Legislature(2001 - 2002)

04/23/2001 01:15 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 23, 2001                                                                                         
                            1:15 pm                                                                                             
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 Mary Kapsner                                                                                                     
Representative Beth Kerttula                                                                                                    
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE CONCURRENT RESOLUTION NO. 17                                                                                              
Expressing the  legislature's support  for sale  of a  portion of                                                               
Alaska's  North Slope  natural gas  for electrical  generation to                                                               
power data centers within the North Slope Borough.                                                                              
     - HEARD AND HELD                                                                                                           
HOUSE BILL NO. 249                                                                                                              
"An Act relating to disposal  of certain property acquired by the                                                               
agricultural revolving loan fund."                                                                                              
     - MOVED HB 249 OUT OF COMMITTEE                                                                                            
HOUSE BILL NO. 244                                                                                                              
"An Act relating  to a grant of state land  to the Denali Borough                                                               
for a  railroad and utility  corridor and a  railroad development                                                               
project; repealing provisions relating to  a grant of a right-of-                                                               
way of  land for a  railroad and  utility corridor to  the Alaska                                                               
Industrial Development  and Export  Authority; and  providing for                                                               
an effective date."                                                                                                             
     - MOVED HB 244 OUT OF COMMITTEE                                                                                            
CONFIRMATION HEARINGS                                                                                                           
Board of Fisheries                                                                                                            
     Dr. John R. White - Bethel                                                                                                 
     Russell Nelson - Dillingham                                                                                                
     - HEARD AND HELD                                                                                                           
PREVIOUS ACTION                                                                                                               
BILL: HCR 17                                                                                                                  
SHORT TITLE:SALE OF NATURAL GAS TO POWER DATA CENTERS                                                                           
SPONSOR(S): RLS                                                                                                                 
Jrn-Date   Jrn-Page                     Action                                                                                  
04/20/01     1096       (H)        READ THE FIRST TIME -                                                                        
04/20/01     1096       (H)        RES                                                                                          
04/23/01                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
BILL: HB 249                                                                                                                  
SHORT TITLE:AG REVOLVING LOAN FUND PROPERTY DISPOSAL                                                                            
SPONSOR(S): REPRESENTATIVE(S)JAMES                                                                                              
Jrn-Date   Jrn-Page                     Action                                                                                  
04/20/01     1097       (H)        READ THE FIRST TIME -                                                                        
04/20/01     1097       (H)        RES                                                                                          
04/23/01                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
BILL: HB 244                                                                                                                  
SHORT TITLE:RIGHT-OF-WAY TO DENALI BOR. FOR RR/UTIL.                                                                            
SPONSOR(S): REPRESENTATIVE(S)JAMES                                                                                              
Jrn-Date   Jrn-Page                     Action                                                                                  
04/11/01     0959       (H)        READ THE FIRST TIME -                                                                        
04/11/01     0959       (H)        TRA, RES                                                                                     
04/17/01                (H)        TRA AT 1:00 PM CAPITOL 17                                                                    
04/17/01                (H)        Heard & Held                                                                                 
04/19/01                (H)        TRA AT 1:00 PM CAPITOL 124                                                                   
04/19/01                (H)        Moved Out of Committee                                                                       
04/20/01     1094       (H)        TRA RPT 3DP 2NR                                                                              
04/20/01     1094       (H)        DP: SCALZI, MASEK, KOHRING;                                                                  
04/20/01     1094       (H)        NR: KOOKESH, KAPSNER                                                                         
04/20/01     1094       (H)        FN1: (DNR)                                                                                   
04/20/01     1095       (H)        FIN REFERRAL ADDED AFTER RES                                                                 
04/20/01     1103       (H)        COSPONSOR(S): HARRIS, WILSON                                                                 
04/23/01     1151       (H)        COSPONSOR(S): SCALZI                                                                         
04/23/01                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
WITNESS REGISTER                                                                                                              
BOB EVANS                                                                                                                       
Netricity, LLC                                                                                                                  
Box 100384                                                                                                                      
Anchorage, Alaska 99510                                                                                                         
POSITION STATEMENT:  Provided opening remarks regarding                                                                         
Netricity's proposed project.                                                                                                   
JAMES DODSON, Executive Vice President                                                                                          
Andex Resources, LLC;                                                                                                           
Vice President, Netricity, LLC                                                                                                  
(No address provided.)                                                                                                          
POSITION STATEMENT:  Presented Netricity's proposed project on                                                                  
the North Slope.                                                                                                                
MARK MEYERS, Director                                                                                                           
Division of Oil & Gas                                                                                                           
Department of Natural Resources                                                                                                 
550 W 7th Avenue, Suite 800                                                                                                     
Anchorage, Alaska 99501-3560                                                                                                    
POSITION STATEMENT:  Presented the division's views on                                                                          
Netricity's proposed project.                                                                                                   
KEVIN BANKS, Petroleum Market Analyst                                                                                           
Division of Oil & Gas                                                                                                           
Department of Natural Resources                                                                                                 
550 W 7th Avenue, Suite 800                                                                                                     
Anchorage, Alaska 99501-3560                                                                                                    
POSITION STATEMENT:  Provided additional information regarding                                                                  
the division's study of natural gas.                                                                                            
PAUL FUHS, Lobbyist                                                                                                             
Pacific Yukon Corporation                                                                                                       
1635 Sitka Number 301                                                                                                           
Anchorage, Alaska 99501                                                                                                         
POSITION STATEMENT:                                                                                                             
BARBARA COTTING, Staff                                                                                                          
to Representative Jeanette James                                                                                                
Alaska State Legislature                                                                                                        
Capitol Building, Room 214                                                                                                      
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Testified on behalf of the sponsor of HB
REPRESENTATIVE JEANETTE JAMES                                                                                                   
Alaska State Legislature                                                                                                        
Capitol Building, Room 214                                                                                                      
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Testified as the sponsor of HB 249 and HB
CAROL CARROLL, Director                                                                                                         
Division of Support Services                                                                                                    
Department of Natural Resources                                                                                                 
400 Willoughby Avenue                                                                                                           
Juneau, Alaska 99801-1724                                                                                                       
POSITION STATEMENT:  Testified that DNR isn't certain that HB
249 corrects an oversight in [HB 116].                                                                                          
DEREK MORRIS, Farmer                                                                                                            
HC 30 Box 5329-AO                                                                                                               
Wasilla, Alaska 99687                                                                                                           
POSITION STATEMENT:  Testified in support of HB 249, but wants                                                                  
to ensure that the board obtains the maximum return to the                                                                      
GARY STROMBERG, Farmer                                                                                                          
(No address provided.)                                                                                                          
POSITION STATEMENT:  Expressed concern with the RFP.                                                                            
HARVEY BASKIN, Farmer                                                                                                           
(No address provided.)                                                                                                          
POSITION STATEMENT:  Testified in support of HB 249.                                                                            
ROBERT FRANKLIN, President                                                                                                      
Alaska Farm Bureau                                                                                                              
PO BOX 75184                                                                                                                    
Fairbanks, Alaska 99707                                                                                                         
POSITION STATEMENT:  Testified in support of HB 249.                                                                            
RACHEL HECKER                                                                                                                   
PO Box 870349                                                                                                                   
Wasilla, Alaska 99687                                                                                                           
POSITION STATEMENT:  Testified to the need to have open                                                                         
competitive bidding.                                                                                                            
TODD HECKER                                                                                                                     
PO Box 870349                                                                                                                   
Wasilla, Alaska 99687                                                                                                           
POSITION STATEMENT:  Testified on the need to dispose of the                                                                    
[Point MacKenzie] properties.                                                                                                   
MARK BROUILLET                                                                                                                  
PO Box 877465                                                                                                                   
Wasilla, Alaska 99687                                                                                                           
POSITION STATEMENT:  Testified in support of HB 249.                                                                            
DAVID HECKER, Partner                                                                                                           
Black Sun Farms                                                                                                                 
PO Box 870349                                                                                                                   
Wasilla, Alaska 99687                                                                                                           
POSITION STATEMENT:  Testified on HB 249.                                                                                       
CRAIG TRYTTEN, Dairy Farmer                                                                                                     
(No address provided.)                                                                                                          
POSITION STATEMENT:  Testified in support of HB 249.                                                                            
JOSEPH FIELDS, President                                                                                                        
Kantishna Holdings, Inc.                                                                                                        
PO Box 71047                                                                                                                    
Fairbanks, Alaska 99707                                                                                                         
POSITION STATEMENT:  Testified in support of HB 244.                                                                            
NANCY BALE, President                                                                                                           
Denali Citizens Council                                                                                                         
PO Box 240054                                                                                                                   
Anchorage, Alaska 99524                                                                                                         
POSITION STATEMENT:  Expressed concerns.                                                                                        
LINDA PAGANELLI                                                                                                                 
(No address provided.)                                                                                                          
POSITION STATEMENT:  Testified in opposition to HB 244.                                                                         
JOAN FRANKEVICH, Regional Staff                                                                                                 
Alaska Regional Office                                                                                                          
National Park Conservation Association                                                                                          
POSITION STATEMENT:  Testified in opposition to HB 244.                                                                         
DR. JOHN R. WHITE, Appointee                                                                                                    
Alaska State Board of Fisheries                                                                                                 
PO Box 190                                                                                                                      
Bethel, Alaska  99559                                                                                                           
POSITION  STATEMENT:   Testified  as appointee  to  the Board  of                                                               
RUSSEL NELSON, Appointee                                                                                                        
Alaska State Board of Fisheries                                                                                                 
PO Box 161                                                                                                                      
Dillingham, Alaska  99576                                                                                                       
POSITION  STATEMENT:   Testified  as appointee  to  the Board  of                                                               
PAUL A. SHADURA II, Self-appointed Board of Fisheries nominee                                                                   
PO Box 1632                                                                                                                     
Kenai, Alaska  99611-1632                                                                                                       
POSITION  STATEMENT:    Presented the  House  Resources  Standing                                                               
Committee  with reasons  to consider  him for  a position  on the                                                               
State of Alaska  Board of Fisheries, after  briefly testifying in                                                               
opposition to the reappointment of Dr. John White.                                                                              
JUDE HENZLER, Executive Director                                                                                                
Bering Sea Fishermen's Association (BSFA)                                                                                       
725 Christensen Drive                                                                                                           
Anchorage, Alaska  99501                                                                                                        
POSITION STATEMENT:   Testified  in support of  the reappointment                                                               
of  Dr.  John White  and  Mr.  Russell  Nelson  to the  Board  of                                                               
ROBERT WILLIAMS                                                                                                                 
PO Box 206                                                                                                                      
Kasilof, Alaska  99610                                                                                                          
POSITION STATEMENT:  Spoke in  opposition to the reappointment of                                                               
Dr. John White to the Board of Fisheries.                                                                                       
KEN LARSON                                                                                                                      
1074 Eliz Street                                                                                                                
North Pole, Alaska  99705                                                                                                       
POSITION STATEMENT:   Testified  in support of  the reappointment                                                               
of Mr. Nelson and Dr. White to the Board of Fisheries.                                                                          
VIRGIL UMPHENOUR                                                                                                                
878 Lynnwood Way                                                                                                                
North Pole, Alaska  99705                                                                                                       
POSITION STATEMENT:   Testified  in support of  the reappointment                                                               
of Mr. Nelson and Dr. White to the Board of Fisheries.                                                                          
PATRICK BOOKEY                                                                                                                  
PO Box 55194                                                                                                                    
North Pole, Alaska  99705                                                                                                       
POSITION STATEMENT:   Testified  in support of  the reappointment                                                               
of Mr. Nelson and Dr. White to the Board of Fisheries.                                                                          
CARL ROSIER, President                                                                                                          
Alaska Outdoor Council (AOC)                                                                                                    
8298 Garnet Street                                                                                                              
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Testified in support of  the reconfirmations                                                               
of Mr. Nelson and Dr. White.                                                                                                    
REUBEN HANKE                                                                                                                    
PO Box 624                                                                                                                      
Kenai, Alaska  99611                                                                                                            
POSITION STATEMENT:  Testified in  support of the reconfirmations                                                               
of Mr. Nelson and Dr. White.                                                                                                    
JOE HANES                                                                                                                       
PO Box 3132                                                                                                                     
Soldotna, Alaska  99669                                                                                                         
POSITION STATEMENT:  Testified in  support of the reconfirmations                                                               
of Mr. Nelson and Dr. White to the Board of Fisheries.                                                                          
DREW SPARLIN                                                                                                                    
37020 Cannery Road                                                                                                              
Kenai, Alaska  99611                                                                                                            
POSITION   STATEMENT:      Testified   in   opposition   to   the                                                               
reappointment of Dr. John White to the Board of Fisheries.                                                                      
AUSTIN AHMASUK                                                                                                                  
PO Box 1292                                                                                                                     
Nome, Alaska  99762-1292                                                                                                        
POSITION STATEMENT:   Recommended Dr. John White  and Mr. Russell                                                               
Nelson for confirmation to the Board of Fisheries.                                                                              
ACTION NARRATIVE                                                                                                              
TAPE 01-40, SIDE A                                                                                                              
Number 0001                                                                                                                     
CO-CHAIR  BEVERLY  MASEK  called  the  House  Resources  Standing                                                               
Committee meeting  to order at  1:15 p.m.   Representatives Fate,                                                               
Green, Chenault, Stevens,  Masek, and Scalzi were  present at the                                                               
call to  order.  Representatives  McGuire, Kapsner,  and Kerttula                                                               
arrived as the meeting was in progress.                                                                                         
HCR 17-SALE OF NATURAL GAS TO POWER DATA CENTERS                                                                              
CO-CHAIR MASEK  announced that the  first item of  business would                                                               
be   HOUSE  CONCURRENT   RESOLUTION   NO.   17,  Expressing   the                                                               
legislature's support  for sale  of a  portion of  Alaska's North                                                               
Slope  natural  gas  for  electrical  generation  to  power  data                                                               
centers within the North Slope Borough.                                                                                         
Number 0150                                                                                                                     
BOB   EVANS,  Representative,   Netricity,   LLC,  informed   the                                                               
committee that  Netricity is a  company that was formed  to place                                                               
an  Internet data  center  on  the North  Slope  by using  Alaska                                                               
natural  gas to  generate the  power for  the data  center.   Mr.                                                               
