Legislature(2001 - 2002)

04/11/2001 01:10 PM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 11, 2001                                                                                         
                           1:10 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Beverly Masek, Co-Chair                                                                                          
Representative Drew Scalzi, Co-Chair                                                                                            
Representative Hugh Fate, Vice Chair                                                                                            
Representative Joe Green                                                                                                        
Representative Mike Chenault                                                                                                    
Representative Lesil McGuire                                                                                                    
Representative Gary Stevens                                                                                                     
Representative Beth Kerttula                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative Mary Kapsner                                                                                                     
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 129                                                                                                              
"An  Act  relating  to lifetime  state  park  developed  campsite                                                               
     - MOVED HB 129 OUT OF COMMITTEE                                                                                            
HOUSE BILL NO. 205                                                                                                              
"An Act  relating to resource  development and to grants  for the                                                               
purpose of promoting resource  development from appropriations of                                                               
a portion of  the revenue derived from the  extraction of certain                                                               
state natural resources."                                                                                                       
     - MOVED CSHB 205(RES) OUT OF COMMITTEE                                                                                     
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 76                                                                                       
"An  Act relating  to the  Alaska Right-of-Way  Leasing Act;  and                                                               
providing for an effective date."                                                                                               
     - MOVED SSSB 76 OUT OF COMMITTEE                                                                                           
SENATE BILL NO. 164                                                                                                             
"An Act prohibiting leases under  the Right-of-Way Leasing Act on                                                               
state land in or adjacent to  the Beaufort Sea; and providing for                                                               
an effective date."                                                                                                             
     - MOVED HCS SB 164(O&G) OUT OF COMMITTEE                                                                                   
HOUSE BILL NO. 232                                                                                                              
"An Act permitting state residents to purchase remote                                                                           
recreational cabin sites."                                                                                                      
     - BILL HEARING POSTPONED                                                                                                   
PREVIOUS ACTION                                                                                                               
BILL: HB 129                                                                                                                  
SHORT TITLE:FREE PARK PERMITS: DISABLED VETS/SR. CIT                                                                            
SPONSOR(S): REPRESENTATIVE(S)MASEK BY REQUEST                                                                                   
Jrn-Date   Jrn-Page                     Action                                                                                  
02/16/01     0344       (H)        READ THE FIRST TIME -                                                                        
02/16/01     0344       (H)        RES, FIN                                                                                     
04/11/01                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
BILL: HB 205                                                                                                                  
SHORT TITLE:RESOURCE DEVELOPMENT: BD./GRANTS/FUND                                                                               
SPONSOR(S): REPRESENTATIVE(S)FATE                                                                                               
Jrn-Date   Jrn-Page                     Action                                                                                  
03/22/01     0690       (H)        READ THE FIRST TIME -                                                                        
03/22/01     0690       (H)        RES, FIN                                                                                     
04/11/01                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
BILL: SB 76                                                                                                                   
SHORT TITLE:RIGHT-OF-WAY LEASING ACT: TERM & RENEWAL                                                                            
SPONSOR(S): SENATOR(S) THERRIAULT                                                                                               
Jrn-Date   Jrn-Page                     Action                                                                                  
02/07/01     0301       (S)        READ THE FIRST TIME -                                                                        
02/07/01     0301       (S)        RES                                                                                          
03/29/01     0859       (S)        SPONSOR SUBSTITUTE                                                                           
03/29/01     0859       (S)        RES                                                                                          
04/02/01                (S)        RES AT 3:30 PM BUTROVICH 205                                                                 
04/02/01                (S)        Moved Out of Committee                                                                       
04/03/01     0919       (S)        RES RPT 3DP 2NR                                                                              
04/03/01     0919       (S)        DP: TORGERSON, PEARCE,                                                                       
04/03/01     0919       (S)        NR: LINCOLN, ELTON                                                                           
04/03/01     0919       (S)        FN1: INDETERMINATE(DNR)                                                                      
04/04/01     0932       (S)        RULES TO CALENDAR 4/4/01                                                                     
04/04/01     0943       (S)        READ THE SECOND TIME                                                                         
04/04/01     0943       (S)        ADVANCED TO THIRD READING                                                                    
                                   UNAN CONSENT                                                                                 
04/04/01     0943       (S)        READ THE THIRD TIME SSSB 76                                                                  
04/04/01     0943       (S)        PASSED Y19 N- E1                                                                             
04/04/01     0943       (S)        EFFECTIVE DATE(S) SAME AS                                                                    
04/04/01     0946       (S)        TRANSMITTED TO (H)                                                                           
04/04/01     0946       (S)        VERSION: SSSB 76                                                                             
04/04/01                (S)        RLS AT 10:45 AM FAHRENKAMP                                                                   
04/05/01     0852       (H)        READ THE FIRST TIME -                                                                        
04/05/01     0852       (H)        O&G, RES                                                                                     
04/05/01     0870       (H)        CROSS SPONSOR(S): HARRIS                                                                     
04/10/01                (H)        O&G AT 5:00 PM CAPITOL 124                                                                   
04/10/01                (H)        Moved Out of Committee                                                                       
04/11/01     0955       (H)        O&G RPT 5DP                                                                                  
04/11/01     0955       (H)        DP: KOHRING, DYSON, JOULE,                                                                   
                                   GUESS, FATE                                                                                  
04/11/01     0955       (H)        FN1: INDETERMINATE(DNR)                                                                      
04/11/01                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
BILL: SB 164                                                                                                                  
SHORT TITLE:NO GAS PIPELINE OVER BEAUFORT SEA                                                                                   
SPONSOR(S): SENATOR(S) TORGERSON                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/23/01     0786       (S)        READ THE FIRST TIME -                                                                        
03/23/01     0787       (S)        RES                                                                                          
03/28/01                (S)        RES AT 3:30 PM BUTROVICH 205                                                                 
03/28/01                (S)        Moved Out of Committee                                                                       
03/29/01     0856       (S)        RES RPT 7DP                                                                                  
03/29/01     0856       (S)        DP: TORGERSON, TAYLOR,                                                                       
                                   HALFORD, PEARCE,                                                                             
03/29/01     0856       (S)        KELLY, LINCOLN, ELTON                                                                        
03/29/01     0856       (S)        FN1: ZERO(DNR)                                                                               
03/30/01                (S)        RLS AT 10:45 AM FAHRENKAMP                                                                   
04/02/01     0903       (S)        RULES TO CALENDAR 4/2/01                                                                     
04/02/01     0906       (S)        READ THE SECOND TIME                                                                         
04/02/01     0906       (S)        ADVANCED TO THIRD READING                                                                    
                                   UNAN CONSENT                                                                                 
04/02/01     0906       (S)        READ THE THIRD TIME SB 164                                                                   
04/02/01     0907       (S)        PASSED Y18 N- A1 E1                                                                          
04/02/01     0907       (S)        EFFECTIVE DATE(S) SAME AS                                                                    
04/02/01     0908       (S)        TRANSMITTED TO (H)                                                                           
04/02/01     0908       (S)        VERSION: SB 164                                                                              
04/03/01     0821       (H)        READ THE FIRST TIME -                                                                        
04/03/01     0821       (H)        O&G, RES                                                                                     
04/03/01     0831       (H)        CROSS SPONSOR(S): CROFT,                                                                     
04/10/01                (H)        O&G AT 5:00 PM CAPITOL 124                                                                   
04/10/01                (H)        Moved HCS SB 164(O&G) Out of                                                                 
04/10/01                (H)        MINUTE(O&G)                                                                                  
04/11/01     0957       (H)        O&G RPT HCS(O&G) 5DP                                                                         
04/11/01     0957       (H)        DP: DYSON, GUESS, JOULE,                                                                     
                                   CHENAULT, FATE                                                                               
04/11/01     0957       (H)        FN1: ZERO(DNR)                                                                               
04/11/01                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
WITNESS REGISTER                                                                                                              
JENNIFER YUHAS, Staff                                                                                                           
to Representative Beverly Masek                                                                                                 
Alaska State Legislature                                                                                                        
Capitol Building, Room 128                                                                                                      
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Spoke on behalf of Representative Masek,                                                                   
sponsor (by request) of HB 129.                                                                                                 
CAROL CARROLL, Director                                                                                                         
Division of Support Services                                                                                                    
Department of Natural Resources (DNR)                                                                                           
400 Willoughby Avenue, Fifth Floor                                                                                              
Juneau, Alaska  99801-1724                                                                                                      
POSITION STATEMENT:  Suggested an amendment to HB 129 changing                                                                  
the lifetime pass to an annual pass.                                                                                            
PETER PANARESE, Field Operations                                                                                                
Central Office                                                                                                                  
Division of Parks & Outdoor Recreation                                                                                          
Department of Natural Resources (DNR)                                                                                           
550 West Seventh Avenue, Suite 1380                                                                                             
Anchorage, Alaska  99501-3561                                                                                                   
POSITION STATEMENT:  Answered questions regarding HB 129.                                                                       
KRISTY TIBBLES, Staff                                                                                                           
to Senator Drue Pearce                                                                                                          
Alaska State Legislature                                                                                                        
Capitol Building, Room 119                                                                                                      
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Answered questions relating to HB 205 on                                                                   
behalf of the Senate Resources Standing Committee, sponsor of SB
136, the companion bill.                                                                                                        
EDWARD C. FURMAN                                                                                                                
PO Box 2367                                                                                                                     
Cordova, Alaska  99574                                                                                                          
POSITION STATEMENT:  Testified in support of HB 205.                                                                            
PAMELA LaBOLLE, President                                                                                                       
Alaska State Chamber of Commerce (ASCC)                                                                                         
217 Second Street, Suite 201                                                                                                    
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified on behalf of the ASCC in support                                                                 
of HB 205.                                                                                                                      
WILDA RODMAN, Staff                                                                                                             
to Senator Gene Therriault                                                                                                      
Alaska State Legislature                                                                                                        
Capitol Building, Room 121                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Spoke on behalf of Senator Therriault,                                                                     
sponsor of SSSB 76.                                                                                                             
STEVEN (ph) JONES, Manager                                                                                                      
TAPS [Trans Alaska Pipeline System] Right-of-Way Renewal Project                                                                
(No address provided)                                                                                                           
POSITION STATEMENT:  Testified in support of SSSB 76.                                                                           
SENATOR JOHN TORGERSON                                                                                                          
Alaska State Legislature                                                                                                        
Capitol Building, Room 427                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Spoke as sponsor of SB 164.                                                                                
MICHAEL HURLEY                                                                                                                  
