Legislature(1995 - 1996)
05/03/1996 08:05 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE May 3, 1996 8:05 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 John Davies Representative Pete Kott Representative Don Long Representative Irene Nicholia MEMBERS ABSENT Representative Ramona Barnes COMMITTEE CALENDAR Governor's appointment of David Norton to the Alaska Oil and Gas Conservation Commission CS FOR SENATE BILL NO. 247(RLS) am(efd fld)(ct rule fld) "An Act restricting the use of certain funds deposited in the fish and game fund; and relating to the powers and duties of the commissioner of fish and game." PREVIOUS ACTION BILL: SB 247 SHORT TITLE: USE OF FISH & GAME FUND/COMM'R'S POWERS SPONSOR(S): SENATOR(S) TAYLOR, Sharp, Miller JRN-DATE JRN-PG ACTION 01/30/96 2251 (S) READ THE FIRST TIME - REFERRAL(S) 01/30/96 2251 (S) RES, FIN 03/20/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 03/25/96 (S) RES AT 3:30 PM BUTROVICH ROOM 205 03/28/96 2941 (S) RES RPT CS 3DP 2NR NEW TITLE 04/03/96 (S) FIN AT 9:00 AM SENATE FINANCE 532 04/03/96 (S) MINUTE(FIN) 04/04/96 3064 (S) FISCAL NOTES TO CS (F&G-3) 04/04/96 3064 (S) FIN RPT CS 2DP 2NR NEW TITLE 04/04/96 3064 (S) FISCAL NOTES TO CS (F&G-3) 04/04/96 3064 (S) ZERO FISCAL NOTE TO CS (DPS) 04/09/96 (S) RLS AT 12:20 PM FAHRENKAMP RM 203 04/09/96 (S) MINUTE(RLS) 04/10/96 3112 (S) RULES CS & 2CAL 1NR 4/10/96 NEW TITLE 04/10/96 3112 (S) FNS TO CS (F&G-3) 04/10/96 3112 (S) PREVIOUS ZERO FN (DPS) 04/10/96 3114 (S) READ THE SECOND TIME 04/10/96 3114 (S) RLS CS ADOPTED UNAN CONSENT 04/10/96 3114 (S) ADVANCE TO THIRD READING FLD Y12 N8 04/10/96 3114 (S) THIRD READING 4/11 CALENDAR 04/11/96 3166 (S) READ THE THIRD TIME CSSB 247(RLS) 04/11/96 3166 (S) FAILED PASSAGE Y10 N10 04/11/96 3167 (S) TAYLOR NOTICE OF RECONSIDERATION 04/12/96 3206 (S) RECON TAKEN UP - IN THIRD READING 04/12/96 3206 (S) RETURN TO SECOND FOR AM 1 UNAN CONSENT 04/12/96 3206 (S) AM NO 1 ADOPTED UNAN CONSENT 04/12/96 3207 (S) AUTOMATICALLY IN THIRD READING 04/12/96 3207 (S) PASSED ON RECONSIDERATION Y11 N8 E1 04/12/96 3208 (S) EFFECTIVE DATE(S) FAILED Y13 N6 E1 04/12/96 3208 (S) COURT RULE(S) FAILED Y12 N7 E1 04/12/96 3220 (S) TRANSMITTED TO (H) 04/15/96 3732 (H) READ THE FIRST TIME - REFERRAL(S) 04/15/96 3733 (H) RESOURCES, FINANCE 04/26/96 (H) RES AT 8:00 AM CAPITOL 124 04/26/96 (H) MINUTE(RES) 04/29/96 (H) RES AT 8:00 AM CAPITOL 124 04/29/96 (H) MINUTE(RES) 05/01/96 (H) RES AT 8:00 AM CAPITOL 124 05/01/96 (H) MINUTE(RES) 05/02/96 (H) RES AT 0:00 AM CAPITOL 124 05/02/96 (H) MINUTE(RES) 05/03/96 (H) RES AT 8:00 AM CAPITOL 124 WITNESS REGISTER DAVID NORTON 1208 "S" Street Anchorage, Alaska 99501 Telephone: (907) 276-2530 POSITION STATEMENT: Answered questions regarding his confirmation to the AOGCC. TERRY OTNESS, Legislative Assistant to Senator Robin Taylor Alaska State Legislature Capitol Building, Room 30 Juneau, Alaska 99801 Telephone: (907) 3873 POSITION STATEMENT: Gave sponsor statement for CSSB 247(RLS) am(efd fld)(ct rule fld). ED GRASSER Alaska Outdoor Council P.O. Box 2193 Palmer, Alaska 99645 Telephone: (907) 745-3772 POSITION STATEMENT: Reviewed proposed amendments to CSSB 247(RLS) am(efd fld)(ct rule fld). WAYNE REGELIN, Director Division of Wildlife Conservation Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 POSITION STATEMENT: Answered questions on CSSB 247(RLS) am(efd fld)(ct rule fld). SARA HANNAN, Executive Director Alaska Environmental Lobby 419 Sixth Street Juneau, Alaska 99801 Telephone: (907) 463-3366 POSITION STATEMENT: Testified against the SB 247(RLS) am(efd fld)(ct rule fld). ACTION NARRATIVE TAPE 96-76, SIDE A Number 000 CO-CHAIRMAN JOE GREEN called the House Resources Committee meeting to order at 8:05 a.m. Members present at the call to order were Representatives Williams, Kott, Davies, Long and Green. Number 072 CO-CHAIRMAN GREEN announced the first order of business would be the confirmation hearing of David Norton to the Alaska Oil and Gas Conservation Commission (AOGCC). He asked Mr. Norton to tell the committee members a few things about himself. DAVID NORTON came before the committee and read his statement into the record: "Mr. Chairman, members of the committee, my name is David Norton. Thank you for inviting me to address the committee. I appreciate the committee holding this hearing to consider me for the commissioner's seat. "To refresh the committee on the Alaska Oil and Gas Conservation Commission, I've attached a one page overview of the commission's responsibilities and functions and I have also attached a one page review of the history of the AOGCC and I believe it's in your packet. "The commission's role is to ensure the efficient depletion of the state's hydrocarbon resources. This is accomplished in three ways: Preventing waste of the resource; secondly, ensuring maximum ultimate recovery of the resource; and protecting the correlative rights of adjacent owners of oil and gas properties. These three aspects of the AOGCC's mission are the basis of the term `conservation' as used in oil and gas regulation and are typical of the mission that all petroleum producing states provide through conservation agencies just like AOGCC. "I would like to address my qualifications as commissioner. The commissioner's seat I stand for today is reserved for an Alaskan `licensed engineer with an educational and professional background in the field of petroleum engineering.' I believe you have my resume and a letter to Chairman Green submitting additional detail of my qualifications in your packet. "After graduation from Rice University, I moved to Alaska in 1974, to work on the trans-Alaska pipeline. For the past 22 years, the majority of my career has been associated with design, construction and operation of the pipeline, including facilities for gas handling, refining and metering. I have significant experience in managing development of complex oil and gas facilities in Alaska. I have been a licensed professional engineer in the state of Alaska since 1984. "I believe a commissioner is best qualified by a range of experience in the oil and gas industry that allows a broad perspective while maintaining an understanding of the technical challenges associated with public policy. There is a difference between technical staff work and the judgement required of a commissioner. The professional staff at the commission includes two petroleum engineers and a petroleum geologist. As do most commissioners and legislators, I will use my technical staff as is appropriate. "I believe I have a unique industry perspective because of my Alyeska pipeline experience. At Alyeska, I was required to obtain financial and technical approvals of the major owners, Arco, BP and Exxon. As a result, I have intimate knowledge of the companies' various cultures, biases and procedures. I am the only current commissioner with direct industry experience. "I would like to provide a response to criticism that I do not have appropriate petroleum engineering background for this seat. "Petroleum engineering is such a broad category that no one could claim experience in all areas under the commission's purview. Petroleum engineering can be viewed as encompassing three broad areas: It covers reservoir characteristics and petrophysics; secondly, it covers drilling and recovery techniques; and thirdly, it covers surface equipment, processes and delivery. My background is in the area of surface equipment, processes and delivery. "The statute does not specifically require a licensed petroleum engineer. If the intent of the statute was to reserve the seat for licensed petroleum engineers, according to state records then only a small pool of about 20 people would be qualified, some of whom may have conflicts because of their employment. I am a licensed civil engineer with significant background in the oil and gas industry in Alaska. "I believe I am a good fit with the current commissioners and staff. We are working well together and I would like to apprise you of some current initiatives that I believe we should and can accomplish at the commission. "Number 1, `Regulation Revision.' We are in the process of completing the first comprehensive revision of our regulations since 1986. The focus is on streamlining technical and procedural requirements for drilling and reservoir management. AOGA is a key industry partner in this effort. We are deleting obsolete requirements and providing less prescriptive regulations to allow more latitude to regulate rapidly changing oil field techniques. We are also anticipating new requirements for abandoning offshore platforms in Cook Inlet. The first phase of this work was completed this quarter and we hope to adopt the finished set of regulations this summer. "Secondly, `The Alaska Energy Infobank.' The infobank is an exciting joint industry/government initiative championed by Arco and BP that puts non-proprietary private and public petrotechnical data on a common shared database. The prize is significant cost savings in not maintaining duplicate sets of data. Since the AOGCC is the primary state archive of well and production data, there are opportunities and challenges for the commission to be more efficient at less cost. I am on the Infobank Steering Board, along with representatives of Arco, BP, Exxon, Unocal and DNR. The Infobank has a website and I've put the electronic address of the website in your packet if you're interested for more information. "Thirdly, `Budget Discipline.' The commission