04/16/2004 01:14 PM House RES
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
April 16, 2004
1:14 p.m.
MEMBERS PRESENT
Representative Nancy Dahlstrom, Co-Chair
Representative Beverly Masek, Co-Chair
Representative Carl Gatto
Representative Bob Lynn
Representative Kelly Wolf
Representative Beth Kerttula
Representative David Guttenberg
MEMBERS ABSENT
Representative Cheryll Heinze, Vice Chair
Representative Nick Stepovich
COMMITTEE CALENDAR
CONFIRMATION HEARING
Board of Fisheries
Robert Heyano - Dillingham
Art N. Nelson - Anchorage
- CONFIRMATION(S) ADVANCED
HOUSE BILL NO. 531
"An Act relating to natural gas exploration and development and
to nonconventional gas, and amending the section under which
shallow natural gas leases may be issued; and providing for an
effective date."
- MOVED CSHB 531(RES) OUT OF COMMITTEE
HOUSE BILL NO. 395
"An Act relating to shallow natural gas leasing and the
regulation of shallow natural gas operations."
- MOVED CSHB 395(RES) OUT OF COMMITTEE
HOUSE BILL NO. 498
"An Act requiring the sale or trade of state land."
- MOVED CSHB 498(RES) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 531
SHORT TITLE: CONVENTIONAL & NONCONVENTIONAL GAS LEASES
SPONSOR(S): RESOURCES
03/04/04 (H) READ THE FIRST TIME - REFERRALS
03/04/04 (H) O&G, RES, FIN
03/16/04 (H) O&G AT 3:15 PM CAPITOL 124
03/16/04 (H) Heard & Held
03/16/04 (H) MINUTE(O&G)
03/18/04 (H) O&G AT 3:15 PM CAPITOL 124
03/18/04 (H) Heard & Held
03/18/04 (H) MINUTE(O&G)
03/22/04 (H) RES AT 1:00 PM CAPITOL 124
03/22/04 (H) <Pending Referral>
04/01/04 (H) O&G AT 3:15 PM CAPITOL 124
04/01/04 (H) Moved CSHB 531(O&G) Out of Committee
04/01/04 (H) MINUTE(O&G)
04/05/04 (H) O&G RPT CS(O&G) 7AM
04/05/04 (H) AM: HOLM, KERTTULA, MCGUIRE, ROKEBERG,
04/05/04 (H) CRAWFORD, HEINZE, KOHRING
04/14/04 (H) RES AT 1:00 PM CAPITOL 124
04/14/04 (H) Heard & Held <Assigned to Subcmte>
04/14/04 (H) MINUTE(RES)
04/16/04 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 395
SHORT TITLE: SHALLOW NATURAL GAS/ OIL AND GAS
SPONSOR(S): REPRESENTATIVE(S) HARRIS
01/23/04 (H) READ THE FIRST TIME - REFERRALS
01/23/04 (H) O&G, RES, JUD, FIN
02/05/04 (H) O&G AT 1:00 PM CAPITOL 124
02/05/04 (H) Heard & Held
02/05/04 (H) MINUTE(O&G)
02/24/04 (H) O&G AT 3:15 PM CAPITOL 124
02/24/04 (H) Heard & Held
02/24/04 (H) MINUTE(O&G)
02/26/04 (H) O&G AT 3:15 PM CAPITOL 124
02/26/04 (H) Heard & Held
02/26/04 (H) MINUTE(O&G)
03/09/04 (H) O&G AT 3:15 PM CAPITOL 124
03/09/04 (H) Moved CSHB 395(O&G) Out of Committee
03/09/04 (H) MINUTE(O&G)
03/12/04 (H) O&G RPT CS(O&G) NT 1DP 3NR 1AM
03/12/04 (H) DP: KOHRING; NR: ROKEBERG, CRAWFORD,
03/12/04 (H) HOLM; AM: KERTTULA
03/19/04 (H) RES AT 1:00 PM CAPITOL 124
03/19/04 (H) -- Meeting Canceled --
04/07/04 (H) RES AT 1:00 PM CAPITOL 124
04/07/04 (H) Heard & Held
04/07/04 (H) MINUTE(RES)
04/14/04 (H) RES AT 1:00 PM CAPITOL 124
04/14/04 (H) Heard & Held <Assigned to Subcmte>
04/14/04 (H) MINUTE(RES)
04/16/04 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 498
SHORT TITLE: SALE OR TRADE OF STATE LAND
SPONSOR(S): REPRESENTATIVE(S) SEATON
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) RES, FIN
04/16/04 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
ROBERT HEYANO, Appointee
to the Board of Fisheries
Dillingham, Alaska
POSITION STATEMENT: Provided the committee with his
qualifications and experience.
ART N. NELSON, Appointee
to the Board of Fisheries
Anchorage, Alaska
POSITION STATEMENT: Provided the committee with his
qualifications and experience.
REPRESENTATIVE PAUL SEATON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Asked questions of appointees during
confirmation hearings on the Board of Fisheries, and as sponsor
of HB 498, presented the bill.
ED DERSHAM, Chairman
Board of Fisheries
Homer, Alaska
POSITION STATEMENT: Testified in support of Mr. Heyano and Mr.
Nelson's appointment to the Board of Fisheries.