Government Relations                                                                                                            
North American Natural Gas Pipeline Group (NANGPG)                                                                              
601 West 5th Avenue, Suite 500                                                                                                  
Anchorage, Alaska 99501                                                                                                         
POSITION STATEMENT:   Spoke in  opposition to SB  164, expressing                                                               
concern that it is premature.                                                                                                   
JACK GRIFFIN, Assistant Attorney General                                                                                        
Oil, Gas & Mining Section                                                                                                       
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
1031 West 4th Avenue, Suite 200                                                                                                 
Anchorage, Alaska  99501-1994                                                                                                   
POSITION STATEMENT:  Recommended amendments to SB 164.                                                                          
ACTION NARRATIVE                                                                                                              
TAPE 01-34, SIDE A                                                                                                              
Number 0001                                                                                                                     
CO-CHAIR  BEVERLY  MASEK  called  the  House  Resources  Standing                                                               
Committee meeting  to order  at 1:10  pm.   Representatives Fate,                                                               
McGuire,  Chenault, Stevens,  Kerttula,  Masek,  and Scalzi  were                                                               
present at  the call to  order.  Representative Green  arrived as                                                               
the meeting was in progress.                                                                                                    
HB 129-FREE PARK PERMITS: DISABLED VETS/SR. CIT                                                                               
CO-CHAIR MASEK announced  that the first order  of business would                                                               
be HOUSE  BILL NO. 129, "An  Act relating to lifetime  state park                                                               
developed campsite permits."                                                                                                    
Number 0142                                                                                                                     
JENNIFER  YUHAS, Staff  to Representative  Beverly Masek,  Alaska                                                               
State  Legislature,  came  before  the committee  to  testify  on                                                               
behalf of  Representative Masek, the  sponsor (by request)  of HB
129.   She  paraphrased the  sponsor statement  [included in  the                                                               
committee packet], which read:                                                                                                  
        This bill was introduced to support [our] older                                                                         
        Alaskans.  Seniors have every right to enjoy the                                                                        
       beauty of our great state.  Many have made a [long-                                                                      
     term] contribution  to Alaska's economy  and community.                                                                    
     Senior citizens generally find  [themselves] on a fixed                                                                    
     income.   The Alaska  Commission on Aging  reports that                                                                    
     the average annual income of  an Alaskan senior citizen                                                                    
     is $8,097.                                                                                                                 
     Alaska  has many  other programs  that recognize  this.                                                                    
     Persons sixty  years and  older are  able to  receive a                                                                    
     hunting and  fishing license at no  charge.  [Renters']                                                                    
     rebates are  available for  those sixty-five  and over,                                                                    
     as  well as  auto tax  exemptions, exemptions  for fees                                                                    
     for property  appraisals, food  distribution, financial                                                                    
     and  medical  assistance,   energy  assistance,  rental                                                                    
     assistance,  and  free  college tuition.    Giving  our                                                                    
     older Alaskans  use of our parks  would encourage their                                                                    
     participation  in  wholesome  outdoor  activities  that                                                                    
     will enhance their quality of  life.  House Bill 129 is                                                                    
     a  reasonable recognition  of our  elders' contribution                                                                    
     to our state.                                                                                                              
[Also included  in the committee  packet was Ms.  Yuhas's written                                                               
testimony, which was handed out to the committee members.]                                                                      
Number 0423                                                                                                                     
CAROL   CARROLL,   Director,   Division  of   Support   Services,                                                               
Department  of Natural  Resources (DNR),  told the  committee the                                                               
department certainly does  not oppose HB 129  and recognizes that                                                               
it is the  policy of the legislature to set  benefits to seniors;                                                               
however,  the  Division of  Parks  &  Outdoor Recreation  ("State                                                               
Parks")  is  32 percent  funded  from  fees  and the  bill  would                                                               
increase the cost of the department.                                                                                            
MS. CARROLL  suggested many  costs reflected  in the  fiscal note                                                               
could  be eliminated  if the  sponsor would  accept an  amendment                                                               
changing the permit  from a lifetime pass to an  annual one.  The                                                               
process used for everybody now would  remain the same:  "We could                                                               
sell them the same decal, et  cetera, and they would just come in                                                               
yearly  for their  free  pass."   Conversely,  the lifetime  pass                                                               
would involve setting up another decal and "tracking."                                                                          
MS. CARROLL told  the committee that anytime  the department does                                                               
away with  fees, there will be  some impact.  Although  [DNR] has                                                               
attempted to estimate the fiscal  impact, the figures represent a                                                               
"best guess"  since the department  does not count people  or ask                                                               
their age.                                                                                                                      
MS.  CARROLL  explained that  with  an  amendment to  change  the                                                               
process to an  annual one, there would be the  following:  a zero                                                               
fiscal  note,  with a  funding  source  switched between  program                                                               
receipts  and the  general fund;  a best  estimate of  which fees                                                               
would no  longer be coming  to the department; and  [an estimate]                                                               
of how  much of the  general funds  would be required  to replace                                                               
[program  receipts] in  order to  avoid a  service impact  on the                                                               
MS. CARROLL cautioned that the  department is only appropriated a                                                               
certain amount;  therefore, any  fees coming  in over  the amount                                                               
estimated would  go into the  general fund.  She  emphasized that                                                               
there would be a net zero revenue impact on the bill.                                                                           
Number 0700                                                                                                                     
CO-CHAIR MASEK  referred to the  DNR's fiscal note  [in committee                                                               
packets] provided by Jim Stratton,  Director, Division of Parks &                                                               
Outdoor Recreation.   She asked Ms.  Yuhas to answer some  of the                                                               
concerns mentioned by Ms. Carroll.                                                                                              
Number 0728                                                                                                                     
MS. YUHAS  stated her belief  that Ms. Carroll had  reviewed [the                                                               
fiscal note] directly  before the meeting and  had addressed some                                                               
of her  own concerns regarding the  fiscal note.  She  said, "One                                                               
of the  things that I  had brought up  was changing the  way they                                                               
did  the  pass to  eliminate  the  printing  and the  other  fees                                                               
associated in  the fiscal  note."  Ms.  Yuhas explained  that the                                                               
DNR's  original  fiscal  note  included  fees  for  creating  and                                                               
printing a brand-new  pass.  She agreed with Ms.  Carroll that if                                                               
[the  department] issued  an annual  pass, then  everything would                                                               
not have to be restructured.                                                                                                    
MS.  YUHAS  offered her  belief  that  an entirely  new  database                                                               
wouldn't be  necessary to  track the information.   She  said she                                                               
would like  someone to research what  it would cost to  track the                                                               
following  two items:   issuing  park  passes at  no charge,  and                                                               
[checking] that people are over 65 years old.                                                                                   
MS.  YUHAS  mentioned  State Parks'  RSA  [reimbursable  services                                                               
agreement],  a public  information  center,  and printing  costs.                                                               
Pointing out  that nothing in  the bill gives an  effective date,                                                               
she said  the committee has the  liberty to decide when  it would                                                               
be effective,  and could do  so in conjunction with  the printing                                                               
schedule  of  the  department  to  save on  costs,  or  else  the                                                               
department could wait until it's time to reprint.                                                                               
MS. YUHAS suggested if a new  database is not being created, then                                                               
there will  not be a  fee for maintenance  of the database.   She                                                               
said there are  a number of statistics that State  Parks and [the                                                               
Department  of] Fish  and Game  supplied [regarding  lost program                                                               
receipts].  She commented, "I don't  know how we can project lost                                                               
program receipts [from having free  permits] if we can't identify                                                               
how  many people  are  using the  service to  begin  with."   She                                                               
estimated,  from her  own observations,  that a  "generous" 15-20                                                               
percent [of people using the state's campgrounds] are seniors.                                                                  
MS. YUHAS mentioned possible concern  that the bill may encourage                                                               
people who  are not  already using the  service to  seek permits,                                                               
thereby causing  overcrowding of parks; however,  she argued that                                                               
although there are times when  the campgrounds are full, multiple                                                               
open  spaces  are  available  the  majority of  the  time.    She                                                               
concluded by saying  she would like to see a  much smaller fiscal                                                               
note and to see the bill pass.                                                                                                  
Number 1006                                                                                                                     
MS. CARROLL responded that if there  is an impact and the program                                                               
receipts do "disappear," as the  department thinks they may, then                                                               
there will be an impact on  service.  It is difficult to estimate                                                               
something that  has not been  tracked.  The  department estimates                                                               
that approximately 15-20  percent of the people in  the parks are                                                               
seniors, and  that 30-40 percent  of those who buy  yearly annual                                                               
passes are seniors.  She emphasized  that there will be an impact                                                               
on the program receipts being collected by DNR.                                                                                 
Number 1075                                                                                                                     
REPRESENTATIVE CHENAULT  asked Ms.  Carroll if the  annual senior                                                               
passes  are  for   residents  only,  or  are  also   for  use  by                                                               
MS. CARROLL  answered residents.   The  department has  done away                                                               
with the nonresident passes.                                                                                                    
REPRESENTATIVE CHENAULT  first commented  that nobody  would know                                                               
how  many  of the  senior  citizens  in the  state's  campgrounds                                                               
during the  summer are  actually residents  or nonresidents.   He                                                               
then surmised  that the  number of  nonresidents would  be higher                                                               
and asked Ms. Carroll if she had information regarding that.                                                                    
MS.  CARROLL replied  that  she  did not  have  any firm  numbers                                                               
because those  statistics have  not been  tracked.   She restated                                                               
that if  the amendment is made,  making the permit an  annual one                                                               
instead of a lifetime one, the  amount in the fiscal note will be                                                               
zero but there will be a funding source switch.                                                                                 
Number 1168                                                                                                                     
REPRESENTATIVE FATE asked if it  would be onerous to have seniors                                                               
apply every year.                                                                                                               
MS. CARROLL said  that may be; it's a choice  the committee needs                                                               
to make.                                                                                                                        
Number 1272                                                                                                                     
MS. YUHAS  conceded that  the fiscal  note may  not be  zero, but                                                               
asked  the committee  to pass  the bill  anyway "as  a reasonable                                                               
gesture to honor our older ... Alaskans."                                                                                       
Number 1330                                                                                                                     
CO-CHAIR MASEK closed public testimony.                                                                                         
Number 1367                                                                                                                     
REPRESENTATIVE  FATE recommended  the committee  leave "lifetime"                                                               
permit in the bill.                                                                                                             
CO-CHAIR  MASEK read  some statistics  from  Ms. Yuhas's  written                                                               
