Legislature(1997 - 1998)

03/06/1997 01:10 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                              
                         March 6, 1997                                         
                           1:10 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Bill Hudson, Co-Chairman                                       
 Representative Scott Ogan, Co-Chairman                                        
 Representative Beverly Masek, Vice Chair                                      
 Representative Ramona Barnes                                                  
 Representative Joe Green                                                      
 Representative William K. ("Bill") Williams                                   
 Representative Irene Nicholia                                                 
 Representative Reggie Joule                                                   
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Fred Dyson                                                     
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HOUSE JOINT RESOLUTION NO. 23                                                 
 Relating to the seizure and sale of Alaska commercial fishing entry           
 permits by the United States Internal Revenue Service.                        
                                                                               
      - MOVED HJR 23 OUT OF COMMITTEE                                          
                                                                               
 HOUSE BILL NO. 123                                                            
 "An Act relating to the repeal of the termination date of the                 
 federal tax obligation loan program under the Commercial Fishing              
 Loan Act; and providing for an effective date."                               
                                                                               
      - MOVED CSHB 123(RES) OUT OF COMMITTEE                                   
                                                                               
 *HOUSE JOINT RESOLUTION NO. 24                                                
 Relating to challenging the environmental and economic integrity of           
 Alaska timber as Christmas decor for the United States Capitol.               
                                                                               
      - MOVED CSHJR 24(RES) OUT OF COMMITTEE                                   
                                                                               
 *HOUSE BILL NO. 151                                                           
 "An Act relating to personal hunting of big game by big game guides           
 while clients are in the field and to use area registration for               
 portions of additional guide use areas by registered guides."                 
                                                                               
      - SCHEDULED BUT NOT HEARD                                                
                                                                               
 (* First public hearing)                                                      
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HJR 23                                                               
 SHORT TITLE: SALE OF LTD ENTRY PERMITS BY IRS                                 
 SPONSOR(S): REPRESENTATIVE(S) HUDSON,Grussendorf,Ivan                         
                                                                               
 JRN-DATE      JRN-PG               ACTION                                     
 02/17/97       373    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/17/97       373    (H)   FSH, RESOURCES                                    
 02/18/97       388    (H)   COSPONSOR(S): IVAN                                
 02/24/97              (H)   FSH AT  5:00 PM CAPITOL 124                       
 02/24/97              (H)   MINUTE(FSH)                                       
 02/25/97       463    (H)   FSH RPT  4DP                                      
 02/25/97       463    (H)   DP: AUSTERMAN, KUBINA, HODGINS, OGAN              
 02/25/97       463    (H)   ZERO FISCAL NOTE (H.FSH/F&G)                      
 03/06/97              (H)   RES AT  1:00 PM CAPITOL 124                       
                                                                               
 BILL:  HB 123                                                               
 SHORT TITLE: TAX OBLIGATION LOAN PROGRAM                                      
 SPONSOR(S): REPRESENTATIVE(S) IVAN, Hudson                                    
                                                                               
 JRN-DATE      JRN-PG             ACTION                                       
 02/10/97       294    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/10/97       294    (H)   FISHERIES, RESOURCES                              
 02/24/97              (H)   FSH AT  5:00 PM CAPITOL 124                       
 02/24/97              (H)   MINUTE(FSH)                                       
 02/24/97       455    (H)   COSPONSOR(S): HUDSON                              
 02/25/97       463    (H)   FSH RPT  4DP                                      
 02/25/97       464    (H)   DP: AUSTERMAN, HODGINS, KUBINA, OGAN              
 02/25/97       464    (H)   ZERO FISCAL NOTE (DCED)                           
 03/06/97              (H)   RES AT  1:00 PM CAPITOL 124                       
                                                                               
 BILL:  HJR 24                                                               
 SHORT TITLE: NO ALASKA CHRISTMAS TREE FOR FED. CAPITOL                        
 SPONSOR(S): REPRESENTATIVE(S) WILLIAMS, Ogan, Ryan                            
                                                                               
 JRN-DATE      JRN-PG             ACTION                                       
 02/21/97       424    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/21/97       424    (H)   RESOURCES                                         
 03/05/97       550    (H)   COSPONSOR(S): OGAN                                
 03/06/97              (H)   RES AT  1:00 PM CAPITOL 124                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 BRUCE TWOMLEY, Chairman/Commissioner                                          
 Commercial Fisheries Entry Commission                                         
 Department of Fish and Game                                                   
 8800 Glacier Highway, Suite 109                                               
 Juneau, Alaska 99801-8079                                                     
 Telephone:  (907) 789-6160                                                    
 POSITION STATEMENT:  Provided testimony on HJR 23.                            
                                                                               
 JERRY MCCUNE, Representative                                                  
 United Fishermen of Alaska                                                    
 211 4th Street, Suite 112                                                     
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-2820                                                    
 POSITION STATEMENT:  Provided testimony on HJR 23 and HB 123.                 
                                                                               
 REPRESENTATIVE IVAN IVAN                                                      
 Alaska State Legislature                                                      
 State Capitol, Room 418                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-4942                                                    
 POSITION STATEMENT:  Sponsor of HB 123.                                       
                                                                               
 GREG WINEGAR, Juneau Lending Branch Manager                                   
 Division of Investments                                                       
 Department of Commercial and Economic Development                             
 P.O. Box 34159                                                                
 Juneau, Alaska 99803-4159                                                     
 Telephone:  (907) 465-2510                                                    
 POSITION STATEMENT:  Provided testimony for the Division of                   
                      Investments on HB 123.                                   
                                                                               
 WAYNE NICOLLS                                                                 
 9723 Trappers Lane                                                            
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 789-5405                                                    
 POSITION STATEMENT:  Provided testimony on HJR 24.                            
                                                                               
 JIM CAPLAN, Deputy Regional Forester for Natural Resources                    
 United States Department of Agriculture - Forest Service                      
 P.O. Box 20107                                                                
 Juneau, Alaska 99802                                                          
 Telephone:  (907) 586-8870                                                    
 POSITION STATEMENT:  Provided testimony on HJR 24.                            
                                                                               
 JACK E. PHELPS, Executive Director                                            
 Alaska Forest Association, Inc.                                               
 111 Stedman, Suite 200                                                        
 Ketchikan, Alaska 99901-6599                                                  
 Telephone:  (907) 225-6114                                                    
 POSITION STATEMENT:  Provided testimony on HJR 24.                            
                                                                               
 JED WHITTAKER                                                                 
 Address not provided                                                          
 Telephone:  Not provided                                                      
 POSITION STATEMENT:  Provided testimony HJR 24.                               
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 97-22, SIDE A                                                            
 Number 0001                                                                   
 CO-CHAIRMAN BILL HUDSON called the House Resources Standing                   
 Committee meeting to order at 1:10 p.m.  Members present at the               
 call to order were Representatives Hudson, Ogan, Masek, Green,                
 Williams, Nicholia and Joule.  Representative Barnes arrived at               
 1:12 p.m.  Representative Dyson was absent because of a family                
 illness.                                                                      
                                                                               