JOHN JENSEN, commercial fisherman
Petersburg, Alaska
POSITION STATEMENT: Testified in support of Mr. Heyano and Mr.
Nelson's appointment to the Board of Fisheries.
RON RAINEY
Kenai River Sportfishing Association, Inc.
Soldotna, Alaska
POSITION STATEMENT: Testified in support of both Mr. Nelson's
and Mr. Heyano's appointment to the Board of Fisheries.
MARK GLASSMAKER, Vice President
Kenai Professional Guide Association
Soldotna, Alaska
POSITION STATEMENT: Testified in support of Mr. Heyano and Mr.
Nelson's appointment to the Board of Fisheries.
STEVE McCLURE, President
Kenai Professional Guide Association
Soldotna, Alaska
POSITION STATEMENT: Testified in support of Mr. Heyano and Mr.
Nelson's appointment to the Board of Fisheries.
REUBEN HANKE, sport fishing guide owner/operator
Soldotna, Alaska
POSITION STATEMENT: Testified in support of Mr. Heyano and Mr.
Nelson's appointment to the Board of Fisheries.
JOE HANES, Guide;
Member, Kenai River Special Management Area Board
Soldotna, Alaska
POSITION STATEMENT: Testified in support of Mr. Heyano and Mr.
Nelson's appointment to the Board of Fisheries.
DALE BONDURANT
Soldotna, Alaska
POSITION STATEMENT: During confirmation hearings, discussed the
McDowell v. State case and the common use clause of the Alaska
State Constitution.
JACK CHENOWETH, Attorney
Legislative Legal Counsel
Legislative Legal and Research Services
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: Explained the proposed committee
substitutes for HB 531, Version V, and HB 395, Version G.
MARK MYERS, Director
Division of Oil & Gas
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 395, answered
questions.
ACTION NARRATIVE
TAPE 04-21, SIDE A
Number 0001
CO-CHAIR NANCY DAHLSTROM called the House Resources Standing
Committee meeting to order at 1:14 p.m. Representatives
Dahlstrom, Masek, Gatto, Lynn, Wolf, Guttenberg, and Kerttula
were present at the call to order.
^CONFIRMATION HEARING(S)
^Board of Fisheries
Number 0058
CO-CHAIR DAHLSTROM brought before the committee the appointments
of Robert Heyano and Art N. Nelson to the Board of Fisheries.
[Packets contained biographical information on the appointees.]
Number 0161
ROBERT HEYANO, Appointee to the Board of Fisheries, provided the
committee with his qualifications and experience. He told the
members that he is a lifelong resident of the Bristol Bay
region. Mr. Heyano said that for 31 years he has operated a
Bristol Bay salmon drift gill net operation, and for 24 years he
has participated in the Togiak herring seine fishery. In
addition, he and his wife own and operate a small sport fish
camp. Mr. Heyano emphasized that he is also an active
subsistence user. He shared that he has served on a number of
committees, including the Nushagak Advisory Committee for 20
years, 10 years of which he served as the chairman, and the
Federal Subsistence Bristol Bay Rural Advisory Council.
CO-CHAIR DAHLSTROM noted that Representative Seaton was present
and invited him to join the members at the table.
Number 0334
ART N. NELSON, Appointee to the Board of Fisheries, provided the
committee with his qualifications and experience. He told the
committee that he lives in Anchorage with his wife, Joanie, and
three young boys. Since being appointed by Governor Murkowski
early last year to complete a term on the Board of Fisheries he
has enjoyed the opportunity to serve. Mr. Nelson said that it
can be very frustrating and challenging when dealing with
divisive issues. It has been a good experience to work with the
stakeholders, learn their fisheries, and help them craft
solutions to the problems they face, he added. While Alaska can
boast some of the healthiest fisheries in the world, there are
still many challenges such as dealing with sustained yield,
allocation, or maximizing values. Sometimes the issues are all
wrapped into the same issue, he commented.
Number 0501
MR. NELSON commented that he believes he brings a broad range of
experience to the board; from growing up commercial fishing on
his parents' boat in Prince William Sound to working on
biological, subsistence, and small boat issues for Western
Alaska. He shared that he also worked for the Bering Sea
Pollock industry. Mr. Nelson added that he did all of this
while still being an avid sport fisherman. These experiences
help him to look at issues that come before the board from a
variety of perspectives, he explained. He acknowledged that
when dealing with fisheries issues it is not always possible to
make everyone happy. Mr. Nelson summarized that he and the
other members of the board have done their best to make the
right decisions to protect the resources and do what is best for
the residents of Alaska. He asked that the members support him
in continuing his service on the board. In closing, he stated
that he has known Mr. Heyano for many years; he is an excellent
individual and a straight shooter, and would be a valuable
addition to the board.
Number 0571
REPRESENTATIVE WOLF asked Mr. Heyano if he has fished in the
Bristol Bay region.
MR. HEYANO replied yes.
REPRESENTATIVE WOLF noted that there were letters of support for
Mr. Heyano from the Bristol Bay Native Association, Mr. Heyano's
state senator, and Dillingham Electric Company. Representative
Wolf asked if Mr. Heyano solicited the letters of endorsement.
MR. HEYANO responded that he has not asked for any letters of
support.
REPRESENTATIVE WOLF asked Mr. Heyano what he believes he can
contribute to the Board of Fisheries to move Alaska forward in
the next three years.