is committed to efficient use of state funds, including the Oil and Gas Conservation Tax, to monitor safe oil field practices and to promote maximum recovery of the state's petroleum resources. To gain the efficiencies to live within our means, we are evaluating several options, including moving facilities to reduce cost and share infrastructure, sharing resources with other agencies, and upgrading technology to take advantage of opportunities to cut costs. "So in closing, Mr. Chairman, I would like to use an analogy that I picked up at the annual Petroleum Industry Alliance meeting last January. Dick Oliver, who is John Morgan's boss at BP, had flown in to give his assessment of the state of the industry in Alaska. he spoke about a metaphorical bridge between today and tomorrow by comparing it to a real bridge over the Gulkana River. The real bridge was a critical link in the completion of the trans-Alaska pipeline and required extraordinary innovation, teamwork and cooperation to complete on time. "Mr. Oliver said that the girders of the metaphorical bridge will be marginal oil fields developed with new emerging technologies. This bridge will require the same extraordinary efforts used on the Gulkana bridge and will span today's gap between Prudhoe Bay and future opportunities such as ANWR and a gas pipeline. "Mr. Chairman, I worked on that Gulkana bridge 20 years ago as a young engineer. Now, as a more seasoned bridge builder, I look forward to working on today's bridge to tomorrow. Thank you." Number 639 CO-CHAIRMAN GREEN asked, "Do you have any idea how many BOP tests are conducted each year? How many wells and then how many tests on each of those?" MR. NORTON explained that there is about 1,400 wells up there. He said he didn't know exactly how many. CO-CHAIRMAN GREEN clarified he is talking about BOP on the drilling wells. MR. NORTON said every time they set up, the commission conducts one and that's their goal. He noted last year they did about 200. CO-CHAIRMAN GREEN asked if there are several conducted during each well drilling. MR. NORTON answered in the affirmative. CO-CHAIRMAN GREEN asked if those are all witnessed by the commission. MR. NORTON explained they have five inspectors on staff. They cover the North Slope and Cook Inlet. The goal is to witness every one of them; however, there isn't enough staff to do that. He said he believes they are trying to get to 75 percent of them. Mr. Norton explained the ones they can't physically witness, they receive a report from the company man. Number 737 REPRESENTATIVE JOHN DAVIES questioned what the BOP test is. CO-CHAIRMAN GREEN explained there is a series of protective equipment - pieces equipment on a well, from the rams up to what is called a bag. It is a hydraulic bag that will close off on anything, either itself or anything that's in the hole drill pipe. He said there are rams which are so powerful they can actually shear the pipe and close against themselves. These are anchored to the well head so that in case you get a gas bubble or something at the well, you can shut it in instantly and keep it under control. Unfortunately, in the early part of the well you can tie it down and plug it off, but if all you've got is surface pipe it can move the whole pipe out. So you have diverter on the surface pipe and then as you get deeper where you've got an anchor then you put more and more control because you get higher and higher pressure potential. Co-Chairman Green said, "Each time you change into a different size pipe then do you actually try and witness these or do you take -- I think you said you'll actually use the company records where they have actually tested it." Number 820 MR. NORTON said the purpose of this is for well control. He informed the committee that lately they have been noticing a disturbing increase in the amount of bad cement jobs of surface casing. The AOGCC started an investigation in the spring as to why this is happening. Mr. Norton said the surface casing has to be cemented in properly or else there is a conduit at the surface for any kind of over pressure down below. It is not only required for well control safety, it is also required for a relatively new technique on the Slope for disposing of cutting waste and that's down the annulus of a well. The annulus is the space between the well bore and the casing. It is a very efficient way to dispose of drilling waste. Mr. Norton said since the Environmental Protection Agency (EPA) has pressured the North Slope operators to dispense with reserve pits, this has become probably the most efficient way to dispose of waste up there. Mr. Norton informed the committee that injecting waste down an annulus probably exceeds the leak off test pressure at the casing shoe, so it is very important that the cement job is adequate to preserve the integrity of the formation and prevent fluids from returning to the surface. There have been several instances of that happening lately so industry has been invited in to explain what is going on. The inspectors are scheduled to come in for a seminar on cementing techniques from industry. He said Arco and BP, through their regulation process, has been invited to suggest ways where commission can be more efficient or the inspectors can be more precise with assessing whether a cement job is good or bad. It is tough to do because it is not something that can be visually seen, other than cement returning to the surface, that would indicated whether the job is good or bad. Number 974 CO-CHAIRMAN GREEN asked if there is something called a "cement bond log." MR. NORTON explained the have run cement bond logs, but the commission has been told that a cement bond log can be interpreted in many many ways and a bad job could look good on a cement bond log. Number 997 CO-CHAIRMAN GREEN referred to Mr. Norton saying that there is a current rash of these that are not well done. He asked if there is anything happening differently currently than there was in the past such as the angles are higher. MR. NORTON referred to when he says "current," and said he talking about the last two or three years. There has been maybe 20 cases in the last two to three years and two or three cases this spring. He said they think it is because of a rush to try to economize on the amount of cement used on a job. The current regulations require cement to be returned to surface and in doing so, if every job had to be that way then there would be a lot of excess cement returned to the surface and that excess cement would have to be hauled off, disposed of which would increase costs. They try to cut the margin as close as they can and in trying to cut that margin, he believes they sometimes have errored on the downside. Mr. Norton said he thinks the initial impetus was when the reserve pits disappeared from the Slope, waste handling on the Slope became and is currently a major cost driver. Number 1074 CO-CHAIRMAN GREEN said, "Well the volumetric of determining the annulus between the pipe and the location would be in your province. I mean while it would be maybe not you specifically, but you mentioned that you've got a staff of petroleum engineers that would determine that. Now if they cut back so they wouldn't surface, I mean they wouldn't come to the surface and actually spill out, when you run these bonds or temperature surveys that would show where the top of the cement is, is it because that upper part of the hole is not cemented or I thought you indicated that there was leakage at the shoe where you're gonna be using disposal methods, and it seemed like the cement - whatever cement would be there and then maybe run out as you came up the hole." MR. NORTON explained the commission reviews drilling plans as a part of the permit to drill. The commission reviews the cement calculations; however, they don't do the calculations. Typically, North Slope operators specifically will allow a fixed percentage over. He noted for Prudhoe Bay he thinks it is 30 percent over the theoretical estimate of annulus. Sometimes that isn't enough, especially in a permafrost area as the hole becomes larger because of permafrost degradation. The commission doesn't check their work and tell them to increase it. It is just reviewed to make sure there is an adequate amount of excess. It is always their responsibility before drilling to ensure that the leak off test has been done. That's primarily where you get your safety margin for well control. He noted he is speaking of annular disposal problems later. Mr. Norton explained the reason he brought it up is to use it as an example of the way AOGCC has been able to detect a problem and adjust their resources to focus on that as a problem rather than going on with business as usual and letting it happen. CO-CHAIRMAN GREEN stated, "Well that's why I'm asking you and certainly we don't need to get into a lot of detail with the committee. My concern though is you may recall a letter that was sent to the Governor last year, and I'm not gonna pursue that, but the concern is your division or your department is responsible for the safety of the wells and if - and your particular part of that of the triad of the commission would be down hole operations - cementing, bottom hole safety valves, all those sorts of things would fall into the purview of your potion of this triad. And the concern I have is - is that there would be certainly the chance of a blow out prevention equipment not functioning properly