Legislature(1995 - 1996)
03/14/1996 01:12 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE March 14, 1996 1:12 p.m. MEMBERS PRESENT Representative Joe Green, Co-Chairman Representative William K. "Bill" Williams, Co-Chairman Representative Scott Ogan, Vice Chairman Representative Ramona Barnes Representative John Davies Representative Pete Kott Representative Don Long Representative Irene Nicholia (via teleconference) MEMBERS ABSENT Representative Alan Austerman OTHER HOUSE MEMBERS PRESENT Representative Gene Kubina COMMITTEE CALENDAR 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 system. - PASSED CSHJR 54(RES) OUT OF COMMITTEE HOUSE BILL 539 "An Act changing the name of the Alaska Soil and Water Conservation Board." - HEARD AND HELD HOUSE JOINT RESOLUTION 60 Relating to Revised Statute 2477 rights-of-way. - PASSED CSHJR 60(RES) OUT OF COMMITTEE 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 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 date." - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: HJR 54 SHORT TITLE: FAVOR TRANS-ALASKA GAS SYSTEM & LNG SALES SPONSOR(S): REPRESENTATIVE(S) KUBINA, Green, Barnes, Navarre, Mackie, Grussendorf, Phillips, B. Davis, Willis, Sanders, Davies, Robinson, Rokeberg, Ogan JRN-DATE JRN-DATE 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 03/13/96 (H) MINUTE(RES) 03/14/96 (H) RES AT 1:00 PM CAPITOL 124 BILL: HB 539 SHORT TITLE: NAME CHANGE FOR SOIL AND WATER BOARD SPONSOR(S): RESOURCES JRN-DATE JRN-PG ACTION 03/08/96 3029 (H) READ THE FIRST TIME - REFERRAL(S) 03/08/96 3029 (H) RESOURCES 03/13/96 (H) RES AT 8:00 AM CAPITOL 124 03/13/96 (H) MINUTE(RES) 03/14/96 (H) RES AT 1:00 PM CAPITOL 124 BILL: HJR 60 SHORT TITLE: RS 2477 HIGHWAY RIGHTS OF WAY SPONSOR(S): STATE AFFAIRS JRN-DATE JRN-PG ACTION 02/16/96 2790 (H) READ THE FIRST TIME - REFERRAL(S) 02/16/96 2790 (H) STATE AFFAIRS, RESOURCES 02/20/96 (H) STA AT 8:00 AM CAPITOL 102 02/20/96 (H) MINUTE(STA) 02/21/96 2823 (H) STA RPT 5DP 1NR 02/21/96 2823 (H) DP: JAMES, PORTER, GREEN, WILLIS, OGAN 02/21/96 2823 (H) NR: ROBINSON 02/21/96 2823 (H) ZERO FISCAL NOTE (STA CMTE/LAA) 02/21/96 2823 (H) REFERRED TO RESOURCES 03/13/96 (H) RES AT 8:00 AM CAPITOL 124 03/13/96 (H) MINUTE(RES) 03/14/96 (H) RES AT 1:00 PM CAPITOL 124 BILL: HB 469 SHORT TITLE: INCREASE LAND GRANT TO UNIV. OF ALASKA 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 03/13/96 (H) MINUTE(RES) 03/14/96 (H) RES AT 1:00 PM CAPITOL 124 WITNESS REGISTER TOM VAN BROCKLIN, Legislative Staff to Representative Gene Kubina Alaska State Legislature Capitol Building, Room 406 Juneau, Alaska 99801 Telephone: (907) 465-4859 POSITION STATEMENT: Presented sponsor statement on HJR 54. JOHN LANDRUM, Kenai Region Manager Kenai LNG Facility Phillips Petroleum Company P.O. Drawer 66 Kenai, Alaska 99611 Telephone: (907) 776-6027 POSITION STATEMENT: Testified on HJR 54. BARBARA HUFF-TUCKNESS Teamsters Local 959 4300 Boniface Parkway Anchorage, Alaska 99504 Telephone: (907) 269-4236 POSITION STATEMENT: Supported HJR 54. DAN LaSOTA, Assembly Member Fairbanks North Star Borough 639 Manchester Loop Fairbanks, Alaska 99712 Telephone: (907) 479-0650 POSITION STATEMENT: Supported HJR 54. MIKE MACY, Coordinator TransAlaska Gas System Environmental Review Committee 750 West Second Avenue, Suite 104 Anchorage, Alaska 99501-2167 Telephone: (907) 279-8247 POSITION STATEMENT: Testified on HJR 54. JEFF LOWENFELS, President Yukon Pacific Corporation 1049 West 5th Avenue Anchorage, AK 99501 Telephone: (907) 265-3100 POSITION STATEMENT: Supported HJR 54. CHERYL SUTTON, Legislative Assistant to Representative Bill Williams Alaska State Legislature Capitol Building, Room 128 Juneau, Alaska 99801 Telephone: (907) 465-3424 POSITION STATEMENT: Presented sponsor statement on HB 539. JEFF HARTMAN, Executive Director Alaska Soil and Water Conservation Board Department of Natural Resources 400 Willoughby Avenue Juneau, Alaska 99801-1724 Telephone: (907) 465-2495 POSITION STATEMENT: Testified on HB 539. TOM HARRIS, Chief Executive Officer Tyonek Native Corporation 1689 C Street, Suite 219 Anchorage, Alaska 99501 Telephone: (907) 272-0707 POSITION STATEMENT: Testified on HJR 60. KATHLEEN DALTON P.O. Box 70681 Fairbanks, Alaska 99707 Telephone: (907) 479-6733 POSITION STATEMENT: Testified on HJR 60. BILL PERHACH, Volunteer Alaska Environmental Lobby P. O. Box 34 Denali, Alaska 99755 Telephone: (907) 683-1373 POSITION STATEMENT: Opposed HJR 60. JOSEPH HENRI, Chair Finance, Facilities and Land Management Committee University of Alaska Board of Regents 9921 Near Point Drive Anchorage, Alaska 99507 Telephone: (907) 279-1493 POSITION STATEMENT: Supported HB 469. HEATH HILYARD, Student Body Representative University of Alaska Fairbanks 542 Falcon View Street Fairbanks, Alaska 99712 Telephone: (907) 457-2236 POSITION STATEMENT: Supported HB 469. SUSAN FLENSBURG, Director Bristol Bay Coastal Resource Service Area Coastal Management Program P.O. Box 849 Dillingham, Alaska 99576 Telephone: (907) 842-2666 POSITION STATEMENT: Testified on HB 469. WENDY REDMAN, Vice President for University Relations University of Alaska Fairbanks P.O. Box 755200 Fairbanks, Alaska 99775-5200 Telephone: (907) 474-7582 POSITION STATEMENT: Testified on HB 469. ACTION NARRATIVE TAPE 96-34, SIDE A Number 0001 CO-CHAIRMAN JOE GREEN reconvened the House Resources Committee meeting, recessed the previous day, at 1:12 p.m. Members present at the call to order were Representatives Green, Williams, Ogan, Davies, Kott, and Long. Representative Barnes arrived late and Representative Nicholia participated via teleconference. Representative Austerman was absent. HJR 54 - FAVOR TRANS-ALASKA GAS SYSTEM & LNG SALES Number 0067 TOM VAN BROCKLIN, Legislative Staff to Representative Gene Kubina, sponsor of HJR 54, noted that Representative Kubina would arrive momentarily. JOHN