 HJR 23 - SALE OF LTD ENTRY PERMITS BY IRS                                   
                                                                               
 Number 073                                                                    
                                                                               
 CO-CHAIRMAN HUDSON announced the committee would hear HJR 23,                 
 Relating to the seizure and sale of Alaska commercial fishing entry           
 permits by the United States Internal Revenue Service.                        
                                                                               
 Number 0195                                                                   
                                                                               
 BRUCE TWOMLEY, Chairman/Commissioner, Commercial Fisheries Entry              
 Commission, Department of Fish and Game, came before the committee            
 to give testimony.  He informed the committee that for more than              
 ten years the Internal Revenue Service (IRS) had attempted to seize           
 and force the sale of limited entry permits.  Therefore, it might             
 be helpful to review what the legislature had in mind when it                 
 established limited entry permits.  He explained, they were a                 
 privilege and that the state reserved the right to take them away.            
 They were awarded initially to individual fishers, primarily                  
 Alaskan fishers, who most needed their fisheries.  They were                  
 awarded on the basis of need and the permits were the means by                
 which Alaska fishers protected their access to their traditional              
 fisheries-that was often the case in rural communities where                  
 commercial fisheries were the only source of cash income to many              
 residents.  Limited entry permits represented both the right to               
 work and a way of life.                                                       
                                                                               
 MR. TWOMLEY explained the permits were also important in terms of             
 the state's enforcement of its conservation laws.  The legislature            
 thought in establishing a permanent interest in a fishery that it             
 would give fishermen a stake in the fishery and an incentive to               
 conserve the resource over time.  "If you know your going to be               
 there next year, there's an incentive to make sure that the fish              
 are coming back."  At the same time, the state reserved the right             
 to take away limited entry permits from individual fishers who did            
 not obey conservation laws.  The state had a powerful enforcement             
 tool and this was one reason why it had not been eager to have                
 third parties, such as, the IRS, come in and take limited entry               
 permits away; it undermines the conservation incentive.                       
                                                                               
 MR. TWOMLEY informed the committee members, that during the ten               
 year period the IRS attempted to force the sale of entry permits,             
 there had been some changes in the federal law for the IRS too.               
 Congress attempted to make the IRS a somewhat kinder and gentler              
 collection agency.  It directed the IRS to not take items held by             
 taxpayers when doing so would cause hardship to the tax payers.  As           
 a consequence, the IRS came to the Commercial Fisheries Entry                 
 Commission in 1992, and asked for help in collecting taxes from               
 permit holders around the state.  The commission agreed to help the           
 IRS in any way it could without compromising state law.  As a                 
 starting point, the commission pressed the IRS to provide                     
 statistics on the extent of the problem and where, geographically,            
 in the state permit holders had this problem.  The IRS produced the           
 statistics which were both revealing and encouraging.  It was                 
 encouraging because the numbers were not as great as even the IRS             
 feared.  The IRS was talking about some 4,000 Alaskan permit                  
 holders who were not in compliance with federal taxes when in fact,           
 the number turned out to be something over 2,000.  The permit                 
 holders resided all over the state-in urban and rural communities.            
 In addition, the amount of taxes owed really wasn't terribly great.           
 It was a manageable number.  He cited 80 percent of the permit                
 holders owed $30,000 or less which made the problem look more                 
 manageable than what was feared.  Upon receiving the information              
 from the IRS, the commission came to the legislature in 1994 and              
 shared the statistics.  The legislature responded by creating a new           
 category of loans within the existing commercial fisheries loan               
 program-the tax obligation loan program.  These were secured loans.           
 The legislature put a limit at $30,000, and required that an                  
 individual could only apply for one of these loans one time in                
 their life.  The legislature called for the expiration of the                 
 program in May of 1997 giving it a life of three years.                       
                                                                               
 MR. TWOMLEY further stated that the loan program turned out to be             
 a very valuable tool because a number of people around the state              
 had already been alerted to the problem and were helping,                     
 particularly in the rural communities, to bring fishers into                  
 compliance.  He cited Jerry Liboff, from Dillingham and the                   
 community development quota (CDQ) outfit for the Bristol Bay                  
 Economic Development Corporation that started a local private                 
 agency in Dillingham, headed by Bernice Heyano.  In addition, the             
 Alaska Business Development Center, a quasi-public agency in                  
 Anchorage, had been tremendously helpful by working around the                
 state in virtually every community to help fishermen come into                
 compliance.  The loan program, he reiterated, had been a very                 
 valuable tool.  It had helped fishermen come forward with more hope           
 and with less fear of the IRS.  It also had generated a lot of                
 revenue for the IRS.  Mr. Twomley was trying to get current                   
 statistics from the IRS to measure the improvements from 1994.  The           
 statistics that he did have came from IRS summons.  The commission,           
 he explained, was hit with a summons that named individual permit             
 holders identified by the IRS as non-filers for the year 1992.  It            
 included more than 2,000 individuals from communities statewide.              
 The commission was recently hit with the same summons that applied            
 to non-filers for the years 1993 and 1994.  The numbers were down             
 from 2,000 to 684 over the two years.  There was something to show            
 for the cooperation that had gone on for both the IRS and for the             
 state.  The bad new, however, was that the IRS was no longer                  
 managed in Alaska.  The IRS Alaska district was rolled into other             
 districts to include Hawaii, Washington and other states.  It was             
 now managed out of Seattle, Washington.  Furthermore, the IRS gave            
 the commission a terrible surprise just before Christmas, despite             
 cooperative efforts and various commitments from the IRS.  It gave            
 the state two days notice and scheduled for sale two limited entry            
 permits from Cook Inlet.  The permits were held by individuals who            
 needed them as a primary source of income for their families and              
 themselves.  The IRS threatened to sell the permits, valued at                
 $30,000, for as little as $3,375.  The sale was also accompanied by           
 a written threat from the IRS Director to do more of the same.  In            
 addition, a revenue officer said that he would go to Dillingham and           
 see some seven limited entry permits.  Mr. Twomley personally                 
 received a call from an Anchorage widow who told him that a revenue           
 officer had threatened her with the sale of her and her deceased              
 husband's permits for as little as $3,000.  In addition, the people           
 who had been calling the revenue officers about the sales, began              
 calling the commission.  The commission had affidavits from them as           
 to what the revenue officers told them about the sales.  The                  
 affidavits said that the sales were known about at the highest                
 level in the IRS, the Commissioners Office in Washington D.C., and            
 that it was designed to help the IRS win its fight with the state.            
 Finally, the affidavits said, that if the IRS could just get one of           
 these permits transferred, it would open the flood gates to permit            
 seizures and transfers.  He was grateful to Representative Hudson             
 for introducing the resolution.  He was also grateful to                      
 Representative Ivan for introducing a bill to extend the loan                 
 program because it had been a valuable tool.                                  
                                                                               
