Legislature(1997 - 1998)

05/01/1997 01:15 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                              
                          May 1, 1997                                          
                           1:15 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Bill Hudson, Co-Chairman                                       
 Representative Scott Ogan, Co-Chairman                                        
 Representative Beverly Masek, Vice Chair                                      
 Representative Fred Dyson                                                     
 Representative William K. ("Bill") Williams                                   
 Representative Irene Nicholia                                                 
 Representative Reggie Joule                                                   
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Ramona Barnes                                                  
 Representative Joe Green                                                      
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HOUSE BILL NO. 238                                                            
 "An Act amending the program of exploration incentive credits for             
 activities involving locatable or leasable minerals or coal                   
 deposits on certain land in the state; and providing for an                   
 effective date."                                                              
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 * SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 243                                   
 "An Act delaying the repeal of the current law regarding                      
 subsistence use of fish and game; amending the effective date of              
 secs. 3 and 5, ch. 1, SSSLA 1992; and providing for an effective              
 date."                                                                        
                                                                               
      - MOVED CSSSHB 243(RES) OUT OF COMMITTEE                                 
                                                                               
 * HOUSE BILL NO. 255                                                          
 "An Act relating to subsistence hunting and fishing; and providing            
 for an effective date."                                                       
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 238                                                               
 SHORT TITLE: MINING EXPLORATION INCENTIVE CREDITS                             
 SPONSOR(S): REPRESENTATIVE(S) VEZEY, Foster, Ivan                             
 JRN-DATE      JRN-PG                 ACTION                                   
 04/08/97      1025    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/08/97      1025    (H)   RESOURCES                                         
 04/17/97              (H)   RES AT 1:00 PM CAPITOL 124                        
 04/17/97              (H)   MINUTE(RES)                                       
 04/23/97      1308    (H)   COSPONSOR(S): FOSTER, IVAN                        
 05/01/97              (H)   RES AT 1:00 PM CAPITOL 124                        
                                                                               
 BILL:  HB 243                                                               
 SHORT TITLE: EXTEND CURRENT SUBSISTENCE LAW                                   
 SPONSOR(S): SPECIAL COMMITTEE ON FISHERIES                                    
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 04/10/97      1060    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/10/97      1060    (H)   RESOURCES                                         
 04/22/97              (H)   RES AT 1:00 PM CAPITOL 124                        
 04/22/97              (H)   MINUTE(RES)                                       
 04/23/97      1293    (H)   SPONSOR SUBSTITUTE INTRODUCED-                    
                             REFERRALS                                         
 04/23/97      1293    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/23/97      1293    (H)   RESOURCES                                         
 04/29/97              (H)   RES AT 1:00 PM CAPITOL 124                        
 04/29/97              (H)   MINUTE(RES)                                       
 05/01/97              (H)   RES AT 1:00 PM CAPITOL 124                        
                                                                               
 BILL:  HB 255                                                               
 SHORT TITLE: SUBSISTENCE HUNTING AND FISHING                                  
 SPONSOR(S): REPRESENTATIVE(S) BARNES, Cowdery, Mulder, Austerman,             
 Green, James, Hodgins, Ryan, Kohring                                          
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 04/18/97      1171    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/18/97      1172    (H)   RESOURCES, WTR                                    
 04/24/97      1332    (H)   COSPONSOR(S): KOHRING                             
 05/01/97              (H)   RES AT 1:00 PM CAPITOL 124                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 REPRESENTATIVE AL VEZEY                                                       
 Alaska State Legislature                                                      
 Capitol Building, Room 13                                                     
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3719                                                    
 POSITION STATEMENT:  Testified as sponsor of HB 238.                          
                                                                               
 REPRESENTATIVE IVAN IVAN                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 418                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4942                                                    
 POSITION STATEMENT:  Testified as cosponsor of HB 238.                        
                                                                               
 RUDY VETTER                                                                   
 P.O. Box 70342                                                                
 Fairbanks, Alaska  99707                                                      
 Telephone:  (907) 457-5509                                                    
 POSITION STATEMENT:  Testified on HB 238.                                     
                                                                               
 MILT WILTSE, Director                                                         
 Division of Geological and Geophysical Surveys                                
 Department of Natural Resources                                               
 794 University Avenue, Suite 200                                              
 Fairbanks, Alaska  99707-3645                                                 
 Telephone:  (907) 451-5005                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 238.                              
                                                                               
 BOB BARTHOLOMEW, Deputy Director                                              
 Income and Excise Audit Division                                              
 Department of Revenue                                                         
 P.O. Box 110420                                                               
 Juneau, Alaska  99811-0420                                                    
 Telephone:  (907) 465-2320                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 238.                              
                                                                               
 DICK BISHOP, Executive Director                                               
 Alaska Outdoor Council                                                        
 211 Fourth Street, Suite 302A                                                 
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 463-3830                                                    
 POSITION STATEMENT:  Testified on SSHB 238 and HB 255.                        
                                                                               
 MARY C. PETE, Director                                                        
 Division of Subsistence                                                       
 Department of Fish and Game                                                   
 P.O. Box 25526                                                                
 Juneau, Alaska  99802-5526                                                    
 Telephone:  (907) 465-2066                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding SSHB 243.                            
                                                                               
 MARK RIEHLE, Legislative Administrative Assistant                             
    to Representative Ramona Barnes                                            
 Alaska State Legislature                                                      
 Capitol Building, Room 403                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3438                                                    
 POSITION STATEMENT:  Presented sponsor statement for HB 255.                  
                                                                               
 THEODORE POPELY, Legislative Assistant                                        
    to House and Senate Majority                                               
 Alaska State Legislature                                                      
 Capitol Building, Room 116                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3439                                                    
 POSITION STATEMENT:  Answered questions on HB 255.                            
                                                                               
 CARL JACK                                                                     
 Rural Alaska Community Action Program                                         
 731 East 8th Avenue                                                           
 Anchorage, Alaska  99501                                                      
 Telephone:  (907) 279-2511                                                    
 POSITION STATEMENT:  Testified in opposition to HB 255.                       
                                                                               
 ART IVANOFF, Subsistence Coordinator                                          
 Maniilaq Association                                                          
 P.O. Box 256                                                                  
 Kotzebue, Alaska  99752                                                       
 Telephone:  (907) 442-7690                                                    
 POSITION STATEMENT:  Testified in opposition to HB 255.                       
                                                                               
 DICK COOSE, Executive Director                                                
 Concerned Alaskans for Resources and Environment                              
 P.O. Box 9266                                                                 
 Ketchikan, Alaska  99901                                                      
 Telephone:  (907) 247-9266                                                    
 POSITION STATEMENT:  Testified on HB 255.                                     
                                                                               
 CALEB PUNGOWIYI, Subsistence Director                                         
 Kawerak, Incorporated                                                         
 P.O. Box 948                                                                  
 Nome, Alaska  99762                                                           
 Telephone:  (907) 443-4728                                                    
 POSITION STATEMENT:  Testified in opposition to HB 255.                       
                                                                               
 GLORIA STICKWAN                                                               
 P.O. Box 264                                                                  
 Copper Center, Alaska  99573                                                  
 Telephone:  (907) 822-5241                                                    
 POSITION STATEMENT:  Testified on HB 255.                                     
                                                                               
 ANGIE MORGAN                                                                  
 P.O. Box 127                                                                  
 Aniak, Alaska  99557                                                          
 Telephone:  (907) 675-4384                                                    
 POSITION STATEMENT:  Testified in opposition to HB 255.                       
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 97-48, SIDE A                                                            
 Number 0001                                                                   
                                                                               