testimony that were  provided by the Alaska Department  of Fish &                                                               
Game:   In the fiscal  year 2000, 3,997  permanent identification                                                               
cards were  issued to senior citizens  to hunt and fish,  and 466                                                               
licenses  were issued  to  disabled veterans.    She added,  "The                                                               
numbers  would  probably be  a  little  less  for  a lot  of  our                                                               
seniors."   She said she would  like the permit to  be a lifetime                                                               
Number 1540                                                                                                                     
REPRESENTATIVE KERTTULA  said she  liked the  idea of  a lifetime                                                               
pass, but  asked whether there was  a way to get  around the cost                                                               
of the printing.   For example, a person could  obtain one annual                                                               
pass and then only have to prove his or her age.                                                                                
Number 1497                                                                                                                     
MS. CARROLL  responded that she  couldn't think of  any language.                                                               
She added  that one of the  things found in other  states is that                                                               
once a person has  a lifetime pass - if it's a decal  on a car or                                                               
a piece of  paper - it can  be passed around.   It's difficult to                                                               
figure  out how  to offer  a  lifetime pass  and not  have it  be                                                               
Number 1540                                                                                                                     
REPRESENTATIVE KERTTULA reiterated that  she would like to figure                                                               
out a  way to  issue a "one-time  annual pass,"  thereby avoiding                                                               
printing costs and  the necessity for seniors to  apply more than                                                               
Number 1593                                                                                                                     
PETER  PANARESE, Field  Operations, Central  Office, Division  of                                                               
Parks  &  Outdoor  Recreation, Department  of  Natural  Resources                                                               
(DNR),  testified  via  teleconference.   He  reported  that  one                                                               
challenge  in managing  State Parks'  campgrounds is  identifying                                                               
people who  have paid  their fees and  then collecting  fees from                                                               
those who haven't yet paid.                                                                                                     
MR. PANARESE  explained that  the system now  used is  to provide                                                               
decals  for display  on  vehicles; those  people  may partake  in                                                               
recreational activities  without being stopped each  time by park                                                               
management,  because  the  decals   are  readily  visible.    Mr.                                                               
Panarese pointed  out that state employees  and volunteers should                                                               
not  be put  in  the  position of  having  to  contact people  in                                                               
vehicles without  decals just to  find out  if they are  over 60.                                                               
He indicated the request in the fiscal  note is to come up with a                                                               
system whereby State  Parks personnel wouldn't have  to contact a                                                               
person directly  once the pass  is issued,  but would be  able to                                                               
tell whether a  person had a pass because it  would be visible on                                                               
the vehicle or on the person.                                                                                                   
Number 1705                                                                                                                     
REPRESENTATIVE KERTTULA  said perhaps  the committee  should wait                                                               
to work this issue out, but  she did not understand why "we can't                                                               
just get a  bunch of orange stickers  and put them on  top of the                                                               
decal and be done  with it."  She stated that  she didn't see the                                                               
purpose of  "bringing seniors  in," and said  there must  be some                                                               
way to overcome having to print a new decal.                                                                                    
Number 1751                                                                                                                     
CO-CHAIR MASEK  said she plans  to have  her staff work  with the                                                               
department.   Meanwhile, she would  leave the  bill as it  is and                                                               
send  it  on  to  the House  Finance  Standing  Committee,  where                                                               
changes can be made to make the bill work.                                                                                      
Number 1765                                                                                                                     
REPRESENTATIVE FATE moved to report  HB 129 out of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There  being no  objection, HB  129 was  moved out  of the  House                                                               
Resources Standing Committee.                                                                                                   
HB 205-RESOURCE DEVELOPMENT: BD./GRANTS/FUND                                                                                  
[Contains discussion relating to SB 136, the companion bill]                                                                    
Number 1815                                                                                                                     
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be HOUSE BILL  NO. 205, "An Act relating  to resource development                                                               
and to grants  for the purpose of  promoting resource development                                                               
from appropriations of a portion  of the revenue derived from the                                                               
extraction of certain state natural resources."                                                                                 
Number 1850                                                                                                                     
REPRESENTATIVE  GREEN  made  a   motion  to  adopt  the  proposed                                                               
committee  substitute   (CS)  [version   22-LS0803\C,  Chenoweth,                                                               
4/5/01] for purposes of discussion.  [No objection was stated.]                                                                 
Number 1860                                                                                                                     
REPRESENTATIVE FATE,  speaking as the sponsor,  explained for the                                                               
committee  members that  HB 205  is a  companion to  SB 136.   He                                                               
paraphrased  his sponsor  statement  [included  in the  committee                                                               
packet], which read as follows:                                                                                                 
     House Bill 205 will  establish the Resource Development                                                                    
     Board  [RDB], which  will be  tasked  with the  primary                                                                    
     duties of  facilitating public education  and promoting                                                                    
     responsible resource development.   The board will have                                                                    
     authority   to  award   matching   grants  to   private                                                                    
     nonprofit corporations for  projects such as conducting                                                                    
     marketing   research,   advertising,  publishing,   and                                                                    
     distributing   information   related   to   responsible                                                                    
     resource extraction.   Grants  may not  be used  for an                                                                    
     election or a ballot proposition,  nor can they be used                                                                    
     for  influencing  issue-specific   legislation  at  the                                                                    
     state or local government level.                                                                                           
     House   Bill   205   also  establishes   the   Resource                                                                    
     Development  Fund  from  which   the  board  may  award                                                                    
     grants.   The fund will  be created within  the general                                                                    
     fund and  will be subject to  legislative appropriation                                                                    
     from  revenues  received  from the  extraction  of  the                                                                    
     state's natural resources.  20  percent of the balance,                                                                    
     after administrative  costs, will also  be appropriated                                                                    
     to  the   New  Business   Incentive  Fund   to  attract                                                                    
     companies to Alaska that build on our resource base.                                                                       
     In  his  annual  address  to  the  legislature,  [U.S.]                                                                    
     Senator Frank  Murkowski advised  that "the  state must                                                                    
     do its part to promote  economic development of its own                                                                    
     lands, irrespective of  the prevailing federal attitude                                                                    
     and political landscape at the federal level."                                                                             
     House  Bill 205  represents an  investment in  Alaska's                                                                    
     future.   Alaska has  been, and  will be,  dependent on                                                                    
     natural  resource  extraction   to  fuel  our  economic                                                                    
     engine  for  the  foreseeable  future.     We  need  to                                                                    
     continue  to  promote  responsible development  of  our                                                                    
     resources while  protecting the environment.   The best                                                                    
     way  to  protect  Alaska's environment  is  to  have  a                                                                    
     strong   diversified   economy.     The   majority   of                                                                    
     environmental groups apparently do  not agree with this                                                                    
     concept,  as   they  continue  to  oppose   nearly  all                                                                    
     development  while  offering  no  alternative  economic                                                                    
     plan.    Alaska's  environmental  protection  laws  are                                                                    
     among  the  strongest in  the  world,  yet by  opposing                                                                    
     development    of     Alaska's    natural    resources,                                                                    
     environmentalists  push development  offshore to  Third                                                                    
     World countries,  ensuring exploitative  development in                                                                    
     the absence of adequate environmental protection laws.                                                                     
     There are  now more  than 90 environmental  groups with                                                                    
     offices  in  Alaska, and  the  vast  majority of  their                                                                    
     money  comes from  the Lower  48.   These organizations                                                                    
     spend millions of dollars in  Alaska attempting to sway                                                                    
     public opinion,  drive public  policy, and  inhibit the                                                                    
     development of  our natural resources.   Because of the                                                                    
     virtually   unlimited   funds    available   to   these                                                                    
     environmental     groups,     Alaska-based     resource                                                                    
     development   advocates    are   unable    to   compete                                                                    
     effectively  in presenting  a balanced  message to  the                                                                    
     public  and are  overwhelmed  by  a one-sided  message.                                                                    
     House   Bill    205   will   provide    assistance   in                                                                    
     disseminating a balanced  message regarding responsible                                                                    
     resource development.                                                                                                      
     Alaska  invests in  marketing our  tourism and  seafood                                                                    
     industries  and  in  supporting  the  opening  of  ANWR                                                                    
     [Arctic   National   Wildlife  Refuge]   to   petroleum                                                                    
     exploration in order  to benefit our economy.   We also                                                                    
     need to invest in the  promotion of our diverse mineral                                                                    
     resources, timber, and oil and gas development.                                                                            
     Creating  the Resource  Development Board  will promote                                                                    
     responsible resource  development in Alaska  and assist                                                                    
     us in meeting our  constitutional mandate of developing                                                                    
     our resources by making them  available for maximum use                                                                    
     consistent with the public interest.                                                                                       
REPRESENTATIVE FATE  commented that the last  statement was taken                                                               
out of  the constitution.   He  indicated the  sectional analysis                                                               
[in the committee packet] reflects the proposed CS, Version C.                                                                  
Number 2145                                                                                                                     
REPRESENTATIVE  FATE referred  to  [Amendment 1],  which read  as                                                               
follows [original punctuation provided]:                                                                                        
          Page 1, line 13:                                                                                                      
               After "amount"                                                                                                   
               Insert "based on the gross revenues but                                                                          
     appropriated  after the  transfer of  payments required                                                                    
     by law to the Permanent Fund, School Fund,"                                                                                
Number 2190                                                                                                                     
REPRESENTATIVE  KERTTULA   suggested  a  friendly   amendment  to                                                               
proposed  Amendment 1  as follows:   after  "the Permanent  Fund,                                                               
School Fund," add "and Constitutional Budget Reserve Fund,".                                                                    
REPRESENTATIVE  KERTTULA explained  that there  currently is  not                                                               
much  being  added  to the  Constitutional  Budget  Reserve  Fund                                                               
(CBRF) because "we  are not getting those big  settlements."  She                                                               
stated her belief  that since an overall fiscal plan  had not yet                                                               
been made,  it may make sense  to "maintain where we're  at right                                                               
at the moment."                                                                                                                 
REPRESENTATIVE FATE  expressed concern because the  CBRF requires                                                               
a three-quarters  vote.   He also  expressed concern  about using                                                               
those types of funds in this effort.                                                                                            
REPRESENTATIVE KERTTULA  agreed about the three-quarters  vote to                                                               
