Legislature(1995 - 1996)
04/10/1995 08:17 AM House RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE April 10, 1995 8:17 a.m. MEMBERS PRESENT Representative Joe Green, Co-Chairman Representative Bill Williams, Co-Chairman Representative Scott Ogan, Vice Chairman Representative Alan Austerman Representative Ramona Barnes Representative John Davies Representative Pete Kott Representative Irene Nicholia MEMBERS ABSENT Representative Eileen MacLean COMMITTEE CALENDAR SJR 12: Relating to the United States Department of Agriculture, Forest Service; relating to the United States Department of Agriculture, Forest Service, strategic plan known as "Reinvention of the Forest Service"; and advocating that implementation of the plan be suspended pending Congressional review and consultation with local governments. HCS CSSJR 12(RES) MOVED OUT OF COMMITTEE HB 191: "An Act relating to the management and disposal of state land and resources; relating to certain remote parcel and homestead entry land purchase contracts and patents; and providing for an effective date." CSSSHB 191(RES) MOVED OUT OF COMMITTEE *HB 279: "An Act relating to a municipal river habitat protection tax credit." CSHB 279(RES) MOVED OUT OF COMMITTEE SB 93: "An Act relating to the disposal of state land along the Dalton Highway; and providing for an effective date." HEARD AND HELD (* First public hearing) WITNESS REGISTER JACK PHELPS, Legislative Assistant to Representative Bill Williams Alaska State Legislature State Capitol, Room 128 Juneau, AK 99801 Phone: 465-3215 POSITION STATEMENT: Reviewed changes on SJR 12 REPRESENTATIVE GENE THERRIAULT Alaska State Legislature State Capitol, Room 421 Juneau, AK 99801 Phone: 465-4797 POSITION STATEMENT: Prime Sponsor HB 191 RON SWANSON, Director Division of Land Department of Natural Resources 3601 C Street, Suite 1122 Anchorage, AK 99503 Phone: 762-2692 POSITION STATEMENT: Answered questions regarding HB 191 REPRESENTATIVE GARY DAVIS Alaska State Legislature State Capitol, Room 420 Juneau, AK 99801 Phone: 465-2693 POSITION STATEMENT: Prime Sponsor HB 279 TOM BOEDEKER, Attorney Kenai Peninsula Borough 144 N. Binkley Soldotna, AK 99669 Phone: 262-4441 POSITION STATEMENT: Supported HB 279 and answered questions regarding HB 279 GERON BRUCE, Legislative Liaison Alaska Department of Fish and Game P.O. Box 25526 Juneau, AK 99811-5526 Phone: 465-4100 POSITION STATEMENT: Answered questions regarding HB 279 SENATOR MIKE MILLER Alaska State Legislature State Capitol, Room 125 Juneau, AK 99801 Phone: 465-4976 POSITION STATEMENT: Prime Sponsor SB 93 DEE HOFFMAN, Director of Planning North Slope Borough P.O. Box 69 Barrow, AK 99723 Phone: 852-0320 POSITION STATEMENT: Supported SB 93 RANDY MAYO, Chief Stevens Village Council Stevens Village, AK 99774 Phone: 478-7228 POSITION STATEMENT: Opposed SB 93 GEORGE YASKA, Director of Wildlife Tanana Chiefs Conference 122 1st Avenue, Suite 600 Fairbanks, AK 99701 Phone: 452-3755 POSITION STATEMENT: Supported SB 93 TERESA SAGER, Legislative Assistant Senator Mike Miller State Capitol, Room 125 Juneau, AK 99801 Phone: 465-4976 POSITION STATEMENT: Answered questions regarding SB 93 SARA HANNAN, Representative Alaska Environmental Lobby, Inc. P.O. Box 22151 Juneau, AK 99801 Phone: 463-3366 POSITION STATEMENT: Opposed SB 93 SAM KITO, Legislative Liaison Department of Transportation & Public Facilities 3132 Channel Drive Juneau, AK 99801 Phone: 465-3904 POSITION STATEMENT: Answered questions regarding SB 93 PREVIOUS ACTION BILL: SJR 12 SHORT TITLE: U.S. FOREST SERVICE PLAN SPONSOR(S): SENATOR(S) TAYLOR,Pearce; REPRESENTATIVE(S) Williams JRN-DATE JRN-PG ACTION 01/25/95 81 (S) READ THE FIRST TIME - REFERRAL(S) 01/25/95 81 (S) RESOURCES 02/10/95 (S) RES AT 03:30 PM BUTROVICH ROOM 205 02/10/95 (S) MINUTE(RES) 02/14/95 266 (S) RES RPT CS 4DP SAME TITLE 02/14/95 267 (S) ZERO FISCAL NOTE (DNR) 02/20/95 (S) RLS AT 11:25 AM FAHRENKAMP RM 203 02/20/95 (S) MINUTE(RLS) 02/22/95 367 (S) RULES TO CALENDAR 2/22/95 02/22/95 368 (S) READ THE SECOND TIME 02/22/95 368 (S) RES CS ADOPTED UNAN CONSENT 02/22/95 368 (S) AM NO 1 FAILED Y8 N11 A1 02/22/95 369 (S) ADVANCED TO THIRD READING UNAN CONSENT 02/22/95 369 (S) READ THE THIRD TIME CSSJR 12(RES) 02/22/95 370 (S) PASSED Y18 N1 A1 02/22/95 370 (S) HALFORD NOTICE OF RECONSIDERATION 02/23/95 386 (S) RECONSIDERATION NOT TAKEN UP 02/23/95 390 (S) TRANSMITTED TO (H) 02/27/95 479 (H) READ THE FIRST TIME - REFERRAL(S) 02/27/95 479 (H) RESOURCES 03/03/95 575 (H) WTR REFERRAL ADDED 03/21/95 (H) WTR AT 05:00 PM CAPITOL 203 03/22/95 850 (H) WTR RPT 3DP 1NR 03/22/95 851 (H) DP: MULDER, PHILLIPS BARNES 03/22/95 851 (H) NR: KUBINA 03/22/95 851 (H) SENATE ZERO FISCAL NOTE (DNR) 2/14/95 03/27/95 947 (H) CROSS SPONSOR(S): WILLIAMS 04/05/95 (H) RES AT 08:00 AM CAPITOL 124 04/05/95 (H) MINUTE(RES) BILL: HB 191 SHORT TITLE: MANAGEMENT OF STATE LAND AND RESOURCES SPONSOR(S): REPRESENTATIVE(S) THERRIAULT JRN-DATE JRN-PG ACTION 02/22/95 448 (H) READ THE FIRST TIME - REFERRAL(S) 02/22/95 448 (H) RESOURCES, FINANCE 03/15/95 741 (H) SPONSOR SUBSTITUTE INTRODUCED- REFERRALS 03/15/95 741 (H) READ THE FIRST TIME - REFERRAL(S) 03/15/95 741 (H) RESOURCES, FINANCE 03/22/95 (H) RES AT 08:00 AM CAPITOL 124 03/22/95 (H) MINUTE(RES) 03/29/95 (H) RES AT 08:00 AM CAPITOL 124 03/29/95 (H) MINUTE(RES) 03/31/95 (H) RES AT 08:00 AM CAPITOL 124 03/31/95 (H) MINUTE(RES) 04/07/95 (H) RES AT 08:00 AM CAPITOL 124 BILL: HB 279 SHORT TITLE: MUNICIPAL RIVER HABITAT TAX CREDIT SPONSOR(S): REPRESENTATIVE(S) G.DAVIS,Navarre JRN-DATE JRN-PG ACTION 03/24/95 896 (H) READ THE FIRST TIME - REFERRAL(S) 03/24/95 896 (H) RESOURCES, FINANCE 04/07/95 (H) RES AT 08:00 AM CAPITOL 124 BILL: SB 93 SHORT TITLE: DISPOSAL OF LAND ALONG THE DALTON HWY SPONSOR(S): SENATOR(S) MILLER,Green,Sharp; REPRESENTATIVE(S) James,Kott JRN-DATE JRN-PG ACTION 02/21/95 350 (S) READ THE FIRST TIME - REFERRAL(S) 02/21/95 350 (S) RES, FIN 02/23/95 386 (S) COSPONSOR(S): GREEN 02/27/95 (S) RES AT 03:30 PM BUTROVICH ROOM 205 02/27/95 (S) MINUTE(RES) 02/28/95 418 (S) RES RPT CS 4DP 1NR SAME TITLE 02/28/95 418 (S) ZERO FISCAL NOTE (DNR #1) 03/15/95 617 (S) FIN RPT 3DP 2NR (RES)CS 03/15/95 618 (S) PREVIOUS ZERO FN (DNR #1) 03/15/95 (S) FIN AT 09:00 AM SENATE FINANCE 532 03/15/95 (S) MINUTE(FIN) 03/16/95 (S) RLS AT 12:00 PM FAHRENKAMP RM 203 03/16/95 (S) MINUTE(RLS) 03/20/95 697 (S) RULES TO CALENDAR 3/20/95 03/20/95 704 (S) READ THE SECOND TIME 03/20/95 704 (S) RES CS ADOPTED UNAN CONSENT 03/20/95 704 (S) ADVANCED TO THIRD READING UNAN CONSENT 03/20/95 704 (S) READ THE THIRD TIME CSSB 93(RES) 03/20/95 705 (S) PASSED Y12 N6 E2 03/20/95 705 (S) EFFECTIVE DATE PASSED Y18 N- E2 03/21/95 726 (S) RESCINDED ACTION IN PASSING UNAN CONS 