Legislature(2003 - 2004)

05/09/2003 08:10 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                          May 9, 2003                                                                                           
                           8:10 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Hugh Fate, Chair                                                                                                 
Representative Beverly Masek, Vice Chair                                                                                        
Representative Carl Gatto                                                                                                       
Representative Cheryll Heinze                                                                                                   
Representative Bob Lynn                                                                                                         
Representative Carl Morgan                                                                                                      
Representative Kelly Wolf                                                                                                       
Representative Beth Kerttula                                                                                                    
Representative Sharon Cissna                                                                                                    
Representative David Guttenberg                                                                                                 
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 277                                                                                                              
"An Act  relating to the  powers of the Regulatory  Commission of                                                               
Alaska in  regard to intrastate pipeline  transportation services                                                               
and pipeline facilities, to the rate  of interest for funds to be                                                               
paid by pipeline shippers or carriers  at the end of a suspension                                                               
of  tariff   filing,  and  to  the   prospective  application  of                                                               
increased  standards on  regulated  pipeline utilities;  allowing                                                               
the  commission  to  accept  rates   set  in  conformity  with  a                                                               
settlement agreement between  the state and one  or more pipeline                                                               
carriers and  to enforce the  terms of a settlement  agreement in                                                               
regard  to  intrastate  rates; and  providing  for  an  effective                                                               
     - HEARD AND HELD                                                                                                           
SENATE BILL NO. 147                                                                                                             
"An  Act  relating  to  control of  nuisance  wild  animals;  and                                                               
providing for an effective date."                                                                                               
     - MOVED SB 147 OUT OF COMMITTEE                                                                                            
CS FOR SENATE BILL NO. 155(RES)                                                                                                 
"An Act relating to predator control programs; and providing for                                                                
an effective date."                                                                                                             
     - MOVED CSSB 155(RES) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 246                                                                                                              
"An Act relating to the limitation on upland acreage that a                                                                     
person may take or hold under oil and gas leases; and providing                                                                 
for an effective date."                                                                                                         
     - SCHEDULED BUT NOT HEARD                                                                                                  
SENATE BILL NO. 88                                                                                                              
"An Act relating to standards for forest resources and                                                                          
practices; and providing for an effective date."                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
HOUSE BILL NO. 196                                                                                                              
"An Act relating to carbon sequestration; and providing for an                                                                  
effective date."                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
PREVIOUS ACTION                                                                                                               
BILL: HB 277                                                                                                                  
SHORT TITLE:PIPELINE UTILITIES REGULATION                                                                                       
SPONSOR(S): REPRESENTATIVE(S) DAHLSTROM                                                                                         
Jrn-Date   Jrn-Page                     Action                                                                                  
04/17/03     1026       (H)        READ THE FIRST TIME -                                                                        
04/17/03     1026       (H)        O&G, L&C                                                                                     
04/22/03                (H)        O&G AT 3:15 PM CAPITOL 124                                                                   
04/22/03                (H)        -- Meeting Canceled --                                                                       
04/23/03     1081       (H)        COSPONSOR(S): KOHRING                                                                        
04/24/03     1108       (H)        RES REFERRAL ADDED AFTER O&G                                                                 
04/24/03                (H)        O&G AT 3:15 PM CAPITOL 124                                                                   
04/24/03                (H)        Heard & Held                                                                                 
04/24/03                (H)        MINUTE(O&G)                                                                                  
04/29/03                (H)        O&G AT 3:15 PM CAPITOL 124                                                                   
04/29/03                (H)        Scheduled But Not Heard                                                                      
05/01/03                (H)        O&G AT 3:15 PM CAPITOL 124                                                                   
05/01/03                (H)        Moved CSHB 277(O&G) Out of                                                                   
05/01/03                (H)        MINUTE(O&G)                                                                                  
05/02/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
05/02/03                (H)        Scheduled But Not Heard                                                                      
                                   <Mtg. Postponed to 4:00 PM>                                                                  
05/02/03                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
05/02/03                (H)        <Pending Referral> -- Meeting                                                                
                                   Canceled --                                                                                  
05/05/03     1316       (H)        O&G RPT CS(O&G) NT 1DP 6NR                                                                   
05/05/03     1316       (H)        DP: KOHRING; NR: HOLM,                                                                       
                                   ROKEBERG, FATE,                                                                              
05/05/03     1316       (H)        KERTTULA, CRAWFORD, MCGUIRE                                                                  
05/05/03     1317       (H)        FN(S): FORTHCOMING                                                                           
05/06/03     1372       (H)        FN1: ZERO(REV) RECEIVED                                                                      
05/06/03     1372       (H)        FN2: ZERO(DNR) RECEIVED                                                                      
05/07/03                (H)        RES AT 8:00 AM CAPITOL 124                                                                   
05/07/03                (H)        Bill Postponed 1:30 PM --                                                                    
05/07/03                (H)        RES AT 1:30 PM CAPITOL 124                                                                   
05/07/03                (H)        Heard & Held                                                                                 
05/07/03                (H)        MINUTE(RES)                                                                                  
05/09/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
05/09/03                (H)        Scheduled But Not Heard                                                                      
05/09/03                (H)        RES AT 8:00 AM CAPITOL 124                                                                   
BILL: SB 147                                                                                                                  
SHORT TITLE:CONTROL OF NUISANCE WILD ANIMALS                                                                                    
SPONSOR(S): SENATOR(S) GREEN                                                                                                    
Jrn-Date   Jrn-Page                     Action                                                                                  
03/17/03     0517       (S)        READ THE FIRST TIME -                                                                        
03/17/03     0517       (S)        RES, FIN                                                                                     
04/16/03                (S)        RES AT 3:30 PM BUTROVICH 205                                                                 
04/16/03                (S)        Moved Out of Committee                                                                       
04/16/03                (S)        MINUTE(RES)                                                                                  
04/17/03     0891       (S)        RES RPT 5DP 2NR                                                                              
04/17/03     0891       (S)        DP: OGAN, SEEKINS, STEVENS B,                                                                
04/17/03     0891       (S)        DYSON; NR: LINCOLN, ELTON                                                                    
04/17/03     0891       (S)        FN1: (DFG)                                                                                   
04/23/03                (S)        FIN AT 10:00 AM SENATE                                                                       
                                   FINANCE 532                                                                                  
04/23/03                (S)        Heard & Held                                                                                 
04/23/03                (S)        MINUTE(FIN)                                                                                  
04/25/03     0966       (S)        FIN RPT 5DP 2NR                                                                              
04/25/03     0966       (S)        DP: GREEN, WILKEN, TAYLOR,                                                                   
04/25/03     0966       (S)        STEVENS B; NR: HOFFMAN, OLSON                                                                
04/25/03     0966       (S)        FN1: (DFG)                                                                                   
04/25/03     0976       (S)        COSPONSOR(S): WILKEN, TAYLOR,                                                                
04/25/03     0976       (S)        WAGONER, DYSON, BUNDE,                                                                       
                                   COWDERY, OGAN,                                                                               
04/25/03     0976       (S)        OLSON, STEVENS B                                                                             
04/25/03                (S)        FIN AT 9:00 AM SENATE FINANCE                                                                
04/25/03                (S)        Moved Out of Committee                                                                       
04/25/03                (S)        MINUTE(FIN)                                                                                  
04/29/03     1027       (S)        RULES TO CALENDAR 4/29/2003                                                                  
04/29/03     1027       (S)        READ THE SECOND TIME                                                                         
04/29/03     1028       (S)        ADVANCED TO THIRD READING                                                                    
                                   4/30 CALENDAR                                                                                
04/30/03     1051       (S)        READ THE THIRD TIME SB 147                                                                   
04/30/03     1051       (S)        PASSED Y18 N- E1 A1                                                                          
04/30/03     1051       (S)        EFFECTIVE DATE(S) SAME AS                                                                    
04/30/03     1051       (S)        ELLIS NOTICE OF                                                                              
05/01/03     1091       (S)        RECONSIDERATION NOT TAKEN UP                                                                 
05/01/03     1091       (S)        TRANSMITTED TO (H)                                                                           
05/01/03     1091       (S)        VERSION: SB 147                                                                              
05/02/03     1268       (H)        READ THE FIRST TIME -                                                                        
05/02/03     1268       (H)        RES, FIN                                                                                     
05/09/03                (H)        RES AT 8:00 AM CAPITOL 124                                                                   
BILL: SB 155                                                                                                                  
SHORT TITLE:PREDATOR CONTROL/AIRBORNE SHOOTING                                                                                  
SPONSOR(S): SENATOR(S) SEEKINS                                                                                                  
Jrn-Date   Jrn-Page                     Action                                                                                  
03/20/03     0551       (S)        READ THE FIRST TIME -                                                                        
03/20/03     0551       (S)        JUD, RES                                                                                     
03/31/03                (S)        JUD AT 1:30 PM BELTZ 211                                                                     
03/31/03                (S)        Heard & Held                                                                                 
03/31/03                (S)        MINUTE(JUD)                                                                                  
04/02/03                (H)        MINUTE(RES)                                                                                  
04/04/03                (S)        JUD AT 1:30 PM BELTZ 211                                                                     
04/04/03                (S)        Heard & Held                                                                                 
04/04/03                (S)        MINUTE(JUD)                                                                                  
04/16/03                (S)        JUD AT 1:00 PM BELTZ 211                                                                     
04/16/03                (S)        Moved CSSB 155(JUD) Out of                                                                   
04/16/03                (S)        MINUTE(JUD)                                                                                  
04/17/03     0892       (S)        JUD RPT CS 2DP 2DNP 1NR NEW                                                                  
04/17/03     0892       (S)        DP: SEEKINS, THERRIAULT;                                                                     
04/17/03     0892       (S)        DNP: FRENCH, ELLIS; NR: OGAN                                                                 
04/17/03     0892       (S)        FN1: ZERO(DFG)                                                                               
04/30/03                (S)        RES AT 3:30 PM BUTROVICH 205                                                                 
04/30/03                (S)        Moved CSSB 155(RES) Out of                                                                   
04/30/03                (S)        MINUTE(RES)                                                                                  
05/01/03     1073       (S)        RES RPT CS 5DP 1DNP NEW TITLE                                                                
05/01/03     1074       (S)        DP: WAGONER, DYSON, LINCOLN,                                                                 
                                   STEVENS B,                                                                                   
05/01/03     1074       (S)        SEEKINS; DNP: ELTON                                                                          
05/01/03     1074       (S)        FN1: ZERO(DFG)                                                                               
05/02/03     1105       (S)        RULES TO CALENDAR 5/2/2003                                                                   
05/02/03     1105       (S)        READ THE SECOND TIME                                                                         
05/02/03     1105       (S)        RES CS ADOPTED UNAN CONSENT                                                                  
05/02/03     1106       (S)        ADVANCED TO THIRD READING 5/3                                                                
05/02/03     1106       (S)        COSPONSOR(S): LINCOLN, OGAN,                                                                 
05/02/03     1106       (S)        GREEN, DYSON, WAGONER,                                                                       
                                   STEVENS B,                                                                                   
05/02/03     1106       (S)        THERRIAULT                                                                                   
05/03/03     1133       (S)        READ THE THIRD TIME CSSB
05/03/03     1133       (S)        COSPONSOR(S): HOFFMAN,                                                                       
                                   WILKEN, TAYLOR                                                                               
05/03/03     1133       (S)        PASSED Y14 N1 E5                                                                             
05/03/03     1133       (S)        EFFECTIVE DATE(S) SAME AS                                                                    
05/03/03     1133       (S)        ELTON NOTICE OF                                                                              
05/04/03     1147       (S)        RECONSIDERATION NOT TAKEN UP                                                                 
05/04/03     1148       (S)        TRANSMITTED TO (H)                                                                           
05/04/03     1148       (S)        VERSION: CSSB 155(RES)                                                                       
05/05/03     1306       (H)        READ THE FIRST TIME -                                                                        
05/05/03     1306       (H)        RES, CRA                                                                                     
05/08/03     1481       (H)        CROSS SPONSOR(S): MORGAN                                                                     
05/09/03                (H)        RES AT 8:00 AM CAPITOL 124                                                                   
WITNESS REGISTER                                                                                                              
LARRY HOULE, General Manager                                                                                                    
Alaska Support Industry Alliance                                                                                                
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Testified  in  support  of  the  proposed                                                               
committee substitute (CS) for HB 277 dated 5/6/2003.                                                                            
ROBIN O. BRENA, Attorney at Law                                                                                                 
Brena, Bell & Clarkson, PC                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   On  behalf of  Tesoro  Alaska Company  and                                                               
Anadarko Petroleum  Corporation, expressed concerns about  HB 277                                                               
and  asked  that  it  be  held to  more  carefully  consider  its                                                               
BONNIE ROBSON, Deputy Director                                                                                                  
Division of Oil & Gas                                                                                                           
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions on HB 277.                                                                              
JANICE GREGG LEVY, Assistant Attorney General                                                                                   
Oil, Gas & Mining Section                                                                                                       
Civil Division (Juneau)                                                                                                         
Department of Law                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on HB 277.                                                                              
DAVE HARBOUR, Commissioner, Chair                                                                                               
Regulatory Commission of Alaska                                                                                                 
Department of Community & Economic Development (DCED)                                                                           
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Expressed  concerns with  HB  277 and  the                                                               
regulatory void it would leave.                                                                                                 
AL BOLEA, President                                                                                                             
BP Pipelines Alaska                                                                                                             
POSITION STATEMENT:  Answered questions relating to HB 277.                                                                     
RANDAL BUCKENDORF, Counsel                                                                                                      
Anchorage Legal Department                                                                                                      
ConocoPhillips Alaska, Inc.                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions relating to HB 277.                                                                     
ROBERT DORAN                                                                                                                    
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:   Testified in  support of SB 147  as someone                                                               
with  a  business that  deals  with  problem wildlife  or  animal                                                               
damage control.                                                                                                                 
JACQUELINE TUPOU, Staff                                                                                                         
to Senator Lyda Green                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Presented  SB  147  on behalf  of  Senator                                                               
Green, sponsor, and answered questions.                                                                                         
MATT ROBUS, Director                                                                                                            
Division of Wildlife Conservation                                                                                               