withdraw from  the fund,  but offered her  belief that  this bill                                                               
would change how the money goes into the fund.                                                                                  
REPRESENTATIVE FATE responded that at  some point the funds would                                                               
have  to be  taken out  to use  for grants  and to  put into  the                                                               
Resource   Development  Board.     Just   for  argument's   sake,                                                               
Representative Fate said,  if the funds were locked  up, a three-                                                               
quarters vote would be required in order to use them.                                                                           
REPRESENTATIVE KERTTULA responded, "It's  just that we're getting                                                               
the money  equal to whatever those  amounts are.  So  it'll never                                                               
take a three-quarters  vote to ... get that money  to this fund."                                                               
She said money  would never be appropriated back out  of the CBRF                                                               
for this fund.                                                                                                                  
Number 2347                                                                                                                     
KRISTY  TIBBLES,  Staff  to Senator  Drue  Pearce,  Alaska  State                                                               
Legislature,  spoke on  behalf of  the Senate  Resources Standing                                                               
Committee, sponsor of SB 136, the  companion bill to HB 205.  She                                                               
informed members that the same  amendment is being offered on the                                                               
Senate side  with consideration  to adding  the CBRF,  based upon                                                               
the fiscal  note provided  by DNR.   She  told the  committee the                                                               
drafter of  the bill  had stated  his opinion  that the  money in                                                               
question does not  pertain to the CBRF because  [the bills] don't                                                               
say "oil settlement money."                                                                                                     
REPRESENTATIVE  KERTTULA  stated   her  understanding,  "So  it's                                                               
simply because  the money never is  going to deal with  the money                                                               
that  goes through  the CBR  anyway. ...  So actually,  then, the                                                               
fiscal note  may be somewhat  misleading ... because  it mentions                                                               
the CBR."                                                                                                                       
MS. TIBBLES responded in the affirmative.                                                                                       
REPRESENTATIVE FATE stated  that he had no  personal objection to                                                               
[Representative  Kerttula's friendly  amendment], but  would like                                                               
the issue clarified.                                                                                                            
REPRESENTATIVE  KERTTULA  agreed that  if  the  money isn't  ever                                                               
going to  come from the  CBR, there is  no reason to  mention it;                                                               
however, it is mentioned in the fiscal note.                                                                                    
Number 2423                                                                                                                     
MS. CARROLL responded:                                                                                                          
     Yes, our  fiscal note does  do that.  What  this amount                                                                    
     is:  it  calculates this, based on the  gross amount of                                                                    
     revenues from  our mineral estate.   ... So  that's ...                                                                    
     how   you  get   the  $2.6   million.     All  of   the                                                                    
     distributions happen after  that, and the appropriation                                                                    
     comes out of  the general fund.  The  amount that comes                                                                    
     out of the  general fund is what  you're worried about,                                                                    
     and  that's  based  on  gross  revenue.    So  that  is                                                                    
     essentially  just a  calculation.   The revenue  stream                                                                    
     goes its  merry way, the way  that it always has.   And                                                                    
     then  the appropriation  that you  make into  this fund                                                                    
     comes out  of the  general fund,  based on  that amount                                                                    
     that   the   Department   of  Natural   Resources   has                                                                    
MS.  CARROLL,  in  response to  a  question  from  Representative                                                               
Chenault, clarified  that it is  current gross receipts  from the                                                               
end of fiscal year 2000.                                                                                                        
Number 2488                                                                                                                     
REPRESENTATIVE   KERTTULA  read   from  page   1,  lines   12-14,                                                               
continuing through page 2, line 1:                                                                                              
          (b) From the money received in the administration                                                                     
     of  the resources  of  the state  under  AS 38.05,  the                                                                    
     legislature  may appropriate  an amount  equal to  one-                                                                    
     quarter of  one percent  of all mineral  lease rentals,                                                                    
     royalties,  royalty  sale   proceeds,  federal  mineral                                                                    
     revenue sharing  payments, and bonuses received  by the                                                                    
     state as follows:                                                                                                          
REPRESENTATIVE KERTTULA said,  "It may be under  'bonuses.'"  She                                                               
stated her  belief that  Ms. Tibbles had  been testifying  to the                                                               
fact  that the  money that  would go  into the  CBR does  not fit                                                               
within  that definition.   She  added,  "And I  guess that's  the                                                               
Number 2508                                                                                                                     
MS. CARROLL responded:                                                                                                          
     In  this  fiscal  note we  calculated  based  on  gross                                                                    
     revenues, which,  in my understanding,  [include] those                                                                    
     settlement   amounts   that   go  directly   into   the                                                                    
     constitutional  budget reserve  because they  are based                                                                    
     on an error that was made  on the revenue that we got -                                                                    
     the receipts that we were  supposed to receive in prior                                                                    
     years.   So that's  how we did  the calculations  - the                                                                    
     Department  of Natural  Resources.   That's one  way of                                                                    
     doing it.                                                                                                                  
Number 2543                                                                                                                     
REPRESENTATIVE CHENAULT asked Ms.  Carroll if the one-quarter [of                                                               
one] percent  is based on  the latest  revenue reports.   He also                                                               
asked  if  future resource  development  would  be taxed  at  the                                                               
current rate and the one-quarter  [of one] percent would come out                                                               
of the  gross.  In the  alternative, would this be  an added one-                                                               
quarter percent increase in future revenue receipts?                                                                            
Number 2588                                                                                                                     
MS.  CARROLL answered  that this  doesn't increase  any royalties                                                               
that might  need to  be paid  by industry;  however, if  there is                                                               
further development "in  there" for the royalties  that are paid,                                                               
it will  be a  part of  the calculation,  because those  would be                                                               
revenues that  [DNR] receives.  Addressing  a follow-up question,                                                               
Ms. Carroll  clarified that  if there is  an increase  in revenue                                                               
coming from  the mineral estate,  this calculation would  be done                                                               
on  the increased  amount of  revenue received.   She  stated her                                                               
expectation that this calculation would be made annually.                                                                       
Number 2682                                                                                                                     
CO-CHAIR  MASEK asked  whether  there was  any  objection to  the                                                               
adoption of Amendment 1  with Representative Kerttula's amendment                                                               
to it.   There being no  objection, Amendment 1, as  amended, was                                                               
Number 2705                                                                                                                     
EDWARD C. FURMAN came before  the committee to testify in support                                                               
of  HB 205.    He said  it  was too  bad that  in  the past,  the                                                               
government gave  eight of  our islands to  Russia.   He mentioned                                                               
land  sold   by  the   federal  government   without  legislative                                                               
permission.  Mr. Furman thanked  the committee for taking time to                                                               
listen to  "this 65-year-old retired  veteran."  He passed  out a                                                               
newsletter  [included in  the  committee  packet] describing  the                                                               
things he frowns on about the government.                                                                                       
Number 2823                                                                                                                     
PAMELA  LaBOLLE,  President,  Alaska State  Chamber  of  Commerce                                                               
(ASCC), testified  on behalf of  the ASCC  in support of  HB 205.                                                               
She told the committee it is  important that the state, which has                                                               
ownership  of its  resources and  is a  "business partner  at the                                                               
table,"  needs  help  in marketing  the  importance  of  resource                                                               
development.   She  asserted that  resource  development was  the                                                               
basis upon which Alaska was allowed into statehood.  She said:                                                                  
     It's  very important  at this  time, when  there is  so                                                                    
     much effort  and false information that  is perpetrated                                                                    
     by those who would have Alaska  be a park, instead of a                                                                    
     self-sufficient  state  of  the  Union,  that  has  the                                                                    
     ability to be  on equal footing in the  world market as                                                                    
     other states do.                                                                                                           
Number 2924                                                                                                                     
CO-CHAIR MASEK closed public testimony.                                                                                         
Number 2930                                                                                                                     
REPRESENTATIVE  GREEN mentioned  the  existence  of the  Resource                                                               
Development  Council (RDC)  and asked  how the  proposed Resource                                                               
Development Board  (RDB) would  go to  operators and  excite them                                                               
about  using Alaska's  resources  [any differently  than the  RDC                                                               
would].     He   also  mentioned   AOGA  [Alaska   Oil  and   Gas                                                               
TAPE 01-34, SIDE B                                                                                                              
REPRESENTATIVE FATE explained  that the purpose of  the RDB would                                                               
be to  not only  support, but  to promote  - to  act as  a public                                                               
relations [entity] and  to be actively involved  in the placement                                                               
of funds.   For  example, the  RDB might choose  to use  funds to                                                               
support tourism, promote the development  of resources, and fight                                                               
the  environmentalists who  are opposed  to  it.   The RBD  could                                                               
disseminate  funds  to  aid  the  efforts  of  other  established                                                               
REPRESENTATIVE GREEN  agreed that  resources should  be marketed.                                                               
He mentioned the  existence of fish marketing,  including that by                                                               
ASMI  [Alaska Seafood  Marketing  Institute]  and other  existing                                                               
organizations.   He also mentioned approximately  $2.7 million in                                                               
fiscal notes.   He said, "From  a commerce point of  view, I just                                                               
don't ...  see where they're going  to go that we're  not already                                                               
going."   Representative  Green  stated his  belief  that an  oil                                                               
company,  for  example,  would  most likely  talk  to  other  oil                                                               
companies, or  approach DNR [for  funds].  He named  a fictitious                                                               
oil company in  Texas and asked how it would  be notified to come                                                               
to Alaska through the RDB.                                                                                                      
REPRESENTATIVE  FATE said  that wouldn't  be the  purpose of  the                                                               
Number 2833                                                                                                                     
CO-CHAIR  MASEK  referred  to   the  sponsor  statement  and  the                                                               
proposed   CS,  which   specifies  that   nonprofit  corporations                                                               
organized  under the  Alaska Nonprofit  Corporation  Act will  be                                                               
given preference for receiving grants.   She asked Representative                                                               
Green if the council he'd mentioned gives grants as well.                                                                       
Number 2805                                                                                                                     
REPRESENTATIVE  GREEN answered  that  the council  does not  give                                                               
grants.    He questioned  whether  there  would be  enough  money                                                               
available to give grants, to create  that kind of an activity for                                                               
something of any consequence regarding natural resources.                                                                       
CO-CHAIR MASEK pointed out AS 44.33.917  in the proposed CS.  She                                                               
remarked, "From  what I see  here, this  is another tool  to help                                                               
nonprofit organizations to develop our state's resources."                                                                      
Number 2689                                                                                                                     
REPRESENTATIVE  FATE said  he  understood Representative  Green's                                                               