LANDRUM, Kenai Region Manager, Kenai LNG Facility, Phillips Petroleum Company, testified via teleconference, saying he was responsible for the Phillips/Marathon liquified natural gas (LNG) project. Started in 1969, the LNG project on the Kenai Peninsula had been in continuous operation for over 26 years, exporting LNG to customers in Japan. MR. LANDRUM specified he was testifying as a technical and business expert regarding the LNG business, saying he was an engineer associated with LNG in a management role for several years. His company believed the LNG business was a big, well-developed, global business that was still growing at a significant rate. "It is also a business that is very safe and environmentally friendly and therefore can be a very good industrial citizen in the communities where it is located," Mr. Landrum stated. He said several members of the House Resources Committee had visited the company's plant near Nikiski. MR. LANDRUM supported a resolution to encourage all parties involved to move toward developing an economically viable LNG project to market gas reserves from Alaska's North Slope. However, Phillips was not necessarily a disinterested third party, he said. They had an interest in some North Slope gas reserves, specifically, the yet-to-be-developed Point Thompson field. They also possessed proprietary technology and experience that could be used in such a project and generally sought involvement in LNG projects around the world where they saw economic opportunity. MR. LANDRUM stated, "As far as the proposed resolution is concerned, we agree that an opportunity to market natural gas in the North Slope as liquefied natural gas in the Pacific Rim should open up early next century. We also agree that there will be a very strong competition for that market and various projects around the Pacific Rim, especially those where expansions of existing capacity are possible. A North Slope project has some competitive disadvantages to overcome, particularly the long distances between where the gas is produced and where it could be liquefied and loaded onto tankers for export. However, it should be advantageous for the North Slope gas that most of the wells and production facilities on the North Slope are already in place." MR. LANDRUM stated that to successfully compete, a means must be found to reduce the investment required for a North Slope gas project. He said there was significant potential for lowering this investment requirement and the operating costs of the North Slope project through better technology and maximizing use of existing infrastructure. He felt it was important for the state to follow the development and issues involved and be prepared to assist, when needed, with expediting permits and approvals, as well as possibly adjusting physical terms to make the project more competitive. MR. LANDRUM said, "However, I would like to raise a bit of caution about the state becoming too involved in dealing directly with the potential customers, especially the Japanese. It has been our experience that the Japanese customers become uncomfortable with too much direct involvement in a project by the local government." Number 0438 REPRESENTATIVE SCOTT OGAN asked what the production capabilities were at Point Thompson. He asked whether it would be possible to develop Point Thompson as a "jump-start" to get the gas pipeline going, perhaps bringing Prudhoe Bay on later, for example. MR. LANDRUM responded that was possible. However, he did not believe the potential production rate had been determined yet. REPRESENTATIVE OGAN referred to other projects competing in the world market and asked if those would cause serious problems for Alaska getting into the market later. MR. LANDRUM replied that many projects, such as Natuna, were quite advanced. He suggested the result could be deferral of Alaska's place in the supply and demand forecast. However, he thought that sometime between the years 2005 and 2010, there should be ample opportunity to market the significant body of LNG in Alaska. Number 0650 CO-CHAIRMAN GREEN apologized for the late start of the meeting and noted that Representative Kubina, prime sponsor of HJR 54, was now present. BARBARA HUFF-TUCKNESS, Teamsters Local 959, testified via teleconference, saying there were over 5,000 working Teamsters in Alaska in the private and public sectors, all of whom favored passage of HJR 54. They perceived the resolution as a call for action. Ms. Huff-Tuckness said organized labor and Yukon Pacific Corporation were addressing an agreement to ensure Alaska hire and a plan of action to ensure that rural residents and Native Alaskans would not be excluded from job opportunities. "This is not the oil pipeline," she said. "This is an Alaska project by Alaskans and for Alaskans." Number 0899 MS. HUFF-TUCKNESS said this particular project was not an environmental issue but a jobs issue. She suggested it would reduce need for governmental aid to individuals and provide much- needed jobs for Alaskans. Number 1080 DAN LaSOTA, Assembly Member, Fairbanks North Star Borough, testified via teleconference. He referred to the assembly's Resolution 96-009, unanimously passed January 25, 1996, which supported HJR 54; a copy of that resolution was included in the committee packets. Mr. LaSota noted that he had also testified before the House Committee on Oil and Gas on an earlier version of HJR 54. He referred to page 3, line 9, and said he was pleased to see that language had been included. He said the current version of HJR 54 was most acceptable to the borough. "The bottom line is that we want the gas to get to the market and for our people to get to work," he concluded. Number 1163 MIKE MACY, Coordinator, TransAlaska Gas System (TAGS) Environmental Review Committee, testified via teleconference from Anchorage. He