Evans  remarked  that projects  such  as  this don't  come  along                                                               
often, but when  they do it is important for  the state to review                                                               
the following.   Firstly, do  the people have the  credibility to                                                               
do what they  say they are going  to do.  Secondly,  do they have                                                               
the finances to do what they  propose.  Thirdly, will they have a                                                               
commitment  to Alaska  that will  benefit Alaska.   He  felt that                                                               
after the presentation, the committee  will agree that this is an                                                               
exciting opportunity for Alaska.                                                                                                
Number 0309                                                                                                                     
JAMES  DODSON, Executive  Vice President,  Andex Resources,  LLC;                                                               
Vice  President, Netricity,  LLC,  testified via  teleconference.                                                               
He informed the  committee that the ownership  of Netricity, LLC,                                                               
is currently 75 percent MDU  Resources Group and 25 percent Andex                                                               
Resources, LLC.  Andex Resources,  LLC, is a private company that                                                               
is primarily  engaged in natural gas  exploration and production.                                                               
Netricity, LLC,  is interested in  building a power plant  on the                                                               
North Slope co-located  with the natural gas  reserves located in                                                               
or near  the Prudhoe Bay unit.   The purpose would  be to utilize                                                               
the  electricity generated  on the  North Slope  in data  centers                                                               
packed with  computes that  host websites  and process  data over                                                               
the Internet.  Those computers  would be connected with the Lower                                                               
48 and Asia  via fiber optics that already  exists between Alaska                                                               
and the Lower 48 and Asia.                                                                                                      
MR. DODSON  explained that the  plan would  be to purchase  up to                                                               
118 million  cubic feet  (MCF) of  natural gas  per day  from the                                                               
State of Alaska out of its royalty  share of gas.  That amount of                                                               
gas  would  sufficient  to  power  approximately  a  500-megawatt                                                               
facility, which amounts to more  power than the City of Anchorage                                                               
consumes.    He noted  that  [Netricity,  LLC]  is looking  at  a                                                               
600,000 to 1 million server size  facility in excess of 1 million                                                               
square  feet in  size.   That  size facility  is currently  being                                                               
permitted in the Silicon Valley area by US Dataport.                                                                            
MR. DODSON  expressed the belief  that Alaska is  uniquely poised                                                               
to  take advantage  of this  opportunity because  it has  a large                                                               
amount of  natural gas that  is underutilized on the  North Slope                                                               
and has  a "stout"  fiber-optic connection  between the  Lower 48                                                               
and Asia.   Furthermore, the North Slope has  the ambient cooling                                                               
and  dry weather  that any  data center  would want.   The  North                                                               
Slope also  has tremendous physical  site security  because there                                                               
is basically  one access road.   The ability to  strictly control                                                               
access to Internet data centers  is very important.  Furthermore,                                                               
the reliability  of power  is very important  because one  of the                                                               
largest problems faced  by Internet data centers in  the Lower 48                                                               
is  the lack  of  available  power.   Moreover,  the power  being                                                               
utilized in the Lower 48 is  power that isn't really designed for                                                               
the data centers; the power  isn't clean or constant.  Therefore,                                                               
Mr. Dodson felt  that isolating this function on  the North Slope                                                               
could provide a  quality advantage, a cost  advantage, a physical                                                               
security advantage, and a cooling  advantage in comparison to the                                                               
Lower 48.                                                                                                                       
Number 0785                                                                                                                     
MR. DODSON,  in response to Representative  Fate, reiterated that                                                               
this data  center would use approximately  118 mcf of gas  a day.                                                               
The current plans  for moving gas off the North  Slope are in the                                                               
neighborhood of  4 bcf  (billion cubic feet)  a day  pipeline and                                                               
thus Netricity  would be one-fortieth  of that number.   However,                                                               
Netricity's use would be on  the North Slope and wouldn't detract                                                               
or displace any gas going into the pipeline.                                                                                    
REPRESENTATIVE FATE  asked if that  amounts to  about one-quarter                                                               
of  that 12.5  percent  royalty.   Representative Fate  explained                                                               
that he  was basing that on  4 bcf.   He also inquired as  to the                                                               
exact share  of the 12.5  percent royalty  on gas that  the state                                                               
currently enjoys.                                                                                                               
MR.  DODSON answered  that approximately  8  bcf a  day is  being                                                               
funneled through  Prudhoe Bay today.   Therefore, Netricity would                                                               
be looking  at one-eightieth of  that amount.  The  state's share                                                               
of that  8 bcf  a day  amounts to roughly  1 bcf  a day  and thus                                                               
Netricity would be looking at one-tenth of that amount.                                                                         
Number 0923                                                                                                                     
REPRESENTATIVE  GREEN inquired  as to  the location  of this  and                                                               
inquired  as  to what  would  be  done  with  the power  that  is                                                               
MR. DODSON  explained that the  power would  go to a  data center                                                               
that is  located approximately 100  feet to .5 mile  maximum from                                                               
the  power plant.   The  data center  would use  the power  right                                                               
there on  the North Slope.   Mr. Dodson related the  basic theory                                                               
that it doesn't  make sense to push gas, for  example, from Texas                                                               
to New York  to burn in a  power plant that powers  a data center                                                               
in New  York when the  light, that data  in the form  of photons,                                                               
could be  sent [to the  location of  the power].   Therefore, the                                                               
location  of the  Internet data  host doesn't  matter but  rather                                                               
it's important to  be able to move the electrons  to the location                                                               
where  the computers  are being  powered.   So, some  of Alaska's                                                               
former disadvantages,  its remoteness, colder climate,  and large                                                               
isolated gas supply, are viewed as advantages for this project.                                                                 
REPRESENTATIVE   GREEN  related   his   understanding  that   500                                                               
megawatts would be a "mammoth" communication center.                                                                            
MR. DODSON  agreed.  Depending upon  the size of the  servers and                                                               
processors  and their  individual process  demands, he  estimated                                                               
that  there would  be between  600,000 to  1 million  servers and                                                               
computers  working in  this  facility.   In  further response  to                                                               
Representative Green,  Mr. Dodson  explained that the  data would                                                               
arrive via a  GCI system that goes from Seattle  to Anchorage and                                                               
round to  Valdez on  to the  Trans-Alaska Pipeline  to Fairbanks.                                                               
Then there  would need  to be a  smaller fiber-optic  system that                                                               
would have  to be dug  from Fairbanks  to the Prudhoe  Bay field.                                                               
Another route  would be the World  Communications Infrastructure,                                                               
Inc., (WCI)  that moves from  Fairbanks along the  Alaska Railway                                                               
system,  down to  Anchorage, out  to sea,  and down  to Portland.                                                               
Both the GCI and WCI lines  have connections to the North Pacific                                                               
cable to Asia, specifically Japan.                                                                                              
MR.  DODSON, in  response to  Representative Green,  informed the                                                               
committee that based  on discussions with GCI  and what Netricity                                                               
views  as  dry land  changes  -  merely  a  switching of  gear  -                                                               
Netricity  believes that  there will  be sufficient  capacity and                                                               
redundancy  to   handle  the  data  traffic   from  the  facility                                                               
REPRESENTATIVE  GREEN inquired  as  to the  royalty gas  purchase                                                               
price rate.                                                                                                                     
MR. DODSON answered that the price  has yet to be negotiated with                                                               
the commissioner of  the Department of Natural  Resources, if the                                                               
contract  is finalized  and  approved by  the  legislature.   Mr.                                                               
Dodson said  that there  has been  review as  to when  a pipeline                                                               
would be  installed on  the North  Slope and  its volumes.   From                                                               
that, a  net present value  of natural  gas was determined  for a                                                               
typical 1,000 cubic foot unit on  the North Slope at a 10 percent                                                               
discount.  The following three  scenarios were developed:  65 tcf                                                               
(trillion cubic feet) moving out at  2.5 bcf a day; 65 bcf moving                                                               
out at 4.0 bcf a  day; 35 tcf moving out at 4.0 bcf  a day.  From                                                               
those the  highest net  present value for  the gas  currently was                                                               
determined to be $.36.  When  that number, $.36, was presented to                                                               
the Division of  Oil & Gas, the department's  economist said that                                                               
it has to determine what gas  is worth in the natural gas market.                                                               
However, Netricity  doesn't see  a natural gas  market to  tie to                                                               
and thus  the aforementioned scenarios  were utilized.   Although                                                               
selling into  Chicago is a  different market than selling  on the                                                               
North Slope, it was difficult to  determine how else to develop a                                                               
Number 1355                                                                                                                     
REPRESENTATIVE GREEN referred  to page 2 of HCR  17, which refers                                                               
to "substantial  added value to Alaska's  natural gas resources".                                                               
Although he wasn't sure what  "substantial" is, he suggested that                                                               
$.36  is somewhat  low.    Therefore, he  asked  if Netricity  is                                                               
prepared to move forward if the cost is higher.                                                                                 
MR. DODSON,  in response  to whether the  project would  still be                                                               
workable at  $.72, said  that the  numbers would  have to  be run                                                               
again.   Although he said that  it could probably work,  he noted                                                               
that other  factors come into play  such as the debt  the company                                                               
could obtain and  whether the North Slope Borough  would help the                                                               
company  underwrite  some  notes  to lower  costs.    Mr.  Dodson                                                               
pointed out  that the ability  to bring  the data centers  to the                                                               
North  Slope  is  inversely  proportionate to  the  cost  of  the                                                               
electricity.   Therefore,  the lower  the  cost of  the gas,  the                                                               
lower  the   cost  of  the   electricity,  which   increases  the                                                               
likelihood  of  placing  a  data   center  at  the  North  Slope.                                                               
However, in the  end the Internet data center market  will be the                                                               
determining factor.                                                                                                             
MR. DODSON  pointed out that the  $.36 was not an  attempt to low                                                               
ball the  project but rather  it was based on  discount scenarios                                                               
based  on  what  was  viewed   as  possible  pipeline  scenarios.                                                               
Furthermore,  Netricity  would  be  competing  with  a  different                                                               
market [because] the  gas would be used on the  North Slope.  Mr.                                                               
Dodson informed the  committee that he had  attended a conference                                                               
on Arctic  gas at  which Governor  Knowles estimated  that Alaska                                                               
has around  70 years worth  of gas to  move out  at 4 bcf  a day.                                                               
Therefore, regardless  of what  Netricity does  or doesn't  do on                                                               
the North  Slope, 4  bcf a day  will move out.   If  Netricity is                                                               
able to  come in and create  an incremental one-tenth of  a bcf a                                                               
day market, basically  Netricity would be using gas  that is cued                                                               
to move  forward.   Since there  is so much  gas waiting  to move                                                               
down the pipeline,  Netricity is saying that it can  turn it into                                                               
cash now while employing Alaskans,  adding value to the resource,                                                               
and placing Alaska  in the position of being a  major node on the                                                               
REPRESENTATIVE GREEN reiterated that his  concern is in regard to                                                               
the "substantial  added value".  He  noted that gas sales  to the                                                               
Mid-continent  (ph) are  perhaps  only one  of three  alternative                                                               
under review.   Representative Green  said that he  merely wanted                                                               
to  be sure  that  the project  wasn't hinging  on  a fairly  low                                                               
Number 1678                                                                                                                     
MR.  DODSON, in  response  to  Representative Stevens,  estimated                                                               
that there would  be between 250-300 full-time jobs  if the power                                                               
plant  can reach  500  megawatts  and the  data  center is  fully                                                               
built.  Those jobs will be on  a schedule similar to that used by                                                               
the oil industry, a two weeks on/two weeks off schedule.                                                                        
REPRESENTATIVE STEVENS asked if there  is any commitment to train                                                               
and employ Alaskans.                                                                                                            
MR.  DODSON replied  yes and  remarked that  there are  two major                                                               
opportunities.   First,  there  is the  opportunity  to bring  in                                                               
Native  Alaskans and  allow them  to train  at the  University of                                                               
Alaska.  The  work would mainly be swapping out  boards and power                                                               
supplies when  things fail.   Second, if  Native Alaskans  can be                                                               
utilized for this employment, they  could have the opportunity to                                                               
access both the  cash economy and the subsistence  economy.  That                                                               
is with  a two weeks  on/two weeks off schedule,  Native Alaskans                                                               
can maintain more  of a Native lifestyle while  still accessing a                                                               
cash economy.                                                                                                                   
MR.  DODSON, in  response to  Representative Fate,  answered that                                                               
the 500  megawatts and the  118 mcf  are peak loads.   Therefore,                                                               
the data center wouldn't run at that capacity all the time.                                                                     
Number 1834                                                                                                                     
MARK  MEYERS, Director,  Division  of Oil  &  Gas, Department  of                                                               
Natural Resources, testified via  teleconference.  On the surface                                                               
Netricity's  proposal  is  "a  neat idea"  and  the  division  is                                                               
delighted  with  the possibility  of  selling  gas on  the  North                                                               
Slope.   Although there is no  initial opposition to the  sale of                                                               
North Slope  gas, there is  [a question] as  to what that  gas is                                                               
worth.  In  order to provide a baseline, Mr.  Meyers informed the                                                               
committee that  gas is  sold to  run utilities  and to  help fund                                                               
TAPS  [and  from  that  the  division]  receives  $1.12  in  mcf.                                                               
Therefore, the $.36  proposed by Netricity is  roughly 25 percent                                                               
of  what is  received from  the current  gas sales  on the  North                                                               
Slope and  is 10 percent  less than  the current retail  value of                                                               
that gas in  Chicago.  Mr. Meyers said that  the real question is                                                               
how   one   evaluates   large,  significant   volumes   of   gas.                                                               
"Certainly,  if  we  were  to   value  it  under  what  we  could                                                               
competitively  get  for  the  gas,  it  would  be  a  substantial                                                               
subsidy,  on   the  order   of  tens   of  millions   of  dollars                                                               
potentially, which  would go directly against  royalty value that                                                               
again, is money  directed to the permanent and  general fund," he                                                               
said.   Therefore, there is  the challenge to [find]  a realistic                                                               
and fair  valuation mechanism for this  major sale of gas   while                                                               
[dealing] with  a long-term contract.   A long-term  option would                                                               
be difficult without  having a better handle on  the valuation of                                                               
North Slope gas.                                                                                                                
Number 1949                                                                                                                     
KEVIN BANKS,  Petroleum Market  Analyst, Division  of Oil  & Gas,                                                               
Department  of Natural  Resources, testified  via teleconference.                                                               
Mr.  Banks mentioned  that  when he  first  heard of  Netricity's                                                               
proposal  he viewed  it with  skepticism, which  has since  grown                                                               
into excitement.  There is real  merit in what Netricity wants to                                                               
do.  However,  "It all depends on  the price," he said.   At this                                                               
point, there are many proposals for  sales of North Slope gas and                                                               
it seems  that the state is  in a somewhat uncertain  position in                                                               
regard  to  what will  move  forward.    Mr. Banks  informed  the                                                               
committee  that  as  part  of  the  fast  track  budget  and  the                                                               
governor's initiative  to commercialize natural gas  on the North                                                               
Slope, the  division has proposed  a couple of studies  that will                                                               
look at the in-state demand  for natural gas, how royalty in-kind                                                               
gas  might  be  used  to  meet that  demand,  and  the  important                                                               
mechanisms that  should be considered  when developing  the value                                                               
of  the  natural gas.    Although  these studies  haven't  begun,                                                               
funding  has  been received  for  part  of  them.   The  division                                                               
intends  to develop  an RFP  and  move forward  on these  studies                                                               
soon.   Mr. Banks  pointed out  that a  best interest  finding is                                                               
required in any  disposition of royalty oil  in-kind.  Therefore,                                                               
these  studies will  support the  findings that  the commissioner                                                               
will have  to make before  selling the  gas.  For  those reasons,                                                               
the  division  intends to  move  forward  and will  include  data                                                               
centers as  a potential  in-state demand in  the study  of future                                                               
REPRESENTATIVE   McGUIRE   inquired   as    to   how   long   the                                                               
aforementioned study would take.                                                                                                
MR. MEYERS  answered that the  intent is to have  the information                                                               
[from the  study] available  in the  November/December timeframe,                                                               
which is when the division hopes to hear from the producers.                                                                    
Number 2199                                                                                                                     
PAUL  FUHS, Lobbyist,  Pacific  Yukon  Corporation, testified  in                                                               
support of  [HCR 17].   Mr.  Fuhs said that  he would  raise some                                                               
issues that  relate directly to this  resolution as well as  to a                                                               
gas line development  project.  In regard to  why this resolution                                                               
is even necessary,  Mr. Fuhs pointed out that  the producers have                                                               
been unwilling to sell Alaska's  gas to anybody, including anyone                                                               
in  the  area  because  it would  establish  a  well-head  value.                                                               