 Number 0842                                                                   
                                                                               
 C0-CHAIRMAN HUDSON thanked Mr. Twomley for his testimony.  He                 
 summarized the contents of the bill to show justification for                 
 introducing it.                                                               
                                                                               
 C0-CHAIRMAN HUDSON explained there had been considerable action of            
 the IRS to take $30,000 permits and to sell them for $3,000.  And,            
 in that process, it took away the opportunity for the people who              
 owed money to earn any money to pay their obligations.  There were            
 significant changes in the tax laws at the federal level around               
 1989.  Was that correct, Mr. Twomley?                                         
                                                                               
 MR. TWOMLEY replied it was 1988.                                              
                                                                               
 Number 0906                                                                   
                                                                               
 C0-CHAIRMAN HUDSON further stated that the tax laws tried to level            
 the field on behalf of the tax payer.  The resolution compliments             
 the efforts of the Governor to try to get the congressional                   
 delegation to rein in on the IRS from actions that were not good              
 for the interest of the public.  If people owed a great deal of               
 money and the IRS seized property that was worth more than what it            
 could sell it for, and they took away their livelihood, the IRS               
 loses, and the American tax payer loses.  The resolution did not              
 try to eliminate the IRS from collecting taxes that were due and              
 payable; it just asked the congressional delegation to use any                
 means available to them to assure that the IRS collect past due               
 taxes from the income generated by the sale of fish and the                   
 voluntary sale of entry permits, as opposed to a seizure.  And, to            
 ensure that the IRS complied with federal law to avoid inflicting             
 economic hardship on the tax payer while, at the same time,                   
 protecting the fishing privileges and the right to work by Alaska             
 fishermen.  The limited entry permit was an effort to try to manage           
 the fisheries and to provide an opportunity for people who had                
 fished for a long period of time to continue that type of                     
 livelihood.  He reiterated the resolution was complimentary.  It              
 was a strong appeal on the part of the legislature and a strong               
 statement to the congressional delegation.  It would be useful to             
 the congressional delegation when they went to the IRS because they           
 could say that the people of Alaska, who had spoken through the               
 legislative process, were offended by the sale of permits that were           
 valued at $30,000 and sold for $3,000, and by taking away the                 
 livelihood that the people needed to pay their taxes.                         
                                                                               
 Number 1040                                                                   
                                                                               
 REPRESENTATIVE JOE GREEN asked Co-Chairman Hudson if he was ready             
 for questions?                                                                
                                                                               
 C0-CHAIRMAN HUDSON replied he was ready for questions either way.             
                                                                               
 REPRESENTATIVE GREEN stated this seemed like a worthwhile endeavor.           
 He wondered if the state of Washington was doing something similar            
 to add to the movement, because Alaska was in constant competition            
 with fishermen from Washington.                                               
                                                                               
 Number 1063                                                                   
                                                                               
 MR. TWOMLEY replied he did not know if there was specific action in           
 Washington.  He did know that the actions by the IRS had been                 
 directed at Alaskan fishermen-exclusively-as far as he could see.             
 "And, so we have a problem here that largely resides in our                   
 communities."                                                                 
                                                                               
 Number 1085                                                                   
                                                                               
 C0-CHAIRMAN HUDSON stated that the permits were the province of the           
 state of Alaska so by taking this action it called for an even                
 playing field on behalf of the fishermen and women.  It also                  
 guaranteed that the use and the control of the limited entry permit           
 was maintained on Alaska's behalf.                                            
                                                                               
 Number 1106                                                                   
 REPRESENTATIVE GREEN stated there were several out-of-state permits           
 granted.  Mr. Twomley indicated that the IRS targeted only Alaskan            
 fishermen rather than all of the people who had an Alaskan permit.            
                                                                               
 MR. TWOMLEY replied, to date, the only enforcement action had been            
 directed towards Alaskan resident entry permit holders.                       
                                                                               
 Number 1127                                                                   
                                                                               
 REPRESENTATIVE GREEN asked, wouldn't that smack of prejudicial                
 treatment and wouldn't that be held unconstitutional by singling              
 out Alaskan residents rather than Alaskan permits?  If that was the           
 case, it would strengthen the resolution.  He suggested that the              
 legislature look into very serious actions against the IRS.                   
                                                                               
 Number 1151                                                                   
                                                                               
 C0-CHAIRMAN HUDSON said he was not an attorney, but that was a                
 valid point.                                                                  
                                                                               
 Number 1157                                                                   
                                                                               
 MR. TWOMLEY stated one of the requests from the resolution was that           
 the IRS simply observe federal law.  It was the restraining                   
 elements of the federal law that would keep the IRS from causing              
 hardship to the tax payer.  The resolution would help all tax                 
 payers, as a result, throughout the United States.  It served a               
 general purpose by keeping the IRS honest under those restraints.             
                                                                               
 Number 1198                                                                   
                                                                               
 REPRESENTATIVE GREEN stated he belonged to the Energy Council which           
 got its clout as a result of the union of several states; it spoke            
 in one accord.  Therefore, "We would get more bang for our buck, I            
 would think, if we could get through the Washington Legislature a             
 similar thing, since it affects-certainly should-affect some of               
 their citizens as well.  And, from that stand point, I think, we              
 would have a little more clout against the IRS than just this                 
 resource state that's way up in the North Pole that nobody really             
 cares much about back in Washington."                                         
                                                                               
 Number 1232                                                                   
                                                                               
 C0-CHAIRMAN HUDSON stated his intentions, as a representative of              
 the people of Alaska, were to try to protect the livelihoods and              
 the interests of the constituents; and at the same time, to try to            
 protect the limited entry permits.  He would like to see if there             
 was any overt discrimination against Alaskans.  He did not want to            
 slow down the resolution, however.  If there was discrimination,              
 then there should be additional proceedings through the court from            
 the attorney general.  It was a very good point.  He thanked                  
 Representative Green for bringing it up.                                      
 Number 1313                                                                   
                                                                               
 JERRY MCCUNE, Representative, United Fishermen of Alaska, was the             
 first person to testify in Juneau.  He stated that the United                 
 Fishermen of Alaska were being targeted unfairly as Representative            
 Green pointed out.  The IRS had many avenues to collect money.                
 And, one was to not take a person's livelihood away.  The IRS could           
 take boats, it could make arrangements while one was fishing to pay           
 the back-taxes, or one could voluntarily sell a permit and other              
 assets.  "I think it's just a thing that the IRS has been trying to           
 do for 10 years and they want to break the barrier to get their               
 hands on these permits because they know they sell them real cheap            
 and fast, and it might not be to state residents either."  The                
 United Fishermen of Alaska, he declared, did not support people not           
 filing or paying their taxes or not making arrangements with the              
 IRS to try to attempt to pay their taxes.                                     
                                                                               