MR. HEYANO replied that as an Alaskan with a strong personal
interest in renewable resources such as fish and wildlife, and
his experience in Bristol Bay he is aware of the need to protect
the resource. He commented that the salmon industry is going
through a tough time and he looks forward to working to make it
a more viable industry.
Number 0834
REPRESENTATIVE WOLF commented that the Board of Fisheries deals
with issues that can be "testy" at times, with respect to public
input and the decisions board members have to make. He asked if
Mr. Heyano believes he has the experience necessary to help
resolve some of the issues between different user groups.
MR. HEYANO replied that he believes he does have the skills to
address these issues. He explained that he has been a public
participant in the Board of Fisheries process for approximately
20 years. During that time he has been on both sides of the
issues. Mr. Heyano told the members that he has served on
committees that have developed management plans that allocated
the resources to users on the local level where the members are
dealing with the subsistence board and commercial fisheries.
Anytime a decision is made on the resource, there has to be
support by the majority of users or the problems continue.
Number 0933
REPRESENTATIVE GUTTENBERG commented that the House Special
Committee on Fisheries has before it legislation dealing with a
moratorium in the Gulf of Alaska and the assigning of rights to
either the vessels, the captains, or the permit holders. He
inquired as to Mr. Heyano's opinion on the matter.
MR. HEYANO replied that he does not have an opinion at this
time.
Number 0980
REPRESENTATIVE GATTO asked if Mr. Heyano believes there should
be some kind of controlled access to the fish in order to
preserve the resource.
MR. HEYANO replied that he is not fully versed on the fisheries
in the Gulf of Alaska, so he could not comment on that
particular fishery at this time. It appears that a lot
fisheries, particularly those in federal waters, are moving in
the direction of controlled access, he added. Mr. Heyano told
the members that if his appointment is confirmed he expects to
be brought up to speed on that issue.
Number 1050
REPRESENTATIVE SEATON asked if Mr. Heyano is familiar with SB 69
which would allow board members to participate in deliberations
and vote [even when] they have either a financial or
participatory conflict of interest in the issue that is being
addressed. He inquired as to Mr. Heyano's opinion.
MR. HEYANO said if the concept behind the Board of Fisheries is
to have a layman board rather than a professional board, then he
said he believes it is important that the most knowledgeable
participants from the public be able to serve on the board. It
is a step in the right direction, he added.
Number 1129
REPRESENTATIVE SEATON asked if he sees a distinction between
participating in a fishery and being knowledgeable, and being a
lobbyist or being paid to be on the board to represent an
organization or viewpoint.
MR. HEYANO replied that he does see the distinction. If an
individual is paid to be on the board, then there is a move of
the board to the professional arena, he said.
REPRESENTATIVE WOLF commented that Mr. Heyano has received nine
letters of endorsement from around the state. He asked if any
members of these organizations interviewed him.
MR. HEYANO stated that no one interviewed him. He acknowledged
that he has not seen either letters of support or opposition to
his appointment.
REPRESENTATIVE WOLF told Mr. Heyano that he would forward him
copies of the letters of endorsement.
Number 1311
ED DERSHAM, Chairman, Board of Fisheries, testified in support
of Mr. Heyano's appointment to the Board of Fisheries. He told
the members that he very much supports Mr. Heyano's service to
the board because he has worked with him in his capacity as
chairman of the Dillingham Advisory Committee, as a private
individual, and as a commercial fisherman. Mr. Heyano provided
valuable input to the process, he said. Mr. Dersham commented
that he has found Mr. Heyano to be a fair-minded individual.
The board has considered his input on the salmon fishing
industry restructuring issue. He explained that as the board
goes forward there will be more participation from the board on
the salmon restructuring debate. Mr. Heyano will be a valuable
asset with respect to that issue, and is well aware of the
commitment involved. Mr. Dersham said he knows Mr. Heyano
deliberated long and hard with his family before agreeing to put
his name forward.
Number 1311
JOHN JENSEN, commercial fisherman, testified in support of Mr.
Heyano, whom he met him last year during the board process. Mr.
Jensen related that he was impressed with Mr. Heyano's ability
to see all [sides] of the problems facing the board. Mr. Jensen
applauded Mr. Heyano's willingness to put his name forward, and
expressed the hope that Mr. Heyano's confirmation is advanced.
Number 1539
RON RAINEY, Kenai River Sportfishing Association, Inc.,
testified in support of the appointment of both Mr. Nelson and
Mr. Heyano to the Board of Fisheries. He told the members that
he lives on the Kenai River and is an avid sports fisherman.
Mr. Rainey said that he has observed Mr. Nelson and his service
on the board for the last two sessions and is very impressed
with his fairness and ability to see both sides of an issue.
CO-CHAIR DAHLSTROM interjected that the committee is hearing
testimony only on Mr. Heyano.
MR. RAINEY commented that he only knew Mr. Heyano by reputation.
He said he has seen him at the Board of Fisheries meetings, and
is impressed with the fact that he has both commercial fishing
experience and participation in the sport fishery as well as the
subsistence fishery. Mr. Rainey opined that Mr. Heyano's
background will bring a balanced view to the board, and
therefore he would like Mr. Heyano to be confirmed.
Number 1607
MARK GLASSMAKER, Vice President, Kenai Professional Guide
Association, testified in support of the appointment of Mr.