 CO-CHAIRMAN BILL HUDSON called the House Resources Standing                   
 Committee meeting to order at 1:15 p.m.  Members present at the               
 call to order were Representatives Hudson, Ogan, Masek, Dyson and             
 Williams.  Representatives Joule and Nicholia arrived at 1:19 p.m.            
 and 1:21 p.m., respectively.  Also present at the table was                   
 Representative Ivan.  Absent were Representative Green, who was               
 chairing another meeting, and Representative Barnes, who was ill.             
                                                                               
 HB 238 - MINING EXPLORATION INCENTIVE CREDITS                               
                                                                               
 Number 0077                                                                   
                                                                               
 CO-CHAIRMAN HUDSON announced the first item of business was House             
 Bill No. 238, "An Act amending the program of exploration incentive           
 credits for activities involving locatable or leasable minerals or            
 coal deposits on certain land in the state; and providing for an              
 effective date."  The bill had been heard previously.  Co-Chairman            
 Hudson advised that the sponsor had a proposed committee substitute           
 (CS), 0-LS0845\F, Chenoweth, 4/21/97.                                         
                                                                               
 Number 0122                                                                   
                                                                               
 REPRESENTATIVE AL VEZEY, sponsor, came forward to testify.  He said           
 although the proposed CS looks like a substantial rewrite of the              
 bill, it is not.  It addresses concerns expressed by the Department           
 of Natural Resources (DNR).  Specifically, it provides a means of             
 evaluating data, giving the DNR explicit authority to use                     
 consulting services paid for by the party wishing to have its data            
 approved for a tax credit.  In effect, it would give the DNR the              
 necessary resources to accomplish the evaluation task.                        
                                                                               
 REPRESENTATIVE VEZEY advised there are minor changes taking into              
 account written comments and those received at the previous                   
 hearing.  The major change is that they moved a section to another            
 part of the bill to make it easier to read.                                   
                                                                               
 Number 0287                                                                   
                                                                               
 CO-CHAIRMAN SCOTT OGAN referred to Section 1 of the proposed CS,              
 page 1, line 10, and asked whether the state would be giving more             
 in credits than it would be getting back in revenue.                          
                                                                               
 Number 0323                                                                   
                                                                               
 REPRESENTATIVE VEZEY replied that the only change in Section 1 is             
 adding item (5) on page 2, which clarifies that geological mapping            
 is an allowable cost.  To date, $38 million in potential credits              
 have been filed.  By way of comparison, about $700,000 a year in              
 mining tax is collected; although Representative Vezey does not               
 know the number of actual credits taken, it is small.  The                    
 advantage to the state of these incentives is receiving a                     
 tremendous amount of leverage on its dollars.  Representative Vezey           
 said the state does not really lose any revenue.  It grants a                 
 credit when a tax liability is incurred, and that is usually years            
 after the credit accrues.                                                     
                                                                               
 Number 0401                                                                   
                                                                               
 CO-CHAIRMAN OGAN questioned the $700,000 worth of revenue per year,           
 when the state grants millions in credits.                                    
                                                                               
 REPRESENTATIVE VEZEY said $38 million in allowable credits have               
 been certified by the department, but the number actually used is             
 infinitesimally small in comparison.  The credits are "simply                 
 sitting in the bank, waiting for an opportunity to use them."                 
                                                                               
 Number 0454                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked:  If only $700,000 in taxes is being                   
 collected in mining taxes, what problem are they trying to fix by             
 giving additional credits?                                                    
                                                                               
 REPRESENTATIVE VEZEY stated that the purpose of this bill is two-             
 fold.  First, it adds geological mapping as an allowable expense              
 for credits; that is a small "tweak" that probably could have been            
 interpreted as allowed under existing law.  Second, they are                  
 creating a new category of tax credits for geophysical, geochemical           
 and geological surveying work released to the public.                         
                                                                               
 REPRESENTATIVE VEZEY said the current mineral exploration incentive           
 tax credit only applies to exploration development on a piece of              
 property.  He explained, "In other words, if you do an exploration            
 and development program over 1,000 square miles and you develop one           
 square mile of that under the current program, only the cost                  
 associated with the one square mile that goes into development is             
 an allowable tax credit.  Now, the company will undoubtedly file              
 all the other credits, in the event that they someday become                  
 eligible, but it might be 15 years, or never, that they become                
 eligible for actual tax deductions.  They're just simply filed and            
 accepted; they're in the bank."                                               
                                                                               
 Number 0599                                                                   
                                                                               
 REPRESENTATIVE VEZEY said the airborne geomagnetic survey program             
 has unquestionably created an economic boom in Alaska, with only              
 $300,000 to $400,000 in yearly expenditures by the state.  As the             
 legislature is unlikely to provide more money to expand the                   
 program, they had come up with a plan:  If a private-sector company           
 did geophysical surveying, geochemical surveying or geological                
 mapping and released the data to the public, they would receive a             
 tax credit for that work.                                                     
                                                                               
 REPRESENTATIVE VEZEY explained, "And there again, we're getting a             
 tremendous amount of leverage, because it's not so much that we               
 expect everybody will take all their data and try to put it in this           
 bank and get a tax credit, because in the first place, until they             
 have a tax liability, they have no incentive.  What we're trying to           
 do here is send out a message that `Hey, we are open for business,            
 and we're going to offer this incentive to you.  If you go out and            
 do an exploration program and it turns up goose eggs, and in your             
 opinion, the data is worthless, you can release it to the public              
 and we'll give you a credit against your future mining tax or your            
 future income tax, if you'll just make it available to the                    
 public.'"  Representative Vezey emphasized that where one person              
 might see no value, somebody else with a different background,                
 training or objective may see real value.                                     
                                                                               
 Number 0705                                                                   
                                                                               
 CO-CHAIRMAN OGAN referred to page 1, lines 10 and 11 of the                   
 proposed CS, which says credits are given "regardless of whether              
 the land is state-owned land".  He asked whether Representative               
 Vezey believes it is advantageous to continue with that policy.               
 For example, if exploration was done on private or federal lands,             
 he assumed the state would not get the revenues.                              
                                                                               
 REPRESENTATIVE VEZEY said that is incorrect.  He referred to the              
 90/10 revenue sharing agreement between the state and federal                 
 governments; mineral severance taxes; and corporate taxes as                  
 sources of revenue regardless of land ownership.                              
                                                                               
 REPRESENTATIVE VEZEY said they had debated that.  If a company                
 surveys private land, he would assume the owner of the land is                
 interested in having it developed and would act like a prudent                
 business manager.  The company would have first priority to look              
 this data over.  If they do not want to use it, there is an                   
 incentive to make it public, which can be done at no cost to the              
 department by providing a tax credit against a mining license tax             
 or income tax.  Once the information is public, anyone may evaluate           
 it and talk to the owner of the land.                                         
                                                                               
 Number 0849                                                                   
                                                                               
 CO-CHAIRMAN HUDSON suggested the option for incentives rests with             
 entities wanting to explore for minerals or develop mineral                   
 properties.  If they choose the incentive, they must give back to             
 the state geological information, for example.  He stated, "It                
 doesn't cost us anything, because they have to come into production           
 before there's a tax obligation."                                             
                                                                               
 REPRESENTATIVE VEZEY concurred.  He emphasized that the primary               
 intent is to send a message.  "And we can do that," he said.                  
 "There is no value to a tax credit if there's no taxable income.              
 It doesn't mean they might have income from somewhere else that               
 might be taxable.  It's just this particular property may not have            
 developed.  And that's the big difference between this bill and the           
 bill that we worked on two years ago, is that this bill, ... the              
 property doesn't have to go into production.  We're trying to                 
 expand this library that catalogs Alaska resources.  Because we all           
 say that we're a rich state, but I defy you to tell me what's                 
 here."                                                                        
                                                                               