03/21/95 726 (S) BEFORE THE SENATE IN THIRD READING 03/21/95 726 (S) RETURN TO SECOND FOR AM 1 UNAN CONSENT 03/21/95 726 (S) AM NO 1 FAILED Y6 N12 E2 03/21/95 727 (S) AUTOMATICALLY IN THIRD READING 03/21/95 727 (S) PASSED Y14 N4 E2 03/21/95 728 (S) EFFECTIVE DATE FAILED Y12 N6 E2 03/21/95 728 (S) RESCINDED ACTION FLG TO ADOPT EFD UNAN C 03/21/95 728 (S) EFFECTIVE DATE PASSED Y16 N2 E2 03/21/95 729 (S) TRANSMITTED TO (H) 03/22/95 833 (H) READ THE FIRST TIME - REFERRAL(S) 03/22/95 833 (H) RESOURCES, FINANCE 04/03/95 1009 (H) CROSS SPONSOR(S): JAMES 04/07/95 (H) RES AT 08:00 AM CAPITOL 124 04/11/95 1270 (H) CROSS SPONSOR(S): KOTT 04/12/95 (H) RES AT 08:00 AM CAPITOL 124 ACTION NARRATIVE TAPE 95-47, SIDE A Number 000 The House Resources Committee was called to order by Co-Chairman Green at 8:17 a.m. Members present at the call to order were Representatives Green, Williams, Ogan, Austerman, and Kott. Members absent were Representatives Barnes, Davies, MacLean, and Nicholia. REPRESENTATIVE JOE GREEN apologized for those committee members who cannot seem to arrive at the committee meetings on time. He said committee members took an oath that they would do their best for the state, and part of that is being on time for those people who are at hearings on time to testify. SJR 12 - U.S. FOREST SERVICE PLAN REPRESENTATIVE SCOTT OGAN WITHDREW his MOTION to MOVE SJR 12 out of committee made at the last hearing. CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION was WITHDRAWN. REPRESENTATIVE BILL WILLIAMS made a MOTION to ADOPT HCS CSSJR 12(RES). CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED. JACK PHELPS, LEGISLATIVE ASSISTANT, REPRESENTATIVE BILL WILLIAMS, stated the change contained in HCS CSSJR 12(RES) is found on page 3, lines 5-7. He recalled at the last hearing, there was discussion about employees compensation and the cost of living allowance for employees being reflective of timber production. He explained HCS CSSJR 12(RES) changes the language to affect the Secretary of Agriculture and the Chief and each Regional Forester of the U.S. Forest Service. He said the point is now directed at the policy makers rather than the working people. REPRESENTATIVE OGAN made a MOTION to MOVE HCS CSSJR 12(RES) with attached fiscal note out of committee with individual recommendations. CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED. HB 191 - MANAGEMENT OF STATE LAND AND RESOURCES REPRESENTATIVE GENE THERRIAULT, PRIME SPONSOR, noted the work draft committee substitute (CS) before the committee is version G, which contains several changes, including those discussed at the last hearing and those which came as a result of the working group. He reviewed those changes. He said Section 8 is a technical amendment from Section 7 of the sponsor substitute of HB 191, which was needed to conform with changes in the remote cabin permit program. Section 12 is a modification of version F, which conforms with amendments made in Sections 22 and 23. Section 21 is an amendment made by the House Resources Committee (HRC). He explained Section 23 states the term of the lease is no more than five years which means a renewal of one additional five-year period. Section 24 is a result of a suggestion by the HRC to eliminate the term "permit." CO-CHAIRMAN GREEN asked Representative Therriault to address the change made on page 5, lines 25-30. REPRESENTATIVE THERRIAULT replied that change removes the remote cabin permit program and inserts lease program. CO-CHAIRMAN GREEN clarified that language is not necessary because there are no more permits. REPRESENTATIVE THERRIAULT said that is correct. Number 145 REPRESENTATIVE ALAN AUSTERMAN noted he has concerns regarding Section 25. He said this section had been discussed several times and he thought it was going to be changed. He stated this section removes a section which has been used for years on the shore leases and puts the leases back up for public auction. He pointed out during the working group's discussion, he was told this section would only apply to new leases but noted it had not been changed. He told committee members he reads this section to say that when existing leases come up for renewal, they can go up for public auction. REPRESENTATIVE THERRIAULT explained when an existing lease comes up for renewal, that lease will go to a fair market value lease but will not have to go up for public auction. He noted in Section 27, the language was changed to address the concern. He said an existing lease would come up for renewal under subleasing and renewals of leases. Therefore, the only time there would be a competitive bid situation is when there is a new area identified and competing people want the same parcel. He stressed if a person has an existing lease, has kept up his or her payments and has not allowed the lease to lapse, he or she would be able to extend that lease or keep control of that piece of property under a renewal. CO-CHAIRMAN GREEN shared Representative Austerman's concern. Number 202 RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF NATURAL RESOURCES (DNR), stated a person with an existing lease, as long as payments are being made and the lease is on good terms, has the right to renew under AS 38.05.102, which is an existing statute. He said that statute says, "If land within a leasehold created under AS 38.05.070 - 38.05.105 is offered for sale or long-term lease at the termination of the existing leasehold, the director may, upon a finding that it is in the best interest of the state, allow the holder in good standing of that leasehold to purchase or lease the land for its appraised fair market value at the time of the sale or long-term lease." He reiterated as long as the lease is being paid, the person has an automatic right of renewal if it is in the best interest of the state. He noted if the person is making payments and is still open for fishing, it will be in the best interest of the state. CO-CHAIRMAN GREEN observed person A has a site, has made his payments, and is a reputable person but perhaps an irritant to the commissioner. The commissioner may renew that lease if it is in the best interest of the state. He clarified it would be automatic for that person to have first right. He wondered if the word "shall" should be used instead of the word "may." MR. SWANSON thought using the word "shall" would create a constitutional problem because a preference right is being given. He stressed if people make their payments, the leases are renewed. He said hopefully personalities are not an issue. REPRESENTATIVE AUSTERMAN noted the last sentence in Section 27 says "and conditions prescribed by the commissioner". He clarified that language