Heyano. He noted that although he has yet to meet or work with
Mr. Heyano, he looked forward to his open-mindedness with the
sport fishing industry.
STEVE McCLURE, President, Kenai Professional Guide Association
(KPGA), related KPGA's support for the appointment of Mr.
Heyano. It's important, he further related, that the makeup of
the board continues to have a member from the Dillingham region.
REUBEN HANKE, owner/operator of a sport fishing guide service on
the banks of the Kenai River, said that although he doesn't
personally know Mr. Heyano, he comes highly recommended from a
group of his peers. Furthermore, Mr. Heyano has been involved
in the board process for a number of years. For those reasons,
Mr. Hanke said he is comfortable that Mr. Heyano is up to date
with many of the issues facing the Board of Fisheries today.
JOE HANES, Guide; Member, Kenai River Special Management Area
Board, echoed earlier comments that although he didn't have any
personal experiences with Mr. Heyano, he respected the opinions
of other board members who are looking forward to working with
Mr. Heyano. Therefore, Mr. Hanes supported Mr. Heyano's
appointment.
Number 1758
DALE BONDURANT informed the committee that he participated in
the McDowell v. State case and believes his participation was
actively considered in the Alaska Supreme Court's decision. In
the aforementioned case Article 8, SECTION 3. "Common Use.
Wherever occurring in their natural state, fish, wildlife, and
waters are reserved to the people for common use." of the Alaska
State Constitution was cited. He related that the Alaska
Supreme Court found in McDowell v. State as well as other cases
the following: "We believe that a professional hunting guide
uses a resource that is sufficiently direct, therefore, it falls
within the common use clause. The work of the guide is
sufficiently directed to the taker, and so there is no
meaningful biased for extinguishing the guide's right under the
common use clause." Mr. Bondurant said that Judge Moore
basically stated that McDowell v. State was an equal protection
case and an easy one at that. Furthermore, the Alaska Supreme
Court has, on a number of occasions, stated that the limited
entry fishery is an exclusionary fishery and thus isn't a common
use fishery. Mr. Bondurant asked Mr. Nelson and Mr. Heyano if
they would accept the Alaska Supreme Court's 6-1 decision in the
McDowell v. State case and support the common use clause of the
Alaska State Constitution.
MR. HEYANO opined that the resources of the state belong to all
Alaskans.
Number 1917
MR. NELSON said that he isn't intimately familiar with the
McDowell case, but as a member of the board one must abide by
all of the laws that are currently in place.
REPRESENTATIVE GUTTENBERG restated his earlier question
regarding the legislation dealing with a moratorium in the Gulf
of Alaska and assignment of rights. He noted that Mr. Nelson
represents some catcher-processor vessels, and therefore
questioned whether he had a position on that or has been part of
the dialogue on the matter.
MR. NELSON said that he is familiar with the matter, and has sat
on the board's three-member committee that is addressing
rationalization. Mr. Nelson emphasized that although in his day
job he works for an association of companies that work in the
Bering Sea, he doesn't represent them in his seat on the Board
of Fisheries. He noted that when he attends Board of Fisheries
meetings he takes unpaid leave and in no way feels beholden to
that association of companies. However, he said that he does
bring the experience of the Bering Sea fishery to the Board of
Fisheries, which is valuable along with his other experience.
With regard to the moratorium, the assignment of rights is
certainly in the purview of the legislation. He offered that
the reason the [rights were assigned] to vessels was because it
was the best way in which to get a handle on the participants in
the fishery while not necessarily having a proliferation of
effort. Still, he acknowledged that there are good arguments to
go to an individual [based moratorium], although it would
possibly allow a significant increase in effort.
REPRESENTATIVE GUTTENBERG noted that there has also been
dialogue with regard to the number of vessels that might enter
[the fishery], which would result in the same effect as an
individual-based moratorium. Therefore, he asked if in Mr.
Nelson's reasoning there could be a place for a combination of
individual- and vessel-based [rights].
MR. NELSON agreed that there could be a combination approach.
He reminded the committee that the North Pacific Fishery
Management Council (NPFMC) is proceeding with rationalizing the
federal side of the fishery. Although the [state] isn't forced
to react to the aforementioned, if the state doesn't there is a
significant possibility for the influx of effort in the state
waters. Also, the participants in the state water fisheries may
face significant economic disadvantage through markets and an
influx of competition if the federal system is rationalized and
the state system is not.
REPRESENTATIVE GUTTENBERG noted that there has been discussion
that there is time to see what happens [with the federal
rationalization]. He asked if Mr. Nelson felt that there is a
specific need to act on this matter.
MR. NELSON pointed out that NPFMC has been working on Gulf
rationalization for a number of years, and only recently was the
issue "punted" to Alaska with regard to how it would want to
deal with it. He opined that he and the board would want to be
sure it make the correct decisions on this matter, which has led
the board to move slower than NPFMC would like. However, Mr.
Nelson said that he wasn't comfortable making a decision until
he understands the issues better and has dealt with the
stakeholders. The fact that NPFMC is rationalizing compels the
board to consider what it might or might not want to do in state
waters, but Mr. Nelson stated that he wouldn't act on a strict
timeline solely because of federal rationalization. In fact, to
some extent NPFMC can't move forward with the specifics of its
plan until it knows how the state will deal with state water
fisheries.