 Number 0942                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN, cosponsor of HB 238, said he comes from             
 an undeveloped area, the Yukon-Kuskokwim delta region.  They need             
 to look at available resources, including possibilities for shallow           
 gas wells that could provide cheaper fuel than the diesel currently           
 used in communities.  He believes this legislation will afford                
 that.                                                                         
                                                                               
 REPRESENTATIVE IVAN said his region contains 6.5 million acres of             
 private land.  Including state lands, it is the size of Oklahoma.             
 He stated the hope that the incentive will be available for some of           
 the small operators interested in production of shallow-well gas              
 and for cataloging the resources.                                             
                                                                               
 Number 1064                                                                   
                                                                               
 REPRESENTATIVE VEZEY said he would like to see the committee get              
 the bill moving.  Although he does not believe it will affect                 
 exploration this summer, he believes if the message goes out this             
 summer, it may affect the amount of exploration activity in Alaska            
 next year.                                                                    
                                                                               
 Number 1146                                                                   
                                                                               
 RUDY VETTER testified via teleconference from Fairbanks, agreeing             
 this may provide increased incentive for exploration.  He cited a             
 local example that he believes may ultimately become a mine bigger            
 than the Fort Knox Mine.  He hopes this bill, over the long term,             
 does not conflict with current law.  He noted that it does not                
 provide penalties nor is it mandatory.                                        
                                                                               
 MR. VETTER thanked "all of you people who helped us get the                   
 airborne data that we've had."  He emphasized that the mining                 
 industry does not want more taxes or state funding.  He said, "Give           
 us the freedom to operate and we can operate very well, and we can            
 take care of all of our environmental factors that are necessary."            
                                                                               
 Number 1320                                                                   
                                                                               
 MILT WILTSE, Director, Division of Geological and Geophysical                 
 Surveys, Department of Natural Resources, testified via                       
 teleconference from Fairbanks.  They had reviewed the proposed                
 committee substitute.  While they agree wholeheartedly with the               
 concept, they still have questions.  For example, they see                    
 confusion as to what old data may be eligible.  They also have                
 questions on the definition of "substantial value."                           
                                                                               
 MR. WILTSE said Section 4 is particularly difficult to interpret.             
 He stated, "It looked like part of that subsection voided some of             
 the new credits and possibly impacted some of the former bill."  It           
 is also unclear whether the credit has a one-time statewide                   
 limitation for each applicant or would be for any one set of data.            
 In addition, as the bill is written, he believes most material                
 would be given to the DNR to evaluate, placing the department in a            
 contractual situation.                                                        
                                                                               
 MR. WILTSE agreed with the concept of not building a bureaucracy              
 within the DNR to evaluate submitted data.  He believes this can be           
 a private-sector-supported, efficient operation.  They would like             
 to work out questions with the sponsor and stakeholders in the                
 mining industry.                                                              
                                                                               
 MR. WILTSE said some people had expressed concern, which he feels             
 may be somewhat valid, that if this is not done correctly, there              
 may be harm to the existing incentive, which is far from anybody's            
 intent.  He suggested the intent could be placed in a separate bill           
 to avoid that possibility.  He offered to work with others towards            
 a "consensus-opinion bill to go forward in the next session, that             
 we could all support with no reservation."                                    
                                                                               
 MR. WILTSE stated his belief that the concept is excellent.  It may           
 go beyond anybody's expectations in terms of building a geologic              
 data base of material that otherwise would not be available.  He              
 stated, "And I'd hate to see us act too much in haste and therefore           
 create a situation that we don't want to create and maybe lose the            
 opportunity of actually putting something like this in place for              
 the long run."                                                                
                                                                               
 Number 1599                                                                   
                                                                               
 REPRESENTATIVE VEZEY responded, "I do think we have addressed his             
 legitimate concerns.  Some of his concerns just pertain to exactly            
 what he's talking about.  I mean, it takes a lawyer to read some of           
 our statutes.  I believe that the only reason to move this bill               
 forward is to put the message out there, because people are making            
 decisions now, and in the next six months, as to how they will                
 spend money in 1998.  And I think this would be a good incentive to           
 have out there."                                                              
                                                                               
 REPRESENTATIVE VEZEY suggested a compromise for the "department               
 folks that are nervous about this" would be simply changing the               
 retroactive date to 1998 and making the effective date sometime in            
 1998.  As he visualizes it, if the bill became law this year, it              
 would not produce results for another year.  Changing the dates               
 would provide another year to work on the details, but the message            
 would still be out there, loud and clear.                                     
                                                                               
 Number 1679                                                                   
                                                                               
 CO-CHAIRMAN OGAN expressed concern about the fiscal note for                  
 approximately $260,000 to $270,000 per year.  Referring to another            
 bill, he pointed out the dive fishery was willing to pay costs to             
 get that fishery going.  He asked where this money would come from.           
 He referred to the analysis section of the fiscal note, which is              
 extensive, and advised that it discusses similar programs in                  
 Canada.                                                                       
                                                                               
 Number 1753                                                                   
                                                                               
 REPRESENTATIVE VEZEY stated his belief that the fiscal note                   
 addresses the original bill, not the committee substitute.  He                
 stated, "It's assumed in this fiscal note that the DNR would be               
 handling this data, evaluating it professionally and publishing it.           
 The committee substitute spells out that it is a third-party                  
 consultant that will do the evaluation, paid for by the person                
 wishing to take the tax credit, and that the person wishing to take           
 the tax credit is responsible for the publication of the data.  So            
 it's zero cost.  Really the cost is some of the director's time,              
 because the director has total authority over whether or not to               
 accept this information."                                                     
                                                                               
 REPRESENTATIVE VEZEY suggested it will come down to the                       
 relationship between the director and the third-party consultant.             
 The director would basically either take the advice of the third-             
 party consultant or not use that consultant.  He stated, "So I                
 believe that we've eliminated this, for all practical purposes, to            
 a zero fiscal note."  He asked Mr. Wiltse, who had prepared the               
 fiscal note, to comment.                                                      
                                                                               
 Number 1808                                                                   
                                                                               
 MR. WILTSE responded, "What Representative Vezey says is partially            
 true.  And I'm sure that that is his intent."  He said his own                
 intent is that when the DNR finally puts a program like this into             
 place, it will function along the lines that Representative Vezey             
 is talking about.  However, as the CS is written, it provides for             
 an applicant to either submit material to the DNR or go the route             
 that Representative Vezey has articulated.  If they do the latter,            
 the cost is theirs.  But if they submit it to the DNR, the cost is            
 the department's.  The DNR had to prepare a fiscal note for the               
 bill as written, even though they know the intent, as the language            
 does not hit the intent.                                                      
                                                                               
 MR. WILTSE said Representative Vezey is correct that the DNR would            
 seek outside review.  What separates state data from other types of           
 mining data is the former undergoes independent peer review.  He              
 envisioned initiating a procedure, for example, with a panel of               
 certified reviewers that would meet criteria acceptable to all                
 parties; it would be codified not in legislation but in some                  
 procedure equitable to everyone.  Somebody submitting data for                
 credit could select a panel, probably of at least three                       
 professionals, to review it and pass on a recommendation or summary           
 of their findings to the director or someone else in the DNR.                 
                                                                               
