Legislature(1997 - 1998)

02/20/1997 01:07 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               HOUSE RESOURCES STANDING COMMITTEE                              
                       February 20, 1997                                       
                           1:07 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Scott Ogan, Co-Chairman                                        
 Representative Beverly Masek, Vice Chair                                      
 Representative Ramona Barnes                                                  
 Representative Fred Dyson                                                     
 Representative Joe Green                                                      
 Representative William K. ("Bill") Williams                                   
 Representative Irene Nicholia                                                 
 Representative Reggie Joule                                                   
 MEMBERS ABSENT                                                                
 Representative Bill Hudson, Co-Chairman                                       
 COMMITTEE CALENDAR                                                            
 BRIEFING:  Timber Industry (Continued from Joint House/Senate                 
            Resources Standing Committees meeting 2/18/97)                     
 HOUSE BILL NO. 89                                                             
 "An Act relating to the Shuyak Island State Park."                            
      - MOVED CSHB 89(RES) OUT OF COMMITTEE                                    
 * HOUSE JOINT RESOLUTION NO. 20                                               
 Relating to RS 2477 rights-of-way.                                            
      - MOVED CSHJR 20(RES) OUT OF COMMITTEE                                   
 * HOUSE BILL NO. 128                                                          
 "An Act relating to water quality; directing the Department of                
 Environmental Conservation to conduct water quality research;                 
 establishing the Water Science Oversight Board; and providing for             
 an effective date."                                                           
      - SCHEDULED BUT NOT HEARD                                                
 HOUSE BILL NO. 28                                                             
 "An Act repealing the Alaska Coastal Management Program and the               
 Alaska Coastal Policy Council, and making conforming amendments               
 because of those repeals."                                                    
      - REMOVED FROM AGENDA                                                    
 (* First public hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  HB  89                                                               
 SHORT TITLE: SHUYAK ISLAND STATE PARK                                         
 SPONSOR(S): REPRESENTATIVE(S) AUSTERMAN                                       
 JRN-DATE      JRN-PG                 ACTION                                   
 01/27/97       150    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/27/97       150    (H)   CRA, RESOURCES                                    
 02/10/97              (H)   CRA AT 8:00 AM CAPITOL 124                        
 02/10/97              (H)   MINUTE(CRA)                                       
 02/12/97       307    (H)   CRA RPT CS(CRA) 3DP 2NR 1AM                       
 02/12/97       307    (H)   DP: JOULE, DYSON, IVAN                            
 02/12/97       307    (H)   NR: SANDERS, RYAN                                 
 02/12/97       307    (H)   AM: OGAN                                          
 02/12/97       307    (H)   FISCAL NOTE (DNR)                                 
 02/13/97       347    (H)   FIN REFERRAL ADDED                                
 02/20/97              (H)   RES AT 1:00 PM CAPITOL 124                        
 BILL:  HJR 20                                                               
 SHORT TITLE: OPPOSE DEPT. OF INTERIOR RS 2477 POLICY                          
 SPONSOR(S): REPRESENTATIVE(S) OGAN, Barnes, Foster                            
 02/07/97       264    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/07/97       264    (H)   RESOURCES                                         
 02/10/97       297    (H)   COSPONSOR(S): FOSTER                              
 02/20/97              (H)   RES AT 1:00 PM CAPITOL 124                        
 WITNESS REGISTER                                                              
 MEGAN SMITH, Executive Director                                               
 National Biofuels Association                                                 
 1130 Connecticut Avenue NW, Suite 300                                         
 Washington, DC  20036                                                         
 Telephone:  (202) 331-8500                                                    
 POSITION STATEMENT:  Gave presentation on biofuels for timber                 
                      industry overview.                                       
 MARK YANCEY, Senior Project Coordinator                                       
 National Renewable Energy Laboratory                                          
 1617 Cole Boulevard                                                           
 Golden, Colorado  80401-3393                                                  
 Telephone:  (303) 275-4454                                                    
 POSITION STATEMENT:  Answered questions on biofuels for timber                
                      industry overview.                                       
 REPRESENTATIVE ALAN AUSTERMAN                                                 
 Alaska State Legislature                                                      
 Capitol Building, Room 434                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4230                                                    
 POSITION STATEMENT:  Presented sponsor statement for HB 89.                   
 DAVID STANCLIFF, Legislative Assistant                                        
    to Representative Scott Ogan                                               
 Alaska State Legislature                                                      
 Capitol Building, Room 128                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3878                                                    
 POSITION STATEMENT:  Explained changes in proposed committee                  
                      substitute for HB 89.                                    
 JIM STRATTON, Director                                                        
 Division of Parks and Outdoor Recreation                                      
 Department of Natural Resources                                               
 3601 C Street, Suite 1200                                                     
 Anchorage, Alaska  99503-5921                                                 
 Telephone:  (907) 269-8700                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions on HB 89.                                      
 CRAIG TILLERY, Assistant Attorney General                                     
 Environmental Section                                                         
 Civil Division (Anchorage)                                                    
 Department of Law                                                             
 1031 West 4th Avenue, Suite 200                                               
 Anchorage, Alaska  99501-1994                                                 
 Telephone:  (907) 269-5100                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions on CSHB 89(RES).                               
 WILLY DUNNE, Chair                                                            
 Kachemak Bay State Parks Citizen Advisory Board                               
 P.O. Box 15043                                                                
 Fritz Creek, Alaska  99603                                                    
 Telephone:  (907) 235-7578                                                    
 POSITION STATEMENT:  Testified in support of HB 89; no official               
                      position on CSHB 89(RES).                                
 JEROME SELBY, Mayor                                                           
 Kodiak Island Borough                                                         
 710 Mill Bay Road                                                             
 Kodiak, Alaska  99615                                                         
 Telephone:  (907) 486-9300                                                    
 POSITION STATEMENT:  Testified in support of CSHB 89(RES).                    
 TOM PEARSON                                                                   
 P.O. Box 284                                                                  
 Kodiak, Alaska  99615                                                         
 Telephone:  (907) 486-2840                                                    
 POSITION STATEMENT:  Testified in support of CSHB 89(RES).                    
 HANK PENNINGTON                                                               
 P.O. Box 5570                                                                 
 Chiniak, Alaska  99615                                                        
 Telephone:  (907) 486-2893                                                    
 POSITION STATEMENT:  Testified in support of CSHB 89(RES).                    
 JOEL WATTUM                                                                   
 P.O. Box 3601                                                                 
 Kodiak, Alaska  99615                                                         
 Telephone:  (907) 486-6803                                                    
 POSITION STATEMENT:  Testified in support of HB 89.                           
 KIM SCHMIDT                                                                   
 P.O. Box 20487                                                                
 Juneau, Alaska  99802                                                         
 Telephone:  (907) 463-5093                                                    
 POSITION STATEMENT:  Testified in support of HB 89.                           
 MICHELE DRUMMOND                                                              
 P.O. Box 334                                                                  
 Kodiak, Alaska  99615                                                         
 Telephone:  (907) 486-9400                                                    
 POSITION STATEMENT:  Testified in support of HB 89.                           
 JODY KENNEDY, Volunteer                                                       
 Alaska Environmental Lobby                                                    
 P.O. Box 22151                                                                
 Juneau, Alaska 99802                                                          
 Telephone:  (907) 463-3366                                                    
 POSITION STATEMENT:  Testified against HJR 20.                                
 CRAIG PUDDICOMBE                                                              
 P.O. Box 215                                                                  
 Palmer, Alaska  99645                                                         
 Telephone:  (907) 745-3151                                                    
 POSITION STATEMENT:  Testified on HJR 20.                                     
 JANE ANGVIK, Director                                                         
 Division of Land                                                              
 Department of Natural Resources                                               
 3601 C Street, Suite 1122                                                     
 Anchorage, Alaska 99503-5947                                                  
 Telephone:  (907) 269-8503                                                    
 POSITION STATEMENT:  Testified in support of HJR 20.                          
 NELSON ANGAPAK                                                                
 Special Assistant - Lands                                                     
 Alaska Federation of Natives                                                  
 1577 C Street, Suite 100                                                      
 Anchorage, Alaska  99501                                                      
 Telephone:  (907) 274-3611                                                    
 POSITION STATEMENT:  Testified on HJR 20.                                     
 ACTION NARRATIVE                                                              
 TAPE 97-16, SIDE A                                                            
 Number 0001                                                                   
 CO-CHAIRMAN SCOTT OGAN called the House Resources Standing                    
 Committee meeting to order at 1:07 p.m.  Members present at the               
 call to order were Representatives Ogan, Masek, Dyson, Green,                 
 Nicholia and Joule.  Representatives Williams and Barnes arrived at           
 1:09 p.m. and 1:28 p.m., respectively.  Co-Chairman Ogan advised              
 that Co-Chairman Hudson was ill that day.                                     
 BRIEFING:  Timber Industry                                                  
 The first order of business was a briefing on the timber industry.            
 Although continued from the 2:00 p.m. briefing of the Joint                   
 House/Senate Resources Standing Committees on February 18, 1997,              
 this was not a joint meeting.                                                 
 Number 0104                                                                   
 MEGAN SMITH, Executive Director, National Biofuels Association,               
 said she was also a subcontractor for the U.S. Department of Energy           
 National Renewable Energy Laboratory (NREL) in Golden, Colorado.              