However,  the producers  sell gas  between themselves  from which                                                               
the state  receives no royalty  value.  Although  [the producers]                                                               
testified in the House Special Committee  on Oil and Gas that the                                                               
gas line isn't economic, they had  no well-head value on which to                                                               
base  [that   statement].     Additionally,  the   House  Special                                                               
Committee on Oil and Gas  heard testimony that the realignment on                                                               
the North  Slope, between  the differing  oil and  gas ownership,                                                               
hasn't taken place  because a couple of  companies have objected.                                                               
Furthermore, there is  not a gas balancing  agreement between the                                                               
companies that would  even allow a gas sale.   Therefore, all the                                                               
barriers to the sale of gas on the North Slope remain.                                                                          
MR.  FUHS then  turned to  the state  royalty gas.   He  recalled                                                               
testimony from the  department that royalty gas is  being sold on                                                               
the North Slope.  However,  he understood that the state couldn't                                                               
have any access  to its royalty gas until it  left the hydrologic                                                               
unit.   Perhaps being on the  North Slope is considered  to be on                                                               
the hydrologic  unit.  Therefore,  Mr. Fuhs pointed out  that all                                                               
the state's lease gas is locked up  on the North Slope as well as                                                               
all  the  state's  royalty  gas.    Mr.  Fuhs  said,  "Maybe  the                                                               
department  could negotiate  a side  deal with  this company  for                                                               
access to the gas or maybe  it's considered to not be leaving the                                                               
hydrologic unit."   These are some the issues  that will continue                                                               
to  be  raised  with  other   legislation.    However,  Mr.  Fuhs                                                               
clarified that  he didn't believe  that HCR 17 should  be delayed                                                               
because  the  legislature  will  have the  ultimate  say  with  a                                                               
royalty gas sale.                                                                                                               
Number 2368                                                                                                                     
REPRESENTATIVE McGUIRE  recalled a  conversation with  Mr. Dodson                                                               
regarding the construction employment  that this proposed project                                                               
would bring  to the North Slope.   She requested that  he provide                                                               
the committee with that information.                                                                                            
MR.  DODSON  informed  the  committee  that  a  modular  building                                                               
expertise  has  been developed  in  Anchorage  and Nikiski.    He                                                               
explained  that  modularization,  to   the  extent  possible,  is                                                               
important on the North Slope.   Mr. Dodson noted that he expected                                                               
the  turbines to  come  out of  the Houston  Ship  Channel to  be                                                               
shipped to the  North Slope.  There is also  the expectation that                                                               
the  data centers  will be  built on  a modular  basis in  either                                                               
Anchorage or Nikiski or both areas.                                                                                             
Number 2439                                                                                                                     
REPRESENTATIVE STEVENS asked if  other industries beside the data                                                               
centers would  find it appropriate to  locate at the site  of the                                                               
energy source.                                                                                                                  
MR. BANKS  answered that he thought  of a gas to  liquids project                                                               
in which  liquids can be  manufactured and pumped along  with the                                                               
oil [on TAPS].                                                                                                                  
MR.  MEYERS   pointed  out  the  long-term   possibility  of  the                                                               
efficiency  in the  generation and  transmission of  electricity.                                                               
That  is,   superconductivity  would  allow  electricity   to  be                                                               
transmitted over long distances without losing power.                                                                           
Number 2519                                                                                                                     
REPRESENTATIVE FATE  asked if the  projections have built  in any                                                               
surplus  energy for  local  use  or for  the  possibility of  the                                                               
aforementioned break through in technology for transmission.                                                                    
MR. MEYER  answered that [the  department] is looking at  that in                                                               
terms  of the  study  that  is being  done  now.   Although  this                                                               
Netricity  idea  caught the  department  by  surprise, it  is  an                                                               
intriguing idea.   Mr. Meyer said, "The other ...  thing to think                                                               
on the North Slope  too is we see a lot  of up-side potential for                                                               
additional gas other  than the gas at Prudhoe."   For example, in                                                               
the North Slope Foothills or the  Point Compton Fields.  "We want                                                               
to  encourage  additional  exploration  for  other  supplies  and                                                               
development  of other  currently known  reserves.   So, all  this                                                               
could fit in  the equation," he said.  However,  the challenge is                                                               
the proposed $.37  mcf price, a price that  every community would                                                               
love to  have.  The challenge  is to have a  fair methodology for                                                               
supplying gas.   He noted  that the  demand study is  supposed to                                                               
encompass gas  at various prices.   Once the value of  the gas is                                                               
known, then  the demand can  be "reverse engineered"  because the                                                               
cheaper the gas, the more demand is created.                                                                                    
MR.  DODSON   informed  the   committee  that   Netricity's  plan                                                               
anticipates putting  in place 14  turbines with 45  megawatts, of                                                               
which 11 turbines  will have 495 megawatts, which  is full usage.                                                               
Of the three  other turbines, at least one would  be turning full                                                               
time, which would  allow the sale of interruptible  power and the                                                               
ability to pick  up any drop in power from  the landline turbines                                                               
when going offline.   He indicated that the  second turbine could                                                               
run  and  service  the  local market,  which  he  didn't  foresee                                                               
increasing above 20 megawatts.   Therefore, there would be excess                                                               
generating capacity on the North Slope.                                                                                         
Number 2698                                                                                                                     
REPRESENTATIVE GREEN remarked that  he didn't recall ever passing                                                               
a  resolution  that  named  a  specific company  as  in  HCR  17.                                                               
Therefore, he  mentioned the  possibility of on  page 1,  line 8,                                                               
deleting "Netricity, L.L.C., an  Alaska limited liability company                                                               
is seeking to" and inserting,  "there have been several expressed                                                               
interests".   Such a  language change  would eliminate  the state                                                               
predetermining an  interest in a  specific company.  He  asked if                                                               
that would be problematic.                                                                                                      
MR.  EVANS  related  his  belief that  there  hasn't  been  other                                                               
expressions of interest  to place an Internet data  center on the                                                               
North Slope.  Mr. Evans pointed  out that HCR 17 is a resolution,                                                               
not legislation,  and as such is  merely an effort to  suggest to                                                               
the administration that the legislature  believes that this is an                                                               
opportunity  to negotiate  with Netricity  in order  to determine                                                               
the price.   Therefore, Mr.  Evans said that naming  Netricity is                                                               
useful because it  is the only company suggesting such  a use and                                                               
desire to enter into negotiations with the state.                                                                               
MR. EVANS pointed  out that the problem of  Internet data centers                                                               
not having  enough energy in  the Lower  48 is a  problem begging                                                               
for  a solution.   The  solution, in  the form  of HCR  17, is  a                                                               
solution  that he  suggested Alaska  move on  relatively quickly.                                                               
He informed  the committee that the  Tennessee Valley Association                                                               
sees itself  as a  solution to  the lack  of energy  for Internet                                                               
data centers in the  Lower 48 as do other areas  in the Lower 48.                                                               
Furthermore, the  trapped gas in  Canada is a  potential solution                                                               
to  this problem.   Therefore,  failing to  move quickly  in this                                                               
area may result in the lose of an opportunity.                                                                                  
REPRESENTATIVE  GREEN said  that rushing  in  at a  rate that  is                                                               
later found to be much higher  would do a gross disservice to the                                                               
people of Alaska.   Therefore, he was nervous with  the notion of                                                               
grabbing it  now or  else it  will be  gone.   Such a  notion was                                                               
heard in relation  to the merger, but it was  "a bag of garbage."                                                               
In  response to  Mr.  Evans'  point that  Netricity  is the  only                                                               
company   that   has  come   forward   with   such  a   proposal,                                                               
Representative Green  suggested that his  aforementioned language                                                               
change  on page  1, line  8, be  in the  singular:   "has had  an                                                               
expressed interest".   He maintained  his concern with  the state                                                               
specifying favor of a specific [company] in a resolution.                                                                       
MR. EVANS  turned to  the price  issue and  pointed out  that the                                                               
resolution doesn't  contain anything about the  price.  Netricity                                                               
wants  to  negotiate  with  the   state  in  order  to  reach  an                                                               
appropriate  price.     In  regard  to   [Representative  Green's                                                               
language  change],  Mr.  Evans   left  that  to  the  committee's                                                               
discretion while pointing out that  Netricity has made the effort                                                               
to come to Alaska in order  to make this opportunity available to                                                               
themselves [as well as the state].                                                                                              
TAPE 01-40, SIDE B                                                                                                              
MR. EVANS  continued, "...  to have the  opportunity to  at least                                                               
have some  ownership of this  notion as we  talk about it  in the                                                               
CO-CHAIR  MASEK  announced  that   she  was  closing  the  public                                                               
discussion of  HCR 17 and  opening up committee discussion.   She                                                               
inquired as  to Representative Green's  intent with  his proposed                                                               
REPRESENTATIVE  GREEN   explained  that  he  was   attempting  to                                                               
determine  whether  the  resolution had  to  include  Netricity's                                                               
name.    Now   that  the  public  discussion   has  been  closed,                                                               
Representative Green  announced that he would  offer his previous                                                               
language change as an amendment.                                                                                                
CO-CHAIR MASEK  announced that  she is  opposed to  the amendment                                                               
because  as Mr.  Evans said,  this  is merely  a resolution  that                                                               
doesn't  bind the  legislature.   Furthermore, whatever  business                                                               
that results from this resolution  will have to be worked through                                                               
the  administration and  the legislative  body.   Co-Chair  Masek                                                               
noted her  support of HCR 17  because it brings jobs  and dollars                                                               
to the state and it opens new doors for the state.                                                                              
REPRESENTATIVE FATE suggested that  the concern could be resolved                                                               
by  inserting  "the  concept  of"   on  page  2,  line  2,  after                                                               
CO-CHAIR MASEK, in response  to Representative Stevens, clarified                                                               
that [Representative  Green's] amendment is before  the committee                                                               
to which she objected.                                                                                                          
REPRESENTATIVE GREEN clarified his amendment as follows:                                                                        
     Page 1, line 8,                                                                                                            
          Delete "Netricity, L.L.C., an Alaska limited                                                                          
     liability company is seeking"                                                                                              
          Insert, "there has been an expressed interest"                                                                        
REPRESENTATIVE  STEVENS  said  that he  believes  he  understands                                                               
Representative Green's concern,  which he shares.   "I think it's                                                               
a  little disingenuous  to  say  we're ...  going  to throw  this                                                               
company's  name  in there  ...,  but  we  don't really  mean  it.                                                               
That's not really  the case.  If we pass  the resolution that has                                                               
the  company's name  in  it, it  has  significance" he  remarked.                                                               
Perhaps  the  amendment  could  be  changed  such  that  it  uses                                                               
language that says  "there have been companies  such as Netricity                                                               
who are  interested."  Representative Stevens  expressed the need                                                               
to  direct the  administration to  review all  firms that  may be                                                               
Number 2729                                                                                                                     
REPRESENTATIVE  FATE reiterated  his suggestion  that on  page 2,                                                               
line 2, after "supports", the  language "the concept of" could be                                                               
inserted in order to allow more "wiggle room."                                                                                  
REPRESENTATIVE GREEN said  that still "smacks back  to selling to                                                               
Netricity."    He reiterated  that  he  has never  seen  specific                                                               
companies  specified  in  resolutions.   He  felt  that  language                                                               
imparting  that the  "DOG"  of  DNR is  in  favor  of this  would                                                               
strengthen this  significantly and perhaps may  be more important                                                               
than specifying a company.                                                                                                      
MR.  MEYERS  remarked  that   he  shared  Representative  Green's                                                               
concern.   He  identified  the  challenge as  which  gas is  sold                                                               
first.   When the netback  from Chicago  is reviewed in  order to                                                               
calculate how $.37 is determined, then  the value of that gas has                                                               
to be  discounted well into  the future.   He used  the following                                                               
example to illustrate how the $.37 was determined:                                                                              
     Suppose you were  out to buy a new car  and you went to                                                                    
     the car  lot and there were  ten brand new cars  of the                                                                    
     same type sitting  on the lot.  And  you negotiate with                                                                    
     the car salesman saying, "I'm  not going to buy the car                                                                    
     that's going to  sell this year.  I know  all those ten                                                                    
     cars,  you're not  going to  sell one  for five  years.                                                                    
     Therefore, I'm going  to give you a lot  less value for                                                                    
     that car because  that car isn't going off  the lot for                                                                    
     five years."                                                                                                               
MR. MEYERS  pointed out that  everyone would  want to be  in that                                                               
position, which  is a challenge.   He related his belief  that if                                                               
the  gas were  sold  at Netricity's  heavily  reduced rate,  many                                                               
others would  develop creative situations  to purchase gas.   Mr.                                                               
Meyers   reiterated  that   he  would   have  concerns   if  [the                                                               
resolution's  language]  is  giving  a clear  indication  that  a                                                               
specific  project has  priority over  another's because  the full                                                               
evaluation necessary  to [determine] the value  hasn't been done.                                                               
He  posed the  question:   "Does this  legislation [HCR  17] give                                                               
them [Netricity]  a competitive advantage  on the North  Slope in                                                               
purchasing royalty gas?"                                                                                                        
Number 2365                                                                                                                     
CO-CHAIR  MASEK announced  that  her staff  would  work with  the                                                               
sponsor of HCR  17, which will be before the  committee with some                                                               
positive amendments  on Wednesday.   This  is an  important issue                                                               
for the state.  [HCR 17 was held.]                                                                                              
HB 249-AG REVOLVING LOAN FUND PROPERTY DISPOSAL                                                                               
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be HOUSE  BILL NO. 249, "An  Act relating to disposal  of certain                                                               
property acquired by the agricultural revolving loan fund."                                                                     
BARBARA COTTING,  Staff to Representative Jeanette  James, Alaska                                                               
State Legislature,  pointed out that the  committee packet should                                                               
include a copy  of SLA 2000, Chapter 81, which  is last year's HB
116.  Ms. Cotting explained that  HB 249 corrects an oversight in                                                               
last year's  HB 116, which  created the Board of  Agriculture and                                                               
Conservation.   Last  Fall the  board was  selected and  has been                                                               
meeting  on a  monthly  basis  ever since.    The  board and  its                                                               
attorney from the  Department of Law were in the  second phase of                                                               
drafting  regulations authorized  by  the new  statute when  they                                                               
discovered a problem.  She  directed the committee's attention to                                                               
the bottom of  page 9 of SLA  [2000 Chapter 81].   There the last                                                               
line  says,  "Disposal  shall   be  conducted  under  regulations                                                               
approved by  the commissioner."   That language is changed  in HB
249  to  say,  "Disposal  shall be  conducted  under  regulations                                                               
adopted by  the board."   This  change would  allow the  Board of                                                       
Agriculture   and  Conservation   to   continue  functioning   in                                                               
accordance with original legislative intent.                                                                                    
Number 2180                                                                                                                     
REPRESENTATIVE JEANETTE JAMES, sponsor of HB 249, explained:                                                                    
     When  we   made  the  board  be   responsible  for  the                                                                    
     agricultural revolving  loan fund  that is  under their                                                                    
     purview.  And  then when it comes to  them disposing of                                                                    
     land  that is  in there  because it's  been repossessed                                                                    
     ...  so they  have  assets in  this,  that they  should                                                                    
     determine the way  that they would dispose  of those as                                                                    
     they  are managing  the  [agricultural] revolving  loan                                                                    
Representative James acknowledged that  there is an argument that                                                               
the  Department  of  Agriculture, under  which  the  agricultural                                                               
revolving loan fund  (ARLF) falls, should have  some oversight by                                                               
the commissioner.  She said that  she is willing to work with the                                                               
department on that issue.                                                                                                       
REPRESENTATIVE   JAMES  pointed   out   that   the  Director   of                                                               
Agriculture is also the hired  person for the Agricultural Board.                                                               
Representative James also pointed  out, "It's very interesting to                                                               
note that this same money that  they're supposed to be in control                                                               
over, we spend every year just to  pay for the people who work in                                                               
the Division  of Ag."   Although this has  been a sore  spot with                                                               
many  farmers, she  didn't  see any  immediate  future in  moving                                                               
beyond  that.    Therefore,  this  will only  work  if  there  is                                                               
cooperation with everyone.                                                                                                      