does not mean the ground rules are being changed. REPRESENTATIVE THERRIAULT responded that language refers to the negotiation on what is fair market value and the requirement for setting that payment would be the terms and conditions of the lease. Number 253 REPRESENTATIVE AUSTERMAN asked which statute existing leases are covered under currently. MR. SWANSON replied AS 38.05.082. REPRESENTATIVE AUSTERMAN recalled Mr. Swanson had said earlier that existing leases are covered under a statute. He clarified that statute is AS 38.05.082. MR. SWANSON said leases issued today are under AS 38.05.082 but when they come up for renewal, they are covered under AS 38.05.102, which is an existing statute. REPRESENTATIVE THERRIAULT added that AS 38.05.102 is the general language in statute which allows for renewals of leases. Therefore, that statute is there for all leases. CO-CHAIRMAN GREEN clarified the word "may" is in the statute as it is written now and has not been a problem in the past. MR. SWANSON replied that is correct. MR. THERRIAULT asked the committee to consider making one more change. He suggested on page 11, line 29, delete "person holding a permit", insert "lease held" and on page 11, line 30, delete "renew that permit", insert "be renewed". He said this suggestion changes the wording so it does not apply to permitting where it talks about a lease. (Representative DAVIES joined the committee.) REPRESENTATIVE AUSTERMAN made a MOTION to ADOPT CSSSHB 191(RES). CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED. Number 347 REPRESENTATIVE AUSTERMAN made a MOTION to AMEND CSSSHB 191(RES) on page 11, line 29, delete "person holding a permit", insert "lease held" and on page 11, line 30, delete "renew that permit", insert "be renewed". REPRESENTATIVE JOHN DAVIES OBJECTED for discussion purposes. CO-CHAIRMAN GREEN said this change is suggested in order to take out the word "permit". REPRESENTATIVE DAVIES WITHDREW his objection. CO-CHAIRMAN GREEN asked if there were any objections to the motion. Hearing none, the MOTION PASSED. Number 379 REPRESENTATIVE AUSTERMAN clarified AS 38.05.082 is used to set up shore fishery leases. MR. SWANSON replied that is correct. REPRESENTATIVE AUSTERMAN clarified it is not possible that it might be misconstrued that subsection (b) would apply to the leases he is concerned about. MR. SWANSON responded no. He explained once a lease is issued, as long as it is in good standing, the lease will be renewed. He said this would only kick in on the original application or if the lease expires and there is a new applicant. He reiterated once a lease is issued, it is renewable. REPRESENTATIVE THERRIAULT added that any renewal would take place under AS 38.05.102. REPRESENTATIVE AUSTERMAN noted subsection (b) does not refer to new. MR. SWANSON said the word new is not included because the person may assign or sell the lease. Number 405 REPRESENTATIVE DAVIES clarified the leases are sellable. MR. SWANSON replied the leases are sellable and assignable upon approval of the state. He stated the person has to have a limited entry permit and cannot sell the lease to someone who does not have one. REPRESENTATIVE DAVIES asked if the original applicant no longer wants to use a lease, why does the state not put the lease back up for auction again. MR. SWANSON said when a person holds a lease, they can do what they want with that lease. REPRESENTATIVE THERRIAULT added that a limited entry permit and a good shore lease site goes together as a package. He said it is not desirable to inadvertently impact the value of the limited entry permit by taking away a good site. He noted that is the reason he wanted to go to a fair market value because it goes along with the limited entry permit and does have a value. He stressed he wanted to ensure that the state is getting at least fair market value while the lease is being used. REPRESENTATIVE OGAN asked how this section affects the guide industry. MR. SWANSON replied the bill does not affect the industry at all as they are issued under existing leases under Title 38 already. He stated this section only deals with shore fish and aquatic farm leases. Number 437 REPRESENTATIVE DAVIES asked if the policy that the leases are renewable and sellable is in regulation. MR. SWANSON stated that policy is in statute AS 38.05.102. REPRESENTATIVE OGAN made a MOTION to MOVE CSSSHB 191(RES), as amended, with attached fiscal notes out of committee with individual recommendations. CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED. HB 279 - MUNICIPAL RIVER HABITAT TAX CREDIT REPRESENTATIVE GARY DAVIS, PRIME SPONSOR, stated last year the legislature passed HB 306 which allowed municipal governments to offer a tax credit to property owners along the Kenai River who improved their property to the degree that it enhanced or protected the habitat value or corrected a previous development that was not conducive to habitat value. He explained HB 279 makes an improvement to that legislation. REPRESENTATIVE DAVIS told committee members HB 279 deletes the requirement that the Alaska Department of Fish and Game (ADF&G) develop regulations to implement the tax credit provisions for habitat protection on the Kenai River. The proposed language mandates that any proposed municipal ordinance developed to implement this law will include the regulatory aspects of the legislation. He stated the ordinance must be approved by the ADF&G before it is adopted. Improvements which will qualify for tax credits will be included in the ordinance. He said ADF&G is also required to respond in writing to the municipality within 60 days of receipt of an ordinance by approving or giving the basis for disapproval. REPRESENTATIVE DAVIS stated Section 1 deletes language that requires credits be certified by ADF&G. A credit may be granted for an improvement that has been constructed in compliance with state and federal laws. He said Section 2 adds subsection (d) establishing that a municipal ordinance is the vehicle for certification of the tax credits. The commissioner of ADF&G must approve or disapprove the ordinance within 60 days after receipt. He explained Section 3 repeals subsection (c) of an existing statute which required ADF&G to establish regulations. REPRESENTATIVE DAVIS said HB 279 is taking the establishment of regulations related to a tax credit within the Kenai Peninsula Borough and giving that authority to the Borough to do it by ordinance. He noted the more local involvement and authority there is, the better off the citizens are. Number 510 REPRESENTATIVE DAVIES asked what the purpose is of the language on page 2, lines 14-16, "without regard to the scope of the protection