Alaska Department of Fish & Game                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on  SB 147 and answered questions;                                                               
testified   on   SB   155,  saying   the   administration   finds                                                               
CSSB 155(RES) unacceptable  because the commissioner  is entirely                                                               
removed  from  the  process,  and proposing  an  amendment  as  a                                                               
compromise between that and the original bill version.                                                                          
KAREN DEATHERAGE                                                                                                                
Defenders of Wildlife                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on  SB 147, noting that she hadn't                                                               
been aware  of it; acknowledged  it may  be a positive  bill, but                                                               
related some questions and concerns.                                                                                            
SENATOR RALPH SEEKINS                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Testified as sponsor of  SB 155, explaining                                                               
changes in CSSB 155(RES) and answering questions.                                                                               
JESSE VANDERZANDEN, Executive Director                                                                                          
Alaska Outdoor Council (AOC)                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 155.                                                                            
DICK BISHOP                                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 155.                                                                            
PAUL JOSLIN, Conservation Biologist                                                                                             
Alaska Wildlife Alliance (AWA)                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to SB 155.                                                                         
JENNA WHITE                                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Testified on  SB 155,  expressing concerns                                                               
and countering figures given as reasons for the legislation.                                                                    
VIC VANBALLENBERGHE                                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Expressed concerns about SB 155.                                                                           
ROBERT FITHIAN, Executive Director                                                                                              
Alaska Professional Hunter Association                                                                                          
Tonsina, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of SB 155.                                                                            
ACTION NARRATIVE                                                                                                              
TAPE 03-40, SIDE A                                                                                                            
Number 0001                                                                                                                     
CHAIR HUGH  FATE called the  previously recessed  House Resources                                                             
Standing  Committee meeting  of May  7,  2003, back  to order  at                                                               
8:10 a.m.      Representatives   Fate,   Gatto,   Heinze,   Wolf,                                                               
Guttenberg,  and Kerttula  were  present at  the  call to  order.                                                               
Representatives Masek,  Lynn, and  Morgan arrived as  the meeting                                                               
was in progress.                                                                                                                
The committee took a brief at-ease.                                                                                             
HB 277-PIPELINE UTILITIES REGULATION                                                                                          
Number 0108                                                                                                                     
CHAIR FATE  announced that the  first order of business  would be                                                               
HOUSE  BILL NO.  277,  "An  Act relating  to  the  powers of  the                                                               
Regulatory Commission of Alaska  in regard to intrastate pipeline                                                               
transportation services  and pipeline facilities, to  the rate of                                                               
interest for  funds to be  paid by pipeline shippers  or carriers                                                               
at  the  end  of  a  suspension of  tariff  filing,  and  to  the                                                               
prospective  application  of  increased  standards  on  regulated                                                               
pipeline utilities;  allowing the commission to  accept rates set                                                               
in conformity with  a settlement agreement between  the state and                                                               
one  or more  pipeline carriers  and to  enforce the  terms of  a                                                               
settlement  agreement   in  regard   to  intrastate   rates;  and                                                               
providing for an effective date."                                                                                               
[Before the  committee, adopted as a  work draft on May  7, 2003,                                                               
was a  proposed committee substitute  (CS) labeled  CSHB 277(RES)                                                               
bil.doc, 5/6/2003.]                                                                                                             
CHAIR FATE informed members of his intention to try to perform                                                                  
some cleanup based on testimony heard from both sides of the                                                                    
Number 0280                                                                                                                     
LARRY HOULE,  General Manager,  Alaska Support  Industry Alliance                                                               
("the  Alliance"), began  by explaining  that the  Alliance is  a                                                               
statewide   nonprofit   trade   association  with   chapters   in                                                               
Fairbanks, Anchorage,  and Kenai.   He paraphrased  the following                                                               
written testimony:                                                                                                              
     The Alliance trade  association membership is comprised                                                                    
     of 420  member companies that provide  support services                                                                    
     and products  to Alaska's  oil and  gas industry.   Our                                                                    
     member  companies employ  over 25,000  Alaskans working                                                                    
     in  Alaska's  oil patch.    In  short, Alliance  member                                                                    
     companies perform  contract services and  sell products                                                                    
     to  the entire  oil  patch from  the exploration  phase                                                                    
     through to the refining industry.                                                                                          
     Initially, my  21-member board  of directors  looked at                                                                    
     HB  277 and  reached no  consensus in  the position  we                                                                    
     should take.   However, now that the  original bill has                                                                    
     been  appropriately  amended  by  the  bill's  sponsor,                                                                    
     Representative  Dahlstrom, and  the administration  has                                                                    
     submitted their amendments, the  21-member board of the                                                                    
     Alliance, by majority vote, has  elected to support the                                                                    
     amended   version  [Version   CSHB  277(RES)   bil.doc,                                                                    
     We  believe  the current  CS  provides  clarity in  the                                                                    
     regulatory  arena.     This  legislation   defines  the                                                                    
     jurisdictional  boundaries  with regard  to  intrastate                                                                    
     transportation that is  long overdue.  The  role of DNR                                                                    
     as the  landowner is  defined.   The bill  confirms the                                                                    
     jurisdiction of  the FERC  over interstate  matters and                                                                    
     finally  clarifies and  defines the  RCA's jurisdiction                                                                    
     over  intrastate services  rendered  by common  carrier                                                                    
     In summary, the bill tells  us who the rule makers are.                                                                    
     It defines the rule  makers' jurisdiction, which brings                                                                    
     the  much  needed  certainty  to  the  private  sector,                                                                    
     certainty that is essential when  making the huge long-                                                                    
     term  capital  investments  required  by  oil  and  gas                                                                    
      companies to develop Alaska's natural resources for                                                                       
     the benefit of Alaskans.                                                                                                   
MR.  HOULE concluded  by asking  the committee  to move  the bill                                                               
Number 0643                                                                                                                     
ROBIN  O. BRENA,  Attorney at  Law; Brena,  Bell &  Clarkson, PC,                                                               
explained  that  he  had  been retained  by  both  Tesoro  Alaska                                                               
Company   ("Tesoro")    and   Anadarko    Petroleum   Corporation                                                               
("Anadarko") to  assist them in  reviewing HB  277.  He  began by                                                               
respectfully  disagreeing with  most  of the  testimony from  the                                                               
proponents of  HB 277.   Mr. Brena said,  "We are not  here today                                                               
because  the Alaska  Pipeline Act  is broken;  we are  here today                                                               
because the Alaska Pipeline Act  worked exactly as it is supposed                                                               
to work and they would like to change that now."                                                                                
MR. BRENA told members that for  the past 25 years there has been                                                               
no  economic  regulation  of  the  Trans-Alaska  Pipeline  System                                                               
(TAPS) by any regulatory body.   Furthermore, there hasn't been a                                                               
just  and  reasonable  rate  on  TAPS  prior  to  the  Regulatory                                                               
Commission of  Alaska's (RCA's) Order  151.  It's the  first time                                                               
in 25 years that standard  ratemaking practices and law have been                                                               
applied  to  set  a  just  and reasonable  rate.    He  said  RCA                                                               
determined  that  in the  past  25  years  the TAPS  owners  have                                                               
overcharged their  ratepayers $10 billion.   The state's interest                                                               
in  those overcharges  is 25  percent.   To date,  the state  has                                                               
forgone $2.5  billion and will  forgo an additional  $2.5 billion                                                               
between now and 2011.                                                                                                           
MR.  BRENA  pointed out  that  RCA  lowered  the rate  from  Pump                                                               
Station No.  1 to Valdez  by 70 percent,  a large decline.   Thus                                                               
TAPS  owners  were  allowed  to  recover  100  percent  of  their                                                               
investment and  every operating  cost incurred,  and earned  a 14                                                               
percent  return on  their investment.   Currently,  the State  of                                                               
Alaska  is losing  $120  million to  150 million  a  year due  to                                                               
excessive  charges.    Mr.  Brena  highlighted  that  the  Alaska                                                               
Pipeline Act  is not about  overlapping jurisdiction  among state                                                               
agencies or  regulatory certainty;  rather, it's  about excessive                                                               
rates.  These are rates that the RCA has finally decided to set.                                                                
Number 1011                                                                                                                     
MR. BRENA noted that members'  packets should contain his written                                                               
remarks and  a sectional analysis.   He emphasized  that limiting                                                               
RCA's  authority  regarding  intrastate   matters  isn't  in  the                                                               
[state's] interest.   As the  Act is currently written,  there is                                                               
seamless jurisdictional  authority between the state  and federal                                                               
regulatory regimes.   The Act currently says, "To  the extent not                                                               
preempted  by  federal  law,  the  state  has  the  authority  to                                                               
regulate."      However,   this  legislation   includes   several                                                               
provisions that intend to pull back that authority.                                                                             
MR.  BRENA  drew  attention  to  the last  page  of  his  written                                                               
testimony, a  chart entitled "Jurisdictional  Gap."  The  top bar                                                               
graph illustrates  seamless jurisdiction under the  existing Act.                                                               
However,  HB   277  redefines  the  RCA's   authority  to  entail                                                               
intrastate matters only.   He explained that the  Act was written                                                               
to ensure  proper resource development.   The federal  Acts don't                                                               
have  certification   facilities  or   abandonment  jurisdiction.                                                               
Under the  federal regime, [a  state] with a pipeline  in service                                                               
is only  told how  much can  be charged.   Therefore, all  of the                                                               
things necessary for Alaska to  control its future with regard to                                                               
its  transportation  infrastructure  would   fall  in  that  gap.                                                               
Included in  that gap are  all interstate matters not  subject to                                                               
federal regulation, which encompasses a lot.                                                                                    
MR. BRENA  posed a situation  in which [a company]  discovers oil                                                               
in  a new  North Slope  field and  wants to  transport it  to the                                                               
Lower 48  market, where over  90 percent  of the oil  goes today.                                                               
He asked how [the company]  would connect to the pipeline system,                                                               
because it  would have no  right to connect to  existing pipeline                                                               
systems if  HB 277 were passed.   Under federal law,  the Federal                                                               
Energy Regulatory  Commission (FERC) has no  authority to require                                                               
a connection.   However,  under existing state  law, the  RCA can                                                               
require  a  connection.   Under  HB  277, however,  RCA  couldn't                                                               
because it  would be an  interstate movement  of oil, and  HB 277                                                               
restricts  the  RCA's  authority   to  intrastate  matters  only.                                                               
Therefore, passing  HB 277 would  result in the  state's forgoing                                                               
the power to require common carriers to connect to new fields.                                                                  
Number 1308                                                                                                                     
MR. BRENA  discussed a  situation in  which a  producer discovers                                                               
oil but one  of the common carriers needs to  expand its capacity                                                               
in order  to efficiently develop  the resource.  The  federal law                                                               
doesn't require  the carrier to  expand capacity;  under existing                                                               
state law,  however, the  state, through  the RCA,  could require                                                               
expanded  capacity.   Under HB  277,  the state  would forgo  its                                                               
authority  to  order a  common  carrier  pipeline to  expand  its                                                               
capacity to transport  oil that's going to be  transported out of                                                               
Alaska, which is where most of Alaska's resources go.                                                                           
MR. BRENA turned to efficiency  improvement.  He pointed out that                                                               
RCA has  the authority  to require  that the  pipeline facilities                                                               
operate  efficiently  and at  the  lowest  cost.   However,  FERC                                                               
doesn't have  that authority.   If  HB 277  passes, the  State of                                                               
Alaska will  be forgoing its jurisdictional  authority to require                                                               
a common carrier pipeline to operate efficiently.                                                                               
MR. BRENA  addressed abandonment.   Under  federal law,  he said,                                                               
the federal  government could turn  off the spigot on  TAPS today                                                               
and FERC would have no recourse.   He emphasized that there is no                                                               
federal abandonment authority.   If RCA's authority is restricted                                                               
to  intrastate  matters only,  the  state  will be  forgoing  the                                                               
ability to  require them to  continue to operate  facilities that                                                               
are necessary for interstate commerce.                                                                                          
Number 1421                                                                                                                     
MR. BRENA suggested  HB 277 is really  about money, specifically,                                                               
DR&R  [dismantlement, removal,  and restoration]  money.   Herein                                                               
lies the  problem, he said;  there hasn't been an  explanation of                                                               
why   this   legislation  should   start   to   delve  into   the                                                               
jurisdictional limits of the RCA,  and there hasn't been a single                                                               
example of abuse.                                                                                                               
MR. BRENA turned attention to  the page of his testimony entitled                                                               
"Jurisdictional Changes  in HB 277."   In  the upper left  box, a                                                               
portion of  the quoted material  reads, "No federal  law, federal                                                               
regulation  or federal  order  exists addressing  post-collection                                                               
treatment of interstate  DR&R allowances on TAPS."   He explained                                                               
that DR&R funds  will be overcollected.  Originally,  the life of                                                               
TAPS was projected to be to  2011.  On the $1.6 billion collected                                                               
to date, such  an amount has been earned that  by 2011 there will                                                               
have been  an overcollection  for DR&R  of $30  billion.   If the                                                               
overcollections  are refunded  to  ratepayers,  the state  should                                                               
gain 25  percent of $30  billion, which amounts to  $7.5 billion.                                                               
The  RCA's  order  said  those  funds could  be  required  to  be                                                               
escrowed, which  is why HB 277  is before the committee  with all                                                               
of  its jurisdictional  changes.   "They" don't  want the  RCA to                                                               
exercise its  intended authority,  he said,  which is  to protect                                                               
the state's interest in the  facilities, whether the oil flows in                                                               
interstate or  intrastate commerce.   Again, the  commission held                                                               
that  no federal  regulation  or order  exists  to address  post-                                                               
collection treatment, he noted.                                                                                                 
MR. BRENA  then fast-forwarded to  2011, when TAPS  carriers will                                                               