 Number 1391                                                                   
                                                                               
 C0-CHAIRMAN HUDSON stated he would like to move the resolution out            
 of the committee.                                                             
                                                                               
 Number 1404                                                                   
                                                                               
 REPRESENTATIVE GREEN moved that HJR 23 move from the committee with           
 individual recommendations and the attached zero fiscal note.                 
 There was no objection, HJR 23 was so moved from the House                    
 Resources Standing Committee.                                                 
                                                                               
 HB 123 - TAX OBLIGATION LOAN PROGRAM                                        
                                                                               
 C0-CHAIRMAN HUDSON announced the committee would hear HB 123, "An             
 Act relating to the repeal of the termination date of the federal             
 tax obligation loan program under the Commercial Fishing Loan Act;            
 and providing for an effective date."                                         
                                                                               
 Number 1443                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN, Alaska State Legislature, explained the             
 bill repealed the termination date of the federal tax obligation              
 loan program that was under the Commercial Fishing Loan Act.  This            
 program was due to sunset on May 26, 1997.  Thus far, 207 loans had           
 been made to fishermen who otherwise would have lost or possibly              
 could have lost their limited entry permits through actions taken             
 by the Internal Revenue Service-the seizure of permits for the                
 payment of delinquent taxes.                                                  
                                                                               
 REPRESENTATIVE IVAN further stated that Mr. Twomley provided a good           
 overview earlier on touching parts of HB 123 and its intent.  It              
 certainly impacted the Dillingham area, the rest of rural Alaska              
 and the entire state of Alaska.  The incident on December 11, 1996            
 when the state was blind sided by the IRS by giving only two days             
 notice and by conducting a pre-Christmas sale of an Alaskan limited           
 entry permit affected a 54 year old Alaskan Native fisherman from             
 a small coastal community.  The value of the permit was $30,000 but           
 it was sold for about $5,000.  It was a sad time for the family,              
 and it affected the people throughout rural Alaska with high                  
 unemployment because commercial fishing is the means for most to              
 gain an annual income.                                                        
                                                                               
 REPRESENTATIVE IVAN further stated that there were people from the            
 Division of Investment here today to answer any technical                     
 questions.                                                                    
                                                                               
 Number 1584                                                                   
                                                                               
 GREG WINEGAR, Juneau Lending Branch Manager, Division of                      
 Investments, Department of Commercial and Economic Development,               
 explained the agency administered the tax obligation program that             
 would sunset if the bill did not pass.  The program was established           
 three years ago because there were a number of Alaskan commercial             
 fishers that were having a tough time with the IRS and were in                
 danger of having their permits repossessed.  The program had been             
 very successful.  The division had assisted over 200 individuals by           
 protecting their permits and their way of making a living.  He                
 believed that there was still a need for the program, to a lesser             
 extent, because of progress.  There was a fairly high delinquency             
 rate with the program-33 percent.  Of that 33 percent, all but 11             
 percent either had a work out in progress or an extension that                
 would cure the delinquency.  He also noted that the loans were                
 fully secure in the event a delinquency could not be resolved.  The           
 program, he explained, was a revolving fund.  The division had not            
 received any general fund money since 1985.  Essentially, the                 
 division loaned money that it received back from re-payments.  It             
 worked out to about $15 million per year.  Mr. Winegar explained              
 the division submitted a zero fiscal note, and he would be willing            
 to answer any questions from the committee members.                           
                                                                               
 Number 1675                                                                   
                                                                               
 REPRESENTATIVE GREEN asked Mr. Winegar if the loans were secured              
 against the vessels, something tangible, or were they secured                 
 against the permit valuation?                                                 
                                                                               
 Number 1687                                                                   
                                                                               
 MR. WINEGAR replied it was a variety of things.  Many times it was            
 the permit.  The division was also able to take vessels, gear and             
 real estate as well.  It varied from case to case.                            
                                                                               
 Number 1698                                                                   
                                                                               
 REPRESENTATIVE GREEN asked Mr. Winegar if the loans were low                  
 interest loans or no-interest loans?                                          
                                                                               
 Number 1704                                                                   
                                                                               
 MR. WINEGAR replied the rate of interest, at this time, was 10.5              
 percent.  It was tied to the prime rate; it was the prime rate plus           
 two, not to exceed 10.5 percent.                                              
                                                                               
 Number 1716                                                                   
                                                                               
 REPRESENTATIVE GREEN replied that was pretty hefty.  He wondered if           
 the fiscal note should be positive rather than zero.  "Because, in            
 effect, what your saying is your extending the time but that also             
 means the additional interest that the state would get."  That was            
 a horrible way to get revenue, assuming it would be repaid.  He               
 asked Mr. Winegar, if there was a statement that would make this              
 even better; or did he figure, if it was a zero fiscal note then              
 the division did not need anything better than that?                          
                                                                               
 Number 1745                                                                   
                                                                               
 MR. WINEGAR replied the division was comfortable with the bill the            
 way it was.  The division had a limited amount of money to deal               
 with and sometimes it was a matter of priorities as far as what the           
 money was used for.                                                           
                                                                               
 Number 1762                                                                   
                                                                               
 REPRESENTATIVE GREEN asked Mr. Winegar if the 11 percent of the 33            
 percent mentioned earlier was one-third of the one-third, or was it           
 one-third of the total?                                                       
                                                                               
 MR. WINEGAR replied it was 11 percent of the total.                           
                                                                               
 Number 1774                                                                   
                                                                               
 REPRESENTATIVE GREEN responded it was one-third of those that were            
 outstanding.  That was a pretty low failure rate.  He asked Mr.               
 Winegar how that compared to the Alaska State Student Loan?                   
                                                                               
 Number 1779                                                                   
                                                                               
 MR. WINEGAR replied he was not familiar with the student loan                 
 rates.  The loans of the division were more risky and running                 
 higher than the normal loans.  The division was able to work with             
 the people throughout the extension process and/or work out, in               
 most cases, to resolve the problems.                                          
                                                                               
 Number 1793                                                                   
                                                                               
 REPRESENTATIVE GREEN explained that the state made great efforts to           
 educate its children through the student loan.  The forfeiture rate           
 was abominable, until foreclosure was implemented.  He was not                
 indicating that for the fishers loan, however, because a 10 percent           
 plus interest rate and an 11 percent failure rate was a good deal.            
                                                                               
 Number 1847                                                                   
                                                                               
 C0-CHAIRMAN HUDSON replied that he agreed.  There were many reasons           
 that the fishermen and women of Alaska were finding themselves in             
 economic disrepair and following behind in their obligations,                 
 including taxes.  The largest reason was the extreme competition              
 from the farmed salmon in Chile, Norway, Canada and other parts of            
 the world; and the break down of the old Soviet Union where the               
 Japanese were investing heavily in the same fisheries that were               
 available in Alaska.  Therefore, the program that was being                   
 described here today was valuable; it was an economic incentive to            
 some sorts, it was not falling into great economic problems, and it           
 was self-perpetuating.                                                        
                                                                               