urged the state to consider environmental and socio-economic impacts. He discussed local hire and suggested the state conduct a survey to determine whether Alaska currently had the workers necessary for the project. To the extent there might be a shortfall, they wanted to see training programs for Alaskans, especially those from rural areas, so that the project could be built in-house. "Otherwise, the hundreds of millions of dollars the state will receive from this project will be frittered away on a tidal wave of nonresidents," Mr. Macy stated. He suggested no village had been more negatively impacted by the oil pipeline than Stevens Village. He wanted indigenous people along the pipeline to directly benefit from the project. MR. MACY stated, "The committee is not enthusiastic about the inevitable impact of an 800-mile, $10 billion-dollar pipeline and liquefaction facility construction project. But we have been encouraged by Yukon Pacific's openness and willingness to respond to our concerns to follow rather than subvert the law and make their project go without a slough of fiscal concessions from the people of Alaska. We're dismayed that the gas producers are still talking about alternative routes. There are significant economic and environmental arguments to using as much of the existing Alyeska TAPS infrastructure as possible. However, we worry that the producers may see these options as a clever way of avoiding their obligations to remove the oil pipeline and related facilities at the end of its service." MR. MACY continued, "We would prefer not to turn Anderson Bay into an industrial zone but we have three concerns about the [indisc.] a brand-new, state-of-the-art LNG facility to an aging, problem- plagued crude oil terminal. This is asking for trouble. The resulting exclusion zone, the area which has to be evacuated within ten minutes in the event of an LNG spill, would extend all the way to Valdez's waterfront. The people of Valdez will not stand for that level of risk. And the federal energy regulatory commission will not allow the commingling of [indisc. -- coughing] nation's domestic oil supply with an LNG export facility. It's appropriate that the legislature's taking an interest in North Slope gas export issues. However, we ask the legislature to put its money where its mouth is and make sure that the state agencies have enough resources to ensure that a gas project is done correctly, with maximum local hire and minimal avoidable impacts." Number 1389 MR. MACY pointed out that a strong regulatory presence lowered insurance rates and prevented unscrupulous companies from getting a competitive advantage over good corporate citizens, and prevented developers from shifting development costs onto the public and its resources, which was the real and unacknowledged national debt. He therefore urged restoration of full funding to the Department of Environmental Conservation, Department of Fish and Game, Department of Natural Resources and Department of Law. CO-CHAIRMAN GREEN said he would have to excuse himself shortly and turn the meeting over to Co-Chairman Williams. CO-CHAIR WILLIAMS noted there were two people in Kodiak waiting to give testimony on HB 118. He informed them that no testimony would be taken on that bill that day and that the committee would call them when a hearing was scheduled. Number 1506 JEFF LOWENFELS, President, Yukon Pacific Corporation, testified that Yukon Pacific was sponsor of the Alaskan gas export project, called the TransAlaska Gas System or TAGS project. "As most of you know, Yukon Pacific is a business unit of the CSX Corporation, a large, international transportation company headquartered in Richmond, Virginia," he said. "CSX has funded Yukon Pacific's successful efforts to permit, promote and advance the TAGS project." MR. LOWENFELS said the resolution represented an important advancement in the evolution of gas sales from Alaska. Its language and bipartisan sponsorship demonstrated a recognition of the promise this project held for all Alaskans, he said. More significantly, it sent a clear message to markets, and to competitors for those markets, that Alaska's representative body recognized the huge potential of Alaska's North Slope resources. "This is an extremely important threshold in the evolution of the TAGS project," Mr. Lowenfels stated. "This kind of action by the state of Alaska is exactly the kind of support other countries give our competitive projects." MR. LOWENFELS referred to a newspaper article from the Financial Times, included in the committee packets, and said the Jakarta government had 16 ministers pushing its Natuna project. The article showed a project that would cost $40 billion, the same size as Alaska's $13 billion project, seeking to sell gas for $4.50 to $5 to the same markets to which Alaska sought to sell its gas. That Indonesian project was aiming for construction to begin in 1997, he said. Number 1629 MR. LOWENFELS concluded by saying unanimous passage of the resolution would contribute to the TAGS project's success strategy by telling Alaska's markets, which Indonesia also sought to serve, that the legislature supported gas sales and that Alaska had a competitive strategy and was willing to act. CO-CHAIRMAN GREEN asked about the construction scheduled to start in 1997. MR. LOWENFELS responded that the article from the London-based Financial Times indicated that the Indonesian - Pertamina partnership's intention was to start construction in 1997 for a project that was, at a minimum, $8 billion more expensive than Alaska's project. Mr. Lowenfels believed they could therefore get into the marketplace before a less expensive Alaskan project could do so. "And it is something we all need to be very concerned about," he concluded. Number 1690 REPRESENTATIVE OGAN referred to the article