Legislature(1995 - 1996)

03/13/1996 08:10 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               HOUSE RESOURCES STANDING COMMITTEE                              
                         March 13, 1996                                        
                           8:10 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 Ramona Barnes                                                  
 Representative John Davies                                                    
 Representative Pete Kott                                                      
 Representative Don Long                                                       
 Representative Irene Nicholia (via teleconference)                            
 MEMBERS ABSENT                                                                
 All members present                                                           
 COMMITTEE CALENDAR                                                            
 HOUSE BILL 394                                                                
 "An Act authorizing a program of natural gas and coal bed methane             
 development licensing and leasing; relating to regulation of                  
 certain natural gas exploration facilities and coal bed methane               
 exploration facilities for purposes of preparation of discharge               
 prevention and contingency plans and compliance with financial                
 responsibility requirements; amending the duties of the Alaska Oil            
 and Gas Conservation Commission as they relate to natural gas                 
 exploration activities and coal bed methane exploration activities;           
 and amending the exemption from obtaining a waste disposal permit             
 for disposal of waste produced from coal bed methane drilling."               
      - PASSED CSHB 394(RES) OUT OF COMMITTEE                                  
 *HOUSE JOINT RESOLUTION 62                                                    
 Requesting the federal government to purchase surplus 1995 Alaska             
 canned pink salmon.                                                           
      - PASSED HJR 62 OUT OF COMMITTEE                                         
 HOUSE BILL 511                                                                
 TITLE: "An Act relating to deposits into the fish and game fund."             
      - PASSED HB 511 OUT OF COMMITTEE                                         
 HOUSE BILL 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."                                 
      - PASSED CSHB 447(RES) OUT OF COMMITTEE                                  
 HOUSE JOINT RESOLUTION NO. 54                                                 
 Encouraging the lessees of Alaska's vast North Slope natural gas              
 reserves to reach agreement to market gas, expressing the                     
 legislature's support for an Alaska North Slope (ANS) gas                     
 transmission pipeline, and requesting the President of the United             
 States and the Governor of the State of Alaska to publicly support            
 and take action that will help expedite the construction of that              
      - HEARD AND HELD                                                         
 *HOUSE BILL 469                                                               
 "An Act relating to the University of Alaska and to assets of the             
 University of Alaska; authorizing the University of Alaska to                 
 select additional state public domain land, designating that land             
 as `university trust land,' and describing the principles                     
 applicable to the land's management; and defining the net income              
 from the University of Alaska's endowment trust fund as `university           
 receipts' subject to prior legislative appropriation."                        
      - HEARD AND HELD                                                         
 *HOUSE JOINT RESOLUTION NO. 63                                                
 Opposing the proposed expansion of the United States Environmental            
 Protection Agency's toxics release inventory program.                         
     - SCHEDULED BUT NOT HEARD                                                 
 *HOUSE BILL NO. 539                                                           
 "An Act changing the name of the Alaska Soil and Water Conservation           
      - SCHEDULED BUT NOT HEARD                                                
 *HOUSE BILL NO. 537                                                           
 "An Act renaming the division of geological and geophysical surveys           
 in the Department of Natural Resources as the department's division           
 of mining and geology, and revising the duties of the state                   
 geologist within that division; and providing for an effective                
      - SCHEDULED BUT NOT HEARD                                                
 HOUSE JOINT RESOLUTION NO. 60                                                 
 Relating to Revised Statute 2477 rights-of-way.                               
      - SCHEDULED BUT NOT HEARD                                                
 HOUSE BILL NO. 118                                                            
 "An Act relating to seafood marketing, to the definition of                   
 'seafood' for purposes of the Alaska Seafood Marketing Institute,             
 and to an aquatic farm product marketing tax; and providing for an            
 effective date."                                                              
      - SCHEDULED BUT NOT HEARD                                                
 (* First Public Hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  HB 394                                                               
 SHORT TITLE: GAS & COAL METHANE LICENSES & LEASES                             
 SPONSOR(S): REPRESENTATIVE(S) OGAN, ROKEBERG, James, Kohring                  
 JRN-DATE     JRN-PG                 ACTION                                    
 01/05/96      2369    (H)   PREFILE RELEASED                                  
 01/08/96      2370    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/08/96      2370    (H)   O&G, RESOURCES, FINANCE                           
 02/08/96              (H)   O&G AT 10:00 AM CAPITOL 124                       
 02/08/96              (H)   MINUTE(O&G)                                       
 02/13/96              (H)   O&G AT 10:00 AM CAPITOL 124                       
 02/13/96              (H)   MINUTE(O&G)                                       
 02/21/96      2846    (H)   COSPONSOR(S): JAMES                               
 02/27/96              (H)   O&G AT 10:00 AM CAPITOL 124                       
 02/27/96              (H)   MINUTE(O&G)                                       
 02/28/96      2909    (H)   O&G RPT  CS(O&G) NT 2DP 4NR 1AM                   
 02/28/96      2910    (H)   DP: ROKEBERG, OGAN                                
 02/28/96      2910    (H)   NR: BRICE, B.DAVIS, G.DAVIS, WILLIAMS             
 02/28/96      2910    (H)   AM: FINKELSTEIN                                   
 02/28/96      2910    (H)   FISCAL NOTE (DNR)                                 
 02/28/96      2910    (H)   ZERO FISCAL NOTE (DEC)                            
 02/28/96      2910    (H)   REFERRED TO RESOURCES                             
 02/29/96      2972    (H)   COSPONSOR(S): KOHRING                             
 03/08/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 03/08/96              (H)   MINUTE(RES)                                       
 03/11/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 03/11/96              (H)   MINUTE(RES)                                       
 03/13/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 BILL:  HJR 62                                                               
 SPONSOR(S): RESOURCES                                                         
 JRN-DATE     JRN-PG                 ACTION                                    
 03/11/96      3061    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/11/96      3061    (H)   RESOURCES                                         
 03/13/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 BILL:  HB 511                                                               
 SHORT TITLE: DEPOSITS INTO FISH AND GAME FUND                                 
 SPONSOR(S): REPRESENTATIVE(S) OGAN                                            
 JRN-DATE     JRN-PG                 ACTION                                    
 02/12/96      2728    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/12/96      2728    (H)   RESOURCES, FINANCE                                
 03/08/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 03/08/96              (H)   MINUTE(RES)                                       
 03/11/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 03/11/96              (H)   MINUTE(RES)                                       
 03/13/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 BILL:  HB 447                                                               
 SPONSOR(S): REPRESENTATIVE(S) MASEK, Toohey, Kohring                          
 JRN-DATE     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  8:00 AM CAPITOL 124                       
 01/31/96              (H)   MINUTE(RES)                                       
 02/05/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 02/05/96              (H)   MINUTE(RES)                                       
 02/16/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 02/16/96              (H)   MINUTE(RES)                                       
 02/19/96      2812    (H)   COSPONSOR REMOVED:  WILLIAMS                      
 02/26/96      2890    (H)   COSPONSOR(S): TOOHEY                              
 02/28/96      2944    (H)   COSPONSOR(S): KOHRING                             
 03/13/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 BILL:  HJR 54                                                               
 SPONSOR(S): REPRESENTATIVE(S) KUBINA, Green, Barnes, Navarre,                 
 Mackie, Grussendorf, Phillips, B.Davis, Willis, Sanders, Davies,              
 Robinson, Rokeberg, Ogan                                                      
 JRN-DATE     JRN-PG                 ACTION                                    
 01/16/96      2453    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/96      2453    (H)   O&G, RESOURCES, FINANCE                           
 02/05/96      2633    (H)   COSPONSOR(S): ROBINSON                            
 02/07/96      2666    (H)   COSPONSOR(S): ROKEBERG                            
 02/09/96      2707    (H)   COSPONSOR(S): OGAN                                
 02/13/96              (H)   O&G AT 10:00 AM CAPITOL 124                       
 02/13/96              (H)   MINUTE(O&G)                                       
 02/13/96              (H)   MINUTE(O&G)                                       
 02/14/96      2749    (H)   O&G RPT  CS(O&G) 3DP 3NR 1AM                      
 02/14/96      2749    (H)   DP: B.DAVIS, OGAN, FINKELSTEIN                    
 02/14/96      2749    (H)   NR: BRICE, G.DAVIS, WILLIAMS                      
 02/14/96      2749    (H)   AM: ROKEBERG                                      
 02/14/96      2749    (H)   FISCAL NOTE (DNR)                                 
 03/13/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 BILL:  HB 469                                                               
 SPONSOR(S): REPRESENTATIVE(S) THERRIAULT, Toohey, Kelly, Davies               
 JRN-DATE     JRN-PG                 ACTION                                    
 02/02/96      2610    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/02/96      2610    (H)   HES, RESOURCES, FINANCE                           
 02/09/96      2708    (H)   COSPONSOR(S): DAVIES                              
 02/28/96      2943    (H)   HES REFERRAL WAIVED                               
 02/28/96      2943    (H)   REFERRED TO RESOURCES                             
 03/13/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 WITNESS REGISTER                                                              
 JAMES HANSEN                                                                  
 Division of Oil and Gas                                                       
 Department of Natural Resources                                               
 3601 C Street, Suite 1380                                                     
 Anchorage, Alaska  99503-5948                                                 
 Telephone:  (907) 269-8804                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 394.                              
 CHERYL SUTTON, Legislative Assistant                                          
   to Representative William K. "Bill" Williams                                
 Alaska State Legislature                                                      
 Capitol Building, Room 128                                                    
 Juneau, AK  99801                                                             
 Telephone:  (907) 465-3715                                                    
 POSITION STATEMENT:  Introduced HJR 62.                                       
 JANICE ADAIR, Director                                                        
 Division of Environmental Health                                              
 Department of Environmental Conservation                                      
 555 Cordova Street                                                            
 Anchorage, AK  99501                                                          
 Telephone:  (907) 269-7644                                                    
 POSITION STATEMENT:  Provided department's position in support and            
                      answered questions regarding HJR 62.                     