Number 2373
REPRESENTATIVE WOLF asked Mr. Nelson if his experience could
lend credibility and provide commonality within the board in
order to remove some of the divisiveness.
MR. NELSON answered that he would hope so and felt that his
broad spectrum of supporters lends to his credibility to listen
to various points of view. Mr. Nelson said that he would do his
best. In further response to Representative Wolf, Mr. Nelson
confirmed that he hasn't seen the list of endorsements from the
governor's office. However, he mentioned that he had heard that
both the United Fishermen of Alaska and the Kenai River
Sportfishing Association had endorsed his appointment. He also
confirmed that he wasn't interviewed for the endorsements that
he received.
Number 2548
REPRESENTATIVE SEATON returned to SB 69 and the financial
conflict of interest and said that he understood Mr. Nelson's
position as an employee. Representative Seaton asked if Mr.
Nelson viewed hired lobbyists or individuals hired to come
before the board as problematic.
MR. NELSON mentioned that whether he had a conflict of interest
on a particular interest was addressed at a meeting earlier this
year. The Department of Law suggested that Mr. Nelson remove
himself from the vote, which he did. Mr. Nelson said that he
does support addressing the conflict of interest issue, which SB
69 partially addresses. Currently, the [legislation] certainly
allows fishermen and ground level participants to be involved
with the Board of Fisheries. Many individuals wouldn't want to
put their name forward because the fishery they are
knowledgeable about wouldn't be able to participate in the votes
and decision-making. Mr. Nelson characterized SB 69 as a step
in the right direction, although he wasn't sure how it would
impact him.
REPRESENTATIVE SEATON asked if Mr. Nelson would support people
who take money to lobby on an issue or be hired as consultants
and then participate in board deliberations and votes.
MR. NELSON replied no, he wouldn't support such.
Number 2710
REPRESENTATIVE GUTTENBERG returned to the NPFMC's
rationalization and the moratorium legislation. He related his
understanding that Mr. Nelson had said that NPFMC is waiting to
see how the state deals with this. However, the House Special
Committee on Fisheries is operating under the premise that NPFMC
will "do it first." Therefore, he questioned what the situation
really is.
MR. NELSON recalled that the process started in the federal
arena three to four years ago. Part of the problem is that the
fish aren't aware of the three-mile boundary. He explained that
NPFMC can't really determine how to manage outside the three-
mile boundary until there is an idea with regard to how the
state will react within the three miles. Fishermen in the state
fisheries and the parallel fisheries are often the same people,
and therefore the assignment of quota shares could depend upon
how much the state and the Board of Fisheries decides to
integrate or create a definite distinction.
Number 2856
MR. HANES noted that he had quite a bit of involvement with Mr.
Nelson at the last Board of Fisheries meeting. He recalled Mr.
Nelson being easy to work with and proposing some innovative
ideas for problems. Therefore, he related his strong support
for the appointment of Mr. Nelson to the Board of Fisheries.
MR. HANKE voiced support for the appointment of Mr. Nelson.
After working with Mr. Nelson over a few board cycles, he has
found him to be fair and equitable on the issues facing the
state's fisheries.
MR. McCLURE stated that KRPGA has nothing but respect for the
effort, work, and time Mr. Nelson has given to the Board of
Fisheries. Although Mr. Nelson and the KRPGA have been on
different sides of various issues, Mr. Nelson has been fair,
unbiased, and professional in his actions. The aforementioned
is all one can ask of anyone on the Board of Fisheries.
Therefore, KRPGA strongly supports the appointment of Mr.
Nelson.
MR. GLASSMAKER expressed support for the appointment of Mr.
Nelson. He noted that he has met and worked with Mr. Nelson in
past board proceedings. He characterized Mr. Nelson's presence
on the Board of Fisheries as an asset to the state's fisheries.
Mr. Nelson's level-heading understanding of the diverse issues
facing the board make him an excellent choice for this difficult
position, he commented.
MR. RAINEY reiterated that he has observed Mr. Nelson at several
Board of Fisheries hearings at which he was straightforward,
fair, and representative of all user groups. Mr. Rainey
reiterated his strong endorsement of the appointment of Mr.
Nelson.
TAPE 04-21, SIDE B
MR. JENSEN spoke in favor of Mr. Nelson's appointment to the
board, and remarked that Mr. Nelson is doing a good job as the
current vice chair of the Board of Fisheries. He felt that
given the opportunity, Mr. Jensen will continue to do a good job
on the board.
MR. DERSHAM said that he has worked with Mr. Nelson for two
cycles of meetings. He characterized Mr. Nelson as a hard
worker and adept at taking on tough issues and developing all of
the possible information. Mr. Dersham said that he supported
the continued service of Mr. Nelson.
Number 2878
REPRESENTATIVE WOLF expressed concern with the endorsements from
the Kenai River Sportfishing Association, which is a 501(c)(3)
nonprofit organization. Under the Internal Revenue System code,
a 501(c)(3) cannot endorse a candidate for public office. The
governor's office has accepted the endorsements. However,
Representative Wolf requested that the endorsements from the
Kenai River Sportfishing Association and the Cook Inlet Sport
fish Caucus be stricken [from the record] due to close
association with the governor. Representative Wolf said he
would object unless those were stricken [from the record].