have collected $40 billion and it  will cost $10 billion to clean                                                               
up.   The question becomes  where the state  is going to  get the                                                               
refunds.   He  related his  understanding that  the state  agrees                                                               
overcollections are  refundable.   Furthermore, the  state agrees                                                               
that  25 percent  of those  overcollections would  come into  the                                                               
state's treasury through additional  royalty and severance taxes.                                                               
If one assumes the above and  assumes that $7.5 billion is on the                                                               
table, he questioned where the money would come from.                                                                           
Number 1715                                                                                                                     
MR. BRENA asserted  that this legislation eliminates  what may be                                                               
the only  effective mechanism to  ensure that the state  has paid                                                               
that money.   The changes made by this legislation  have a direct                                                               
correlation  [between the  statutes]; rather  than jurisdictional                                                               
overlap, HB  277 has to  do with excessive collections  that TAPS                                                               
carriers are  trying to keep,  while he  is trying to  obtain his                                                               
clients' share.                                                                                                                 
MR. BRENA  continued with  the possibilities  of where  the money                                                               
could  come  from.   If  RCA  is taken  out  of  the equation  as                                                               
specified under HB 277, the  $3.5-billion problem becomes a $3.2-                                                               
billion problem.   He pointed out  that FERC may or  may not have                                                               
regulatory authority to  order refunds or order  those refunds to                                                               
be  escrowed.   The  [RCA] held  that there  is  no federal  law,                                                               
order, or regulation that addresses that issue.                                                                                 
MR. BRENA  questioned how  the refund would  occur, even  if FERC                                                               
could  order  those refunds,  because  DR&R  doesn't occur  until                                                               
after the pipeline  is out of service.  Before  DR&R is complete,                                                               
the pipeline  is out  of service for  four years;  therefore, the                                                               
pipeline carriers  have no  money or  reserves because  they have                                                               
been out of  business for four years.  Collecting  from a company                                                               
that  has  been  out  of  business  for  a  while  doesn't  work.                                                               
Furthermore, the  parent guarantees  don't go  to overcollection.                                                               
He  emphasized that  there is  no collection  mechanism possible,                                                               
that  he  is  aware  of,  under  federal law.    If  there  is  a                                                               
collection mechanism,  the state hasn't  exercised it or  made it                                                               
clear.    Therefore, Mr.  Brena  said  he  believes HB  277  will                                                               
foreclose the  only mechanism possible  for the state  to collect                                                               
$7.5 billion.                                                                                                                   
MR.  BRENA  pointed  out  that  HB 277  changes  the  concept  of                                                               
retroactive ratemaking,  the idea that rates  can't be determined                                                               
and applied  backwards.   Retroactive ratemaking  is a  very well                                                               
established doctrine  of law.   This legislation changes  the law                                                               
such that one can't obtain any  reparations from the point of the                                                               
protest  backwards.   Mr. Brena  requested, "If  you're going  to                                                               
change  the rules  of how  to go  back, please  don't apply  them                                                               
going back, because you foreclose people's rights."                                                                             
Number 2094                                                                                                                     
MR.  BRENA   directed  the   committee  to   Section  7   of  the                                                               
legislation,  which   correlates  to  page  11   of  his  written                                                               
analysis.    The new  language  under  Section  7 is,  "An  order                                                           
setting  rates under  this  subsection may  not  affect rates  in                                                           
effect before  the date  the protest or  complaint was  filed, or                                                           
the   date  of   the   commission  action   that  initiated   the                                                           
investigation   or  hearing,   whichever  is   earliest."     The                                                           
aforementioned  is  a  redefinition  of  retroactive  ratemaking.                                                               
Mr. Brena posed  a situation  in which  a company  doesn't comply                                                               
with its own  tariff that specifies everyone will  be charged $1;                                                               
however,  the  company  charges   affiliated  shippers  $.50  and                                                               
nonaffiliated shippers  $1.50.   This practice  goes on  for five                                                               
years, at  which time the  discovery of this  noncompliance leads                                                               
to a investigation.                                                                                                             
MR.  BRENA questioned  whether the  foregoing  company should  be                                                               
able to keep  the money if it  had violated the terms  of its own                                                               
tariff.   This legislation says yes,  no matter how the  money is                                                               
obtained.   Therefore,  this legislation  allows this  company to                                                               
keep the  money from discriminatory  practices until caught.   He                                                               
likened this  to allowing  a bank  robber to  keep all  the money                                                               
until caught.                                                                                                                   
MR. BRENA informed  the committee that RCA has  40 pending cases.                                                               
No one  has analyzed  the impact  that Section 9  of HB  277, the                                                               
applicability provision, would have on  all of the pending cases.                                                               
There  are two  problems,  he  said.   If  substantive rights  of                                                               
ratepayers are  going to be  changed, do it  so that there  is an                                                               
opportunity to  protect them.   Hence he suggested  that [changes                                                               
be implemented for the future  as opposed to retroactively].  Mr.                                                               
Brena  encouraged  the  committee  to read  through  his  written                                                               
remarks.   He  informed  the committee  that  [his clients]  have                                                               
problems  with  virtually   every  section  of  HB   277.    This                                                               
legislation is  poorly drafted, he  said.  He requested  that the                                                               
committee  not  pass  this  legislation   and  hold  it  to  more                                                               
carefully consider its impacts.                                                                                                 
[There was  an announcement that the  previously recessed meeting                                                               
was  adjourned and  that the  May  9 meeting  was beginning;  all                                                               
members were  present.   However, these minutes  treat it  as one                                                               
meeting, which is how it was scheduled.]                                                                                        
Number 2510                                                                                                                     
REPRESENTATIVE  HEINZE  explained  that  she is  looking  at  the                                                               
larger picture  and the future  of this  state.  She  related her                                                               
belief that the  future of the [oil] industry could  be riding on                                                               
this.   "It  seems to  me that  we made  a deal,  and that  we've                                                               
broken  that  deal,"  she  said.   She  suggested  that  a  large                                                               
"producer"  thinking about  building a  pipeline in  Alaska would                                                               
have to wonder whether it would  stay connected with the state or                                                               
even engage  in a  pipeline.   She asked  if Mr.  Brena's clients                                                               
would have  the $20  billion to  build a pipeline  if one  of the                                                               
large producers didn't do so.                                                                                                   
MR. BRENA  agreed that the  state made a  deal.  The  deal agreed                                                               
upon was that  the state wouldn't contest a rate  set at or below                                                               
a ceiling rate.  The deal  also specified that ratepayers had the                                                               
right to  request that fair rates  be set, and if  that was done,                                                               
the  RCA would  have the  right to  set a  fair rate.   Mr. Brena                                                               
pointed out  that his  written remarks  include a  quotation from                                                               
the TAPS carriers  and the state, in which  those two represented                                                               
that  the deal  allowed that  any ratepayer  in the  future could                                                               
file a protest and  have a just and reasonable rate  set.  By the                                                               
terms  of  the  agreement,  it  only  applied  to  the  signatory                                                               
MR. BRENA  said HB  277 breaks  the deal  because it  changes the                                                               
deal for  the ratepayers.   The only  party that  hasn't received                                                               
the deal is the ratepayers, who  were told that they could file a                                                               
protest and receive  a fair rate, a rate under  the ceiling rate.                                                               
Mr. Brena explained that he's  asking the legislature to keep the                                                               
deal made to  the ratepayers when the deal between  the state and                                                               
TAPS owners was passed.                                                                                                         
MR. BRENA noted  that regulatory certainty is  very important for                                                               
everyone  involved.    Regulatory  certainty  is  linked  to  the                                                               
concept that  rates will be  just and reasonable, and  will allow                                                               
the collection of the investment  and operating cost along with a                                                               
fair  return.   The  aforementioned is  all  the ratepayers  have                                                               
requested,  and that's  all RCA  has done,  he said.   Mr.  Brena                                                               
added that the deal [proposed in  HB 277] is structured such that                                                               
it discourages investment  in Alaska because it  allows return on                                                               
a per-barrel basis, rather than  on actual investment.  Mr. Brena                                                               
concluded by requesting that the legislature honor the deal.                                                                    
REPRESENTATIVE HEINZE requested  clarification about the original                                                               
Number 2753                                                                                                                     
BONNIE  ROBSON,   Deputy  Director,   Division  of  Oil   &  Gas,                                                               
Department  of  Natural Resources,  said  the  Department of  Law                                                               
would  be a  more appropriate  agency  to answer.   However,  she                                                               
related her understanding that  the original settlement agreement                                                               
between the State  of Alaska and the pipeline  owners allowed for                                                               
other parties that didn't participate  in the settlement to, at a                                                               
later time,  raise an issue  about whether the tariff  rates were                                                               
just and reasonable.  She  offered her understanding that this is                                                               
what happened with Tesoro and  Williams in the proceedings before                                                               
the RCA.                                                                                                                        
MR. BRENA pointed out that  committee packets contain eight pages                                                               
of quotations  from the TAPS  carriers' briefs  and presentations                                                               
to the RCA.                                                                                                                     
Number 2833                                                                                                                     
JANICE GREGG LEVY, Assistant Attorney  General; Oil, Gas & Mining                                                               
Section; Civil  Division (Juneau),  Department of  Law, responded                                                               
to  Representative   Heinze's  question.    She   said  from  the                                                               
administration's  standpoint, the  representation that  the state                                                               
will  get  billions of  dollars  if  HB  277 doesn't  pass  isn't                                                               
accurate; the RCA isn't in a  position to refund any money to the                                                               
state.    Furthermore,  this  legislation  doesn't  prohibit  any                                                               
shipper  from  seeking refunds  from  the  RCA  or the  FERC  for                                                               
overcollections of DR&R.   Therefore, Ms. Levy  said she believes                                                               
this is  an attempt  to shift  the focus to  another arena.   She                                                               
said  nothing in  this bill,  from her  legal standpoint  and the                                                               
policy standpoint,  would preclude the determination  of just and                                                               
reasonable  rates, which  is what  she  believes the  legislature                                                               
created the RCA to do.                                                                                                          
REPRESENTATIVE  WOLF asked  if there  is a  sunset date  for this                                                               
MS. LEVY answered that the  TAPS settlement agreement will expire                                                               
by  its own  terms in  2011 if  no party  makes any  changes.   A                                                               
provision  allows  the  parties  to begin  to  renegotiate  after                                                               
December 31, 2006.                                                                                                              
TAPE 03-40, SIDE B                                                                                                            
REPRESENTATIVE  KERTTULA asked  how,  under  the jurisdiction  of                                                               
both FERC and  RCA, the [state] can ensure the  ability to fairly                                                               
allow access  so as  to ensure  the [state's]  independence while                                                               
maintaining a  vital oil industry.   She asked about  the impacts                                                               
of this legislation.                                                                                                            
Number 2879                                                                                                                     
MR. BRENA  explained that under  existing state law,  the state's                                                               
power to  regulate and  manage facilities has  two pillars:   the                                                               
inherent police power  of the state to  regulate common carriers,                                                               
and the  state's power  to contract  and develop  its proprietary                                                               
resources.     Mr.  Brena  pointed  out   that  this  legislation                                                               
eliminates the  RCA's authority to  exercise its power  under the                                                               
contract  power  of  the  state because  it  deletes  the  phrase                                                               
"relating to leases".  Furthermore,  it eliminates all regulatory                                                               
power of  the state  to ensure  access, sufficient  capacity, and                                                               
nonpremature  abandonment of  the  common carrier  infrastructure                                                               
that's necessary for the interstate  transportation of oil, which                                                               
is the vast majority of the oil today and into the future.                                                                      
REPRESENTATIVE KERTTULA  noted that the legislature  doesn't have                                                               
authority  over FERC  or the  federal  government, and  therefore                                                               
[HB 277] only affects  the RCA.  She inquired as  to Tesoro's and                                                               
Anadarko's rights  because they'd be  the entities going  to FERC                                                               
requesting access.                                                                                                              
MR. BRENA replied,  "None.  The ... federal  regulatory regime is                                                               
extremely  limited.   It  doesn't  require  certification."   The                                                               
federal   regime   is   entirely   silent   on   all   of   those                                                               
infrastructure-related  questions; it  only  says those  entities                                                               
that  build  a  line  have   to  charge  a  just  and  reasonable                                                               
nondiscriminatory rate.  The federal  regime doesn't specify that                                                               
the  entity would  have to  provide capacity,  allow connections,                                                               
and  so forth.    He  said this  legislation  limits the  state's                                                               
authority through the RCA to  fill that regulatory gap because of                                                               
the state's  concern.  He  pointed out  that the Act  was drafted                                                               
the way it  was because the state was  concerned with development                                                               
of its natural  resources, while the federal regime  isn't at all                                                               
concerned  with that.    Therefore, HB  277  would eliminate  the                                                               
state's ability, through the RCA.                                                                                               
MR. BRENA pointed  out that no other  regulatory agency addresses                                                               
any  of  these  issues  to ensure  sufficient  infrastructure  to                                                               
transport  oil  in  interstate  commerce   out  of  Alaska.    He                                                               
reiterated that  the existing Act  is seamless and says,  "To the                                                               
degree  not preempted  by  federal  law, or  to  the degree  that                                                               
federal law  doesn't do  it and preempt  us, the  state exercises                                                               
its  full authority."   As  soon as  [the state]  backs off  from                                                               
that, a  gap is  created that undermines  the state's  ability to                                                               
ensure  that infrastructure  is  in place  and  adequate for  the                                                               
development  of the  state's own  natural resources.   Mr.  Brena                                                               
asked why  one would  delete the language  which says  that state                                                               
authority goes all the way up to federal authority.                                                                             
Number 2681                                                                                                                     
REPRESENTATIVE GUTTENBERG  turned attention to the  RCA Order 116                                                               
[docket  P-977] and  inquired as  to the  situation that  brought                                                               