concern regarding a  possible duplication of process,  which is a                                                               
waste  of  money.     He  remarked  that   many  times  nonprofit                                                               
corporations could be  a benefit to the state by  getting out the                                                               
desired messages  of the  legislature and  "other members  of the                                                               
state," which cannot get those  messages out because of political                                                               
correctness,  for   instance.     Representative  Fate   said  he                                                               
envisions  those  funds  as  nonprofit  funds  that  can  promote                                                               
economic development, especially in the extraction of resources.                                                                
Number 2625                                                                                                                     
REPRESENTATIVE GREEN  said, "Rather than actually  distribute the                                                               
money to  a nonprofit who  might then  try and extract,  ... it's                                                               
for an information dissemination, primarily, like Arctic Power."                                                                
REPRESENTATIVE FATE concurred.                                                                                                  
REPRESENTATIVE GREEN  stated that  that was  his point:   another                                                               
[entity] is already doing this.                                                                                                 
REPRESENTATIVE FATE said  the exception is that  Arctic Power has                                                               
not come  under this purview;  had this  been in place,  it might                                                               
have.   However, it has  received funds  from other sources.   He                                                               
said he hadn't cited Arctic  Power because [legislators] felt the                                                               
necessity for  a nonprofit organization  to carry a message.   He                                                               
alluded  to  the   fact  that  Arctic  Power   had  been  funded,                                                               
partially, by  the legislature recently  [in its efforts  to open                                                               
ANWR].   He added, "Had this  been in place, they  would have had                                                               
to go through those procedures  that have been prescribed in this                                                               
bill in order to get any  grant funds from this organization, and                                                               
I would suspect that they would have done that."                                                                                
CO-CHAIR MASEK  clarified that Arctic  Power is  solely promoting                                                               
the  opening of  ANWR, whereas  the  bill refers  to "many  other                                                               
resource entities."                                                                                                             
Number 2527                                                                                                                     
REPRESENTATIVE  KERTTULA said  she  must echo  some  of the  same                                                               
concerns  Representative  Green had  offered.    She referred  to                                                               
earlier mention of tourism and  stated that if tourism were added                                                               
[to  the  bill],  she  would   "have  to  come  pretty  close  to                                                               
supporting an idea like this."                                                                                                  
REPRESENTATIVE  KERTTULA indicated  [people involved  in tourism]                                                               
are struggling  to "put it  together to  come back up  with their                                                               
marketing  scheme."   She  also  mentioned "responsible  resource                                                               
extraction" and  expressed concern  that there  is not  a balance                                                               
with  some  of  the  other industries.    Noting  that  differing                                                               
statistics  regarding  tourism,  fishing,   and  oil  as  leading                                                               
industries,  she  concluded  by  saying, "This  money  stream  is                                                               
either going to be way up or  possibly way down, and that kind of                                                               
worries me too."                                                                                                                
Number 2453                                                                                                                     
CO-CHAIR MASEK asked if the  Department of Community and Economic                                                               
Development (DCED)  would "fall under"  tourism.  She  noted that                                                               
[the bill]  states that  the commissioner [of  DCED] shall  be on                                                               
the board.                                                                                                                      
REPRESENTATIVE  KERTTULA stated  her interpretation  that tourism                                                               
is under  that department; however,  it is not being  funded that                                                               
way, because  there is  a private nonprofit  board.   She pointed                                                               
out that  tourism would  never be  able to  get a  grant, because                                                               
it's not an extractive industry.                                                                                                
Number 2419                                                                                                                     
REPRESENTATIVE FATE  said he does not  preclude tourism; however,                                                               
it is not the thrust of this legislation.                                                                                       
REPRESENTATIVE  KERTTULA clarified  that she  had brought  up the                                                               
issue of  tourism because neither the  title of the bill  nor the                                                               
thrust  includes it;  however,  unless the  sponsor  of the  bill                                                               
wanted  to redo  the  whole  idea, [she  was  not  asking for  an                                                               
Number 2365                                                                                                                     
REPRESENTATIVE  FATE  noted  that   in  Denver,  in  the  mineral                                                               
industry at large, it takes 7-15  years to get a project through.                                                               
He said:                                                                                                                        
     If we have somebody who is  going to bat for the state,                                                                    
     wherein  sometimes we  can't, and  we have  a nonprofit                                                                    
     organization that  needs some funds to  help facilitate                                                                    
     reducing the time it gets  something [going], we should                                                                    
     take advantage of that.                                                                                                    
REPRESENTATIVE FATE told the committee  Alaska's problem is worse                                                               
than that of many of states in the  Lower 48.  For example, a gas                                                               
pipeline from Prudhoe Bay to the  Lower 48, by way of Chicago and                                                               
California, was  authorized, with  all certificates, as  long ago                                                               
as 1978.                                                                                                                        
Number 2274                                                                                                                     
REPRESENTATIVE  KERTTULA stated  her belief,  regarding promoting                                                               
development in  Alaska, that the  money would be better  spent by                                                               
aiding  the company  itself, for  example, or  developing a  good                                                               
permitting system.   She mentioned Red Dog  [Mine], air [quality]                                                               
violations, and a  six-month lag in communication.   She said she                                                               
respects  where Representative  Fate is  going, but  respectfully                                                               
disagrees that that is where the money is best spent.                                                                           
Number 2229                                                                                                                     
REPRESENTATIVE McGUIRE  drew attention to  page 2, lines  4-7, of                                                               
the proposed CS, which read:                                                                                                    
               (2) after allowance for the expenses                                                                             
     described in (1)  of this subsection, not  more than 20                                                                    
     percent  of  the  remaining estimated  balance  of  the                                                                    
     amount   authorized   for  appropriation   under   this                                                                    
     subsection  to  the  new business  incentive  fund  for                                                                    
     purposes authorized by AS 45.81.010 - 45.81.050;                                                                           
REPRESENTATIVE McGUIRE  remarked that  she liked  the idea.   She                                                               
offered her  belief that  one current  problem is  attracting new                                                               
business  to  Alaska.   She  said  she  would  like to  see  that                                                               
[percentage] increase, although  she did not know  how that might                                                               
affect  the makeup  of  the  rest of  the  bill.   Representative                                                               
McGuire said she thought new  business incentives were one of the                                                               
key elements of the bill.                                                                                                       
REPRESENTATIVE  FATE   responded  that   there  might   be  other                                                               
problems,   of  which   he  is   unaware,  with   increasing  the                                                               
percentage;  however,  he  had   no  personal  objection  to  the                                                               
suggestion.  He  added that the next committee  of referral would                                                               
be a proper place to look at that.                                                                                              
Number 2142                                                                                                                     
REPRESENTATIVE GREEN asked how much  of the $2.7 million would be                                                               
available to pass out, after  the agencies that are writing these                                                               
[grants] extract  their [expenses].   He asked if  anything would                                                               
be gained by  this, other than having  some additional literature                                                               
going somewhere.   He said it  is difficult to see  how much more                                                               
money will actually be required in order to do some good.                                                                       
Number 2042                                                                                                                     
REPRESENTATIVE  FATE  told  Representative  Green  he  could  not                                                               
answer  his questions  at this  point because  there has  been no                                                               
experience with this to determine projected expenses.                                                                           
REPRESENTATIVE GREEN  responded that he  loves the goal if  it is                                                               
certain it  would work  as planned.   He  agreed Alaska  needs to                                                               
extract its  resources.   He said  some problems  with permitting                                                               
stem  directly   or  indirectly   from  the   EPA  [Environmental                                                               
Protection Agency];  therefore, if this [legislation]  were going                                                               
to go  towards education  and the  EPA, he  could be  more easily                                                               
persuaded,  because it  is a  major  stumbling block  in need  of                                                               
correction.  He  suggested that striking a deal with  the EPA may                                                               
be an incentive  for other companies to come to  Alaska.  He said                                                               
[Alaska]  operates in  a more  environmentally sound  manner than                                                               
any other place  in the world.   He added, "If we  could strike a                                                               
deal with EPA, because of that  history, then ... let's go to ...                                                               
two percent."                                                                                                                   
REPRESENTATIVE  FATE   asked  Representative  Green  if   he  was                                                               
suggesting an amendment.                                                                                                        
REPRESENTATIVE GREEN answered, "If I knew where it was going."                                                                  
Number 1931                                                                                                                     
MS. TIBBLES  offered an example:   the Alaska  Miners Association                                                               
could  apply for  a grant  to produce  new information  regarding                                                               
mining in Alaska.                                                                                                               
REPRESENTATIVE  GREEN  said  they produce  the  information  now,                                                               
without the grant.  He mentioned  a Canadian company that got Red                                                               
Dog [Mine] started.   He asked if  "we" had talked to  any of the                                                               
people who might be looking for funding.                                                                                        
Number 1859                                                                                                                     
REPRESENTATIVE  FATE restated  that he  understood Representative                                                               
Green's concerns.  This would  be a reinforcement for things that                                                               
already exist; the bill addresses  the nonprofit aspect.  He said                                                               
there is a  process to follow, and the grants  would not be given                                                               
out indiscriminately.   Although there may be overlap,  it may be                                                               
very beneficial.                                                                                                                
Number 1768                                                                                                                     
REPRESENTATIVE GREEN stated that the  tourism business is in need                                                               
of  money every  year;  it competes  with  [businesses] that  are                                                               
"being subsidized by other states,  by other countries."  He said                                                               
their marketing  council has  really helped.   He  also mentioned                                                               
the  battle  to  open  ANWR  and spoke  of  "specific  need"  and                                                               
"specific issue."  To illustrate  his point, Representative Green                                                               
told the committee  that his children were given  money when they                                                               
were specific about what they wanted, rather than vague.                                                                        
Number 1695                                                                                                                     
CO-CHAIR MASEK  explained that the  proposed board would  be made                                                               
up of [five] people:  [one  each] from the forestry, mining, oil,                                                               
and    gas   industries    [through   their    respective   trade                                                               
associations],  as  well  as  the  commissioner  of  DCED.    She                                                               
indicated  those people  would be  the  ones to  issue the  grant                                                               
money and that grants would help [groups] promote themselves.                                                                   
Number 1614                                                                                                                     
REPRESENTATIVE FATE  referred to  the first  line of  his sponsor                                                               
statement, which read:                                                                                                          