so you watch that. And we haven't gotten into down hole safety valves in case there is a rupture of the producing equipment once the well -- the rig is gone, and all that is still under your purview. My concern now is that you mentioned this surface pipe and not being able to meet the leak off test and, yes, there is down hole injection later in the annulus, but which is now between the production stream and that surface pipe and there is fluid injected at whatever 4, 5, 6,000 feet. If there is not integrity at that casing shoe that seems to me that's also a purview of the Conservation Commission and particularly the job that you are looking at." Number 1309 MR. NORTON indicated that is correct. He said hopes he didn't indicate that they were allowing operators to drill a head if the leak off test failed. That's not the case. The leak off test has to pass before they can drill a head. That demonstrates integrity at the shoe. Mr. Norton said subsequent to that, if that specific well became a candidate for annular injection, the injection pressure at the shoe or down hole sometimes exceed the leak off test pressure. He said he thinks it primarily exceeds it in order to fracture (indisc.). Mr. Norton explained if you use that as disposal well, you've got to be sure that the cement job above the point of injection is competent. They look at cement bond logs and other diagnostic techniques to ensure that and the companies bring their information in and show it to the inspectors and staff. In a limited number of cases, it has not been the case. It becomes an area of concern for them to focus on. Number 1384 CO-CHAIRMAN GREEN referred to the inspectors and petroleum engineers and asked Mr. Norton if they report to him. MR. NORTON explained the inspectors report to Dave Johnston. He said there isn't an executive direct at the commission. The commissioners have divided up the staff for purposes of supervision and they perform evaluation and personnel action. Mr. Norton informed the committee his area includes the statisticians for well production. He noted that is the reason he is focusing on the info bank as a great opportunity. Mr. Norton noted his area also includes one petroleum engineer and petroleum geologist. The other petroleum engineer supervises the inspectors and is under the purview of David Johnston. The three commissioners deal with issues such as surface cementing as a committee. He said he thinks they all work fairly well together. CO-CHAIRMAN GREEN said he is interested in the fact that there are these various charges and safety is one that is of paramount concern, not only to the employees that might be around it, but to environmental degradation potential. Number 1534 REPRESENTATIVE DAVIES said Mr. Norton indicated the three major purviews of the AOGCC were preventing waste, ensuring maximum recovery and the correlative rights. The inspections that have been discussed seem to also have some impact on safety issues. He asked if there is another agency that has primary responsibility for the safety of these installations. MR. NORTON explained for well safety, the AOGCC is the main state agency. He said he believes state safety personnel gets involved in some surface facilities, but as far as blow out prevention the commission is the primary agency for that. He noted that follows from preventing waste if there is a blow out. It is safety primarily, but the genesis is in the preventing waste of the resource. Number 1618 REPRESENTATIVE DON LONG referred to the Northstar unit that has been discussed. He said it appears they may be applying for a permit for production very soon or sometime in the near future. He asked Mr. Norton asked how he sees the role of the commission with the Northstar unit, which is an off-shore unique type of operation. MR. NORTON said the AOGCC hasn't gotten too deep in the Northstar legislation because it is a leasing change. He said the Department of Natural Resources (DNR) is the primary agency for that. When and if Northstar becomes a developing field, the commission will get involved in several ways. They will have to develop pool rules to allocate the resource among the different leases. Mr. Norton explained Northstar has some partial federal leases on it so they will have to coordinate with MMS. He said AOGCC will be involved in the details of issuing conservation orders to establish pool rules for that reservoir. Mr. Norton explained the commission's role in oil field development comes to play after the ground is leased and exploration and development starts. Number 1710 CO-CHAIRMAN GREEN referred to underground blowouts and asked Mr. Norton if there has ever been one in Alaska. MR. NORTON said he doesn't believe it has ever happened. CO-CHAIRMAN GREEN referred to the leak off test and said you stay below the fractured radiant and when you're going to inject, you go above it. He asked, "Now what does the Conservation Commission do to ensure that some of that material isn't -- when you fracture that you fracture horizontally instead of having it come up behind the pipe, other from the fact that it shows up at the surface." MR. NORTON said except for exploration wells, a great majority of wells that are being drilled today are development wells in reservoirs that have known characteristics. There has been quite a bit of industry work on subsurface geology and they've done fracture tests and fracture predictions and have set their casing depths based on knowledge of the fields. Those casing depths are deep enough to contain any surface fractures - fractures that would allow conduit at the surface. He noted that several years ago they had a well control problem at Endicott. As a result of that problem, the operators deepened their surface casing for all development wells in that area. Mr. Norton indicated it is a different situation for exploration wells. There is more care taken on setting those. CO-CHAIRMAN GREEN pointed out that the Santa Barbara spill of 1969 was because of a problem with inadequate surface pipe. Number 1852 REPRESENTATIVE DAVIES asked how far the AOGCC purview goes from the well. He asked if it includes pipes to the gas handling facilities. He also asked if it includes any of the pipeline gathering systems. MR. NORTON said their purview to prevent waste of the resource is not only underground waste, but surface waste. Technically, their purview goes up to the meters at pump station 1. He said they are involved with all the gather lines and other surface equipment on the North Slope up to a transportation system like the pipeline. Number 1894 CO-CHAIRMAN GREEN said Mr. Norton indicated that one of the charges is conservation of waste. He said that in Prudhoe Bay there was a maximum efficient rate set at one and one half million barrels a day and that was predicated primarily on shipping, but the major function was rather than gut the reservoir in a few years was to prevent waste by a little more orderly withdraw. He said, "My concern again, if reservoir A is discovered or as Representative Long talked about the Northstar. Now when you get involved in Northstar and you've got enough wells that you feel you've got the field delineated, you I would think would be very instrumental in determining what the MER for that field is gonna be and how they go about developing it to prevent waste. I know that you don't have economic considerations, but you do have reservoir waste. Now without being a petroleum engineer, how would you go about doing that major issue?" Number 1969 MR. NORTON said he doesn't have the background to set that rate. He would rely on staff to advise him as to what the rate should be. That is typically the way the commission has operated in the past. Staff work is important as one person can't be all things to all people. Mr. Norton said if he were a reservoir engineer, he'd probably focus his entire effort on reservoirs and maybe not seed a forest for the trees. He referred to the Northstar example and said typically the operators would come in with their recommendations and there would be a public hearing. The information they provide would be analyzed by the commission's staff and a recommendation would be made. The operators would have a chance in a public setting to respond, object or acquiesce, then the commission would issue the order of setting that MER. CO-CHAIRMAN GREEN questioned whether the commission employs outside expertise. He said they may roll you if your not very familiar with the nuances of casing design and some of the petroleum activities. MR. NORTON said the state of Alaska is interesting as far as oil development goes because the players up here are limited. For the most part, there are responsible large multi-national companies that have a standard of care that is exemplary. He said he agrees that bringing in smaller to mid size independents is where the future efficiencies are going to be. There is lots of development that the big guys just don't want to deal with, but are very attractive to the small and mid size independents. However, with those independents could come some bad actors. CO-CHAIRMAN GREEN pointed out they work on a very thin margin and are going to try and cut costs wherever they can. MR. NORTON explained the commission has the ability to go outside for contract work, but noted they don't have any money in their budget for outside consulting. Number 2140 CO-CHAIRMAN GREEN explained when Prudhoe Bay was being formed, there was