 MR. WILTSE said Representative Vezey is also correct that under               
 that scenario, the cost would not be borne by the state.  The                 
 actual mechanism of retaining consultants, for example, can be                
 worked out.  However, the committee substitute leaves open the very           
 real possibility that people would opt to put those costs on the              
 DNR.  That is why the amounts in the fiscal note are still there.             
                                                                               
 Number 1969                                                                   
                                                                               
 CO-CHAIRMAN HUDSON said as he hears it, Mr. Wiltse believes this              
 bill can be worked out so as not to harm the current exploration              
 incentives program.  However, they need additional time and effort            
 to ensure nothing harms that.                                                 
                                                                               
 MR. WILTSE agreed and stated, "I think a safer way to do it would             
 be in a separate bill.  I think if there's a lot of effort put into           
 it, we can probably not do any damage to the original bill."                  
                                                                               
 Number 2025                                                                   
                                                                               
 BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division,           
 Department of Revenue, came forward to testify.  He indicated he              
 had provided questions to the sponsor on issues needing                       
 clarification.  He agreed the dollar impact is small initially,               
 although it may grow in the future.  This bill is for costs of an             
 activity that never goes into production, but there are time lags.            
 Something may not go into production for eight years.  He asked:              
 What happens if a company takes credits currently and the mine goes           
 into production?                                                              
                                                                               
 MR. BARTHOLOMEW said these are technicalities.  However, if put               
 into law, these technicalities are what the private industry must             
 work with when their tax advisors decide what to do.  He cautioned,           
 "And so, if you put it out before it's ready, and you risk a bill             
 getting through next year to correct the technicalities, you may be           
 living with those; you may not get a correction through."                     
                                                                               
 MR. BARTHOLOMEW indicated his intention of having the sponsor and             
 the DNR resolve the program.  Then the Department of Revenue could            
 say what works on the tax schemes, helping to achieve the goals.              
 He does not believe the tax schemes should drive the legislation.             
 "And so we really haven't taken a position other than there are               
 some issues now that have not been worked out on how the current              
 tax credit would work and how the new program would ferret into               
 that," he explained.  "And I think what DNR has been saying is you            
 may want to do it in a completely separate section of the tax code.           
 You may just want to say, `Do it this way' and not merge them."               
                                                                               
 Number 2146                                                                   
                                                                               
 CO-CHAIRMAN HUDSON said he was looking at the concerns of both Mr.            
 Wiltse and Mr. Bartholomew.  He asked them whether it was possible            
 to do any rapid determination with the prime sponsor to clean this            
 up.  "But absent that, I'm not inclined to move this bill forward,"           
 he stated.  He asked for input from the committee.                            
                                                                               
 Number 2187                                                                   
                                                                               
 CO-CHAIRMAN OGAN commented that the state is not currently saying             
 it is unfriendly to mining.  He expressed support for the concept             
 of this legislation.  He asked Mr. Wiltse how the fiscal note                 
 relates to the committee substitute.                                          
                                                                               
 Number 2229                                                                   
                                                                               
 MR. WILTSE explained, "The note that is attached to the bill right            
 now is one that I drafted up yesterday.  I went back to the                   
 original one that we had drawn up, put dollar figures to it and               
 left it the same, because the way the bill is written, this would             
 apply right now.  And the reason for that is because there is the             
 choice, you know; there is a choice that people can submit their              
 data right to the department."                                                
                                                                               
 Number 2248                                                                   
                                                                               
 CO-CHAIRMAN HUDSON announced he was holding HB 238 over.  He said             
 he sensed vagueness on the part of testifiers, not displeasure with           
 the bill.  He suggested if the departments could meet with                    
 Representative Vezey about their major concerns, it would give him            
 a better feeling for the legislation.  (Note:  The proposed                   
 committee substitute was not adopted as a work draft.)                        
                                                                               
 CO-CHAIRMAN HUDSON turned the gavel over to Co-Chairman Ogan.                 
                                                                               
 SSHB 243 - EXTEND CURRENT SUBSISTENCE LAW                                   
                                                                               
 CO-CHAIRMAN OGAN announced the next order of business was Sponsor             
 Substitute for House Bill No. 243, "An Act delaying the repeal of             
 the current law regarding subsistence use of fish and game;                   
 amending the effective date of secs. 3 and 5, ch. 1, SSSLA 1992;              
 and providing for an effective date."  He said this bill simply               
 extends the existing subsistence law.                                         
                                                                               
 Number 2301                                                                   
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN, Chairman of the House Special                  
 Committee on Fisheries, which sponsored the bill, came forward to             
 testify.  He said Co-Chairman Ogan had stated the extent of this              
 bill, in that it extends the effective date of the subsistence laws           
 to 1999.                                                                      
                                                                               
 Number 2317                                                                   
                                                                               
 CO-CHAIRMAN OGAN said he has concerns about "piece-mealing" the               
 subsistence issue and somewhat side-stepping it.  However, until              
 there is a cohesive plan, it may behoove them to move this.                   
                                                                               
 Number 2357                                                                   
                                                                               
 REPRESENTATIVE BILL WILLIAMS noted that extending the 1992 law is             
 something the legislature has done for the past two sessions.  This           
 just gets them through for the next two years.                                
                                                                               
 Number 2376                                                                   
                                                                               
 REPRESENTATIVE REGGIE JOULE indicated he has heard that the                   
 majority is working on the larger subsistence issue.  He suggested            
 extending the current law is probably necessary until something               
 else is done.  Otherwise, it reverts to the 1986 law.  He asked:              
 Would we be able to repeal this if we came to a resolution?                   
                                                                               
 CO-CHAIRMAN OGAN affirmed they could do so, provided they had the             
 votes.  He asked whether Representative Joule is comfortable with             
 the 1992 subsistence law as it was written.                                   
                                                                               
 REPRESENTATIVE JOULE asked whether that question specifically                 
 related to SSHB 243.                                                          
                                                                               
 CO-CHAIRMAN OGAN said yes.                                                    
                                                                               
 REPRESENTATIVE JOULE stated, "I would be in favor of extending                
 this.  In terms of the larger issue of subsistence, of course, I              
 think that's a whole different discussion.  But in context of this            
 particular extension, yeah, ... I think we can go ahead and extend            
 this bill."                                                                   
                                                                               
 Number 2461                                                                   
                                                                               
 CO-CHAIRMAN OGAN noted that the bill sunsets October 1.                       
                                                                               
 TAPE 97-48, SIDE B                                                            
 Number 0006                                                                   
                                                                               
 REPRESENTATIVE IRENE NICHOLIA suggested taking this up after the              
 proposed special session.                                                     
                                                                               
 CO-CHAIRMAN OGAN responded that although he agrees in principle, he           
 is worried that if there is no special session and the law sunsets,           
 they will go back to the old law.  He asked whether they should               
 consider repealing the old law and staying with the more current              
 one.                                                                          
                                                                               
 Number 0034                                                                   
                                                                               
 REPRESENTATIVE FRED DYSON suggested there are too many variables to           
 count on this being unnecessary.  Unless they want to go to the               
 "significantly monumental task of rewriting or repealing," the only           
 question is:  Do we want the 1986 subsistence rules to go into                
 effect in October, or do we want to do this?                                  
                                                                               
