterminate and based on king salmon and king salmon tags in
coming up with the $46,000 figure. He noted that people fish
for grayling or pike, for example, on the Yukon River or
Porcupine River. He questioned whether the department had any
idea whether $46,000 was a firm figure.
Number 2787
MR. BENTZ acknowledged that one hard-to-determine number is how
many people the 2,700 licenses represent, as Mr. Williams had
said, because some people make multiple trips and buy short-term
licenses. For people coming to sport fish out of Haines and
Skagway, however, Mr. Bentz said he thinks it's a good estimate
that half buy king salmon tags. He explained:
We've got hatchery fish returning to those areas. We
increased the bag limits. In some cases, in some
places, the annual limit that is imposed on
nonresidents is waived in these terminal areas. It's
a very attractive fishery, not only for people coming
down out of Canada, but for the local residents [of]
Southeast Alaska.
MR. BENTZ said he's not as familiar with the fishing patterns of
Yukon anglers in the Interior, and surmised there would be more
emphasis on resident species such as grayling or burbot, for
example. He added, "But definitely in Southeast, from what
we've seen, the people that do come down are after anadromous
adult salmon and halibut and other bottomfish."
Number 2868
REPRESENTATIVE GUTTENBERG referred to the 2,700 figure for Yukon
residents and asked whether there is another number for British
Columbia, which has a much larger population.
MR. BENTZ said he didn't know that number but could have it
generated by the department.
Number 2912
REPRESENTATIVE HEINZE suggested if these people spend $20 to $30
a day, that totals $54,000 to $81,000. Highlighting the
estimated $170,000 loss to the department, she said although
this bill is a wonderful idea, she's trying to justify it
fiscally. She requested Senator Dyson's input.
SENATOR DYSON replied:
My guess is, there will be an increase in the number
of fishermen. My guess also, to be honest, is the net
revenue from that fishery to the department will
decrease a bit. And if the sales tax passes, I
suspect that the communities there will more than make
up for that, and we will more than make up for it in
state revenue. And I'd be delighted to work with the
department to make sure that ... we don't lose those
"leverage federal funds" ... in some way; I don't know
how to do that. But I've got to be honest: I think
that these guys are right, and they're not enemies;
they're just putting forth ... the department's real
concern about the money. But I think [there'll] be a
net gain for us, as a state, on it, and I think
[there'll] be a net revenue loss of an undetermined
amount to these folks.
TAPE 03-45, SIDE B
Number 2991
SENATOR DYSON reiterated that Yukoners are excited about this,
and spoke about the gain in public relations, which isn't
quantifiable. He characterized this as a small gesture that
will help with a gas pipeline and extending the railroad, for
example. He noted that Representative Gruenberg had gone with
him to the Yukon on his last trip, and talked about continuing
the bilateral partnership between Yukon and Alaska. He said it
is intangible and cannot be put on a spreadsheet or in a fiscal
note. He also mentioned the concept of "circle tourism" that
includes both the Yukon and Alaska. He suggested the impact
from this bill will be small but measurable.
CHAIR FATE offered that the fiscal note is negative but
indeterminate.
Number 2864
REPRESENTATIVE WOLF asked how much is generated statewide
through tags and license fees annually in Alaska.
MR. BENTZ said roughly $11 million to $12 million for sport
fishing licenses and king salmon tags.
REPRESENTATIVE WOLF suggested $42,000 is a small amount in the
overall picture.
MR. BENTZ concurred.
Number 2819
REPRESENTATIVE GUTTENBERG surmised that a lot of funds go into
management, maintenance, and salaries. He remarked, "A lot of
times, when it comes down to what you can do with the last
dollar into a project, that could be in any one of our
communities." He said he'll make a speech on the House floor if
the bill gets there about trying to make up those funds in the
short term. He then asked whether Dingell-Johnson funds can
only be matched with sport fishing funds or can be matched with
general fund dollars.
MR. BENTZ replied that the only thing federal funds cannot be
matched with is other federal funds or federally generated
money. Therefore, it could be from the general fund or the fish
and game fund.
REPRESENTATIVE GUTTENBERG suggested the legislature should
ensure there isn't a net loss to the department at the end of
the budget process.
Number 2770
CHAIR FATE asked whether there was any objection to the motion.
There being no objection, CSSB 56(FIN) was reported from the
House Resources Standing Committee.
ADJOURNMENT
The House Resources Standing Committee meeting was recessed
until 1:00 p.m. or after the floor session. [The meeting was
never reconvened.]
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