this legislation to the table.                                                                                                  
MR.  BRENA  answered   that  in  1977  Tesoro   filed  a  protest                                                               
requesting  that the  commission initiate  an investigation  into                                                               
DR&R  because it  had  been so  dramatically  overcollected.   He                                                               
pointed out  that DR&R is unique  as a rate element  because it's                                                               
collected today, but isn't spent for  40 or 50 years.  Typically,                                                               
the regulatory contract is such  that the DR&R money is collected                                                               
today  and if  there's money  left over,  it is  returned to  the                                                               
ratepayers.    In  Tesoro's calculation,  $10  billion  has  been                                                               
overcollected.     Therefore,  Tesoro  would  like   the  RCA  to                                                               
establish how much money has  been collected and earned on what's                                                               
collected; how much  DR&R is going to cost; what  the life of the                                                               
line is;  and if there  are overcollections, how those  are going                                                               
to  be refunded.   Tesoro  does not  want to  leave [open]  those                                                               
mechanisms until  the last four  years after the pipeline  is out                                                               
of business.  "They just collected  too much from us, and we want                                                               
our money back," he concluded.                                                                                                  
Number 2594                                                                                                                     
CHAIR FATE asked what RCA's Order 151 specified.                                                                                
MR.  BRENA  explained that  Order  151  determined how  just  and                                                               
reasonable rates should be set on  TAPS, and then set those rates                                                               
for 1997  through 2000.   Order 151  determined that  the ceiling                                                               
rate  methodology that  the TAPS  carriers  proposed for  setting                                                               
their rates, and had been  charging, resulted in excessive rates.                                                               
Therefore, the  commission adopted  a different  methodology, set                                                               
just   and  reasonable   rates,  and   ordered  refunds   of  the                                                               
overcollections to the shippers.                                                                                                
Number 2520                                                                                                                     
REPRESENTATIVE  KERTTULA  related  her  understanding  that  [the                                                               
state] can  require DR&R, and hopefully  obtain the overpayments,                                                               
if there  are any,  at the  end.   She asked  if [the  state] can                                                               
require that the interest [on  those overpayments be repaid].  In                                                               
terms of  the right-of-way agreements,  it's more about  the fact                                                               
that everything gets  cleaned up at the end  [that is important],                                                               
she suggested.                                                                                                                  
MR.  BRENA first  agreed [DR&R]  and  the right-of-way  agreement                                                               
have nothing whatsoever to do  with the issue of overcollections;                                                               
so that  just specifies what needs  to be cleaned up  with regard                                                               
to  state  lands,  excluding Native  lands,  private  lands,  and                                                               
federal lands.                                                                                                                  
MR. BRENA  then pointed out  that [the issue  of overcollections]                                                               
isn't addressed  any other place.   Furthermore,  other pipelines                                                               
do have  escrow accounts and  funds.  If  the escrow of  funds is                                                               
required, one  can set  them up  so that there  is no  charge for                                                               
taxes.   Therefore,  one can  actually collect  about 40  percent                                                               
less from the ratepayers.                                                                                                       
MR.  BRENA related  his belief  that the  correct calculation  of                                                               
DR&R  collection should  be how  much  was collected.   If  [DR&R                                                               
collections] were escrowed, [then  the calculation should be with                                                               
regard]  to how  much was  earned on  those escrowed  funds.   If                                                               
[DR&R collections] weren't escrowed,  the internal rate of return                                                               
on the capital  for which it was used [should  be included in the                                                               
MR. BRENA explained  that in the case of TAPS,  the internal rate                                                               
of  return for  a 10-year  period for  the TAPS  owners was  16.5                                                               
percent.    He  views  DR&R  as  a fund  of  money  that  is  the                                                               
ratepayers' money  until spent.   If the  [TAPS owners]  use that                                                               
money and  earn 16.5 percent  on it,  those are the  earnings for                                                               
which  the they  should ultimately  be responsible  because those                                                               
earnings are  based on the  ratepayers' funds.  Mr.  Brena agreed                                                               
that earnings on DR&R is a major issue.                                                                                         
Number 2362                                                                                                                     
REPRESENTATIVE KERTTULA turned to  the issue of retroactivity and                                                               
the impact it would  have on the 40 pending cases.   She asked if                                                               
the  concern is  as follows:   if  the rules  change, the  change                                                               
should be  [effective] after  those cases  are finished;  thus no                                                               
one would enter the game and then have it changed midstream.                                                                    
MR.  BRENA  replied  yes.    He specified  that  the  concern  is                                                               
twofold:    substantive  and procedural.    If  this  legislation                                                               
passes as  it stands,  it would affect  both the  substantive and                                                               
procedural rights of ratepayers  and existing clients in existing                                                               
claims,  and in  some  cases perhaps  foreclose them  altogether.                                                               
Mr. Brena added:                                                                                                                
     If you're  going to change  the rules on people,  or if                                                                    
     you're going to change  rights between stakeholders, it                                                                    
     hurts  regulatory  certainty  to go  backwards  and  do                                                                    
     that.  It  should only be done going forwards.   And so                                                                    
     it should only be done  with regard to new matters that                                                                    
     are filed before the commission.                                                                                           
MR.   BRENA   related   that    [retroactivity]   goes   to   the                                                               
constitutional  bar  on  ex  post  facto  laws.    Agreeing  with                                                               
Representative  Heinze that  it isn't  fair to  change deals,  he                                                               
said, "If you pass House Bill  277, it not only changes the deals                                                               
as they were represented to  the commissions, but it also changes                                                               
them going backwards, and ... that just isn't fair.                                                                             
Number 2226                                                                                                                     
DAVE  HARBOUR,  Commissioner,  Chair,  Regulatory  Commission  of                                                               
Alaska, Department  of Community  & Economic  Development (DCED),                                                               
highlighted that  the RCA is  virtually always the  lone decision                                                               
maker that bases  decisions solely on the merits of  the case, as                                                               
the legislature  specifies.  Therefore, he  characterized the RCA                                                               
as  more  like  the  legislature's advisors  and  the  governor's                                                               
advisors than one of two sides of an issue.                                                                                     
MR. HARBOUR turned to concerns  raised regarding Section 9, which                                                               
addresses the applicability  of pending matters.   He related his                                                               
belief that every  single one of the pipeline  dockets now before                                                               
the RCA would be affected in  either the DR&R, the interest rate,                                                               
or the  facility issues.   He clarified  that there are  about 30                                                               
[open] dockets, not 40, because some dockets have been combined.                                                                
MR.   HARBOUR  pointed   out  that   the  predecessors   of  this                                                               
legislature 30 years ago envisioned  what has been discussed here                                                               
today:  state regulatory jurisdiction  would flow out to meet the                                                               
regulatory  jurisdiction  of  the federal  government,  and  thus                                                               
there would  be no  regulatory void.   However,  this legislation                                                               
creates a number of voids, specifically,  at the end of Section 4                                                               
on page  5 of [the proposed  CS dated 5/6/2003], the  deletion of                                                               
the  language,  "except  to  the extent  they  are  preempted  by                                                               
federal law."  He said the  meaning is almost reversed.  Although                                                               
he acknowledged that the aforementioned  is within the purview of                                                               
the legislature  to do, he  suggested that the  legislature would                                                               
want to do this mindfully.                                                                                                      
CHAIR FATE turned to an  earlier statement that [the TAPS owners]                                                               
have  received a  14  percent return  on  investment.   Recalling                                                               
testimony from  the industry that  around 13 percent is  not high                                                               
because of the risk incurred by  the companies, he inquired as to                                                               
Mr. Bolea's thoughts.                                                                                                           
Number 2008                                                                                                                     
AL  BOLEA, President,  BP Pipelines  Alaska,  explained that  the                                                               
rate  of   return  when   regulatory  agencies   review  pipeline                                                               
investments is  a judgment  of the amount  of risk  undertaken by                                                               
the investor.  He informed the  committee that back in 1976, when                                                               
the $9-billion  pipeline investment  was being  made, it  was the                                                               
single largest  private investment in  the history of  the United                                                               
States;   furthermore,  it   was  viewed   as  the   highest-risk                                                               
investment  ever  made   in  the  United  States.     During  the                                                               
negotiations  with   the  [Alaska]   attorney  general   and  the                                                               
Department of Law, he said, the  appropriate rate of return was a                                                               
key  issue.   He  explained  that  the TAPS  [tariff]  settlement                                                               
methodology  (TSM) was  structured in  such a  way to  generate a                                                               
rate of  return.  He  further explained  that the rate  of return                                                               
was generated by all the  investment being recovered in the front                                                               
end.   All costs [of the  TAPS carriers], the $9  billion for the                                                               
pipeline,  an   estimate  of  DR&R,  was   all  front-end-loaded.                                                               
Furthermore, TAPS  carriers earned  a rate of  return as  a level                                                               
amount over the entire life of the pipeline.                                                                                    
MR.  BOLEA  suggested that  Mr.  Brena  is  choosing a  rate  and                                                               
applying  it  to  an  amount   of  the  asset  that  hasn't  been                                                               
recovered.   Moreover,  the recovery  in any  year has  declined.                                                               
Mr. Bolea said  one can't choose a single number  in a year, take                                                               
14 percent,  for example,  multiply it  times the  remaining rate                                                               
base,  and  say  that's  the appropriate  amount  of  money  TAPS                                                               
carriers should  be earning,  given the TSM  model.   Rather, one                                                               
must look over  the entire life of the  transaction and determine                                                               
whether the  rate of return  was excessive or not.   Furthermore,                                                               
14  percent as  a rate  of return  over the  entire life  of TAPS                                                               
falls  within  the range  of  reason  relative  to the  risk,  he                                                               
opined.  He said, "We would've  argued back in 1976 that a higher                                                               
rate of  return was  justified, and the  state would've  argued a                                                               
lower rate  of return.  But  a 14 percent rate  of return, within                                                               
the 14, 15, 16 range, would be reasonable."                                                                                     
Number 1820                                                                                                                     
CHAIR FATE  turned to the  issue of  capacity and noted  that the                                                               
oil pipeline  is running half  full.  He  asked how big  an issue                                                               
capacity  is in  the future,  relative  not only  to filling  the                                                               
pipe,  but  also to  the  pump  stations,  the upgrading  of  the                                                               
pipeline, and new  technologies.  He asked Mr. Bolea  if he could                                                               
foresee  a  situation  in  which  the  TAPS  carriers  could  add                                                               
capacity to the  present TAPS pipeline.  Although  gas is another                                                               
matter,  one would  begin to  infringe on  the Stranded  Gas Act,                                                               
which moves into the area of capacity, he suggested.                                                                            
MR. BOLEA  informed the committee  that currently  the pipeline's                                                               
physical capacity  is 2 million barrels  a day.  The  pipeline is                                                               
running at  about a million  barrels a day;  in order to  do this                                                               
efficiently, many of  the pump stations are shut down.   The cost                                                               
of  maintaining  shutdown  pump   stations  is  incredibly  high.                                                               
Therefore, [TAPS  carriers] are incurring costs  to hold capacity                                                               
in  place, and  all  those costs  are bearing  on  the rate  that                                                               
everyone pays  to move their  barrels [of oil] through  the line.                                                               
Furthermore, these  pump stations  are effectively 30  years old.                                                               
The opportunity to replace these  old pump stations with new pump                                                               
stations is  being evaluated.   Although the TAPS  owners haven't                                                               
decided what  the right  investment will  be, they  are generally                                                               
committed to  trying to make  the pipeline more efficient  and to                                                               
last for a longer period of time.                                                                                               
MR.  BOLEA said  the intention  of the  TAPS owners  is to  use a                                                               
technology  that is  more modular,  with  smaller electric  motor                                                               
units that  can stack easily.   For  example, six units  could be                                                               
stacked next to  each other and connected to a  header, and there                                                               
would  be  enough  hydraulic  capacity for  1.1  million  to  1.3                                                               
million barrels a  day, to four pump stations.   If more capacity                                                               
is needed, given  that this technology is largely  off the shelf,                                                               
it's easy to  order more pumping units and stack  the units.  The                                                               
intention, he  explained, is to  leave the manifolds in  place on                                                               
the  pump stations  that  are removed  and  have the  flexibility                                                               
within perhaps 36  months, if another Prudhoe  Bay is discovered,                                                               
to bring  the pipeline capacity  back up  to 2 million  barrels a                                                               
day.  "It's ... in our best  interests to move as many barrels as                                                               
possible.   It's not in our  intention to shut in  barrels on the                                                               
North Slope," he said.                                                                                                          
Number 1646                                                                                                                     
RANDAL   BUCKENDORF,   Counsel,   Anchorage   Legal   Department,                                                               
ConocoPhillips Alaska,  Inc., returned  to Chair  Fate's question                                                               
regarding the 14 percent rate of return.  Mr. Buckendorf said:                                                                  
      I presume that from portions of the testimony that I                                                                      
       was not present at - but I have heard that figure                                                                        
     before  -   the  number  that's   used  is   used  very                                                                    
     specifically, and it is a  14 percent return on equity,                                                                    
     which is  different than  the average  weighted return.                                                                    
     You earn  a different  interest on equity  versus debt,                                                                    
     so there's a  weighted average.  So they  use that very                                                                    
     carefully.   It's  not the  weighted  average that  was                                                                    
     earned.  There's a big difference.                                                                                         
MR.  BUCKENDORF  said the  actual  rate  of  return in  the  TAPS                                                               
settlement  agreement for  those earlier  years was  6.1 percent,                                                               
which  was negotiated  carefully  by the  state  and the  justice                                                               
department.  Beyond those early  years, an incentive-based return                                                               
was negotiated.   He said  no guaranteed  return was even  in the                                                               
settlement agreement; rather, as  an incentive for the affiliates                                                               
of  the pipeline  owners to  explore  for and  produce more  oil,                                                               
there was essentially  a zero return and  an incentive-based per-                                                               
barrel allowance.                                                                                                               
MR. BUCKENDORF turned to the  issue of capacity and recalled that                                                               