Number 2032                                                                                                                     
CAROL   CARROLL,   Director,   Division  of   Support   Services,                                                               
Department   of  Natural   Resources  (DNR),   acknowledged  that                                                               
although DNR  has not  had much  time to review  HCR 17,  she and                                                               
Representative James  have been  discussing the resolution.   Ms.                                                               
Carroll   mentioned  that   she   had  made   some  comments   to                                                               
Representative  James  regarding   the  connections  between  the                                                               
executive  branch boards  and  the  regulations, the  rule-making                                                               
body.   She agreed on  the importance  to work jointly,  which is                                                               
intended.  Therefore,  she and the department are  looking into a                                                               
way to say such so that an agreement can be reached.                                                                            
REPRESENTATIVE  GREEN asked  if Ms.  Carroll viewed  HB 249  as a                                                               
correction for an oversight [of HB 116].                                                                                        
MS.  CARROLL  answered  that  she  wasn't  certain  that  HB  249                                                               
corrects an oversight and thus she is present.                                                                                  
Number 1949                                                                                                                     
DEREK  MORRIS,  Hay  Farmer,  testified  via  teleconference  and                                                               
mentioned that he wants to  purchase a parcel at Point MacKenzie.                                                               
Mr. Morris announced  that he is in support of  HB 249.  However,                                                               
he expressed concern with the language  on page 1 that says, "The                                                               
regulations must  ensure that the  property is disposed of  so as                                                               
to  maximize  the   return  to  the  state".     He  related  his                                                               
understanding that possibly there  are some request for proposals                                                               
(RFPs) for property for which  the appraisals being used are four                                                               
years  old.   Therefore, it  seems that  if the  state sells  the                                                               
property based on  those appraisals, the state  won't receive its                                                               
proper return on  their parcels.  He said that  the ARLF needs to                                                               
have those funds in order  to have other agricultural activities.                                                               
Mr. Morris concluded by reiterating  that he supports HB 249, but                                                               
he wants to  ensure that the board obtains the  maximum return to                                                               
the state.                                                                                                                      
GARY  STROMBERG testified  via teleconference.   He  informed the                                                               
committee that  he has been  a farmer  at Point MacKenzie  for 18                                                               
years.  Mr.  Stromberg expressed concern with  the recent actions                                                               
with the RFP  in which there have been attempts  to designate who                                                               
receives properties  with values  that are different  than market                                                               
value.   Whatever rules are  established must conform  with state                                                               
law and  thus maximize the  return to  the state.   Mr. Stromberg                                                               
noted that  he sent  a letter  to Representative  James regarding                                                               
the problems there have been  with the [Division] of Agriculture.                                                               
He felt  that some  rules have  to be  developed so  that farmers                                                               
aren't turned  against each other  or it  would be better  not to                                                               
have a [Division] of Agriculture.                                                                                               
Number 1760                                                                                                                     
HARVEY  BASKIN  testified  via teleconference  and  informed  the                                                               
committee  that  he is  one  of  the  original farmers  at  Point                                                               
MacKenzie.  Although  he is a member of the  Board of Agriculture                                                               
and Conservation, he  is speaking as a farmer.   Mr. Baskin noted                                                               
his support of HB 249 because  it clarifies the intent of HB 116.                                                               
He related  his understanding that  the Board of  Agriculture and                                                               
Conservation was appointed to manage,  monitor, and have input on                                                               
all disposals  of agricultural  land.  However,  if part  of that                                                               
authority lies in another state  office, then it is difficult for                                                               
a buyer or board member to answer  to two bosses.  He inquired as                                                               
to  which set  of  regulations  would one  abide  by when  making                                                               
decisions.   Therefore, he stated  that the authority  to dispose                                                               
of  state  land with  a  maximum  value  is  one of  the  primary                                                               
responsibilities of the  board and the people  who help supervise                                                               
the management of  the land.  Mr. Baskin related  his belief that                                                               
outcry bidding is probably the fairest process.                                                                                 
Number 1619                                                                                                                     
ROBERT  FRANKLIN, President,  Alaska Farm  Bureau, testified  via                                                               
teleconference in  support of HB  249.  The  original legislative                                                               
intent was for  the board to control the  entire fund, everything                                                               
that is included under the  definition of property.  Mr. Franklin                                                               
expressed concern  with maximizing the  return to the state.   In                                                               
that regard, he  agreed with Mr. Baskin that  outcry bidding does                                                               
establish the  value of  it.  However,  the Point  MacKenzie land                                                               
will probably be in a [price]  range that exceeds [what one would                                                               
pay for] agricultural purposes.                                                                                                 
Number 1498                                                                                                                     
RACHEL  HECKER  testified  via   teleconference  and  noted  that                                                               
although she is the Mat-Su  representative for the Alaska Farmers                                                               
Union, today she is speaking as  the newest dairy farmer at Point                                                               
MacKenzie.   Ms. Hecker expressed  concern with the  lease tracts                                                               
that were  "given over"  without due  process, that  is [farmers]                                                               
weren't allowed to  bid on them.  Since those  weren't put out to                                                               
competitive  bid,  the  state's  return wasn't  maximized.    Ms.                                                               
Hecker informed the  committee that she was told  late last year,                                                               
early this year  that she could bid on those  lease properties in                                                               
the Spring just  like everyone else.  However, at  the last board                                                               
meeting it was  stated that there was no one  interested in those                                                               
lease properties and thus it was  in the board's best interest to                                                               
return the land to those that  were leasing them.  Therefore, Ms.                                                               
Hecker  expressed her  desire to  sell the  land in  an open  and                                                               
competitive  bid process  and the  land that  can't be  sold yet,                                                               
should be leased to the highest bidder.                                                                                         
TODD  HECKER testified  via teleconference  and  agreed with  his                                                               
wife that  he would like  to have the  opportunity to bid  on the                                                               
[Point MacKenzie]  land, which was  clearly brought forth  at the                                                               
[board] meeting although [the board]  didn't acknowledge it.  Mr.                                                               
Hecker  explained that  he purchased  his land,  a bare  piece of                                                               
property, for $400,000 and placed  $.5 million worth in buildings                                                               
on the  property because  the state  has "forced  our hand  to do                                                               
that."   When he first moved  to this location, he  was told that                                                               
another place would be for sale,  which has been the case for the                                                               
past four  years.   This is  a piece of  property for  which [the                                                               
board] is  planning on using  an RFP.  Those  practices shouldn't                                                               
happen that  way.  He charged  that there is much  property being                                                               
held in order to justify jobs.   Mr. Hecker said, "If the state's                                                               
going to  maximize their  benefits out of  this and  their price,                                                               
they should  sell it now  because the market  is as good  as it's                                                               
ever  going to  be  down there  and the  last  sales have  proved                                                               
Number 1230                                                                                                                     
MARK BROUILLET testified via teleconference.   He began by saying                                                               
that he has  been interested in acquiring some  property at Point                                                               
MacKenzie,  but he  has run  into some  problems.   Therefore, he                                                               
felt that HB 249 may help alleviate some of his concerns.                                                                       
DAVID   HECKER,  Partner,   Black   Sun   Farms,  testified   via                                                               
teleconference that he is interested  in bidding on land at Point                                                               
MacKenzie.    Mr.  Hecker  noted that  during  the  last  bidding                                                               
process he bid on Number 10,  which was appraised at $240,000 and                                                               
sold to someone else for $305,000.   That is money in the state's                                                               
CRAIG TRYTTEN,  Dairy Farmer, testified via  teleconference.  Mr.                                                               
Trytten stated  his support  of HB  249 so  that the  state could                                                               
receive  the best  return  on its  dollar.   He  agreed that  the                                                               
appraised value  [used for the  RFP] is four years  old; however,                                                               
those  are  "kind  of  a  minimum  bid."     He  said,  "It  also                                                               
discriminates against  any other Alaskan without  a dairy ability                                                               
from  being held  off  from  buying a  farm."   Furthermore,  the                                                               
intent of  the board  was to  obtain the  maximum return  for the                                                               
state.    Mr.  Trytten  informed   the  committee  that  he  just                                                               
completed building a new dairy farm  and his barn cost as much as                                                               
the appraised value on the farm to be  sold.  If a deal is cut to                                                               
sell a  $1 million  piece of  property for $.5  million, it  is a                                                               
great loss to the state and  it lowers the value of his property,                                                               
which is determined  by the average sale price of  the land.  Mr.                                                               
Trytten expressed his desire to have  an open public bid in which                                                               
the [highest bidder] takes the  land.  He emphasized the problems                                                               
that  occurred  when  the  government   has  the  land  at  Point                                                               
CO-CHAIR MASEK closed public testimony on HB 249.                                                                               
Number 0925                                                                                                                     
REPRESENTATIVE FATE moved to report  HB 249 out of committee with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.   There being no  objection, HB  249 was reported  from the                                                               
House Resources Standing Committee.                                                                                             
HB 244-RIGHT-OF-WAY TO DENALI BOR. FOR RR/UTIL.                                                                               
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be HOUSE BILL NO. 244, "An Act  relating to a grant of state land                                                               
to the Denali  Borough for a railroad and utility  corridor and a                                                               
railroad development project; repealing  provisions relating to a                                                               
grant  of a  right-of-way  of  land for  a  railroad and  utility                                                               
corridor  to   the  Alaska  Industrial  Development   and  Export                                                               
Authority; and providing for an effective date."                                                                                
Number 0857                                                                                                                     
REPRESENTATIVE   JEANETTE   JAMES,  Alaska   State   Legislature,                                                               
testified as  the sponsor of HB  244.  This legislation,  HB 244,                                                               
would  "undo" the  authority  Alaska  Industrial Development  and                                                               
Export Authority (AIDEA)  has to bond to identify  a corridor for                                                               
rail in  the north access to  Denali National Park.   She pointed                                                               
out  that the  committee packet  includes maps,  which illustrate                                                               
this 90,000 acre  piece of property that is next  to Denali Park.                                                               
This  property  is  state  land   and  is  also  known  as  "Wolf                                                               
Township."     Representative  James  explained  that   "we"  are                                                               
attempting  to  gain  other  access into  the  park  because  the                                                               
current  access is  insufficient,  at capacity,  and  in need  of                                                               
improvement.  Therefore,  a second entrance to the  park would be                                                               
valuable.   However, she stressed  that she doesn't favor  a road                                                               
due to all the problems a  road would create [in a park setting].                                                               
This proposal merely  provides an opportunity for  rail access to                                                               
only  the  state lands,  which  is  about  40 miles  from  Healy.                                                               
Although there  may be some  interest in going farther,  it would                                                               
require  federal intervention  and much  work.   Furthermore, the                                                               
group interested  in putting in  this 40 miles of  rail indicates                                                               
that this is an opportunity to be a "paying proposition."                                                                       
REPRESENTATIVE  JAMES  explained that  HB  244  would identify  a                                                               
swath  from the  90,000 acre  piece of  land and  give it  to the                                                               
Denali Borough  so that the  borough could identify and  survey a                                                               
route through the  middle.  The borough would have  until 2006 to                                                               
identify and  survey that  route, after  which the  borough would                                                               
only  own the  route, which  would  be up  to 3,500  acres.   The                                                               
reality is  that the corridor  would require merely  1,500 acres.                                                               
Representative James  acknowledged that  some are  concerned with                                                               
the location  of the  corridor.   Furthermore, the  Department of                                                               
Natural Resources  (DNR) would prefer authorizing  the borough to                                                               
identify the corridor  and return to DNR in order  to ensure that                                                               
there  are no  existing uses,  which would  result in  conflicts.                                                               
Once  DNR approved  the  corridor, then  the  surveying could  be                                                               
done,  after which  DNR could  transfer  the land  to the  Denali                                                               
Borough.  Representative James clarified,  "That is the amendment                                                               
that  we're going  to be  working on  to try  to get  a CS  up to                                                               
Finance, but  because we're on  an extended timeframe  here, we'd                                                               
like to move the bill out as it is today."                                                                                      
REPRESENTATIVE JAMES,  in response  to the concern  regarding why                                                               
40,000 acres  is necessary for  this, pointed out that  the route                                                               
would have to traverse the lay  of the land and proceed such that                                                               
animal  and habitat  conflicts are  avoided.   Therefore, a  wide                                                               
area is necessary.  She then  turned to the concern regarding the                                                               
possibility that the land is given  to the Denali Borough, but no                                                               
railroad  is built.   Therefore,  it was  decided that  this [the                                                               
corridor  land] will  be part  of the  borough's land  selection.                                                               
Representative  James  informed  the committee  that  the  Denali                                                               
Borough Assembly is in support of  this proposition, HB 244.  She                                                               
noted  that she  would  be in  the area  this  summer working  to                                                               
ensure that this corridor would not intrude on state park land.                                                                 
Number 0382                                                                                                                     
REPRESENTATIVE  JAMES informed  the committee  that U.S.  Senator                                                               
Murkowski  got   $1.32  million   appropriated  by   the  federal                                                               
government to  work on this issue.   There was a  park survey [by                                                               
the  Park Service]  who did  support  the northern  access.   The                                                               
state needs a  match of $330 million, which she  believes will be                                                               
included in  this year's capital  budget.  Therefore,  there will                                                               
be  money  to  perform  the   environmental  assessment  and  the                                                               
environmental impact study (EIS).   Representative James said, "I                                                               
think  the protection  for the  listening  to the  voices of  the                                                               
folks is in  there in the process  and what we really  need to do                                                               
is get it on the table  and authorize somebody to go forward with                                                               
it and that's  what this bill is intended to  do."  The committee                                                               
substitute (CS)  has already been  ordered, but  wasn't available                                                               
in time for this meeting.                                                                                                       
Number 0270                                                                                                                     
JOSEPH  FIELDS, President,  Kantishna  Holdings, Inc.,  testified                                                               
via teleconference  in support of  HB 244.   He said that  HB 244                                                               
provides an expedited methodology  to establish a right-of-way in                                                               
order  to create  something that  has  been endorsed  by all  the                                                               
boroughs  and cities  of  the  Railbelt.   He  recalled that  the                                                               
legislature has  passed two  resolutions in  support of  this and                                                               
there was  the AIDEA bill  of 1998,  which is essentially  HB 244                                                               
save the change  from AIDEA to the Denali  Borough.  Furthermore,                                                               
HB  244 does  relieve the  bonding authorization  from AIDEA  and                                                               
eliminates the  transfer to AIDEA,  which would be  beneficial to                                                               
AIDEA.   Mr. Fields  informed the committee  that there  has been                                                               
federal movement [with]  a new secretary reviewing  the access as                                                               
found  by the  1994  Denali task  force.   That  task force,  the                                                               
national public  board that advises  the National  Parks Service,                                                               
called for  a new access  route to  Wonder Lake.   Therefore, Mr.                                                               
Fields was  confident that with the  passage of HB 244,  the work                                                               
of identifying  the specific  right-of-way can  begin.   He noted                                                               
that  the  right-of-way  will  not  take  up  the  entire  yellow                                                               
section, but  will only take up  something the size of  the Parks                                                               
Highway  and end  up  as  a 300  foot  right-of-way.   He  echoed                                                               
Representative  James' earlier  comments regarding  the intention                                                               
to avoid habitat  and features that are  difficult for railroads.                                                               
Mr.   Fields  announced   that  Stampede   Road  is   not  really                                                               
appropriate for this.  He hoped  that the committee would move HB
244 forward so  that the details could be worked  out at the next                                                               
hearing,  which [will  produce]  a good  bill  that will  produce                                                               
about $.25  billion worth of  private investment in the  state as                                                               
well  as possibly  900  jobs over  the years.    He concluded  by                                                               
saying,   "This  is   a  rare   opportunity  for   public-private                                                               
relationship to  flourish and go forward.   I hope you  will move                                                               
it quickly."                                                                                                                    
TAPE 01-41, SIDE A                                                                                                              
[Please  note that  approximately  three minutes  of Mr.  Braun's                                                               
testimony  was  not  recorded  and thus  was  obtained  from  the                                                               
written testimony he read the committee.]                                                                                       
Number 0001                                                                                                                     
DAVID BRAUN, testifying via teleconference, read the following                                                                  
     [I am  opposed to House  Bill 244.  Public  and private                                                                    
     land developers  are trying  to appropriate  state land                                                                    