 The U.S. Department of Energy had worked ten years on technology              
 that was now ready for market advancement.  The technology involved           
 converting cellulose, basically anything made of wood or                      
 agriculture residues, into ethanol.  Ms. Smith said they came to              
 Alaska six months ago, after noticing Alaska had an incentive in              
 place for ethanol production, a wood waste problem and an ethanol             
 Number 0210                                                                   
 MS. SMITH explained that Alaska had been using methyl tertiary                
 butyl ether (MTBE) mixed with fuel in Fairbanks and Anchorage.  For         
 different reasons, it had not gone over well, and Anchorage was now           
 using "E10."  Ms. Smith said while MTBE was a fairly complicated              
 molecule, ethanol was "such a nice molecule you can actually drink            
 it."  She noted that California, which was now having problems with           
 MTBE leaching into ground water, may be converting to ethanol soon.           
 MS. SMITH said right now in the United States, ethanol is made                
 mostly in the Midwest from starch inside corn kernels.  "The rest             
 of the plant is this cellulose that we're talking about," she                 
 explained.  "And there is a federal subsidy in place right now at             
 54 cents a gallon or 5.4 cents per gallon when it's mixed at E10.           
 Basically, NREL's trying to help the corn ethanol industry improve            
 their conversion factors by using this cellulose in the corn.  But            
 you can also take that a step further and look at other products              
 that are cellulose-based, such as wood waste in Alaska and convert            
 MS. SMITH said preliminary results from NREL looked fairly good for           
 soft woods, which were composed mostly of six-carbon sugars or                
 glucose, with a fairly good conversion rate.  It also looked                  
 simpler than using some other feed stocks.  She noted that Alaska             
 had basically free waste wood or "hog fuel" that the industry                 
 wanted to get rid of.  A free feed stock would drop production                
 costs for ethanol drastically, which was another reason they had              
 come to Alaska.                                                               
 Number 0366                                                                   
 MS. SMITH explained that wood is made of glucose and approximately            
 25 percent lignin.  A precursor to coal, lignin has the same BTU              
 content as coal.  "So you can actually take the lignin out of the             
 wood and use it to run the entire process, so you don't have any              
 electricity coming in," she said.  "You don't have to buy any                 
 electricity.  It runs itself, and in addition it has about 20                 
 percent of this electricity left over to sell to the grid or help             
 run a sawmill or whatever you want to couple it up to ....  You can           
 use it as process steam as well."                                             
 MS. SMITH referred to job creation and said the current ethanol               
 market in Anchorage was 8 million gallons.  Preliminary statistics            
 indicated 8 million gallons would produce roughly 50 jobs right at            
 the plant.  Jobs created by bringing in the resource from the                 
 forests, for example, would add another 50 to 100 jobs.  They                 
 estimated 36 million board feet per year would be required to run             
 the 8-million-gallon plant.  "And the people that we've talked to,            
 it sounds like that is feasible in this area because of the hog               
 fuel problem," she said.  "We're not talking about using the                  
 higher-valued wood.  We really are bottom feeders."  She said they            
 wanted all the waste wood possible.                                           
 MS. SMITH suggested Alaska could make more than 8 million gallons             
 and market it to the Lower 48.  For example, a market for ethanol             
 was starting to grow in California, which currently uses 1.7                  
 billion gallons of MTBE.  Ms. Smith indicated they had been working           
 in California to persuade them to use ethanol.                                
 MS. SMITH had also made telephone calls that day about developing             
 a market in Japan.  She understood Japan currently used some ethyl            
 tertiary butyl ether (ETBE).  She suggested the possibility of                
 shipping ethanol to Japan, or other markets, from Alaska.                     
 Number 0546                                                                   
 MS. SMITH reported, "Right now, at the National Renewable Energy              
 Laboratory in Colorado, they have a pilot plant that is processing            
 about one ton of this biomass per day.  And they are looking at the           
 soft woods on a bench scale.  And as I said, it looks pretty good             
 so far.  They haven't hit any glitches.  And they're thinking they            
 could probably have all the fine tuning on this technology for soft           
 woods developed ... within a year.  So this would be feasible for             
 something in Alaska."                                                         
 MS. SMITH noted that NREL is working on a "prefeasibility study"              
 with the Ketchikan pulp mill.  They are looking at using existing             
 boilers and the waste water treatment facility, as well as possibly           
 retrofitting their facility for this process.                                 
 Number 0601                                                                   
 MS. SMITH said the process is "basically pretty environmentally               
 benign."  One site in California, which has strict environmental              
 regulations, had already been permitted.  She foresaw no problems             
 with that in Alaska.                                                          
 MS. SMITH believed a state incentive was probably necessary to get            
 started and to help attract the industry.  Being one of the first             
 such plants built, there would be risk.  Ms. Smith hoped the                  
 federal subsidy would stay in place.  However, if that were                   
 removed, there would be additional reason to keep the state                   
 Number 0656                                                                   
 CO-CHAIRMAN OGAN thanked Ms. Smith.  He jokingly said he could                
 envision homesteader stills out in the bush to run chain saws.              
 REPRESENTATIVE JOE GREEN asked Ms. Smith whether any kind of timber           
 could be used.                                                                
 MS. SMITH said any tree will do.  There were different sugars in              
 hard and soft woods.  There were also different water contents, for           
 example, but those could be analyzed.                                         
 REPRESENTATIVE GREEN asked, "You have regular and high-test?"                 
 MS. SMITH said, "No, it's always the same."                                   
 Number 0719                                                                   
 REPRESENTATIVE GREEN asked whether all the biomass was used or                
 whether a significant product was left over.                                  
 MS. SMITH asked whether he meant the hog fuel and everything.                 
 REPRESENTATIVE GREEN concurred.                                               
 MS. SMITH said there were always some waste streams coming off the            
 REPRESENTATIVE GREEN clarified that he was thinking of the bulk               
 actually being utilized.                                                      
 MS. SMITH said, "We use all of it."                                           
 Number 0756                                                                   
 MARK YANCEY, Senior Project Coordinator, National Renewable Energy            
 Laboratory, came forward to elaborate.  He explained, "Wood is                
 about 70-75 percent of these sugars, and ... probably 90 percent of           
 that would be converted to ethanol.  And then the remainder would             
 be lignin that we would propose would be used in a boiler to run              
 the plant, generate electricity and steam.  So there'd be very,               
 very little waste left over."                                                 
 REPRESENTATIVE GREEN said he supposed the cost of the plant would             
 depend on the ultimate through-put it was designed for.  He asked             
 whether it was modular, so that a pilot could be put in and later             
 built onto.                                                                   
 MR. YANCEY replied, "You can do that.  That's done quite often in             
 the corn ethanol industry.  They build a smaller plant and then add           
 on.  Once they have the cash flow going, they'll expand the plant.            
 And you could do the same thing here."                                        
 Number 0800                                                                   
 REPRESENTATIVE GREEN asked whether their study would include plant            
 location.  He inquired about putting the plant near the work force            
 versus putting it near the biomass.  He noted there was a                     
 tremendous spruce kill throughout Southcentral Alaska.                        
 MR. YANCEY said he had heard about that.  He indicated they could             
 look at plant location in their study.  He said moving the plant              
 away from the resource would add to transportation costs.                     
 Number 0846                                                                   
 REPRESENTATIVE GREEN asked what emissions would come from the plant           
 once it was operating.                                                        
 MR. YANCEY replied, "The primary source of the emissions would be             
 from the boiler.  So it's basically a wood-burner.  And that's                
 about it.  You'd have a waste water stream, but that would go                 
 through a water treatment plant and would be pretty benign."                  
 Number 0882                                                                   
 REPRESENTATIVE FRED DYSON asked whether their projections showed it           
 could be competitive with petroleum-based automotive fuels.                   
 MR. YANCEY replied, "That's our goal.  We're not quite there yet.             
 Really what we need to compete with right now is MTBE, and really             
 that doesn't exist in Alaska.  So that competitor is gone."  He               
 said their goal eventually was to produce ethanol at 65 cents per             
 gallon and compete directly with gasoline.                                    
 REPRESENTATIVE DYSON asked, "Are you saying that cities like                  
 Anchorage's exceeding of the federal air quality standards and the            
 poor reputation of methanol is giving you guys an opportunity for             
 almost a monopoly market if you can get in here and get into                  
 MR. YANCEY replied, "It's definitely not a monopoly in the entire             
 country, because the MTBE appears to be a problem in the cold                 
 climates."  He noted there had been problems in Wisconsin, New                
 Jersey and elsewhere.                                                         
 Number 0964                                                                   
 MS. SMITH added that it was Alaska's choice as to which oxygenate             
 to use.  "But our understanding is that MTBE is not favorable up              
 here," she said.  "So you've decided to go with ethanol.  And this            
 is a way that you could be making it in-state instead of shipping             
 it all the way from the Midwest, which is financially pretty                  
 Number 0982                                                                   
 REPRESENTATIVE DYSON asked what the state could do to make it work.           