heavy air between the operators and the AOGCC having to do with how that field was going to be operated. The expertise of the AOGCC came into a lot of play because while they could contract outside, they still needed some in-house people for reliance. They actually made a lot of calls, changes and negotiations on the unit agreement. Those things will continue to happen. Co-Chairman Green asked Mr. Norton if he feels the commission has or will have the expertise necessary to stand up to some of these companies. He said it is a matter of opinion and the state looks to the commission. He asked Mr. Norton if he feels the AOGCC could stand up to some of the multi national companies and say, "Wait a minute dudes, this is the way we're gonna do it in Alaska." Number 2225 MR. NORTON pointed out he worked for Aleyska for a long time. He said he dealt with the owners, Exxon, Arco and BP and is used to the way to the way they operate. He continued to inform the committee of a process they just went through regarding the planned development of Prudhoe Bay. Number 2336 REPRESENTATIVE SCOTT OGAN asked Mr. Norton if he would describe his professional background as being in the field of petroleum engineering. MR. NORTON said he is not a petroleum engineer. He noted he has a background in the oil and gas industry in Alaska. Mr. Norton said he is not a petroleum engineer and is not a licensed petroleum engineer. REPRESENTATIVE OGAN asked Mr. Norton if he is a mechanical engineer. MR. NORTON responded that he is a civil engineer. REPRESENTATIVE OGAN asked Mr. Norton if he is aware of the statute requirements for the position he is filling. He read from the statute, "Licensed professional engineer with educational professional background of petroleum engineering." MR. NORTON indicate he is aware of the statute. REPRESENTATIVE OGAN said Mr. Norton seems like a very sincere gentlemen and has high integrity. He said he has some basic problems with the selection in that by statute, he is required to have background and he doesn't have it. Representative Ogan said he isn't directing it at Mr. Norton, but it seems the Governor was not reading the statute when he made the appointment. MR. NORTON said if the statute wanted a licensed petroleum engineer, it would say so directly. He said it seems that the way it is written where it requires a licensed engineer with a background, it gives some latitude. Mr. Norton said he personally believes he qualifies as he is a licensed engineer in the state of Alaska and he has a background. REPRESENTATIVE OGAN said not in petroleum engineering. MR. NORTON said he understands there is a disagreement. REPRESENTATIVE OGAN said it isn't a reflection personally on Mr. Norton at all. MR. NORTON said if he felt he couldn't handle the job, he would back out. He said he feels he could do a good job in the position. Number 2427 REPRESENTATIVE OGAN said, "I guess I base my concern that you made a couple of references that you typically rely on staff to make some decisions that I believe -- the reason the statute was designed that way was because they were interested in having -- the legislature, when we set up this commission, was interested in having a person on that position that would not have to rely on staff for those kinds of decisions so... Thank you Mr. Chairman." Number 2464 REPRESENTATIVE IRENE NICHOLIA said she thinks Mr. Norton is well qualified as he does have a civil engineering degree and has a background of oil and gas conservation. She said she believes he could do a good job and is well qualified. TAPE 96-76, SIDE B Number 001 REPRESENTATIVE NICHOLIA continued, "...I don't know the answer to this so why don't you make some calls and call these people and then come back and tell me what this is about. I mean nobody in this world knows everything. So I'd just like to put that onto the record too." CO-CHAIRMAN GREEN said, "Well what I think what Representative Ogan had referenced to is when you call a staffer or you call some department, you expect the person in that department to have the expertise. As an elected official you might not, but you would have to some place to find it in state and that's what we'll be calling the AOGCC for expertise." REPRESENTATIVE NICHOLIA said, "And he won't know all the answers and he'll have to do the research himself when they're dealing with something. It's just like when we deal with something every day, we always do our research ourselves too. So I mean, you know, it goes with the job - it goes with every job." Number 037 CO-CHAIRMAN GREEN said Mr. Norton is currently working on a 4 mil tax from the industry per barrel and that's supplies the funding for the Conservation Commission. He said he heard Mr. Norton say something about not having the funding for perhaps hiring a consultant. He asked Mr. Norton if he thinks the 4 mil tax should be increased. Number 053 MR. NORTON said there is such a thing called the oil and gas conservation tax, 4 mils. It goes to the general fund and doesn't come directly to them. He said they have get it reappropriated back to them. Their budget, historically, has always been less than the income from the tax. Mr. Norton said the tax is supposed to support oil and gas activities. The Alaska Oil and Gas Conservation Commission is not the only agency in state government that deals with oil and gas issues as Department of Natural Resources and Department of Revenue also does. Mr. Norton said the tax used to be dedicated directly for the AOGCC. He said, "Our budget this year - the Governor submitted a steady state budget request. It was cut, I think now it stands at $50,000 under which is probably about a 3 percent cut which is going to be difficult for us. We have a -- I believe we still have $100,000 CIP line item in there for reservoir studies and depending on how we interpret that intent, we can use the $100,000 for contract if some of the hypotheticals you were speaking of earlier came to pass, we could make a stab at using that money for contracts." Number 129 CO-CHAIRMAN GREEN clarified it is budget process maybe more than a tax process. MR. NORTON agreed. He said it would be great to have a dedicated 4 mil budget for the commission. Number 141 REPRESENTATIVE DAVIES said, "I just wanted to point out as required by the Constitution." Number 147 CO-CHAIRMAN GREEN said, "I introduced a bill, 381 which would designate the -- to keep from having this overlap between DNR and AOGCC. What's your opinion on that? Is that necessary? Or is that gonna be resolved?" MR. NORTON said his opinion is that the bill is premature at this point in time because they've asked the Attorney General's Office to analyze the entire relationship between the Department of Natural Resources and AOGCC. He said absent their opinion, we shouldn't try to fix something that may not need to be fixed right now. He said he personally hasn't seen the Attorney General's opinion on relationships. CO-CHAIRMAN GREEN said there is currently conflict. He asked Mr. Norton if he thinks the Attorney General's Office is going to resolve it. MR. NORTON said there is conflict, but maybe it is conflict by design. He said maybe the intent of the enabling legislation was to create a check and balance. It would be interesting to know what the intent is and then if legislation is indicated to fix something, the we can focus on that. Number 174 CO-CHAIRMAN GREEN said it is his understanding that DNR has one position and AOGCC has another. He said if they come together somebody is going to have to have the authority to say, "This is the way it'll be." He asked Mr. Norton if he thinks that authority will be resolved through the Attorney General's Office. MR. NORTON said he hopes it will and if it doesn't, there may be a need for legislation. Number 216 CO-CHAIRMAN GREEN said Unicol has shut down some of the platforms in the inlet and they have indicated that over the next few years maybe another five would be shut down. He said if we don't eventually use those for something else, they're going to have to be removed. He asked Mr. Norton if he has a position on the proper method if there has to be a removal. MR. NORTON explained in their regulation revision they are trying to anticipate abandonment of platforms. He said they are working with AOGA to come up with a good plan for the state and industry. In Cook Inlet they are looking at cutting off platforms he believes at five feet below the mud line. If it is deep enough, they may allow structures to be blown off and laid down on the mud floor. He noted they haven't adopted any regulations yet. Number 267 CO-CHAIRMAN GREEN explained the reason he asked about keeping them is because there has been this thought that DNR says that is a mature exhausted province of oil and yet there have been two recent discoveries there. He asked if there is any thought that by removing a structure as expensive as they are, possibly prematurely, the economics wouldn't support bring another platform out there. Although the existing platform may not be in the proper position, but it might be usable to help exploit a resource that wouldn't otherwise be exploitable. MR. NORTON said that's a good point. He noted he doesn't have a position on it. Their regulations require plugging abandonment of wells, including platforms, after a certain point of time where there is no more economic activity. Mr. Norton said he believes there is discretion in regulations to allow case-by-case