 Number 1893                                                                   
                                                                               
 C0-CHAIRMAN SCOTT OGAN asked Mr. Winegar at what point did he                 
 expect write-offs?  The issue was discussed in the last committee.            
                                                                               
 Number 1937                                                                   
                                                                               
 MR. WINEGAR replied eventually the division did expect losses which           
 was inevitable with any loan program.  "We bend over backwards to             
 try and work with the harvester, and really the foreclosure I would           
 say, is a very last resort for us."  There were going to be cases             
 at some point where the division would need to cover the funds, but           
 it had not happened, yet.  The division hoped it would be a small             
 number of times that it would need to do that.                                
                                                                               
 Number 1958                                                                   
                                                                               
 C0-CHAIRMAN OGAN announced he had an amendment to the bill.  He was           
 concerned because the state, too often, stepped in to help people             
 who did not perform to pay their taxes.  He would support moving              
 the bill out of the committee, however.                                       
                                                                               
 Number 1997                                                                   
                                                                               
 REPRESENTATIVE RAMONA BARNES asked Mr. Winegar what was the                   
 collateral for the loans?                                                     
                                                                               
 Number 2005                                                                   
                                                                               
 MR. WINEGAR replied many times it was the permit itself, but it               
 could also be a vessel, real estate or other assets of the                    
 harvester.  It varied from case to case.                                      
                                                                               
 Number 2011                                                                   
 REPRESENTATIVE BARNES said, "Then you wouldn't write off a loan               
 just to forgive it, you would take something in collateral,                   
 always?"                                                                      
                                                                               
 Number 2019                                                                   
                                                                               
 MR. WINEGAR replied, "Yes, that's correct."  In fact, it was                  
 required by statute that the division did that.                               
                                                                               
 Number 2024                                                                   
                                                                               
 REPRESENTATIVE BARNES stated that she was having serious problems             
 with the bill because other Alaskans that had financial                       
 difficulties either got an extension on their taxes, or something,            
 to carry them over.  "It seems like every time the commercial                 
 fishermen get in trouble that we find a way to bail them out.  We             
 don't find a way to bail out other Alaskans."  She agreed with the            
 bill, when it was originally put on the books, but to see a bill to           
 extend the program gave her serious problems.  She asked Mr.                  
 Winegar how many more of these types of loans did he foresee in the           
 future?                                                                       
                                                                               
 Number 2061                                                                   
                                                                               
 MR. WINEGAR replied one of the stipulations of the original piece             
 of legislation was the once-in-a-lifetime opportunity to take                 
 advantage of the program.  There was concern of the people asking             
 for a loan every time that he or she had a tax problem.  Part of              
 the problem, however, was trying to reach as many of the folks as             
 possible because many were scattered around the state.  The idea of           
 the extension would be to try to reach more individuals.                      
                                                                               
 Number 2083                                                                   
                                                                               
 REPRESENTATIVE BARNES asked Mr. Winegar why was it the obligation             
 of the state to reach these individuals?  They knew they owed                 
 taxes.                                                                        
                                                                               
 Number 2093                                                                   
                                                                               
 MR. WINEGAR replied he did not know that it was an obligation as so           
 much as there was a program that gave an opportunity for harvesters           
 to protect their livelihood.                                                  
                                                                               
 Number 2102                                                                   
                                                                               
 REPRESENTATIVE BARNES stated that she appreciated the original                
 intent of the program.  However, if one of her constituents failed            
 to pay his taxes, the IRS could take his automobile, for example,             
 which was the means that got him back and forth to work.  The IRS             
 could take anything else that he owned.  "We're not doing anything            
 to help those Alaskans."  That was their livelihood.                          
 Number 2131                                                                   
                                                                               
 C0-CHAIRMAN OGAN stated that the IRS often took things without due            
 process.  "It's the only governmental organization that takes                 
 first, and then you come in and prove why you don't need them to              
 take what they've already taken from you."                                    
                                                                               
 Number 2158                                                                   
                                                                               
 JERRY MCCUNE, Representative , United Fishermen of Alaska, was the            
 first person to testify in Juneau on HB 123.  The United Fishermen            
 of Alaska supported the bill.  "We don't think it should be, you              
 know, going on for the next 25 years.  People have to realize their           
 obligations, and realize that they're going to have to make                   
 arrangements to file and pay their taxes.  We see that improvement            
 through the program as previously testified."  Not too long ago it            
 was passed in statute that the IRS could not take their livelihood            
 away; therefore, the answer to Representative Barnes' question was,           
 "No."  The United Fishermen of Alaska were trying to protect the              
 limited entry system, to keep the limited entry permits in Alaska,            
 and to inform folks about the program.  The fishing organizations             
 were encouraging people to talk to the IRS, to file, and to try to            
 budget, which was tough with the prices the past five years.  He              
 reiterated that the United Fishermen of Alaska supported the                  
 program, for whatever time the legislature saw fit that the state             
 no longer needed it, and its extension for now.                               
                                                                               
 Number 2242                                                                   
                                                                               
 C0-CHAIRMAN HUDSON asked Representative Ogan to introduce his                 
 amendment.                                                                    
                                                                               
 Number 2249                                                                   
                                                                               
 C0-CHAIRMAN OGAN moved Amendment 1, 0-LS0538/A.1, Cramer/Utermohle,           
 3/6/97.  It deleted all of the material of the original bill and              
 extended the program from "three" years to "eight" years, extending           
 its life another five years.                                                  
                                                                               
 Number 2273                                                                   
                                                                               
 REPRESENTATIVE BARNES objected.  Another five year extension was              
 too much.  A person that owed $30,000 had to have made a lot of               
 money and had to have had a lot of write offs.  "So, to extend this           
 for another five years is just about more than I can swallow so I'd           
 have to vote against this amendment."                                         
                                                                               
 Number 2307                                                                   
                                                                               
 REPRESENTATIVE BILL WILLIAMS said he supported Amendment 1.  The              
 fishing industry was one of the largest industries that employed              
 the people of Alaska and the fishermen were part of that industry.            
 Therefore, we should try to help the fishermen as much as we can;             
 and if it meant another five years, especially when it was down on            
 its knees because of the salmon glut in the world, I think we had             
 to do something to that effect.                                               
                                                                               
 Number 2352                                                                   
                                                                               
 REPRESENTATIVE GREEN said he supported Amendment 1.  The state had            
 recently made incentive moves in the petroleum field to keep people           
 employed in the state even if it meant sacrificing some of its                
 earnings.  The alternative of not doing something like this,                  
 whether it was a meritorious loan or not, was bankruptcy and                  
 unemployment which did not help anybody or the state.  If there               
 were people willing to try to make amends for a very bad situation,           
 such as, when the oil prices were low, the state could ultimately             
 end up on a business venture that was not of the best interest.  It           
 was a risk that the state needed to take.  If every time the state            
 got involved to encourage "entrepreneurialship" and the legislature           
 hammered those that were willing to take that risk it sent a bad              
 message.  The legislature had to look at this a little different              
 than if it was the board of directors of bank A, for example.  It             
 was a good idea to put a limit and a tendency to revisit it.  If              
 eight years was too long, he could see five years.                            
                                                                               