 MR. YANCEY believed keeping the incentive in place was the most               
 important thing for the state to do at this time.  It was new                 
 technology and a new industry.  Investors needed to be attracted.             
 "And at this time, it's a relatively high-risk venture to build               
 this plant and to make money," he said.  "With the tax incentive,             
 that risk is reduced substantially.  So I think with that in place,           
 you'll be able to attract the capital and someone to be the                   
 owner/operator of the plant."                                                 
 Number 1039                                                                   
 REPRESENTATIVE IRENE NICHOLIA asked what the tax incentives were.             
 MR. YANCEY said there is an 8-cent-per-gallon tax exemption for               
 ethanol that is blended with motor fuel.  That translates to 80               
 cents per gallon after it is blended at a 10-percent level.  "It's            
 a motor fuel excise tax," he added.                                           
 MS. SMITH said it was an excise tax exemption.                                
 MR. YANCEY added, "A state tax exemption."                                    
 Number 1071                                                                   
 REPRESENTATIVE NICHOLIA said, "If we keep that in place, then,                
 that's an incentive for people like your other companies to come in           
 to Alaska and become venturers?"                                              
 MR. YANCEY clarified that NREL, which develops technology and is              
 funded by taxpayers, would not own a plant.  Instead, NREL was                
 trying to develop the technology and transfer it to private                   
 industry.  "But you need some incentive to get private industry               
 started, to get them to invest in this," he advised.                          
 Number 1101                                                                   
 REPRESENTATIVE NICHOLIA referred to Mr. Smith's indication that               
 NREL is working with the Ketchikan pulp mill and asked, "What other           
 plans do you have for Alaska?"                                                
 MS. SMITH said they had talked to people in the Interior and were             
 aware of the beetle kill.  Although there was a lot of interest in            
 Alaska, they were talking with those who seemed like the most                 
 serious players or who showed the most interest.  Sealaska                    
 Corporation and the Ketchikan Pulp Company currently stood out.               
 Despite a lot of possibility in the Interior, there was no                    
 "player."  For example, there had been talk of a veneer plant;                
 however, Ms. Smith believed that had fallen through.  "So we're               
 just going where the opportunities are, really," she concluded.               
 Number 1154                                                                   
 REPRESENTATIVE NICHOLIA asked who they were talking to in the                 
 MS. SMITH replied, "Ron Ricketts was kind of our starting place,            
 and we talked to the university some."  She said they had also                
 talked to Ahtna Incorporated.  Although Ahtna was interested, the           
 opportunity was not quite there.                                              
 Number 1187                                                                   
 REPRESENTATIVE GREEN asked what minimum through-put or volume of              
 biomass feed stock was required and how much that would cost.                 
 MS. SMITH replied that for the 8-million-gallon plant, used as a              
 model because that was Anchorage's market, they estimated 36                  
 million board feet per year.                                                  
 REPRESENTATIVE GREEN said although that would take care of                    
 Anchorage, areas such as Fairbanks also had a problem.  He asked              
 about the possibility of multiple plants and how much an 8-million-           
 gallon-per-year plant would cost.  He further asked whether that              
 amount would be produced throughout the year for use over a three-            
 month period.                                                                 
 MS. SMITH replied that right now Anchorage is oxygenating their               
 fuels year-round.  They have chosen to do that, although by law               
 they only are required to oxygenate for four months.  Ms. Smith               
 said, "Alaska can do whatever they want to.  If they want to start            
 using 85 percent ethanol in vehicles made by Ford, there's a Taurus           
 out now you can buy."  She indicated the 500-vehicle state vehicle            
 fleet could be changed over, creating a market.  There were also              
 export markets.  She asked Mr. Yancey to address multiple plants.             
 Number 1265                                                                   
 REPRESENTATIVE GREEN restated his concern, saying although NREL was           
 gearing around an 8-million-gallon plant for Anchorage, there was             
 also a problem in Fairbanks requiring use of an alternate fuel.               
 MR. YANCEY responded, "The size of the plant normally is restricted           
 by the distance that you have to transport the feed stock.  So the            
 bigger the plant gets, the more ... feed stock you have to bring in           
 from longer distances.  So you reach a point where bigger plants              
 aren't economical."                                                           
 Number 1292                                                                   
 REPRESENTATIVE GREEN suggested the study might show it was better             
 to locate the plant even away from Anchorage.  It might be cheaper            
 to ship the biomass a short distance and then ship the product.               
 MR. YANCEY agreed.  He said generally it was more important to                
 locate the plant where the resource was.                                      
 REPRESENTATIVE GREEN asked how much an 8-million-gallon plant would           
 MR. YANCEY said about $20 million for the ethanol plant.  "If you             
 have to build a biomass power plant with it, that may be another              
 $10 million," he added.                                                       
 Number 1320                                                                   
 MS. SMITH referred to the Ketchikan pulp mill and pointed out that            
 facility already had the boilers in place, which would reduce                 
 capital costs.                                                                
 REPRESENTATIVE BILL WILLIAMS noted that this might be a big help to           
 Ketchikan.  He asked whether a letter of support from the House               
 Resources Standing Committee would be helpful.                                
 MS. SMITH believed it would.  She suggested perhaps writing a                 
 letter to NREL asking for assistance in a prefeasibility study.               
 REPRESENTATIVE WILLIAMS asked that Ms. Smith talk with her staff              
 and Pete Ecklund, and he indicated he would talk to the committee           
 Number 1368                                                                   
 CO-CHAIRMAN OGAN noted that Alaska had a serious problem with an              
 excess of pulp-grade timber.  He expressed hope that long-term                
 contracts could be negotiated to keep the sawmills open.  He                  
 believed it would be advantageous to look at ethanol production; at           
 using excess pulp-grade wood for setting up kilns; and at getting             
 more value-added finished products from Alaska's fine timber,                 
 rather than letting someone else do it.                                       
 HB 89 - SHUYAK ISLAND STATE PARK                                            
 Number 1409                                                                   
 CO-CHAIRMAN OGAN announced the next order of business was House               
 Bill No. 89, "An Act relating to the Shuyak Island State Park."  He           
 said he had been working closely with the sponsor and the Kodiak              
 Island Borough to come up with a consensus on a committee                 
 Number 1438                                                                   
 REPRESENTATIVE ALAN AUSTERMAN, sponsor of HB 89, said while the               
 bill was fairly simple, the issues of adding new lands to parks and           
 tying up lands in Alaska were complicated.  He said the people of             
 Kodiak Island had been working on this concept for some time now.             
 He noted that Shuyak Island, the furthest north of a chain of                 
 islands, is fairly small compared to Afognak Island or Kodiak                 
 Island itself.                                                                
 REPRESENTATIVE AUSTERMAN said the west side of Shuyak Island was              
 already a state park.  On the east side, some of the island was               
 "tied up in what they call a marine habitat area."  The area under            
 consideration was in the middle.  Owned by the Kodiak Island                  
 Borough, it had been deeded under an agreement with the state when            
 the state was giving out lands to municipalities.                             
 REPRESENTATIVE AUSTERMAN said the history of Shuyak Island was one            
 of commercial and sport fishing, recreational use and hunting.  On            
 the southern end of the island was an old processing plant, which             
 had been sold and converted into a recreational sport fishing and             
 hunting lodge.  He said there were probably five other pieces of              
 patented land or mining claims in addition to the state and borough           
 lands on Shuyak Island.                                                       
 Number 1549                                                                   
 REPRESENTATIVE AUSTERMAN explained that following settlement of the           
 Exxon Valdez case, a large amount of money was put into the Exxon             
 Valdez Oil Spill Trustee Council.  They began looking for pieces of           
 property that should be protected.  When the land in question was             
 chosen, Representative Austerman was on the Kodiak Island Borough             
 assembly.  He had taken part in negotiations to involve the Exxon             
 Valdez trustees.  The borough assembly had passed an ordinance                
 establishing a permanent fund for maintaining borough buildings;              
 that money would be available in the long term for Kodiak Island              
 and all its schools, including the six villages on the island.  "So           
 we are looking forward to the finalization of all this," he said.             
 Number 1650                                                                   
 REPRESENTATIVE AUSTERMAN acknowledged that some people were                   
 concerned about tying up more land.  He said two-thirds of Kodiak             
 Island is in a National Wildlife Refuge, with the other third being           
 state and private holdings.  Although the availability of land was            
 a constant source of concern, he believed certain pieces of                   
 property were special and should not be logged or subjected to                
 motorized use.  "And we on Kodiak Island feel that Shuyak Island is           
 that place for us," he stated.                                                
 REPRESENTATIVE AUSTERMAN explained the exclusion of all-terrain               
 vehicles (ATVs).  The terrain was not conducive to ATVs.  It was              
 heavily timbered, with only a few open areas right on top of the              
 mountains.  He believed the Kodiak community considered that when             
 deciding they wanted this as a state park.  He said, "Now, the deal           
 that the Kodiak Island Borough struck with the Exxon Valdez, and              
 have struck with the state parks, is that they put a lot of                   
 covenants on what the state parks could do with the property as               
 well.  And part of that was the ATVs, for example.  Part of it was            
 that there are six or so pieces of patented land and mining claims            
 on there that needed to be recognized and not touched and not                 
 interfered with."                                                             
 Number 1742                                                                   
 REPRESENTATIVE AUSTERMAN briefly discussed CSHB 89(CRA).  The                 
 question had been raised whether Kodiak Island should be protected            
 further because the covenants were not in the original bill but in            
 a separate agreement.  The CSHB 89(CRA) version, which                        
 Representative Austerman had gone through, included those                     
 covenants; he had no problem with that.  He said the only other               
 issue that came up during the previous committee's hearing was in             
 reference to firearms.  He asked Co-Chairman Ogan whether that was            
 covered in the current proposed committee substitute.                         