extensions. Number 324 CO-CHAIRMAN GREEN said there was an audit conducted by the Budget and Audit Committee in 1991. He read from it, "A significant factor in reservoir management as well as in the financial health of the state is the commission's oversight of oil and gas meters. We believe this oversight to be inadequate." He asked Mr. Norton he had a comment. MR. NORTON said he isn't familiar with the audit. He said the inspectors do witness meter proving weekly. He said he could look into it. CO-CHAIRMAN GREEN said he believes last year there was a contention on metering between the Department of Revenue and the Conservation Commission. Number 375 REPRESENTATIVE PETE KOTT made a motion to move Mr. Norton's name forward to the floor for confirmation. CO-CHAIRMAN GREEN asked if there was an objection. Hearing none, it was so ordered. Number 400 CO-CHAIRMAN GREEN announced at 9:04 a.m. the House Resources Committee would recess to the call of the chair. Number 410 CO-CHAIRMAN GREEN reconvened the House Resources Committee meeting at 3:08 p.m. CSSB 247(RLS) am(efd fld)(ct rule fld) - USE OF FISH & GAME FUND/COMM'R'S POWERS Number 420 CO-CHAIRMAN GREEN announced the committee would address CSSB 247(RLS) am(efd fld)(ct rule fld), "An Act restricting the use of certain funds deposited in the fish and game fund; and relating to the powers and duties of the commissioner of fish and game," sponsored by Senator Robin Taylor. Number 440 TERRY OTNESS, Legislative Assistant to Senator Robin Taylor, Alaska State Legislature, came before the committee. He explained Senator Taylor has reviewed the proposed amendments and finds them acceptable. CO-CHAIRMAN GREEN said there is Amendment 1. MR. OTNESS asked if Mr. Grasser could review the amendment as he prepared it. Number 483 ED GRASSER, Alaska Outdoor Council, came before the committee. He said, "The ten of these amendments that the Alaska Outdoor Council proposed was to delete some of the language that we thought was a bit, I guess, controversial and to try and make the bill workable from the department's standpoint, is to give them the discretion to do some of the things that they seem to think they wouldn't be able to do under the original bill. Anyway, the first amendment takes out the requirement that the legislature would have to go through and do appropriations basically on a -- what we viewed as a line item deal. It still keeps in the language that says they have to follow the intent of the legislature as to why the money -- or to the programs the was appropriated for in the first part of that section, in section (a) in Section 2. So the first amendment just deletes the language that says the legislature shall make a separate appropriation, which is -- probably end up being a rather lengthy affair for the Finance Committee or the subcommittee." CO-CHAIRMAN questioned whether the committee should review all the amendments. Number 548 REPRESENTATIVE ALAN AUSTERMAN said he thinks there are several things that are all tied together in the amendment. MR. GRASSER continued describing the proposed amendments. "Then in the expenditure section of the bill starting on page 2, there was considerable concern expressed by some of our member organizations that are involved in sport fishing so we suggested taking out `sport fish stocks' on page 2, line 2, so that they wouldn't necessarily fall under the intensive management regime. On page 2, line 8, we suggested deleting the word `increase' and inserting `may enhance' in there so that there would be some discretionary ability at the department level on whether or not they could accomplish those goals. The original language that increased sport fish stocks would basically tie the department's hand, in our view, but by changing that to `may enhance' means that they may or may not be able to accomplish that goal. And then line 9 or 8 to 9 deleting `increase' and inserting `for purposes of increasing' that's basically the same purpose is to give the department some discretionary leeway in making the decision there on enhancing fish stocks or game populations. Page 2, lines 9 through 12, we just suggested that that be deleted because we didn't want to get into, I guess, the wolf control issue in this bill. I think from the Outdoor Council's point of view, we were looking at this more as an attempt to streamline or make more tight the requirements of the department to utilize monies raised from the sale of fishing and hunting licenses and big game tags. And that's kind of a controversial thing and we thought that could be dealt with elsewhere so we decided - suggested that be deleted. On page 2, line 20, following `allowed' and this is I think a fairly significant change, insert `except in cases where educational efforts are evident that support sport fishing, hunting, trapping, and related management'." CO-CHAIRMAN GREEN questioned what that means. MR. GRASSER said, "That might be something that the committee might have to work on. That was our suggested language. The department might have some problems with that, but the intent of that language was to allow for programs to be funded, like Potters Marsh, through the fish and game fund as long as there was things like interpretative signs put up on the boardwalk saying where the money came from for the management of the marsh, in other words fish and game fund, and maybe some other information that denoted what kind of contribution the PR fund and fish and game fund and hunters have made, and in this case specifically Ducks Unlimited, as a group, have made to the existence and management of places like Potters Marsh or Kraemers Field or McNeil River or whatever. That's the intent. I don't know if this language accomplishes that or not." Number 701 CO-CHAIRMAN GREEN said, "Would this -- am I - am I on the -- if you put `for the benefit of the public' instead of `where there is benefit to the public' or `where benefits to the public are evident' something like that. Is that what your talking about or am I misunderstanding what you mean?" MR. GRASSER said that might help delineate what they are trying to do. He said it is just a suggestion and the council is not tied to this specific language. He said their intent was to allow for some level of funding from the fish and game fund. Most sportsmen are not opposed to funding these types of programs and they are wildlife viewers also. One of the big arguments they have had in the debate with the department is that when it comes to the support of legitimate hunting, trapping and related management issues, they have been rather quieter or neutral on the issue. He said the council would feel much more comfortable with the department's position if there were some guidelines in those areas like Potters Marsh or Kraemers Field that demonstrated where the money was coming from and what role related hunting, trapping and management has played in restoration of wildlife and overall management schemes for wildlife. He explained that is the intent of the amendment and noted they would be willing to look at the wording further. Number 774 MR. GRASSER said, "From page 3, line 2, following `occur' this is basically the same type of amendment as the previous one. The intent there is to do the same thing - to allow the department discretion to utilize some level of fish and game funds for programs in nongame areas. And, again, if that doesn't accomplish that goal, we'd be willing to work with the committee or... I guess that we'd urge that, you know, the committee to come up with language and pass this bill out today since time is short, but that was our intent with this language. Then in line 3 (page 3), beginning on line 26 you're gonna go through a series of amendments that are basically the same as the ones we just went through because there's two sections in the bill. One deals with fish and game fund monies and one deals with PR monies. And so the amendments are basically the same as what we've just went through for those expenditure sections that deal with PR monies. And then the other substantive amendment we have is on page 5, lines 9 through 25. Those are the definition -- that's the definition section. We proposed an amendment to delete all the definition section. And there again, it was our feeling that those definitions, in our opinion, don't add to what we would like to see happen with this bill, mainly a better view of how these funds should be expended by the department as directed by the legislature. And we didn't feel these definitions were necessary to accomplish that and we thought they raised some red flags. And besides I think some of these definitions were already put into law to some degree or another with the previous intensive management bill that was passed a couple of years ago. And I guess that's it for the amendments." Number 914 REPRESENTATIVE DAVIES said the only amendment he would like to work on is the educational programs. He said he isn't sure exactly what he would propose. He asked if the committee could exclude that amendment and have an at ease to review the amendment. CO-CHAIRMAN GREEN indicated there are three. The first is toward the bottom of the first page, line 16. The second is at the top of page 2, line 3 and the third is at the bottom of page 2, line 22. He said, "What you're suggesting is maybe we work on something there, but accept the rest of them." Number 951 REPRESENTATIVE DAVIES said that is correct. He moved to divide the question. CO-CHAIRMAN