Mr. Bolea has discussed "strategic  reconfiguration," which  will                                                               
be going  through review.   He  noted that  there have  been many                                                               
meetings  with  the  Joint  Pipeline  Office,  including  several                                                               
meetings  with  RCA.   That  process  is  underway and  will  [be                                                               
available] for  approval in the  near future, he said.   However,                                                               
Mr.  Buckendorf said  he wasn't  sure how  this legislation  will                                                               
come into play with that.                                                                                                       
Number 1495                                                                                                                     
REPRESENTATIVE   KERTTULA  asked   if   this  legislation   keeps                                                               
[smaller] companies like  Tesoro and Williams from  being able to                                                               
connect or use the facilities or to use TAPS in the future.                                                                     
MR. BOLEA  replied, "It is  not our  intent and it  is completely                                                               
out of  line with  our economic interests  to restrict  access to                                                               
the TAPS  line.  The  more barrels  flowing through the  line, it                                                               
averages down the cost, which benefits everybody."                                                                              
MR. BUCKENDORF  turned to the  legal perspective.  He  said every                                                               
pipeline on  the North Slope  is jointly regulated  under federal                                                               
and state  law, and  therefore subject  to intra-  and interstate                                                               
regulation; every pipeline is subject  to being a common carrier,                                                               
since  state  and  federal  right-of-way  leases  require  common                                                               
carriage; and  [TAPS owners] are  required to accept, as  long as                                                               
there is capacity,  every barrel that comes there.   In the event                                                               
a barrel cannot be accepted,  regardless of who brings it, [TAPS]                                                               
has to prorate every entity that's bringing those barrels.                                                                      
MR. BUCKENDORF recalled that a  lot of information has been given                                                               
regarding what HB  277 will or will not do  regarding the ability                                                               
to force  connections.   Although Mr.  Buckendorf said  he hadn't                                                               
had time to fully analyze all  that, at first glance he disagreed                                                               
with every  statement.  He  related his understanding  that Chair                                                               
Fate intends  to hold this bill  until Monday, and he  offered to                                                               
go through  the various statements  made this morning.   However,                                                               
he said  he doesn't  believe HB  277 will  impact the  ability of                                                               
anyone to connect to any of the pipelines in the state.                                                                         
Number 1283                                                                                                                     
REPRESENTATIVE  GATTO  remarked   that  although  Mr.  Buckendorf                                                               
mentioned that it's not in the  best interest of [TAPS owners] to                                                               
deny someone's  putting oil  in the pipeline,  it wouldn't  be in                                                               
the their  best interest  if it didn't  produce more  income than                                                               
needed to make the bottom  line.  Therefore, Representative Gatto                                                               
asked what  would keep  [TAPS owners]  from gouging,  since there                                                               
are no other pipelines.                                                                                                         
MR.  BOLEA answered  that  it's against  the  law; [TAPS  owners]                                                               
aren't allowed  to discriminate  and every  shipper must  pay the                                                               
same rate.                                                                                                                      
REPRESENTATIVE  GATTO asked  if  this  would be  so  even if  the                                                               
entity only had a hundred barrels a  day.  He asked if the entity                                                               
would  have to  deliver  it  to the  pipeline  or  just tell  the                                                               
pipeline that  it had oil  which [TAPS]  should get and  put into                                                               
the big line from the little line.                                                                                              
MR. BOLEA  explained that  the system  works in  such a  way that                                                               
those who  want to make a  connection to TAPS, for  example, have                                                               
to meet  the standards  prescribed in the  TAPS agreement:   they                                                               
have  to   meet  certain   pressure,  temperature,   safety,  and                                                               
integrity standards.  He noted that  those who want to connect to                                                               
TAPS  bear  the  cost  to  get  connected  to  the  line.    Once                                                               
connected, they pay  the same rate as everyone else  on the line.                                                               
The common carrier can't discriminate  in any way, shape, or form                                                               
among the carriers.                                                                                                             
Number 1137                                                                                                                     
REPRESENTATIVE KERTTULA returned to  DR&R, the interest rate, and                                                               
whether [the state]  has the right to expect any  certain rate of                                                               
MR. BOLEA  said he was going  to answer from the  TSM methodology                                                               
negotiated with the state.  He  explained that the state and TAPS                                                               
carriers in 1976  had to develop a methodology to  define how the                                                               
costs and  rate of return  were going  to be recovered,  which is                                                               
the TSM.   The methodology is fixed; it's just  a formula.  Every                                                               
year  the  actual numbers  for  the  year  or estimates  for  the                                                               
subsequent year are  loaded into the formula, and  the product of                                                               
that formula is the tariff.                                                                                                     
MR. BOLEA said  although the methodology is fixed,  the tariff is                                                               
a function  of actual costs  during a year.   At the time  of the                                                               
settlement, no one  knew what it was going to  cost to dismantle,                                                               
recover, and restore  TAPS.  Furthermore, no one  knows that now.                                                               
Although engineers do  estimates, he said, "The  reality is, what                                                               
it's going  to cost is  an enormous risk."   He noted  that there                                                               
isn't  even a  prescribed  standard that  the  state and  federal                                                               
government will define,  a standard that they want  to recover at                                                               
the time.   Therefore, the TAPS  owners have taken on  the entire                                                               
risk of what it's going to  cost to abandon, recover, and restore                                                               
TAPS.   That  is,  as part  of the  negotiation,  what the  state                                                               
wanted;  the  state  wanted  certainty  because  it  wanted  some                                                               
predictable revenues.                                                                                                           
MR.  BOLEA  said a  fixed  amount  of money,  $1,549,000,000,  is                                                               
prescribed  in the  agreement;  each year  the  TAPS owners  were                                                               
permitted to recover a piece  of that $1,549,000,000.  He related                                                               
his belief  that the TAPS owners  are one or two  years away from                                                               
recovering  the balance  of the  $1,549,000,000.   "Subsequent to                                                               
that,  it is  completely our  risk," he  said.   Whatever happens                                                               
with rates of return and rates  of inflation, the actual scope of                                                               
work is completely  the TAPS owners' risk.   Under the settlement                                                               
agreement, there is  no prescribed rate of return,  and there are                                                               
no refunds.  "It was  a settlement, deliberately, with the intent                                                               
of ensuring that the state had no exposure," he added.                                                                          
Number 0889                                                                                                                     
REPRESENTATIVE KERTTULA  noted that  the shippers have  the right                                                               
to challenge  these rates.   She asked  if that's part  of what's                                                               
happening in docket [Order] 116.                                                                                                
MR.  BUCKENDORF  answered, "That  is  correct."   Over  the  past                                                               
month,  a lot  of  the testimony  here has  focused  on the  TAPS                                                               
settlement agreement  and methodology, and what  this legislation                                                               
will or  will not  do.   Mr. Buckendorf  related his  belief that                                                               
needed clarifications  are in the  current CS.   This legislation                                                               
doesn't validate  or invalidate that agreement,  he asserted; all                                                               
those  rights still  exist.   However,  the TAPS  owners will  be                                                               
dealing with Mr.  Brena, on appeal or before  the commission, for                                                               
a long time in the future.   With regard to the current docket on                                                               
DR&R for the rates at issue  in Order 151 for the years 1997-2000                                                               
and 2001 forward, that docket is in brief before the RCA.                                                                       
MR. BUCKENDORF noted  that a week ago Thursday  the TAPS carriers                                                               
agreed  to  forgo  those  intrastate rates  for  DR&R  under  the                                                               
agreement for  the years 1997  forward, simply to save  the cost.                                                               
Basically, the TAPS  owners will spend more  litigating this than                                                               
they  will   collect.    Yesterday  the   RCA  requested  further                                                               
verification  and briefing  around  those questions  in order  to                                                               
determine whether or not that docket can be closed.                                                                             
Number 0628                                                                                                                     
REPRESENTATIVE KERTTULA asked if Ms. Levy had anything to add.                                                                  
MS.  LEVY turned  to access  and capacity.   She  said the  state                                                               
would agree  with the testimony  of Mr. Buckendorf and  Mr. Bolea                                                               
that  there is  a mechanism  already in  place that  requires the                                                               
pipelines  to  have  a  certificate  of  public  convenience  and                                                               
necessity to  operate a pipeline  in the  state.  The  RCA issues                                                               
that certificate,  and one condition  of the certificate  is that                                                               
the [pipeline] be a common  carrier.  Furthermore, [one condition                                                               
is] to  permit interconnections when another  explorer or shipper                                                               
desires to connect  to the main line.  There  could be additional                                                               
interconnection  even with  a feeder  pipeline.   Therefore,  she                                                               
didn't believe there  would be a regulatory gap  there, she said;                                                               
furthermore, she didn't  believe there would be  any situation in                                                               
which  there  would   be  the  inability  to   ship  the  state's                                                               
resources, which is what everyone here is concerned about.                                                                      
REPRESENTATIVE KERTTULA directed attention  to Section 5, page 5,                                                               
of the  proposed CS.  She  asked if that language  is intended to                                                               
support the right to  go to the RCA in terms  of not allowing the                                                               
reduction  of   capacity  or  the  reduction   in  transportation                                                               
services.  Or is it just to deal with DR&R instead?                                                                             
MS. LEVY  explained that  the new  language -  "reduced capacity"                                                               
and  "reduction in  transportation  services" -  was inserted  to                                                               
assure people  that the  deleted language  - "discontinue  use of                                                               
all or  any portion of  a pipeline"- wouldn't  permanently reduce                                                               
capacity  or transportation  services.   She  explained that  the                                                               
deleted language  is deleted to  assure that the  pipeline owner,                                                               
whether it  be TAPS or any  other pipeline in the  state, retains                                                               
some flexibility  in equipment used  to provide  efficient, cost-                                                               
effective  transportation.    This  was addressed  by  Mr.  Bolea                                                               
during  his testimony  regarding  the need  to  reconfigure in  a                                                               
circumstance where there is 30-year-old equipment, she noted.                                                                   
Number 0330                                                                                                                     
REPRESENTATIVE  GUTTENBERG drew  attention to  the new  language,                                                               
"or  reduction of  transportation services",  and inquired  as to                                                               
the meaning of "services".                                                                                                      
MS. LEVY answered  that "services" isn't defined  in the statute,                                                               
although  it's  used  regularly   within  the  statutes  and  the                                                               
regulations.     Therefore,   a  definition   certainly  can   be                                                               
understood  from  the  language  that's there,  she  said.    The                                                               
transportation service is  the function of the  pipeline; it's to                                                               
transport the resource.                                                                                                         
MS. LEVY moved  to the topic of interest rates.   She pointed out                                                               
that [the  interest rates]  are an  issue that  remains available                                                               
for  litigation  before the  RCA  or  the  FERC, and  she  didn't                                                               
believe the bill eliminated that  concern.  She recalled that Mr.                                                               
Brena had a concern that the  FERC might not have jurisdiction by                                                               
the time  the shipper  got around to  seeking refunds.   However,                                                               
she  said   the  administration  would  submit   that  these  are                                                               
sophisticated  entities that  are already  litigating that  issue                                                               
before the  RCA.  Furthermore,  nothing stops them from  going to                                                               
the FERC today, next  year, or in 10 years when  TAPS is still in                                                               
full  swing, and  discussing the  issue of  whether too  much has                                                               
been  collected  for  DR&R.   Therefore,  she  said,  she  didn't                                                               
believe  the legislation  prohibited any  such action  or left  a                                                               
regulatory gap in that regard.                                                                                                  
REPRESENTATIVE  KERTTULA related  her understanding  that someone                                                               
has to  look at  the life of  the rates to  be able  to determine                                                               
whether the  14 percent is correct.   Yet protests must  be filed                                                               
within a certain amount of time.   She asked how that can be done                                                               
MS.  LEVY  remarked  that  DR&R  is  a  unique  subset  of  costs                                                               
collected through  the rates.   As illustrated by  decisions from                                                               
FERC  and  RCA,   she  said  DR&R  costs  are   viewed  a  little                                                               
differently from others.  Thus it's  always possible to go in and                                                               
discuss that component for which nothing has yet been spent.                                                                    
TAPE 03-41, SIDE A                                                                                                            
Number 0001                                                                                                                     
REPRESENTATIVE KERTTULA  turned to retroactivity.   She asked, if                                                               
this legislation will impact [30  RCA] cases, whether it would be                                                               
better to specify that it's prospective only.                                                                                   
MS. LEVY  characterized the  issue of  retroactivity as  a policy                                                               
question   for   the  legislature   to   consider.     From   the                                                               
administration's perspective,  she said, one should  keep in mind                                                               
that rate proceedings go on for  a long time.  For example, there                                                               
are  open dockets  dating back  to 1986.   Therefore,  if someone                                                               
wants to  look prospectively,  this action  may not  affect cases                                                               
for another 20 years.                                                                                                           
MS. LEVY  pointed out  that on a  regular basis,  the legislature                                                               
passes  laws that  affect proceedings.   She  explained that  the                                                               
administration  was concerned  about  the original  legislation's                                                               
having a retroactive provision with  regard to the interest rate;                                                               
there  was concern  that  it would  affect  potential refunds  if                                                               
Order  151  were  upheld  by  the courts.    Although  it  wasn't                                                               
improper  from a  legal perspective,  she said,  from a  fairness                                                               
standpoint   the    administration   supported    removing   that                                                               
retroactive   provision.     She   characterized  the   remaining                                                               
provisions  as more  "policy"  because,  in the  administration's                                                               
view, they don't  change the course of anything,  but clarify and                                                               
provide guidance.                                                                                                               
Number 0297                                                                                                                     
REPRESENTATIVE  GUTTENBERG  pointed out  that  page  7, line  25,                                                               
seems  to  give  the  authority  for  tariffs  and  other  things                                                               
affecting  the state  to  the attorney  general.   Therefore,  he                                                               
inquired as to how  big a shift in policy that  would be from the                                                               
RCA to the attorney general.                                                                                                    