CO-CHAIR DAHLSTROM said that she wasn't sure whether the
committee could strike those endorsements from the record. She
opined that it's appropriate for Representative Wolf to make his
statements and then the committee will proceed with its vote.
She noted that she would pass along Representative Wolf's
concerns.
Number 2748
CO-CHAIR MASEK moved that the committee forward the names of Mr.
Robert Heyano and Mr. Art Nelson to the full body for
consideration.
REPRESENTATIVE WOLF objected.
A roll call vote was taken. Representatives Guttenberg,
Kerttula, Gatto, Lynn, Masek, and Dahlstrom voted in favor of
forwarding the names of Mr. Heyano and Mr. Art Nelson to the
full body for consideration. Representative Wolf voted against
it. Therefore, the names were forwarded to the full body for
consideration by a vote of 6-1.
REPRESENTATIVE WOLF clarified that his objection is to the
endorsements not the appointees.
CO-CHAIR DAHLSTROM passed the gavel to Co-Chair Masek.
HB 531-CONVENTIONAL & NONCONVENTIONAL GAS LEASES
[Contains discussion of HB 395.]
CO-CHAIR MASEK announced that the next order of business would
be HOUSE BILL NO. 531, "An Act relating to natural gas
exploration and development and to nonconventional gas, and
amending the section under which shallow natural gas leases may
be issued; and providing for an effective date."
CO-CHAIR MASEK reminded the committee that prior to the
committee's last meeting she appointed a subcommittee on HB 531,
which met yesterday. She requested that the chair of the
subcommittee present the information it found to the committee.
Number 2600
REPRESENTATIVE GATTO moved to adopt CSHB 531, Version 23-
LS1818\V, Chenoweth, 4/15/04, as the working document. There
being no objection, Version V was before the committee.
CO-CHAIR DAHLSTROM explained that basically the subcommittee
reviewed HB 395 and HB 531 and determined that HB 395 pertains
to the present and HB 531 to the future. Some agreement was
reached with regard to the terminology, which she requested the
drafter address. The subcommittee agreed that the two pieces of
legislation would be compatible.
Number 2518
JACK CHENOWETH, Attorney, Legislative Legal Counsel, Legislative
Legal and Research Services, Legislative Affairs Agency,
explained that the goal of the subcommittee was to ensure that
the two pieces of legislation weren't in conflict. Very few
changes were made to HB 531 and the changes are encompassed in
Version V. The subcommittee desired for the provisions to
covering the waiver of the local planning authority, which was
added last year in HB 69, to be repealed. Therefore, AS
31.05.125, AS 38.05.177(n), and a particular provision that was
amended when those changes were added were repealed. The other
change in Version V was to AS 46.03.100(f) where the language
was changed to conform to language used in HB 524 in which the
legislature addressed the exclusion from the water and
wastewater discharge permits.
REPRESENTATIVE GUTTENBERG asked if any consideration was given
to melding HB 531 and HB 395 together.
MR. CHENOWETH said that he wasn't given that instruction.
CO-CHAIR DAHLSTROM confirmed that there was mention of having
one piece of legislation come out of the subcommittee. In
discussing the pros and cons of the aforementioned, one member
felt that one piece of legislation should be put forth while the
other two members of the subcommittee felt that [two pieces of
legislation should be put forth].
REPRESENTATIVE GATTO said that the subcommittee labored over
this matter and decided that it would be more practical to keep
the two pieces of legislation separate. He mentioned that the
two pieces of legislation were clearly aligned.
MR. CHENOWETH explained that HB 531 reflects an approach that
eliminates shallow natural gas leasing as a separate form of
leasing and brings that leasing under the conventional oil and
gas leasing provisions of AS 38.05.180. The aforementioned was
done per the general direction provided by the Department of
Natural Resources (DNR). Substantial drafting is required to
allow DNR to act on leasing on a gas only basis. The
legislation also includes DNR's suggestion to replace the
language "shallow natural gas" with "nonconventional gas." "All
of the changes made in [HB] 531, generally are made to move
leasing in that direction so that ... we're back to one general
form of leasing whether it's for conventional oil and gas or ...
whether it's for ... nonconventional gas leasing," he explained.
Number 2248
CO-CHAIR DAHLSTROM moved to report CSHB 531, Version 23-
LS1818\V, Chenoweth, 4/15/04, out of committee with individual
recommendations and the accompanying fiscal notes.
REPRESENTATIVE KERTTULA said that she wanted to offer an
amendment.
CO-CHAIR MASEK said that Representative Kerttula, as a member of
the subcommittee, had a "shot at it." She reminded the
committee that there is a motion to report Version V from
committee pending.
REPRESENTATIVE KERTTULA objected to the motion.
A roll call vote was taken. Representatives Gatto, Dahlstrom,
Masek, and Lynn voted in favor of reporting CSHB 531, Version
23-LS1818\V, Chenoweth, 4/15/04, out of committee.
Representatives Guttenberg and Kerttula voted against it.
Therefore, CSHB 531(RES) was reported out of the House Resources
Standing Committee by a vote of 4-2.
HB 395-SHALLOW NATURAL GAS/ OIL AND GAS
[Contains discussion of HB 531.]
CO-CHAIR MASEK announced that the next order of business would
be HOUSE BILL NO. 395, "An Act relating to shallow natural gas
leasing and the regulation of shallow natural gas operations."