 LAURIE H. OTTO, Deputy Attorney General                                       
 Criminal Division                                                             
 Department of Law                                                             
 P.O. Box 110200                                                               
 Juneau, Alaska  99811-0300                                                    
 Telephone:  (907) 465-3428                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 511.                              
 DEAN PADDOCK                                                                  
 Bristol Bay Driftnetters Association                                          
 P.O. Box 21951                                                                
 Juneau, Alaska  99802                                                         
 Telephone:  (907) 463-4970                                                    
 POSITION STATEMENT:  Supported HB 511.                                        
 JEFF LOGAN, Legislative Assistant                                             
   to Representative Joe Green                                                 
 Alaska State Legislature                                                      
 Capitol Building, Room 24                                                     
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4931                                                    
 POSITION STATEMENT:  Provided information on status of HB 447.                
 BEVERLY MASEK, Representative                                                 
 Alaska State Legislature                                                      
 Capitol Building, Room 418                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-2679                                                    
 POSITION STATEMENT:  As sponsor of HB 447, supported committee                
                      substitute and new amendment.                            
 SARA HANNAN, Executive Director                                               
 Alaska Environmental Lobby                                                    
 P.O. Box 22151                                                                
 Juneau, Alaska  99802                                                         
 Telephone:  (907) 463-3366                                                    
 POSITION STATEMENT:  Testified on HB 447.                                     
 NICO BUS, Acting Director                                                     
 Division of Support Services                                                  
 Department of Natural Resources                                               
 400 Willoughby Avenue                                                         
 Juneau, Alaska  99801-1724                                                    
 Telephone:  (907) 465-2406                                                    
 POSITION STATEMENT:  Responded to question on HB 447.                         
 GENE KUBINA, Representative                                                   
 Alaska State Legislature                                                      
 Capitol Building, Room 406                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4859                                                    
 POSITION STATEMENT:  Provided sponsor statement on HJR 54.                    
 MORGAN SOLOMON                                                                
 P.O. Box 589                                                                  
 Barrow, Alaska  99723                                                         
 Telephone:  (907) 852-7674                                                    
 POSITION STATEMENT:  Supported HJR 54.                                        
 CLIFF EAMES                                                                   
 Alaska Center for the Environment                                             
 519 West Eighth, Suite 201                                                    
 Anchorage, Alaska  99501                                                      
 Telephone:  (907) 274-3621                                                    
 POSITION STATEMENT:  Opposed HB 469.                                          
 GENE THERRIAULT, Representative                                               
 Alaska State Legislature                                                      
 Capitol Building, Room 421                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4797                                                    
 POSITION STATEMENT:  Provided sponsor statement on HB 469.                    
 CHARLIE BODDY, Representative                                                 
 Resource Coalition                                                            
 Usibelli Coal Mine, Inc.                                                      
 122 First Avenue, Suite 302                                                   
 Fairbanks, Alaska  99701                                                      
 Telephone:  (907) 452-2625                                                    
 POSITION STATEMENT:  Testified on HB 469.                                     
 ACTION NARRATIVE                                                              
 TAPE 96-32, SIDE A                                                            
 Number 0001                                                                   
 CO-CHAIRMAN JOE GREEN called the House Resources Committee meeting            
 to order at 8:10 a.m.  Members present at the call to order were              
 Representatives Green, Williams, Ogan, Austerman, Davies, Kott, and           
 Long.  Representative Barnes arrived late and Representative                  
 Nicholia joined the meeting via teleconference.                               
 HB 394 - GAS & COAL METHANE LICENSES & LEASES                               
 Number 0089                                                                   
 REPRESENTATIVE SCOTT OGAN, sponsor of HB 394, offered to answer any           
 questions before addressing amendments.  The committee was working            
 from version M, dated 3/7/96.  Representative Ogan moved                      
 Amendment1 to CSHB 394, which read:                                           
      Page 2, line 24:  Delete "at the drill site"                             
      Page 3, line 27:  Delete "at the drill site"                             
      Page 5, line 26:  Delete "at the drill site"                             
 REPRESENTATIVE OGAN explained this was a technical amendment                  
 recommended by the Department of Natural Resources, Division of Oil           
 and Gas.  He said, "They felt that `at the drill site' was not                
 appropriate language because right before that, it talks about ...            
 within 3,000 feet of the surface at the drill site.  The problem is           
 sometimes that the casing doesn't go straight down.  If they                  
 deviate the casing somewhat, it could be interpreted that 3,000               
 feet from the drill site might not be 3,000 feet down."                       
 CO-CHAIRMAN GREEN asked if there were any comments about the                  
 proposed amendment.  There being none, Amendment 1 passed.                    
 Number 0231                                                                   
 REPRESENTATIVE OGAN moved Amendment 2 to CSHB 394, which read:                
      Page 9, line 5 & 6:  Delete "of the facility"                            
              line 5:  Insert "owner or" following "the"                       
      Page 9, line 11:  Delete "of the facility"                               
              line 11:  Insert "owner or" following "the"                      
      Page 10, line 7:  Delete "of the facility"                               
               line 7:  Insert "owner or" following "the"                      
 REPRESENTATIVE OGAN believed this was a recommendation of the Oil             
 and Gas Conservation Commission.  "Of the facility", which was not            
 clear language, was being changed to "owner or operator".                     
 Basically a technical amendment, it would cover anybody associated            
 with the drilling operation, Representative Ogan said.                        
 CO-CHAIRMAN GREEN asked if there were questions or objections.                
 There being none, Amendment 2 passed.                                         
 Number 0320                                                                   
 REPRESENTATIVE OGAN offered Amendment 3 to CSHB 394, which read:              
      Page 3, line 19:  Substitute "more" for "less"                           
 He explained, "What we'd like to do is put a very linear process in           
 the public comment period, here.  This was a drafting mistake, a              
 request of the drafter to change this. ...  We'd like the public              
 comment period not to exceed 60 days, so when an operator will                
 know, for example, that if he applies for a lease in the fall of              
 one year, that in so many days, by the spring of next year, he'll             
 be able to go into the area and set up and operate."                          
 CO-CHAIRMAN GREEN asked if there were questions or objections to              
 Amendment 3.                                                                  
 REPRESENTATIVE JOHN DAVIES objected.  He asked:  "Would you object            
 to just making it 60 days, period?"                                           
 REPRESENTATIVE OGAN replied 60 days would be fine.                            
 Number 0443                                                                   
 REPRESENTATIVE DAVIES moved to amend Amendment 3 to read, "a                  
 comment period of 60 days".                                                   
 CO-CHAIRMAN GREEN said, "Just deleting `not less than'."                      
 REPRESENTATIVE DAVIES concurred.                                              
 CO-CHAIRMAN GREEN noted that was a friendly amendment to                      
 REPRESENTATIVE OGAN agreed he perceived it as a friendly amendment.           
 Number 0479                                                                   
 REPRESENTATIVE GREEN stated, "We're making it a 60-day specific,              
 rather than `more' or `less'."  He asked if there was an objection.           
 There being none, Amendment 3 passed.  Co-Chairman Green noted that           
 it would read, "comment for a period of 60 days."                             
 REPRESENTATIVE OGAN moved Amendment 4 to CSHB 394, which read:                
      Page 5, Lines 26-29:                                                     
           Delete:  "If the lessee's operation under the lease                 
      results in the production of oil or of gas in violation of               
      this subsection, the director shall immediately suspend the              
      lessee's operation under the lease and may terminate the                 
           Insert:  following "surface"   ".  If an                            
      onshore well drilling for natural gas under a lease authorized           
      by AS 38.05.177 penetrates a formation capable of producing              
      gas below 3,000 feet of the surface, the owner or operator               
                (1) shall notify the department and the Alaska Oil             
      and Gas Conservation Commission; and                                     
                (2) may not conduct further operations in the                  
      drilled well until the facility complies with all applicable             
      laws and regulations relating to oil and gas production;                 
      however, this paragraph does not prevent the owner or operator           
      from conducting activities that may be required by the Alaska            
      Oil and Gas Conservation Commission to plug or abandon a                 
 Number 0489                                                                   
 REPRESENTATIVE OGAN explained there was a similar provision in the            
 bill that when an operator entered a formation capable of producing           
 oil, that operator had to cease operation and notify the                      
 department.  Further operations could not be conducted until the              
 facility complied with applicable laws and regulations.                       
 Representative Ogan said, "What we're attempting to do with this is           
 to put some further parameters.  The legal experts and DNR [have]             
 shared some concern about ... who owns the gas below 3,000 feet.              
 And if the operator enters into a gas formation [where] gas is                
 possibly produced below 3,000 feet, ... we would like them to cease           
 operations and enter into the normal oil and gas lease process."              
 REPRESENTATIVE OGAN mentioned there had been subsequent discussion,           
 not reflected in Amendment 4, where someone would possibly be able            
 to plug the well at 3,000 feet and produce the gas above that.  He            
 said he would not put that on the table currently.                            
 REPRESENTATIVE OGAN stated, "What I've been told by the experts is            
 if a person enters a formation, ... for example, if its a gas cap             
 on an oil formation, the pressures will be much greater and they'll           
 be able to tell that they're into this formation that possibly                
 produces gas from below 3,000 feet.  Because we're making a lot of            
 accommodations to put this program in place, we'd like to make this           
 as bullet-proof as possible, so we don't end up in litigation and             
 problems further on down the line."                                           
 Number 0642                                                                   
 CO-CHAIRMAN GREEN referred to page 2, line 20, and said "SHALLOW              
 NATURAL GAS LEASES" applied to a lease within 3,000 feet of the               
 surface.  He asked:  "How, then, would a well produce gas below               
 3,000 feet in this amendment?"                                                
 REPRESENTATIVE OGAN replied, "Only if ... the gas that they hit               
 above 3,000 feet ... possibly comes from below 3,000 feet.  In                
 other words, if they hit the top of a gas cap that extends below              
 3,000 feet, we'd like them to enter into a conventional oil and gas           
 Number 0777                                                                   
 REPRESENTATIVE ALAN AUSTERMAN indicated there was no competitive              
 leasing at that point in time, as would normally occur.  He asked             
 what prohibited people from drilling 3,000-foot wells without                 
 having to get permits until they found a gas pocket.                          