or restoration that would be achieved by the improvements." REPRESENTATIVE DAVIS replied when an ordinance is drafted and the department is reviewing whether or not the ordinance meets the requirements of an improvement to the habitat, there are varying degrees of improvement. He said if a person owns 100 feet of Kenai Riverfront property and makes an improvement, the improvement could include a 20 foot boardwalk or it could include a complete 100 foot boardwalk. He explained the ordinance the department will be required to improve will not have any degree. He noted the department also has concern about the clearness of the language. REPRESENTATIVE DAVIES stated he is concerned about the word "scope" and how it relates to the authorized aid in protecting or restoring habitat. Number 545 TOM BOEDEKER, KENAI PENINSULA BOROUGH ATTORNEY, testified via teleconference and stated last year the legislature passed a bill that provides for an optional tax credit for protective measures and improvements to the river in regard to habitat. He said during the last year it has become apparent that perhaps the regulatory aspects of the legislation and the requirement to adopt regulations may have been an unwieldy tool. HB 279 has been requested to ease that problem. MR. BOEDEKER said one problem is the existing legislation requires the definition of what is a protective measure to be adopted by regulation, which involves a long drawn out process. He stated it is easier and better to have the assembly take first crack at what it was wanting to give credit for and what it thought would be a protective measure. He explained the process would involve having the commissioner of ADF&G review that and say yes or no as to whether or not they are truly protective or improvement measures regarding the habitat. He noted that would be a check on the process so if the assembly went off in left field and said an improvement measure was to build an office building, the commissioner could say that does not improve habitat. He stressed the objective of having the review is to ensure that truly protective or improvement measures are being given a credit. MR. BOEDEKER stated the language regarding the scope was to specifically address the question of local policy versus departmental policy on what is a wise activity to give a credit for. He said perhaps boardwalks are the choice of the local assembly to give credit as an improvement to protect the bank area but perhaps a boardwalk does not fit with ADF&G's policies and objectives as to what they would like to see. He noted without regard to the actual benefit received from the project, the department's determination would be based on whether or not a project is a protective measure or not. He explained the cost benefit analysis and the worthiness of the project to give a credit would be a local option, which would probably be best decided by the assembly without having to involve ADF&G in the process. MR. BOEDEKER said HB 279 would also take ADF&G out of the loop in regard to each individual project. He stated ADF&G felt with the existing legislation, they would be required to review each project to determine if it met the definitions and actual construction. He stressed it is the desire to see that administration function at the local level and to not place any additional burden on ADF&G, especially since ADF&G does not have a full time habitat person in the area. Number 590 REPRESENTATIVE DAVIES clarified the local assembly wants to authorize anything having a positive benefit but does not want to make any limitations as to what fraction that benefit may represent of the ideal possible improvements that could be taken. MR. BOEDEKER replied that is correct. REPRESENTATIVE DAVIES expressed concern that the word "scope" can be misread to say ADF&G cannot even make the determination as to whether the project is beneficial or not. MR. BOEDEKER said he understood Representative Davies' concern. He noted there had been proposed additional language when the bill was drafted but legislative drafting thought the language would not work. He stressed it is not desired to have the cost benefit analysis done at the state level because if the commissioner does the reviewing, it is almost certain that regulations will be needed to set criteria for his decision in order to avoid a legal challenge against his decision. The criteria will be worked out at the local level. He thought it would be redundant to do that at both levels. He felt there probably is better language but he did not know what that might be. REPRESENTATIVE DAVIES suggested the following language, "without regard to the percentage of the total protection or restoration that could be achieved by ideal improvement measures". MR. BOEDEKER thought that language might work. REPRESENTATIVE DAVIS expressed concern about the common definition of the word "scope". He said perhaps "scope" is the right word. He asked Mr. Boedeker if he has a definition of what "scope" is commonly understood to mean. (Representative NICHOLIA joined the committee.) MR. BOEDEKER replied "scope" would generally apply to all aspects of the coverage--how far it goes and the means of implementation --but it is generally focused on the overall coverage as opposed to the details. He said the word "scope" was used in the original draft as an additional identifier (indiscernible). He stated the word "scope" is less precise. REPRESENTATIVE DAVIS clarified in using the word "scope" value does not ordinarily jump out. MR. BOEDEKER said value can be included but it is not the first thing that leaps out when using the term. Number 667 REPRESENTATIVE OGAN asked if HB 279 could potentially give a business that owns property on the Kenai River, looking for a good tax write off with the borough, the ability to do a lot of nice improvements to enhance their business on the waterfront in the name of habitat protection and get a real good tax break. MR. BOEDEKER said that question was discussed. He said in earlier versions of the bill, the credit was not allowed if the project was primarily for commercial benefit. The discussion was it does not really matter if the project is protecting the river if it is an incidental benefit to commercial versus private and it should not matter if the project is going to protect the river. It was determined at that time, the objective was to protect the river, not go against commercial versus private. He noted the application of this would be up to the local assembly as to whether or not they would give a particular item a credit or not. MR. BOEDEKER noted under existing legislation, if ADF&G identifies 19 items as qualified, they