     House Bill 205 will  establish the Resource Development                                                                    
     Board, which will be tasked  with the primary duties of                                                                    
     facilitating    public    education    and    promoting                                                                    
     responsible resource development.                                                                                          
REPRESENTATIVE FATE said to Representative Green:                                                                               
     If you consider that, I  suppose, some of the beauty of                                                                    
     this land is a resource,  then I would assume also that                                                                    
     you  would  say  that  this  could  help  develop  that                                                                    
     resource   through   tourism,   which  both   you   and                                                                    
     Representative Kerttula  have been  talking about.   It                                                                    
     does not, as  I have said before,  ... negate advancing                                                                    
     any funds from ... going  in that direction, but that's                                                                    
     going to  be a  process that we'll  have to  go through                                                                    
     from  the  applicant  and  from   the  review  of  each                                                                    
Number 1523                                                                                                                     
REPRESENTATIVE  KERTTULA emphasized,  however, that  there cannot                                                               
be tourism  under this.  It  is for the development  of resources                                                               
having commercial promise, using  methods of responsible resource                                                               
extraction.  It cannot be used for tourism.                                                                                     
Number 1493                                                                                                                     
REPRESENTATIVE  FATE  moved  to  report  CSHB  205  [version  22-                                                               
LS0803\C, Chenoweth,  4/5/01, as amended] out  of committee [with                                                               
individual  recommendations and  the accompanying  fiscal notes].                                                               
[Representative  Kerttula  first   objected,  then  withdrew  her                                                               
objection.]   There being no  objection, CSHB 205(RES)  was moved                                                               
out of the House Resources Standing Committee.                                                                                  
SB 76 - RIGHT-OF-WAY LEASING ACT                                                                                              
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be SPONSOR  SUBSTITUTE FOR SENATE  BILL NO. 76, "An  Act relating                                                               
to  the Alaska  Right-of-Way Leasing  Act; and  providing for  an                                                               
effective date."                                                                                                                
Number 1295                                                                                                                     
WILDA RODMAN, Staff to Senator Gene Therriault, Alaska State                                                                    
Legislature, gave a brief overview of the bill by paraphrasing                                                                  
the sponsor statement, which read:                                                                                              
     Senate  Bill 76  makes three  important changes  to the                                                                    
     1972 Alaska  Right-of-Way Leasing Act, which  gives the                                                                    
     Department of Natural Resources  [DNR] the authority to                                                                    
     lease state land for oil and gas pipelines.                                                                                
     First, SB  76 increases  the maximum term  of right-of-                                                                    
     way  lease renewals  from the  current 10  years to  30                                                                    
     years.   Leases  for several  pipelines, including  the                                                                    
     Trans-Alaska   Pipeline   System,  Endicott,   Kuparuk,                                                                    
     Oliktok and  Milne Point all  expire in May, 2004.   SB
     76 changes the  length of terms for  renewals only, not                                                                    
     the length of  the original lease term,  so the renewal                                                                    
     process for  the pipelines with  leases that  expire in                                                                    
     2004 will  proceed uninterrupted.  The  30-year term of                                                                    
     renewal is  consistent with that  of federal  grants of                                                                    
     right-of-way  for  oil  and  gas  pipelines,  and  will                                                                    
     result  in significant  savings  of time  and money  to                                                                    
     industry and the state.                                                                                                    
     A section of the bill  allows for existing leases to be                                                                    
     amended,   upon  request,   to   incorporate  the   new                                                                    
     provision for renewal  periods of up to 30  years.  The                                                                    
     bill also  places in statute  a provision  allowing for                                                                    
     the extension  of leases under their  existing terms if                                                                    
     the lessee  has applied for  renewal, but the  terms of                                                                    
     the lease  are still under  negotiation at the  date of                                                                    
     expiration.   The  language proposed  in AS  385.110(b)                                                                    
     states  that the  leases shall  be continued  until the                                                                    
     commissioner issues a final determination on renewal.                                                                      
     Although current statutes  give the commissioner leeway                                                                    
     to  extend a  right-of-way  lease or  grant an  interim                                                                    
     lease pending finalization  of a renewal determination,                                                                    
     I believe  the procedure for extending  a lease pending                                                                    
     renewal needs to  be set out in statute.   Although DNR                                                                    
     believes it  can adhere t  a self-imposed  deadline for                                                                    
     renewing  leases  before  they  expire,  I  think  such                                                                    
     rationale  injects  unnecessary  uncertainty  into  the                                                                    
     renewal process.                                                                                                           
     Second, the bill amends the  definition of "state land"                                                                    
     for  purposes  of  the   right-of-way  leasing  Act  to                                                                    
     include only  land in which  the interest owned  by the                                                                    
     state is  sufficient to  permit the  state to  lease it                                                                    
     under  the  authority  of  the  Department  of  Natural                                                                    
     Third, the bill requires  lessees under new and renewed                                                                    
     right-of-way leases  to reimburse the stated  for costs                                                                    
     associated with  monitoring the  operation, maintenance                                                                    
     and  termination  of  pipelines on  state  right-of-way                                                                    
     leases.   The  bill  requires the  commissioner to  use                                                                    
     best efforts to reach agreement  with the lessee on the                                                                    
     cost reimbursement  and to provide  the lessee  with an                                                                    
     annual  estimate of  the projected  costs and  scope of                                                                    
     the work.                                                                                                                  
Number 1021                                                                                                                     
STEVEN (ph)  JONES, Manager, TAPS [Trans  Alaska Pipeline System]                                                               
Right-of-Way   Renewal  Project,   thanked   the  committee   for                                                               
considering the bill.   He said SSSB 76  contains language agreed                                                               
upon among  TAPS, the  administration, and the  DNR.   He offered                                                               
that  SSSB 76  is  "a good  solution to  a  few relatively  minor                                                               
administrative issues that we had on renewal."                                                                                  
Number 0965                                                                                                                     
REPRESENTATIVE GREEN asked Mr. Jones  if renewals in other states                                                               
are typically of this magnitude,  and rather than being every ten                                                               
years, are over an extended period of time.                                                                                     
MR.  JONES  replied  that  he  could  not  say  what  the  common                                                               
situation is  in other states;  however, the  federal provisions,                                                               
which have  frequently been  used over the  years for  renewal in                                                               
the Lower 48, are for a maximum 30-year period.                                                                                 
REPRESENTATIVE GREEN said  it has been rumored -   because of the                                                               
concern  about environment-related  challenges  -  that if  there                                                               
isn't  an EIS  [environmental impact  statement] prepared,  there                                                               
could be court challenges and  [the process] could get "tied up."                                                               
He asked Mr. Jones whether he  thought that if the renewal period                                                               
were over  a lesser  period of  time - ten  years, for  example -                                                               
"this same  sort of  thing would  have to  be gone  through every                                                               
time."   He stated his  understanding that "multiple  millions of                                                               
dollars" are involved in getting this renewal.                                                                                  
MR. JONES  said the  reason there  is a need  to go  through NEPA                                                               
[National  Environmental  Policy  Act   of  1969]  compliance  is                                                               
because of  a federal requirement.   He stated  his understanding                                                               
that the  Secretary of the  Interior has determined an  EIS would                                                               
be necessary.   He noted there  is no state requirement  to do an                                                               
EIS or comply with NEPA.  He continued:                                                                                         
     The  federal  rules,  again,   provide  for  a  30-year                                                                    
     renewal,  so ...  depending on  the determination  that                                                                    
     was  made  by,  in  this   case,  the  Bureau  of  Land                                                                    
     Management, [which]  administers the federal  grant, we                                                                    
     could have  to go through  another renewal in  a lesser                                                                    
     period of  time than  30 years; but  that's one  of the                                                                    
     decisions   that  the   Secretary   has   to  make   in                                                                    
     determining whether  or not to renew  the right-of-way,                                                                    
     is the duration of the lease.                                                                                              
     The main reason that we  ... suggested the amendment to                                                                    
     the  state statute  is because  we're regulated  by the                                                                    
     Joint Pipeline Office, which, of  course, is a combined                                                                    
     federal and  state office.   And really it was  just to                                                                    
     put  the two  offices on  similar footing,  so that  we                                                                    
     didn't have the state looking  at a renewal over a more                                                                    
     frequent  period  of  time  than  the  federal  renewal                                                                    
     period,  since the  two of  them work  together and  we                                                                    
     work together with them.                                                                                                   
Number 0662                                                                                                                     
REPRESENTATIVE KERTTULA asked  how long TAPS is  projected to run                                                               
and what the  production levels are projected to be  for the next                                                               
30 years.                                                                                                                       
MR.  JONES  answered that  "we"  plan  to submit  an  application                                                               
called a "duration  report."  He offered the belief  - based upon                                                               
reports  from the  U.S. Department  of Energy,  for example,  and                                                               
just  associated  with  the  existing  areas,  not  ANWR  [Arctic                                                               
National Wildlife Refuge] or NPRA  [National Petroleum Reserve of                                                               
Alaska]  -  that  "we'll"  have   sufficient  oil  in  commercial                                                               
qualities to transport off the  Slope, through TAPS, for at least                                                               
another 30  years.  He  added, "Granted,  no one can  predict the                                                               
price of oil, so this is with some caveat there."                                                                               
Number 0490                                                                                                                     
REPRESENTATIVE  FATE  noted  that  Mr. Jones  had  mentioned  the                                                               
request of  the Secretary of the  Interior for an EIS.   He asked                                                               
if that  had been  under a  different administration  and whether                                                               
there had been an opportunity to reverse that.                                                                                  
MR.  JONES  replied that  the  decision  had  been made  under  a                                                               
different   administration   by,   he  believed,   an   assistant                                                               
secretary.  He  said there was also a  solicitor's opinion issued                                                               
on the  applicability of NEPA to  the renewal decision.   It is a                                                               
decision that was  made and that is subject to  review by the new                                                               
Secretary [of  the Interior];  however "we"  have to  comply with                                                               
the existing one made in 1999.                                                                                                  
REPRESENTATIVE  FATE  said   based  upon  Representative  Green's                                                               
earlier  suggestion, it  might be  more  prudent to  do the  EIS,                                                               
rather   than  to   run  the   risk  of   eventual  environmental                                                               
Number 0299                                                                                                                     
REPRESENTATIVE  FATE moved  to report  SSSB 76  out of  committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  SSSB 76 was moved  out of the                                                               
House Resources Standing Committee.                                                                                             
SB 164-NO GAS PIPELINE OVER BEAUFORT SEA                                                                                      