MS. LEVY replied that this isn't  a significant shift at all, but                                                               
a clarification  of what  has been in  practice ever  since there                                                               
have been  pipelines in  this state.   Years  ago, she  said, the                                                               
legislature made  it clear  in a pipeline  Act that  the attorney                                                               
general -  the Department of Law,  as the agency -  was to handle                                                               
pipeline matters  before the  FERC.   The aforementioned  is also                                                               
the  intent  with regard  to  pipeline  matters before  the  RCA,                                                               
although it's not as express,  and this legislation would clarify                                                               
that.   Additionally,  the administration  would submit  that, in                                                               
any event, the  authority over pipeline matters  resides with the                                                               
attorney general because  there is a statute  that specifies that                                                               
when the  authority isn't expressly  given to other  agencies, it                                                               
falls  to the  most  logical agency.   In  the  case of  pipeline                                                               
matters, this has been the  Department of Law in conjunction with                                                               
any of the affected agencies.                                                                                                   
Number 0454                                                                                                                     
REPRESENTATIVE   HEINZE  asked   if   the   language  "just   and                                                               
reasonable" is a binding term.                                                                                                  
MS. LEVY  replied that it's a  legal term of art  defined through                                                               
court decisions and the regulatory  bodies.  Nothing in this bill                                                               
would  change  the  RCA's  ability to  determine  what  just  and                                                               
reasonable rates are on the pipelines it regulates, she said.                                                                   
Number 0515                                                                                                                     
CHAIR  FATE,  upon determining  there  were  no other  questions,                                                               
closed public testimony.                                                                                                        
CHAIR FATE indicated the committee  would continue with HB 277 on                                                               
[May 12, 2003].   He said the next meeting  will be for questions                                                               
only, and  thus the Department  of Law,  the Division of  Oil and                                                               
Gas, the  industry, the  Alliance, and  others with  expertise in                                                               
these matters  may want to be  available for questions.   [HB 277                                                               
was held over.]                                                                                                                 
CHAIR  FATE recessed  the  meeting at  9:56 a.m.    [End of  this                                                               
TAPE 03-42, SIDE A                                                                                                            
Number 0001                                                                                                                     
CHAIR  FATE  called  the  meeting  back to  order  at  1:10  p.m.                                                               
Members present at  the call to order  were Representatives Fate,                                                               
Masek,   Gatto,    Guttenberg,   Heinze,   Lynn,    and   Cissna.                                                               
Representatives Morgan  and Wolf  arrived as  the meeting  was in                                                               
CHAIR  FATE  welcomed new  member  Representative  Cissna to  the                                                               
committee.    [Committee  assignments had  changed  during  floor                                                               
session.  Representative Kerttula was  no longer a member, having                                                               
been assigned to the House Finance Committee.]                                                                                  
SB 147-CONTROL OF NUISANCE WILD ANIMALS                                                                                       
Number 0125                                                                                                                     
CHAIR FATE announced that the next order of business would be                                                                   
SENATE BILL NO. 147, "An Act relating to control of nuisance                                                                    
wild animals; and providing for an effective date."                                                                             
Number 0224                                                                                                                     
ROBERT DORAN testified as follows:                                                                                              
     We  started  a  business  approximately  one  year  ago                                                                    
     dealing  with problem  wildlife  or  ... animal  damage                                                                    
     control.  And we would like  to see this bill passed so                                                                    
     that we  can greatly  serve the public  in Southcentral                                                                    
     We're  seeing a  tremendous  amount of  growth in  this                                                                    
     area.  We're also seeing  more and more residential and                                                                    
     commercial  developments  constructed   very  near  two                                                                    
     prime  wildlife   habitats.    And  ...   anyone  who's                                                                    
     traveled through Anchorage, I'm  sure they can see that                                                                    
     even  despite these  changes, many  of  the species  of                                                                    
     birds and animals continue  using these developed areas                                                                    
     for protection and foraging.                                                                                               
     These  factors,  along with  little  or  no hunting  or                                                                    
     trapping    pressure,   creates    a   potential    for                                                                    
     confrontations  to arise  between people  and wildlife.                                                                    
     And even  if the  location allowed for  regular hunting                                                                    
     or  trapping, many  of these  problems  occur when  the                                                                    
     regular  season  for  several  species  of  animals  is                                                                    
     closed.   And  a  provision in  Alaska  state law  that                                                                    
     would allow  a licensed individual specializing  in the                                                                    
     control  of   problem  wildlife  to   control  nuisance                                                                    
     animals outside  of the regular season  would alleviate                                                                    
     this problem.                                                                                                              
     If  properly  regulated,  many  people  in  the  public                                                                    
     service industry and  different agencies would benefit.                                                                    
     Based upon  conversations that I  have had  with state,                                                                    
     borough, and  municipal agencies, including  the Alaska                                                                    
     Department  of  Fish  & Game  [ADF&G],  Anchorage,  and                                                                    
     [Matanuska-Susitna]  animal control  shelters, as  well                                                                    
     as  the Alaska  State  Troopers,  Division of  Wildlife                                                                    
     Protection,  I've  found   that  these  agencies  often                                                                    
     either  don't  have  the  time   or  the  personnel  or                                                                    
     resources to ... adequately  deal with these conflicts.                                                                    
     And  with them  being  able to  refer problem  wildlife                                                                    
     calls to a licensed nuisance wildlife control operator                                                                     
      [NWCO], this would relieve these and other agencies                                                                       
     from this responsibility.                                                                                                  
Number 0395                                                                                                                     
MR.  DORAN  suggested  local  agencies   also  could  benefit  by                                                               
gathering  data from  NWCOs to  evaluate urban  impacts on  local                                                               
wildlife  populations  and surrounding  habitats.    He said  the                                                               
evidence of these kinds of benefits  can be seen in the Lower 48,                                                               
where animal  damage control companies  work in  cooperation with                                                               
local  game  departments and  offer  a  valuable service  to  the                                                               
public.  This  is a relatively new business  nationwide, and very                                                               
new  in Alaska.   He  emphasized that  it is  a "people  service"                                                               
dedicated to serving the general public.                                                                                        
MR. DORAN, in response to  a question from Representative Cissna,                                                               
explained that  this business  is similar to  pest control.   But                                                               
rather than dealing with insects,  it deals with various wildlife                                                               
species.    Examples  are  pigeons   nesting  atop  a  commercial                                                               
building  where  the  droppings   can  become  a  hazard  through                                                               
entering  the building  via the  heating and/or  air-conditioning                                                               
systems,  squirrels  living  in   somebody's  attic,  or  beavers                                                               
causing  problems  by  damming  waterways  and  flooding  highway                                                               
rights-of-way.    He  said it's  difficult  to  anticipate  every                                                               
situation, and situations he's responded to have been unique.                                                                   
Number 0579                                                                                                                     
REPRESENTATIVE HEINZE alluded to  the sponsor statement and asked                                                               
how snow geese are a nuisance, other than perhaps to aircraft.                                                                  
MR. DORAN answered  that when first pursuing this  he'd talked to                                                               
Phil Cole  (ph), at that  time in  charge of special  permits for                                                               
ADF&G, who'd  suggested that  Mr. Doran  list every  species he'd                                                               
want  to  or  be  able  to deal  with.    Reiterating  that  it's                                                               
difficult to  anticipate what types  of calls would  be received,                                                               
he said the desire was to  include "just about every species that                                                               
is indigenous  or migrates  to the  state of  Alaska."   He noted                                                               
that one  call he'd received  from ADF&G was about  an alligator,                                                               
which he'd never thought he'd get a call about in Alaska.                                                                       
Number 0751                                                                                                                     
JACQUELINE  TUPOU,  Staff to  Senator  Lyda  Green, Alaska  State                                                               
Legislature,  presented  SB  147  on  behalf  of  Senator  Green,                                                               
sponsor.  She explained that  it provides authority for the Board                                                               
of Game to  deal with nuisance wild  animals, specifically, small                                                               
mammals and  wild birds.   It does this in  two ways.   First, it                                                               
creates  a professional  license  so people  like  Mr. Doran  can                                                               
offer this service.  Second, it  gives authority to ADF&G so that                                                               
it can  grant authority to people  to deal with these  animals in                                                               
their own  homes.   Thus the animals  are protected  from persons                                                               
who lack  knowledge of their  behavior patterns; people  can call                                                               
ADF&G and be referred to a list  of persons such as Mr. Doran who                                                               
offer this service.                                                                                                             
MS.  TUPOU informed  members  that  the list  of  animals in  the                                                               
sponsor statement  isn't definitive.   One provision of  the bill                                                               
is that  regulations don't  go into effect  until July  2004 [for                                                               
Sections 2,  3, and 5 of  the Act]; this provides  the department                                                               
ample time to  determine what animals [should be  included].  The                                                               
list  hasn't been  created because  the regulations  haven't been                                                               
written; that  is something  the department  will do  through its                                                               
process.     She  noted  that  department   representatives  were                                                               
available to testify.                                                                                                           
Number 0900                                                                                                                     
REPRESENTATIVE  GATTO asked  about procedures  to date  for doing                                                               
what this bill sets out for the future.                                                                                         
MS.  TUPOU  deferred  to  the  department,  which  she  said  has                                                               
different rules and  regulations for big game, for  example.  She                                                               
offered  her understanding  that  this has  been  a loophole  for                                                               
which the  department doesn't have the  specific authority unless                                                               
the animals  are in season.   Thus the department doesn't  have a                                                               
list  of  referrals if  a  private  citizen  is worried  about  a                                                               
porcupine in the yard, for example.                                                                                             
Number 0979                                                                                                                     
REPRESENTATIVE HEINZE  said she grew  up with people  calling the                                                               
Cooperative  Extension for  answers  to certain  questions.   She                                                               
asked whether people could call the  Board of Game for answers on                                                               
to how to deal with bats in their homes, for example.                                                                           
MS. TUPOU deferred to the department.                                                                                           
Number 1041                                                                                                                     
MATT ROBUS,  Director, Division of Wildlife  Conservation, Alaska                                                               
Department  of Fish  &  Game,  addressing Representative  Gatto's                                                               
question  about how  these situations  have been  handled before,                                                               
noted that it  relates to testimony he was planning  to give.  He                                                               
said when  [ADF&G's] permitting authorities were  defined through                                                               
various  legislation, "nuisance"  was specifically  left out  the                                                               
last time.   For example, ADF&G  has authority to issue  a permit                                                               
for people to  take wildlife if something escalates  to the point                                                               
of being a  public safety problem or if it's  for a scientific or                                                               
educational  purpose.   However,  there have  been situations  in                                                               
which,  when asked,  the department  has been  unable to  issue a                                                               
permit to allow somebody to deal with a nuisance situation.                                                                     
MR. ROBUS  reported that the  U.S. Fish and Wildlife  Service has                                                               
issued a  permit, for instance,  when a  raven nest needed  to be                                                               
removed  from  a  crane  boom in  the  springtime;  however,  the                                                               
department couldn't  do so  without somehow  deeming it  a public                                                               
safety problem.   With this legislation, [ADF&G] will  be able to                                                               
authorize commercial  operators who get a  license or individuals                                                               
who have  a nuisance  problem to  try to  deal with  that problem                                                               
through  one  of  the  department's  permits.   Thus  it  adds  a                                                               
capability that the department hasn't had.                                                                                      
MR.  ROBUS  noted  that  for   beaver,  the  department  has  the                                                               
capability  already  to  allow  people to  remove  them  under  a                                                               
"depredation permit" under a special  regulation.  He offered his                                                               
belief  that for  porcupines, there  are no  limits, seasons,  or                                                               
restrictions,  but  said  the  department  often  is  called  for                                                               
expertise on  removal; he noted that  a shovel and bag  aren't as                                                               
good as a garbage bucket and a piece of plywood.                                                                                
Number 1237                                                                                                                     
REPRESENTATIVE GATTO posed a scenario  in which a person wants to                                                               
build a  church and buys  20 acres of land,  but there is  a tree                                                               
with an eagle's nest.  He asked whether that's a "nuisance".                                                                    
MR. ROBUS answered that both  a federal Act and state regulations                                                               
deal  with  that,  but  it   wouldn't  fall  under  the  nuisance                                                               
regulations [under the bill].  He added:                                                                                        
     Any migratory  bird is under the  umbrella jurisdiction                                                                    
     of  the  U.S.  Fish  and  Wildlife  Service  under  the                                                                    
     Migratory  Bird Treaty  Act.   And,  therefore, we  can                                                                    
     only permit  to the extent  that the feds  have already                                                                    
     decided  to permit,  on any  migratory bird.   So,  for                                                                    
     instance, if we wanted to  move a raven's nest or issue                                                                    
     a nuisance  permit to  deal with  some geese  that were                                                                    
     depredating  somebody's   grain  field  and   that  was                                                                    
     considered  a nuisance,  rather  than  a public  safety                                                                    
     problem,  we could  go ahead  and do  it, but  we could                                                                    
     only  do it  within  the sideboards  set  by a  federal                                                                    
     permit that  has already  been issued.   And ...  we do                                                                    
     lots of  ... scientific educational permits  under that                                                                    
     very scenario.                                                                                                             
Number 1336                                                                                                                     
MR. ROBUS  returned to  Representative Heinze's  earlier question                                                               
about seeking  information similar  to that from  the Cooperative                                                               
Extension.  He said that  hadn't been considered in analyzing the                                                               
bill, but  added, "If  the Cooperative  Extension had  people who                                                               