 C0-CHAIRMAN HUDSON asked Co-Chairman Ogan to speak to the issue of            
 how many years Amendment 1 extended the program.                              
                                                                               
 Number 2453                                                                   
                                                                               
 C0-CHAIRMAN OGAN replied Amendment 1 changed the bill to eight                
 years with a net effect of five years from the original expiration            
 date.  Amendment 1 extended the bill for another five years total.            
                                                                               
 TAPE 97-22, SIDE B                                                            
 Number 0001                                                                   
                                                                               
 REPRESENTATIVE GREEN stated there should be an end-point at some              
 time.                                                                         
                                                                               
 Number 0011                                                                   
                                                                               
 REPRESENTATIVE BARNES stated that she did not have a problem with             
 extending it.  She had a problem with extending it for five years,            
 however.  "I think that there's lots and lots of other businesses             
 out there, certainly the oil industry serves a great many Alaskans,           
 and our fishing community also serves some Alaskans, but they also            
 serve a great number of out-of-state people as well, so is the oil            
 industry.  And, we're working to try to turn that around."  In the            
 case of the fishing industry, there was not much that the state               
 could do to turn that around because many of the permits were owned           
 by people that did not live in Alaska.  She personally had worked             
 and would continue to work to open up new markets to sell Alaskan             
 fish in.  "I want to see our fishing industry succeed, but I                  
 believe that just making something this long a period of time                 
 after it has already been in existence for three years, is a little           
 bit too much."                                                                
                                                                               
 Number 0062                                                                   
                                                                               
 REPRESENTATIVE IVAN announced he concurred with Amendment 1, to               
 extend the program up to five years; and he was speaking for rural            
 Alaska.                                                                       
                                                                               
 Number 0074                                                                   
                                                                               
 C0-CHAIRMAN HUDSON asked Mr. Winegar, from his perspective, where             
 were most of the delinquent accounts held?  Were they principally             
 held in rural Alaska or were they all over the state?                         
                                                                               
 Number 0089                                                                   
                                                                               
 MR. WINEGAR replied they were spread around the state.  The                   
 division's portfolio had a lot of loans in rural Alaska, therefore,           
 the percentages would be higher in rural areas.                               
                                                                               
 C0-CHAIRMAN HUDSON asked Mr. Winegar if he would say any particular           
 part of rural Alaska?                                                         
                                                                               
 MR. WINEGAR replied he had not analyzed it to that extent.                    
                                                                               
 Number 0106                                                                   
                                                                               
 C0-CHAIRMAN HUDSON stated several years ago a lot of it was in                
 Bristol Bay and on the West coast of Alaska.  That was when the               
 legislature first started looking at whether or not it was                    
 worthwhile to create a loan to help these people maintain their               
 livelihoods, while at the same time, being responsible for their              
 taxes.                                                                        
                                                                               
 Number 0122                                                                   
                                                                               
 REPRESENTATIVE GREEN asked Mr. Winegar if the loan was being made             
 to non-Alaskan residents or just Alaskan residents?                           
                                                                               
 MR. WINEGAR replied it was strictly residents.  In fact, residents            
 that had been here for the last two years.                                    
                                                                               
 Number 0132                                                                   
                                                                               
 REPRESENTATIVE BARNES moved that the word "eight" be changed to               
 "six."  This would, in effect, give the program another three years           
 of life.                                                                      
                                                                               
 Number 0173                                                                   
 REPRESENTATIVE IVAN replied his bottom-line interest was to                   
 continue the program.  He had hoped it would be extended another              
 five years, but he also understood the concerns expressed today.              
                                                                               
 C0-CHAIRMAN HUDSON asked Representative Ivan if he was willing to             
 accept the amendment?                                                         
                                                                               
 REPRESENTATIVE IVAN replied, "Yes."                                           
                                                                               
 C0-CHAIRMAN HUDSON asked if there was any objection to the motion             
 to amend Amendment 1.  There was no objection.                                
                                                                               
 C0-CHAIRMAN HUDSON called for a motion to move Amendment 1, as                
 amended.                                                                      
                                                                               
 Number 0200                                                                   
                                                                               
 REPRESENTATIVE BARNES moved that Amendment 1, as amended, be                  
 adopted.  There was no objection.                                             
                                                                               
 Number 0244                                                                   
                                                                               
 REPRESENTATIVE BARNES moved that HB 123, as amended, move from the            
 committee with individual recommendations and attached fiscal                 
 note(s).  There was no objection, CSHB 123(RES) was so moved from             
 the House Resources Standing Committee.                                       
                                                                               
 HJR 24 - NO ALASKA CHRISTMAS TREE FOR FED. CAPITOL                          
                                                                               
 The next order of business to come before the House Resources                 
 Standing Committee was HJR 24, Relating to challenging the                    
 environmental and economic integrity of Alaska timber as Christmas            
 decor for the United States Capitol.                                          
                                                                               
 CO-CHAIRMAN HUDSON called on Representative Bill Williams, sponsor            
 of HJR 24, to present the resolution.                                         
                                                                               
 Number 0265                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS read the following sponsor statement into             
 the record:                                                                   
                                                                               
 "House Joint Resolution 24 was introduced in response to the                  
 Clinton Administration's proposal to harvest trees from the Tongass           
 National Forest for the purpose of decorating the nation's capital            
 during the 1998 Christmas season.                                             
                                                                               
 "Under normal circumstances this proposal would be met with open              
 arms and be considered an honor by the people who live and work in            
 the Forest.  However, these are not normal circumstances.  Federal            
 policy decisions, the inability of the Forest Service to get timber           
 volume out, and litigation has led to mill closures, widespread job           
 loss and economic depression, not to mention the associated                   
 negative socio-economic impacts.                                              
                                                                               
 "I consider the proposal a direct insult to the people of Southeast           
 Alaska.  These are people who are prohibited from making an honest            
 living in the woods, yet are asked to harvest Christmas trees, send           
 them back east AND fund the project.  At a time when we need every            
 single dollar we have to try and rebuild our economy it is                    
 incredible that the Federal Government would ask us to fund such a            
 project.                                                                      
                                                                               
 "We need to send a strong message to Washington that says we do not           
 agree with their actions regarding the Tongass National Forest.               
 The human cost of `saving the Tongass' has been too high.  We do              
 not agree with their taking of trees for decorative purposes while            
 the jobless citizens of Southeast Alaska try to scrape enough money           
 together to save their homes and dreams.  I urge you to support               
 House Joint Resolution 24."                                                   
                                                                               
 CO-CHAIRMAN HUDSON explained Representative Williams also had an              
 amendment to the resolution.  He asked him to explain it to the               
 committee members.                                                            
                                                                               