 CO-CHAIRMAN OGAN said yes.                                                    
 Number 1792                                                                   
 REPRESENTATIVE RAMONA BARNES asked, "When you looked at this park,            
 did you look at finding land elsewhere that we could take a like              
 amount of land and make it public, or other uses, take it out of              
 the park system in exchange for putting this land into the park               
 Number 1815                                                                   
 REPRESENTATIVE AUSTERMAN said he had not, although there may have             
 been other discussions at the borough level in the final stages of            
 which he was unaware.  He suggested someone from the Division of              
 Parks and Outdoor Recreation or the mayor of Kodiak might address             
 that.  Representative Austerman acknowledged the desire of some               
 legislators for a "land-neutral" concept.  He stated he had no                
 problem with that, if it was required to protect areas needing                
 protection and to open areas that should be opened.                           
 Number 1852                                                                   
 REPRESENTATIVE GREEN referred to language in Section 1 of CSHB
 89(CRA) that said, "continued use of the area for sport and                   
 subsistence hunting and fishing, commercial fishing, trapping and             
 recreational activities."  He stated there was a "real donnybrook"            
 between those entities.  The legislature kept saying it was trying            
 to bring the warring factions together between sports fishing and             
 commercial fishing.  Yet this bill added the separation again.                
 REPRESENTATIVE GREEN asked Representative Austerman to consider               
 dropping the segregation between fishing activities.  Instead, he             
 suggested the wording "for hunting, fishing and trapping and                  
 recreational activities."  He expressed the desire to keep this               
 divisiveness out of new legislation and asked for Representative              
 Austerman's thoughts.                                                         
 REPRESENTATIVE AUSTERMAN replied that they had thought about that.            
 He himself had added "commercial fishing" into the bill.  One                 
 reason was that Shuyak Island historically had been a lucrative               
 commercial fishing area, and he was concerned about excluding an              
 industry that had been there so long.  He was also concerned that             
 if the bill just said "fishing," at some point the Division of                
 Parks and Outdoor Recreation might preclude commercial fishing.               
 He said he did not look at it as being a divisive action.  Rather,            
 he looked at it more as a protection of the existing things already           
 going on in that area.                                                        
 Number 1962                                                                   
 REPRESENTATIVE GREEN said a significant amount of land was                    
 purchased as an outgrowth of the Exxon Valdez oil spill in Prince             
 William Sound.  He proposed finding out how much additional land              
 had been "locked up" with the oil spill money.  He expressed                  
 concern that Alaska, a resource state, was locking itself out.  He            
 suggested a potential a trade-off of these lands.                             
 Number 2039                                                                   
 REPRESENTATIVE AUSTERMAN said he did not have information on how              
 much land the Exxon Valdez settlement had purchased.  He knew it              
 was a fair amount.  However, one of the beauties Kodiak Island                
 residents saw and felt was that two-thirds of the island was tied             
 up in the federal National Wildlife Refuge, which protected them.             
 REPRESENTATIVE AUSTERMAN said before becoming a legislator, he                
 fought with the National Wildlife Refuge tooth and nail because he            
 thought they were too protective.  Now he had served two years in             
 the legislature and gone through battles over issues in Cook Inlet            
 and the Kenai River, for example, about what is happening to the              
 habitat and the wildlife resource.  He was becoming ever more                 
 thankful for the National Wildlife Refuge because it had a tendency           
 to keep Kodiak pristine enough so they could still enjoy it.  He              
 emphasized that it was still usable.                                          
 REPRESENTATIVE AUSTERMAN explained that nearby Afognak Island                 
 contained a lot of clear-cut area.  "It's good economy," he said.             
 "And you look at the old area where they clear-cut it before, and             
 it's starting to grow back.  But if you took the whole island and             
 did that to it, then I think you've destroyed the pristine value of           
 what you've got out there.  So I think that you have to have that             
 balance.  And I think that on Kodiak, you've got it."                         
 REPRESENTATIVE AUSTERMAN referred to Shuyak Island and indicated              
 access to this valued pristine wilderness was by skiff or float               
 plane.  It offered the ability for a tourism industry that cannot             
 be destroyed.  He emphasized they were trading off the logging                
 industry or other development for the tourism industry.                       
 Number 2166                                                                   
 CO-CHAIRMAN OGAN offered a proposed committee substitute, 0-                  
 LS0382\B, Luckhaupt, 2/17/97.                                                 
 REPRESENTATIVE AUSTERMAN advised that the mayor of Kodiak Island              
 Borough and the assembly agreed with the changes in the proposed              
 committee substitute.                                                         
 Number 2191                                                                   
 DAVID STANCLIFF, Legislative Assistant to Representative Scott                
 Ogan, came forward to explain changes in the proposed committee               
 substitute.  He referred to Section 1, page 1, lines 7 through 15.            
 He said the purposes section was changed to put it more in line               
 with covenants and deed restrictions contained in the agreement               
 between the Division of Parks and Outdoor Recreation and the Kodiak           
 Island Borough.  It required the division to follow that agreement,           
 which related to traditional uses.  It also added commercial                  
 fishing as a traditional use.                                                 
 MR. STANCLIFF referred to Section 4, page 3, lines 26 through 30.             
 He said the second change provided specific language to protect the           
 Department of Fish and Game's management authority within the park.           
 Not a new concept, it had been used in other land descriptions.               
 Number 2275                                                                   
 MR. STANCLIFF referred to Section 5, page 4, lines 5 through 7.  He           
 said the third change related to the prohibition of weapons.  The             
 original bill had said "lawful use of a weapon."  He explained,               
 "This allows people within the park to use a weapon at all times              
 for personal protection.  And if there are going to be                        
 prohibitions, they should be for only during a time when the public           
 safety is unduly threatened within that park."                                
 MR. STANCLIFF referred to Section 5, page 4, line 15.  He said it             
 added commercial fishing as a protected traditional use.                      
 MR. STANCLIFF referred to Section 6, page 4, lines 18 through 28.             
 He said the most comprehensive change was language added by prior             
 legislatures to shift the burden somewhat from the user to the                
 department when an incompatibility was found within a state park.             
 "This would require the commissioner to go through a series of                
 steps and outline what that compatibility is, the specific area               
 that it's going to occur in, the time that the incompatibility is             
 going to exist and also the reasons for each compatibility," he               
 explained.  Mr. Stancliff said one other important provision in               
 Section 6 was that traditional access to private land within the              
 park was also included, which was not specifically stated in the              
 previous bill.                                                                
 Number 2364                                                                   
 REPRESENTATIVE BARNES referred to page 4, line 7.  She asked the              
 meaning of the language, "and only at such times that public safety           
 is unduly threatened".                                                        
 MR. STANCLIFF replied, "That would mean probably a circumstance ...           
 where there was heavy camping in an area.  And if people had been             
 accustomed to using that area as a target practice area, and it to            
 be an area where people camped heavily, the commissioner, ... both            
 under the incompatible uses and this clause, could prohibit the use           
 of a weapon there."                                                           
 Number 2394                                                                   
 REPRESENTATIVE BARNES suggested anytime there was vague language in           
 legislation, somebody did mischief.  She believed "unduly                     
 threatened" was too vague.                                                    
 CO-CHAIRMAN OGAN concurred.  He proposed a conceptual amendment               
 that would strike "is unduly" from the language, leaving it saying,           
 "and only such times that public safety is threatened."                       
 REPRESENTATIVE BARNES made a motion to adopt that amendment.                  
 REPRESENTATIVE DYSON said he would have used the term "public                 
 safety crisis."                                                               
 CO-CHAIRMAN OGAN thought that was also subjective.  He said a                 
 person with a gun in the woods might seem threatening to someone.             
 REPRESENTATIVE DYSON said that to him, the word "crisis" was far              
 more restrictive than the proposed wording.                                   
 CO-CHAIRMAN OGAN noted there was a motion before the committee to             
 adopt the amendment.  He asked whether Representative Dyson still             
 REPRESENTATIVE DYSON withdrew his objection.                                  
 TAPE 97-16, SIDE B                                                            
 Number 0006                                                                   
 REPRESENTATIVE GREEN suggested that since the committee substitute            
 was not yet adopted, it could not be amended.                                 
 REPRESENTATIVE BARNES withdrew her motion.  She then made a motion            
 that the committee adopt work draft 0-LS0382\B, Luckhaupt, 2/17/97.           