wanted to  be authorized to do  that type of thing,  we would now                                                               
have the authority to at least consider permitting doing that."                                                                 
REPRESENTATIVE HEINZE  asked whether citizens could  call [ADF&G]                                                               
for information about bats in the attic, for example.                                                                           
MR. ROBUS answered:                                                                                                             
     One of  the big  jobs that  our area  management people                                                                    
     throughout  the state  in our  23 offices  do is  field                                                                    
     calls  like that  every  year. ...  I've  been in  that                                                                    
     position, ...  caught between wanting to  be of service                                                                    
     and wanting to get the rest  of your work done.  And so                                                                    
     we often  give a  whole lot of  advice over  the phone.                                                                    
     We try not to advise people  to do things that we don't                                                                    
     have  the  authority  to  do or  they  don't  have  the                                                                    
     authority to do.                                                                                                           
     But yes,  ... we issue  a lot of  Extension-type advice                                                                    
     as the  wildlife experts  for the  state, and  I'm sure                                                                    
     we'll always  continue to  do so.   But now  [with this                                                                    
     legislation] we  can actually  tell somebody,  "You may                                                                    
     go ahead  under this permit  and take an animal."   And                                                                    
     take ... means a wide  variety of things, anything from                                                                    
     killing the animal to moving  it to hazing it - scaring                                                                    
     it away.   You can't do  any of that legally  unless we                                                                    
     authorize it.   But now  we'll be  able to do  that for                                                                    
     nuisance animals.                                                                                                          
MR.  ROBUS  pointed out  that  this  isn't  defense of  life  and                                                               
property.  When issuing these  permits to private individuals and                                                               
commercial operators,  [ADF&G] generally would take  the approach                                                               
that nonlethal methods are preferable,  escalating from there and                                                               
eventually  getting into  lethal  take, if  necessary.   He  also                                                               
noted  that the  effective date  is a  year from  July 1  for the                                                               
commercial part,  but recalled that the  noncommercial part takes                                                               
effect July  1 of this  year, so [ADF&G] could  immediately begin                                                               
to  issue  permits to  people  who  have problems  with  nuisance                                                               
Number 1510                                                                                                                     
REPRESENTATIVE LYNN recalled reading  about an Alaskan university                                                               
where a  [northern goshawk] attacked  someone.  He  asked whether                                                               
this bill would apply in such a case.                                                                                           
MR.  ROBUS said  yes, if  it were  judged a  nuisance.   It might                                                               
already  be judged  a public  safety  problem, for  example.   He                                                               
pointed out, however, that northern  goshawks are uncommon enough                                                               
that the  department would look  long and hard  before disturbing                                                               
the nesting situation.                                                                                                          
Number 1578                                                                                                                     
REPRESENTATIVE  CISSNA   returned  attention   to  Representative                                                               
Gatto's hypothetical  situation involving  an eagle's nest.   She                                                               
asked  what latitude  [ADF&G] would  have with  this.   She noted                                                               
that protection of eagles falls under federal law.                                                                              
MR. ROBUS answered that he isn't  sure that falls under the scope                                                               
of  this Act  and that  he hadn't  read up  on the  [federal Bald                                                               
Eagle  Protection Act]  lately.   He noted  that [ADF&G]  advises                                                               
land-management  agencies  and  other permitting  agencies  about                                                               
what can and cannot be done.                                                                                                    
MS. TUPOU offered her interpretation  that the word "small" would                                                               
preclude eagles' inclusion in the legislation.                                                                                  
Number 1669                                                                                                                     
MR. ROBUS,  in response to  a question from  Representative Gatto                                                               
about nests, said:                                                                                                              
     If it's an  inactive nest, I think  we'd determine that                                                                    
     it's just  a bunch  of sticks.   But  if ...  there has                                                                    
     been activity in the nest  and there's eggs in the nest                                                                    
     or  birds around  the nest,  then  we'd probably  treat                                                                    
     that ... as a nuisance.                                                                                                    
CHAIR FATE  remarked that  he believes  this legislation  fills a                                                               
void in the statutes.                                                                                                           
Number 1744                                                                                                                     
KAREN DEATHERAGE,  Defenders of Wildlife, noting  that she hadn't                                                               
been aware of the bill, told  members she'd served three years on                                                               
the  urban wildlife  taskforce in  Anchorage,  which has  clearly                                                               
defined a  lot of "nuisance  animals," mostly exotic  species but                                                               
also some small  mammals and birds like magpies.   She said, "The                                                               
department up here  has got another person working  with the area                                                               
biologist to  assist in  some of these  calls."   Emphasizing the                                                               
importance  of  wildlife  to  people  living  in  Anchorage,  she                                                               
suggested the need  for concern about any  permitting system that                                                               
might endanger  what people  consider valuable,  whether it  is a                                                               
porcupine [or other animal].                                                                                                    
MS. DEATHERAGE expressed concern,  first, about whether the Board                                                               
of Game  will have jurisdiction  over the department  in allowing                                                               
these permits;  she offered her  belief that any  decision should                                                               
come from  the department.   Second, she expressed  concern about                                                               
whether  this will  create a  heavier burden  for the  department                                                               
with regard  to enforcement and ensuring  there is no abuse  of a                                                               
permit system.  She questioned whether  this is a major issue out                                                               
there and causing stress on  the department now, except for calls                                                               
relating to bears and moose.  She told members:                                                                                 
     I'm aware of bear calls  and moose calls because I work                                                                    
     closely with  ADF&G up here  in Anchorage.  And  one of                                                                    
     the   things   we've   done   very   successfully   and                                                                    
     cooperatively  is educate  the  public.   And that  has                                                                    
     created huge,  huge differences in the  number of calls                                                                    
     and even  the number of  bears, for example,  that have                                                                    
     been  killed as  a result  of being  a nuisance,  quite                                                                    
MS. DEATHERAGE  acknowledged that  this may  be a  positive bill,                                                               
but said she wanted to put forth those questions and concerns.                                                                  
Number 1927                                                                                                                     
CHAIR FATE asked whether anyone else  wished to testify.  He then                                                               
closed public testimony.                                                                                                        
Number 1931                                                                                                                     
REPRESENTATIVE  MASEK moved  to report  SB 147  out of  committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes; she asked for unanimous consent.                                                                                         
REPRESENTATIVE CISSNA objected.                                                                                                 
A  roll  call vote  was  taken.   Representatives  Heinze,  Lynn,                                                               
Morgan, Wolf, Masek, Gatto, and  Fate voted in favor of reporting                                                               
SB 147 from  committee.  Representative Cissna  voted against it.                                                               
Representative Guttenberg  was absent  for the vote.   Therefore,                                                               
SB  147  was  reported  out   of  the  House  Resources  Standing                                                               
Committee by a vote of 7-1.                                                                                                     
SB 155-PREDATOR CONTROL/AIRBORNE SHOOTING                                                                                     
[Contains discussion of HB 208, the companion bill]                                                                             
Number 2014                                                                                                                     
CHAIR FATE  announced that the  final order of business  would be                                                               
CS FOR  SENATE BILL  NO. 155(RES), "An  Act relating  to predator                                                               
control programs; and providing for an effective date."                                                                         
The committee took an at-ease from 1:40 p.m. to 1:45 p.m.                                                                       
REPRESENTATIVE MASEK  asked the  sponsor to explain  changes from                                                               
the original bill version.                                                                                                      
Number 2081                                                                                                                     
SENATOR  RALPH   SEEKINS,  Alaska  State   Legislature,  sponsor,                                                               
explained  that   wolverine  had  been  included   again  at  the                                                               
department's  request.   He told  members, "We  felt that  it was                                                               
important that wolverine,  who can be cumbersome  and probably be                                                               
... at  threat in  the wild  from any  kind of  airborne hunting,                                                               
should be protected."                                                                                                           
SENATOR SEEKINS  also said  the process  was changed  around such                                                               
that the  Board of Game  would get  input from scientists  in the                                                               
division; would decide to make  this an intensive management area                                                               
under  current  statute;  and then  would  authorize  a  predator                                                               
control  program  that  included airborne  and  same-day-airborne                                                               
shooting.  The board would  have the prerogative to determine who                                                               
the participants  could be, and  should establish  the following:                                                               
predator-reduction objectives, limits, methods  and means; who is                                                               
authorized to  participate; and the conditions  for participation                                                               
of individuals in the program.                                                                                                  
SENATOR SEEKINS  said this basically eliminates  "the second bite                                                               
of  the apple"  by  the commissioner.    It is  a  Board of  Game                                                               
process  with   the  best  scientific   input  coming   from  the                                                               
department.  "And once the  department provided that information,                                                               
it  was  not necessary  for  the  commissioner to  recertify  the                                                               
information that  his staff had  already brought to the  board in                                                               
order to make that decision," he  explained.  He opined that this                                                               
decision [under  the bill] will  be as  apolitical as it  can be,                                                               
done by the board members and based on sound science.                                                                           
Number 2236                                                                                                                     
SENATOR   SEEKINS  elaborated   in  response   to  remarks   from                                                               
Representative Wolf:                                                                                                            
     What  we're  trying  to  do  here  is,  we  do  have  a                                                                    
     statutorily  appointed  Board  of   Game.  ...  We,  as                                                                    
     trustees, the members of these  bodies, the trustees of                                                                    
     the resources  of the state  of Alaska,  including wild                                                                    
     game, ... have set up  a statutory process in the Board                                                                    
     of Game  so that  they can  look at  and have  a public                                                                    
     process to  take a look at  all of the reasons  ... for                                                                    
     having  methods and  means ...  of harvest,  et cetera,                                                                    
     for wild  game in the  state of Alaska, to  comply with                                                                    
     our  ...  constitutional   requirement  to  manage  for                                                                    
     sustained yield.                                                                                                           
     What  we've said  was, those  decisions should  be made                                                                    
     based  on the  best  available science,  should not  be                                                                    
     made based  on politics.   We  should be  managing this                                                                    
     resource scientifically.   So what  we have ...  in our                                                                    
     process today is  testimony that comes to  the Board of                                                                    
     Game,  including testimony  from our  own experts,  our                                                                    
     scientists   that   tell  us   population   objectives,                                                                    
     carrying  capacities,  bull-cow   ratios  -  all  these                                                                    
     things that  can come into  play to determine,  "Are we                                                                    
     meeting the constitutional  mandate for sustained yield                                                                    
     or not; if there's a  problem, then help us to identify                                                                    
     the problem  and show  us" -  and it has  to be  here -                                                                    
     that  the  board shall  have  had  to have  determined,                                                                    
     based  on information  provided  by  the department  in                                                                    
     regard to  ... an  identified big-game  population, ...                                                                    
     that they haven't met the  objectives - that could be a                                                                    
     harvest  objective;  that  could be  ...  a  population                                                                    
     objective; it could  be both on predators or  on prey -                                                                    
     and that a cause for the failure is predation.                                                                             
Number 2368                                                                                                                     
SENATOR SEEKINS continued:                                                                                                      
     It has  to be an identified  cause, scientifically, and                                                                    
     then that ... it's a  reasonable expectation that ... a                                                                    
     predator control  program could aid in  the achievement                                                                    
     of those objectives  that could get us  there. ... Then                                                                    
     they have  to design how  the best possible way  ... to                                                                    
     carry  out  that  ...   predator  reduction  would  be.                                                                    
     There's some  control all the  way through.   And we've                                                                    
     tried very hard  to make sure, then, that  the Board of                                                                    
     Game understands  they just can't  say, "Well,  we need                                                                    
     to  reduce predators  here."   They have  to show  why.                                                                    
     And they  have to show  what the  result will be.   And                                                                    
     then they  have to  establish how many.   They  have to                                                                    
     establish the  methods and means  to be able to  do it,                                                                    
     because  in different  parts  of  the state,  different                                                                    
     types  of methods  and means  can be  effective or  not                                                                    
     effective.   And then  they have  to determine  who can                                                                    
     participate and  then, on top  of that,  the conditions                                                                    
     for participation.                                                                                                         
     So we've  said, "Along  with you making  this decision,                                                                    
     you  have  some responsibility  to  the  people of  the                                                                    
     state  of   Alaska  to  make   sure  you're   doing  it                                                                    
     properly."   And  so we're  ... kind  of expanding  not                                                                    
     only the opportunity, but also the responsibility.                                                                         
     This does  not preclude the department  from being able                                                                    
     to  handle their  own  parallel (indisc.--coughing)  if                                                                    
     they so wish.  This just  allows them to say, "Here's a                                                                    
     problem,  here's a  solution, here's  a way  it can  be                                                                    
     done,"  and to  authorize  private  individuals ...  to                                                                    
     assist,  as [Governor  Murkowski] has  said; he'd  like                                                                    
     local folks  to be able  to carry out ...  the predator                                                                    
     control ... programs as much  as possible.  And I think                                                                    
     that this  accomplishes that, and  it ... keeps  it out                                                                    
     of the political  arena.  Yes, [Board  of Game members]                                                                    
     are   somewhat-political    appointees,   but   they're                                                                    