 Representative Austerman understood that an operator could complete           
 the paperwork afterwards, without going through a competitive bid.            
 He asked if that was how it was set up, with the amendment.                   
 Number 0828                                                                   
 REPRESENTATIVE OGAN suggested someone on teleconference might be              
 better qualified to answer that.                                              
 CO-CHAIRMAN GREEN asked:  "Is your question that they can go                  
 anywhere and punch holes?  They're only going to be drilling holes            
 on their lease.  Their lease is just limited to 3,000 feet.  Or are           
 you thinking maybe there'll be some 3,000-foot leases and not                 
 anything leased below that?"                                                  
 REPRESENTATIVE AUSTERMAN replied, "Well, obviously, this bill is              
 for everything above 3,000 feet.  And everything above your                   
 demarcation line ... is a competitive-type leasing, whereas this              
 new bill is not a competitive-type leasing program."  He suggested            
 a person could pick a place to drill; if everybody said it was all            
 right, that person could go ahead and drill there above 3,000 feet.           
 Representative Austerman asked if that was correct.                           
 CO-CHAIRMAN GREEN responded, "If a lease is granted."                         
 REPRESENTATIVE OGAN agreed.                                                   
 CO-CHAIRMAN GREEN said, "So, it's what's happened below that, in              
 this area that has not been leased, below 3,000 feet."                        
 REPRESENTATIVE AUSTERMAN concurred.                                           
 CO-CHAIRMAN GREEN stated, "It's my understanding there would be               
 nothing to preclude the driller of the 3,000-foot well, who had               
 special compensation because he doesn't have to have as big a bond            
 and all these other ramifications for the likelihood it's not                 
 there.  If he then says, `hey, I think there's a mother lode below            
 here, I'm going to go get a lease of a different kind', then he               
 would be subject to all the other ramifications of a lease, the big           
 bond, the whole nine yards, just as he would be now."                         
 Number 0937                                                                   
 REPRESENTATIVE AUSTERMAN asked if that would have eliminated the              
 competition that would normally occur.                                        
 CO-CHAIRMAN GREEN replied, "Well, no, he has to get the lease.  And           
 the owner of the land, if it's Native land or if it's state land,             
 may say, `I'm sorry, Charlie, that's not going to be on the lease             
 schedule for five more years.'  So, you ... can't drill in the                
 lower until you get a lease, and that's not going to be up for                
 awhile.  The only exception that I can think of is if there was               
 [an] exploration licensing area, that the shallow gas entity wanted           
 to come in and say, `look, there's a Native village on this large,            
 sub-surface lease and we think we can find some shallow gas', that            
 might be an exception.  But, then, that would already be leased to            
 someone else who has the rights to drill deeper.  So, I don't think           
 that would be a problem."                                                     
 REPRESENTATIVE AUSTERMAN asked:  "But what if at 2,995 [feet] he              
 finds oil?  Then he has to cap it?"                                           
 CO-CHAIRMAN GREEN said yes.                                                   
 REPRESENTATIVE AUSTERMAN continued:  "He can't go any further with            
 Number 1002                                                                   
 REPRESENTATIVE OGAN said that was covered in another portion of the           
 bill.  An operator who encountered a formation capable of producing           
 oil had to cease operations and notify the department and the                 
 Alaska Oil and Gas Conservation Commission (AOGCC), as well as                
 comply with all applicable laws.  Representative Ogan noted that              
 operations would cease except for whatever was instructed by the              
 CO-CHAIRMAN GREEN stated, "Then you get into a correlative rights             
 situation.  And that's where the Conservation Commission comes in,            
 because then, in effect, you have a 3,000-foot lease but you're               
 trying to drain ... oil from a 3,001-foot lease, which is a                   
 different entity."   He added, "You can't drain oil from someone              
 else's lease, unless it's unitized."                                          
 Number 1072                                                                   
 REPRESENTATIVE OGAN pointed out that Section 7, page 9, relating to           
 onshore well drilling for gas that penetrated a formation capable             
 of producing oil, had the same stipulations.                                  
 REPRESENTATIVE DAVIES said he understood the concern and noted they           
 were talking about the "hinterlands," where little geophysical                
 exploration had occurred.  He wondered how a person would know, at            
 2,900 feet, where gas was coming from.                                        
 Number 1138                                                                   
 REPRESENTATIVE OGAN replied he had been told by Tuckerman Babcock             
 of the AOGCC that if they hit a natural gas formation not                     
 associated with the characteristics of methane, which was low-                
 pressure and low-volume, chances were it could be associated with             
 another type of gas.  Representative Ogan suggested if committee              
 members had reservations about the Amendment 4, he would withdraw             
 it for later discussion.                                                      
 Number 1192                                                                   
 REPRESENTATIVE DAVIES stated the amendment was better than the                
 existing language.  However, he was seeking clarification.  He                
 asked if an adjacent leaseholder or the AOGCC would trigger it.               
 CO-CHAIRMAN GREEN replied, "In order to drill the well, to get the            
 permit, you have to have an Oil and Gas Conservation Commission               
 permit.  And in that permit, the requirements are that you will               
 provide the geological information you find - if you're going to              
 log it, all copies of the logs, any cuttings, any cores that are              
 taken - so that the Conservation Commission engineering and                   
 geological staff would be privy to the information that the                   
 operator gets on the well. ... Let's assume ... at 2,990 you                  
 encounter a gas sand that might be a part of a dome that extends              
 below 3,000 feet, which would come under this operation.  At that             
 time, you would have to follow this amendment, as I understand your           
 suggestion."  Chairman Green added that the AOGCC would then have             
 authority.  "You then get into a situation of either draining                 
 unleased or other leased interests below 3,000 feet," he said,                
 indicating that addressed Representative Austerman's question.                
 Number 1384                                                                   
 CO-CHAIRMAN GREEN continued, "So, then, you either have to ... go             
 to a unitization or get permission of the owner of the lower gas-             
 hold," he said.  "That gets sticky, and so, I would imagine what              
 would happen is you'd be tangled up in a unitization effort, which            
 would actually work against the concept here, because those things            
 probably take a year, at minimum.  But, on the other hand, it might           
 not take that much, because whoever has the sub-surface lease,                
 then, is assured of at least finding some gas."  He noted this was            
 all speculative.  He suggested it would be handled not in this bill           
 but by the AOGCC and the Department of Natural Resources (DNR), as            
 far as leasing was concerned.                                                 
 Number 1411                                                                   
 CO-CHAIRMAN GREEN noted there were several methods for determining            
 that the condition existed.  For an unleased area, the situation              
 would be stickiest, he suggested, because the operator or someone             
 else might want to take out a conventional lease.  And the lease              
 for the lower interval would not be on the lease schedule.                    
 REPRESENTATIVE AUSTERMAN said that was his question.                          
 CO-CHAIRMAN GREEN said, "Then, you get a situation where, at this             
 person's detriment, they have discovered a gas reservoir at the               
 very, very edge of their lease area and that's an unfortunate                 
 situation, because they would be in a correlative rights problem."            
 Number 1444                                                                   
 JAMES HANSEN, Leasing/Evaluations, Division of Oil and Gas,                   
 Department of Natural Resources (DNR), testified via teleconference           
 from Anchorage.                                                               
 CO-CHAIRMAN GREEN asked:  "Would you be willing to take this                  
 situation on?  Did you understand the concern that was registered?"           
 MR. HANSEN replied he had written down the same concern that                  
 morning.  "You pretty much have pointed out all the problems," he             
 said.  He referred to the question of what would happen if gas were           
 struck that extended below 3,000 feet.  He suggested the operator             
 would have to hold back and DNR would have to go through the                  
 competitive process in order to lease below 3,000 feet.  "That                
 would be a stumbling block to producing any of that gas, even above           
 the 3,000 feet," he said.                                                     
 Number 1484                                                                   
 REPRESENTATIVE DAVIES asked Mr. Hansen, "In a relatively unexplored           
 area, ... how would we know that you'd penetrated a formation                 
 capable of producing gas below the 3,000 feet?  What kinds of                 
 information would be available out of single hole to know that kind           
 of information?"                                                              
 MR. HANSEN replied there were several ways to tell.  If a bed was             
 dipping down-slope, away from the well, it was fairly certain that            
 gas existed further down.  "If you drill down to 3,000 feet, stop             
 at that point, and you hit gas, and you still have gas at 3,000,              
 chances are pretty good you've got gas below 3,000," he said.  "But           
 you're right, without a geophysical survey to be able to `see'                
 what's down there or ... how thick the formation is ..., it would             
 be hard to tell."  He said if there were other signs, it could be             
 assumed gas extended further down, however.                                   
 Number 1546                                                                   
 CO-CHAIRMAN GREEN explained that surface geology would create the             
 desire to drill there in the first place.  He asked why a person              
 would want to drill a 3,000-foot well just on speculation.                    
 "They're going to try to find that area that gives the most                   
 likelihood of finding gas," he said, indicating magnetometers,                
 seismic indications, or surface geology could be used to make that            
 REPRESENTATIVE DAVIES referred to a concern raised by Dave Lappi at           
 an earlier hearing and asked:  "Suppose that you encountered gas at           
 2,000 feet and the well went on down, and then you got into a                 
 situation where this paragraph would be triggered and you had to              
 plug it.  Within this language, is it possible for AOGCC to allow             
 them to plug the bottom of the hole and back up to the 2,000-foot             
 horizon and just produce the low-pressure methane from that level?"           
 CO-CHAIRMAN GREEN replied, "I would certainly think so."                      
