Legislature(1995 - 1996)
02/05/1996 08:13 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE February 5, 1996 8:13 a.m. MEMBERS PRESENT Representative Joe Green, Co-Chairman Representative William K. "Bill" Williams, Co-Chairman Representative Scott Ogan, Vice Chairman Representative Alan Austerman Representative Pete Kott Representative Irene Nicholia MEMBERS ABSENT Representative Ramona Barnes Representative John Davies Representative Don Long COMMITTEE CALENDAR HOUSE BILL NO. 447 "An Act providing that state land, water, and land and water may not be classified so as to preclude or restrict traditional means of access for traditional recreational uses." - HEARD AND HELD *HOUSE BILL NO. 439 "An Act relating to minerals, including coal, to the statewide bonding pool for the reclamation activities imposed on mining operations, and to the statewide bonding pool's use for surface coal mining projects." - PASSED HB 439 OUT OF COMMITTEE *HOUSE SPECIAL CONCURRENT RESOLUTION NO. 1 Disapproving Executive Order No. 92. - PASSED HSCR 1 OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HB 447 SHORT TITLE: CAN'T CLOSE LAND TO TRADITIONAL REC. USES SPONSOR(S): REPRESENTATIVE(S) MASEK,Williams JRN-DATED JRN-PG ACTION 01/24/96 2524 (H) READ THE FIRST TIME - REFERRAL(S) 01/24/96 2524 (H) RESOURCES 01/26/96 2548 (H) COSPONSOR(S): WILLIAMS 01/31/96 (H) RES AT 08:00 AM CAPITOL 124 01/31/96 (H) MINUTE(RES) 02/05/96 (H) RES AT 08:00 AM CAPITOL 124 BILL: HB 439 SHORT TITLE: MINING BONDING POOL & ADVISORY COM'N SPONSOR(S): REPRESENTATIVE(S) BRICE,Kelly JRN-DATE JRN-PG ACTION 01/22/96 2507 (H) READ THE FIRST TIME - REFERRAL(S) 01/22/96 2507 (H) RESOURCES, LABOR & COMMERCE, FINANCE 01/31/96 2587 (H) COSPONSOR(S): KELLY 02/05/96 (H) RES AT 08:00 AM CAPITOL 124 BILL: HSCR 1 SHORT TITLE: DISAPPROVING EXECUTIVE ORDER 92 SPONSOR(S): SPECIAL COMMITTEE ON OIL AND GAS JRN-DATE JRN-PG ACTION 01/26/96 2540 (H) READ THE FIRST TIME - REFERRAL(S) 01/26/96 2540 (H) RESOURCES, FINANCE 02/05/96 (H) RES AT 08:00 AM CAPITOL 124 WITNESS REGISTER DAVID STANCLIFF, Legislative Staff to Representative Beverly Masek Alaska State Legislature Capitol, Room 418 Juneau, AK 99801 Telephone: (907) 465-2688 POSITION STATEMENT: Presented sponsor statement on HB 447. RON SWANSON, Director Division of Lands Department of Natural Resources 3601 C Street, Suite 1122 Anchorage, AK 99503-5947 Telephone: (907) 762-2692 POSITION STATEMENT: Testified on HB 447. DAN RITZMAN, Volunteer Alaska Environmental Lobby Northern Alaska Environmental Center 324 Yana Court Fairbanks, AK 99709 Telephone: (907) 452-5021 POSITION STATEMENT: Has concerns with HB 447. PATRICK PHILLIPS 8940 Greenbelt Drive Anchorage, AK 99502 Telephone: (907) 243-2179 POSITION STATEMENT: Testified in support of HB 447. KEVIN HITE Anchorage Snowmobile Club 8050 Summerset Drive Anchorage, AK 99518 Telephone: (907) 522-6373 POSITION STATEMENT: Testified in support of HB 447. MICK MANNS Paradise Valley Bettles, AK 99726 Telephone: (907) 479-5704 POSITION STATEMENT: Has concerns with HB 447. Supports HB 439. RANDY CROSBY Outdoor Recreational Tourism 3300 Wesleyan Drive Anchorage, AK 99508 Telephone: (907) 333-3665 POSITION STATEMENT: Testified in support of HB 447 LINNEA GREAVES P. O. Box 102873 Anchorage, AK 99510 Telephone: (907) 272-7480 POSITION STATEMENT: Testified in support of HB 447 ROY C. BOWDRE P. O. Box 2 Delta Junction, AK 99737-0002 Telephone: (907) 895-4448 POSITION STATEMENT: Sent a written statement supporting HB 447. DANA OLSON HC 30, Box 5438 Wasilla, AK 99654 Telephone: (907) 373-4612 POSITION STATEMENT: Has concerns with HB 447. DAVID ROGERS, Attorney 211 Fourth Street, Suite 108 P. O. Box 33932 Juneau, AK 99803 Telephone: (907) 586-1107 POSITION STATEMENT: Has concerns with HB 447. ROBERT B. STILES, President Alaska Coal Association 711 H Street Anchorage, AK 99501 Telephone: (907) 276-6868 POSITION STATEMENT: Testified in support of HB 439. CHARLES P. BODDY Usibelli Coal Mine, Inc. 122 First Avenue, Suite 302 Fairbanks, AK 99701 Telephone: (907) 452-2625 POSITION STATEMENT: Testified in support of HB 439. NICO BUS, Acting Director Division of Support Services Department of Natural Resources 400 Willoughby Avenue Juneau, AK 99801-1724 Telephone: (907) 465-2406 POSITION STATEMENT: The DNR supports Executive Order No. 92. KENNETH A. BOYD, Director Division of Oil and Gas Department of Natural Resources 3601 C Street, Suite 1380 Anchorage, AK 99503 Telephone: (907) 762-2547 POSITION STATEMENT: The Division supports Executive Order No. 92. ACTION NARRATIVE TAPE 96-12, SIDE A Number 000 CO-CHAIRMAN JOE GREEN called the House Resources Committee meeting to order at 8:13 a.m. Members present at the call to order were Representatives Green, Williams, Ogan, Kott, and Nicholia. Members absent were Representatives Austerman, Barnes, Davies and Long. HB 447 - CAN'T CLOSE LAND TO TRADITIONAL REC. USES CO-CHAIRMAN GREEN announced that the committee would hear HB 447, HB 439 and HSCR 1, in that order. Witnesses from Anchorage, Delta Junction and Fairbanks were on the teleconference network and Jane Anvik was available via offnet. Number 079 DAVID STANCLIFF, Legislative Staff Assistant testified on behalf of the sponsor, Representative Beverly Masek, and said there are two reasons for HB 447. The first reason is an Administrative branch of government is using a legislatively created statute for a purpose which the legislature did not intend. The second reason is to involve the people's branch of government in the major decisions concerning public access to state land and waters. MR. STANCLIFF informed the committee of an authority that now