would not have to grant the credit to all of them. He said that has not changed in HB 279. He explained the assembly determined if commercial was a problem, it could be addressed at the local level. REPRESENTATIVE DAVIS thought existing legislation also limits the amount of tax credit to 50 percent of the value. MR. BOEDEKER said that is correct. He stated the credit is limited to 50 percent of the monies spent. He explained if the tax bill was $5,000 and a project cost $10,000, that person would be eligible for a tax credit of $2,500. TAPE 95-47, SIDE B Number 000 GERON BRUCE, LEGISLATIVE LIAISON, ADF&G, stated in the ADF&G position paper contained in committee members folders, the department identified the language being discussed as an item that needed further discussion so the department was clear as to what was expected from the department. He felt the discussion the committee has had and the discussion which occurred in the Senate Resources Committee has provided the department with a clarification as to what the department's role is expected to be in the process. CO-CHAIRMAN GREEN asked if Mr. Bruce was speaking in favor of the amendment or in favor of leaving the language as is. MR. BRUCE replied if the language can be further clarified in statute, that would be ADF&G's preference. He said if improved language is not possible, ADF&G has adequate clarification as to how the process is supposed to work and what the department's role is. (Representative BARNES joined the committee.) REPRESENTATIVE DAVIS asked if the department feels the proposed amendment would give more detail to their concern. MR. BRUCE responded it is the department's understanding that this language is what is intended--the department is not to make any judgement on whether a particular proposal achieves a benefit that has a desirable cost benefit or is better than some other alternative. He said an example is boardwalks. It could be argued that the ideal boardwalk would be made out of a metal grate which would allow sunlight to go through it, allowing growth under the boardwalk but that would be more expensive than a simple wooden boardwalk. However, a simple wooden boardwalk would provide some measure of habitat protection. He noted this language would make it clear that the simple wooden boardwalk would be an improvement and something the department would approve without regard to the ideal benefit that might be secured from a metal grate type boardwalk. Number 090 CO-CHAIRMAN GREEN recalled in the past there has been some expensive attempts made to prevent erosion of shorelines such as the use of huge rocks. He wondered if that was voluntary or required. MR. BRUCE stated the department's recommendation, to the extent possible, is for the natural character of the shoreline be maintained. Therefore, when the bank is hardened, fish habitat qualities are lessened. He said a bank hardened by the use of boulders and other features, giving an even shoreline, is preferable to a straight wall which provides no fish habitat protection. He noted that in general, hardening of the banks is not something the department encourages. Rather, the department looks at other means such as boardwalks and the use of trees to prevent erosion of shorelines. CO-CHAIRMAN GREEN said, "the reason I brought that up...it seems to me if that was a requirement there has been some precedence set that your indication that metal is better because sunlight comes through, it still provides keeping feet off the bank. Is there a significant difference in the cost between wood planking and metal grating that are we doing a half-way measure...that is ultimately if the wood then begins to deteriorate and we kill the plant life, are we in worse shape ten years from now than we would have been now?" MR. BOEDEKER stated the borough is aware of a number of those problems and is not trying to dismiss them. Rather, the borough is trying to get a framework to be able to work with ADF&G to try and define things while still allowing the local option. He said the borough has discussed trying to address some of the issues and ADF&G's concerns. The borough is trying to look forward to the future to ensure that a credit is not given for things that will be detrimental on the long term. He stressed the desire is to avoid burdening ADF&G with a lot of petty administration. Number 178 REPRESENTATIVE RAMONA BARNES recalled it has not been too many years since the property owners along the Kenai River were required to use huge boulders to stabilize their riverbank. She wondered if that requirement was not what it should have been. MR. BRUCE replied in cases where a land owner or property owner wants to do something to restrict or impede the process of erosion along their bank front and their action is below the mean high water mark, they must get a permit from ADF&G. He said ADF&G generally works with the land owner to get an improvement which accomplishes both the purpose the land owner is interested in, while maximizing habitat protection if possible. He noted boulders have been approved in the past but he did not think they were required. Rather, boulders were an option the land owner felt was within their ability to pay for and was better than some other solution. REPRESENTATIVE BARNES recalled that to do any improvement to the riverbank, it was required that a specific size of boulder be put in. REPRESENTATIVE DAVIES made a MOTION to AMEND HB 279 on page 2, line 15, delete "scope of the protection or restoration that would be achieved by the improvements." and insert "the percentage of the total protection or restoration that could be achieved by ideal improvement measures." REPRESENTATIVE DAVIS said he had no objection to the proposed amendment. CO-CHAIRMAN GREEN asked if there were any objections to the amendment. Hearing none, the MOTION PASSED. CO-CHAIRMAN WILLIAMS made a MOTION to MOVE CSHB 279 with attached fiscal note out of committee with individual recommendations. CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED. SB 93 - DISPOSAL OF LAND ALONG THE DALTON HIGHWAY Number 248 SENATOR MIKE MILLER, PRIME SPONSOR, said last session the legislature passed SB 210 which provided for the reauthorization of existing leases in nodes along the Dalton Highway. He explained SB 93 will allow opening up more areas along the highway for nonresidential disposals. He added the areas are those primarily where there were pipeline camps. He stated the areas include the Yukon River Crossing, Coldfoot, Happy Valley, and Franklin Bluffs. SENATOR MILLER noted there is a proposed amendment. He said the North Slope Borough had concerns in that they had made some land selections