     in  Denali  Borough.    They  want  to  make  the  Wolf                                                                    
     Townships  an  extension   of  Denali  National  Park's                                                                    
     transportation  system, and  develop it  for their  own                                                                    
     financial gain.                                                                                                            
     On  Thursday,  April   19  [the]  House  Transportation                                                                    
     Committee  quickly  passed  HB  244  out  of  committee                                                                    
     without  providing for  any  public  comment or  public                                                                    
     hearing.  The  history of this bill is  interesting.  A                                                                    
     working  draft of  the bill  distributed at  the Denali                                                                    
     Borough Assembly  meeting April  7th said,  "The Denali                                                                    
     Borough  shall  identify  and  survey  a  railroad  and                                                                    
     utility corridor  ... from near the  community of Healy                                                                    
     to  the eastern  boundary of  Denali National  Park and                                                                    
     Preserve."  It  also said, "The borough  may retain not                                                                    
     more  than  3,500 acres  of  the  land granted  to  the                                                                    
     borough under  this section."   This  land would  be in                                                                    
     addition to  the borough entitlement and  is worth many                                                                    
     millions  of  dollars.]    And   I  don't  believe  the                                                                    
     citizens of Alaska will  ever be adequately compensated                                                                    
     for the loss of this public land.                                                                                          
     A  legislative staffer  noted  that  having the  Denali                                                                    
     Borough do the survey for  a private enterprise put the                                                                    
     borough in  the role of  developer.  The bill  was then                                                                    
     changed  so  that   Kantishna  Holdings,  Incorporated,                                                                    
     would identify  and survey the railway,  but the Denali                                                                    
     Borough would still get 3,500  acres to develop whether                                                                    
     the railroad  was built  or not.   In my  opinion, this                                                                    
     bill  is an  attempt to  give valuable  public land  to                                                                    
     Denali Borough  to sell,  lease, or  otherwise develop.                                                                    
     The ultimate  use of any  land conveyed to  the borough                                                                    
     is completely unpredictable.   The borough assembly has                                                                    
     been unwilling to  regulate land use as  charged by the                                                                    
     Contrary  to what  some supporters  of HB  244 say  the                                                                    
     question is  not whether  development should  occur but                                                                    
     where it  should be.   There are  tens of  thousands of                                                                    
     acres east  of Panguingue  Subdivision open  to borough                                                                    
     land  selection.   Leaving the  Wolf Townships  as they                                                                    
     are  encourages  development  that  is  independent  of                                                                    
     Denali  National  Park and  Preserve.    People of  the                                                                    
     state, I don't  believe, wanted the Park  Service to be                                                                    
     given to Wolf  Townships and I don't  believe they want                                                                    
     ... the  Wolf Townships, in  any way, connected  to the                                                                    
     park.     Alaskans   and  tourists   use  this   as  an                                                                    
     alternative to  the congestion  and bureaucracy  of the                                                                    
     park.   It's worth noting  that now travelers  from all                                                                    
     over the globe are  purposely coming exclusively to the                                                                    
     Wolf Townships as  a result of Jon  Krakaur's book Into                                                                  
     the Wild,  the story of  Chris McCandless's death.   It                                                                  
     is  shortsighted and  absolutely impossible  to try  to                                                                    
     funnel all  our visitors through Denali  National Park.                                                                    
     We can  learn from the  mistakes made outside  parks in                                                                    
     the Lower  48.  Keeping  Wolf Townships as they  are is                                                                    
     good for economic development.                                                                                             
     Also, I have  to question the motives of  those who are                                                                    
     hostile to  the National  Park Service that  would have                                                                    
     the park  encroach on  our public land.   I  also think                                                                    
     that  Kantishna Holdings,  Incorporated, should  reveal                                                                    
     the  names of  all those  who will  benefit financially                                                                    
     from this venture.   ... I must state  again that there                                                                    
     are no  restrictions on land  the Denali  Borough might                                                                    
     sell or lease (indisc.).                                                                                                   
Number 0303                                                                                                                     
NANCY  BALE, President,  Denali Citizens  Council, testified  via                                                               
teleconference.   Ms. Bale  specified that  she is  testifying on                                                               
behalf  of  herself and  the  Denali  Citizens Council,  a  local                                                               
oversight group in  the Denali area.  She  informed the committee                                                               
that  she has  lived and  worked  in Denali  National Park  since                                                               
1971.  Furthermore,  she has mushed and skied  the Stampede area.                                                               
Ms. Bale pointed out that lands  north of the Wolf Townships were                                                               
given  to  Denali  National  Park  as part  of  the  1980  Alaska                                                               
National  Interest Lands  Conservation  Act (ANILCA)  settlement.                                                               
The  purpose  of  all  the  northern  additions  was  to  provide                                                               
wildlife habitat, specifically for the  Denali caribou herd.  The                                                               
Stampede Trail is  located on the open tundra  that gently slopes                                                               
downward to some  rolling hills.  From her  personal contact with                                                               
the Stampede  Trail, she  informed the  committee that  there are                                                               
many wetlands along  the route as well as some  major streams and                                                               
a small river.  This area  has already been regarded as important                                                               
as wildlife  habitat by  the state lands  planning process.   She                                                               
quoted the Tanana Basin Area Plan  as saying, "State land in this                                                               
unit  is to  be  retained in  public  ownership for  multiple-use                                                               
management.   The  emphasis is  on management  of recreation  and                                                               
maintaining fish and wildlife habitat."                                                                                         
MS.  BALE related  her belief  that the  importance of  this land                                                               
necessitates  any change  in land  management to  go through  the                                                               
already  existing   public  process.     Furthermore,   the  Wolf                                                               
Townships  area is  not  identified  as an  area  from which  the                                                               
borough could  select entitlements.   Therefore, an  amendment to                                                               
the Tanana Basin  Area Plan would be required before  it could be                                                               
deeded.      However,   HB   244   "shortstops"   that   process.                                                               
Additionally,  whenever   the  state  conveys  land   from  state                                                               
ownership to another entity a  best interest finding is generally                                                               
required, which  is not  included in this  bill.   Therefore, the                                                               
public process in  determining the fate of this  land is somewhat                                                               
sidestepped by HB 244.                                                                                                          
MS.  BALE  then turned  to  the  issue  of  due diligence.    She                                                               
informed  the  committee  that   Kantishna  Holdings,  Inc.,  has                                                               
already had  a chance for  a right-of-way through the  1998 AIDEA                                                               
bill.   However,  Kantishna Holdings,  Inc., has  failed to  show                                                               
AIDEA  due diligence  in the  many intervening  years.   Thus she                                                               
wasn't  sure  that  Kantishna  Holdings,  Inc.,  could  show  due                                                               
diligence to develop a cost effective railway in this area.                                                                     
MS. BALE  recalled Representative James' remark  that she prefers                                                               
a railway  because it's more environmentally  friendly.  However,                                                               
Ms. Bale  pondered whether the  3,500 acres, if not  developed by                                                               
rail because of  the lack of due diligence would  end up having a                                                               
road  through  them.    She  informed the  committee  that  SB  3                                                               
nominates   some   funds   to    study   other   rail   or   road                                                               
[possibilities],  which  creates  conflict.   Although  Ms.  Bale                                                               
agreed with Representative  James that a road in  this area would                                                               
not be appropriate, she didn't believe  that a rail would be cost                                                               
effective  or  a "good  for  Alaskans"  way to  promote  tourism.                                                               
There are dozens  of alternatives to this that  will be discussed                                                               
during  a panel  discussion  by the  Denali  Citizens Council  in                                                               
early June.   Ms. Bale  indicated that the committee  should have                                                               
her full written testimony.                                                                                                     
LINDA PAGANELLI  testified via teleconference.   She informed the                                                               
committee that  although she is  a member of the  Northern Alaska                                                               
Environmental  Center as  the Denali  Watch  Coordinator, she  is                                                               
testifying  on her  own behalf.    She noted  that the  committee                                                               
should have her written testimony, which she read as follows:                                                                   
     I am a long time resident of the Denali Borough living                                                                     
         on the Stampede Trail in the Panguingue Creek                                                                          
     Subdivision.   This  coming summer  will  mark my  20th                                                                    
     season driving a  bus on the Denali  National Park road                                                                    
     for  the park's  concessionaire.   While  I do  support                                                                    
     efforts  to assess  possible solutions  to park  access                                                                    
     issues, I do  not support the North  Access solution as                                                                    
     put forth in HB 244 based on the following.                                                                                
     Determinations made  by the Alaska State  Department of                                                                    
     Natural Resources,  the National Park service,  and the                                                                    
     United States Congress are  unanimous in their findings                                                                    
     that the  area in question, the  Wolf Townships, serves                                                                    
     as an important habitat  for wildlife, particularly for                                                                    
     park caribou and wolf populations.   These lands should                                                                    
     remain  in   public  ownership  for  the   purposes  of                                                                    
     maintaining  wilderness  recreation  opportunities  for                                                                    
     local,  regional, and  statewide  users and  protecting                                                                    
     fish and wildlife habitat.                                                                                                 
     In  1986  the  Denali Subsistence  Resource  Commission                                                                    
     conveyed,  to  the  Secretary of  the  Interior,  their                                                                    
     strong opposition  to any construction of  new roads or                                                                    
     railroads in  Denali National Park  and Preserve.   The                                                                    
     commission   has   reiterated   their   opposition   to                                                                    
     development of roads  a number of times.   Any activity                                                                    
     that  impairs  the  overall  health  of  an  ecosystem,                                                                    
     natural  processes  or  resource availability  has  the                                                                    
     potential  to   adversely  impact  the   customary  and                                                                    
     traditional activities practiced  by subsistence users.                                                                    
     The Wolf  Townships, retained in state  ownership, will                                                                    
     continue  to serve  to protect  the  natural ranges  of                                                                    
     large  park mammals  from incompatible  development and                                                                    
     will  thus,  better  ensure   the  continuance  of  the                                                                    
     subsistence lifestyle.                                                                                                     
     I am  concerned with the stipulation  contained in this                                                                    
     bill  that grants  over 45,000  acres  of prime  public                                                                    
     land to  the Denali  Borough.  I  am in  agreement with                                                                    
     the  Department  of  Natural Resources,  "that  a  more                                                                    
     efficient and  equally effective approach would  be for                                                                    
     the borough  and Kantishna Holdings, Inc.,  to identify                                                                    
     the  corridor first,  then DNR  transfer  the land,  or                                                                    
     Kantishna Holdings,  Inc., simply apply for  a ROW from                                                                    
     I am also in agreement  with their assessment that this                                                                    
     deal  should  not come  down  to  a  "give away"  to  a                                                                    
     private developer  and that the  citizens of  the state                                                                    
     receive  adequate  compensation  for  granting  private                                                                    
     exclusive  use of  thousands of  acres  of state  land.                                                                    
     This bill grants sole rights  of project development to                                                                    
     one  company,  Kantishna  Holdings, Inc.,  without  the                                                                    
     opportunity  for a  competitive bid  process.   On this                                                                    
     basis, the  bill may be  unconstitutional.   Although I                                                                    
     am  far  from  being  a constitutional  law  expert,  I                                                                    
     request  that the  committee  deliberate the  following                                                                    
     questions:    What's  the  legislative  purpose  behind                                                                    
     granting  Kantishna Holdings,  Inc., a  sweetheart deal                                                                    
     and  a  legislatively  mandated seat  at  the  planning                                                                    
     table?     Where's  the  state's  common   interest  in                                                                    
     bestowing this deal on Kantishna Holdings, Inc.?                                                                           
     An  unreasonable fix  date for  the  transfer of  lands                                                                    
     from the  state to  the borough  fails to  encourage or                                                                    
     even  allow  public  input   on  the  consideration  of                                                                    
     whether or  not these  lands should transfer.   Impacts                                                                    
     to  homeowners, sport  and  subsistence hunters,  local                                                                    
     guiding  businesses,  and  other local,  regional,  and                                                                    
     statewide   users   will   consequently   be   ignored.                                                                    
     Transfer  to the  municipality should  not be  approved                                                                    
     until the recommended changes to  the Tanana Basin Area                                                                    
     Plan have been publicly  reviewed through the amendment                                                                    
     and  reclassification  processes   as  defined  by  the                                                                    
     appropriate Alaska statutes.                                                                                               
     The  Denali Borough  government boasts  a "do  nothing"                                                                    
     policy towards  guiding growth  and development  in the                                                                    
     borough.   It's shortsighted approach  towards planning                                                                    
Number 1174                                                                                                                     
JOAN   FRANKEVICH,  Regional   Staff,  Alaska   Regional  Office,                                                               
National  Park  Conservation  Association (NPCA),  testified  via                                                               
teleconference and  explained that  NPCA is a  national nonprofit                                                               
group  dedicated to  protecting  the National  Park  System.   Of                                                               
NPCA's  over 450,000  members over  1,000  live in  Alaska.   Ms.                                                               
Frankevich stated  that NPCA has  opposed the north  Denali route                                                               
since it  was first proposed.   Furthermore, NPCA opposes  HB 244                                                               
for the  following reasons.   There is little benefit  or purpose                                                               
of this  railroad to park  visitors.   Having worked in  the park                                                               
for five summers, Ms. Frankevich  is very familiar with the area,                                                               
visitors, travel  patterns, and with  the needs of  the visitors.                                                               
She noted that she is also  familiar with the northern area where                                                               
the railroad would  be placed.  Ms. Frankevich  said, "For Denali                                                               
visitors, the  primary attraction is wildlife  viewing."  Besides                                                               
Katamai  National  Park and  McNeil  State  Park, Denali  is  the                                                               
easiest and  most predictable location  to view grizzly  bears as                                                               
well as a variety of other  wildlife.  She informed the committee                                                               
that wildlife in  the park is seen mainly in  the middle third of                                                               
the  park road,  which is  roughly from  Igloo Canyon  to Eielson                                                               
Visitors Center.  The entrance area  and the Wonder Lake area are                                                               
forested and  thus it  is more difficult  to view  wildlife here.                                                               
The northern  route is similar  and thus the chance  for wildlife                                                               
viewing   from   the   railroad    would   be   fairly   minimal.                                                               
Additionally, the north route scenery  isn't as dramatic as along                                                               
the park  road.  The proposed  site of the railroad  on the north                                                               
side,  the low  range  blocks views  of the  high  peaks and  the                                                               
glaciers of the  Alaska Range.  Furthermore,  the [northern] area                                                               
has  never been  glaciated and  thus none  of the  dramatic broad                                                               
glaciated valleys and views like those  on the park road.  On the                                                               
proposed  route there  are occasional  views of  Mt. McKinley  at                                                               
high  points and  once  Wonder  Lake is  reached  the scenery  is                                                               
spectacular, which may  make the ride worth it.   She pointed out                                                               
that Mt.  McKinley is the  highest peak  in North America  and as                                                               
such it  generates its own  weather.  Therefore, even  when clear                                                               
elsewhere, the mountain  is often shrouded in clouds.   She noted                                                               
that  she worked  at Eielson  Visitors Center,  which tracks  the                                                               
visibility of  the mountain as is  done every year.   In general,                                                               
the mountain is visible 30 percent of the time.                                                                                 
MS. FRANKEVICH stated  that compared to the park  road, the north                                                               
rail  route  offers  poor   wildlife  viewing,  less  spectacular                                                               
scenery,  and infrequent  views of  Mt. McKinley  similar to  the                                                               
park  road.   Therefore, [NPCA]  doesn't see  this proposed  rail                                                               
route being  a benefit for  park visitors  nor in demand  by park                                                               
visitors.    Furthermore, there  is  a  misperception that  large                                                               
numbers of  potential visitors  are turned  away from  riding the                                                               
park buses every  year.  This is incorrect.   After speaking with                                                               
National Park  Service staff today,  Ms. Frankevich  was informed                                                               
that in  2000 there were over  363,000 visitors to Denali  with a                                                               
bus ridership  composing about 76  percent of that total.   About                                                               
2,000 people were turned away  from the [buses], which amounts to                                                               
less than 1  percent of the total visitors.   The other visitors,                                                               
such  as  climbers  to  Mt.   McKinley,  Ruth  Glacier  landings,                                                               
etcetera,  account   for  the   rest  of   the  numbers.     This                                                               
misperception  is  probably due  to  the  presence of  visitation                                                               