exists, according to the Administration, which enables the commissioner or the director to enlarge the state park system and block traditional public access without legislative involvement. MR. STANCLIFF distributed a handout entitled, Denali State Park Master Plan and referred to a departmental map, Denali State Park boundary modifications. He said the park was created by the legislative authority, but the boundaries on the map are not those created by the legislature exclusively. On the Southwest side of the park boundary, there is an expansion of the original boundary which, purposefully, takes in Blair Lake. Number 250 MR. STANCLIFF informed the committee that the new section of park was created through an ILMA, an Interagency Land Management Agreement. When the Department of Natural Resources was asked to explain how the 360 acre expansion happened, without statutory authority, Representative Masek received a document from Jim Stratton, Director, Division of Parks and Outdoor Recreation, citing statutes that are totally unrelated to expanding parks restrictions or authority. Number 293 MR. STANCLIFF said the Administration has been asked to produce records showing the number of times and purposes ILMA authority has been used. He said the sponsor was given an estimate of over 500 times; 50 decisions involved park authority and 50 more involved fish and game authority. The remainder involved the Department of Transportation for material sites which is one of the categories this authority was intended for along with firefighting and telecommunication sites. MR. STANCLIFF continued, the legislature gave the Administration the authority to transfer interagency land on areas up to 640 acres without legislative involvement. That authority, as it has been used on Blair Lake, has meant the end of over 50 years of traditional access. He said the new regulations for Denali Park were drafted to specifically eliminate aircraft landings in the ILMA zone at Blair Lake. MR. STANCLIFF related that Representative Masek had difficulty explaining to her constituency that this Administration, or any Administration, could eliminate activity which has taken place for over 50 years without legislative oversight. Number 431 MR. STANCLIFF said Representative Masek introduced HB 447 to stop this type of activity and prevent it from happening in the future. He said the Senate version of HB 447 has ten co-sponsors. MR. STANCLIFF continued, the reason Representative Masek took a broader approach in dealing with the administrative access prohibitions is twofold: this committee and the full legislature should establish ground rules for matters as important as public access, long term public access for recreation. HB 447 would establish those ground rules by not allowing access activities to be eliminated without legislative consent. Number 511 MR. STANCLIFF said HB 447 will not affect Administrative authority within parks and it will not affect fish and game lands. The bill pertains to the land and waters under general land management of Title 38. All other lands and waters are in Title 41. He said the sponsor will leave it to the committee's discretion whether the legislature needs to have oversight in those areas as well. MR. STANCLIFF concluded, this bill is about accountability and striking a better balance on behalf of Alaskans. To date, no legislature has placed in statute, language recognizing and protecting public access to lands and waters for recreation as a broad policy matter. Number 683 CO-CHAIRMAN GREEN said, by allowing this public access, could there be restrictions on "other uses," which might ultimately be deemed the highest and best use, such as a gold mine where there could be the potential of injury to the public. MR. STANCLIFF responded that almost all recreational access in the state is along routes traditionally used by miners, the timber industry and others. It is not Representative Masek's intent to obstruct valid land disposals or land use patterns with regard to development by this legislation. If there needs to be protective language inserted by the committee, the sponsor will be happy to cooperate. Number 820 RON SWANSON, Director, Division of Land, Department of Natural Resources said he would provide background information in addition to the sponsor statement. He said about 500 Interagency Land Management Agreements (ILMAs) have been issued since statehood. ILMA's have been issued to the Division of Parks, the Department of Transportation and Public Facilities and the Department of Fish and Game. Most of the ILMA's have gone to DOT/PF for a variety of purposes: material sites, communication sites, airports, and maintenance facilities. The Department of Fish and Game sites are research sites and hatcheries. MR. SWANSON said the Division of Parks ILMA's are issued in a variety of ways and under a variety of different land ownerships. Most of these sites are "507 sites" conveyed to the DNR by the Bureau of Land Management under statute 507 which says they can only be used for recreational uses. These sites are usually campgrounds like Harding Lake and Chena River; others have been added via the planning process. The DNR goes through a land use planning process using an area plan. The areas are identified by recreational use, either through expansion of additional parks, like Denali, or just identified for those particular purposes. They are then transferred to the Division of Parks for management because that is the appropriate entity. MR. SWANSON said, when the DNR transfers an ILMA to parks, fish and game, or transportation, we convey it subject to their