in Franklin Bluffs and Happy Valley. This amendment makes it clear that SB 93 would not override their land selections. He noted there has been concerns expressed about development along the road. He stressed the highway is open and people will be traveling the road. He felt unless the state starts putting services along the road, there will be more problems. He noted the department supports SB 93. CO-CHAIRMAN GREEN wondered with the potential improvements, will the liability to the state be increased. SENATOR MILLER replied he did not know. He said SB 93 will help cut down the long stretches of the highway without services. He hoped that since the highway is open, the state can begin securing federal funds to start improving the road. REPRESENTATIVE BARNES asked why the state would have more liability on the Dalton Highway than it has on any other roads. SENATOR MILLER said the state would not. Number 309 REPRESENTATIVE DAVIES recalled Senator Miller had talked about development nodes and clarified those nodes are located in subsection (b) (2). SENATOR MILLER stated the Senate Resources Committee also made some changes because the bill passed last year had problems in the language and some of the legal descriptions had to be corrected. REPRESENTATIVE DAVIES said he was not concerned about the legal descriptions but what the nodes apply to. SENATOR MILLER replied Mr. Swanson could answer the question. Number 342 DEE HOFFMAN, DIRECTOR OF PLANNING, NORTH SLOPE BOROUGH, testified via teleconference and stated the North Slope Borough does have valid land selections on file for all of Happy Valley and Franklin Bluffs, as well as parcels at Deadhorse. She said the best way to handle any need for development at these nodes would be to convey to the North Slope Borough the lands they have selected. Then the North Slope Borough would be in a position to exercise maximum local control in the growth and development of these nodes. MS. HOFFMAN said the state departments and their respected agencies have not assured the (indiscernible) coordinating the group that they will be able to handle the expected traffic on the Dalton Highway this summer. She noted a couple of newspaper articles, one of which the Department of Transportation & Public Facilities' Commissioner Perkins clearly stated the need for more public participation in the planning and development of the state's transportation system. Another article was in regard to the Bureau of Land Management (BLM) seeking funds to help fund outhouses, trash cans, dump stations and other areas of need. MS. HOFFMAN said the (indiscernible) industry expects to bring 125,000 tourists to Deadhorse this summer and noted that only about 12,000 tourists drove the highway in 1994. She felt it would be in the best interest of the state to convey to the North Slope Borough the lands selected and let the borough work closely in the development of a comprehensive land use plan, so that facilities and services could be planned and funded appropriately. She noted the North Slope Borough is currently revising its comprehensive land use plan, which does encompass planning for services and facilities in conjunction with state and federal agencies along the road within borough boundary districts. REPRESENTATIVE IRENE NICHOLIA asked what the North Slope Borough's position is on SB 93. MS. HOFFMAN said the North Slope Borough is in support of the proposed amendment. REPRESENTATIVE NICHOLIA asked if the North Slope Borough supports SB 93. MS. HOFFMAN replied yes. CO-CHAIRMAN GREEN said he can see some real benefit to having the Dalton Highway open and having amenities along it but he can also see some problems. He wondered if this will be any different than any other highway or improvements to a highway and wondered if any unusual problems are foreseen. MR. SWANSON said no. He stressed the road is now open and he is very concerned about providing basic services. He noted currently there is one gas station halfway up the road. He pointed out the department is wanting to provide basic amenities, not hotels every six miles. REPRESENTATIVE NICHOLIA stated her concern regarding SB 93 is the costs to the state. She felt the costs are going to fall into the hands of emergency medical services, public health issues, landfills for the disposal of garbage and additional sewage treatment. MR. SWANSON said the desire is to get private industry to provide some of these basic services so it is not a burden to the state. He noted that currently the state definitely has that burden. He is not convinced it will be possible to get private industry to provide all the needed services but at least the department needs the tools to try and do so. Number 446 REPRESENTATIVE NICHOLIA clarified SB 93 does not authorize payment for emergency medical services, public health issues, landfills for the disposal of garbage and additional sewage treatment. MR. SWANSON said SB 93 allows DNR to issue a lease to private industry to provide those services and private industry could charge the public for doing those things. He stressed currently the entire burden is on the state and partially on BLM. He noted the department is looking for one more opportunity to release some of that burden. REPRESENTATIVE OGAN wondered what happens now if there is an accident, someone breaks down or there is a medical emergency. He asked if it would be feasible to charge a toll to travel the highway to cover some of the costs involved as it will take years to get private development up there. MR. SWANSON said the road is open and the state has to deal with it. He stressed the department is looking for the ability to lease some land to private industry if they desire to provide any of the services needed. REPRESENTATIVE BARNES said with the proposed amendment to SB 93, which allows the North Slope Borough to take some of their land entitlements through selecting some of the land along the highway, it seems the borough would be in a very good position to put in the amenities necessary because it is a part of the state they are very familiar with. She felt SB 93 is a good bill. Number 510 REPRESENTATIVE DAVIES asked Mr. Swanson if he had read the letter from Yukon Pacific addressed to Speaker Phillips. MR. SWANSON replied he had not. REPRESENTATIVE DAVIES said Yukon Pacific has all the permits in place to build a gas pipeline. In their letter, they are asking the legislature to delay action on SB 93 until the issue of whether or not disposing of the land would be unrealistic, in view of their proposed needs for development and building another pipeline, is addressed. He noted the camps along the highway were put in place to support