 Number 0110                                                                   
                                                                               
 DICK BISHOP, Executive Director, Alaska Outdoor Council, came                 
 forward to testify.  He said the council supports SSHB 243.  He               
 said, "The whole matter of how to address the subsistence issue is            
 certainly in a state of flux, as you know better than most.  While            
 a new strategy is being sought, we think it is essential that state           
 law retain the statutory provisions regulating subsistence and                
 nonsubsistence uses that were enacted in 1992.  Principal among               
 these includes the nonsubsistence areas, the definition of                    
 `reasonable opportunity' as it relates to subsistence uses, a                 
 systematic process by which the Boards of Fisheries and Game decide           
 upon subsistence use and other use regulations, and the definitions           
 of `customary and traditional' and `customary trade.'  Those were             
 important provisions that were put in the '92 law, and we feel they           
 should remain."                                                               
                                                                               
 MR. BISHOP stated, "We support HB 243 even though, as the                     
 discussion has already indicated, we recognize that the existing              
 state law relating to subsistence uses of fish and game is                    
 imperfect, and you are looking at possible changes.  We see the               
 extension of provisions of the '92 law as necessary for                       
 conservation and reasonable allocation while the whole issue is               
 undergoing yet another review."                                               
                                                                               
 MR. BISHOP continued, "The Alaska Outdoor Council strongly supports           
 personal consumptive uses of fish and game and subsistence                    
 lifestyles.  However, we have stated that we do not believe that a            
 constitutional or statutory priority is necessary to adequately               
 provide for subsistence uses, and we have consistently opposed an             
 arbitrary and discriminatory closed-class priority based on zip               
 code, culture or ethnicity.  Nevertheless, the council has been               
 willing to compromise in order to support ... Governor Hickel's               
 bill in 1992 and again, recently, in support of HJR 21.  As you               
 know, Governor Hickel's bill did not pass the legislature due to              
 opposition from the Alaska Federation of Natives."                            
                                                                               
 MR. BISHOP concluded, "In summary, the council is willing to                  
 support SSHB 243 as an interim measure while needed changes to                
 federal law and, if necessary, to state law or our constitution,              
 are considered.  However, a one-year extension is probably                    
 preferable to the two-year that is listed in the bill, just to keep           
 it kind of warm.  Frankly, the council continues to be perplexed              
 and frustrated by the widespread apparent indifference to the                 
 constitutional provisions providing for equal rights and equal                
 protection with respect to fish and game uses.  That indifference             
 to the protection of individual rights, upon which the United                 
 States and the state of Alaska were founded, tests our patience and           
 our willingness to consider compromises which diminish or revoke              
 those provisions in Alaska's constitution.  Although this issue               
 addresses uses of fish and game, it is in fact an issue of civil              
 rights, and we don't know how long we're willing to continue to be            
 willing to compromise on these issues that are so basic to people's           
 individual rights and protections."                                           
                                                                               
 Number 0262                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked whether the committee had questions for Mary           
 Pete from the Division of Subsistence or Ron Somerville, technical            
 consultant to the leadership of the House and Senate.  Both Ms.               
 Pete and Mr. Somerville came forward to the witness table.                    
                                                                               
 REPRESENTATIVE DYSON requested their opinions on whether this bill            
 should pass.                                                                  
                                                                               
 Number 0287                                                                   
                                                                               
 MARY C. PETE, Director, Division of Subsistence, Department of Fish           
 and Game (ADF&G), stated support for SSHB 243.  She said as                   
 committee discussion shows, unless there is another way to address            
 subsistence, this bill would keep consistency in how the                      
 subsistence law is implemented.  It retains important provisions              
 relating to nonsubsistence use areas, as well as definitions that             
 the public has become accustomed to and that have eased the board's           
 work in managing subsistence hunting and fishing.                             
                                                                               
 Number 0324                                                                   
                                                                               
 REPRESENTATIVE BEVERLY MASEK asked Ms. Pete to expound on the issue           
 of what the public has become accustomed to.  She asked whether               
 that is dealing with customary, traditional or cultural aspects,              
 for example.                                                                  
                                                                               
 Number 0331                                                                   
                                                                               
 MS. PETE said definitions put in place by the 1992 law are key in             
 implementing subsistence hunting and fishing; one is "customary and           
 traditional" and the other is "customary trade and barter."  She              
 believes the stricter definitions of the latter in the 1992 bill              
 provide a wider sense of comfort regarding subsistence statewide,             
 primarily in the commercial fishing industry.                                 
                                                                               
 Number 0364                                                                   
                                                                               
 REPRESENTATIVE MASEK asked for clarification about what the public            
 has become accustomed to.                                                     
                                                                               
 MS. PETE said if this bill did not pass, on October 1, 1997, the              
 state would revert to the 1986 law, parts of which are                        
 unconstitutional under the state constitution.  She said, "The                
 flip-flop that the state has taken in terms of subsistence                    
 management, especially since 1986, I think has frustrated users in            
 the state, because some years, it's rural residency; some years it            
 isn't.  Some years, we have nonrural areas; some years we don't.              
 And the 1992 law established nonsubsistence areas, which                      
 essentially mirror the nonrural areas prior to ... 1992.  And                 
 another flip-flop, I think, will just lead the public to assume               
 that the state really can't manage subsistence, that there's been             
 so much flux and unrest regarding subsistence, that, you know, this           
 is just another example of where we haven't been able to maintain             
 consistency until the issue is resolved."                                     
                                                                               
 MS. PETE advised that the Governor has a resolution, HJR 10, to               
 provide a constitutional amendment ballot to put the constitution             
 in line with ANILCA, which is one option for the legislature.  She            
 said the other option is the Lieutenant Governor's three-tiered               
 package.                                                                      
                                                                               
 Number 0455                                                                   
                                                                               
 REPRESENTATIVE MASEK responded that Governor Hickel had worked on             
 a plan, to which the Alaska Federation of Natives (AFN) said no.              
 In addition, the AFN stand on Lieutenant Governor Ulmer's plan was            
 a "no-net loss policy."  Representative Masek mentioned HJR 21,               
 which she sponsored and which would divert the problem back to                
 ANILCA, where the problem began.  She said right now, the state               
 does not have control over defining customary, traditional or rural           
 preference.  She asked what Ms. Pete envisions as a way of                    
 resolving this.                                                               
                                                                               
 Number 0521                                                                   
                                                                               
 REPRESENTATIVE NICHOLIA stated what was in front of the committee             
 was to extend the 1992 law, not to discuss visions for resolving              
 the subsistence question.                                                     
                                                                               
 Number 0539                                                                   
                                                                               
 CO-CHAIRMAN OGAN called a brief at-ease at 2:17 p.m.  He called the           
 meeting back to order at 2:18 p.m., saying he would allow                     
 Representative Masek some latitude.                                           
                                                                               
 REPRESENTATIVE DYSON suggested witnesses should feel free to opt              
 out when questions are expanded beyond the exact bill on the table.           
                                                                               
 Number 0610                                                                   
                                                                               
 REPRESENTATIVE MASEK asked Ms. Pete's opinion on how to resolve               
 this problem if the bill did not pass.                                        
                                                                               
 MS. PETE said state law defines "customary and traditional" and               
 "customary trade and barter."  She explained, "And as you well                
 know, we can't enact rural preferences, so we did have a definition           
 of `rural' as well, prior to the McDowell decision.  So the state           
 has defined those terms, and we've used those definitions to                  
 implement the law.  You know, certainly, the federal government,              
 they manage subsistence on federal lands; they have their own                 
 definitions.  But we have defined those terms."                               
                                                                               