authority to manage the land. In this case, it is the Division of Parks, and it is under Title 41, not Title 38. In the DOT/PF, it is under Title 19, and in the Department of Fish and Game, it is under Title 16. When the Division of Parks receives the land, they use their authority, sometimes they restrict access, but they also have citation authority. The state under Title 38 authority has no citation authority for activities that occurred within the area. MR. SWANSON said the intent of the bill focuses on parks and the activities that happen within parks and the restrictions there. He recommended that the committee look at Title 41 and not Title 38. To his knowledge, the department has never restricted access under Title 38 at any time. Restrictions that have occurred on existing leases such as the Fort Knox Mine. The DNR cannot allow people to go meandering around and digging up holes, but if it is under lease, a private landowner can do that. The DNR has never restricted access on state land under Title 38 authority. Number 976 MR. SWANSON mentioned the DNR Catalog of Alaska State Parks which lists all the parks and sites and the method they are managed under today. He identified some of the most popular ones, adding that Land and Water Conservation Funds and federal sport fish money have been used on these sites: Chena River, Harding Lake, Valdez Glacier, Worthington Glacier, Southcentral McHugh Creek, Clam Gulch, Kodiak's Buskin River, Inca River and Fort Abercrombie are under an ILMA. In Southeast Alaska, the Chilkoot Trail, the entire Juneau Trail system and Sitka's historical Totem Bight are all examples of parks that have been ILMA'd over to the Division of Parks to manage under Title 41 authority. Number 990 CO-CHAIRMAN GREEN noted the arrival of Representative Austerman and the presence of Representative Tom Brice. Number 1000 REPRESENTATIVE OGAN referred to the Denali State Park Master Plan and discussed the East boundary expansion adjacent to Indian River of approximately 470 acres. He asked what the term, "a more logical boundary means." MR. SWANSON agreed with Representative Ogan that the current boundary is the railroad tracks. He said the area along the river is a popular use area and the idea is to adjust the boundary right up to the river. DAN RITZMAN, Alaska Environmental Lobby, expressed concerns with HB 447. He said the Alaska Environmental Lobby is comprised of 22 member groups from around the state and participates in the many land use planning decisions that HB 447 seeks to circumvent. Developing a long range management plan should be a long detailed process involving representatives from all of the interested users groups and local and regional residents. Under current law, in regulations, the state land management agencies take very in-depth planning processes before classifying land use. MR. RITZMAN continued, a good example of this is the recent planning process for Denali State Park. That process lasted for over two years and had twelve public meetings, task force meetings, and, at least, three opportunities for written public comment to be submitted. MR. RITZMAN felt that HB 447 would take land classification responsibilities away from the professionals in the land management agencies, and make it a political decision in the hands of the legislature. He said the legislature does not have the time or the staff to conduct the long involved, public involvement processes necessary to make land classification decisions. He feels these decisions should remain in the hands of the professionals in the departments of natural resources and fish and game. Number 1300 CO-CHAIRMAN GREEN said the committee would hear from witnesses on the teleconference network. PATRICK PHILLIPS, member, Chugach State Park Citizens Advisory Board; officer and director, Alaska General Industries Inc., testified that an estimated 28,000 snowmobile owners reside in Anchorage. He said HB 447 is a splendid piece of legislation and is greatly needed. If this bill had been in place 15 years ago, perhaps 70 percent of Chugach State Park would not have become a wilderness sanctuary closed to winter motorized recreation. He asked the committee to consider adding language to restore snowmobile owners rights in those areas that have been taken away, and the right to recreational access on public lands. Number 1419 KEVIN HITE, Board of Directors, Anchorage Snowmobile Club, and Park Watch Coordinator, Chugach State Park, said he is testifying in support of HB 447 on behalf of the 700 members and families of the Anchorage Snowmobile Club. He said Anchorage is a prime example of an area that has been closed to recreational use with the slow incremental exclusion of access of a particular user group to public lands based on personal preferences. HB 447 will help stop the disenfranchisement of the snowmobile user group. Number 1523 MICK MANNS, Paradise Valley Mining and Golden Wilderness Recreation, testified on behalf of the recreational users and miners of the Brooks Range, Coldfoot and Bettles. He said the law needs to be clarified and HB 447 is a good place to start. Our concern is in active mining. We work with the snowmachiners and dog mushers in our area and mark the trails to keep them off of our airstrip and keep them away from areas of open cut. There should be language added to HB 447 that protects both the traditional users, and the miners, and the people who own private airstrips. Every winter individuals abuse that right; they run over runway markers and tear up mining claim markers in active mining areas. By staying on traditional trails, especially