GREEN said that seems reasonable to him. He asked if there was an objection to dividing. Hearing none, he said they will divide the question on that basis - those three areas where educational efforts are included. He asked Representative Davies if his amendment is to move everything excluding those three areas. REPRESENTATIVE DAVIES indicated that is correct. CO-CHAIRMAN GREEN asked if there was an objection. Hearing none, it was so ordered. He said the committee would address the three areas where they are trying to come up with educational programs or educational efforts. He noted all the committee members were present with the exception of Representative Barnes. He asked Mr. Grasser to review what the council is looking for. Number 1000 MR. GRASSER said what they're trying to do with those three amendments is to provide a level of discretion for the department to be able to solicit and use fish and game fund monies for programs in traditional nongame areas like Potters Marsh as long as there was also an effort by the department with an agreement or as directed by the legislature that any of those fish and game funds expended for the management of those nongame areas would include and educational program that supported hunting and trapping and related management by some means. He noted that might need to be defined. REPRESENTATIVE DAVIES asked Mr. Grasser if he is familiar with what is sort of a hunters day that is carried out at Kraemers Field each year. He asked if that is the kind of thing he is talking about. There must be 3,000 people that come by to talk about how this supports management of game. There is a lot of discussion of hunting and the safe use of weapons, etc. Number 1053 MR. GRASSER said that is exactly what they are looking for. In some cases, such as Potters Marsh, an interpretative sign put on the boardwalk would accomplish this goal to some degree. CO-CHAIRMAN GREEN said it sounds like there are two things going. There is an annual activity and then there is something at Potters Marsh which is a viewing area for six months of the year. MR. GRASSER said it might be helpful to define `educational efforts' for the purpose of this language to include things like interpretative signs that support related management to hunting, trapping, etc. The department would know that they have the ability solicit these funds and use them in these areas for nongame as long as those types of other activities were included in the program. Number 1095 REPRESENTATIVE DAVIES indicated Wayne Regelin was in attendance and asked if he might have some comments or suggestions. CO-CHAIRMAN GREEN asked Mr. Regelin to come forward. Number 1172 WAYNE REGELIN, Director, Division of Wildlife Conservation Department of Fish and Game, informed the committee he has seen the proposed amendments. He said he believes the amendments really improves the bill and takes away some of the department's concerns such as removing the requirement for 360 separate budget appropriations. Mr. Regelin noted he doesn't think that was the intent, but that was the way it was worded. Section (C) adds some flexibility so that the department can use other management schemes other than maximum sustained yield. There are some concerns with the bill and he thinks the amendments were an attempt to provide the flexibility for the department in doing broader programs that they think are beneficial to hunting, hunters and other people that enjoy wildlife. Mr. Regelin said, "I didn't put amendments together but I - or suggested amendments, but I don't know the way it's written right now I don't think we could use the funds for public service which is -- all the big program we have, all the people that call the office and want to know where to go hunting and walk in and do that, you know, cause it -- the way, you know, I don't think that's -- again, it's not what was meant, but it's very restrictive the way it's written still even though there is more flexibility. It would allow us to do no work in hunter ed - or I mean endangered species work or nongame conservation. And law enforcement I think is a question. It might be - you could interpret it as helping under that part (C), but I think that could be debatable. The one thing that -- and all of those I think are kind of open to question whether or not we could or couldn't and I don't think it was the intent to stop those things and we can probably fix that with wording. There is one big concern and that's that right now on the federal aid dollars that we get, 6 percent of em go for indirect costs back to the Division of Administration. Between us and Sport Fish, that gives them about a million dollars a year. That has been done by the Finance Committees, it started about three years ago in order to replace general funds that as they got tighter and this bill would prohibit that. And that's why there is such a (indisc.) would be a substantial fiscal note because general -- you still have to pay the vendors and that type of thing. So that would be, you know, one and that's not addressed in any of the amendments. Number 1299 MR. GRASSER pointed out there is wording that says, "the administration of fish and game license function and payment of license vendor compensation." MR. REGELIN explained, "In the Division of Administration there is a licensing section and there is -- and that's taken care of. We brought that up before, but there also use the funds to -- and it's appropriated based on the number of employees we have and the size of the budgets. Some -- this federal aid funding and the rest of it is general fund and it depends on whether it's commercial fisheries and subsistence and habitat versus sport fish and wildlife, so that it's a proportion there to keep us from getting into problems with diversion of funds, but that's you know -- there is more than licensing in the Division of Administration. It's the payment - it's the personnel section -- the, you know, payment of all the bills and that kind of thing - engineering." Number 1350 MR. GRASSER said he doesn't necessarily disagree with Mr. Regelin. He suggested asking counsel. He said, "It seems to me that the expansion of - expenditure of funds for those types of programs like -- I mean obviously you have to administer programs and have some top level management in any type of organization, including Department of Fish and Game, would in some way be tied to the on- the-ground programs that field biologists or area biologists may be carrying out. I guess what I'm hearing is that the department is doing that section of the bill that has to do with expenditure of funds for personnel or administration, a much more narrow aspect than perhaps, and I'd have to defer to Terry on this, whether or not that's what their intent was, but I don't think the intent of the bill is to preclude them from administering programs." Number 1499 MR. OTNESS indicated frustration as he hasn't heard anything about this concern. He said every committee the bill has been in there is another "but" added. Mr. Otness said his concern is that we're running short of time. He said if there is an issue, it could be brought up in the Finance Committee as it is a fiscal issue. MR. REGELIN agreed and said Kevin Brooks, director of Administration has been in attendance each time the bill was heard and has brought it up. Number 1459 REPRESENTATIVE DAVIES asked if the portion of the bill that causes concern is on page 2, lines 23, 24 and 25, "(C) expended for costs of personnel or administration, other than costs of personnel or administration directly incurred in conjunction with projects allowed under this subsection, except under a general indirect recovery provision;" MR. REGELIN said, "Mr. Chairman, that part allows for -- it says it my not be used for personnel or administration, other than the costs for personnel or administration directly incurred in conjunction with projects under this section and we call it indirect costs, that's -- I mean that's the title of how we...." REPRESENTATIVE DAVIES explained he wants to be sure that is the part of the bill that is being addressed. He said he would suggest for consideration is that after the word "subsection," insert "except under a general indirect recovery provision." In other words, this would allow for the normal kinds of indirect recovery but it wouldn't allow for direct expenditures for personnel who weren't involved in this. MR. REGELIN said he thinks that would take care of the problem. CO-CHAIRMAN GREEN asked Mr. Otness if he is agreeable to the wording. Number 1597 MR. OTNESS indicated he would have to speak to Senator Taylor. Number 1622 CO-CHAIRMAN BILL WILLIAMS said this is a financial area and he is sure it would be addressed in the Finance Committee. He asked if the Resources Committee can take care of the amendments that deal with the resource issues. CO-CHAIRMAN GREEN indicated the amendment seems to cover the issue. If the Finance Committee doesn't like it, they will change it. CO-CHAIRMAN WILLIAMS said he doesn't want the bill to get bogged down. MR. OTNESS said Senator Taylor could state his objection in the Finance Committee if he has a problem with the amendment. REPRESENTATIVE DAVIES said he would offer the wording as an amendment. Number 1689 CO-CHAIRMAN GREEN said Amendment 2 would insert the wording "except under a general indirect recovery provision" between the words "subsection" and "or" on page 2, line 25. He asked if