 Number 0681                                                                   
                                                                               
 CO-CHAIRMAN OGAN read from state statute, saying, "Customary and              
 traditional means noncommercial, long-term and consistent taking              
 of, use of and reliance on fish and game".  He noted it goes on               
 from there.  He said, "Customary trade, a limited noncommercial               
 exchange for minimal amounts of cash, as restricted by the                    
 appropriate board of fish and game resources."  He said it does not           
 go into birds or fur-bearers.  Co-Chairman Ogan noted that HJR 21             
 calls for Alaskans to decide what those definitions are.  He asked            
 Ms. Pete whether, under current law, she finds that residents using           
 subsistence are comfortable with these definitions and whether                
 these definitions of "rural" and "customary and traditional" work.            
                                                                               
 Number 0731                                                                   
                                                                               
 MS. PETE said they work in that the ADF&G has not heard of problems           
 with them.  There has been no public outcry as the boards have used           
 those definitions in managing fish and game, although probably not            
 everyone is happy with them.                                                  
                                                                               
 Number 0754                                                                   
                                                                               
 CO-CHAIRMAN HUDSON made a motion to adopt SSHB 243 for discussion             
 and asked unanimous consent.  There being no objection, it was so             
 ordered.                                                                      
                                                                               
 Number 0795                                                                   
                                                                               
 CO-CHAIRMAN HUDSON made a motion to amend SSHB 243 on page 1, line            
 7, by changing "1999" to "1998".  He said that would place                    
 responsibility on the current legislature to conclude the work on             
 this issue to the extent practical and possible.  He asked                    
 unanimous consent.                                                            
                                                                               
 REPRESENTATIVE AUSTERMAN advised that he had no problem with it.              
                                                                               
 Number 0856                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked whether it would need to be brought             
 up again in 1998, then.                                                       
                                                                               
 CO-CHAIRMAN HUDSON said absolutely; that is his intention.  He                
 stated, "If we don't amend this, if we leave it to 1999, it                   
 essentially gives this legislature an opportunity to walk away from           
 the subject.  If we put it in 1998, it forces this legislature to             
 deal with it in the next session, and I believe that that is our              
 responsibility."                                                              
                                                                               
 Number 0894                                                                   
                                                                               
 CO-CHAIRMAN OGAN concurred.  He asked if there was any objection to           
 the motion.  There being none, the amendment was adopted.                     
                                                                               
 Number 0919                                                                   
                                                                               
 CO-CHAIRMAN HUDSON made a motion to move SSHB 243, as amended, from           
 the committee with individual recommendations and zero fiscal note.           
 He asked unanimous consent.                                                   
                                                                               
 CO-CHAIRMAN OGAN asked if there was an objection.  There being                
 none, CSSSHB 243(RES) moved from the House Resources Standing                 
 Committee.                                                                    
                                                                               
 HB 255 - SUBSISTENCE HUNTING AND FISHING                                    
                                                                               
 Number 0943                                                                   
                                                                               
 CO-CHAIRMAN OGAN announced the next item of business was House Bill           
 No. 255, "An Act relating to subsistence hunting and fishing; and             
 providing for an effective date."  He advised that he had no                  
 intention of moving the bill that day, as the sponsor was absent              
 due to illness, but would take brief public testimony after the               
 bill was presented.                                                           
                                                                               
 Number 0980                                                                   
                                                                               
 MARK RIEHLE, Legislative Administrative Assistant to Representative           
 Ramona Barnes, read the sponsor statement into the record:                    
                                                                               
 "House Bill 255 was crafted using Alaska's constitution as its                
 basis.                                                                        
                                                                               
 "As you know, the legislature is mandated by the constitution to              
 provide for the utilization, development and conservation of all              
 natural resources belonging to the state, including the land and              
 waters, for the maximum benefit of the people.                                
                                                                               
 "Further, wherever occurring in their natural state, the fish,                
 wildlife and waters of the state are reserved to the people for               
 common use.                                                                   
                                                                               
 "Under the Alaska constitution, no exclusive right or special                 
 privilege of fishery shall be created or authorized in the natural            
 waters of the state.                                                          
                                                                               
 "The laws and regulations which govern the use or disposal of                 
 natural resources under the constitution, the state constitution,             
 shall apply equally to all persons similarly situated with                    
 reference to the subject matter and purpose to be served by the law           
 or regulation.                                                                
                                                                               
 "Replenishable resources belonging to the state shall be utilized,            
 developed and maintained on a sustained yield basis, subject to               
 preferences among beneficial users.                                           
                                                                               
 "HB 255 would establish an allocation mechanism and ensure the                
 allocation for the various uses of the fish and game resources,               
 including subsistence use, to be consistent with the principles of            
 sustained yield and will be the result of decisions by the                    
 respective boards of fish and game.                                           
                                                                               
 "The boards are empowered to adopt criteria upon which to base the            
 allocation decisions, including the allocation for subsistence.               
 The boards will provide regulations to determine who may                      
 participate in subsistence hunting and fishing during times of                
 abundance as well as of shortage.                                             
                                                                               
 "The subsistence allocation will be determined as a percentage of             
 the stock or population that is available, based upon sustained               
 yield.  The percentage must provide a preference to satisfy                   
 subsistence use.                                                              
                                                                               
 "The boards of fish and game shall distinguish among those provided           
 a subsistence use on the basis of need, customary use and one's               
 ability to obtain food by other means, should restrictions become             
 necessary.                                                                    
                                                                               
 "Under the provisions of HB 255, commercial sale of subsistence-              
 taken fish or game is prohibited; however, customary trade, barter            
 or sharing for personal use or family use is authorized."                     
                                                                               
 Number 1106                                                                   
                                                                               
 CO-CHAIRMAN OGAN stated that "customary trade and barter" is                  
 defined in state law.  He asked how this bill changes that.                   
                                                                               
 MR. RIEHLE deferred to Ted Popely.                                            
                                                                               
 Number 1157                                                                   
                                                                               
 THEODORE POPELY, Legislative Assistant to House and Senate                    
 Majority, came forward to testify.  He stated, "I don't believe               
 that HB 255 does change the existing definition of customary and              
 traditional, the '92 law."                                                    
                                                                               
 Number 1176                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked, "How does it stand up to ANILCA?"              
                                                                               
 MR. POPELY replied that the problem with the state law complying              
 with ANILCA is the rural preference provision.  He said, "What HB
 255 attempts to do, in a nutshell, is to redefine the priority from           
 one that is based on rural residency, as dictated through ANILCA,             
 to one that is based on actual dependence on the resource for                 
 family food consumption.  Specifically, there are two factors used            
 generally:  the customary and direct dependence on the resource for           
 human consumption and the ability to obtain food if subsistence use           
 is restricted or eliminated."                                                 
                                                                               
 MR. POPELY continued, "I certainly can't speak for the court as to            
 how this would be viewed in light of ANILCA's requirement for rural           
 preference.  I suspect that there is an argument to be made that              
 the result of the application of [HB] 255 would be to restrict                
 subsistence preference to a rural resident priority.  I suspect               
 that's probably part of the intent.  I can't speak for the sponsor            
 on that.  And as to whether or not that resulting rural preference,           
 sort of a de facto rural preference, would satisfy the requirements           
 of ANILCA, I cannot say."                                                     
                                                                               
 Number 1254                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked whether, other than "rural," all                
 other areas in the bill are pretty close to ANILCA's                          
 interpretation.                                                               
                                                                               
 Number 1283                                                                   
                                                                               
 MR. POPELY said he understood the question to be a comparison                 
 between the bill and ANILCA.  He said, "Of course, as a state                 
 statutory provision, it doesn't affect ANILCA per se, as federal              
 legislation.  It can't change ANILCA, as a state statute.  There              
 are a number of provisions that are not addressed that ANILCA                 
 includes.  The definitions section, of course, provides a number of           
 different problems.  You've discussed `customary and traditional,'            
 `customary trade.'  There is a provision in ANILCA that may be of             
 some interest to those sponsoring the bill, dealing with the                  
 federal court oversight that has been raised over and over as a               
 problem, with some proponents.  That's not addressed in this bill."           
                                                                               