counters on  the highway prior  to 1996.  Those  counters counted                                                               
everyone on the  park's highway and thus it  was interpreted that                                                               
only a  small percentage  were able  to ride  the bus.   However,                                                               
that is  inaccurate.  Furthermore,  the current bus system  has a                                                               
high level of  satisfaction as supported by a 1998  survey by the                                                               
University of  Idaho in  which 88 percent  of the  visitors rated                                                               
the  bus   system  as  good   or  excellent  and   that  wildlife                                                               
observations were  the greatest single factor  in contributing to                                                               
visitor satisfaction.                                                                                                           
MS.  FRANKEVICH  concluded  by saying  that  this  project  makes                                                               
little  sense to  her.   "A railroad  that starts  just 17  miles                                                               
north of  the park road  is very expensive  and ends in  the same                                                               
place -  where demand is  low, where they  won't see a  bear, and                                                               
over 50 percent  of the riders won't see Mt.  McKinley - seems to                                                               
serve  little purpose,"  she said.   Moreover,  she echoed  prior                                                               
concerns regarding giving this land  to the Denali Borough, which                                                               
is a  young borough with  no road powers.   The borough  has done                                                               
virtually  no land  planning, which  it abhors.   Therefore,  the                                                               
borough seems a highly unlikely  choice to receive a state right-                                                               
Number 1500                                                                                                                     
REPRESENTATIVE CHENAULT  recalled Ms. Bale's  testimony regarding                                                               
the Denali Borough's  lack of road powers and her  belief that it                                                               
shouldn't  have the  land.   He  asked if  Ms.  Bale would  favor                                                               
transferring state land to the hands of a local community.                                                                      
MS. BALE  answered that the  way the  state has agreed  to manage                                                               
this  land per  the  Tanana  Basin Area  Plan  has addressed  the                                                               
general purposes  for wildlife management  and the  general needs                                                               
for subsistence  use of the  locals.  Therefore, she  favored the                                                               
retention of ownership in the state's hands.                                                                                    
CO-CHAIR MASEK  closed the  public testimony  and inquired  as to                                                               
the will of the committee.                                                                                                      
Number 1595                                                                                                                     
REPRESENTATIVE McGUIRE  moved to report  HB 244 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 244 was reported  from the                                                               
House Resources Standing Committee.                                                                                             
CO-CHAIR MASEK  called a  brief at-ease at  3:10 p.m.  and handed                                                               
the gavel to Co-Chair Scalzi.                                                                                                   
CONFIRMATION HEARINGS                                                                                                         
Board of Fisheries                                                                                                            
CO-CHAIR SCALZI called  the meeting back to order.   He announced                                                               
the  committee  would consider  two  nominees  for the  Board  of                                                               
Fisheries.  He asked Dr. White to speak first.                                                                                  
Number 1721                                                                                                                     
DR. JOHN  R. WHITE, Appointee,  Alaska State Board  of Fisheries,                                                               
testified  via teleconference.   He  thanked the  House Resources                                                               
Standing  Committee  for hearing  his  testimony  and offered  to                                                               
answer  any  questions  regarding  his resume  [included  in  the                                                               
committee packet].   Dr. White  stated he was compelled  to serve                                                               
again on  the Board  of Fisheries for  the benefit  of continuity                                                               
and to  continue to work  on the development of  the "sustainable                                                               
fishery  salmon  policy,"  within   regulation,  until  it  "best                                                               
reflects the  interests of the  salmon resource for the  State of                                                               
Alaska."  He continued:                                                                                                         
     Finally,  Mr.  Chairman,  I  [am]  very  interested  in                                                                    
     serving  again,  because I  see  a  great need  in  the                                                                    
     state, at this time -  considering the salmon crises in                                                                    
     Western  Alaska -  to have  continuity brought  to bear                                                                    
     between  different  funding  agencies  engaged  in  the                                                                    
     research that  needs to  be done  on stocks  in Western                                                                    
     Alaska that  are failing so dramatically  at this time,                                                                    
     and  have  that  continuity  brought to  the  Board  of                                                                    
     Fisheries.  And  I hope to be able to  do that by being                                                                    
     an  advisor  to  the   North  Pacific  Anadromous  Fish                                                                    
     Commission,  and be  able to  bring high  seas research                                                                    
     back  to the  state  body and  try  to find  continuity                                                                    
     between  those   bodies  and   how  that   research  is                                                                    
Number 1874                                                                                                                     
REPRESENTATIVE CHENAULT asked Dr. White  what his agenda would be                                                               
over the next three years were  he to be confirmed.  He clarified                                                               
that Dr. White  may answer as to his "personal"  agenda or to the                                                               
agenda of the Board of Fisheries.                                                                                               
DR. WHITE  answered that  the issue  of paramount  importance was                                                               
finding some  regulatory means to  address the crises  in Western                                                               
Alaska, among  other areas, where  there are "de  minimus" stocks                                                               
that  need  the  attention  of   the  state.    His  two  highest                                                               
priorities, for the  Board of Fisheries, would be  to continue to                                                               
take  public  testimony  and  to "nurture  the  maturity  of  the                                                               
sustainable salmon fisheries policy."                                                                                           
Number 1962                                                                                                                     
REPRESENTATIVE CHENAULT asked Dr. White  what his agenda would be                                                               
regarding stocks of the Cook Inlet.                                                                                             
DR. WHITE responded he thought  the Board [of Fisheries] had made                                                               
a request  of [ADF&G] that it  "try to get" management  plans for                                                               
all the  stocks - specifically chum  and pink salmon stocks  - in                                                               
[Cook] Inlet.   He hoped [ADF&G] would bring  that information to                                                               
the Board  of Fisheries before  it's next meeting.   He indicated                                                               
that he  would not  "carry an  agenda in any  way, into  the Cook                                                               
Inlet meeting,  other than  the information  that was  brought to                                                               
bear, and the proposals that were put before [the board]."                                                                      
Number 2009                                                                                                                     
REPRESENTATIVE FATE  commented that  the split public  opinion on                                                               
Dr. White's reappointment seemed to  be divided between "the blue                                                               
water  fishermen and  those  other fishermen  on  the rivers  and                                                               
other waterways."   He asked Dr.  White how he accounted  for the                                                               
divisiveness between  those who supported  him and those  who did                                                               
DR.  WHITE answered  he has  been a  strong advocate  for Western                                                               
Alaska fisheries  for over 25  years and, during his  time served                                                               
on  the  Board of  Fisheries,  has  spoken "forcefully"  for  the                                                               
following:     conservation  of  the  failing   Western  Alaskan,                                                               
Kuskokwim,  Yukon River,  and Norton  Sound stocks;  conservation                                                               
measures  within  his  sport and  subsistence  fisheries  on  the                                                               
Kuskokwim, Yukon, and Norton Sound;  and the introduction of Tier                                                               
II fisheries  in Norton  Sound, because of  the "grave  nature of                                                               
conservation  concerns that  involved  those stocks."   He  said,                                                               
"The  farther you  reach out  of our  region to  try to  conserve                                                               
stocks, the  more people don't  think they have  a responsibility                                                               
for what's wrong with the conditions of our stocks."                                                                            
DR. WHITE stated:                                                                                                               
     I've been a forceful  spokesperson in the international                                                                    
     settings  in  trying  to   minimize  Japanese  take  of                                                                    
     Western Alaskan  stocks.  I've  been a  strong advocate                                                                    
     in the  federal fisheries,  in the trawl  fisheries for                                                                    
     minimizing the  interception of Western  Alaska stocks.                                                                    
     And I've  tried to hold all  parties accountable within                                                                    
     statute and  regulation for  the conservation  of those                                                                    
     same  stocks, within  the confines  of the  mixed-stock                                                                    
     fishery  and the  Sustainable Salmon  Fisheries Policy,                                                                    
     so  that everyone,  hopefully, shared  the conservation                                                                    
     burden equally.   That's  how I voted.   That's  what I                                                                    
     did.   And there will  be people who  strongly disagree                                                                    
     that  I   tried  to  hold  that   ...  "burden-sharing"                                                                    
Number 2170                                                                                                                     
REPRESENTATIVE FATE mentioned the fact  that the salmon catch was                                                               
"manifestly" larger than it  was 15 to 20 years ago.   He cited a                                                               
possible reason  for the increase:   "fisheries  introducing more                                                               
fish into an  environment that's competing with  the wild stock."                                                               
He  suggested that  might  be the  cause of  the  problem in  the                                                               
Yukon/Kuskokwim  drainage  and  asked  Dr.  White  how  he  would                                                               
propose to solve the problem.                                                                                                   
DR. WHITE  replied the research  of the North  Pacific Anadromous                                                               
Fish  Commission  and  of PICES  [North  Pacific  Marine  Science                                                               
Organization] is  "about a year  or two  out" and will  be coming                                                               
back  to  the  [Board  of Fisheries];  however,  the  preliminary                                                               
research "demonstrates  grave concerns for the  carrying capacity                                                               
of the  Bering Sea and  the North  Pacific Ocean."   He detailed:                                                               
"Preliminary  indicators  are   that  there  is  'inter-specific'                                                               
competition  between different  species  of  salmon, and  there's                                                               
also  'intra-specific'  competition  between  individual  species                                                               
from different areas."                                                                                                          
DR. WHITE stressed  the need for Alaska to be  part of an ongoing                                                               
"mature,  well-thought-through forum,"  for purposes  of deciding                                                               
how  much  out-migrant  stock  can  be put  in  the  ocean.    He                                                               
predicted  that future  [research]  would show  that  there is  a                                                               
carrying-capacity problem.   Dr. White said,  "The Canadians feel                                                               
this pretty vehemently at the  present time; there's a conference                                                               
that's going to  be held on that soon."   He recommended that all                                                               
fishermen in the State of Alaska  "sit down and have a reasonable                                                               
discussion" when the research information becomes available.                                                                    
Number 2300                                                                                                                     
REPRESENTATIVE  McGUIRE stated  that she  had received  more POMs                                                               
[public opinion  messages] on this  issue, than any  other during                                                               
this  session, and  she  noted two  overriding  concerns:   there                                                               
isn't  a  blue  water,  commercial fishermen  on  the  Board  [of                                                               
Fisheries], and there should be;  and the [Board of Fisheries] is                                                               
collectively  responsible  for  the  collapse of  the  Yukon  and                                                               
Kuskokwim  fisheries and  the  destruction of  the  "Area M"  and                                                               
Upper Cook  Inlet fisheries.   She  asked Dr.  White to  give his                                                               
opinion on those public comments.                                                                                               
DR. WHITE responded thus:                                                                                                       
     First  of all,  I  don't think  there's a  catastrophic                                                                    
     collapse  of  many of  those  fisheries.   The  Western                                                                    
     Alaska fisheries  have been  literally closed  and shut                                                                    
     down  for several  years; that's  a commercial  fishery                                                                    
     collapse.   A subsistence fishery collapse  is when you                                                                    
     have a  ... Tier II  fishery in the  known subdivision.                                                                    
     The other fisheries have been  limited and they've been                                                                    
     changed.     There   have  been   difficult  allocation                                                                    
     decisions.  There have  been contentious issues between                                                                    
     ...  Representative [McGuire],  I've tried  to be  fair                                                                    
     and I've  tried to  share the burdens  equally, between                                                                    
     different  parties.    "Allocative" decisions  are  not                                                                    
     popular, but I  have always tried to be  a board member                                                                    
     that  would listen  and  weigh  fairly the  information                                                                    
     before "you."  And I think my record reflects that.                                                                        
DR.  WHITE  said that  the  idea  that  there was  no  blue-water                                                               
commercial fisherman  on the  Board of Fisheries  was wrong.   He                                                               
cited Mr. Grant Miller, from Sitka, as having extensive blue-                                                                   
water fishery  experience as  a troller,  seiner, and  in herring                                                               
fisheries.  Dr. White emphasized  that having representation from                                                               
blue-water  commercial fishermen  on the  Board of  Fisheries was                                                               
important, because [Alaska] has some  of the most important blue-                                                               
water fisheries  in the world, including  shellfish, finfish, and                                                               
bottomfish fisheries.   He added that the Board  of Fisheries has                                                               
been "diligent" in its attention to the needs of those blue-                                                                    
water fisheries.                                                                                                                
REPRESENTATIVE McGUIRE clarified that  she had thought the public                                                               
opinion to be  relatively one-sided and her intent  in asking Dr.                                                               
White  questions was  to give  him a  chance to  "provide another                                                               
side of the story."                                                                                                             
DR. WHITE told  Representative McGuire that some  of those emails                                                               
about  "the   action  alert"  to  oppose   his  appointment  were                                                               
forwarded to him  and thanked her for giving  him the opportunity                                                               
to "get the factual record straight on this."                                                                                   
Number 2563                                                                                                                     
REPRESENTATIVE  KAPSNER  welcomed  Dr.  White  and  informed  her                                                               
colleagues that  she could gather  three times as many  emails in                                                               
support of him.  She pointed out  that the subject of many of the                                                               
negative  emails  was  shallow, including  complaints  about  Dr.                                                               
White's   length   of   term   on   the   Board   of   Fisheries.                                                               
Representative Kapsner  said it takes  time to "get a  handle on"                                                               
the great variety of fisheries and  resources the state has.  She                                                               
stated she has known Dr. White "all  her life" and he has done an                                                               
"exceptional" job  in this position, defending  people who depend                                                               
on the fish resource for their income and for subsistence.                                                                      
Number 2650                                                                                                                     
REPRESENTATIVE FATE,  in response to an  announcement by Co-Chair                                                               
Scalzi that this issue would be  heard again in the House Special                                                               
Committee on Fisheries,  pointed out that not all  the members of                                                               
the House  Resources Standing  Committee were  also on  the other                                                               
committee.   He also stated  that the House Special  Committee on                                                               
Fisheries  was primarily  made up  of blue-water  fishermen.   He                                                               
said  he hoped  that there  was  another viewpoint  heard at  the                                                               
House Resources  Standing Committee  meeting that would  be taken                                                               
to  and expressed  at the  House Special  Committee on  Fisheries                                                               
CO-CHAIR SCALZI informed the  committee that both Representatives                                                               
Fate and Chenault  wouldn't be able to attend  the [House Special                                                               
Committee on Fisheries] meeting, taking  place in a couple hours.                                                               
He  stated  that  the  presentation would  go  before  the  House                                                               
Special Committee  on Fisheries and the  House Resources Standing                                                               
Committee again,  separately, on Wednesday [April  25, 2001], and                                                               
before  the "full  body" on  the following  Monday; subsequently,                                                               
there would be no final decisions made in the meeting at hand.                                                                  
Number 2725                                                                                                                     
REPRESENTATIVE  McGUIRE  clarified  the  procedure  allowed  each                                                               
individual  committee,   to  which  the  confirmation   had  been                                                               
referred,  to  have  the  opportunity  to  confirm  or  deny  the                                                               
CO-CHAIR SCALZI  clarified that,  in the interest  of expediency,                                                               
he would  be holding  all his questions  until the  House Special                                                               
Committee  on Fisheries  meeting, so  that those  representatives                                                               
who were  not in both  committees could  have time to  speak now.                                                               
In response to a question  from Representative Green, he said the                                                               
appointees would  be invited  back for  Wednesday's meeting.   He                                                               
mentioned  the  great  amount of  public  response  received  and                                                               
public testimony still to be heard on this issue.                                                                               
Number 2835                                                                                                                     
RUSSEL  NELSON,  Appointee,  Alaska  State  Board  of  Fisheries,                                                               
testifying via  teleconference, expressed  his "desire"  to serve                                                               
another term  on the Board of  Fisheries.  He stated,  during his                                                               
past three-year term, he worked  hard to understand the issues of                                                               
all  Alaska's  fisheries and  to  "make  fair decisions  for  the                                                               
conservation and development of these fisheries."                                                                               
MR.  NELSON   highlighted  two  policies   he  supported:     the                                                               
Sustainable [Salmon]  Fisheries Policy, which ensures  that ADF&G                                                               
and  the Board  of  Fisheries are  "proactive  in preserving  our                                                               
fisheries resources";  and the  "committee process,"  which gives                                                               
the public and  the Board of Fisheries committee  members "a more                                                               
interactive  method of  solving contentious  proposals that  come                                                               
before the Board [of Fisheries]."                                                                                               
Number 2925                                                                                                                     