 Number 1640                                                                   
 MR. HANSEN agreed it was a definite possibility that the gas could            
 be plugged and left there.                                                    
 REPRESENTATIVE DAVIES asked:  "So, when it says `plug the well',              
 that doesn't imply plug the whole thing, but just plug that portion           
 of it.  Is that right?"                                                       
 MR. HANSEN replied that the wording may need to be more specific.             
 REPRESENTATIVE DAVIES asked:  "So, could we put some language in              
 like `plug a portion or all of', or something like that?"                     
 MR. HANSEN agreed that should work.                                           
 CO-CHAIRMAN GREEN thought it was covered.  He said the paragraph              
 did not prevent the owner or operator from activities that may be             
 required by the AOGCC, which had jurisdiction over the well.                  
 Number 1659                                                                   
 REPRESENTATIVE DAVIES said, "My concern is that the language says             
 `to plug or abandon the well'.                                                
 CO-CHAIRMAN GREEN explained, "They will allow plug-backs, partial             
 plug-offs of zones above.  You can actually plug off a[n] ...                 
 intermediate zone and produce lower, or you can plug the lower zone           
 and produce above it, as required by AOGCC."                                  
 REPRESENTATIVE DAVIES stated, "I'm just concerned that this line              
 doesn't get read that the only option AOGCC has is to plug or                 
 abandon the entire well."                                                     
 CO-CHAIRMAN GREEN thought the language could not be construed to              
 say "you must plug and abandon the well."                                     
 Number 1689                                                                   
 REPRESENTATIVE OGAN clarified, "The legislative intent, my intent,            
 and maybe the committee's intent we could put on the record, is               
 that it is not for them to plug and abandon, but just simply to               
 give AOGCC the authority to deal appropriately with a situation.              
 I think we all maybe agree that we still would like to see the gas            
 produced from that well to go to that particular village, ... but             
 let AOGCC make the call as [to] what the appropriate steps are to             
 do that."                                                                     
 Number 1714                                                                   
 CO-CHAIRMAN GREEN said, "If I could offer a friendly amendment [to            
 Amendment 4] to avoid that possibility:  `to plug, plug back or               
 abandon the well'."                                                           
 REPRESENTATIVE DAVIES replied, "I'd be more comfortable with that."           
 REPRESENTATIVE OGAN said, "That would be more than considered a               
 friendly amendment."                                                          
 CO-CHAIRMAN GREEN stated, "And that plug-back is a common                     
 vernacular in the oil industry."  He asked if there was any                   
 objection to the amendment to Amendment 4.  There being none, it              
 was so ordered.  Co-Chairman Green asked if there were questions,             
 comments, or any objection to Amendment 4, as amended.  There being           
 none, Amendment 4, as amended, was adopted.                                   
 Number 1748                                                                   
 REPRESENTATIVE OGAN moved Amendment 5 to CSHB 394, which read:                
      Page 4, line 20, after "lease;":                                         
           Insert "if the commissioner determines that the lessee              
     has not diligently developed or continued to operate under the            
     lease, the commissioner, after giving notice and opportunity              
     for hearing to the lessee, may terminate the lease;"                      
 REPRESENTATIVE OGAN explained that because of the many                        
 accommodations being made to independent companies to facilitate              
 drilling the gas, he was attempting to make this as "bullet-proof"            
 as possible, to prevent speculators from coming in and tying up               
 leases for five years without developing them.  "What we want                 
 people to do is to lease these leases and be ready, within a year,            
 to do some drilling and some action," he said, adding this was a              
 safe-guard measure to enhance the intent of the bill.                         
 Number 1803                                                                   
 CO-CHAIRMAN GREEN asked Mr. Hansen if legal problems might occur              
 with the amendment.  He asked if it would be an agreement entered             
 into beforehand, eliminating potential litigation.                            
 MR. HANSEN replied he thought the amendment was needed.  He                   
 suggested changing "commissioner" to "director"; when the annual              
 review was done, the director would have the discretion of                    
 terminating the lease if the party was not doing anything.                    
 CO-CHAIRMAN GREEN asked:  "And you don't feel there's any problem,            
 then, with somebody suggesting that that director might be                    
 deleterious or ... arbitrary and capricious?"                                 
 REPRESENTATIVE AUSTERMAN indicated page 4, line 18, already dealt             
 with that.                                                                    
 MR. HANSEN replied that one could always request a reconsideration            
 by the commissioner on the director's decision.                               
 Number 1875                                                                   
 REPRESENTATIVE OGAN moved an amendment to Amendment 5 to change               
 "commissioner" to "director".                                                 
 CO-CHAIRMAN GREEN asked if there was any objection to using the               
 word "director".  There was none.  He asked if there was further              
 concern that, as indicated by Mr. Hansen, there might be other                
 words to help prevent arbitrary capriciousness or whether that was            
 REPRESENTATIVE DAVIES commented, "I would think that this kind of             
 language would be part of the lease.  It should be able to be                 
 known, going into this situation, that this is part of the deal,              
 ... that if the director isn't happy with your operation, then he             
 has this power to make the decision."                                         
 CO-CHAIRMAN GREEN asked Mr. Hansen if he had indicated that.                  
 Number 1917                                                                   
 MR. HANSEN replied yes and said, "We do have appeal regs in effect            
 in which anybody, for any decision by the director, ought to                  
 appeal.  They have that right to appeal to the commissioner.  So,             
 if someone thinks they're being unfairly treated by the director,             
 they do have legal standing."                                                 
 CO-CHAIRMAN GREEN asked if there was further discussion or any                
 objection to adopting Amendment 5.  There being none, Amendment5,             
 as amended, was adopted.                                                      
 Number 1965                                                                   
 REPRESENTATIVE DAVIES offered Amendment 6 to CSHB 394, which read:            
      Page 10, line 15-18:                                                     
           Delete all material                                                 
 He explained that Amendment 6 deleted Section 11, the prohibition             
 against using the 470 Fund.                                                   
 Number 1906                                                                   
 REPRESENTATIVE OGAN said he did not object.  He indicated his                 
 concerns about deleting the language had been alleviated.                     
 CO-CHAIRMAN GREEN asked if there was indication that suppliers of             
 the 470 Fund would object.                                                    
 REPRESENTATIVE OGAN replied that he had spoken with three major               
 suppliers.  While they had some reservations that the 470 Fund was            
 being expanded, Representative Ogan thought they understood that              
 the possibility of the 470 Fund being used would probably be                  
 mitigated by this bill.  If the bill was effective, there would be            
 less handling and shipping of diesel fuels in the bush.  " And                
 we've also addressed some of the concerns by providing some                   
 financial responsibility for incidental operational spills,"                  
 Representative Ogan said.  "So, because of that, they don't have an           
 objection to it."                                                             
 CO-CHAIRMAN GREEN asked if there were further comments about                  
 Amendment 6.                                                                  
 REPRESENTATIVE OGAN asked anyone in the audience who objected to              
 please speak up.                                                              
 Number 2065                                                                   
 CO-CHAIRMAN GREEN noted there were no objections and stated that              
 Amendment6 was adopted.  He asked if there was further discussion             
 on HB 394.                                                                    
 REPRESENTATIVE DON LONG recalled a concern at a past meeting about            
 page 2, lines 25-32, and page 3, on existing leases.  He asked if             
 anything was being done about that.                                           
 REPRESENTATIVE OGAN explained there had been a meeting between                
 himself and Representatives Long, Davis and Austerman to discuss              
 those issues.  He said, "I know what your concerns are about the              
 North Slope.  I remain committed to work with you between now and             
 the next committee of referral to see if we can get some language             
 that would help your situation.  It's got to be a concerted effort            
 between the [Department of] Natural Resources and myself, and I'd             
 be happy to work with you on that."   He explained that the short             
 notice had precluded the ability to draft language for the present            
 REPRESENTATIVE LONG said he had no problem with that.                         
 Number 2135                                                                   
 REPRESENTATIVE DAVIES expressed concern about that issue, as well.            
 His office had contacted Mr. Hansen the previous day to try to work           
 out language.  "The department's concerns are sufficiently                    
 complicated that it's not easy to draft some language in the short            
 period of time," he said.                                                     
 Number 2161                                                                   
 MR. HANSEN responded that his concern was over how complicated it             
 would be.  Legal problems needed to be addressed and he wanted to             
 run it by the Attorney General's office to see what could happen if           
 leases were allowed to overlap.  He was unsure what problems there            
 might be, but he foresaw there would be some.                                 
 CO-CHAIRMAN GREEN said, "Wouldn't it be, since that is a lease-hold           
 entity to whoever has the deeper lease - they go from the surface             
 down - that the only way you could accomplish, I think, what                  
 Representative Long wants would be a sublease, if the lease itself            
 does not preclude that.  I think if you try and file lease-on-top-            
 of-lease, you'll hang both leases up."                                        
 MR. HANSEN thought that was correct.                                          
 CO-CHAIRMAN GREEN continued, "But I think it's not without reason             
 to think that you might be able to get a sublease, from a deep                
 lease owner, for the shallow rights."                                         
 Number 2211                                                                   
 MR. HANSEN said, "I believe that's right, Mr. Chairman.  I think              
 Mr. Lappi said that it's actually done in the Lower 48.  So, that's           
 why I'm saying it's not impossible.  I'm just saying we need to               
 look at it closely to see what legal ramifications there might be."           
 REPRESENTATIVE LONG suggested that in the interest of time, the               
 bill would be the instrument to start with.  Another amendment                
 could be made later.                                                          
 CO-CHAIRMAN GREEN submitted that it would not be part of the                  
 current bill in any regard.  "It would have to be an agreement with           
 the other leaseholder," he said.  "The state could not                        
 retroactively take back a portion of that lease by itself."                   
 Number 2239                                                                   
 REPRESENTATIVE DAVIES referred to page 2, line 26 and said he had             
 a corollary concern because that wording excluded everything in the           
 North Slope and Cook Inlet, whether or not it was currently leased.           