and said it appeared that Exxon was willing to compete with whoever stands up. Buyers were to sign up before construction began next year. "So, they're obviously aggressively pursuing these customers, which, in my opinion, would compete with Alaskan customers and interests," he said. MR. LOWENFELS indicated there was no question that the Natuna project was competition to Alaska. Number 1794 REPRESENTATIVE RAMONA BARNES asked who had submitted the amendment in the packet. REPRESENTATIVE KUBINA said he had great problems with the amendment, which he thought substantially weakened the bill, especially the last portion, which removed lines 23 and 24 on page2. He asked if the work draft had been adopted as a committee substitute. REPRESENTATIVE BARNES moved that CSHJR 54, version D, dated 2/16/96, as a work draft. REPRESENTATIVE OGAN objected for purposes of discussion. He said he had agreed to move the amendment for sake of discussion, not that he necessarily supported it. Number 1869 REPRESENTATIVE KUBINA said the only difference in the work draft was the addition of a local hire statement on page 3. "And I think we left out the sending a copy to the Governor, and so we thought we should do that, since we're asking him to do some thing," he said. CO-CHAIR WILLIAMS asked if there was any objection. He noted that the amendment was tied into version D. REPRESENTATIVE OGAN withdrew his objection. CO-CHAIR WILLIAMS noted there was no objection and ordered that work draft D be adopted. He asked for the wishes of the committee. REPRESENTATIVE BARNES moved that CSHJR 54 move from committee with individual recommendations, and asked unanimous consent. REPRESENTATIVE PETE KOTT said he believed the original bill had a fiscal note. Number 1942 REPRESENTATIVE BARNES said, "I would move it with a zero fiscal note, because there is a fiscal note in here and I don't believe it's necessary." She asked unanimous consent. CO-CHAIR WILLIAMS asked if there was any objection. There being none, CSHJR 54 moved from the House Resources Committee. HB 539 - NAME CHANGE FOR SOIL AND WATER BOARD Number 2022 CHERYL SUTTON, Legislative Assistant to Representative Bill Williams, introduced HB 539 by reading the sponsor statement into the record: "House Bill 539 was introduced by request of the Soil and Water Conservation Board. It simply changes the name of the Board to the Natural Resources Conservation and Development Board. This request has been made for the following reasons: MS. SUTTON read, "The declaration of policy for the board is to provide for the development, use and conservation of the farm, forest and grazing land of the state. The present name does not reflect adequately that the board has a resource development as well as a conservation mission. "MS. SUTTON continued, "This name change is in agreement with that of the major federal player in the partnership -- the Natural Resources Conservation Service. This organization changed its name from the Soil Conservation Service in the Department of Agriculture. MS. SUTTON proceeded, "The board, as well as the local Soil and Water districts, has a close tie with the NRCS Alaska Resource Conservation and Development offices in assisting rural regions of the state in adding value to their available resources. MS. SUTTON concluded, "The name change will not affect any of the statutory responsibilities of the board. It has a zero fiscal note." Number 2070 JEFF HARTMAN, Executive Director, Alaska Soil and Water Conservation Board, Department of Natural Resources, testified via teleconference from Aniak. He stated that the third mission of the board is to advise the commissioner and make recommendations for a specific action necessary for effective and orderly development of agriculture, forests and grazing land. MR. HARTMAN explained the board's present name does not reflect that and the board feels that the name change to the Natural Resources Conservation and Development Board is appropriate. The name change will not affect the function and there is no cost. Number 2137 REPRESENTATIVE DAVIES inferred that the title appears to change the scope of work of the board. Number 2181 MR. HARTMAN responded that the "Natural Resources" part of the name does reflect the Natural Resources Conservation Service (NRCS), the board's federal partner, in the Department of Agriculture. MR. HARTMAN explained that the main issue is the "development" aspect and the resources include forestry and agriculture. Two members of the present board are involved with game ranching and a health farm in the Kenai, and one member is the past president of the Reindeer Herders Association. The board is involved in many resources other than land and water, and the "Natural Resources" reflects that we work for the Department of Natural Resources and our major federal partner, the Natural Resources Conservation Service. MR. HARTMAN said the board is not trying to assume any duties of the Oil & Gas Conservation Commission. Our emphasis is on rural development and "value added" development of the program, and specifically, the resource conservation development within the NRCS. Number 2274 REPRESENTATIVE PETE KOTT wondered who developed the language in the boards and commissions manual as to the board's function. MR. HARTMAN was not able to answer that question. He did say that the Alaska Soil and Water Conservation program will have its 50th anniversary next year. He said this bill does not change the Alaska Soil and Water program, nor the district, but the one aspect of the program, the five member advisory board to the commissioner, we are seeking to change, is the name change. REPRESENTATIVE KOTT suggested looking at the language in the function because the current board name would serve the function, at least, in the boards and commissions handbook, and might be more