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be  SENATE BILL  NO. 164,  "An Act  prohibiting leases  under the                                                               
Right-of-Way  Leasing Act  on state  land in  or adjacent  to the                                                               
Beaufort Sea; and providing for  an effective date."  [Before the                                                               
committee was HCS SB 164(O&G).]                                                                                                 
[There was  a motion to  adopt the bill for  discussion purposes,                                                               
but it was already before the committee.]                                                                                       
Number 0103                                                                                                                     
SENATOR JOHN  TORGERSON, Alaska State Legislature,  sponsor of SB
164, indicated the  "over-the-top" route does not  serve the best                                                               
interests of  the state.  He  listed some benefits of  a pipeline                                                               
that would not  exist with the over-the-top route:   in-state use                                                               
of  natural gas;  maximum benefits  for short-term  and long-term                                                               
jobs; a  significant long-term property  tax base for  the state;                                                               
and value-added industries.                                                                                                     
TAPE 01-35, SIDE A                                                                                                              
Number 0001                                                                                                                     
SENATOR TORGERSON paraphrased an excerpt from page 3, lines 11-                                                                 
14, which read in part:                                                                                                         
          (b) Consistent with the legislative policy and                                                                        
     goals set out in (a)  of this section, the commissioner                                                                    
     may not grant  a lease across state land that  is in or                                                                    
     adjacent to the Beaufort  Sea for pipeline right-of-way                                                                    
     purposes to  authorize construction and operation  of a                                                                    
     natural gas  pipeline following a "northern"  or "over-                                                                    
     the-top" route ...                                                                                                         
          (c) The limitation on leasing set out in (b) of                                                                       
     this section  does not apply  on and after the  date on                                                                    
     which  a natural  gas pipeline  following a  "southern"                                                                    
     route that  parallels the Trans Alaska  Pipeline System                                                                    
     and  the  Alaska  Highway   to  transport  North  Slope                                                                    
     natural  gas  to  North   American  markets  or  Alaska                                                                    
     tidewater for delivery to  foreign and domestic markets                                                                    
     has been completed and has begun operation.                                                                                
SENATOR  TORGERSON  pointed  out  the  new  language  of  HCS  SB
164(O&G) on page 2 [lines  15-22], saying it originates from "the                                                               
"Northstar  bill"  and deals  with  the  effectiveness of  having                                                               
maximum local hire.                                                                                                             
Number 0210                                                                                                                     
REPRESENTATIVE GREEN inquired if SB 164 had been subjected to                                                                   
legal review regarding the issue of the legislature's limiting                                                                  
the commissioner's leasing authority.                                                                                           
SENATOR TORGERSON replied:                                                                                                      
     I do  have a legal  opinion that basically  talks about                                                                    
     three  issues that  were  raised  in earlier  hearings:                                                                    
     one is equal protection; one  is a commerce clause; and                                                                    
     one is separation of powers.   And our legal department                                                                    
     has found all of them not to be valid.                                                                                     
REPRESENTATIVE GREEN clarified that Senator Torgerson meant all                                                                 
language in the bill passes muster.                                                                                             
Number 0312                                                                                                                     
REPRESENTATIVE  KERTTULA asked  Senator  Torgerson  if his  legal                                                               
sources  considered  whether  the  companies  had  to  study  any                                                               
alternative routes.                                                                                                             
SENATOR TORGERSON  said that  question had not  been raised.   He                                                               
mentioned  that the  committee might  hear in  upcoming testimony                                                               
that [the companies] are required  to do alternative studies on a                                                               
particular route.  He offered his personal opinion:                                                                             
     The route has  already been chosen by  the President of                                                                    
     the United  States and by  Congress.  It's  ratified by                                                                    
     treaty between Canada  and the United States.   That is                                                                    
     the route.   So if they  wanted to lay the  pipe in the                                                                    
     route that's  already authorized, an  alternative route                                                                    
     - alternative methodology  - is not required.   If they                                                                    
     wanted to select  a different route, no  matter what it                                                                    
     was, then  they would  ... be  required to  do studies,                                                                    
     unless they could  prove cause that that  route was the                                                                    
     only route  that is feasible  and no other  route could                                                                    
     be.  But  in any event, they'd probably  be involved in                                                                    
     doing other studies.                                                                                                       
REPRESENTATIVE  KERTTULA  clarified that  she  had  asked out  of                                                               
curiosity, not because she objected to SB 164.                                                                                  
Number 0430                                                                                                                     
REPRESENTATIVE SCALZI  expressed concern  that although  he likes                                                               
the route, he  has "just a little bit of  reservation about tying                                                               
our  hands  completely  on  this."   He  mentioned  a  resolution                                                               
recently passed by the House, but  said [SB 164] states more than                                                               
the resolution;  it "says this  is the  only way you're  going to                                                               
go."  He asked Senator Torgerson  if he could predict any future,                                                               
detrimental consequences of closing  the options, even though the                                                               
intent of the bill seems clear today.                                                                                           
SENATOR TORGERSON  answered that the "over-the-top"  route is the                                                               
option being  closed off, for  the reason  that there will  be no                                                               
value-added  industry  in  Alaska  on "gas  we  can't  get,"  and                                                               
because jobs  and tax  valuations wouldn't  be spread  across the                                                               
state  to the  maximum benefit.    He added  that LNG  [liquefied                                                               
natural gas]  routes are  still open  and said  this is  just one                                                               
buried pipe in the Beaufort  Sea that [the legislature] is saying                                                               
"no" to.                                                                                                                        
SENATOR TORGERSON  mentioned a  route proposed  in 1977  that was                                                               
"onshore ANWR."  Although [the  Alaska State Legislature] did not                                                               
act on that,  Senator Torgerson said Congress  and the government                                                               
of Canada did, because the  proposed area was too environmentally                                                               
sensitive.   He  remarked, "So,  if a  pipeline's environmentally                                                               
sensitive  onshore, heaven  knows what  it's going  to be  called                                                               
offshore, buried under the ice."   He added that the only benefit                                                               
of this route might be to  the treasury, but overall it would not                                                               
be good for the State of Alaska.                                                                                                
Number 0705                                                                                                                     
MICHAEL HURLEY, Government Relations,  North American Natural Gas                                                               
Pipeline  Group  (NANGPG),  stated   that  he  must  respectfully                                                               
disagree with Senator  Torgerson.  He mentioned  that his written                                                               
testimony was very similar to  the testimony he gave the previous                                                               
week for  [HCR 8]; therefore, he  would not read it  to the House                                                               
Resources  Standing Committee  today.   [A copy  of Mr.  Hurley's                                                               
written testimony is included in  the committee packet and can be                                                               
found in  the minutes  for HCR  8.]   He specified  that [NANGPG]                                                               
believes passage of  SB 164 at this time -  removing options from                                                               
the table - is not a good idea and is premature.                                                                                
Number 0789                                                                                                                     
CO-CHAIR MASEK  noted for  the record a  letter [included  in the                                                               
committee packet] from Commonwealth North.   She said it appeared                                                               
[Commonwealth North]  would like to have  adequate opportunity to                                                               
evaluate all options prior to making this bill law.                                                                             
Number 0850                                                                                                                     
REPRESENTATIVE FATE  asked Mr. Hurley  when an opportune  time to                                                               
pass this legislation would be.                                                                                                 
MR. HURLEY  replied that NANGPG  is currently engaged  in studies                                                               
throughout this  year, spending  in excess of  $75 million  to do                                                               
the engineering work and to  study the attributes of both routes.                                                               
He suggested that the committee  wait for NANGPG's input from its                                                               
economic, socioeconomic,  and environmental  studies, as  well as                                                               
input  from   the  U.S.  federal  government   and  the  Canadian                                                               
REPRESENTATIVE  FATE  responded  that  although he  is  a  strong                                                               
proponent of the oil and gas  industry, "input" means to him that                                                               
[the  legislators] are  not  really  players at  the  table.   He                                                               
mentioned a  recent energy meeting  where "the  considerations of                                                               
the exploration of  the gas were so prolific" that  there may not                                                               
be  time to  wait for  NANGPG  to produce  a report  that has  no                                                               
timeline, because the market may close.                                                                                         
REPRESENTATIVE FATE  characterized the state's  responsibility to                                                               
its  "shareholders"   as  similar  to  the   responsibilities  of                                                               
companies to their  shareholders.  He expressed hope  that SB 164                                                               
would  be taken  by the  industry as  "piece of  legislation that                                                               
mirrors our  concern about these  timelines."  He  also expressed                                                               
hope  that it  would  galvanize the  producers  into making  some                                                               
decisions that would speed up the process.                                                                                      
Number 1113                                                                                                                     
REPRESENTATIVE GREEN expressed his  commitment to a pipeline that                                                               
comes down through  the middle of the state; however,  he said he                                                               
thought it  was premature  to determine  now that  the [over-the-                                                               
top]  route will  not work,  even though  he is  against it  now.                                                               
Representative  Green said  he wants  to know  what he  is saying                                                               
"no"  to, rather  than  saying  "no" to  something  that is  just                                                               
feared.    Representative  Green  said although  he  thought  the                                                               
timing of SB 164 was wrong, however, he would support it.                                                                       
Number 1218                                                                                                                     
CO-CHAIR MASEK said she shared Representative Green's concerns.                                                                 
Number 1236                                                                                                                     
JACK  GRIFFIN,  Assistant Attorney  General,  Oil,  Gas &  Mining                                                               
Section,   Civil  Division   (Anchorage),   Department  of   Law,                                                               
testified via teleconference.  He  indicated some potential legal                                                               
issues within the  language of SB 164.  He  reminded members that                                                               
neither  he  nor [Legislative  Legal  Services]  could rule  upon                                                               
whether a particular legal objective  was valid, however, because                                                               
that  is the  courts'  functional; he  surmised, therefore,  that                                                               
counsel from [Legislative Legal  Services] had probably said that                                                               
if  presented with  "these legal  arguments,"  the courts  should                                                               
rule  that this  law will  withstand constitutional  review.   He                                                               
went on to say:                                                                                                                 
     At  least with  respect  to the  commerce clause  issue                                                                    
     [and equal]  protection clause issue,  I would  like to                                                                    
     say  that   I  would  agree  with   [Legislative  Legal                                                                    
     Services] on that.   It would also be my  view that, if                                                                    
     the  court  were  presented with  the  commerce  clause                                                                    
     issue and equal protection  issues that I've identified                                                                    
     previously  in testimony,  they  should  find that  the                                                                    