 She asked unanimous consent.  There being no objection, the work              
 draft was before the committee.                                               
 Number 0059                                                                   
 REPRESENTATIVE BARNES made a motion to amend the work draft on page           
 4, line 7, by striking the words "is unduly" following "public                
 safety."  The language would then read, "only at such times that              
 public safety is threatened".  She asked unanimous consent.  There            
 being no objection, the amendment was adopted.                                
 Number 0089                                                                   
 REPRESENTATIVE REGGIE JOULE referred to page 4, line 5, and asked             
 whether it might be necessary to define "weapon."                             
 CO-CHAIRMAN OGAN replied that he would broadly interpret that to be           
 firearms, bow and arrow, a knife, or any other form of weapon.  He            
 asked whether anyone present could address that.                              
 Number 0115                                                                   
 MR. STANCLIFF explained, "The drafters typically try to include a             
 term broad enough to include anything that may be used to carry out           
 the traditional activities in the area.  And they don't want to be            
 restrictive.  So they have gone to the term "weapon" as a broad               
 term, to be all-inclusive."                                                   
 Number 0143                                                                   
 JIM STRATTON, Director, Division of Parks and Outdoor Recreation,             
 Department of Natural Resources, came forward to testify in support           
 of HB 89.  He said the existing park provided some of the best                
 hunting and fishing opportunities in the entire state park system.            
 When the park was created in 1984, the legislature provided for               
 four public-use cabins, which had become some of the more popular             
 in the entire park system, especially in August for the silver                
 salmon run and in the fall for deer hunting.  Travel through the              
 park was primarily by float plane from Kodiak or Homer, which                 
 provided a significant economic boost to air taxi operators and               
 guides in both communities.                                                   
 Number 0194                                                                   
 MR. STRATTON said HB 89 would perpetuate these fish, wildlife and             
 recreation opportunities by expanding the park's boundaries to                
 encompass two major pieces of land for which current and future               
 uses were legally restricted for fish and wildlife habitat and                
 public recreation purposes.  The 9,009 acres of existing state                
 land, delineated in blue on the map, were restricted by a legal               
 settlement between the state and the Kodiak Island Borough.  This             
 legal settlement resulted from a disagreement over municipal                  
 entitlements and sets forth in a consent decree, signed in 1981,              
 that these lands may only be used for wildlife habitat and public             
 recreation.  Plans for that acreage to become a state game refuge             
 were never completed; it was now included in this park expansion              
 MR. STRATTON said in 1996, the Exxon Valdez Oil Spill (EVOS)                  
 Trustee Council purchased the lands delineated on the map in                  
 yellow.  He noted these were the lands that Representative                    
 Austerman had spoken about that brought funds to the Kodiak Island            
 Borough; the borough was using those funds for a local permanent              
 fund.  Mr. Stratton suggested that Mayor Selby might speak to that.           
 "But the borough did sell the land with the expectation that it               
 would be added to the park to perpetuate the fishing, hunting and             
 recreational uses," Mr. Stratton said.  "The conservation easement            
 held on those properties by the federal government restricts uses             
 to those which will maintain the existing fish and wildlife habitat           
 and allow for public recreation."                                             
 MR. STRATTON said the Division of Parks and Outdoor Recreation has            
 a long history of providing recreational access in a habitat-                 
 friendly manner and looked forward to providing that access in an             
 expanded Shuyak Island State Park.  Once those additions were                 
 established as part of the park system, the division would revise             
 the current park master plan to include the new acreage in an                 
 island-wide plan for new trails, campsites, possible new cabin                
 sites and anchorages.  Those were reflected in the fiscal note.  As           
 funds and volunteers were made available, once the planning was               
 done, the new access opportunities would be realized.                         
 Number 0264                                                                   
 MR. STRATTON said park designation does not diminish existing                 
 hunting, fishing or trapping rights on the island.  He believed the           
 committee substitute ensured that would be the case.  He said the             
 park's original 1984 legislation clearly intended for management of           
 fish and game, especially commercial fishing, to be the                       
 responsibility of the Department of Fish and Game (ADF&G), not the            
 Division of Parks and Outdoor Recreation.  However, the latter did            
 work cooperatively with the ADF&G by managing two fish weir                   
 counting sites to help the ADF&G determine commercial fish                    
 MR. STRATTON said management of Shuyak Island would cost the park             
 system only a minimal amount, as they already had a seasonally                
 staffed ranger station on the island and a volunteer program that             
 brought two-to-four volunteers out every summer to assist the                 
 ranger.  "The increased cost of management is for extra boat gas to           
 access the shoreline of an expanded park," he explained.  "We are             
 currently expanding the visitor opportunities in the existing park            
 through development of a trail system and a new visitor contact               
 station funded by the state's Exxon Valdez criminal settlement                
 through the Division of Parks marine recreation project."                     
 Number 0305                                                                   
 MR. STRATTON said Shuyak Island's existing reputation as a fishing            
 and hunting destination in the late summer and fall is expanding as           
 Alaskans, local tourism companies and adventure travelers from                
 around the world discover its unique kayaking and small boating               
 opportunities to not only fish but also observe marine mammals, sea           
 birds and terrestrial wildlife.  He believed the park expansion               
 would add Shuyak Island to Alaska's other great park units as a               
 topic for adventure travel and sports magazines seeking new                   
 destinations.  He said designating the entire island as a park                
 would add to its allure and increase its notoriety as an Alaska               
 recreational destination.  "This is good for Alaskan hunters,                 
 fishermen and boaters and good for those businesses providing                 
 transportation and support," he said.                                         
 MR. STRATTON advised that he had reviewed the proposed committee              
 substitute.  He agreed with the intent to ensure that neither this            
 park administration nor future ones restricted hunting, fishing and           
 trapping opportunities on the island.  He deferred to Craig                   
 Number 0365                                                                   
 CRAIG TILLERY, Assistant Attorney General, Environmental Section,             
 Civil Division (Anchorage), Department of Law, testified via                  
 teleconference.  He referred to page 1, lines 7 and 8, which read,            
 "In accordance with the covenants and deed restrictions set by the            
 Kodiak Island Borough".  He stated his assumption that the wording            
 referred to the warranty deed for the portion of land acquired by             
 the trustee council recently.  Because this bill affected the                 
 entire park, a much greater area of land, he believed the wording             
 was somewhat inconsistent.  "However, certainly the things that you           
 go on to list that are the way you go on to describe them do not              
 present any problem at all legally," he stated.                               
 MR. TILLERY believed the sentence beginning "In accordance" was not           
 only a bit inconsistent but also somewhat vague in that it did not            
 specify which document it referred to.  He suggested deleting that            
 sentence and saying, "The purposes of establishing the park are"              
 and continuing from there.  "Other than that, everything that's               
 changed in here is something that's really a matter of discretion             
 for Parks," he said.  "It doesn't create a legal problem with any             
 of the deeds or restrictive covenants that I can see."                        
 Number 0428                                                                   
 CO-CHAIRMAN OGAN said he could see Mr. Tillery's point about                  
 inconsistency because while the bill covered the whole state park,            
 it referred to the part recently conveyed to the state for the                
 purpose of the park.  He asked whether having this discussion on              
 the record would be adequate if there were a court challenge.                 
 MR. TILLERY responded, "I don't know that a court would go back and           
 look at this.  I don't see this as bringing up an issue.  I don't             
 see a court challenge as based on this language.  It only is sort             
 of preparatory language.  The meat of what the purposes are is in             
 the clause that follows that.  If you wish to leave it in here like           
 this, I do not see it creating a legal problem.  I simply point it            
 out as something that I felt was a little ambiguous and was ...               
 sort of inconsistent with perhaps what people were thinking when              
 they wrote it.  But I do not see this creating a legal problem."              
 Number 0503                                                                   
 REPRESENTATIVE GREEN said he wanted to see what had been designated           
 over the past few years as park purchases and restricted use.  He             
 asked whether that was possible and whether Mr. Stratton would be             
 the appropriate person to do it.                                              
 MR. STRATTON responded, "I believe that's something we could put              
 together in fairly short order for you."                                      
 REPRESENTATIVE GREEN said, "I would sure like to see that because             
 I think we need to know, as a committee, just what has happened and           
 what is likely to happen in the future."                                      
 Number 0539                                                                   
 CO-CHAIRMAN OGAN noted that he had heard HB 89 in the previous                
 committee.  He had expressed concern to Mr. Stratton then about the           
 ramifications of putting a state park where people hunted.  He said           
 the reason for drafting the committee substitute was to protect               
 traditional lifestyles.  "It's reasonable that we can call it a               
 park," he said.  "And certainly, the traditional uses will be                 
 protected in statute, and we won't be able to log or some of these            
 other uses."                                                                  
 Number 0577                                                                   
 REPRESENTATIVE GREEN asked whether the uses allowed in this park              
 differed from other state park uses.                                          
 MR. STRATTON responded, "Not significantly, no.  You can hunt in              
 all the state parks, with the exception of parts of Chugach State             
 Park.  Legislation was passed in 1984 that made it very clear that            
 you can hunt in state parks, but ... part of that legislation                 
 allowed certain wildlife viewing areas in Chugach State Park to be            
 off-limits to hunting, in consultation with and set by the Board of           
 Game.  But all the other parks are -- people hunt in them now."               