PAUL A.  SHADURA II, Self-appointed  Board of  Fisheries nominee,                                                               
began his testimony in opposition to Dr. White.                                                                                 
CO-CHAIR SCALZI asked  Mr. Shadura to limit his  testimony to his                                                               
position as  a "potential nominee"  and to save his  testimony on                                                               
[Dr. White and  Mr. Nelson] until the House  Special Committee on                                                               
Fisheries meeting.                                                                                                              
TAPE 01-41, SIDE B                                                                                                              
MR.  SHADURA  outlined his  family's  long  history of  fisheries                                                               
experience, stating his  family has lived in the  Cook Inlet area                                                               
for 100  years, processing fish  and operating traps.   He listed                                                               
his experience  as:  a  fish buyer  who operates 21  locations; a                                                               
member of  the Kenai  River Special Management  Area who  is very                                                               
concerned with the conditions of  the river; a representative for                                                               
the Cook  Inlet area  in the  Cook Inlet  Aquaculture Association                                                               
for  20 years;  and a  member of  the Cook  Inlet Region  Citizen                                                               
Advisory  Council -  "the oil  watchdog in  Cook Inlet"  - for  5                                                               
years.  He also said, "I have a setnet fisherman."                                                                              
MR. SHADURA  emphasized he is  an Alaskan fisherman  who believes                                                               
in Alaskans  and wants  to serve  on the  Board of  Fisheries, to                                                               
"listen  to the  people of  this state  and affect  change."   He                                                               
expressed  frustration   with  the  [lack  of]   cooperation  and                                                               
communication  [from] the  Board  of Fisheries  members over  the                                                               
last six  years.  He added,  "I have been denied  access to them.                                                               
I  have been  ridiculed publicly  [by] them  - and  particularly,                                                               
John White."                                                                                                                    
Number 2849                                                                                                                     
REPRESENTATIVE  GREEN  mentioned  the assumption  that  when  the                                                               
[fishing] nets  [are activated],  the fishing  "dries up"  in the                                                               
Kenai River and  when the nets [are no longer  in use], then "the                                                               
next day"  there are  fish in  the [Kenai]  River for  the sport-                                                               
fishermen.  He asked Mr. Shadura  how he felt about the effect of                                                               
subsistence and  commercial fishing  on "personal use"  and sport                                                               
MR. SHADURA  replied, "I think  the recipe  is to sustain  a high                                                               
return -  as close  to maximum  sustainable yield,  as possible."                                                               
He said  the sport  and personal  use fisheries  make up  a small                                                               
component of  the return, particularly  as pertains to  the Kenai                                                               
River, whereas the  commercial fishery "takes the  burden of both                                                               
those other[s], and maybe rightfully  so."  Mr. Shadura projected                                                               
the returns of the future  will be "seriously diminished from the                                                               
particular  plans  that  are  in  effect  at  this  point."    He                                                               
reiterated  his  involvement  with  the  community  -  mentioning                                                               
friends  who are  guides or  subsistence users  - and  stated his                                                               
preference for  a "balancing act."   He added, "In the  Kenai, we                                                               
are  very strong  economically throughout  the state,  because we                                                               
are balanced.  What we do  object to is interference that creates                                                               
instability in that economy."                                                                                                   
Number 2750                                                                                                                     
REPRESENTATIVE  GREEN stated  that  if [the  Board of  Fisheries]                                                               
does not arrive  at the balance of which Mr.  Shadura spoke, then                                                               
many  personal-use fishermen  would  be affected.   He  suggested                                                               
that  "five  percent  off commercial"  might  supply  "more  than                                                               
enough for all the personal use."                                                                                               
MR. SHADURA  stated a point  of consideration that the  State [of                                                               
Alaska] has come a long way  since it took over the management of                                                               
the  fisheries  in 1959.    He  emphasized that  [Alaska]  cannot                                                               
survive  without  its  commercial  fisheries,  saying  "it's  the                                                               
abundance  numbers that  bring people  to Alaska  to fish  on the                                                               
Kenai River."   Subsequently,  when there are  reports of  a poor                                                               
year, people  don't go to the  Kenai River to fish.   He stressed                                                               
that  the  "commercial  fishery  is  not  out  there  to  exclude                                                               
Number 2650                                                                                                                     
REPRESENTATIVE  FATE mentioned  the  fishermen on  the Yukon  and                                                               
Kuskokwim Rivers who have depended  on their fisheries for years,                                                               
but had  no commercial season last  year and will have  none this                                                               
year.  He asked Mr. Shadura  to comment on possible solutions for                                                               
those people.                                                                                                                   
MR. SHADURA  admitted that  he had not  been involved  with those                                                               
areas, but  assured the  committee he  would dedicate  himself to                                                               
finding a solution.  He  emphasized that he lives "this business"                                                               
every day, reading  textbooks and doing all he  can to understand                                                               
what it takes to "perpetuate the fisheries wherever I am."                                                                      
Number 2579                                                                                                                     
JUDE   HENZLER,  Executive   Director,  Bering   Sea  Fishermen's                                                               
Association  (BSFA),  representing   commercial  and  subsistence                                                               
"fishers"  in   Western  and   Interior  Alaska,   testified  via                                                               
teleconference, in support of the  reappointment of Dr. White and                                                               
Mr. Nelson [to the Board of Fisheries].                                                                                         
Number 2519                                                                                                                     
ROBERT  WILLIAMS  spoke  on  behalf   of  the  Kenai  [Peninsula]                                                               
Fisherman's Association (KPFA),  an organization of approximately                                                               
250 to  300 people.   He  explained KPFA  represents much  of the                                                               
setnet fishing  that takes  place in  the Cook  Inlet Basin.   He                                                               
stated that  KPFA is opposed  to the legislative  confirmation of                                                               
Dr. John  White to  the Board  of Fisheries.   Mr.  Williams said                                                               
KPFA feels a real need for  a "bona fide" commercial fisherman on                                                               
the Board  of Fisheries,  saying "as  of now we  only have  one -                                                               
that's  Grant  Miller."   He  added  that  the governor  had  not                                                               
appointed  any [fishermen]  to the  Board of  Fisheries in  seven                                                               
years.  He continued:                                                                                                           
     In  Cook  Inlet, in  the  basin,  we have  three  board                                                                    
     members  on this  board, that  ... are  from our  area:                                                                    
     one's  an attorney,  one's a  saltwater guide,  and the                                                                    
     third is a retired sport-fish  biologist.  So, we have,                                                                    
     literally, no  representation and this creates  a large                                                                    
     imbalance when our issues are voted on.                                                                                    
MR. WILLIAMS  stated his opinion  that Dr. White has  "maybe been                                                               
on the  Board [of Fisheries] too  long" and has a  difficult time                                                               
"dealing  with"  and listening  to  the  public and  hearing  its                                                               
concerns, capabilities  that Mr.  Williams expressed should  be a                                                               
prerequisite  for  serving  on  the   Board  of  Fisheries.    He                                                               
mentioned Dr.  White's length of  term on the Board  of Fisheries                                                               
and said  KPFA has been  concerned about [Dr.  White] "developing                                                               
MR. WILLIAMS also  stated that Dr. White does not  "take heed" of                                                               
the  biological  studies  provided  to him  by  ADF&G's  research                                                               
biologists.    He  added,  "Lately   this  board  has  just  been                                                               
disregarding [the  studies], and going  [its] own way,  with some                                                               
... 'wacky' science  that really scares me."   Mr. Williams noted                                                               
that escapements have been raised  to the point where "[the Board                                                               
of  Fisheries is  going for  sustained [yield],  rather than  for                                                               
maximum sustained  [yield]."   He added  that "down  cycles" were                                                               
also  to blame.   Mr.  Williams concluded,  saying [KPFA]  had no                                                               
objection to the reappointment of  Russell Nelson to the Board of                                                               
Number 2385                                                                                                                     
REPRESENTATIVE KAPSNER  asked Mr. Williams  how he could  say Dr.                                                               
White was not a "bona fide" fisherman.                                                                                          
MR. WILLIAMS defined a fisherman  qualified to serve on the Board                                                               
of  Fisheries  as  someone  who  fishes all  year  round  and  is                                                               
involved in  a variety of fisheries  - perhaps in crab  and cod -                                                               
and has a "wider spectrum"  on what's happening in the fisheries.                                                               
Based on  those guidelines,  Mr. Williams  admitted he  would not                                                               
consider himself a good candidate for the position.                                                                             
MR. WILLIAMS said, "Our representation  right now, basically, has                                                               
no commercial  fishing from our  area on  it."  He  remarked that                                                               
the  Board of  Fisheries was  supposed  to hold  a meeting  every                                                               
three years,  but has met  five or six times  in the last  six or                                                               
seven  years.    He  said,  "If  we're  going  to  get  all  this                                                               
attention,  I really  feel like  we need  to have  somebody [who]                                                               
represents our area."                                                                                                           
REPRESENTATIVE KAPSNER asked Mr.  Williams to clarify whether his                                                               
opposition was  "not as much  personal against Dr. White,"  as it                                                               
was a "geographic preference."                                                                                                  
MR. WILLIAMS did  not agree, stating that he does  not agree with                                                               
the  way  Dr.  White  has  conducted  himself  on  the  Board  of                                                               
Fisheries.    He reiterated  his  previous  statements that  many                                                               
people find  Dr. White  to be  unapproachable and  unreceptive to                                                               
the  best  biological  information.   In  regard  to  the  latter                                                               
statement, Mr. Williams also mentioned Chairman [Dan] Coffey.                                                                   
MR. WILLIAMS,  in response  to Representative  Kapsner, responded                                                               
that although  it was probably not  too long for a  legislator to                                                               
serve  for six  years, the  same amount  of time  on a  volunteer                                                               
board was too long.  He explained  that many of the issues on the                                                               
Board of  Fisheries are  "contentious," and  a board  member gets                                                               
involved in them and, understandably,  wants to see them through,                                                               
but  inevitably picks  up  "baggage"  and "gets  too  much of  an                                                               
agenda going."                                                                                                                  
REPRESENTATIVE KAPSNER  said Dr. White was  very open-minded, and                                                               
she was  sorry that  Mr. Williams' experiences  with him  had not                                                               
been as good.                                                                                                                   
Number 2249                                                                                                                     
REPRESENTATIVE GREEN  said he  had presumed  that the  members of                                                               
the Board of  Fisheries were "neutral" and  would "weigh things,"                                                               
but Mr.  Williams' use  of the  words, "agenda,"  "location," and                                                               
"association"  made him  think that  Mr.  Williams thought  there                                                               
might be bias among the Board of Fisheries members.                                                                             
MR. WILLIAMS  replied he  could only  "speak for  his area."   He                                                               
     Our  fisheries ...in  the  [Cook]  Inlet [have]  pretty                                                                    
     much  been dismantled  in  the last  seven  years.   We                                                                    
     didn't expect  the runs to be  as high as they  were in                                                                    
     the  late eighties  forever and  the price  to stay  as                                                                    
     high.  ...  we always knew we were going  to come off a                                                                    
     "cloud" for  awhile, but basically, ...  with the raise                                                                    
     in escapement  levels, it  keeps us  out of  the water.                                                                    
     We only fish two days a  week.  So, there's five days a                                                                    
     week that  fish are all in  the river.  If  the peak of                                                                    
     the run comes  in when the timing is right,  we may get                                                                    
     an extra week in July.                                                                                                     
     ...  We don't  fish  [coho salmon]  any  longer.   That                                                                    
     season's curtailed  completely; we're out of  the water                                                                    
     by August 7.  ... Some  people in Cook Inlet start July                                                                    
     10 and  they're done August  5.  I mean,  we're talking                                                                    
     about  a ...  four- to  five-week window  here with  no                                                                    
     fishing time available for us.   I don't know what else                                                                    
     to  say.   Other than  a  real large  return, we're  so                                                                    
     limited on fishing time.                                                                                                   
     We've  lost our  maximum sustained  yield on  the Kenai                                                                    
     River, basically.   And  we had it  before, and  we ...                                                                    
     also  had  a  sustained  yield  on  the  other  smaller                                                                    
     tributaries,  so it's  not like  we just  worried about                                                                    
     the Kenai  and forgot about  the rest - that  was never                                                                    
     the board's intent.                                                                                                        
REPRESENTATIVE GREEN  said "you're  out of  the water"  and asked                                                               
Mr. Williams if he was a setnetter.                                                                                             
MR. WILLIAMS said yes.                                                                                                          
Number 2147                                                                                                                     
REPRESENTATIVE McGUIRE  asked if  Mr. Williams  could objectively                                                               
say what would have happened  to subsistence and sport fish users                                                               
if the escapement level had not been raised.                                                                                    
MR. WILLIAMS  answered there  are very  few subsistence  users in                                                               
the  [Cook Inlet]  area  at this  time.   He  stated  that a  few                                                               
educational permits  are allowed  for fishing  in the  river, and                                                               
"they"  have been  very good  about not  fishing when  there's no                                                               
escapement.    Mr.  Williams  said   the  condition  of  "maximum                                                               
sustained  yield"  is  created,   by  deciding  "what  window  of                                                               
escapement is going to bring back the most fish to the river."                                                                  
He continued:                                                                                                                   
     What's  happened since  then  is we  went  from an  MSY                                                                    
     [maximum   sustained   yield]   to  an   OEG   [optimum                                                                    
     escapement  goal].    In other  words,  it's  going  to                                                                    
     sustain  a  fishery,  but  it's   going  to  take  into                                                                    
     consideration the socio/economic  factors in the river,                                                                    
     [for instance]:   guides [and]  the public.   And we've                                                                    
     never had  a problem  with that.   We just  never found                                                                    
     any common ground, ... it's  always been one way or the                                                                    
     Dipnetters, basically,  are able  to fish two  to three                                                                    
     weeks [and]  harvest anywhere  from 150,000  to 300,000                                                                    
     sockeye in the  Cook Inlet basin.   Sport fishermen, at                                                                    
     best, can only harvest 2 out  of 10 fish that go up the                                                                    
     river.  So  what happens is we let so  many fish in the                                                                    
     river ...  get harvested.   We put over a  million fish                                                                    
     in the Kenai [River], and the return suffers for it.                                                                       
     During  Exxon  Valdez that  happened  --  four or  five                                                                    
     other years.  If you  get a biological escapement goal,                                                                    
     up in that area, that means  take out all the fish that                                                                    
     have been caught.   It will actually  make the spawning                                                                    
     escapement -- Our department  brought forth the numbers                                                                    
     they  thought  best,  roughly,  a  BEG  of  300,000  to                                                                    
     500,000 is what brought back our best funds.                                                                               
REPRESENTATIVE GREEN questioned being up to 800,000.                                                                            
MR. WILLIAMS answered, "Actually,  1.2 million (indisc.) account,                                                               
which would  bring [900,000] to  [950,000].  He clarified  he was                                                               
not  blaming  the  actions  of   the  Board  [of  Fisheries]  for                                                               
statewide poor runs, but was concerned with [the numbers].                                                                      
Number 1997                                                                                                                     
DR.  WHITE responded  to  the last  statements  by Mr.  Williams,                                                               
saying,  "Reasonable people  differ in  their interpretations  of                                                               
the data."  He said  he respectfully disagreed with Mr. William's                                                               
presentation, which was  based solely upon the Kenai  River.  Dr.                                                               
White  stated  the higher  escapement  goals  improved the  total                                                               
nutriment of the system and were  better, not only for the target                                                               
species of red  salmon, within the Kenai River  drainage, but for                                                               
the "healthy carrying capacity" of  the ecosystem for all species                                                               
in the  Kenai River.   He mentioned rainbow trout,  Dolly Varden,                                                               
Coho,  and other  red salmon  in the  Russian River.   Dr.  White                                                               
pointed  out Mr.  Williams neglected  to  address that  increased                                                               
escapement  also  allowed for  greater  escapement  on "the  west                                                               
side"  and  into the  northern  rivers  in the  Anchorage  Basin:                                                               
Turnagain Arm, Knik Arm, and the Susitna [River].                                                                               
CO-CHAIR SCALZI  asked Dr.  White to clarify  that [what  he just                                                               
stated] was contrary to the recommendations of ADF&G.                                                                           
DR. WHITE  responded he did not  agree with that.   He said, "The                                                               
Board [of Fisheries] has the  authority to have optimal sustained                                                               
yield,  which  may   be  above  or  below   an  escapement  level                                                               
determined for  one specie."   He emphasized  that [the  Board of                                                               
Fisheries]  worked with  [ADF&G] at  length "to  stay within  the                                                               
confines of sustainable  yields for all species."   He said there                                                               
was  a   concurrence.    Dr.   White  allowed  that   a  possible                                                               
interpretation  might  be that  there  was  a difference  in  the                                                               
maximum sustained yield, only for Kenai red salmon.                                                                             
Number 1835                                                                                                                     