 REPRESENTATIVE WILLIAMS moved that Amendment 1 be adopted.                    
                                                                               
 REPRESENTATIVE WILLIAMS explained that Amendment 1 made the                   
 resolution more clear by adding figures to it.                                
                                                                               
 CO-CHAIRMAN HUDSON stated Amendment 1 made it current with the                
 recent action taken by the Forest Service and the Ketchikan Pulp              
 Mill.                                                                         
                                                                               
 REPRESENTATIVE WILLIAMS further explained that he hoped the                   
 resolution would allow for media coverage in Alaska and the rest of           
 the country so that it would be understood what was happening in              
 the Tongass National Forest.  The forest for the past six to eight            
 years had been managed by political science.  "What we would like             
 to do is to be able to manage the Tongass in the right manner with            
 regular science."                                                             
                                                                               
 CO-CHAIRMAN HUDSON asked the committee members if there was any               
 objection to the motion to adopt Amendment 1?  There was no                   
 objection, Amendment 1 was so adopted.                                        
                                                                               
 Number 0486                                                                   
                                                                               
 WAYNE NICOLLS was the first person to testify in Juneau.  He was              
 here testifying on behalf of himself today.  He apologized to                 
 Representative Williams if his remarks appeared contradictory to              
 him because he had never opposed him before.  But, he did want to             
 present a clear picture of the Christmas Tree Project.  This                  
 resolution was poor timing given the circumstances of the Tongass             
 National Forest.  Many knew that the Tongass could produce several            
 times more than whatever the level would come out of the Tongass              
 plan.  "It's tragic to have the job loss and to have the                      
 productivity that's potentially lost and the potential for a                  
 thriving and a growing forest products industry instead of having             
 it shut down."                                                                
                                                                               
 MR. NICOLLS further explained that before political correctness it            
 was called the Capital Christmas Tree and more appropriately it was           
 called the people's tree.  It was started and sustained by the                
 people's forest service to supply the people's tree from the                  
 people's forest.  The honor and the privilege of supplying the tree           
 required years of effort and determination, of which, none was                
 political.  Therefore, he hoped that the legislature would speak              
 for the people.  Since the beginning, tax payer's money had only              
 been used sparingly for a small part of salaries and expenses.  The           
 employees contributed many unpaid hours.  It was mostly supported             
 by volunteers and donations.  Mr. Nicolls had a vested interest in            
 the program because he was part of the group that started the                 
 program.  In 1996, the project tried to get a tree to commemorate             
 the silver anniversary of the Alaska Native Claims Settlement Act,            
 Sealaska, the centennial of the Bonanza Creek discovery, and the              
 eve of the 90th anniversary of the Tongass National Forest.  The              
 effort was lost to the state of Utah because of the golden spike              
 significance and the state's centennial.                                      
                                                                               
 MR. NICOLLS further stated that the nomination and selection for              
 the capital tree was a deliberate, long-term and highly competitive           
 process.  It was similar on a grand scale for shopping for the                
 perfect Christmas tree with his wife.  The honors and privileges              
 that it brought to the people were significant.  The final                    
 selection was made by the nation's arborist, who was responsible              
 for even the temporary flora in the nation's capital.  Several                
 communities usually participated.  The Petersburg Chamber pledged             
 in 1995 the transportation funds, if the tree was selected from               
 Alaska.  Furthermore, as many as 60 smaller trees went along for              
 various Washington D.C. locations, such as, the Supreme Court                 
 building; none went to the White House.  The tree in the White                
 House was the winner among the Christmas tree growers in the Lower            
 Forty-Eight.  It was not connected with the capital trees.  If                
 there was the opportunity again, it was a chance to showcase                  
 Alaska, its forests, its productive potentials, and the results of            
 its productive management.  For example, the best specimen would              
 probably come from a second growth area providing a positive                  
 message.                                                                      
                                                                               
 MR. NICOLLS wished the committee members well in their decision.              
 "I hope that our message does get through that we're being put                
 upon."                                                                        
                                                                               
 Number 0824                                                                   
 REPRESENTATIVE GREEN explained under different circumstances he               
 would agree 100 percent with the testimony from Mr. Nicolls.                  
 However, he found that the results of the executive order were                
 repugnant.  The resolution probably would not do any good, but                
 neither would sending the trees.  "We have an administration in               
 Washington that really doesn't care about Alaska.  They have shown            
 that.  They don't care about small states.  They're willing to just           
 about sell out anybody that has only a 3 or a 4 congressional                 
 delegation and cater to those environmentally oriented states back            
 East that have 30 to 50 electoral votes."  He supported the                   
 resolution.                                                                   
                                                                               
 Number 0907                                                                   
                                                                               
 MR. NICOLLS replied he was happy to be retired from the forest                
 service so that he could unabashedly agree with Representative                
 Green's statements.                                                           
                                                                               
 CO-CHAIRMAN OGAN wondered, for the record, if Mr. Nicolls was not             
 retired would he not have said that.                                          
                                                                               
 MR. NICOLLS responded he probably would have said it anyway.                  
                                                                               
 Number 0941                                                                   
                                                                               
 JIM CAPLAN, Deputy Regional Forester for Natural Resources, United            
 States Department of Agriculture - Forest Service, was the next               
 person to testify in Juneau.  He explained he was here to answer              
 any questions about the process.  He had handled the program for              
 three years at the Washington D.C. end of the pipeline.  He                   
 declared, if the people of Southeast Alaska did not want this type            
 of activity to go on, it would not go on.  It was that simple.  The           
 tree was not due in Washington D.C. until 1998, therefore, another            
 tree from another forest could be substituted.                                
                                                                               
 Number 0992                                                                   
                                                                               
 REPRESENTATIVE IRENE NICHOLIA asked Mr. Caplan who paid for the               
 transportation of the trees?                                                  
                                                                               
 MR. CAPLAN replied it was paid for by voluntary contributions from            
 the communities and cooperators.  For instance, Silver Bay Logging            
 offered to aerial lift the trees as a contribution.  He cited Mac             
 Trucks and Harley Davidson as companies that had participated and             
 contributed as well.  Sometimes the communities were able to raise            
 a great bit of money but a lot of times it was a combination of               
 contributors.                                                                 
                                                                               
 Number 1045                                                                   
                                                                               
 REPRESENTATIVE NICHOLIA asked Mr. Caplan if he had received any               
 reactions from the Southeast communities?                                     
 Number 1056                                                                   
                                                                               
 MR. CAPLAN replied some communities were very upset and others were           
 supportive.  The program was not intended to create conflict                  
 between communities or within communities.  However, it had been              
 difficult to decide if there was any community consensus.                     
                                                                               
 Number 1085                                                                   
                                                                               
 REPRESENTATIVE BARNES asked Mr. Caplan what was his job?                      
                                                                               
 MR. CAPLAN replied he was the Deputy Regional Forester for Natural            
 Resources here in Alaska.                                                     
                                                                               