when there are open pit and drift shaft hazards, they can avoid injury to themselves and avoid liability to the state and to the miner. There should be something in law to penalize abusers. Number 1776 RANDY CROSBY, Sno-Action Alaska and (indisc.) Lake Lodge, testified in support of HB 447 saying that he is aware of many instances where land managers of the state have taken it upon themselves to reclassify land, and then restrict or prohibit the most common means of transportation used to reach these lands. For example, Blair Lake, about 15 miles north of Talkeetna. Until last year, this was a lake reasonably accessible only by airplane, in the summer. Through an ILMA, it is now classified as part of Denali State Park. The first thing park managers did was to propose prohibiting aircraft from landing there with the regulation change. When questioned on their actions, park managers said they were pursuing management objectives to protect the resources. History will show that aircraft have been landing there for decades and no harm has come to the resource as yet. The value of this lake and the surrounding land has decreased for most Alaska citizens as the reasonable access to it is now a signature away from being prohibited. He felt that HB 447 will allow citizens more control in the management of their land and take away the power of bureaucrats deciding what is best for us. Number 1905 LINNEA GREAVES, Far North Tours, testified in support of HB 447 saying that winter tourists look forward to snowmobiling and snow cap tours. She expressed concern that some recreational access will be limited. She asked the committee to look at extending its authority to Title 41. CO-CHAIRMAN GREEN announced that the committee had received written testimony from Roy C. Bowdre, Delta Junction, in support of HB 447. DANA OLSON, Amber Lake Homeowners Association, testified that HB 447 supersedes the land planning process and has the potential of constitutional challenges because it affects the equal opportunity to obtain state ownership. She believes that the public has the right to obtain land, but has a problem with a bill that affects the state's ability to do land planning and to dispose of land simply for recreational or subsistence uses. MS. OLSON said her property in Amber Lake includes a seismic trail with signs posted no trespassing. Keep Out. Still, there are snowmachine races down the trail destroying the fences, the shrubbery and the agricultural crop. She forewarned that the legislature will have a problem with enforcement. MS. OLSON felt that HB 447 is being generated by the self-interests of the bill's sponsor and the Talkeetna area. She said the proponents of HB 447 are very vocal about being involved in the land planning process, and recommended that these issues be addressed in the staff plan. Number 2141 DAVID ROGERS, Attorney, Lobbyist, Council of Alaska Producers and Echo Bay Alaska, testified that he is concerned about implications with respect to mining and other development projects. He said he would follow the progress of the bill. Number 2179 MR. STANCLIFF said it is not the sponsor's intention to thwart mining or development or private land ownership. The bill only involves decisions that are major, public access decisions. The planning processes can go on "ad infinitum," and this does not take away powers of planning. But, if HB 447 passes, the legislature would have a say in the matter. We have in statute protected access for mining. What has not happened is to balance the agenda with regard to recreation. MR. STANCLIFF said the DNR's comments were not exactly correct in that this bill is addressed to the commissioner's authority. In the case of Blair Lake, the commissioner's representative stated that if we wanted to get into parks, we needed to move from Title 38 to Title 41. Representative Masek started with Title 38 because land managers allowed the Division of Parks to extend 640 acres into general land management and shut off access. There is nothing to prevent this from happening. This bill would allow some protection for future development as it coincides with traditional access. He said the Senate version may be the vehicle that is used, but he asked the committee to consider moving HB 447. Number 2298 CO-CHAIRMAN GREEN clarified that HB 447 is an amendment to Title 38. He asked if the Senate version is the same. MR. STANCLIFF said the bills are identical, but more and more folks want to extend into the Department of Fish and Game land, who will block access; and they want to extend into Title 41, Division of Parks, because of winter tourism. The Alaska Visitors Association and the Alaska Tourism Marketing Council have listed "access" as a major part of their agenda. He said there are 54 million acres of federal wilderness in this state and access has been blocked on it. It is called national parks. MR. STANCLIFF reported that the U.S. Fish and Wildlife Service is also in the process of blocking motorized access in all kinds of areas. The BLM has blocked access in recognition of archeological discoveries along the Denali Highway. What is left for Alaskan citizens really exists only on state lands. Number 2351 REPRESENTATIVE OGAN referred to the Jim Stratton memo and asked for clarification on ILMA's. He asked Mr. Stancliff if he feels the Department of Natural Resources is exceeding its intent. MR. STANCLIFF said the statutes cited in the memo make no reference to restricting access to state land. He said there have been 500 uses of this discretionary authority and the department has been asked to provide explanation of how they have