the construction of the oil pipeline and would be very useful for the staging of the construction of a gas pipeline. He pointed out Yukon Pacific's concern is that the state may eliminate the camps and then another new set of pads would have to be created for construction of the gas line. MR. SWANSON stated the concern of Yukon Pacific is very valid. He said any disposals the DNR does anywhere within the nodes will go through a planning process and would involve Yukon Pacific. Number 539 RANDY MAYO, CHIEF, STEVENS VILLAGE COUNCIL, testified via teleconference and stated the village has many concerns. He noted even before the Dalton Highway was open, there were many problems with vandalism, destruction of private property and the loss of fish and game in a traditional subsistence use area. He said in the village there is hardly any cash economy except welfare payments. He stressed the village opposes SB 93 for several reasons including cultural, spiritual, and economical. MR. MAYO felt many bills in the legislature are submitted by business people who live in urban areas. He said the village does not see how SB 93 will benefit the local surrounding communities. He stated many existing problems such as law enforcement, trash along the road, etc., have not even been resolved, yet it is proposed to build up more. He noted it had been mentioned that the private sector would possibly provide some of these services and he wondered if they will be required to build landfills, etc., up to the Department of Environmental Conservation and the Environmental Protection Agency standards. He questioned if the costs involved would be too much for the private sector. He also wondered what Alyeska's position is on SB 93. REPRESENTATIVE BARNES recalled that Mr. Mayo spoke of his concerns as they relate to the subsistence lifestyle along the Dalton Highway but he also mentioned that the only cash available is in the form of welfare payments. She wondered if SB 93 will help the village corporation get some of the land to put in some sort of services and help provide a source of cash for the people in the village to get them off of welfare. Number 604 MR. MAYO said he is not on the village corporation board but noted the village does operate a fish camp tour and has a couple of tour boats. He noted even with those operations, the village has had problems. REPRESENTATIVE BARNES thought if the road was in better condition and had better amenities for the driving public, the village would be able to have more tourists at the fish camp. GEORGE YASKA, DIRECTOR OF WILDLIFE, TANANA CHIEFS CONFERENCE (TCC), testified via teleconference and stated he is not familiar with the amendment discussed earlier. TERESA SAGER, LEGISLATIVE ASSISTANT, SENATOR MIKE MILLER, said the amendment would clarify that the lands selected by the North Slope Borough, as part of their land entitlement but which have not yet been conveyed, would not be affected by SB 93 once the conveyance occurs. MR. YASKA said currently TCC supports SB 93. TAPE 95-48, SIDE A Number 000 CO-CHAIRMAN GREEN read the amendment to Mr. Yaska. MR. YASKA clarified the municipality referred to in the amendment would be in the North Slope Borough. CO-CHAIRMAN GREEN answered probably but not necessarily. MR. YASKA reiterated TCC supports SB 93 but noted TCC still has concerns about the large number of people going up the Dalton Highway and the too few services offered. Number 058 SARA HANNAN, REPRESENTATIVE, ALASKA ENVIRONMENTAL LOBBY, INC. (AEL), urged committee members to oppose SB 93. She said what needs to be considered is long-range economic and fiscal obligations to the state. She agreed the Dalton Highway requires additional services to be available and the state has an obligation to provide some services because it is a state-owned highway, open to public access. She noted the Trans-Alaska Gas Pipeline working committee and the AEL have been talking a lot about the Dalton Highway over the past few years and share many concerns from different perspectives. MS. HANNAN said the Dalton Highway development corridor was originally built as an industrial road. She stressed it still is an industrial road and is not up to the standards of a highway found anywhere else. She stated the problem with opening the highway has been that more people use it and the obligation and liability the state has in regard to the highway is increasing. She noted the more services available, the higher the liability the state has to the people who have private property along the highway. She pointed out that the various problems in regard to the highway are not adequately being addressed. MS. HANNAN noted the Anchorage Daily News did an interview with the new commissioner of the Department of Transportation & Public Facilities and he indicated that currently the Dalton Highway's maintenance plan will not change. She said ongoing fiscal obligations to the state accelerate when there is private development. She stressed the AEL is not opposed to services being provided along the highway but feels it is premature for the state to dispose of those lands and discuss putting private Alaskans out there, with their resources invested in capital investment, unless the state is able to provide the services a property owner should have. MS. HANNAN stated in addition to being able to protect private property and enforce the laws the state currently has, the state will have some additional obligations. When there is someone living on a remote site and six children live there, the state has a legal obligation to provide education. She reiterated there is a need to look at the long-range development plan for the Dalton Highway including the long-range use of it by Yukon Pacific, the long-range fiscal obligations of the state to protect the private property currently there, and what will be done with emergency services and troopers. She stressed the state does not have the money to put more private property holders with private property investment in a remote area when the state cannot protect it. SAM KITO, LEGISLATIVE LIAISON, DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES, said the department feels having amenities along the highway would be in the best interest of the state. REPRESENTATIVE BARNES clarified that in other areas of the state which have rural highways such as the Dalton Highway, the amenities are usually closed down in the winter so there is not the likelihood of having to provide additional schools, etc., along the highway. She said if this land was selected by Native corporations, schools are already provided in the villages where the children and adults live. MR. KITO stated