appropriate than a new name. MR. HARTMAN said that if the name change is approved, he will draft a new mission statement for the boards and commissions handbook. Number 2328 MS. SUTTON explained that the purpose for this particular board is outlined in statute. She said the language is fairly clear and does seem to fit with their purpose in statute. Number 2345 REPRESENTATIVE DAVIES said that the purpose in statute for the present Alaska Soil and Water Conservation Board fits under the proposed new title, but that is because the proposed title is so broad. He asked Mr. Hartman if he had considered something like the "Agricultural and Silvicultural Conservation and Development Board." MR. HARTMAN replied that that was not specifically addressed by the board when they arrived at the present name. MR. HARTMAN apprised the committee of the board's interest in developing tourist related products from natural resources. He said he was looking at a birch wood box in Aniak, which is not agricultural, but it is utilizing a natural resource with the help of the Natural Resources Conservation and Development Board to develop a market. He said the board is also working with others and trying to broaden the scope into locally available resources in the soil and water district. He talked about a project in the Willow area of making pressboard out of wood chips. He said that is not agricultural but it is using byproducts from a lumber mill and making a marketable product. Another project in Fairbanks is a dog "waste" compost project making compost and fertilizer from dog team waste.....(end tape) TAPE 96-34, SIDE B Number 0001 REPRESENTATIVE KOTT moved that HB 539 move from the House Resources Committee with individual recommendations and attached zero fiscal note. Number 0015 REPRESENTATIVE DAVIES objected. Number 0033 CO-CHAIRMAN WILLIAMS said he would hold the bill for a quorum and rescheduled HB 539 for Monday, March 18th. HJR 60 - RS 2477 HIGHWAY RIGHTS OF WAY Number 0033 CO-CHAIRMAN WILLIAMS announced that the committee would take testimony on HJR 60 while awaiting the arrival of the bill's sponsor, Representative Jeannette James. Number 0109 TOM HARRIS, Chief Executive Officer, Tyonek Native Corporation, testified on behalf of the Village of Tyonek. He requested that the March 14, 1996 letter addressed to Senator Georgianna Lincoln from the Tyonek Native Corporation be entered into the record as part of the corporation's testimony: "Tyonek Native Corporation and The Native Village of Tyonek are requesting your assistance in conveying our concerns over House Joint Resolution No. 60. relating to Revised Statute 2477 right-of- way (RS 2477). "Please be aware that the State has made a claim of RS 2477 (200) that crosses the Chuitna River at its mouth, takes out a 100 feet through the village, and violates the Russian Orthodox cemetery in the village, then travels on to the old village site where it terminates in the old village cemetery (also Russian Orthodox), turns around and comes back. "The purpose of RS 2477 is supposedly to provide access to mineralized areas to the general public. As you know, Tyonek is a private community much like the private communities elsewhere in the lower 48. However to meet the needs of the resource development industry, Tyonek has already provided access to resource developers such as ARCO, Pacer Dome, Unocal, to name a few. Such access was provided by Tyonek, at no cost to the State of Alaska and without disrupting the community. Why then is RS2477(200) needed? Why does the state need access to Tyonek's cemeteries? "RS 2477 as written and proposed by U.S. Congress Bill H.R. 2081, provides for no public review or comment on any RS 2477 right-of- way, no permitting or environmental impact review, no compensation to the land owner (constituting a taking under the 5th Amendment), and no commitment by the State to maintain the right-of-way after it's taken. While we agree that there are certain rights-of-way that everyone can agree to support, we cannot and do not support RS 2477(200) in its present format, and have grave concerns about the constitutionality of RS 2477 in its present form. Thank you for your support and consideration on this issue." CO-CHAIRMAN WILLIAMS asked Mr. Harris if he had further testimony. Number 0134 MR. HARRIS emphasized that Tyonek is not opposed to resource development and supports responsible resource development, but does not believe that RS 2477 allows any public land, 100 foot public right-of-way, anywhere for any reason, without public comment or review, without appropriate federal, state or local government permitting and without appropriate confrontation with the land owners that it is reasonable, responsible or in Alaska's best interest. Number 0197 MR. HARRIS stated that Tyonek's opposition is primarily in respect to RS 2477 (200). He reminded the committee that there are over 1,800 of these rights-of-ways and stated that HJR 60 lists just over 500. He said that none of those rights-of-ways have been publicly reviewed and stated that the resolution is worded that the rights-of-ways were documented and qualified. He said he had received no information that they were qualified and by whom. Number 0230 MR. HARRIS said that RS 2477 (200) goes right through the Village of Tyonek. It violates two cemeteries, Russian Orthodox cemetery, and terminates in one of those cemeteries and then turns around and goes back. We just do not see the need for that. This kind of development is very counterproductive to relationships across the state. Number 0256 MR. HARRIS referred to page 3, line 1, "to enable this generation and future generations of Alaskans to use the routes established by pioneer Alaskans." He said, "Respectfully, Mr. Chairman and committee members, we believe that it ought to state pioneer and `Native