Number 2162
CO-CHAIR DAHLSTROM moved to adopt CSHB 395, Version 23-LS1314\G,
Chenoweth, 4/16/04, as the working document. There being no
objection, Version G was before the committee.
CO-CHAIR MASEK reminded the committee that HB 395 had been
assigned to a subcommittee. She requested that Mr. Chenoweth
explain Version G.
JACK CHENOWETH, Attorney, Legislative Legal Counsel, Legislative
Legal and Research Services, Legislative Affairs Agency, noted
that the committee should have a copy of an April 16, 2004,
memorandum he prepared. Mr. Chenoweth related that the goal was
to ensure that HB 395 operate in some fashion whether it passed
by itself or if HB 531 passed as well. Section 1 of [Version G]
amends the requirements regarding how the Alaska Oil and Gas
Conservation Commission (AOGCC) involves itself in shallow
natural gas. The language in Section 1 is the same as in the
prior draft, no change has been made to this section. The only
change in Section 2 is to repeal and reenact Section 1 and
change all references to "shallow natural gas" to
"nonconventional gas." Therefore, Section 1 will be in effect
if HB 395 becomes law while Section 2 will operate if both HB
395 and HB 531 become law. Section 3, he explained, is a public
forum provision that's imposed upon the AOGCC covering shallow
natural gas and will operate if HB 395 alone becomes law. If
both HB 395 and HB 531 become law, it's necessary to change the
references to "shallow natural gas" to "nonconventional gas,"
which is accomplished in Section 4.
MR. CHENOWETH continued to review Version G. Section 5 is the
same definition of "shallow natural gas" as in the prior version
with the adjustment in the reduction of depth from 4,000 to
3,000 feet in an attempt to standardize that. However, if HB
531 becomes law, AS 31.05.170(14) is repealed, which is located
on page 17, line 14, and replaced by the definition of
"nonconventional gas." Section 7 of Version G will operate
under passage of either legislation or passage of both. Section
7 addresses how mineral interests are to be dealt with in
situations when the access to the minerals isn't covered under
the Alaska Land Act, the reservation of the mineral interest
under Section 6(i) of the Statehood Act. The aforementioned
would be pre-Statehood Act lands and some of the split estates
that have occurred under the Alaska Native Claims Settlement Act
(ANCSA) when the regional Native corporations and the village
corporations own separate estates. There is no need to
establish an alternative to Section 7 because it stands alone.
MR. CHENOWETH pointed out that Section 8-11 are amendments that
all dealing with existing shallow natural gas provisions in AS
38.05.177. The aforementioned sections maintain the same
language as in the prior draft and utilize some of the
safeguards for water-well tasting, noise abatement, setbacks,
and the termination or abandonment obligations at the time the
lease comes to an end. Mr. Chenoweth related that he was
instructed to make sure that those provisions survived if
shallow natural gas is replaced by nonconventional gas.
Therefore, in Section 12 paragraphs (3) and (4) [and (5)] are
applicable when leases are issued for nonconventional gas
leasing. He highlighted that Section 11 is a provision that
provides additional safeguards to cover shallow natural gas
leasing and the requirement of what's to be included in an
agreement between an owner and a lessee or things that have to
be dealt with in the event a lessee seeks to enter land under a
bond. The aforementioned provisions are carried over in Section
12(ff)(4)(E).
MR. CHENOWETH turned to Section 13, which is an amendment to the
notice provision in the event existing shallow natural gas
leasing goes forward under nomination. The specifics of the
notice provisions are specified in AS 38.05.945(b), Section 14
of Version G. Section 15 simply reverses Section 14 if shallow
natural gas is eliminated. The amendment to reverse Section 13
is dealt with in the repeal of AS 38.05.945(a)(7) on page 17,
line 14. Section 16 appears because the [subcommittee] insisted
that the language having to do with the exclusion from the water
well and the wastewater permitting requirements mirror what was
done in HB 524. Section 17 is a conforming event. In the event
that HB 531 becomes law, Sections 18 and 19 operate the same as
earlier provisions for retaining the definition of "shallow
natural gas" or replacing it with the definition of
"nonconventional gas." Sections 20-21 repeal the waiver of the
local approval authority that's given to the commissioner.
Number 1661
MR. CHENOWETH highlighted Section 23, which sets out some
repealers that are contingent. He reminded the committee that
various sections of Version G take effect only if HB 531 takes
effect. Section 24 is an effective date for the contingent
provisions and ensures that those provisions [take effect] one
day later than HB 531. Section 25 is the effective date for the
noncontingent provisions in Version G.
REPRESENTATIVE GUTTENBERG directed attention to page 12, line
18, paragraph (7), and inquired as to the notice requirement
that is required.
Number 1525
MARK MYERS, Director, Division of Oil & Gas, Department of
Natural Resources (DNR), specified that [paragraph (7)]
basically puts in place the same [notice] standard as used for a
conventional lease sale. Therefore, there is a best interest
finding and a notification of the sale. The call for comments
would also be incorporated into the best interest finding
process.