 "And the reason for that is to avoid the possibility of an                    
 overlapping lease," he said.  He thought the bill should be                   
 modified to allow for that possibility, although it would be                  
 complicated.  He believed it was possible to amend the language at            
 line 26, for example, to allow for the possibility where no lease             
 currently existed.  "In other words, the lease sale could be                  
 offered subject to whatever existing shallow leases may be in place           
 and whatever language would have to be around it would have to be             
 developed," he said.  "That would take care of Representative                 
 Long's concern in a number of instances," he concluded.                       
 REPRESENTATIVE AUSTERMAN moved that CSHB 394(RES), version M, as              
 amended, move from the House Resources Committee with accompanying            
 fiscal notes and individual recommendations.  There being no                  
 objection, it was so ordered.                                                 
 HJR 62 - FED PURCHASE SURPLUS '95 CANNED SALMON                             
 Number 2326                                                                   
 CO-CHAIRMAN WILLIAM K. "BILL" WILLIAMS accepted the gavel from Co-            
 Chairman Green to preside over the testimony on HJR 62.  He said              
 his intent was move the resolution from committee today.                      
 Number 2348                                                                   
 CHERYL SUTTON, Legislative Assistant to Representative Bill                   
 Williams, read the sponsor statement for HJR 62 into the record:              
 MS. SUTTON said, "The Alaska canned pink salmon industry is facing            
 a serious crisis caused by record harvests in 1995.  The record               
 pack of nearly four million cases on a 48 tall basis is seriously             
 affecting the industry's ability to move these surpluses.                     
 MS. SUTTON continued, "The pink salmon harvest forecast for 1995              
 was 76.1 million but actually turned out to be 128 million.  This             
 was 51.9 million over forecast.  The strength is attributed to good           
 ocean survival.                                                               
 MS. SUTTON proceeded, "USDA has traditionally required that canned            
 salmon be processed under NMFS "Type 1" Continuous Inspection, even           
 though neither the commercial marketplace nor the U.S. Food and               
 Drug Administration (FDA) makes this requirement.  The canned                 
 salmon industry does not normally contract NMFS inspectors to                 
 oversee the processing operation unless there is an indication that           
 there will be a USDA purchase program.  In 1995, a letter was sent            
 by USDA to the salmon industry indicating that, based on the                  
 harvest level forecasts at the time, a purchase was not warranted.            
 Consequently, the bulk of the industry did not assume the                     
 additional expense of NMFS inspection.  When the size of the run              
 became apparent, it was too late to bring inspectors to the plants.           
 MS. SUTTON said, "The industry is prepared to have the National               
 Marine Fisheries Service (NMFS) Inspection Services Division                  
 conduct lot inspections of product processed in 1995 to certify               
 that the product meets the technical requirements of the Commercial           
 Item Description for canned salmon.  NMFS believes these assurances           
 should be deemed adequate for USDA purchases for its various                  
 MS. SUTTON said, "House Joint Resolution 62 requests the federal              
 government to purchase 1995 Alaska canned pink salmon surpluses for           
 their domestic and export programs.  These programs, managed by the           
 Agricultural Marketing Service, include school lunch programs,                
 export programs, assistance to low income persons and the federal             
 prison system.                                                                
 MS. SUTTON continued, "The resolution asks the Department of                  
 Agriculture to waive the National Marine Fisheries Service "Type 1"           
 inspection requirement.  The canned salmon industry operates under            
 federal and State of Alaska regulations as well as the guidelines             
 of the "Canned Salmon Control Plan and Container Integrity Program"           
 which were developed in conjunction with the National Food                    
 Processors Association and FDA.  Alaska canned salmon is traded               
 internationally on the assurances of these programs.                          
 MS. SUTTON said, "At present, at least six major Alaska seafood               
 companies have notified fishermen they will not be buying pink                
 salmon for the 1996 season because of the surplus.  This situation            
 poses economic disaster for our fishermen and processors.                     
 MS. SUTTON concluded, "The canned pink salmon surpluses offer a               
 highly nutritious and healthful product for the federal                       
 government's programs.  It is imperative that USDA make a decision            
 quickly.  Operating plans and commitments to purchase cans and                
 packaging material must be made now to be manufactured and shipped            
 for the 1996 season."                                                         
 MS. SUTTON added that the committee's support would be much                   
 appreciated...(CHANGE TAPE)                                                   
 TAPE 96-32, SIDE B                                                            
 Number 0001                                                                   
 REPRESENTATIVE LONG questioned Ms. Sutton about the use of bagged             
 salmon.  Would that also require the "Type 1" inspections?                    
 Number 0023                                                                   
 MS. SUTTON felt that particular product had not been produced in              
 any volume at this point for the marketplace.                                 
 REPRESENTATIVE DAVIES asked whether the sponsor had considered                
 adding a resolve to include some specific reference to substituting           
 the other marine fisheries inspections or the ADEC inspections so             
 the resolve did not say that we were asking them to waive the "Type           
 1" inspections but to utilize the other information that was                  
 available in lieu of that requirement.                                        
 Number 0058                                                                   
 MS. SUTTON replied that numerous industry people and Alaska's                 
 federal delegation and others have been working on this issue.  She           
 said the National Marine Fisheries Service who conducts both of               
 these inspections, the "Type 1" continuous inspection and the lot             
 inspection, has written to the U.S. Department of Agriculture                 
 expressing their concern with the "Type 1"  inspection and asking             
 them to waive that requirement and outlining what the lot                     
 inspection would cover and why it would suffice.  These issues have           
 been dealt with.  She referred to page 2, line 10 of HJR 62 and               
 stated she felt that Representative Davies concern was adequately             
 Number 0108                                                                   
 CO-CHAIRMAN GREEN said if the federal government comes in and buys            
 up copious amounts of excess canned salmon, what they do with that            
 and what sort of price, is it a reduced or competitive price.                 
 MS. SUTTON replied that she did not know but informed him that                
 canned salmon is now moving at a low price everywhere in the                  
 international and domestic marketplace.  She said she expected it             
 to be a comparable price to what is moving and being traded now.              
 There is no doubt that people are going to take losses but it is              
 more important to move that inventory, the costs of warehousing 1.7           
 million cases are astronomical.                                               
 Number 0149                                                                   
 CO-CHAIRMAN GREEN stated in the past, there was a concern about               
 botulism, albeit a fake scare; he asked if relieving this kind of             
 inspection would increase that possibility.                                   
 MS. SUTTON answered in the negative, no it would not increase the             
 threat of that kind of incident.  She informed the committee that             
 Janice Adair, Department of Environmental Conservation, would be              
 addressing what the DEC requirements are for inspection.  She said            
 the state's canned salmon regulations are so strict that people who           
 can salmon are not allowed to anything that is watermarked.  A fish           
 that is watermarked means a fish that comes late in the run or has            
 been milling in area where there is fresh water.                              
 MS. SUTTON emphasized that this is wonderful product going into the           
 can.  It is not as some people think that because it is in a can it           
 must be low in product.  It is very high in product and the                   
 industry standards are extremely strict all the way through.  She             
 suggested that the regulations in place now exceed what the "Type             
 1" inspection would be.                                                       
 MS. SUTTON explained that all the "Type 1" inspection would do is             
 have someone from the federal government, an inspector from the               
 National Marine Fisheries Service physically present in the plant             
 on the line when it is being processed.  They would process in the            
 same manner whether that person were standing there or not standing           
 there.  They do not change anything in their operation.                       
 Number 0221                                                                   
 JANICE ADAIR, Director, Division of Environmental Health,                     
 Department of Environmental Conservation, testified in support of             
 HJR 62.  She said she was encouraged to see canned salmon in the              
 school lunch program.                                                         
 CO-CHAIRMAN WILLIAMS closed testimony on HJR 62 and asked the wish            
 of the committee.                                                             
 Number 0250                                                                   
 REPRESENTATIVE AUSTERMAN moved that HJR 62 move from the House                
 Resources Committee with individual recommendations and attached              
 zero fiscal note.  There being no objection, it was so ordered.               
 CO-CHAIRMAN GREEN accepted the gavel from Co-Chairman Williams and            
 announced that HB 118, Seafood Marketing / Aquatic Product Tax, and           
 HB 537, Division of Mining & Geology/State Geologist, would be                
 rescheduled to the continuation of the recessed meeting on                    
 March14, 1996, at 1:00 p.m.                                                   
 HB 511 - DEPOSITS INTO FISH AND GAME FUND                                   
 Number 0282                                                                   
 CO-CHAIRMAN GREEN brought HB 511 before the committee.                        
 REPRESENTATIVE OGAN, sponsor of HB 511, explained the bill                    
 originated in response to concerns over inadequate protection of              
 wildlife resources in the state.  In light of declining revenues,             
 dry-docked equipment, and lack of enforcement from the Department             
 of Law, HB 511 was designed to help with cases involving commercial           
 fishing violations.  "Already, civil fines are being deposited into           
 the Fish and Game Fund," he said.  "House Bill 511 adds that                  
 criminal fines would also be deposited into the Fish and Game Fund.           
 And the legislature each year will still have to approve the budget           
 and reimburse service agreements."  He suggested a good example was           
 the Tyson settlement.                                                         
 REPRESENTATIVE DAVIES asked for clarification on how the Fish and             
 Game Fund worked and whether it was a dedicated fund.                         
 Number 0402                                                                   
 REPRESENTATIVE OGAN explained that the Fish and Game Fund was the             
 only dedicated fund, other than funds dedicated by federal law, in            
 the state of Alaska.  Monies from various sources, including                  
 hunting and fishing licenses, tags, and federal monies, went into             
 the fund, he said.                                                            
 REPRESENTATIVE LONG said it appeared that previous legislation had            
 intended that all forfeitures be deposited to the general fund.               
 Now, the legislature was asking that this be deposited into the               
 Fish and Game Fund, which was originally for licenses, fees, and so           
 forth.  "I feel that this may be looking toward a need for a                  
 proposition that the voters would have to consider, making it a               
 dedicated fund for the forfeitures," he said.                                 