affected access. Number 2437 REPRESENTATIVE OGAN asked Mr. Stancliff if he characterizes this action as an abuse of the ILMA process. MR. STANCLIFF said Representative Masek feels it is a blatant abuse of the process. Number 2447 REPRESENTATIVE OGAN asked if Representative Masek would consider a "friendly amendment" to include "horseback riding and packing" in the allowable means of traditional means of access? MR. STANCLIFF responded that would be considered a friendly amendment and said another friendly amendment would include "recreational mining." It is not limited to those....end Side A. TAPE 96-12, SIDE B Number 000 CO-CHAIRMAN GREEN referenced earlier testimony from witnesses concerned about mining and safety issues. He asked if the sponsor would consider an amendment to include the posting of notices. MR. STANCLIFF said that would be considered a friendly amendment. When the state parcels out land disposals or mining claims and they are across a trail that has been used for forty years, there is going to be conflict. Proper marking and a provision in the legislation that says it does not authorize unacceptable incursions into private land or development lands would be proper. Number 057 CO-CHAIRMAN GREEN discussed with Mr. Stancliff whether the sponsor would prefer that the bill be amended in the Resources Committee or the House Finance Committee. MR. STANCLIFF indicated that the Senate version will probably be the version that is passed. He recommended that the committee pass HB 447 out of committee with the attached friendly amendments. Number 106 REPRESENTATIVE OGAN moved to pass HB 447 out of the Resources Committee with individual recommendations and attached fiscal note. REPRESENTATIVE ALAN AUSTERMAN objected, advising the committee not to pass the bill until the committee's amendments are incorporated. He stated that the committee may not like the Senate version, and said he wants to further research Title 41. Number 161 REPRESENTATIVE OGAN concurred with Representative Austerman and withdrew his motion. Number 200 CO-CHAIRMAN GREEN appointed a subcommittee for HB 447 comprised of Representative Nicholia, Co-Chairman Williams and Representative Ogan, chair. CO-CHAIRMAN GREEN brought HB 439 before the House Resources Committee. HB 439 MINING BONDING POOL & ADVISORY COM'N Number 223 REPRESENTATIVE TOM BRICE said HB 439 emerged from Alaska Minerals Commission recommendations and from various miners within Alaska. He said while the commissioner may allow surface coal mining operations to participate, no surface coal mine has been able to use the pool. He said the bonding pool provides, to miners, a cheaper alternative to the reclamation bonding. REPRESENTATIVE BRICE explained that reclamation bonding is very expensive and very hard to obtain due to environmental laws and, what is hard to quantify, but what is actually reclaimed. The bonding pool was established to provide an alternative means to reclamation bonding. He said HB 439 adds surface coal mine operations to the list of participants who comprise the bonding pool without having to pay substantial sums of cash or provide certificates of deposit to meet the reclamation requirements. Number 365 C0-CHAIRMAN GREEN theorized that there are ten honorable people who form the pool, and then "Joe Sleaze Bag" wants to get involved. Is there an assurance or protection in the bill that "Mr. Sleaze Bag" cannot tap this pool? Is there an opportunity to then "blackball" him? Number 482 REPRESENTATIVE BRICE said the current laws, in Title 29, are very stringent and pretty nasty to people who do not meet reclamation requirements. He premised about a participant who does not pay reclamation, leaving it to the bonding pool to pay for. Imagine about 10-15 placer miners who are having their bonding pool sucked dry to pay for that operation. "You ain't got a friend in this town," not to mention being civilly liable for both reclamation and administrative costs to ensure that that reclamation is done. CO-CHAIRMAN GREEN further illuminated, if "Mr. Sleaze Bag" does not have a record, he may come in from another state, and he may sell 150 or 200 percent interest in a wildcat well. REPRESENTATIVE BRICE explained that to participate in a surface coal mining operation, you have to go through a permitting process and put up a substantial amount of money initially. He said there is a cap of $750.00 per acre for placer miners under this provision, but that cap does not apply to surface coal mining. Number 548 REPRESENTATIVE OGAN referred to the letter from Usibelli Coal Mine to Representative Brice, and clarified that HB 439 establishes a bonding pool. He said since Usibelli is the only active coal mine in the state, how can you have a pool of one? REPRESENTATIVE BRICE said the bill allows the surface coal miners, the Usibelli Coal Mine, to participate in an existing pool for mining reclamation that includes placer miners and various other types of mining activities across the state. Usibelli will provide a large source of income to that pool and provide financial stability to the rest of the mining operations. Number 587 REPRESENTATIVE OGAN asked who else is in the pool? Representative Brice deferred to the Department of Natural Resources. CO-CHAIRMAN GREEN surmised that there have been a number of coal leases issued and it is a matter of the market. REPRESENTATIVE BRICE said that was true, and reclamation bonding is a major hurdle in the development of those leases. Number 636 CO-CHAIRMAN GREEN asked if this also applies to private lands, that have the jurisdiction, throughout the state. REPRESENTATIVE BRICE responded