 Number 0606                                                                   
 REPRESENTATIVE GREEN expressed concern about "fixing" this one and            
 then having it subject to restrictions by future legislatures.  He            
 acknowledged that one legislature could not bind future ones.                 
 CO-CHAIRMAN OGAN said he shared those concerns.                               
 REPRESENTATIVE BARNES commented, "Indeed we did fix it in 1984 so             
 that people could continue these traditional hunting -- and there             
 was a big move that caused us to do that, because they were trying            
 to drive the hunters out of these national parks and to get rid of            
 CO-CHAIRMAN OGAN asked which park Representative Barnes was                   
 referring to.                                                                 
 REPRESENTATIVE BARNES said, "Well, it was throughout the state.  So           
 we did pass a law that says you could continue to use firearms in             
 the park, and there's some language in there that allows them to              
 restrict it on a very narrow basis.  And I don't recall what that             
 was but I do remember the battle that we had here over it.  'Cause            
 ever since I've been in this legislature, they've been trying to              
 lock up land and stop people from hunting and fishing and                     
 everything else.  If you're a bird watcher, you've got it made."              
 Number 0699                                                                   
 WILLY DUNNE, Chair, Kachemak Bay State Parks Citizen Advisory                 
 Board, testified via teleconference from Homer, saying he was a               
 hunter, a fisherman and a bird watcher.  He explained that because            
 the advisory board had unanimously passed a resolution the previous           
 week supporting CSHB 89(CRA), he could not speak to the proposed              
 committee substitute.  However, the board encompassed a broad range           
 of user groups, including avid hunters and fishermen.  Many board             
 members used Kachemak Bay State Park for hunting and realized that            
 was a valid use of state parks.  He said they wanted the expansion            
 of Shuyak State Park to increase recreational opportunities.                  
 MR. DUNNE said expansion made sense from an economic standpoint.              
 Commercial operators in Homer flew people to Shuyak Island State              
 Park.  There were float plane operators, a commercial boat                    
 operator, and kayak outfitters operating there as well.  This bill            
 would expand those economic opportunities.                                    
 MR. DUNNE said many people in his area viewed the bill as opening             
 land to the public.  In Homer and Kachemak Bay State Park, and on             
 the Homer Spit especially, when land was developed and turned over            
 to private ownership, "no trespassing" signs went up.  That seemed            
 to be the ultimate lock-up.  Where people once could recreate, hunt           
 and fish, they were no longer allowed.                                        
 Number 0820                                                                   
 JEROME SELBY, Mayor, Kodiak Island Borough, testified via                     
 teleconference.  He said Shuyak Island had been under consideration           
 as a park for 15 to 20 years by the Kodiak community.  In Kodiak,             
 two or three people showing up for a public hearing was                       
 significant; ten indicated a major issue.  However, 100 people                
 showed up the night a proposal to dispose of this land came up in             
 the early 1980s, saying, `Do not dispose of this land; put it into            
 a state park.'"  He said that feeling has grown over the years.               
 MAYOR SELBY explained this land was selected by the trustee council           
 because more species impacted by the Exxon Valdez oil spill used              
 Shuyak Island than any other single piece of land in the oil spill            
 region.  "We look at it as being critical to developing the Kodiak            
 Island tourism industry," he said.  "We have a substantial                    
 opportunity here to diversify our economy, and the tourism use of             
 Shuyak Island is a very important part of that overall plan."                 
 MAYOR SELBY said, "I guess we would differ with you significantly             
 about the use of the word `lock-up.'  We see this as a development            
 of maybe a different type, because we see it being developed for a            
 lot of tourism activity.  The fact is that we use the heck out of             
 this island."                                                                 
 MAYOR SELBY said the island was small but had a rich ecosystem.  It           
 could be hiked across in a day, and people could hunt, fish and               
 watch birds.  Of the entire Kodiak archipelago, Shuyak Island was             
 the crown jewel they wished to preserve for tourism development.              
 MAYOR SELBY noted that Afognak Island, just south of Shuyak Island,           
 was mostly privately owned and would be logged and clear-cut.                 
 "That gives us a balance," he said.  "We're looking for a tourism             
 spot here on the north end."  He said private ownership and heavy             
 logging on Afognak were one reason they had not proposed a trade-             
 off in terms of land disposal.                                                
 MAYOR SELBY said furthermore, the land in question was already                
 public land of the Kodiak Island Borough.  "We're just retaining it           
 as public land, but now it's in the hands of the state," he said.             
 "So we haven't really removed from the private sector anything."              
 Number 0983                                                                   
 MAYOR SELBY stated support for inserting commercial fishing into              
 the bill, as the area continues to be important for that activity.            
 Shuyak Island was also used for some brown bear hunting and as a              
 major deer hunting area.  Many people came from Anchorage and the             
 Kenai Peninsula area to hunt deer in the fall, as it was the most             
 accessible island of the Kodiak archipelago with a healthy deer               
 MAYOR SELBY advised, "We put the deed restrictions on it on                   
 purpose.  The hunting and fishing is also protected by the deed               
 restrictions, when we transferred the land, so that we've kind of             
 gone parallel here with you in preparing this parks bill, because             
 we felt that there's pretty much unanimous support from every                 
 interest group in Kodiak."                                                    
 MAYOR SELBY said, "Just for clarification, the state of Alaska now            
 owns this island entirely.  What we are asking you to do is adopt             
 this bill, which places it into the state land status as a park,              
 and that the primary reason that we chose park status to recommend            
 to you folks was because that that means that it never comes up for           
 disposal in the state land management system.  Virtually every                
 other type of land status in the state, at some point or another,             
 it can come up and can be disposed of potentially.  We didn't want            
 it in that status."                                                           
 MAYOR SELBY said with the language in the bill, Shuyak Island will            
 obviously be a heavily used parcel of land even though it has park            
 status.  He urged passage of the proposed committee substitute.               
 Number 1101                                                                   
 TOM PEARSON testified via teleconference from Kodiak, saying he               
 agreed with many of the previous speaker's statements.  He believed           
 the park had actually improved access to these public lands rather            
 than locking them up.  It enhanced both sport and commercial                  
 fishing by having volunteers maintain fish weirs on the island,               
 providing timely information regarding commercial seasons, openings           
 and closings.  He found commercial and recreational fishing to be             
 compatible in the park.  He said while fishing recreationally, he             
 had been able to outfish some of the seiners during commercial                
 openings.  He urged passage of the bill.                                      
 CO-CHAIRMAN OGAN said, "We wanted to ensure that important                    
 lifestyle."  He noted that the National Park System had closed                
 commercial fishing in some areas.                                             
 Number 1206                                                                   
 HANK PENNINGTON testified via teleconference from Kodiak.  A 22-              
 year resident of Kodiak Island, he had been writing an outdoor                
 column for six years.  Intimately familiar with Shuyak Island, he             
 hunted, fished and photographed wildlife there.  He complimented              
 the state parks on their record to date in being "supportive,                 
 friendly and even enthusiastic in ensuring that the people that use           
 the existing Shuyak State Park have that opportunity and it's a               
 quality experience."                                                          
 MR. PENNINGTON said that attitude and those priorities were                   
 reflected in the existing Shuyak Island State Park Management Plan,           
 dated March 1995.  "And based on their performance in the past and            
 the outlook for the future, and the restrictions or specific                  
 language you've put in your committee substitute on this bill, I              
 have every confidence that that tradition is going to continue if             
 this becomes a state park."  He said it would be a serious                    
 misconception for someone to view inclusion of these lands in a               
 park as any kind of restriction on outdoor activities including               
 hunting, fishing and subsistence uses.                                        
 MR. PENNINGTON spoke against use of all-terrain vehicles (ATVs) on            
 Shuyak Island.  He believed the highest point on the island was               
 only 500 feet.  The land was user-friendly in terms of foot                   
 traffic, and the bays and fjords provided excellent access from the           
 water.  He said the timber on the island would restrict use of                
 ATVs.  Even worse, much of the island was low, boggy, marshy areas            
 where a single pass of an ATV would be extremely destructive.  He             
 encouraged including a prohibition in the bill against ATV use                
 Number 1346                                                                   
 JOEL WATTUM testified via teleconference from Kodiak in support of            
 the bill.  He described Shuyak Island as small, pristine and having           
 a nice ecosystem that would be easy to damage.  He believed having            
 the park there, with one active manager, was preferable to having             
 several nonactive managers with no knowledge of uses occurring                
 there.  He said since the cabins were built, Shuyak Island was                
 actually more available to people for recreational fishing and                
 hunting opportunities.                                                        
 MR. WATTUM concurred with Mr. Pennington's testimony about ATVs.              
 He believed it would be difficult to use ATVs there other than on             
 game trails and beaches.  Some places were even tough to walk                 
 Number 1483                                                                   
 KIM SCHMIDT came forward to testify in support of HB 89.  A Juneau            
 resident, she had been an Alaska State Parks volunteer on Shuyak              
 Island in the summer of 1995.  She had maintained cabins and trails           
 and assisted park visitors.  One of the most important                        
 responsibilities was managing a salmon weir to track the health of            
 Shuyak's coho salmon runs.  She said numerous commercial fishing              
 openings brought boats from both Kodiak and Homer.                            