 Number 0463                                                                   
 REPRESENTATIVE OGAN indicated HB 511 simply clarified existing law.           
 It was not a constitutional issue, he said.  He deferred to Laurie            
 Otto for an explanation.                                                      
 LAURIE H. OTTO, Deputy Attorney General, Criminal Division,                   
 Department of Law, read language from the Alaska Constitution,                
 explaining that it helped clarify the general prohibition on                  
 dedicated funds.  The exception to that prohibition said, "this               
 provision shall not prohibit the continuance of any dedication for            
 special purposes existing upon the date of ratification of this               
 section by the people of Alaska".                                             
 MS. OTTO said if a dedicated fund existed when the constitution was           
 adopted, funds could currently be dedicated for that purpose.  "And           
 so, in this bill, what you see is a continuation of the historical            
 practice of dedicating funds that were related to claims or losses            
 caused by damages to fish and game resources to the state," she               
 said, "which is why, if you look at the language of the bill, you             
 will see that it ... only allows deposit into the Fish and Game               
 Fund of fines and forfeitures in cases where there were violations            
 that damaged or present a threat of damage to the fisheries                   
 resource.  The Fish and Game Fund was not historically used for               
 game, and it was not historically used just to enforce general                
 regulations in the fishing arena.  But if it's related to damage or           
 threat of damage to the resource, it's constitutionally permissible           
 to deposit it in the Fish and Game Fund."                                     
 Number 0576                                                                   
 MS. OTTO continued, "Now, certainly a past legislature has made a             
 decision in the language that you asked about, to have those monies           
 go into the general fund.  But this legislature, as in all                    
 appropriation areas, is not bound by actions of past legislatures.            
 You can make an independent determination of where you think those            
 monies should be deposited and you can, as Representative Ogan                
 proposes, change the law to allow those monies to go into the Fish            
 and Game Fund, although, as he said, this legislature, and future             
 legislatures, still retain the ability to decide how Fish and Game            
 Funds will be used.  It's an appropriation that you make like every           
 other appropriation."                                                         
 Number 0586                                                                   
 REPRESENTATIVE LONG said, "You're expanding the definition of the             
 original dedication that's happened earlier.  That's my concern, is           
 that whatever is relating to a fish product of any kind would be              
 dedicated to this fund."                                                      
 MS. OTTO replied, "You are correct that if it tied it to anything             
 relating to fish and tried to put it in the Fish and Game Fund as             
 a dedicated fund, that would not be permissible, because it is                
 broader than the original dedication."  She referred to page 1,               
 line 4, "violations that damage or present a threat of damage",               
 which, she said, was in every section of the bill.  "As long as it            
 is narrowed in that way, that is, in fact, what the original pre-             
 statehood fund was used for," she said.  "And, therefore, it is a             
 constitutionally permissible action of dedicating those funds in              
 the Fish and Game Fund.  You're right, though.  If it were anything           
 relating to fish, that would not be acceptable."                              
 Number 0700                                                                   
 REPRESENTATIVE DAVIES voiced concerns.  For example, there was a              
 certain amount of dedicated motor fuels tax, which he believed to             
 be a nickel, in existence at the time of statehood.  He understood            
 that interpretations were that the nickel was dedicated, but that             
 any amount beyond that could not be increased without a vote of the           
 people, as a dedicated fund.  "If that understanding and                      
 interpretation is correct, it seems like this is a similar sort of            
 a thing," he said, "where we're ... expanding the scope of the                
 amounts of money that would go into the fund.  And it would seem              
 like that would require a vote of the people, by analogy of what              
 happened under the motor fuel situation."                                     
 Number 0714                                                                   
 MS. OTTO responded she did not know about the motor fuel tax.  "If,           
 in fact, what happened is that there was a specific amount of money           
 identified in the law as going into the motor fuels tax, I could              
 see that that would be limited," she stated.  "But pre-statehood,             
 what happened with [the] Fish and Game Fund, or the predecessor to            
 that, is that any monies were ... dedicated to the furtherance of             
 the protection, rehabilitation, preservation and conservation of              
 the territorial fish and shellfish resources.  And any money that             
 came into the state for that purpose could be deposited into the              
 Fish and Game Fund.  So, it was not limited by any particular                 
 amount of money, as what you're describing with the motor fuels               
 tax.  So, pre-statehood, the money that we're talking about would             
 have gone into the Fish and Game Fund."  She emphasized that pre-             
 statehood dedicated funds were analyzed by what would have                    
 happened, pre-statehood, had the money come into the state.  "Pre-            
 statehood, the money that is identified in Representative Ogan's              
 bill would have gone into the Fish and Game Fund," she concluded.             
 Number 0779                                                                   
 REPRESENTATIVE OGAN offered to clarify the intent of the bill.  He            
 referred to Section 1, relating to purpose.  He said "fisheries law           
 enforcement activities" would include possibly funding equipment to           
 apprehend violators and funding Department of Law personnel who               
 would specialize in such cases.  The Tyson case had resulted in a             
 $4.1 million settlement.  "There may be other violations of this              
 sort going on, that are not being caught just because we ... don't            
 have the resources to do it," he suggested.                                   
 Number 0850                                                                   
 REPRESENTATIVE DAVIES said he did not disagree with the purpose.              
 However, he was concerned about the general prohibition against               
 dedication of funds in Alaska's constitution.  "And every time we             
 do that, we increase the scope or increase the amount or add                  
 another dedication of funds, it makes me nervous," he said,                   
 "because the folks that drafted our constitution recognized that              
 ... every time you do that, you limit the scope of a succeeding               
 legislature to have an adequate array of tools to deal with                   
 problems that are presented to them at the time.  While it is true            
 that the legislature appropriates the money ... out of the fund,              
 the ... purposes for which it can be appropriated are limited by              
 the terms of the dedication of the fund, so they couldn't                     
 appropriate it for general public safety on the highways, for                 
 example."  He emphasized it was a constitutional concern.                     
 REPRESENTATIVE DAVIES indicated another way to solve the problem              
 would be to adequately fund the Department of Law and the Division            
 of Habitat and Restoration in the Department of Fish and Game.                
 "While we may disagree on the mechanisms for doing that, I think              
 that that's what needs to be done," he said, voicing his preference           
 to fund it through the operating budget by looking to other revenue           
 Number 0944                                                                   
 MS. OTTO said, "Everybody, I think, who looks at the situation                
 acknowledges that we're not adequately pursuing commercial fishing            
 violations, particularly ones that damage the resource, that there            
 appears to us to be both a significant number of violators who are            
 really damaging one of our really most important renewable                    
 resources, very important to the economy of the state, but also,              
 that we're not capturing the fines and forfeitures because we don't           
 have the resources to dedicate to it.  And I think that essential             
 to understanding what is trying to be done with this bill is                  
 realizing that we are, in fact, creating a new revenue stream into            
 the Fish and Game Fund, money that's not being captured right now,            
 that most of the money isn't money that's being diverted out of the           
 general fund and put into the general fund.  It's mostly money                
 that's not being captured right now."                                         
 Number 1052                                                                   
 DEAN PADDOCK, Bristol Bay Driftnetters Association, testified in              
 support of HB 511, saying, "This association has always supported             
 the conduct of an orderly fishery.  We believe strongly in the                
 protection of the resource.  But there's another element ... and              
 that is the need to provide a level playing field between the                 
 participants in the fishery."  He suggested that nowhere else in              
 Alaska was that as important as in Bristol Bay, where large numbers           
 of fishermen competed for large numbers of fish.                              
 MR. PADDOCK indicated Bristol Bay enforcement was the single                  
 largest operation carried out by the Division of Fish and Wildlife            
 Protection in the Department of Public Safety.  Members of his                
 association, wanting to ensure enforcement presence in Bristol Bay,           
 had suggested supplementing funds by instituting a statutory                  
 assessment on every license sold there.  "As it is now, when the              
 enforcement money runs out, they're gone," Mr. Paddock.  "Maybe               
 there'll be a fly-over by a plane, but the boats, the skiffs, the             
 surveillance, it's gone.  And then, when that happens, the orderly            
 fishery deteriorates and we've got people fishing further and                 
 further outside these lines."  He advocated a "user pay" concept.             
 He concluded by saying he thought this situation applied elsewhere            
 in the state, as well.                                                        
 Number 1300                                                                   
 CO-CHAIRMAN GREEN asked if there was further comment and closed the           
 public testimony.                                                             
 REPRESENTATIVE AUSTERMAN mentioned a letter received from Larry               
 VanderLind from the Committee to Prevent Illegal Salmon Fishing in            
 Bristol Bay.  Mr. VanderLind indicated that with 1900 drift permits           
 in the Bristol Bay area, the fishermen themselves would like to               
 impose a $250 surcharge, which would total approximately $475,000             
 per year.  That committee had criteria for involvement in setting             
 regulations and policies on how the enforcement would be done, and            
 to ensure it was done correctly, Representative Austerman added.              
 REPRESENTATIVE OGAN closed by saying, "They're not doing an                   
 adequate job.  I understand people's concerns with this bill."  He            
 referred to Section 1 and said to the extent permitted by                     
 applicable state and federal law, this would operate within                   
 parameters of existing law.  "If you look, starting from the East             
 Coast and work your way around, Alaska's one of the last great                
 fisheries in the world, and certainly in North America," he said.             
 "And if we don't do an adequate job of protecting the resource, we            
 will be paying dearly for it in the future."                                  
 CO-CHAIRMAN GREEN referred to Representative Davies' concern about            
 dedication.  He asked if Representative Ogan believed the                     
 legislature would be operating within its purview and its                     
 constitutional rights.                                                        
 REPRESENTATIVE OGAN replied yes.  He added that they had heard                
 qualified testimony that day asserting that fact.                             