Alaskans.'" It is only appropriate if this bill is going to be considered, it ought to document pioneer Alaskans and also Native Alaskans usage of the land. Number 0293 REPRESENTATIVE JEANNETTE JAMES, sponsor of HJR 60, responded to Mr. Harris that she would be happy to write in "Native Alaskans." REPRESENTATIVE LONG suggested that deleting the word "pioneer" would simplify the issue. Number 0328 KATHLEEN DALTON testified from Fairbanks, stating she was formerly associated with the study of the 1,500-1,800 RS 2477 rights-of- ways. She complimented HJR 60 on being well written and factual. MS. DALTON informed the committee that the Department of the Interior has been attempting in the last four years to legislate by regulation. She cautioned, "In other words, to eliminate any access to an RS 2477 right-of-way before the assertion is made, if an assertion is ever made, before the state can review it." Number 0400 MS. DALTON applauded legislative leadership in recognizing that this is a serious problem. She said access is a serious problem in Alaska and we know that ANILCA has Title XI which has appeared as a solution to any access problem by some, but she believes that ANILCA does not answer all access problems. She referred to 17 (b) under ANCSA relating to access possibility, and said it is not an access possibility except at the time of a conveyance of Native land to a Native corporation. There are very strict limitations on those. Number 0437 MS. DALTON referred to page 2, line 17 reading, "Whereas federal and state courts have consistently ruled for 100 years that it was the intent of the Congress in enacting RS 2477 that the law of the state where the RS 2477 right-of-way is located defines the acts that constitute acceptance and the scope of the right-of-way." She indicated that the state has not had an opportunity as far as decline (indisc.) and she hopes the issue will remain open and it may be 10 years from now that this is needed. MS. DALTON addressed Mr. Harris from Tyonek stating that some of the trails that were looked at in the study were traditional Native trails. She mentioned Shishmaref across the conservation unit. There is a cultural trail from the upper Alatna area over into Kobuk. That trail has been established there for centuries. Number 0502 CO-CHAIRMAN WILLIAMS closed teleconference testimony and invited Juneau participants to come forward. Number 0530 BILL PERHACH, Volunteer, Alaska Environmental Lobby, testified that the Alaska Environmental Lobby cannot support HJR 60 and read his statement into the record: "This resolution accurately quotes the language of RS 2477 providing that the "right-of-way for the construction of highways over public lands, not reserved for public use, is hereby granted." MR. PERHACH continued, "It correctly notes the Federal Land Policy and Management Act repealing RS 2477 in 1976 expressly reserves existing rights-of-way created under RS 2477. MR. PERHACH proceeded, "It laudably commits Alaska `to a balanced philosophy of the development and wise use of Alaska's scenic beauty, mineral wealth, wildlife, and other natural resources coupled with environmental protection to ensure future generations' might experience Alaska as we still know it. MR. PERHACH stated, "However, this resolution's reliance on case law supporting the intent of a Congress that governed the United States 130 years ago might very well be misplaced. `The law must be stable, but it cannot stand still.' MR. PERHACH, "The resolution's confidence in a definition of `construction' satisfied by mere use is tenuous and - at the very least - will make lawyers wealthy. MR. PERHACH said, "Ultimately, however, HJR 60 fails to deserve support because it endorses bad legislation: U.S. Senate Bill 1425 and U.S. House Bill 2081. These Bills are open ended and do not address major concerns of many Alaskans such as the `taking' of private lands; the status of Native Lands; the disposition of surveyed and unsurveyed section lines, the scope of `upgrades' (winter trails across wetlands to all weather highways); unmanaged motorized access, and access to and through National Parks. MR. PERHACH concluded, "Ultimately, Alaska is acquiring a poor reputation as steward of its resources. This resolution does nothing for that image and only provides more ammunition for those who say we're not." MR. PERHACH further stated that he is from the Denali Borough and in initial studies that were done in Denali Park, there were 30 RS 2477 routes identified. Six of those were routes that go into the Kantishna. You will recall that part of all six routes were looked at as a way of bringing another road into the Kantishna providing what is referred to as North Side Access. He said the engineers, the Fairbanks Northern Regional DOT, referred to the favored route also known as the Stampede Trail, all of those routes are winter trails. Number 0709 REPRESENTATIVE LONG thanked Mr. Perhach for his testimony stating that he had been teetering on whether to support this legislation until the testimony alleged that lawmakers were poor stewards. Number 0727 REPRESENTATIVE OGAN stated that he was not teetering and takes high offense to Mr. Perhach's assertion that the legislature is a poor steward. He said, "The ultimate lockup and the ultimate win for the environmental community would be to, forever, have no access to the state. I think the environmental community is quietly sitting back and hoping, and praying, that we will not be able to establish any rights-of-ways, because it is the only win. Then you guys will not have to fight things project-by-project, because then there will never be any projects." Number 0771 REPRESENTATIVE JEANNETTE JAMES prefaced that HJR 60 was designed to establish that the state has some rights in the RS 2477, and said that the Federal Revised Statute 