     laws withstand challenges under those clauses.  But I                                                                      
     don't think that's the case.                                                                                               
MR.  GRIFFIN  indicated  the  question  to  ask  is  whether  any                                                               
relatively simple  changes could be  made to the bill  that would                                                               
strengthen  [the  state's] position  on  these  types of  crucial                                                               
issues.  From his perspective and  that of the Department of Law,                                                               
several relatively simple changes  could be made without changing                                                               
the  ultimate intent  of the  legislature in  any way,  but which                                                               
would  help   in  defending  any  legal   challenges  that  might                                                               
ultimately  be  brought by  those  who  might disagree  with  the                                                               
legislature's policy choice in this case.                                                                                       
MR.  GRIFFIN  noted   that  he  had  been   speaking  to  Senator                                                               
Torgerson's  staff  and  would  make  himself  available  to  the                                                               
Senator  and the  committee to  explore possible  changes to  the                                                               
language of the bill.                                                                                                           
Number 1464                                                                                                                     
CO-CHAIR MASEK asked Mr. Griffin  to share his ideas for amending                                                               
the language.   [Co-Chair Masek had a copy of  the latest version                                                               
faxed  to Mr.  Griffin; meanwhile,  she called  Senator Torgerson                                                               
back to the witness table.]                                                                                                     
Number 1636                                                                                                                     
SENATOR  TORGERSON  told  the  committee  that  Mr.  Griffin  has                                                               
repeatedly proposed  changes to  SB 164  during his  testimony at                                                               
several  committee meetings.   Senator  Torgerson stated  that he                                                               
will  not be  in  favor of  making the  changes  proposed by  Mr.                                                               
Griffin until  he hears  from [the  governor's office]  that they                                                               
are in  agreement to the  bill.   He explained that  the governor                                                               
has  expressed dislike  for SB  164  in his  public speeches  and                                                               
other comments.   He remarked  on the difference between  the Mr.                                                               
Griffin's opinion and that of [Legislative Legal Services].                                                                     
Number 1725                                                                                                                     
MR.  GRIFFIN  responded   that  he  didn't  think   there  was  a                                                               
difference  between his  opinion and  that of  [Legislative Legal                                                               
Services],  at least  in regard  to the  commerce clause  and the                                                               
equal protection  issue.  Rather,  the question is  whether there                                                               
is a better way to present [SB 164], ultimately, to the court.                                                                  
Number 1822                                                                                                                     
MR. GRIFFIN informed the committee  that he'd received the latest                                                               
version of SB 164.  He  recommended the following amendments:  On                                                               
page  3,   Section  3,  subparagraph  (b),   lines  14-17,  after                                                               
"operation  of  a  natural gas  pipeline",  delete  "following  a                                                               
'northern' or  'over-the-top' route  running east from  the North                                                               
Slope to Canada's  Mackenzie River Valley, then south  to link to                                                               
existing pipeline  networks to transport North  Slope natural gas                                                               
to  North  American  markets.";  and  add  "for  distribution  of                                                               
natural gas market".                                                                                                            
MR. GRIFFIN articulated the rationale  for that change, saying at                                                               
this time  a route  through the state's  submerged lands  off the                                                               
coast of  ANWR is not  in the best  interest of the  state, given                                                               
that  there is  another  federally approved  route  to get  North                                                               
Slope gas to foreign and interstate  markets.  The reason for the                                                               
change is  to generalize the  language as much as  possible while                                                               
still  accomplishing  the  legislative  purpose  at  hand.    Mr.                                                               
Griffin cautioned,  "By identifying the project  so specifically,                                                               
you open the door to technical legal arguments."                                                                                
MR.  GRIFFIN also  recommended  the  elimination of  subparagraph                                                               
(c), lines  18-22, from page  3 of the  bill, because he  said he                                                               
did  not think  that  language was  necessary  to accomplish  the                                                               
present legislative purpose.  He explained:                                                                                     
     It may  very well be  that even after  the construction                                                                    
     and operation  of a southern pipeline,  the legislature                                                                    
     might feel that  it's not in the  state's best interest                                                                    
     to  have a  sub-sea pipeline  off the  coast of  Alaska                                                                    
     that spans  100 or 150  miles.   We don't have  all the                                                                    
     facts ... today  to know whether that's going  to be in                                                                    
     the state's best interest or not.                                                                                          
MR.  GRIFFIN recommended  sticking  with  the legislative  policy                                                               
choice articulated  in [his amended]  subparagraph (b)  until the                                                               
legislature is presented  with enough evidence to  prove that the                                                               
over-the-top route is in the state's best interest.                                                                             
Number 2140                                                                                                                     
REPRESENTATIVE   GREEN  asked   whether  Mr.   Griffin's  concern                                                               
regarding subsection (b) is that  "without this indication of 'to                                                               
market'" it could jeopardize or  preclude a line, say, from Point                                                               
Thomson,  which  would  be  onshore  but  would  very  likely  be                                                               
handling gas.                                                                                                                   
MR. GRIFFIN responded:                                                                                                          
     I would not  see the language, as I proposed  it, as in                                                                    
     any way  prohibiting development of Point  Thomson gas,                                                                    
     unless  for some  reason it  was necessary  to run  the                                                                    
     Point  Thompson pipeline  immediately  adjacent to  the                                                                    
     Beaufort Sea or off the coast of the North Slope.                                                                          
REPRESENTATIVE GREEN clarified that his  concern was with the way                                                               
(b) is  written now.   He  asked Mr. Griffin  if his  concern was                                                               
that  the result  of passing  the bill  without the  modification                                                               
under discussion  would be to  jeopardize "shipping  gas adjacent                                                               
to the shoreline."                                                                                                              
MR. GRIFFIN  replied that the  concern centered  around arguments                                                               
that  might be  raised under  the commerce  clause and  the equal                                                               
protection  clause for  a gas  project that  fits the  definition                                                               
currently in subsection (b), whether  that project involved Point                                                               
Thomson or Prudhoe Bay.                                                                                                         
Number 2235                                                                                                                     
REPRESENTATIVE GREEN continued his line of questioning:                                                                         
     It may  ... seem foolish  now, but it's  possible, with                                                                    
     the gas  accumulation at Point Thomson,  there could be                                                                    
     significantly more gas in that  immediate area that may                                                                    
     ultimately prove better  to go east and  still have the                                                                    
     Prudhoe  Bay gas  [in] a  pipeline coming  down through                                                                    
     the state.                                                                                                                 
     And so  I'm wondering  if, because of  the way  this is                                                                    
     written,   would    that   preclude    Point   Thomson,                                                                    
     subsequently to a  gas line coming through  the state -                                                                    
     subsequent development  at Point Thompson -  going east                                                                    
     and  down the  Mackenzie?   Would (b)  prevent that  as                                                                    
     it's written now?                                                                                                          
MR. GRIFFIN responded that he believed it would.                                                                                
Number 2296                                                                                                                     
REPRESENTATIVE KERTTULA  pinpointed that the new  language of Mr.                                                               
Griffin's  proposed   amendment  preserves  the  intent   of  the                                                               
original  legislation,  uses  general rather  specific  language,                                                               
does  not interfere  with any  other projects,  and protects  the                                                               
right to  have offshore pipelines.   She described  Mr. Griffin's                                                               
amendment as  an effort to "get  away from an attack  on the face                                                               
of the legislation."  She asked Mr. Griffin to confirm that.                                                                    
MR. GRIFFIN concurred, saying he  was trying to avoid a potential                                                               
"facial"  challenge to  the bill,  based on  either the  commerce                                                               
clause or an equal protection argument.                                                                                         
REPRESENTATIVE  KERTTULA   asked  Mr.  Griffin  to   confirm  the                                                               
following statement:                                                                                                            
     Without this  language, ... if  you were a  company and                                                                    
     you  were   seeking  ...  an  alternative   route,  you                                                                    
     wouldn't even have  to come in and apply  for a permit,                                                                    
     potentially.   You  could just  go  straight to  court.                                                                    
     You'd never even have to  come through and try, because                                                                    
     you'd already be foreclosed.                                                                                               
MR. GRIFFITH answered that it could be a risk.                                                                                  
Number 2370                                                                                                                     
SENATOR TORGERSON  offered excerpts  of a  legal opinion  that he                                                               
said was "on point" to  Mr. Griffin's memo to another legislator.                                                               
He said he would supply copies  to members of the House Resources                                                               
Standing  Committee  only,  for   confidentiality  reasons.    He                                                               
mentioned  the  significance  of the  federal  government  having                                                               
spoken in  regard to the gas  pipeline issue, and how  SB 164 and                                                               
the objectives of federal policy  are congruent, according to the                                                               
author of  the letter.   Senator Torgerson  added that  he didn't                                                               
think  Mr.  Griffin believed  in  the  fundamental policies  that                                                               
this legislature was trying to set.                                                                                             
Number 2440                                                                                                                     
REPRESENTATIVE  KERTTULA  asked  Senator Torgerson  what  adverse                                                               
effect would  come from  adopting Mr.  Griffin's amendment.   She                                                               
also asked whether  it wouldn't be preferable  to "give ourselves                                                               
the chance to stand up to that kind of a legal challenge?"                                                                      
SENATOR  TORGERSON   replied  that   the  language   without  the                                                               
amendment was very clear and he liked it.                                                                                       
REPRESENTATIVE  KERTTULA made  a  motion to  adopt Mr.  Griffin's                                                               
amendment.    She explained  that  she  didn't believe  it  would                                                               
change the  intent of "this very  good idea."  Instead,  she told                                                               
members, it  "protects us against  facial challenges, puts  us on                                                               
better  footing in  the  courts,  and, with  due  respect to  the                                                               
sponsor, ... [follows] very good legal advice."                                                                                 
SENATOR TORGERSON reiterated that he opposed it.                                                                                
Number 2604                                                                                                                     
CO-CHAIR MASEK  called an at-ease.   She called the  meeting back                                                               
to order.                                                                                                                       
A roll  call vote  was taken.   Representative Kerttula  voted in                                                               
favor of  the amendment.  Representatives  Fate, Chenault, Green,                                                               
McGuire,   Stevens,  Masek,   and   Scalzi   voted  against   it.                                                               
[Representative Kapsner  was absent.]   Therefore,  the amendment                                                               
failed by a vote of 1-7.                                                                                                        
Number 2660                                                                                                                     
REPRESENTATIVE McGUIRE  moved to  report HCS  SB 164(O&G)  out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There being  no objection,  HCS SB  164(O&G) was                                                               
moved out of the House Resources Standing Committee.                                                                            
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 3:30 p.m.                                                                 

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