 MS. SCHMIDT noted the economic importance of the coho run.  A late            
 run, it afforded fishermen an opportunity to make up for losses               
 earlier in the season.  It also attracted sports fishing                      
 enthusiasts.  During the run, cabins were booked solid, with some             
 guests having to book cabins six months in advance.                           
 MS. SCHMIDT said on Shuyak Island, she had met Alaskans and both              
 domestic and international travelers.  Travel to Shuyak provided              
 income for float plane pilots from Kodiak and the Kenai Peninsula,            
 retailers and sports outfitters.  She described Shuyak Island as              
 spectacular even by Alaskan standards.  She urged passage of the              
 bill to enlarge a park already enjoyed extensively by Alaskans.               
 Number 1604                                                                   
 MICHELE DRUMMOND came forward to testify.  A Kodiak Island                    
 resident, she supported HB 89 and believed the park had plenty of             
 support from the community.                                                   
 Number 1640                                                                   
 REPRESENTATIVE AUSTERMAN said the fiscal note had not been                    
 addressed in the previous committee.  "It's $15,000," he said.  "I            
 would prefer that that become a zero note, that the amount of money           
 that they're asking for is something that I think they can absorb             
 in the park system already.  If they're going to add new cabins in            
 the area, the income from the rental of the cabins should cover               
 boat gas and the things that the park is really interested in."               
 Number 1680                                                                   
 REPRESENTATIVE BARNES said she had been going to make that motion.            
 She did not believe the legislature should ever pass out fiscal               
 notes as small as $15,000 or $1,000.  "And certainly the                      
 departments can more than make up for it in their huge budgets,"              
 she said.                                                                     
 CO-CHAIRMAN OGAN said in light of the state's fiscal crisis, he               
 Number 1717                                                                   
 REPRESENTATIVE BARNES made a motion that the committee substitute             
 for HB 89, Version B, as amended, move from the committee with                
 individual recommendations.  She further moved that the committee             
 zero out the $15,000 fiscal note from the Department of Natural               
 Resources and instead adopt a zero fiscal note.  She suggested                
 there would then be no need for the bill to go to the House Finance           
 Committee.  She asked for unanimous consent.                                  
 REPRESENTATIVE GREEN objected for discussion and asked where the              
 bill would go next if there were no zero fiscal note.                         
 CO-CHAIRMAN OGAN advised that it had a House Finance Committee                
 Number 1780                                                                   
 REPRESENTATIVE AUSTERMAN requested that it be waived from the House           
 Finance Committee and go straight to the House Rules Committee.               
 REPRESENTATIVE GREEN said he had no problem with moving the bill.             
 However, he was concerned about only having a verbal commitment               
 from the Division of Parks and Outdoor Recreation to provide                  
 information.  He wanted to see what lands had been withdrawn for              
 park purposes, preferably on a map but certainly in a description,            
 because he wanted to see how much land would not be available for             
 private use.  "And so I would really like to see that as almost a             
 condition-after-the-fact to passing this bill out," he said.                  
 REPRESENTATIVE BARNES agreed.  She suggested it would be preferable           
 to have the "whole Department of Natural Resources relating to                
 lands" show the committee on a map exactly how much state land was            
 in parks and other uses.  She indicated most of the land from the             
 abolished Mental Health Trust went into parks.  She expressed                 
 concern over the extremely small amount of private land in Alaska.            
 She suggested the committee needed to see a map with overlays                 
 showing federal, state and municipal lands.  She believed an entire           
 meeting should be scheduled for that.                                         
 Number 1955                                                                   
 REPRESENTATIVE GREEN withdrew his objection.                                  
 CO-CHAIRMAN OGAN asked Mr. Stratton to plan on briefing the                   
 committee on that at his earliest convenience.                                
 Number 1970                                                                   
 REPRESENTATIVE JOULE referred to the fiscal note and stated, "I               
 know $15,000 isn't much, but we often hear how sometimes various              
 departments get mandated to do something but the dollars don't                
 follow.  And ... at $1,000, I can certainly see that, and maybe               
 even at this amount.  But I don't know what amount should be a cut-           
 off point.  And I guess I would just caution that we be careful               
 about mandating without having money to follow where it might be              
 Number 2074                                                                   
 CO-CHAIRMAN OGAN asked whether there was any objection to                     
 Representative Barnes's motion.  There being no objection, CSHB
 89(RES) moved from the House Resources Standing Committee with a              
 zero fiscal note.                                                             
 HJR 20 - OPPOSE DEPT. OF INTERIOR RS 2477 POLICY                            
 TAPE 97-17, SIDE A                                                            
 Number 0001                                                                   
 CO-CHAIRMAN OGAN provided the sponsor statement for the next order            
 of business, House Joint Resolution No. 20, relating to RS 2477               
 rights-of-way.  He explained, "Revised Statute 2477 was a right               
 granted to the states in the United States Congress with the                  
 passage of the mining act in 1866.  Subsequent congressional                  
 action, and more than 100 years of case law, has recognized the               
 state's authority to determine and define RS 2477 rights-of-way."             
 CO-CHAIRMAN OGAN noted that Congress had repealed RS 2477 in 1976.            
 However, they specifically acknowledged the legal existence of RS             
 2477 rights-of-way established prior to the repeal.  On January 22,           
 1977, Secretary of the Interior Bruce Babbitt issued an interim               
 departmental policy which contained bureaucratic roadblocks and               
 created new definitions, including language relating to existing              
 CO-CHAIRMAN OGAN concluded, "RS 2477 rights-of-way are critical to            
 the future of our young state.  We do not have the transportation             
 corridors that other states have, and the one-size-fits-all                   
 mentality of, sometimes, our friends in the administration in                 
 Washington, D.C., doesn't necessarily work for us.  Therefore, I              
 have introduced this resolution."                                             
 Number 0214                                                                   
 REPRESENTATIVE BARNES offered an amendment, provided by Co-Chairman           
 Ogan, and asked unanimous consent.  The amendment read:                       
      Page 3, line 29, following "the":                                        
           Insert "Honorable William Clinton, President of the                 
           United States of America; and to the Honorable Bruce                
           Babbitt, Secretary of the Interior; and to the"                     
 CO-CHAIRMAN OGAN asked if there was an objection.  There being                
 none, the amendment was adopted.                                              
 Number 0264                                                                   
 JODY KENNEDY, Volunteer, Alaska Environmental Lobby (AEL), referred           
 to her written testimony and pointed out that references to SJR 13            
 should read HJR 20.  Ms. Kennedy said, "This resolution and                   
 Secretary of the Interior Babbitt's newly-stated policy for                   
 administering RS 2477 claims continue to fuel the controversy over            
 this 120-year-old statute.  The Alaska Environmental Lobby                    
 represents 22 environmental organizations and over 10,000 Alaskans,           
 The lobby strongly opposes HJR 20 for the following reasons:                  
 "RS 2477 rights-of-way are no panacea for the perceived inadequacy            
 of the state's road system.  Supporters of HJR 20 are misleading              
 the public when they claim that these rights-of-way are the answer            
 to public access across federal lands.  The routes of primitive               
 trails and dirt roads alleged to be RS 2477 rights-of-way are                 
 inadequate for modern highway alignments even if the courts were              
 ultimately to determine that these rights-of-way could be used for            
 modern highways.                                                              
 "An attempt to secure RS 2477 routes by the state will engender               
 intense controversy and impose staggering litigation costs on                 
 private property owners, homesteaders, allotment owners, mining               
 claim owners and Native landowners who will need to defend their              
 private property rights against the state's claims that they likely           
 have no idea exist.  If HJR 20 is adopted and the Knowles                     
 Administration follows through on its instructions, Alaska will go            
 to war with thousands of its own citizens.                                    
 "State acquisition of these rights-of-way through national                    
 conservation systems and across millions of acres of Native and               
 other private lands will lead to a multitude of undesirable                   
 impacts, such as destruction of fish and wildlife habitat,                    
 disturbance of wildlife and other quiet users, increased hunting              
 pressure in competition with rural residents, poaching and off-road           
 vehicle trespassing.                                                          
 "The state has other avenues it can pursue to obtain rights-of-way            
 across much of the federal land in Alaska, such as ANILCA's Title             
 XI provisions for establishing transportation corridors.  These               
 alternative approaches for the state to establish rights-of-way are           
 far less contentious than asserting RS 2477 claims and provide                
 opportunity to obtain the necessary alignments needed for                     
 construction for a modern road or highway.                                    
 "The Alaska Legislature's posturing on this issue, with its                   
 overtones and undercurrents of Sagebrush Rebellion and Wise Use               
 rhetoric, is clearly another example of state's rights sword-                 
 rattling.  By embracing the Utah county approach for `exert your              
 rights first, get asked questions later,' the legislature is                  
 promoting an approach that is [the] antithesis of reasoned                    
 "The Alaska Environmental Lobby urges the promoters of HJR 20 to              
 call off their declaration of war on thousands of fellow Alaskans.            
 State-federal discourse and negotiation is needed, not a quick-fix            
 scheme costing state and landowners staggering sums of money and              
 time.  Should this misguided resolution pass, AEL urges the                   
 Governor to ignore it in favor of calm and rational discussions               
 with the Department of Interior on how Title XI can be implemented            
 in the best interests of Alaska and the nation."                              