MR. CHENOWETH directed attention to page 5, lines 28-29, which
specifies that there must be the opportunity for public comment
for a period of not less than 60 days. The aforementioned is
"picked up" on page 12, lines 18-19. He reminded the committee
that shallow natural gas proceeds on the basis of an individual
expressing an interest in developing a particular parcel of
land. Based on the identification of the parcel, the potential
lessee makes application. Therefore, the obligation of DNR to
provide notice of receipt of a lease application is being added
[in Section 14]. The call for public comment refers back to AS
.177(c). Under HB 531 there would be no division of initiating
a lease rather it would all take place under the conventional
oil and gas leasing methodology. When the state initiates the
decision to lease in a particular area, it isn't on the basis of
an individual making an application for a lease rather it's on
the basis of the state specifying the area which it's proposing
to put up for lease. In the latter situation AS .177 wouldn't
need to be retained and thus is eliminated if HB 531 takes
effect.
The committee took an at-ease from 2:34 p.m. to 2:37 p.m.
Number 1204
CO-CHAIR DAHLSTROM moved to report CSHB 395, Version 23-
LS1314\G, Chenoweth, 4/16/04, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 395(RES) was reported out of committee.
CO-CHAIR MASEK returned the gavel to Co-Chair Dahlstrom.
HB 498-SALE OR TRADE OF STATE LAND
CO-CHAIR DAHLSTROM announced that the final order of business
would be HOUSE BILL NO. 498, "An Act requiring the sale or trade
of state land."
Number 1120
REPRESENTATIVE PAUL SEATON, Alaska State Legislature, sponsor,
stated that HB 498 is meant to help the state acquire special
purpose lands. He recalled that last year he worked hard on
creating a public recreational area outside of Homer, which
required the acquisition of private lands. The private lands
were acquired by the state being the conduit for 100 percent
federal legacy lands. The argument against acquiring the land
was that it was private land and the state taking it for an
economic development project would remove the land from its tax
base. Furthermore, it was argued that the state acquiring the
land would further deplete the amount of privately owned land in
the state. Trying to get through and balance the acquisition of
private land by the state is the intent of HB 498.
REPRESENTATIVE SEATON explained that if the state is going to
acquire private land for a public purpose, HB 498 requires the
Department of Natural Resources (DNR) to review the area to
determine whether there is other settlement land, agricultural
land, or resource designated lands that could be available to
put up for sale on an equal value basis. He noted that the
acquisition of park land or land for recreational development
wouldn't be held up waiting for the sale to take place.
Representative Seaton pointed out that in some areas of the
state the problem is that there isn't very much state land,
although there may be parcels of land that are vital to a
community's economic base. If DNR can't find land within a
reasonable distance, then the requirements would be fulfilled
and the purchase of the [private land] wouldn't be stopped.
Representative Seaton highlighted that the legislation includes
a provision such that the review for other state lands could be
fulfilled, if a trade with the landowner is accomplished.
Basically, this legislation results in no net loss, and
therefore the amount of private ownership isn't lost. Although
more amounts of state land are offered for sale than is
purchased, often the state lands are remote.
Number 0739
CO-CHAIR MASEK moved to adopt CSHB 498, Version 23-LS1230\Q,
Bullock, 3/31/04, as the working document. There being no
objection, Version Q was before the committee.
The committee took a brief at-ease at 2:45 p.m.
REPRESENTATIVE GATTO posed a situation in which there is an "in
holding" for a series of parcels that are needed. If the
individual with the in holding doesn't want to leave the area
and accept another parcel of land, does the state have a way to
deal with it, he asked.
REPRESENTATIVE SEATON clarified that this legislation in no way
forces an individual to sell any land. This legislation merely
requires that the state, DNR, when it acquires land from a
willing private owner, offer other state land for sale to the
private property owner. The land offered by the state would
only be development lands. A trade isn't required and would
probably be an unusual circumstance, he noted. With regard to
obtaining additional federal lands by the state, Representative
Seaton said those lands would be [available] as they are
classified as developmental lands. Currently, there is a small
amount of state land that is actually in the settlement,
agricultural category because local governments have selected
much of the proximate developable land.
Number 0447
CO-CHAIR MASEK noted that the committee packets includes a Homer
News article regarding when the governor vetoed the federal
grant for the Kachemak Heritage Land Trust (KHLT). The
committee packet also includes a letter to Representative Seaton
from KHLT and a letter from Representative Seaton to the
governor. She inquired as to why this legislation was
introduced.
REPRESENTATIVE SEATON informed the committee that last year KHLT
applied for the purchase of the Baycrest Ski Trails, which was a
parcel that the federal government had listed as number 14 in
parcels that should be acquired for public use. The Baycrest
Ski Trails provided the area of Homer with access to many of the
area's ski trails. This was pulled out of the capitol budget in
the Senate last year because of the philosophical concern
regarding taking private land and placing it in public
ownership. However, in the House it was returned to the budget.
After convincing the Senate Finance Committee that this was an
economic development project for the local economy, the Senate
concurred and put it back in the budget. However, the
aforementioned concern ultimately lead to the governor's veto of
that. Later it was decided that the veto shouldn't have taken
place and it was agreed that the Joint Committee on Legislative
Budget and Audit could accept the money for the land. The
intent of this legislation is to get past the concern and help
everyone realize that so that these valuable pieces of property
can be obtained.
Number 0111
CO-CHAIR MASEK moved to report CSHB 498, Version 23-LS1230\Q,
Bullock, 3/31/04, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 498(RES) was reported from the House
Resources Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:55 p.m.
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