that it applies to those areas where reclamation bonding is required. Number 675 REPRESENTATIVE AUSTERMAN referenced the new section on page three, line 25, Alaska Surface Coal Mining Advisory Commission, and asked if this is a new commission REPRESENTATIVE BRICE answered that was correct. The idea is to establish a commission that focuses on surface coal mine issues. Currently, within the Department of Natural Resources budget the surface coal mines are about to lose primacy in its regulatory abilities. That is an issue this advisory commission could be looking at as well as various other bonding requirements. Representative Brice referred to the items outlined in the Usibelli letter that the advisory commission could address. REPRESENTATIVE BRICE said there is a $75.0 fiscal note for the advisory commission. He said discussions were held on limiting the commission to two or three years. REPRESENTATIVE AUSTERMAN asked the sponsor if it was his intention to add a subsection (e) to limit the commission to two years. REPRESENTATIVE BRICE acknowledged that was a consideration. Number 750 REPRESENTATIVE AUSTERMAN said HB 439 has both Labor & Commerce and Finance committee referrals. He suggested that the Resources Committee send a recommendation to consider sunset regulation. Number 827 C0-CHAIRMAN GREEN announced that the committee would hear from the participants on the teleconference network. R. B. STILES, President, Armor Corporation, and President, Alaska Coal Association testified in support of HB 439 identifying first, things that the bill will not do: - HB 439 will not decrease the required level of bonding for surface coal mines. - HB 439 will not increase the risk profile of the bonding pool. - HB 439 will not necessarily decrease the bonding expense for surface coal miners. - HB 439 will reduce the amount of assets that have to be placed as surety in support of these bonds. Number 950 MR. STILES said he would like to cover items that the bill will do. - HB 439 will increase the assets of and the income to the bonding pool. - HB 439 will make bonding available to Alaskan surface coal miners. Number 980 MR. STILES said if a guy is a "scuzzball," he will never obtain a bond or a permit. Number 1017 MICK MANNS, Paradise Valley Mining, also testified on HB 439 stating that the bill will definitely increase the capability of the bonding pool. He related an instance in Alaska where certain individuals had refused to give bonding money back to people they did not like even though the reclamation was complete. Mr. Manns recommended that oversight was needed to ensure that this cannot happen in future. Number 1061 CHARLES P. BODDY, Usibelli Coal Mine, Inc., testified on behalf of Usibelli Coal Mine, he interpolated -Alaska's only current producing coal mine- and referenced the session laws of 1982, the Alaska Surface Coal Mining program, saying that part of that law included different forms of bonding that were to be part of that program. One requirement was that a self bonding program shall be developed. He said that law was passed in 1982, and in February of 1996, we are still without the ability to self bond in this state because the regulations for self bonding called for in 1982 have not been pushed through. He discussed a concern with the session laws of Alaska of 1990 which created a bonding pool that was used for all mining other than surface coal mining. Number 1155 MR. BODDY requested that one sentence be added to that law, "the commissioner may allow coal mining individuals to bond through the pool." Number 1218 MR. BODDY continued, the second part of HB 439 pertains to the creation of the Alaska Surface Coal Mining Advisory Commission, and it is a very positive part of the bill. He said the Governor's budget is turning primacy back to the federal government by abolishing the surface coal mine permitting program in Alaska. He recommended that a two year life for the newly formed commission would be adequate. MR. BODDY discussed sections of the federal Surface Coal Mining Control and Reclamation Act and the inconsistencies in those sections. He said one task of the commission could work on clarifying the relationship of the state and federal agencies in applying the regulations developed for use in the coterminous United States, to the unique environment we experience here in Alaska. Number 1319 MR. BODDY said he would like to see legislative involvement on the proposed surface coal mine commission and recommended that the chairmen of the Senate and House Resources Committees serve as ex- officio members on the commission. Number 1473 REPRESENTATIVE OGAN asked Mr. Boddy why the Alaska Minerals Commission is not addressing this bonding issue rather than creating a new commission at the expense of $75,000. MR. BODDY said from the Alaska Coal Association's point of view, the Alaska Minerals Commission would not be an appropriate group to do this. This is a sufficiently, industry and program specific initiative where the coal industry is willing to pay its own way so that the cost can be minimized except for the Administrative and legislative sides. Number 1590 NICO BUS, Acting Director, Division of Support Services, Department of Natural Resources commented that the department does not have a problem with the bonding part of HB 439, but the DNR does have a problem with the fiscal impact of creating a new commission, in a time of fiscal constraint. He said the DNR would be happy to work with the sponsor and the industry to resolve this issue. Number 1658 REPRESENTATIVE BRICE responded that his office is always open to these types of negotiations and