REPRESENTATIVE  KAPSNER, regarding  Dr.  White's statement  about                                                               
higher escapement  goals improving  the nutriment of  the system,                                                               
mentioned an article from the  Anchorage Daily News that said the                                                             
greater the  number of spawning  fish that  eventually decompose,                                                               
the better it is for the ecosystem of the fish fry.                                                                             
CO-CHAIR SCALZI  added that there  is a difference of  opinion on                                                               
"how  much fish  you can  put  in a  river."   He mentioned  that                                                               
Coghill Lake  was dead  for 10 years  after over-escapement.   He                                                               
pointed out Carl Rosier was in the room from ADF&G.                                                                             
Number 1748                                                                                                                     
KEN LARSON, a  charter boat operator "out of  Valdez, Alaska" and                                                               
member of  the Valdez Charter Boat  Association (VCBA), testified                                                               
via teleconference in support of  the reappointment of Mr. Nelson                                                               
and Dr. White  to the Board of Fisheries.   Regarding the subject                                                               
of  length of  term in  office, Mr.  Larson said,  "I don't  like                                                               
going back to  the beginning, if there's a body  of knowledge out                                                               
there that can be used and should be used."                                                                                     
Number 1707                                                                                                                     
VIRGIL  UMPHENOUR,  former  member  of the  Board  of  Fisheries,                                                               
testified via  teleconference in  support of  Mr. Nelson  and Dr.                                                               
White.  He  worked with Dr. White and, contrary  to the statement                                                               
made in  previous testimony,  said Dr. White  always goes  out of                                                               
his way to make himself available to the public.                                                                                
Number 1669                                                                                                                     
PATRICK  BOOKEY,  representing himself  and  "Luck  of the  Irish                                                               
Charters," out  of Valdez,  Alaska, testified  via teleconference                                                               
in support  of the reappointment of  Dr. White and Mr.  Nelson to                                                               
the  Board  of   Fisheries.    He  stated   both  appointees  are                                                               
experienced and have shown their  "capacities" and "abilities" in                                                               
the past.                                                                                                                       
Number 1636                                                                                                                     
GEORGE  YASKA, testified  via teleconference,  on  behalf of  the                                                               
Tanana Chief's Conference and its  president, Steve Guiness (ph),                                                               
in support  of the reappointment of  Dr. White and Mr.  Nelson to                                                               
the  Board of  Fisheries.   He stated  both appointees  have been                                                               
"good  conservators of  the  resource on  the  Yukon [River]  and                                                               
throughout Alaska."                                                                                                             
Number 1566                                                                                                                     
CARL ROSIER, President, Alaska Outdoor Council (AOC), read the                                                                  
following testimony, [available in the committee packet]:                                                                       
     As many  of you know  the Alaska Outdoor Council  is an                                                                    
     association of 45  outdoor recreation groups supporting                                                                    
     conservation  and   wise  use  of  Alaska's   fish  and                                                                    
     wildlife resources,  protection of public  access, fair                                                                    
     allocation of  resources, and  equal protection  of the                                                                    
     constitutional  rights  of  all  Alaskans  to  use  our                                                                    
     natural resources.                                                                                                         
     The  Alaska Outdoor  Council is  a strong  supporter of                                                                    
     the Alaska Board regulatory system.   During the nearly                                                                    
     30 years  of my  career with  the Alaska  Department of                                                                    
     Fish & Game, I have  had the opportunity to observe and                                                                    
     participate  in  a  significant   number  of  Board  of                                                                    
     Fisheries regulatory  sessions with a variety  of board                                                                    
     members.   Alaska's  system is  the most  publicly open                                                                    
     process in the nation and  when one views the generally                                                                    
     good condition  of our  fish resources  it is  a system                                                                    
     that has served the state  well.  A significant part of                                                                    
     the  board's effectiveness  has  been  the quality  and                                                                    
     continuity  of  many  dedicated individuals  that  have                                                                    
     served  on   what  we  consider  to   be  the  toughest                                                                    
     regulatory appointment in the state.                                                                                       
     Your  committee has  before it  two very  dedicated and                                                                    
     capable individuals  that are truly deserving  of being                                                                    
     confirmed for  another term on the  Board of Fisheries.                                                                    
     The   current  Board   of  Fisheries   operates  as   a                                                                    
     consensus-building   entity    that   has   established                                                                    
     efficient  processes to  bring  opposing  views to  the                                                                    
     table  for   resolution  among  the   stakeholders  and                                                                    
     further   enlightenment  of   the   board.     If   the                                                                    
     stakeholders cannot reach consensus,  the board has the                                                                    
     last and  best information on  which to make  the final                                                                    
     decision on  a given  issue.  Much  of this  system has                                                                    
     been arrived at through the leadership of Dr. White.                                                                       
     The present board leaves no  question about science and                                                                    
     conservation   of    the   resource    being   priority                                                                    
     considerations in the regulatory  decision process.  In                                                                    
     this  arena the  Board of  Fisheries has  completed the                                                                    
     initial development  of a sustainable  fisheries policy                                                                    
     for  the state  and is  now making  application to  the                                                                    
     various  fisheries  statewide.     Development  of  the                                                                    
     policy  has occurred  in  conjunction with  stakeholder                                                                    
     groups  and  the  technical support  of  ADF&G.    This                                                                    
     policy  is now  providing guidance  to the  public, the                                                                    
     department,  and future  boards on  decision making  to                                                                    
     assure  continued  sustained  yield  of  our  fisheries                                                                    
     resources.  In  our view, [it is] a good  piece of work                                                                    
     under  the leadership  ... of  Dr. White  and one  that                                                                    
     will go  far in  assuring the  health of  our fishery's                                                                    
     Balance in  regard to decisions affecting  a variety of                                                                    
     user groups by  the current board is  probably the best                                                                    
     I  have observed  in a  fish  board.   No one  interest                                                                    
     group  dominates  the  board   as  we  have  frequently                                                                    
     observed  in the  past.    It is  AOC's  view that  the                                                                    
     present  Board  gives   true  consideration  of  public                                                                    
     demands, whether  you are [a]  commercial, subsistence,                                                                    
     personal-use, or  sport [user].  As  a participant, you                                                                    
     may   not  like   a  decision,   but  you   have  every                                                                    
     opportunity to make  your case and know  that the board                                                                    
     is listening and fairly evaluating your view.                                                                              
     All members of  the current board come  to the meetings                                                                    
     well prepared and  it is obvious by  the debates within                                                                    
     the board that  the reams of material  produced for the                                                                    
     board's  edification is  indeed being  used to  support                                                                    
     the board's decisions.                                                                                                     
     The two members before  you for confirmation have grown                                                                    
     in  their knowledge  and understanding  of the  various                                                                    
     complex  fisheries  in  our   state.    Both  of  these                                                                    
     individuals  have become  an integral  part  of a  well                                                                    
     functioning regulatory  board that is important  to all                                                                    
     Alaskans.    The system  is  functioning  well and  the                                                                    
     Alaska   Outdoor   Council   urges   you   to   support                                                                    
     confirmation of  Dr. John White and  Mr. Russell Nelson                                                                    
     for another term on the Board of Fisheries.                                                                                
     Thank you for the opportunity to testify.                                                                                  
Number 1287                                                                                                                     
REUBEN HANKE,  owner/operator of  a guide  business on  the Kenai                                                               
River,   testified  via   teleconference   in   support  of   the                                                               
reappointment  of  Dr. White  and  Mr.  Nelson  to the  Board  of                                                               
Fisheries.   Regarding both appointees,  he listed  the following                                                               
considerations:   they  served well  on the  Board of  Fisheries;                                                               
they  were very  approachable;  and  they displayed  impartiality                                                               
between  commercial  fishing,  sport fishing,  personal  use,  or                                                               
subsistence fishing, in decisions affecting those groups.                                                                       
Number 1231                                                                                                                     
JOE  HANES, an  Alaskan resident  for  39 years  and Kenai  River                                                               
guide  for the  past 22  years, testified  via teleconference  in                                                               
support of the  reappointment of Dr. White and Mr.  Nelson to the                                                               
Board of  Fisheries.   He reminded  the House  Resources Standing                                                               
Committee  that there  are two  primary, harvestable  wild stocks                                                               
left in  the United States, which  are located in the  Cook Inlet                                                               
and  the Bering  Sea.   He  said,  "And yet,  in  the history  of                                                               
mankind, we have  yet to save -- and have  a sustainable fishery,                                                               
both  commercial and  sport.   And  this board  makes very  tough                                                               
decisions, in an attempt, for  the first time ever, to accomplish                                                               
that goal."                                                                                                                     
MR. HANES  mentioned fishing  time that's  been lost  by himself,                                                               
drifters, and setnetters, and reiterated  that Mr. Nelson and Dr.                                                               
White must make tough decisions on the board.  He said:                                                                         
     I'd just like to see  them continue.  And, hopefully we                                                                    
     can ... make some of  these other decisions that affect                                                                    
     all of us  here in Cook Inlet, some of  which you don't                                                                    
     all  have  control  over,  but  --  for  instance,  1/2                                                                    
     million pounds  of pollock was  harvested 15  years ago                                                                    
     and last year they harvested 3 billion pounds.                                                                             
Number 1095                                                                                                                     
DREW  SPARLIN, testifying  via teleconference,  mentioned he  had                                                               
submitted written testimony, [included  in the committee packet],                                                               
and stated  his opposition of  the reappointment of Dr.  White to                                                               
the Board  of Fisheries.   He said Dr.  White had not  served the                                                               
commercial industry well,  or fairly.  Mr. Sparlin  noted his own                                                               
experience  of 37  years in  the industry,  as a  "drifter."   He                                                               
mentioned  his observation  of "fish  politics" throughout  those                                                               
years, working  with many  boards and  many people  involved with                                                               
those boards.   Mr. Sparlin indicated an  escapement problem that                                                               
occurred  last year,  when  the  drift fleet  and  set nets  were                                                               
restricted  for a  "great length  of  time."   He mentioned  coho                                                               
[salmon],  sockeye [salmon],  the  Kenai River,  and "20  million                                                               
pinks swimming up the Cook Inlet."  He continued:                                                                               
     We asked the  department to open the  fishery, as early                                                                    
     as  August 4,  and  we asked  them  to enact  emergency                                                                    
     orders,  so  that  they   could  conduct  a  reasonable                                                                    
     fishery.   There [were]  150,000 "humpies"  caught last                                                                    
     year,  and 21  million,  by the  Department  of Fish  &                                                                    
     Game's estimate of 21 million,  that swam into the Cook                                                                    
     Inlet.   At  the same  time we  were here  in Soldotna,                                                                    
     considering  declaring the  area a  disaster.   We have                                                                    
     canneries  that are  closing.    Processing plants  are                                                                    
     leaving, right  and left.   We need to  understand that                                                                    
     we have to have a stable  industry, and we have to have                                                                    
     an  opportunity to  be able  to participate  in surplus                                                                    
     ...  stocks, so  that this  can be  economically passed                                                                    
     throughout  our community,  and  therefore benefit  the                                                                    
     State of Alaska.                                                                                                           
MR.  SPARLIN recognized  he expressed  the minority  opinion from                                                               
those  who   had  previously  testified,  but   urged  the  House                                                               
Resources Standing  Committee to  "seriously investigate  some of                                                               
these issues."  He stated it is  wrong when not one person on the                                                               
Board  [of Fisheries]  derives "a  significant  portion of  their                                                               
income" from commercial fishing.                                                                                                
Number 0901                                                                                                                     
REPRESENTATIVE  KAPSNER   asked  Mr.   Sparlin  to   clarify  his                                                               
statement  about   the  qualifications  of  Board   of  Fisheries                                                               
MR.  SPARLIN reiterated  that there  should be  better commercial                                                               
fisheries representation  on the Board of  Fisheries, considering                                                               
how important  commercial fisheries are  to the State  of Alaska.                                                               
He added  that Dr. White  is a dentist, and  doesn't do a  lot of                                                               
commercial fishing  and the  other two members  [of the  Board of                                                               
Fisheries]  who  have  permits   are  "very  marginal  commercial                                                               
fishermen," in terms of their income derived from fishing.                                                                      
REPRESENTATIVE KAPSNER responded:                                                                                               
     This  summer we  had just  a handful  of openings,  and                                                                    
     most  people who  fished, didn't  make enough  money to                                                                    
     reimburse  the cost  of gas,  or their  crew.   One guy                                                                    
     from Kasigluk went  out fishing and I heard  him on the                                                                    
     radio  saying  that  he had  enough  money  after  that                                                                    
     "opener" to  buy his kids  a half-gallon of  ice cream.                                                                    
     We just don't have a  fishery there anymore and I don't                                                                    
     think  that's  the fault  of  the  Board of  Fisheries.                                                                    
     It's just not there.  And  I'm sure that if we did have                                                                    
     a fishery, I'd see Dr. White fishing every "opener."                                                                       
MR.  SPARLIN  replied  he  appreciated  Representative  Kapsner's                                                               
statement  and  sympathized  with  the  "severe  situation,"  but                                                               
pointed out  that the  issues being  discussed have  been ongoing                                                               
during Dr. White's terms on the Board of Fisheries.                                                                             
Number 0702                                                                                                                     
AUSTIN AHMASUK, Subsistence  Specialist, Kawerak, Inc., testified                                                               
via teleconference.  Mr. Ahmasuk  mentioned testifying before the                                                               
Board of Fisheries on several  occasions, as well as attending "a                                                               
significant  portion   of  the  month-long  January   meeting  in                                                               
Anchorage this year."  He stated:                                                                                               
     The Board of  Fisheries has the very  difficult task of                                                                    
     developing  fisheries regulations  that must  answer to                                                                    
     wide interests  and reasoned  scientific understanding.                                                                    
     Dr.  John  White  and  Russell  Nelson  both  represent                                                                    
     voting  records on  important fishery  regulations that                                                                    
     favor  Western  Alaskan  salmon and  non-salmon  stocks                                                                    
     that   have    seen   disastrous   returns.       Their                                                                    
     participation  in the  Board  of  Fisheries actions  in                                                                    
     past years has brought to  light some of the biological                                                                    
     concerns that our  region has been pointing  to for the                                                                    
     last 10  years.  Though  Dr. White and Mr.  Nelson have                                                                    
     voted  favorably in  past  years  on important  fishery                                                                    
     issues  for Western  Alaska,  they understandably  must                                                                    
     make decisions  on other fish stocks  throughout all of                                                                    
     Alaska.   Having  seen firsthand  the rationale  within                                                                    
     the  Board of  Fisheries,  I'm happy  to recommend  Dr.                                                                    
     White and Mr.  Nelson for confirmation to  the Board of                                                                    
     Fisheries, [because of] their  high level of calculated                                                                    
     and  thoughtful  efforts  in   this  state's  Board  of                                                                    
     Fisheries regulatory process.                                                                                              
DON  STILES, Fishery  Specialist,  Kawerak,  Inc., testified  via                                                               
teleconference, on  behalf of  Kawerak's 22  tribal organizations                                                               
and over  6,000 residents throughout  the Bering  Straits region,                                                               
in support  of the reappointment of  Dr. White and Mr.  Nelson to                                                               
the Board of Fisheries.  He stated:                                                                                             
     During ...  the candidates'  tenure on the  Board, they                                                                    
     have acted  as responsible  stewards for  the fisheries                                                                    
     of  Alaska, and  [have] well-represented  all the  user                                                                    
     groups - subsistence, commercial,  and sport - involved                                                                    
     in the  board process.   Both Mr. Nelson and  Dr. White                                                                    
     go  out  of  their  way   to  ensure  that  they  fully                                                                    
     understand the  issues before the Board  [of Fisheries]                                                                    
     and  weigh the  often-conflicting public  viewpoints to                                                                    
     arrive at well-balanced and rational decisions.                                                                            
Number 0502                                                                                                                     
CO-CHAIR SCALZI announced the end of public testimony and said                                                                  
the confirmation hearings would continue on Wednesday, April 25,                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 4:29 p.m.                                                                 

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