 Number 1473                                                                   
 REPRESENTATIVE AUSTERMAN moved that HB 511 move from committee with           
 accompanying fiscal notes and individual recommendations.                     
 REPRESENTATIVE LONG objected.                                                 
 CO-CHAIRMAN GREEN asked for a roll call vote.  Voting for moving HB           
 511 were Representatives Austerman, Kott, Ogan, Williams and Green.           
 Voting against it were Representatives Davies and Long.                       
 Representative Nicholia was present via teleconference and did not            
 vote; Representative Barnes was absent.  Co-Chairman Green noted              
 that HB 511 moved from the House Resources Committee.                         
 HB 447 - PROTECT ACCESS FOR TRADIT'NL OUTDOOR USES                          
 Number 1514                                                                   
 CO-CHAIRMAN GREEN called on Jeff Logan to advise the committee of             
 the status of HB 447, which had been in subcommittee.                         
 JEFF LOGAN, Legislative Assistant to Representative Joe Green,                
 stated that the subcommittee on HB 447, chaired by Representative             
 Ogan, had produced a committee substitute.  On February 16, 1996,             
 the House Resources Committee met again and heard additional                  
 testimony, but there was no quorum present.  At that time,                    
 Representative Ogan presented the committee substitute, version G.            
 MR. LOGAN discussed changes in that committee substitute.  First,             
 there was a new title reflected in the bill.  In Section 1, the CS            
 added intent language to assure that nothing in the bill affected             
 private property interests.  In Section 3, the CS provided for                
 reasonable alternatives for access when conflicts arose and added             
 new means of access for any new activities covered in the bill.  In           
 Section 4, the CS established authority for development interests             
 to control access across leased areas when reasonable alternatives            
 were not available to go around them.  Mr. Logan noted that                   
 versionG had not yet been adopted by the committee.                           
 Number 1655                                                                   
 REPRESENTATIVE AUSTERMAN moved to adopt CSHB 447, version G, dated            
 2/12/96.  There being no objection, it was adopted as the work                
 REPRESENTATIVE BEVERLY MASEK, sponsor of HB 447, testified that she           
 had no problem with the manner in which the subcommittee had                  
 amended the bill.  She stated there was an additional amendment               
 that she supported, Representative Long's suggestion to change                
 "recreational" to "outdoor".                                                  
 REPRESENTATIVE LONG indicated that change was to be made throughout           
 the bill.                                                                     
 Number 1760                                                                   
 CO-CHAIRMAN GREEN asked if there was an objection to changing                 
 "recreational" to "outdoor".  There being no objection, it was so             
 REPRESENTATIVE DAVIES referred to page 2, line 32, and questioned             
 whether making that line read "outdoor restrictions" was                      
 CO-CHAIRMAN GREEN asked Representative Long whether he wanted that            
 change throughout the bill.                                                   
 REPRESENTATIVE LONG clarified the change should occur wherever it             
 said "traditional recreational activities".  That should be changed           
 to "traditional outdoor activities".  He suggested that would                 
 preclude page 2, line 32, from being altered.                                 
 CO-CHAIRMAN GREEN asked if there were further questions or comments           
 and noted that the amendment had been adopted.                                
 Number 1857                                                                   
 REPRESENTATIVE AUSTERMAN referred to the first hearing on the bill,           
 in early February, when there had been concern about Title 41                 
 lands.  He asked if that would be addressed in the bill.                      
 REPRESENTATIVE MASEK said it was not addressed in the bill, nor was           
 there an intention to do so.  She restated that she concurred with            
 all the changes in the committee substitute.                                  
 REPRESENTATIVE OGAN moved that CSHB 447, version G, as amended,               
 move from the House Resources Committee with individual                       
 recommendations and attached fiscal notes.                                    
 REPRESENTATIVE AUSTERMAN asked if there would be public testimony.            
 CO-CHAIRMAN GREEN noted that nobody was signed up to testify.  He             
 further noted that Representative Barnes had joined the meeting.              
 Number 1954                                                                   
 REPRESENTATIVE PETE KOTT objected for the purpose of hearing from             
 the Department of Natural Resources about the fiscal note.                    
 CO-CHAIRMAN GREEN asked if anyone was present from the Department             
 of Natural Resources to address the fiscal note.                              
 Number 2001                                                                   
 REPRESENTATIVE RAMONA BARNES moved that HB 447 be moved from                  
 committee with a zero fiscal note.                                            
 REPRESENTATIVE OGAN withdrew his motion to move the bill with the             
 attached fiscal note.                                                         
 CO-CHAIRMAN GREEN acknowledged a request from Sara Hannan to                  
 testify on the bill.                                                          
 Number 2070                                                                   
 SARA HANNAN, Executive Director, Alaska Environmental Lobby,                  
 testified that HB 447 transferred authorities that had been                   
 available for all state agencies through a process called                     
 interagency land management agreements (ILMAs), a Title 37                    
 provision that allowed transfer of authorities between divisions.             
 "Typically, those authority transfers average 97.5 acres each," she           
 said.  "Since 1970, 95 ILMAs have occurred, transferring a total of           
 9,258 acres between agencies.  In 86 of these transfers, there has            
 been absolutely no closure, no restrictions of access provisions in           
 those transfers.  In eight of the nine other transfers, there were            
 restrictions such as no motorized access in the campground.  Most             
 of these transfers of lands are to accommodate a changing purpose,            
 a trailhead, a campground, an airport extension or an airport                 
 provision protection that's no longer needed, so the Department of            
 Public Safety, the Department of Transportation no longer wants               
 control over the area outside of the airstrip and they're willing             
 to give that authority back to another division."                             
 Number 2158                                                                   
 MS. HANNAN continued, "In one of those transfers, the Blair Lake              
 transfer that occurred in 1995, there was a closure.  And the                 
 transfer of land [indisc.] authority to regulate Blair Lake to the            
 Division of Parks.  There was a closure.  Blair Lake has been                 
 closed to airplane traffic.  Blair Lake is adjacent to Denali State           
 Park.  Just near Blair Lake, Princess Cruises is constructing what            
 will become the largest commercial operation in a state park in the           
 state of Alaska.  At their request, Blair Lake was closed to                  
 airplane access.  Now, much like Representative Masek, my                     
 constituents are not happy that Blair Lake is closed to access.               
 But the purpose for closing Blair Lake to airplane access was at              
 the request of the commercial operator who is making a multi-                 
 million-dollar investment in an in-holding in a state park."                  
 MS. HANNAN continued, "An extensive public review process goes into           
 place before state park plans come into place and are approved.               
 This accommodation of a commercial user doesn't please other                  
 commercial users; it doesn't please many people who thought that              
 access was guaranteed.  But I would indulge you to think about the            
 fact that sometimes there are closures that are there not for the             
 purpose of keeping people out, but providing for commercial                   
 MS. HANNAN continued, "Most of the closures to access that are                
 accomplished are for public safety protections.  We keep airport              
 perimeters, even though it's public multiple-use land; we don't               
 allow snow machines to cross the airport approach, for the safety             
 of the airplane, for the safety of the snow-machiner."  Ms. Hannan            
 expressed that the changes to titles under the HB 447 were                    
 misdirected, irrelevant, and did not accomplish the desired end.              
 "You heard a lot of testimony from snow-machiners, saying the state           
 parks prevent us from snow-machining where we'd like to recreate,"            
 she said.  "The titles that this bill affects don't affect the                
 authority that a state park uses to close snow-machine access.  I'd           
 also like you to realize that most of Alaska and most state parks             
 are not closed to snow-machines.  A few valleys within Chugach                
 State Park, which is the largest state park in Alaska, are closed             
 to snow-machines, but all of the public lands along the Parks                 
 Highway and the Glenn Highway are open to snow-machines."                     
 Number 2350                                                                   
 MS. HANNAN concluded, "Any time you close lands to access, Alaskans           
 are concerned.  And those decisions should be made through a                  
 lengthy, public, deliberate process.  And I would say that the                
 legislature is not going to have the time to indulge in those kind            
 of closure decisions, that this bill requests that the legislature            
 do directly, instead of its agencies.  I'd urge you not to pass               
 [HB] 447 from committee because I don't think that it does anything           
 except for put a large work pile on your desk that you'll never be            
 able to get to."                                                              
 CO-CHAIRMAN GREEN thanked Ms. Hannan and noted that public                    
 testimony was closed.                                                         
 REPRESENTATIVE WILLIAMS referred to page 2, line 26, which had been           
 amended to read "traditional outdoor activities means those types             
 of activities that people may utilize for sport, exercise,                    
 subsistence".  He asked if they were trying to define subsistence.            
 [END OF TAPE]                                                                 
 TAPE 96-33, SIDE A                                                            
 Number 0021                                                                   
 CO-CHAIRMAN GREEN indicated they were waiting to hear from Nico Bus           
 from the Department of Natural Resources regarding the fiscal note.           
 REPRESENTATIVE OGAN said he would be happy to move the bill from              
 committee with a zero fiscal note.                                            
 REPRESENTATIVE KOTT indicated a number of bills had come before the           
 House on the floor with zero fiscal notes for promulgating                    
 regulations.  He suggested in the current case, there had been a              
 weak analysis of the expense associated with the bill.                        
 CO-CHAIRMAN GREEN said he agreed and that fiscal notes were                   
 certainly subject to question.                                                
 REPRESENTATIVE KOTT concurred with moving the bill with a zero                
 fiscal note and pointed out the bill would go to the House Finance            
 Number 0198                                                                   
 REPRESENTATIVE DAVIES said that without having heard from the                 
 Department of Natural Resources, he objected to changing the fiscal           
 REPRESENTATIVE BARNES replied, "It is the responsibility of the               
 departments to be here and speak to their fiscal notes."  She                 
 recalled an occasion in the House Finance Committee when a                    
 department had submitted a zero fiscal note that should have been             
 for $14 million.                                                              
 CO-CHAIRMAN GREEN noted there was a motion to move the bill with a            
 zero fiscal note.                                                             
 REPRESENTATIVE DAVIES still objected.  He emphasized that Mr. Bus             
 was on his way to testify and that it was just a matter of                    
 completing a phone call.                                                      
 CO-CHAIRMAN GREEN indicated they had waited long enough and asked             
 for a roll call vote.  Voting to move the bill with a zero fiscal             
 note were Representatives Austerman, Barnes, Kott, Ogan, Williams             
 and Green.  Voting against it were Representatives Davies and Long.           