 Number 0642                                                                   
 CRAIG PUDDICOMBE testified via teleconference from Mat-Su, saying             
 he and Jack Dunham are plaintiffs in an ongoing quiet-title lawsuit           
 related to RS 2477.  Although at first it was a claim of adverse              
 possession, it became an RS 2477 issue after defendants failed on             
 adverse possession.  There had been seven years of court                      
 proceedings.  They believed because theirs was the only active RS             
 2477 case, they were becoming a test case for the State of Alaska.            
 MR. PUDDICOMBE referred to the Joint Senate/House Resources                   
 Committees overview of RS 2477 on February 2, 1997.  He believed it           
 was inappropriate for Doug Blankenship, the defendants' attorney,             
 to testify about the plaintiffs' case at that meeting and for                 
 Attorney General Bruce Botelho to say that the State of Alaska had            
 filed an amicus of significant contribution in the case.                      
 Number 0723                                                                   
 MR. PUDDICOMBE said the "pro" of RS 2477 is to access land, whereas           
 the "con" is that with the different types of land in Alaska, there           
 will be different RS 2477s.  First, there were RS 2477s concerning            
 federal lands.  He thought it was naive for the state to believe              
 the federal government would not want a say concerning RS 2477s on            
 federal land.  He foresaw costly litigation relating to these.                
 MR. PUDDICOMBE said second, RS 2477s asserted on state land would             
 also not be settled without costs and litigations because of the              
 different user groups.  Third were RS 2477s to be asserted on                 
 private property, of particular concern, for example, to a private            
 property owner who thought he owned his land because no easements             
 were reserved in the patent or the deed.                                      
 MR. PUDDICOMBE cited his own case as an example.  It involved a               
 five-acre parcel surrounded by thousands of acres of state land,              
 which contained other access routes to the area in question.  A               
 state decision from a two-year study by the Department of Natural             
 Resources (DNR) had found no RS 2477s on his property.  That was              
 appealed, and the lower court's decision was reversed.  However,              
 there was no reference to the State of Alaska decision, he said.              
 "Because of the Supreme Court's decision, the same assistant                  
 attorney general that was involved extensively in the state's                 
 decision also (indisc.) not appealed by him - not appealable by him           
 - now is asking the court for a 100-foot right-of-way through our             
 property," he said.  "This is just one case.  Think about the ones            
 to come."                                                                     
 MR. PUDDICOMBE said fourth, RS 2477s will be asserted on Native               
 lands, which basically are the same as private property.  Fifth, RS           
 2477s will be asserted on federal and state parks, military                   
 installations, borough and city land and possibly game refuges.  He           
 said, "2477 as defined as a right-of-way for the construction of              
 highways over public lands, not reserved for public use, is hereby            
 granted - about as broad as it gets."  He suggested every 18-inch             
 game trail followed by humans for hunting, fishing, mining, hiking,           
 and so forth would be included.                                               
 CO-CHAIRMAN OGAN asked Mr. Puddicombe to summarize because of time            
 constraints.  He noted that testimony provided in writing would be            
 included in the record and made available to members on the floor.            
 Number 0980                                                                   
 MR. PUDDICOMBE suggested appropriate parts of that last statement             
 be included in RS 2477 regulations concerning private property.  He           
 stated, "It was and is very irresponsible for the State of Alaska             
 not to note all easements, including 2477s, on the deed at the time           
 of patent.  The State of Alaska should advertise for 2477s on all             
 land that is to become private property.  If one exists, then                 
 record it as such.  If not, don't.  If the State of Alaska can come           
 forward at any time after a patent is issued and assert a 2477,               
 then there is no property that is sacred and no reason why a person           
 would want to own so-called private property.  Without a 2477                 
 easement recorded, your title insurance is useless. ... You have              
 wasted thousands of dollars on worthless property or thousands more           
 proving there isn't one."                                                     
 Number 1047                                                                   
 CO-CHAIRMAN OGAN noted that RS 2477 rights-of-way have been                   
 identified.  He said there is public record of those, although he             
 did not know whether it was all recorded, which may be part of the            
 problem.  "But we're working on that," he added.                              
 Number 1086                                                                   
 CO-CHAIRMAN OGAN advised that Jane Angvik from DNR was available on           
 Number 1111                                                                   
 REPRESENTATIVE GREEN referred to a 1995 report of the Natural                 
 Resources Policy Transition Team, provided shortly after the new              
 administration came into office.  The report said, under                      
 transportation, that one suggestion was to develop consensus among            
 all affected groups to assert or vacate RS 2477 rights-of-way,                
 place limits on how RS 2477 rights-of-way may be used and managed,            
 and then address all existing ANCSA claims.  Representative Green             
 stated concern that the term "or vacate" would imply they were                
 really thinking about dropping this, despite what the committee had           
 heard.  He asked Ms. Angvik to address the DNR's current attitude.            
 Number 1175                                                                   
 JANE ANGVIK, Director, Division of Land, Department of Natural                
 Resources (DNR), testified via teleconference.  Although not                  
 familiar with that report, she believed the Administration was                
 diligently trying to come up with management policies for RS 2477s.           
 She explained, "As you're well aware, we have existing regulations            
 that govern rights-of-way.  You're asking me if they're still                 
 interested in vacating, and I'd say that we're still trying to                
 figure out how to do the assertions.  And that would occur long               
 before anybody would vacate any of these."  Ms. Angvik said as far            
 as procedure, the Attorney General's office, the Department of                
 Transportation and the DNR were trying to work out any regulatory             
 changes that they would propose for the management of RS 2477s                
 after they were asserted and successfully asserted in the courts.             
 Number 1253                                                                   
 REPRESENTATIVE GREEN expressed concern that they were still trying            
 to assert the RS 2477 issue, after which they would address                   
 vacating it or, if not that, place limitations on it.  He reminded            
 the committee of the extreme difficultly in getting the TAPS                  
 pipeline rights-of-way needed to go across federal lands.  "And               
 that's our umbilical cord to survival," he said.  "Can you imagine            
 a mere thing like a road or an accessibility?"  He said he had                
 heard Ms. Angvik say the DNR was not yet sure yet where they were.            
 "And to me, that's scary," he said.                                           
 Number 1304                                                                   
 REPRESENTATIVE BARNES said, "I would like to think that this                  
 Administration, if they got it in their head to vacate right-of-              
 ways, that they would certainly come before this legislature to               
 discuss their intent so we could take appropriate action, because             
 I believe that there would be an appropriate remedy whereby we                
 could stop them from doing such a thing.  And I cannot imagine, in            
 my wildest dream, that ... this transition report that they have,             
 that it is something that they would consider doing as something              
 that would be looked upon feasibly or looked upon well by the                 
 Alaska public.  And while there may be 10,000 people represented by           
 the environmental organizations, I'd like to say that there's some            
 660,000 Alaskans, and I don't think many of them would like to see            
 these right-of-ways vacated."                                                 
 Number 1361                                                                   
 MS. ANGVIK emphasized that the Administration was not advocating              
 vacating any RS 2477s.  She said vacations only occur when there is           
 another, more favorable or beneficial route.  The DNR was neither             
 vacating nor proposing to vacate anything.                                    
 Number 1380                                                                   
 CO-CHAIRMAN OGAN indicated he would like to discuss Mr.                       
 Puddicombe's case privately with Ms. Angvik.  He asked Ms. Angvik             
 whether she or the DNR supported HJR 20.                                      
 Number 1401                                                                   
 MS. ANGVIK at first said she did not know.  She said they were as             
 outraged as the committee by the actions of Secretary of Interior             
 Babbitt.  They wholeheartedly supported, and had actively spoken              
 out against, his actions on the promulgation of the new policy.               
 Ms. Angvik concluded by stating support for the resolution.                   
 Number 1444                                                                   
 MR. NELSON ANGAPAK, Special Assistant - Lands, Alaska Federation of           
 Natives (AFN), said the AFN believes Section 17(b) of the Alaska              
 Native Claims Settlement Act (ANCSA) is the proper method of                  
 identifying access across ANCSA lands, not Title XI of ANILCA.  A             
 number of regions in the state had attempted to use Title XI for              
 access to lands they wanted to develop.  The cost was prohibitive             
 and they do not see it as an answer to access onto private lands.             
 As an author of Title XI, he knew its intent.  Therefore, access              
 into ANCSA lands should be through Section 17(b) of ANCSA.                    
 Number 1551                                                                   
 REPRESENTATIVE DYSON informed the committee of a possible conflict            
 of interest because he owns land south of Denali with an easement             
 across it.  Although he would support HJR 20, he wished the                   
 easement were not there.                                                      
 Number 1556                                                                   
 REPRESENTATIVE BARNES made a motion to move HJR 20, as amended,               
 with individual recommendations and a zero fiscal note.  There                
 being no objection, CSHJR 20(RES) moved from the House Resources              
 Standing Committee.                                                           
 Number 1570                                                                   
 CO-CHAIRMAN OGAN adjourned the House Resources Standing Committee             
 at 3:01 p.m.                                                                  

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