he is more than happy to resolve these issues. CO-CHAIRMAN GREEN asked Representative Brice for his preference of working on the bill in the Resources Committee or passing it to the next committee of referral, House Labor and Commerce. REPRESENTATIVE BRICE said his preference was to move the bill to Labor and Commerce and, in the meantime, prepare an appropriate committee substitute. Number 1751 REPRESENTATIVE PETE KOTT said, in the spirit of cooperation, he knows exactly what he wants to do with HB 439. He said the House Labor and Commerce is charged with the oversight of boards and commission, and would work with the sponsor in drafting a committee substitute. REPRESENTATIVE OGAN expressed his concern with the fiscal impact. He said if this commission is established, he is emphatic that its life be no longer than two years. Number 1809 CO-CHAIRMAN GREEN said there have been several suggestions to amend HB 439 including Representative Austerman proposal for sunset regulations. Chairman Green felt that the House Labor and Commerce Committee could address these changes including Mr. Manns concern where the jurisdiction did not return the bonding money. He said he would entertain a motion to move the bill. Number 1858 REPRESENTATIVE AUSTERMAN moved that HB 439 move from the House Resources Committee with individual recommendations and the attached fiscal note. Hearing no objection, it was so ordered. HSCR 1 - DISAPPROVING EXECUTIVE ORDER 92 Number 1888 CO-CHAIRMAN GREEN brought HSCR 1 before the committee. No one from the House Special Committee on Oil & Gas was available to testify. A memorandum from Representative Rokeberg, Chairman, House Special Committee on Oil & Gas to the House Resources Committee is as follows: "Executive Order No. 92 consolidates the Division of Oil and Gas with the Division of Geological and Geophysical Surveys located within the Department of Natural Resources. The testimony before the House Special Committee on Oil and Gas indicated that there is no consensus regarding whether the consolidation outlined in Executive Order No. 92 is the correct configuration of the two divisions. "Remarks during public testimony indicates there are both good and bad consequences if the consolidation goes forward. As a result of committee testimony, the members of the committee voted to introduce a special resolution to oppose the consolidation in order to expedite the process and move the executive order to the appropriate authorized committee. "In addition, we checked with Legislative Legal on the proper procedure for handling a resolution opposing an executive order. The legal memorandum we received stated that under Uniform Rule 21, joint standing committees must consider executive orders." Number 1924 NICO BUS, Acting Director, Division of Support Services, Department of Natural Resources provided background information on the bill. During last year's budget process, the funding for the director's position of the Division of Geological and Geophysical Surveys was deleted. He said the department then looked at the division to see if it warranted it's own division status. The commissioner asked the Alaska Geologic Mapping Advisory Board to establish a committee and assess the role and function of the Division of Geological & Geophysical Surveys and decide whether or not the department needed a director. MR. BUS said that report was finalized, last fall. The board recommended that the director/state geology office be relocated to Anchorage; recruiting through a nationwide recruiting system, and that the director be appointed for a five year term. Another recommendation was that the Division of Geological and Geophysical Surveys needed to have a strong presence in the state of Alaska because of its importance to the resource and because of recurring geological hazards. MR. BUS said another recommendation was that the geological surveys division pursue and develop partnerships with those who are working towards common goals. He said during the Fiscal Year 97 budget preparations, the department looked at efficiencies. The DNR did not want to diminish the mission of the Division of Geological and Geophysical Surveys, and the department also wanted to implement the recommendations of the Alaska Geologic Advisory Board. He said the DNR's objective was to strengthen the surveys and improve administrative support. As a result, the Department of Natural Resources proposed Executive Order No. 92. Number 2082 MR. BUS said, to make sure that the Division of Geological and Geophysical Surveys does not get absorbed into the Division of Oil and Gas, which was a concern of the House Special Committee on Oil and Gas, they will be doing best interest findings for the oil and gas people. The DNR basically wants to keep them separate in terms of budgetary issues. These two divisions will each have their own budget component and the legislature will have the opportunity to fund them at appropriate levels. The DNR plans to keep the field presence in tact for the geological surveys which it feels is very critical. MR. BUS said the consolidation provides some budget efficiencies by sharing administrative support for both divisions and, in that process, the DNR saves $50,000 in the FY97 budget, which is in line with what the legislature charged us with during the budget deliberations. MR. BUS said the DNR feels Executive Order No. 92 is an efficiency measure in state government aimed at improving cooperation and communication between the two divisions and strengthening their missions. In the process, the department is gaining budgetary and administrative efficiencies. He said Mr. Ken Boyd was available to answer programmatic questions. Number 2282 KENNETH A. BOYD, Director, Division of Oil and Gas, Department of Natural Resources, testified that the resolution combines two divisions with a long history of cooperation on various projects including methane projects, and North Slope field work in general. He hoped this combination will provide new opportunities to work together in the future. He said he strongly supports Executive Order No. 92. It is an opportunity for administrative efficiencies. Number 2347 CO-CHAIRMAN GREEN referred to Executive Order N0. 