 Representative Nicholia, present via teleconference, did not vote.            
 Therefore, CSHB 447(RES), as amended, moved from the House                    
 Resources Committee with individual recommendations and a zero                
 fiscal note.                                                                  
 Number 0322                                                                   
 The teleconference operator announced that Nico Bus was on-line.              
 CO-CHAIRMAN GREEN explained to Mr. Bus that concern had been raised           
 that the bill might not require the amount of money shown in the              
 fiscal note.  He asked Mr. Bus to submit a justification and                  
 informed him that HB 447 bill had been moved from committee with a            
 zero fiscal note.                                                             
 NICO BUS, Acting Director, Division of Support Services, Department           
 of Natural Resources, agreed to provide the requested back-up.                
 HJR 54 - FAVOR TRANS-ALASKA GAS SYSTEM & LNG SALES                          
 Number 0371                                                                   
 CO-CHAIRMAN GREEN brought HJR 54 before the committee and indicated           
 that although the bill would be heard the following day, the                  
 sponsor wished to make a statement.                                           
 REPRESENTATIVE GENE KUBINA, sponsor of HJR 54, explained that the             
 resolution was the culmination of a year's discussions with people            
 throughout the state and private industry, with the goal of                   
 encouraging marketing of North Slope natural gas.  The resolution             
 specifically asked the legislature to bring together people                   
 involved with natural gas, including lessees, the Governor, and the           
 potential buyers.  It put the legislature on record as supporting             
 marketing of natural gas.  It asked the Governor to bring those               
 involved together, to continue to support the joint pipeline                  
 office, to encourage developers to have an Alaska-hire agreement              
 for the construction of any pipeline, and to meet with all parties            
 to try to bring it to fruition.  The resolution also asked the                
 President of the United States to make it a trade issue with Asian            
 countries and to demonstrate to the country his support.                      
 Number 0526                                                                   
 REPRESENTATIVE KUBINA mentioned there had been talk about a natural           
 gas pipeline for years.  "This resolution does not really get into            
 the route that would be taken," he said.  "It tried to really skirt           
 around the controversial parts and come into what we can all agree            
 on, and that is that we do want to market our natural gas."                   
 Representative Kubina indicated some people suggested there was a             
 150-year supply of gas; he said there certainly was more than a 25-           
 year supply.  "As a legislature, we want to do what we can to                 
 encourage this to happen," he said, "so that, obviously, we can               
 have the income into our state for it."  He concluded by saying               
 people would testify at the following day's meeting.                          
 MORGAN SOLOMON testified via teleconference from Barrow in support            
 of HJR 54, saying the proposal had been on paper for many years and           
 that Alaskans would benefit from the gas line going through the               
 state rather than through Canada.                                             
 Number 0709                                                                   
 REPRESENTATIVE KUBINA mentioned that HJR 54 had a $10,000 fiscal              
 note from the department and therefore had a House Finance                    
 Committee referral.  He had talked to the commissioner, who                   
 understood the fiscal note would be zeroed out; the commissioner              
 had included a yearly trip to Asia, which Representative Kubina               
 felt was unnecessary, as a lot of things could be done here to get            
 this project moving.  Representative Kubina suggested there would             
 be little objection if the House Resources Committee wished to zero           
 out the fiscal note.                                                          
 CO-CHAIRMAN GREEN noted that HJR 54 would be held over to the                 
 following day's meeting.                                                      
 HB 469 - INCREASE LAND GRANT TO UNIV. OF ALASKA                             
 CO-CHAIRMAN GREEN brought HB 469 before the committee and noted               
 that Cliff Eames was on teleconference to testify.                            
 Number 0822                                                                   
 CLIFF EAMES, Alaska Center for the Environment (ACE), testified via           
 teleconference from Anchorage, saying ACE, which had offices in               
 Anchorage and the Mat-Su Valley, opposed HB 469, as they had                  
 opposed similar bills over the years.  "It's not a question of                
 opposing adequate funding for higher and other education," Mr.                
 Eames said.  "In fact, I think it's fairly clear that                         
 conservationists as a group are very supportive of education.  But            
 it's a question of how do we fund the University of Alaska and                
 other state services.  Bills similar to this have been vetoed by              
 two governors for very good reasons.  We believe those reasons are            
 still relevant."                                                              
 MR. EAMES believed HB 469 would likely result in an                           
 unconstitutional, dedicated fund.  However, even if that were not             
 so, the policy against dedicated funds was violated by this bill,             
 he asserted.  By transferring 500,000 acres, or another substantial           
 amount, of potentially revenue-generating land to the University of           
 Alaska, a tremendous amount of flexibility would be lost for                  
 allocating future state funding to other programs, services or                
 facilities, Mr. Eames said.  From a conservation or public use                
 standpoint, the chance to use these public lands in a multiple-use            
 fashion would also be lost.  Instead, the lands would be entirely             
 dedicated to revenue generation for the university.  Mr. Eames                
 concluded by saying he would submit written comments.                         
 Number 1003                                                                   
 CO-CHAIRMAN GREEN apologized to the numerous people waiting to                
 testify via teleconference.  He stated his intention had been to              
 take testimony that day only from one person unable to testify the            
 following day.  Co-Chairman Green asked that additional testifiers            
 call again the next day at 1:00 p.m., when the hearing would                  
 Number 1025                                                                   
 REPRESENTATIVE GENE THERRIAULT, sponsor of HB 469, stated that                
 since similar legislation had been passed and vetoed last year,               
 committee members were familiar with what the bill asked for.                 
 "Basically, what we're trying to do is follow through on making the           
 University of Alaska a true land-grant college or university                  
 system," he said.  "At the time of statehood, the university did              
 have a pledge to receive lands from the federal government.                   
 However, when lands were given to the state, that pledge from the             
 federal government was extinguished.  Basically, the thought was              
 that the state would follow through on the pledge for the land                
 grant out of the state lands, that were given to the state."                  
 Representative Therriault explained that Governor Egan had not                
 followed through on that.  The land that the state received was               
 managed by DNR, including the 100,000 acres that the university had           
 selected at the time.  Over the next 30 years, with DNR managing              
 those lands, the income to the university was estimated to be                 
 around $590,000.  "So, it's fairly clear that the state Department            
 of Natural Resources was not very aggressive in managing those                
 lands to derive a revenue stream for the benefit of the university,           
 which is what you would want a ... land-grant university to do,"              
 Representative Therriault said.                                               
 REPRESENTATIVE THERRIAULT continued, "House Bill 469 allows the               
 University of Alaska now to select up to 500,000 acres over a 20-             
 year period of time.  And there are numerous things that have been            
 worked out with the Administration and different coal miners in the           
 state to try and alleviate some of their concerns."  Representative           
 Therriault noted that Ms. Redman from the University of Alaska was            
 available for questions.  He also indicated negotiations had                  
 continued as late as that morning to try to address concerns of the           
 Administration and resource developers.                                       
 Number 1188                                                                   
 CHARLIE BODDY, Representative, Resource Coalition, stated he                  
 representing a coalition including the Alaska Coal Association, the           
 Alaska Miners Resource Development Council, and the Council of                
 Alaska Producers, which had met via teleconference that week.  Mr.            
 Boddy said the resource community had concerns and that the                   
 coalition would submit a detailed list of concerns and additional             
 comments, probably by week's end.                                             
 MR. BODDY indicated the words "trusts lands" in the bill title was            
 of concern.  He referred to the Mental Health Trust lands, which              
 had been acquired through the legislative, administrative and                 
 superior court processes.  Mr. Boddy indicated 175 items were being           
 challenged in that settlement, with briefs due April 20 in the                
 supreme court, and with the possibility that the issues could                 
 continue on to the U.S. Supreme Court.                                        
 MR. BODDY referred again to the Mental Health lands and said, "At             
 one time, we had over 8 million acres hypothecated as part of that            
 settlement.  The bill currently has no over-selection or parameters           
 built in around it about how much acreage could be set aside at               
 this time, until such time as a half a million acres were rounded             
 up.  That's a major area that we'd like to have looked at."                   
 MR. BODDY referred to the land management issue, which he noted had           
 been brought up the previous year in relation to where the                    
 management of those lands should lie.  "Again, that would be a                
 decision ... that this legislature is well equipped to deal with in           
 setting up that trust," he concluded.                                         
 Number 1341                                                                   
 CO-CHAIRMAN GREEN referred to "checkerboarding" from state and                
 Native selections, and now the university selections.  He asked if            
 the concern of the coalition was that, even after the finality of             
 the Mental Health Trust lands, earlier selections could be impaired           
 because of subsequent selections either blocking access or creating           
 MR. BODDY responded that could be an issue.                                   
 CO-CHAIRMAN GREEN asked if those were the types of concerns the               
 coalition had, which would be on the list provided by the end of              
 the week.                                                                     
 MR. BODDY affirmed that and said they had identified issues but not           
 yet fleshed them out.  He indicated the all-inclusive list still              
 needed to be sorted and put into a coherent form to provide to the            
 Number 1435                                                                   
 REPRESENTATIVE AUSTERMAN commented that he had a conflict and could           
 not attend the continuation of the hearing the next day.                      
 CO-CHAIRMAN GREEN stated he also had a conflict and would be late.            
 He then recessed the House Resources Committee meeting at 10:07               
 a.m., noting the committee would reconvene the following afternoon.           
 [MEETING RECESSED UNTIL MARCH 14, 1996, AT 1:00 P.M.]                         

Document Name Date/Time Subjects