2477 (RS 2477) provided for `the right-of-way' for the construction of highways over public lands, not reserved for public use. HJR 60 preserves access all over Alaska using traditional roads and trails for future roads and trails. REPRESENTATIVE JAMES said the definition of "highways" could be construed to mean black top and in Alaska that is not the case. We have spent a lot of time and money trying to identify where these trails are and time is running out. We need some assistance. REPRESENTATIVE JAMES further speculated if a trail is protected, it is possible by negotiation to move the trail a little to be sure that it is physically able to be constructed or does not interfere with some other uses since the trail was used. I think that if Alaska wants to have a successful future, this resolution is a very important part of it. We are going to have to talk this out and work this out together. REPRESENTATIVE JAMES further said, I do not see that we have any controversy with the Native lands and the Native issues in the state. I think that our entire goal should be to be able to provide ourselves with income off of our resources. We need these trails in order to do that. Yes, we have spent a lot of money trying to identify where these trails are. No, we have not been able to get into court to assert our rights and get a court decision that says, in fact, this is a valid trail. When we bring forward these identified trails throughout the state, and we go to court to establish them, that is the time when people can come forward with their objections. These are not automatic, we have to assert them first. Number 0898 REPRESENTATIVE RAMONA BARNES referred to page 3, line 2 and moved to insert "Native and" before the word "pioneer." The sentence would read, "to enable this generation and future generations of Alaskan to use the routes established by Native and pioneer Alaskans." She said Native Alaskans were here first and it stands to reason that they should be included first. Number 0922 CO-CHAIRMAN WILLIAMS said, hearing no objection, it is so ordered. Number 0938 REPRESENTATIVE JAMES stated that if we are going to continue to be good stewards of the state, and manage the state's resources in a responsible manner, and we continue to represent the protection of the environment in a safe way, this is the public process. To not do anything is the wrong answer. The thing is to do it in a responsible manner. I think this is an important message to send to Washington, D.C. Number 0983 REPRESENTATIVE DAVIES offered an amendment on page 2, line 25-29: delete all material. REPRESENTATIVE BARNES objected. Number 1016 REPRESENTATIVE JAMES responded that she understands Representative Davies concern but felt it imperative to keep the language, "to preserve the long-standing judicial and executive interpretation of RS 2477 and to protect the existence of rights-of-way previously granted by the federal government under RS 2477." Number 1070 REPRESENTATIVE BARNES interpreted Representative Davies intent and suggested the deletion of "S. 1425" on line 25; the language could read, "Whereas legislation has been introduced in the United States Senate." On line 26 delete "H.R. 2081" and the language could read, "Whereas legislation has been introduced in the United States House." She felt that would accomplish Representative Davies purpose and stated that she supported that amendment. Number 1100 REPRESENTATIVE DAVIES accepted Representative Barnes amendment to the amendment. Hearing no objection, it was so ordered. Number 1120 CO-CHAIRMAN WILLIAMS asked if there was objection to the amendment. Hearing no objection, it was so ordered. Number 1123 REPRESENTATIVE BARNES moved that HJR 60, as amended, move from the House Resources Committee with individual recommendations and attached zero fiscal note. There being no objection, CSHJR 60(RES) passed from the House Resources Committee. HB 469 - INCREASE LAND GRANT TO UNIV. OF ALASKA Number 1137 CO-CHAIR WILLIAMS announced the next order of business was HB 469. He called on Joseph Henri to testify. JOSEPH HENRI, Chair, Finance, Facilities and Land Management Committee, University of Alaska Board of Regents, explained that committee had been pushing for a state land grant and said the bill was much needed. "We're a land grant university under the federal statute, but we have no lands, substantively speaking," he said. He indicated that while the university had 112,000 acres of land, Alaska had 104,000,000 upland acres, plus an unspecified amount of tideland and submerged acreage. Number 1231 MR. HENRI noted the university was asking for one-third of 1percent of the land owned by the state. Receiving 500,000 acres would be a big step for the university, which would work hard to induce development and to earn money on it, which was necessitated by diminishing general fund money. "I think we will offer the mining world a good, sensible, reliable deal," he said. "We will not be arbitrary with them. If we were, they wouldn't come to our land. And, of course, we have, in our university system, a school of mineral engineering, graduates of whom are running some of these companies this very day." Number 1436 CO-CHAIR WILLIAMS asked Sara Hannan of the Alaska Environmental Lobby if she could wait until the following Monday to speak, to which she agreed. HEATH HILYARD, Student Body Representative, University of Fairbanks, spoke on behalf of HB 469. Tuition rates had risen nearly 200 percent over the past decade, he said. Meanwhile, general fund monies to the university had diminished enough that tuition increases had not entirely offset the decline. Mr. Hilyard noted that the Board of Regents had just approved another tuition increase. "We're not even maintaining status quo at this point in time," he said. "We're just slowing the rate of