Coldfoot is a work camp leased to a private entity. He said that work camp is more staffed in the summer than in the winter. He noted there are no children there requiring schooling in the winter. He pointed out it is the DNR's intent to dispose land in a similar situation and not create a year-round or permanent living situation. Number 220 REPRESENTATIVE NICHOLIA asked why there was no fiscal note from the Department of Transportation & Public Facilities. She noted parts of the Dalton Highway washes out every year. MR. KITO stated the department is not anticipating any additional need for maintenance. He said at this point, the department cannot anticipate what the volume of traffic increase will be because of the full opening. He explained the department is projecting it can get by with its current level of maintenance and rehabilitation of the roadway. REPRESENTATIVE NICHOLIA asked when the road washes out, who is responsible for putting the road back in place, the state or Alyeska. MR. KITO replied the road is maintained by the state in agreement with Alyeska Pipeline. REPRESENTATIVE DAVIES felt if more services are provided along the highway, it follows that there will be more traffic. MR. KITO said the DNR's contingency is it is not known what the level of services will be and they would like to be able to provide for services if the demand increases on the highway. He stated the allowing of the disposal of this land does not necessarily mean the land will automatically be leased to private land owners. He noted there is a BLM plan for the corridor in place and the DNR has been working with the BLM on creating the amenities. REPRESENTATIVE DAVIES clarified the purpose of SB 93 is to improve the amenities along the Dalton Highway. MR. KITO replied the purpose of SB 93 is to allow for amenities should they become necessary. REPRESENTATIVE DAVIES said a reasonable person would conclude that if the state enters into a program of disposing land for the purpose of providing amenities along the highway that is what will happen eventually. He asked if the amenities get built and there is an increase in traffic as a result, would it not follow that there would be a demand to improve the maintenance on the highway. MR. KITO replied there probably will be an increased demand for maintenance and rehabilitation of the highway. He noted the department is in the beginning stages of providing for rehabilitation of the highway from milepost zero up to Coldfoot and beyond that as funding is available through the federal highway administration on the state's highways program. Number 289 REPRESENTATIVE BARNES stated the Dalton Highway was transferred from Alyeska to the state of Alaska in the early 1980s. Since that time, the state has had an absolute responsibility to maintain the road. She said the state has not always done the kind of job it should have and consequently there have been tremendous washouts, the base has blown away, etc. She pointed out whether or not the state disposes of this land, the work is going to have to be done, because the Dalton Highway is the lifeline to the state's oil patch. She felt whether or not there are 100 tourists driving the road is irrelevant. She noted by doing it through SB 93, the state is able to garner more federal funds to help with the upkeep of the road which is the lifeline of Alaska. She reiterated the state's responsibility for the road has been there since the early 1980s. REPRESENTATIVE DAVIES agreed but felt the responsibility to maintain the highway is tempered by the state's fiscal abilities and added that maintaining the highway for the purpose of an industrial road is adequate for the purpose of the lifeline for the state but is not adequate for a tourism resource. He said if the state is going to improve amenities and take actions resulting in additional people traveling the highway, the state should expect demands to improve the road to a higher standard than what is required by the truckers and industry. He pointed out that will cost money. He thought the suggestion earlier about charging a toll to help with that incremental demand should be considered. REPRESENTATIVE DAVIES noted he is not opposed to providing more amenities and encouraging more traffic but is concerned that the state needs to be more realistic about what the fiscal impacts will be. REPRESENTATIVE BARNES made a MOTION to AMEND CSSB 93(RES) on page 4, after line 12: Insert a new bill section to read: "*Sec. 2. AS 19.40.200 is amended by adding a new subsection to read: (e) Notwithstanding (b) of this section, land described in (b) of this section is not available for disposal if it has been selected by a municipality to satisfy a general grant land entitlement under AS 29.65 unless the selection is disapproved by the state in a final decision." Renumber the following bill section accordingly. REPRESENTATIVE DAVIES OBJECTED for discussion purposes. REPRESENTATIVE NICHOLIA said municipalities are concerned about their Native allotment selections. She wondered how a single person having a Native allotment would be affected. MR. SWANSON replied there are no Native allotments along the highway affected by SB 93. He said the only issue being dealt with are selections made by the North Slope Borough and those will be adjudicated prior to any other activity. REPRESENTATIVE NICHOLIA clarified there are no other Native allotment applicants other than the North Slope Borough. MR. SWANSON responded that is correct. REPRESENTATIVE DAVIES wondered if a regional corporation qualifies as a municipality and also asked whether or not there are any regional corporation claims. MR. SWANSON said no. He noted there is a lot of federal land but SB 93 only affects land the state owns. He stated if there is a conflicting claim by a village or regional corporation, or Native allotment, that would have a preference over the state selections. REPRESENTATIVE OGAN wondered if the amendment affects Yukon Pacific's ability to set up their pipeline operation. MR. SWANSON replied no. He reiterated before the disposal of land, the department has to go through a planning process and Yukon Pacific would be very much involved. He noted the department currently has a task force dealing with all of the land selections up there. REPRESENTATIVE DAVIES WITHDREW his objection. CO-CHAIRMAN GREEN asked if there were any other objections. Hearing none, the MOTION PASSED. CO-CHAIRMAN GREEN announced SB 93 would be heard again on Wednesday and noted HB 258 would be heard on Wednesday. ADJOURNMENT There being no further business to come before the House Resources Committee, Co-Chairman Green adjourned the meeting at 10:10 a.m.