there was an objection. Hearing none, it was so ordered. CO-CHAIRMAN GREEN said the committee would address the education section of the bill. He asked if Mr. Grasser or Mr. Regelin had any suggestions. He asked Mr. Regelin if he knows what they are looking for with educational programs or educational efforts. Number 1743 MR. REGELIN said the department could do educational projects. CO-CHAIRMAN said, "There are three places that we're trying to find a word or some words that would explain what they're after and -- because it look to me like I misread it. When I read the amendments, I looked at that completely different than what Mr. Grasser has told us so..." MR. GRASSER explained the intent of that language was to allow for funding, through the fish and game fund. REPRESENTATIVE AUSTERMAN pointed out the language was on page 2, line 23. MR. GRASSER said it would allow for the use of fish and funds in nongame areas as long as there was some effort such as an interpretative sign on the boardwalk at Potters Marsh, etc., to show that the dollars that were help supporting the management of that nongame area came from fish and game fund money or PR money and that there was some effort to demonstrate that hunting, trapping, sport fishing and related management had benefits to wildlife. He said that was the intent. He noted if any members of the committee had alternative language they would like to suggest to make that more evident, it would be fine with him. Number 1854 MR. REGELIN explained the part that would probably be left out which is very important in their educational program is called "project wild." He explained that project wild is where they train teachers throughout the state to teach wildlife curriculum that the department develops about hunting, fishing and wildlife management. Unless that project is included somewhere else, they wouldn't be able to do that under the bill. CO-CHAIRMAN GREEN said Mr. Regelin had indicated hunter's education, so it is hunters as well as teachers. MR. REGELIN explained they are separate programs. CO-CHAIRMAN GREEN pointed out that both of the programs are funded, in part, from revenues that are brought in from licenses. MR. REGELIN indicated they are. Number 1906 REPRESENTATIVE OGAN asked how much money is expended on project wild and where has it been taking place. MR. REGELIN explained it is about $150,000 a year and they have trained approximately 4,000 teachers all over Alaska. On weekends the teachers come in and donate their time. He said they also have a national curriculum put together for all the western states and one specific to Alaska which is more oriented towards hunting. Number 1972 MR. GRASSER informed the committee it wasn't the Alaska Outdoor Council's intent to exclude funding of project wild. He said he does see in the original bill the language does tie the expenditure. He said they wrote their amendments based on that to a specific areas. Project wild obviously isn't an area, it is a program. He said if that could be fixed, it would be fine with him. Number 2003 REPRESENTATIVE DAVIES suggested the change would be needed on page 4, after line 8, and on page 2, after line 17. He indicated there is a wording, "shall be used for only projects that provide for," and then there is a list (A) through (F). On another page there is (A) through (E). He suggested inserting another section (F) on page 4 that says, "Educational programs in schools that support..." Then use the same language "support sport fishing, hunting, trapping and related management." MR. GRASSER suggest that might be simplified by looking at page 2, subsection (B) where it says "shall be used only for projects that provide for..." He said subsection (B) adds a whole list of things including hunter education. There might be a possibility of putting "other educational efforts" or similar language. He said there is an increment where money is allowed for hunter education. CO-CHAIRMAN GREEN indicated the wording should be "wildlife education." REPRESENTATIVE NICHOLIA questioned if the word "hunter" would be deleted and add "wildlife." CO-CHAIRMAN GREEN questioned if the wording would be put in after "hunter education." MR. GRASSER indicated that is correct. Number 1514 REPRESENTATIVE DAVIES moved the amendment be adopted. CO-CHAIRMAN GREEN indicated a motion has been made to insert "wildlife education" between the words "education" and "public" on line 5, page 2. He asked if there was an objection. Hearing none, the amendment was adopted. Number 2218 MR. OTNESS suggested the committee might want to look at Section 4 of page 3 and add that wording to line 29 as well. Number 2223 REPRESENTATIVE DAVIES moved the amendment be adopted. CO-CHAIRMAN GREEN said it has been moved that those same two words would be added between "education" and "public" on page 3, line 29. He asked if there was an objection. Hearing none, the amendment was adopted. Number 2243 MR. OTNESS said the last issue is defining "educational efforts." He said a section might be added to define educational efforts as interpretative signs, public service, public service events and educational programs. CO-CHAIRMAN GREEN asked if this would be in all three places. MR. OTNESS indicated that is correct. He suggested the drafter of the bill could come up with a definition for educational efforts. CO-CHAIRMAN GREEN asked what wording Mr. Otness is suggesting for page 1. MR OTNESS said, "Educational efforts defined as interpretative signs, public service, public service events and educational programs." Number 2360 MR. GRASSER said all the language in (h) on page 5 starting on line 9 was deleted. He suggested inserting a definition section and define "educational efforts" there so it wouldn't have to be done in three places. REPRESENTATIVE DAVIES noted in two places the wording "educational programs" was used and in another place the wording "educational efforts" was used. CO-CHAIRMAN GREEN said they would be defining "educational." TAPE 96-77, SIDE A Number 001 CO-CHAIRMAN GREEN said, "...and I want to specify where, but what. Representative Davies." REPRESENTATIVE DAVIES said has he understands, the committee is talking about using these funds to support specific areas like Potters Marsh and Kraemers Field. We're saying it's okay to use these funds for those things so long as there is an interpretative sign or there are public service events that support hunting, etc. CO-CHAIRMAN GREEN asked Mr. Grasser if that is what he had in mind. He said notification or some sort of sign is not necessarily the project the itself. Number 083 MR. GRASSER said it could be just an interpretative sign at Potters Marsh or it could be more than that. In the case of McNeil River it could be that the biologist that conducts the activity there could have a portion of his presentation to the tourists that visit that area would include information about hunting and the benefit to wildlife and related management, etc. He said it will be different in some areas, just as long there is some evidence that we're making an effort to let the public know what benefits wildlife is getting from hunting. Number 136 REPRESENTATIVE DAVIES said he would move a conceptual amendment which would be to add a definition section that defines the word "educational" in the context of "educational efforts and educational programs to include interpretative signs, public service events, and wildlife educational events and things like hunting days." Number 278 CO-CHAIRMAN GREEN asked if there was an objection to the conceptual amendment. Hearing none, the conceptual amendment was adopted. Number 324 CO-CHAIRMAN GREEN said, "Now that brings us back to perhaps the other half or the divided portion of this Amendment Number 1 where we had those three places called educational. With this definition now, is there a motion to accept those..." REPRESENTATIVE DAVIES so moved. CO-CHAIRMAN GREEN said, "Alright. Three places then in the Amendment 1 where we referred to education that we left out is now amendment to accept those as the completion of the amendment. Is there objection? This amendment then, Number 1 as well as an Amendment Number 2 that Representative Davies had are accepted into this act. Is there any other amendment or any other comment about this bill." Number 393 REPRESENTATIVE DAVIES moved on page 5, lines 5 through 8... CO-CHAIRMAN GREEN interrupted and stated that has been stricken. REPRESENTATIVE DAVIES moved to strike subsection (g). He explained the amendment the committee just adopted deleted a (indisc.) definition, but above that is (g) and that is the subject of his current amendment. CO-CHAIRMAN GREEN apologized to Representative Davies and asked what he was saying. REPRESENTATIVE DAVIES explained his motion is to delete subsection "(g)." REPRESENTATIVE WILLIAMS questioned Mr. Otness what his feeling is about the amendment. MR. OTNESS said he doesn't think the sponsor would be in agreement to that amendment. Number 491 REPRESENTATIVE AUSTERMAN said if the statute law says one thing the department is required to do and if they go and do something totally the opposite, doesn't the citizen already have the ability to take them to court. He said he believes they do. Number 530 MR. OTNESS said he doesn't know the answer to that question. MR. REGELIN said the department gets taken to court all the time. He said the answer is yes, they have the right. He said he guesses this just reiterates it. CO-CHAIRMAN