 Number 1349                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked whether Mr. Popely was saying the               
 bill does not come too close to ANILCA's definitions.                         
                                                                               
 MR. POPELY said that is a difficult question.  "There are so many             
 definitions provided in ANILCA," he commented.                                
                                                                               
 REPRESENTATIVE WILLIAMS handed Mr. Popely a copy of the ANILCA                
 provisions and noted that Mr. Popely is an attorney.  He asked the            
 differences between ANILCA today "as it is written in front of you            
 there" and HB 255.                                                            
                                                                               
 CO-CHAIRMAN OGAN advised that Mr. Popely was testifying on short              
 notice.                                                                       
                                                                               
 Number 1407                                                                   
                                                                               
 MR. POPELY said he would be glad to try to address that.                      
                                                                               
 REPRESENTATIVE WILLIAMS said he would be happy to wait.                       
                                                                               
 Number 1431                                                                   
                                                                               
 REPRESENTATIVE NICHOLIA asked whether HB 255 eliminates the sunset            
 provisions adopted earlier that day in CSSSHB 243(RES).                       
                                                                               
 MR. POPELY replied, "Yes, I believe it does, in Section 12 of the             
 bill."                                                                        
                                                                               
 Number 1463                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked whether this allows out-of-state hunters to            
 practice subsistence hunting.                                                 
                                                                               
 MR. POPELY referred to page 4, lines 15 and 16, 20 and 21, and 25             
 and 26, under Sections 8 through 10, items (30), (31) and (32).  He           
 said looking at the definitions section, technically it allows                
 nonresidents to partake in subsistence activities by eliminating              
 language referring to residents.                                              
                                                                               
 Number 1545                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked whether Mr. Riehle knew the motivation                 
 behind that.                                                                  
                                                                               
 MR. RIEHLE said he would have to defer to the sponsor.                        
                                                                               
 Number 1595                                                                   
                                                                               
 CARL JACK, Rural Alaska Community Action Program, testified via               
 teleconference from Anchorage in opposition to HB 255.  He said the           
 only legal protection for subsistence users is ANILCA.  The trade-            
 offs proposed in HB 255 will be far too great because it would                
 completely dismantle the current status and replace it with an                
 economic-based and individual-based, welfare-type program that                
 would require individuals to demonstrate significant dependence for           
 direct and family consumption.  The eligibility criteria would be             
 set by the boards, which would have total discretion and would                
 "impose this very questionable allocation on some kind of                     
 percentage to take care of those needs."  He said this allocation             
 would not necessarily require all subsistence uses to be fully                
 satisfied before other consumptive uses are allowed.                          
                                                                               
 MR. JACK said the bill completely ignores the cultural aspect of              
 subsistence, effectively repealing the requirement that "customary            
 and traditional" subsistence use be given priority.  He said                  
 looking at implementation of the individual permitting system and             
 given how the majority has substantially reduced the budget for the           
 Division of Subsistence, it will be next to impossible to enforce             
 the permitting system.                                                        
                                                                               
 MR. JACK said finally, the bill does nothing to bring state                   
 subsistence into compliance with ANILCA or forestall the federal              
 takeover of subsistence fishing effective October 1, 1997.  He                
 stated, "If anything, this bill will only increase the deep                   
 difference that already exists between the federal and state law."            
                                                                               
 Number 1827                                                                   
                                                                               
 REPRESENTATIVE MASEK asked whether Mr. Jack could provide an                  
 example or further define why he feels his legal protection is                
 greater under ANILCA than if the state had authority over its fish            
 and game.                                                                     
                                                                               
 MR. JACK replied, "I think while we would like to see the return of           
 fish and game management to the state of Alaska, the court                    
 decisions in certain cases have proven that, for the most part, the           
 subsistence users have to rely on the ANILCA provisions as the only           
 means to find it legal to continue the way of life that they have             
 lived for thousands of years."                                                
                                                                               
 Number 1950                                                                   
                                                                               
 REPRESENTATIVE MASEK said she grew up in the bush, in Anvik on the            
 Yukon River, although now she lives in Willow and is unable to hunt           
 or fish because of problems with the subsistence issue.  She said,            
 "And it seems to me that trying to create the hunting and fishing             
 rights for where you live and what race you are, there are so many            
 Native people that live out of the rural areas, how are they going            
 to be able to hunt and fish and continue their customary and                  
 traditional way of life?"                                                     
                                                                               
 Number 2003                                                                   
                                                                               
 MR. JACK said he is also an Alaska Native, born and raised in                 
 Kipnuk but residing in Anchorage.  He said he would be more than              
 willing to give that up so those with no other means of supporting            
 themselves could harvest fish and game to meet their subsistence              
 needs.  He suggested in rural Alaska, people live 70 percent off              
 the land and sea and 30 percent through cash.  He discussed the               
 high cost of living.                                                          
                                                                               
 Number 2111                                                                   
                                                                               
 REPRESENTATIVE MASEK said she knew of no case in Alaska where a               
 Native had been denied the right to hunt or fish.  She said she was           
 trying to find out more about protection for subsistence hunting              
 and fishing.  "Because the state could offer the same as what the             
 federal law is doing," she commented.                                         
                                                                               
 Number 2169                                                                   
                                                                               
 CO-CHAIRMAN OGAN referred to page 4, line 23, under Section 10,               
 which states that "`subsistence uses' means the noncommercial,                
 customary and traditional uses of wild, renewable resources by an             
 individual who significantly depends on the resource".  He said               
 that seems to fit people in rural Alaska and elsewhere.  He noted             
 that barter and trade are also discussed in that section.  He did             
 not see this as a threat of lesser protection.                                
                                                                               
 MR. JACK replied, "I think further review should be given, at least           
 on the part of those that promote or feel that the provisions of              
 ANILCA gives us that protection.  Since you have just adopted [HB]            
 243 and this bill would sunset what you have acted on, I would ...            
 recommend that you not move this bill out of the committee."  He              
 noted there had been talk about a special session and suggested               
 that might be a time to look at this.                                         
                                                                               
 Number 2361                                                                   
                                                                               
 DICK BISHOP, Executive Director, Alaska Outdoor Council, came                 
 forward to testify, saying the council has no position on HB 255.             
 However, based on initial review, there were several factors to be            
 considered by the legislature.  The principle, critical difference            
 between this bill, or the 1992/1986 bill, and the federal ANILCA              
 law is that state law does not have "rural" in it.                            
                                                                               
 MR. BISHOP said worthy aspects of this bill include that it does              
 not eliminate most of the critical definitions in existing law,               
 such as "customary and traditional," "customary trade" and                    
 "reasonable opportunity."  It does redefine subsistence, with which           
 the council agrees, putting the subsistence priority on an                    
 individual basis.                                                             
                                                                               
 TAPE 97-49, SIDE A                                                            
 Number 0006                                                                   
                                                                               
 MR. BISHOP referred to the Alaska residency requirement; he                   
 suggested that was inadvertently omitted and should be put back in.           
 This bill does not arbitrarily discriminate on the basis of zip               
 code or "some other closed-class criteria," which he believes is              
 important.  He stated, "We think it probably has the potential of             
 significantly reducing the difficulties with the Tier 2 provisions            
 under existing law, and that may be something to consider in the              
 whole mix of options that the legislature may be looking at."                 
                                                                               