regression in the UA system. This additional 500,000 acres would go a long way to helping the university generate enough revenue to begin to at least maintain status quo, if not possibly succeed and progress, as I was presuming it was intended to do." Mr. Hilyard said there were serious technical and external issues that were not of great concern to the students. However, they were concerned about tuition increases, coupled with unfunded faculty positions and program closures. As a result, the students firmly supported HB469. Number 1580 REPRESENTATIVE DON LONG asked if Mr. Hilyard knew which lands were being looked at. MR. HILYARD indicated he did not know. CO-CHAIR WILLIAMS informed people waiting on teleconference that more public testimony would be taken Monday. He asked for a motion to accept CSHB 469, version F, as a work draft. REPRESENTATIVE KOTT said, "So moved." There being no objection, it was so ordered. Number 1740 SUSAN FLENSBURG, Director, Bristol Bay Coastal Resource Service Area (BBCRSA) Coastal Management Program, testified via teleconference, saying BBCRSA's coastal district encompassed 11 communities, including Dillingham. The majority of land in the coastal district was owned by the state. There had been two state management plans in effect for the area, including the Bristol Bay Area Plan and the Nushagak/Mulchatna Rivers Recreation Management Plan. Ms. Flensburg said the latter was not only a land use plan for the Department of Natural Resources but also a special coastal management plan for the district. MS. FLENSBURG said, "I support education. I think the university needs increased funding. We've got a small branch out here in Dillingham, as well. But my main concern with the bill, the way it's presently crafted, is that it seems to totally by-pass any kind of public review process." She referred to Section 8(e), page 8, lines 17-20, and said the management plans had taken years to develop, with a full-blown public review process upon which decisions were made. She thought the bill threw all that out the window. "My understanding of the bill is that none of the existing land use management plans would apply," she said. "There would be no best-interest finding determination, which is typically done for land use decisions." Ms. Flensburg asked why the bill was written so that it precluded relying on the land use plans and the state's best interest finding determination process for land selection. CO-CHAIR WILLIAMS deferred to Wendy Redman for a response. Number 1975 WENDY REDMAN, Vice President for University Relations, University of Alaska Fairbanks, explained HB 469 included sections that expanded the university's current public process. The university had also passed new policies expanding on that process, she said. She noted that prior to disposal of any lands, the Department of Natural Resources (DNR) had to meet requirements addressing best use determination. MS. REDMAN said, "This bill was specifically redrafted this year in a way that gives, essentially, total control to the Department of Natural Resources for them to determine even what lands would be available for us to select from." She indicated that was primarily in response to concerns raised by the environmental community and others, who wanted to make sure DNR would follow the public processes with which Alaskans were comfortable. "So, we were comfortable with that, as well," she said. "And so, this bill really is a much more simplified way. Essentially, it says DNR gets to determine what lands are even available for selection, based on their own best use determination." Number 2100 MS. FLENSBURG stated she did not see that in the bill. She referred to Section 8 (e), which began, "In conveying land to the University of Alaska under this section, the commissioner of natural resources shall give public notice under AS 38.05.945(b)". Ms. Flensburg noted that was the standard public notice provision in Title 38. She pointed out subsection (e) concluded by saying, "but other provisions of AS 38.04 and AS 38.05 do not apply." Ms. Flensburg said those sections talked about the state's best interest planning determination process. She said the bill removed the state's ability to rely on existing land use plans to help determine what those selections should be. Although public notice would be provided, there would be no public review process. [END OF TAPE] TAPE 96-35, SIDE A Number 0005 CO-CHAIR WILLIAMS announced the teleconference would conclude at 2:45 p.m. He informed Ms. Flensburg that Representative Therriault, sponsor of the bill, had an 800 number and offered to call Ms. Flensburg to provide that number. MS. FLENSBURG indicated she could call Representative Therriault's office. She concluded by saying she hoped the committee understood how significant Section 8 (e) was. Number 0088 REPRESENTATIVE DAVIES pointed out to Ms. Flensburg that under Section 8, the land list had to be submitted to the legislature, which should provide a public process. CO-CHAIR WILLIAMS announced that the public hearing would continue Monday at 8:00 a.m. AN UNIDENTIFIED WOMAN, speaking via teleconference from the University of Alaska Anchorage, indicated numerous students were waiting on teleconference to testify. She said most of the students there opposed the bill. She asked if the hearing could be continued that day. Number 0197 CO-CHAIR WILLIAMS responded that although the committee members would be willing, the teleconference was ending. He apologized that not everyone could be heard that day. After the teleconference concluded, he offered to hear testimony from two students in the audience, who declined, saying they were from Juneau and would return Monday. ADJOURNMENT There being no further business to conduct, CO-CHAIR WILLIAMS adjourned the House Resources Committee meeting at 2:45 p.m.