GREEN said he remembers a bill that went through the House Resources Committee and then it was modified in the House Judiciary Committee where there was immunity granted for some and not others. That was deleted from the bill. Co-Chairman Green asked Mr. Otness if he knows what Senator Taylor had in mind by specifying that public officials are not immune from a lawsuit. MR. OTNESS said, "I'm hoping that I might delay a little bit so he might answer that himself. I'm not sure I care to speculate." Number 609 CO-CHAIRMAN GREEN said there is a motion to strike lines 5 through 8. He asked if there was an objection. CO-CHAIRMAN WILLIAMS objected. Number 628 REPRESENTATIVE AUSTERMAN asked for a five minute recess. CO-CHAIRMAN GREEN recessed the meeting. CO-CHAIRMAN GREEN called the meeting back to order and said the motion has been made to remove lines 5 through 8. He asked if there was objection. Hearing none, it was so ordered. Number 761 CO-CHAIRMAN GREEN said three amendments have been introduced and adopted. He asked if there was any other discussion. Number 806 SARA HANNAN, Executive Director, Alaska Environmental Lobby, came forward to give her testimony on the proposed committee substitute for SB 247. She said she applauds the committee for their diligence to detail in modifying the bill. Ms. Hannan said the amendments are vast improvements, but she doesn't think the bill can be amended to be a good piece of legislation. She referred to when the sponsor testified on the bill the previous week, he spoke about paying the fiddler and asserted that he had hired the fiddler by paying a small fee. Ms. Hannan said, "But I'm gonna say that the state of Alaska is hosting a big wedding and you've been invited to the wedding and you're fee to come to the wedding. What is expected out of you by that invitation is that when you come you bring a small gift or offering and the right of a hunter to hunt in Alaska and the small fee that a Alaska hunter pays does not cover the cost that the right to hunt bears along the rest of us. Most the cost the Department of Fish and Game have in managing game are cost for hunters and there are hundreds of thousands of dollars in those costs, but to be a sport hunter in Alaska you pay your small fee and you get to go hunt and to turn around and say, `That gives me the right to tell them what they're gonna serve me at dinner and what music the fiddler plays,' is an erroneous thought. There are very very very few programs that institute taxes or fees that cover and are a direct corollary between the user. The thing that comes the closest is probably the federal gasoline tax where you are actually are paying for how much you're driving or how big your car is. But if you drive an electric car, you still get to drive on federally funded highways and you don't get to go say, just because you've got biggest gas guzzler out there, I get to determine the speed limit because I pay more in gasoline taxes than you and your neighbors driving those little cost efficient car do. Everyone abides by the same laws and the cost of the highway patrol to patrol those laws is not proportioned out. Our licensure of hunters and fishers in this state is something we do because we think that you need to regulate them and they need to be responsible for it. They need to know the bag limits. They don't get to come say when they get to hunt and where they get to hunt through statute. They get to make those decisions by participating in the Board of Game and the Board of Fish process. Those are significant processes that are undermined by forcing the department into a position where they don't get to make fair recommendations and they don't get to distribute fees that they receive from the federal government in a disproportionate share. If we were truly gonna proportionalize this, the people who would most directly benefit and who get to decide what we do with this are German hunters who are coming on a guided hunt in Alaska and pay real money to be hunting here. They would get to say what songs the fiddler plays at the wedding we're hosting. That's not what we want. That's not what we should do." Number 989 MS. HANNAN continued, "I want to draw your attention to one other section of the bill, Section 1 that puts into statute a directive. And I don't have any problem with a directive for the Department of Game - the Department of Fish and Game to cooperate with sportsmen association, but the final phrase on that section, lines 7 and 8, is that the department should work to introduce new populations into suitable habitat. Siberian tigers into the Interior, elk on to islands in Southeast, sturgeon into our rivers, work to introduce new species. We don't have adequate money to manage the resources we do and provide the baseline science to do accelerate management, let alone to tell our department we want them working on new species. That's something they can do at the directive of the Board of Game and something we may want them to do. The reason Sweden has a huge moose population is that area of the country - of the planet has been inhabited for centuries in dense habitation. And to quickly equalize the habitat parallel in Alaska, if we let the entire Kenai Peninsula burn today, we'd have great moose habitat there. Lets torch it. Should burn every 100 years by nature, but we've controlled what it burns and as a result, the moose population and the moose habitat has changed. Those are socioeconomic decisions, not strictly biology and I don't think that putting into statute a misbalance of it corrects some of those very complex decisions. I think the bill stinks. I don't think it can be improved to the point that it should be enacted into statute. If you didn't take the time to read - I did distribute last week a really eloquent description of how those federal monies come to play and the thing to remember is our hunters and fishers aren't paying for what we're using. We're getting a lot of money out Manhattanites who are buying forty-fours and letting us get $9 out of every tax - nine to one ratio for what we're paying out in federal taxes on ammo. I don't want Manhattan to get our money and I don't think that we want German foreign hunters deciding our game policies. I don't think that this bill does anything to serve the hunters of Alaska. Thanks for your time." Number 1194 CO-CHAIRMAN GREEN said Ms. Hannan brought up an interesting point in Section 1 about the introduction of new species. MR. OTNESS indicated that it is populations and not species. CO-CHAIRMAN GREEN asked Mr. Regelin, "Do you see, while even the way this is written, that you would cooperate with? Does that mandate to you any concern that the division - the Department of Fish and Game would have if some sportsmen comes in and wants Bangle tigers that this would -- and I don't -- I know that was a facetious thing..." MS. HANNAN clarified it is Siberian tigers as Bengals wouldn't survive our winters, but Siberians would. Number 1235 MR. REGELIN noted that when he first reviewed the bill, he had the same concern Ms. Hannan had because he thought exotic species. He noted it doesn't say "species," it says "populations" and because of that he felt if we can take a population and move it within Alaska, because if it's not biologically feasible he doesn't think they would have to do it. REPRESENTATIVE DAVIES asked if there is a word they could use that would modify populations. MS. HANNAN suggested using the word "indigenous." Number 1276 REPRESENTATIVE DAVIES moved to insert the word "indigenous." MS. HANNAN suggested the wording, "To expand indigenous populations into suitable habitat." CO-CHAIRMAN GREEN asked Mr. Regelin what he would suggest. Number 1297 MR. REGELIN suggested, "To expand indigenous populations into suitable habitat." Number 1328 REPRESENTATIVE NICHOLIA asked if they should use the word "relocate." She asked if it doesn't say "introduce" and introducing would be relocating a species. MR. REGELIN said he didn't write it down. CO-CHAIRMAN GREEN explained that what he has is "introduced new" would be changed to "expand indigenous population." MR. REGELIN suggested using "relocate" or "trans locate" or something similar rather than "expand" might be better. Number 1362 REPRESENTATIVE NICHOLIA referred to caribou in the Interior and said if you wanted to move some of them to the Anchorage area, and asked if that is what the bill means. MR. REGELIN said that is the way he reads the bill. REPRESENTATIVE OGAN suggested using the wording, "introduce indigenous populations into suitable new habitat." CO-CHAIRMAN GREEN asked if there are any other comments before he offers the new amendment which would change the words "introduce new" and insert "expand indigenous." He asked if there was an objection. Hearing none, the amendment was adopted. Number 1438 REPRESENTATIVE KOTT made a motion to move CSSB 247 out of committee with individual recommendations and the accompanying fiscal notes. CO-CHAIRMAN GREEN asked if there was an objection. REPRESENTATIVE DAVIES objected. A roll call vote was taken. Representatives Austerman, Kott, Long, Ogan, Williams and Green voted in favor of the motion. Representatives Davies and Nicholia voted against the motion. So HCSCSSB 247(RES) passed out of the House Resources Committee. ADJOURNMENT Number 1490 There being no further business to come before the House Resources Standing Committee, CO-CHAIRMAN GREEN adjourned the meeting at 4:10 p.m.