92. Section 3. AS 41.08.010 and Section 4. AS 41.08.020 and discussed requirements and duties of the state geologist. There is no prerequisite in the order requiring that the person who does the administration be a registered geologist; like the Oil and Gas Conservation Commission, for example. CO-CHAIRMAN GREEN said, speaking in accordance with the Special Committee on Oil and Gas, his concern is that, as a function, the prior Division of Geological and Geophysical Surveys would be under the auspices of the Division of Oil and Gas....end tape. TAPE 96-13, SIDE A Number 000 CO-CHAIRMAN GREEN stated that the geology surveys division has consistently been utilized by the minerals industry for their expertise, maps, and hazard specialization which are the described duties for the general public and for entities that do not have large and sophisticated groups of geological and geophysical expertise; whereas the oil and gas industry has these resources at their command. CO-CHAIRMAN GREEN mentioned his past association with the oil and gas industry and expounded on the industry's self-reliance in doing its own surveys. He alluded to the bidding on bonus lease sales and lease sales where there has been no bidding. He said a more direct example would be "bonus bidding" and "the money left on the table." What that is, is significant amounts of money left on the table, even with the most sophisticated geological departments in some of these companies. CO-CHAIRMAN GREEN declared that a better use of the agency's resource might be to keep the Division of Geological & Geophysical Surveys either autonomous or combined with the Division of Mines. He said he agreed with the House Special Committee on Oil and Gas and tended not to approve Executive Order No. 92. Number 327 MR. BOYD said the Division of Oil and Gas does not nominate areas for leasing, the division takes lease sale nominations from industry as far as the five-year process. The two lease sales that had no bidders, both of those areas were nominated by industry, in areas where they had an interest. As time passes, economics may change and companies interest may move, but industry does nominate the acreage. MR. BOYD continued, the purpose of the geology section in the Division of Oil and Gas is not just the technical part of the lease sale, it is there to do a lot of the work that involves unitization computerization and other issues that involve geological and geophysical knowledge. In summary, to protect the state's interest. MR. BOYD said he would try to do a good job as the state's geologist. It is not his intention to meld the groups together except to use the capabilities of both groups in a cross pollination. He would like the people in Fairbanks involved in day-to-day operations, the unitization and computerization functions and to learn how tract allocation works. He felt this is a valuable lesson for any geologist. Number 429 CO-CHAIRMAN GREEN commended Mr. Boyd on the work that he has been doing, he said the work is exemplary. Chairman Green clarified that his comments, in no way, reflect any disrespect for the great job Mr. Boyd is doing. Number 457 CO-CHAIRMAN WILLIAMS said the state is encouraging fiscal restraint and talking about consolidation in many areas. He asked Chairman Green that if his concern was resolved, would it hinder the industry to consolidate. Number 500 CO-CHAIRMAN said consolidation would not hurt the Division of Oil and Gas, it would help them. He said his concern is that the divisions would not stay separate, and the Division of Geological and Geophysical Surveys would not continue to be as aggressive in the charges that are incumbent upon them. He said if there is an economy of scale, he would rather see them combined with a group that does utilize them and stay focused on hard rock and tectonics. Number 643 REPRESENTATIVE AUSTERMAN asked if consolidation can be done and still protect those issues. He said, there is nothing wrong with saving money and now we are saying that we do not want to save money. CO-CHAIRMAN GREEN said there may be a better marriage that saves the same amount of money but does away with the potential of drifting into the wrong element. CO-CHAIRMAN GREEN said the intent of HSCR 1 is to not put the Division of Geological and Geophysical Surveys in the Division of Oil and Gas. Leaving it by itself will require a fiscal note, or continue without a leader, or meld them with the Division of Mines. Number 709 REPRESENTATIVE AUSTERMAN asked if the committee could amend the Executive Order No. 92 to delete the Division of Oil and Gas and include the minerals division. CO-CHAIRMAN GREEN said the House Resources Committee or someone would have to sponsor a bill to do that prior to February 11th. Number 751 REPRESENTATIVE OGAN moved HSCR 1 move from the House Resources Committee with individual recommendations and attached zero fiscal note. Hearing no objection, it was so ordered. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Green adjourned the meeting at 9:58 a.m.