 REPRESENTATIVE BARNES stated, "So, you're not retired?"                       
                                                                               
 MR. CAPLAN replied he was not retired and did not plan to be real             
 soon, but after today it could happen.                                        
                                                                               
 Number 1106                                                                   
                                                                               
 REPRESENTATIVE BARNES replied she was not so sure that it would               
 happen to him because he did a fine job with the party line.  The             
 federal administration would not have any reason to retire him                
 early.                                                                        
                                                                               
 MR. CAPLAN replied he appreciated the remarks of Representative               
 Barnes.                                                                       
                                                                               
 REPRESENTATIVE BARNES further stated that the people of Alaska                
 would very much like to have a tree from Alaska displayed in the              
 United States capital.  However, she also believed that Washington            
 D.C. needed to understand that a tree was significant to Alaska for           
 many reasons.  The city of Kotzebue used to have one tree that was            
 stolen.  And, for years the people of Kotzebue tended to that tree.           
 The people of Southeast lived off of the forest and when their                
 livelihood was shut down the way it had been, it meant that some              
 children would not be able to eat.  "And, so if the only protest              
 that they have is to say:  `Well we would very much like you to               
 have our tree,' we can't in good faith do that because you've put             
 our people out of work.  Thus, they can't feed their families, or             
 cloth their children, or do the things that they need to do."                 
                                                                               
 Number 1195                                                                   
                                                                               
 CO-CHAIRMAN OGAN stated that he would find great pleasure if the              
 national media picked up on this issue.  He also hoped that the               
 other areas that were solicited would not provide a tree sending a            
 greater message from the people living and working in the forest              
 that they had enough of the "war on the West."  "With all due                 
 respect, Sir, I hope they won't find a tree for Washington."                  
                                                                               
 Number 1237                                                                   
                                                                               
 CO-CHAIRMAN HUDSON stated, for the record, that he had known Mr.              
 Caplan for a number of years and he did not know anybody more                 
 honorable, professional, or more caring and concerned about Alaska;           
 so, he would like to see him keep his job.                                    
                                                                               
 MR. CAPLAN replied "Thank you, Mr. Chairman.  I appreciate it."               
                                                                               
 Number 1255                                                                   
                                                                               
 REPRESENTATIVE GREEN suggested to Mr. Caplan, if he really wanted             
 to find out what the people in the affected communities thought, to           
 pass out a contribution hat in Wrangell and Ketchikan to help pay             
 for the transportation of the trees out East.  "I'm afraid that               
 they would be a little less civil than we are being here."                    
                                                                               
 Number 1307                                                                   
                                                                               
 REPRESENTATIVE REGGIE JOULE replied that the tree in Kotzebue was             
 a national forest complete with a white picket fence around it.               
 Furthermore, as a kid he grew up hearing about the White House and            
 the big deal about the Christmas tree and he wondered if Alaska               
 would ever get that.  "I never thought we had trees because I                 
 figured the Tlingit were the first ones across the land bridge,               
 they clear-cutted and made canoes out of all of them and left the             
 rest of us stranded."                                                         
                                                                               
 REPRESENTATIVE JOULE further stated that he always had hoped that             
 Alaska would have the distinct honor of placing a Christmas tree in           
 the nations capital.  But, it was a little frustrating to be put              
 into this kind of light; and in any other circumstances it would be           
 an honor.  Maybe, if there was another place in Alaska that could             
 do this, it could be considered.  However, with the situation as it           
 was, he would support the resolution even though it seemed in some            
 ways mean spirited.  The point needed to be made, however, and this           
 was one way to do it.                                                         
                                                                               
 Number 1459                                                                   
                                                                               
 JACK E. PHELPS, Executive Director, Alaska Forest Association,                
 Inc., was the next person to testify in Juneau.  He appreciated the           
 resolution and the comments today made by a few of the members of             
 the committee.  It was important for the committee members to                 
 recognize that the process began by the Forest Service in 1993                
 which was the year that Alaska lost the Sitka pulp mill.  At that             
 time no one believed that the state would loose the Wrangell mill             
 and the Ketchikan pulp mill as well.  Therefore, this was an                  
 unfortunate and ironic turn of events since at one time there was             
 community support.  "It's unfortunate that larch doesn't grow in              
 Southeast Alaska because larch was a conifer that loses its needles           
 in the winter and maybe it would be really appropriate for us to              
 send a larch back there to decorate the nations capital."  It would           
 be symbolic of what had happened to the industry - death.  Under              
 the current administration, we were back to pre-Magna Charta                  
 England - the king's forest rather than the people's forest as Mr.            
 Nicolls stated earlier.  That was the problem throughout the public           
 land states in the western half of the United States.  "We are                
 being told we cannot encroach on the king's forest."  The Alaska              
 State Legislature should be applauded for trying to make a                    
 statement with this resolution.  He urged its speedy passage from             
 both sides of the aisle.                                                      
                                                                               
 Number 1641                                                                   
                                                                               
 JED WHITTAKER was the next person to testify in Juneau.  He                   
 objected to the "politicalization" of Christmas.  He explained                
 Christmas was a time for giving, a time that brought out the best             
 of everyone, and a time for sharing to become the best that one               
 could be as a human.  He understood and shared the outrage of                 
 Representative Williams of the injustice of the Clinton                       
 Administration's actions on the Tongass.  However, the resolution             
 did not show the best that Alaskans could be to the rest of the               
 nation by politicizing Christmas.  Representative Williams was well           
 intended, however, he did not think that this was a proper course             
 of action.  It was an abuse of public monies to even discuss                  
 something like this.  "I was listening to you all give various                
 platitudes and jokes and whatnot.  And, I would have to remind you            
 that this is a public hearing and you're supposed to be hearing               
 from the public.  You have much opportunity to deliberate about               
 your very important decision about objecting to Christmas trees               
 after the public hearing."  In conclusion, Christmas was not about            
 politics and Christmas trees were not about politics.  It was a               
 time to put politics to rest.  "I would hope that you can find it             
 in your heart to do what is best for both Alaska and the nation."             
                                                                               
 Number 1821                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked Co-Chair Hudson if the letter from              
 John Conley, Member, Ketchikan Gateway Borough Assembly, could be             
 added to the record?  There was no objection, it was so added to              
 the committee file.                                                           
                                                                               
 Number 1854                                                                   
                                                                               
 REPRESENTATIVE BARNES moved and asked unanimous consent that HJR
 24, as amended, move from the committee with the attached zero                
 fiscal note and individual recommendations.  There was no                     
 objection, CSHJR 24(RES) was so moved from the House Resources                
 Standing Committee.                                                           
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 Number 1888                                                                   
                                                                               
 CO-CHAIRMAN HUDSON adjourned the House Resources Standing Committee           
 meeting at 2:36 p.m.                                                          
                                                                               
                                                                               

Document Name Date/Time Subjects