 MR. BISHOP said another major difference between existing state law           
 and HB 255 is that many responsibilities and definitions currently            
 outlined in statute would be transferred to the Board of Fisheries            
 and the Board of Game, including setting of standards.  That has              
 both positive and negative aspects.  For example, it may spawn a              
 whole new cycle of debate over terms, issues or definitions.                  
                                                                               
 MR. BISHOP concluded by saying the Alaska Outdoor Council                     
 recommends consideration of HB 255 along with other alternatives in           
 looking at the whole subsistence picture.  They believe it has                
 certain strong elements from the standpoint of maintaining the                
 potential of conforming to the Alaska constitution and the supreme            
 court observation that "a definition of subsistence uses that went            
 to individuals was much more likely to be consistent with the                 
 constitution than something like `rural'."                                    
                                                                               
 Number 0187                                                                   
                                                                               
 REPRESENTATIVE NICHOLIA asked Mr. Bishop whether he believes this             
 bill regains state management of federal lands.                               
                                                                               
 MR. BISHOP replied, "No, I don't see where it would."                         
                                                                               
 CO-CHAIRMAN OGAN asked Mr. Popely whether he could confirm that               
 opinion.                                                                      
                                                                               
 Number 0280                                                                   
                                                                               
 MR. POPELY said, "My professional opinion is that it probably would           
 not.  I agree with Dick Bishop that the user preference that is               
 provided in the bill would not satisfy the rural preference that's            
 dictated by ANILCA.  But I wouldn't foreclose that there's a                  
 reasonable argument and that reasonable minds could disagree about            
 that."                                                                        
                                                                               
 Number 0351                                                                   
                                                                               
 ART IVANOFF, Subsistence Coordinator, Maniilaq Association,                   
 testified via teleconference from Kotzebue, saying he opposes HB
 255 for reasons cited by Carl Jack.  He said the bill is based on             
 economics and focuses on a welfare-type program, not taking into              
 consideration cultural aspects of the Native people in rural                  
 Alaska.  Furthermore, there is no opportunity for people to                   
 participate in policy decisions, as it gives the Board of Game and            
 the Board of Fisheries discretionary authority.                               
                                                                               
 MR. IVANOFF responded to Representative Masek's question to Carl              
 Jack about whether the state had denied anyone the opportunity to             
 subsistence hunt or fish.  He cited Moses Point and the Nome River            
 as examples where, "based on politics," the Board of Fisheries has            
 not allowed people to fish, based on "an interception problem we              
 have" in Area M.  He said scientific data indicates 60 percent of             
 the chum salmon caught are destined for Northwest Alaska,                     
 identified as stretching from the Arctic to Bristol Bay.  He said             
 60 percent of 700,000 chum is nearly 420,000, a significant number            
 when talking about small rivers.                                              
                                                                               
 Number 0544                                                                   
                                                                               
 DICK COOSE, Executive Director, Concerned Alaskans for Resources              
 and Environment (CARE), testified via teleconference from                     
 Ketchikan.  He said CARE is a grass-roots organization that                   
 addresses loss of access to public resources.  With others, they              
 are forming a statewide coalition that wants the legislature, the             
 Governor and the congressional delegation to act immediately to               
 prevent federal takeover of state fisheries management and return             
 management of game to the state.                                              
                                                                               
 MR. COOSE acknowledged solutions will not be easy.  While CARE has            
 no position for or against HB 255, they would like to see the bill            
 achieve their goal of full and effective state management of fish             
 and game.  He said the federal government is slowly but surely                
 destroying "the livelihood and economy of Alaska."  They have                 
 divided the state into classes of user groups and then implemented            
 restrictions to the point that a user group or business is no                 
 longer viable; he cited destruction of the Southeast Alaska timber            
 economy as an example.  He said the question is whether Alaskans              
 will unite and prevent federal takeover of fisheries management, or           
 whether they will allow the federal government to take over and               
 destroy commercial and sport fisheries, as well as the related                
 local economies, followed by possible loss of tourism and mining.             
                                                                               
 Number 0839                                                                   
                                                                               
 REPRESENTATIVE OGAN commented that it appears the whole idea behind           
 federal intervention is to turn Alaska into a "big eco-tourist                
 park."  He suggested if some of the problems with ANILCA are not              
 resolved, especially the commercial sale of fish, the very                    
 existence of commercial fishing will be threatened, which he                  
 believes is in no one's best interest.  He called commercial                  
 fishing "the biggest employer in the bush."                                   
                                                                               
 Number 0893                                                                   
                                                                               
 CALEB PUNGOWIYI, Subsistence Director, Kawerak, Incorporated,                 
 testified via teleconference from Nome in opposition to HB 255.  He           
 suggested it would require an enormous amount of administrative               
 work to implement.  Referring to requirements for qualifying for              
 subsistence, he stated, "I think it's also very demeaning and                 
 perhaps, in a way, sickening."  He suggested it would be a law                
 enforcement nightmare.  He said he is getting to where he no longer           
 cares whether the state gets management of fish and game back.  He            
 concluded by questioning whether there is intelligent life in the             
 legislature.                                                                  
                                                                               
 Number 1056                                                                   
                                                                               
 GLORIA STICKWAN testified via teleconference from Glennallen,                 
 saying she wanted to reiterate Carl Jack's comments; she did so.              
 In response to Representative Masek's conversation with Mr. Jack,             
 she briefly discussed a lawsuit filed against the state, which                
 resulted from fishing being closed except for weekends in 1976, and           
 the time for moose hunting being reduced to five days one year.               
 She said the state was not providing protection.                              
                                                                               
 CO-CHAIRMAN OGAN suggested when seasons and bag limits are reduced,           
 it protects the resource for future use.  He asked whether Ms.                
 Stickwan was saying subsistence use of those resources had been cut           
 back or whether it was general hunting and fishing seasons.                   
                                                                               
 MS. STICKWAN said yes to the latter.  The people of Copper River              
 had filed a lawsuit against the state because of it.                          
                                                                               
 CO-CHAIRMAN OGAN asked what the outcome was.                                  
                                                                               
 MS. STICKWAN said she believes they got the fishing back.  She said           
 the state does not really protect them.  She does not see it as               
 protection when they cannot fish, which they depend on for a                  
 living.                                                                       
                                                                               
 CO-CHAIRMAN OGAN commented that he does not know the exact                    
 particulars of that case; however, many of those are resource                 
 management decisions rather than allocative decisions towards                 
 groups.                                                                       
                                                                               
 Number 1311                                                                   
                                                                               
 ANGIE MORGAN testified via teleconference from Aniak in opposition            
 to HB 255.  She said much of what she wanted to say was already               
 stated by Carl Jack, Art Ivanoff and "all the others that were                
 opposing it."  She said the river is a highway for people living in           
 the villages.  For example, right now, everyone is anxious for the            
 ice to move so they can get fresh fish.  They also use the river as           
 a highway in the winter to enable them to hunt moose.  In addition,           
 people feel that House bills are "always against subsistence users            
 here."  In her area, people look at subsistence as their lifestyle.           
 She had lived in Anchorage before; now living in Aniak, she is                
 beginning to see the importance of keeping the customary and                  
 traditional lifestyle.                                                        
                                                                               
 Number 1494                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked if anyone else wished to testify, then                 
 concluded the hearing.  (House Bill 255 was held over.)                       
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 Number 1504                                                                   
                                                                               
 CO-CHAIRMAN OGAN adjourned the House Resources Standing Committee             
 meeting at 3:15 p.m.                                                          
                                                                               

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