     confirmed  ... by  these bodies,  and so  they ...  now                                                                    
     would have that decision-making authority.                                                                                 
Number 2474                                                                                                                     
REPRESENTATIVE GATTO asked about the effect of the bill on the                                                                  
bear population.                                                                                                                
SENATOR SEEKINS  answered, "If  a bear is  a predator,  they have                                                               
the responsibility and the right  to determine ... how to control                                                               
it.  And I believe a bear is  a predator.  In fact, I think bears                                                               
have a greater effect in many  areas on mortality rates for moose                                                               
calves than wolves do."                                                                                                         
Number 2502                                                                                                                     
REPRESENTATIVE HEINZE referred to page  2 [Section 2].  She asked                                                               
whether  the Board  of Game  will have  authority over  all this,                                                               
including "who can shoot, who can  fly," and what methods will be                                                               
SENATOR  SEEKINS answered  in the  affirmative.   He said  that's                                                               
consistent with [the board's] authority  in statute now, and this                                                               
is a reiteration  of other rights and responsibilities  it has in                                                               
Number 2546                                                                                                                     
REPRESENTATIVE  HEINZE asked  Senator  Seekins for  clarification                                                               
about the numbers relating to wolf and moose populations.                                                                       
SENATOR SEEKINS offered an example  from Game Management Unit 13.                                                               
Pointing  to an  area  on  a wall  map,  he  mentioned the  Parks                                                               
Highway, Denali  Highway, Richardson Highway, and  Glenn Highway,                                                               
saying it's basically contained  within that boundary between the                                                               
two major population areas of Alaska.  He said:                                                                                 
     At one  time in  the late '80s,  early '90s,  the moose                                                                    
     population -  the reproductive base of  that population                                                                    
     - was  about 27,000.   Today it's  less than 8,000.   A                                                                    
     number of years  ago, the Board of Game  said, "This is                                                                    
     now  an  intensive  management  area,"  and  authorized                                                                    
     predator  control   programs.    But  under   the  last                                                                    
     administration, for  political reasons stated  that way                                                                    
     - not  assumed -  they decided  not to  do any  kind of                                                                    
     predator control program in there. ...                                                                                     
     The  harvest by  humans  has stayed  below a  thousand.                                                                    
     Something's killing those animals.   And the biologists                                                                    
     say it's wolves and bears. ...  And they say we need to                                                                    
     have a  predator control program.   The wolf population                                                                    
     is 900-plus roughly, depending on  when you measure it.                                                                    
     The  ceiling that's  been established  by the  board is                                                                    
     around 200.   The  bear population  exceeds 1,500-1,600                                                                    
     grizzly  bears in  that area.   The  population is  way                                                                    
     over the net.                                                                                                              
SENATOR SEEKINS referred  to charts of wolf  and moose population                                                               
trends for  Unit 13.   He indicated  nothing has been  done other                                                               
than  private   hunting  to  meet  the   department's  population                                                               
objective of 200 wolves.                                                                                                        
Number 2698                                                                                                                     
SENATOR SEEKINS  expressed concern about failing  in managing the                                                               
resources that  are Alaskans'  public-trust assets.   He  said 80                                                               
percent  or more  of  moose calves  born in  this  area are  dead                                                               
before  they're  four weeks  old.    Highlighting the  number  of                                                               
predators,  he said  they  can't  even be  counted  and can't  be                                                               
caught  without a  predator control  program  of some  kind.   He                                                               
offered his belief  that the Board of Game has  to authorize this                                                               
because  the  mandate  is  that  the highest  and  best  use,  by                                                               
statute, is for human consumption.  He added:                                                                                   
     I submit to  you that ... if we were  just to take one-                                                                    
     third of what  we could have produced out  of there, we                                                                    
     would  triple the  harvest  of moose  in  the state  of                                                                    
     Alaska in  the high years  - triple  it.  And  if those                                                                    
     people  from Anchorage  and  Fairbanks  and the  highly                                                                    
     populated  part  of  the  state were  able  to  have  a                                                                    
     reasonable opportunity  to harvest close to  home, they                                                                    
     wouldn't be going to Ruby  or to Rampart or other parts                                                                    
     of  the state  to  hunt.   Not  only  do  we solve  the                                                                    
     problem by  controlling our  populations of  game close                                                                    
     to -- the  problem of managing for  sustained yield, we                                                                    
     take the  pressure off the  rural communities,  which I                                                                    
     think is a  secondary benefit of equal  importance.  So                                                                    
     give people a  chance to harvest close to  home - we'll                                                                    
     solve some of the other issues of the state as well.                                                                       
SENATOR SEEKINS  said it's  a real problem  and that  nobody will                                                               
dispute these numbers  from the department, which  are taken from                                                               
their own  reports.  He noted  that for some, the  trend has been                                                               
"extended one year," but said  they're straight-line trends, with                                                               
no reason to believe it won't continue.                                                                                         
Number 2900                                                                                                                     
REPRESENTATIVE  HEINZE asked  about gestation  periods for  moose                                                               
and wolves, and how many young are born a year.                                                                                 
SENATOR SEEKINS  answered that there  is a high twinning  rate in                                                               
moose, though  he didn't  have the figures,  and said  wolves can                                                               
have three to six  or more pups up to twice a year.   In Unit 13,                                                               
"from myself  and other  people who  do hunt  and travel  in Unit                                                               
13," he said  it is rare to  see a moose calf  that survives into                                                               
the fall.                                                                                                                       
TAPE 03-42, SIDE B                                                                                                            
SENATOR  SEEKINS   said  these  populations  are   always  either                                                               
declining or increasing.                                                                                                        
Number 2940                                                                                                                     
REPRESENTATIVE  WOLF voiced  wholehearted support  for the  bill.                                                               
He  said Alaska's  constitution clearly  states and  explains the                                                               
sustained yield  principle for maximum  benefit of  the residents                                                               
of  Alaska.    He  remarked   that  this  bill  isn't  a  hunting                                                               
opportunity, but a predator control program.                                                                                    
SENATOR SEEKINS  said by  telling the  Board of  Game it  has the                                                               
right to determine who participates,  "we would believe that they                                                               
would have  the responsibility to  make sure that the  people who                                                               
did  it  were responsible  people,  not  just  opening it  up  to                                                               
anybody."   He reported  that he'd  met the  day before  with two                                                               
members of  the department, another  Senator, and a man  from the                                                               
U.S. Department of Agriculture (USDA).   Senator Seekins said the                                                               
USDA  has a  division or  office that  assists other  states with                                                               
predator control, and  that the man is a  certified aerial gunner                                                               
who  said  other  Western states  use  airborne-hunting  predator                                                               
control programs.  Citing the idea  of taking care of the problem                                                               
efficiently, effectively,  and humanely, Senator  Seekins offered                                                               
his belief that this can be done with [SB 155].                                                                                 
Number 2815                                                                                                                     
REPRESENTATIVE GUTTENBERG asked why  the governor doesn't do this                                                               
predator control now.                                                                                                           
SENATOR SEEKINS  answered that the current  statute says predator                                                               
control can only  be based on the prey  population objective, and                                                               
then must  be certified  by the commissioner.   This  bill allows                                                               
the Board  of Game  to use  all population  objectives, including                                                               
harvest objectives.  He explained:                                                                                              
       You may have a population objective that's fairly                                                                        
      stable, but you're not able to harvest anything for                                                                       
     human   use  because   it's   being  overharvested   by                                                                    
     predators.   But under the  current law, you  could not                                                                    
     do anything  about that.   The McGrath area,  if you'll                                                                    
     recall, was  (indisc.) down.   It had ...  a population                                                                    
     objective  of, let's  say, a  unit of  three, and  they                                                                    
     reduced it  to a unit  of one  so that they  could meet                                                                    
     the  population  objective.   So  now  you couldn't  do                                                                    
     anything until you could show  that the prey population                                                                    
     didn't meet  the objectives.   So we want to  roll back                                                                    
     into  that   the  ability  to   look  at   ...  harvest                                                                    
     objectives as  well as predator  population objectives.                                                                    
     This now  allows them to  look at all  their objectives                                                                    
     and come up with ... a harmonious program.                                                                                 
     And now,  the governor  himself, I  don't know  why the                                                                    
     governor does  not choose  what he does  not do.  ... I                                                                    
     have   not  heard   anyone  from   the  Department   of                                                                    
     Administration say  that it  was based  on any  kind of                                                                    
     scientific principle.   And  so, to  take that  kind of                                                                    
     political pressure  off of any ...  governor, no matter                                                                    
     who it is  that's in office or what  party they're from                                                                    
     in  office, I  think this  should become  an apolitical                                                                    
     and science-based  decision.   By doing that,  we don't                                                                    
     put  anyone in  a  position where  they  have to  worry                                                                    
     about  the  headline  in the  paper  related  to  their                                                                    
     activity; it's as this governor  asked it to be, early,                                                                    
     to be science-based, and as he's  asked it to be, to be                                                                    
     primarily  carried  out  by people  that  live  in  the                                                                    
     communities where it's necessary.                                                                                          
     Nowhere  else   in  statute,  on   any  fish   or  game                                                                    
     regulation,  does a  commissioner  or a  member of  the                                                                    
     administration have  any kind  of veto  power ...  on a                                                                    
     program authorized by the board.   And we're now making                                                                    
     this part  of the  statute consistent with  every other                                                                    
Number 2665                                                                                                                     
REPRESENTATIVE  GATTO suggested  there  had been  a thought  that                                                               
tourism tended to  drive some decisions.  He referred  to a graph                                                               
relating  to  predator populations  and  noted  that there  is  a                                                               
steady  increase  in  the  predator  population  in  spite  of  a                                                               
declining prey population.   He asked whether  that reflects that                                                               
wolves can get along on other prey and wait.                                                                                    
SENATOR SEEKINS  replied that if  they're killing  moose, they're                                                               
also killing caribou and will  "eat them down until they're gone,                                                               
and then  they'll start eating each  other."  He said  30 percent                                                               
of wolves killed in Alaska today  are "killed by other wolves for                                                               
SENATOR SEEKINS  offered an editorial  from that  day's Fairbanks                                                             
Daily  News-Miner, saying  it gives  a sense  of how  people from                                                             
Interior Alaska support "science-based control."                                                                                
REPRESENTATIVE  WOLF recalled  from high  school that  wolves are                                                               
the only predators  that will eat mud to survive,  because of all                                                               
the nutrients.                                                                                                                  
Number 2530                                                                                                                     
MATT ROBUS,  Director, Division of Wildlife  Conservation, Alaska                                                               
Department of Fish  & Game, reminded members  that he'd testified                                                               
on the  original HB 208, companion  bill to SB 155,  and had said                                                               
the language  originally proposed  was a  technical tweak  to the                                                               
existing statute  to overcome the issue  that "high-centered" the                                                               
department  and  the Board  of  Game  in  trying to  implement  a                                                               
predation  control program  in the  McGrath area  this year.   By                                                               
contrast, [CSSB 155(RES)]  is now a fairly  substantial change to                                                               
that statute.  He offered the department's view of what it does.                                                                
MR. ROBUS  addressed Section 1.   He said it allows  the Board of                                                               
Game  to  establish a  predation  control  program that  utilizes                                                               
nondepartment  personnel.   The  existing  statute  has a  fairly                                                               
cumbersome  process whereby  the  Board of  Game  listens to  the                                                               
department  give  its  scientific  information;  crafts  a  draft                                                               
program; then must request that  the commissioner of ADF&G make a                                                               
finding based on  three criteria:  whether  predation is creating                                                               
a  decline  in  the  ungulate population;  whether  reversing  or                                                               
reducing  the predation  will allow  that ungulate  population to                                                               
improve;  and  whether aerial  methods  are  necessary to  reduce                                                               
predation.   Section   1    streamlines   this   process   fairly                                                               
significantly in  that it takes  the commissioner finding  out of                                                               
the process.                                                                                                                    
MR.  ROBUS reported  that much  discussion and  debate in  Senate                                                               
committees  related  to  whether  the  executive  branch  retains                                                               
authority to make  decisions on whether programs are  going to be                                                               
implemented.  He told members:                                                                                                  
      We believe that there is still a significant role in                                                                      
         decision making within the department and the                                                                          
     administration because  this bill  does not  affect the                                                                    
     fiscal  authority of  ... the  commissioner to  run the                                                                    
     department.   And  also there  is  a federal  airborne-                                                                    
     hunting Act that disallows  people from conducting this                                                                    
     type  of  activity unless  the  state  issues a  permit                                                                    
     certifying  that they  are engaged  in  an activity  to                                                                    
     protect  a wildlife  population.   So  the state  still                                                                    
     will have  a significant role,  no matter what  is done                                                                    
     with this statute.                                                                                                         
Number 2350                                                                                                                     
MR. ROBUS turned attention to  Section 2, which also had received                                                               
quite a  bit of discussion.   He said  the Department of  Law has                                                               
advised  [ADF&G]  that   the  Board  of  Game   already  has  the                                                               
authorities listed in Section 2.  He said:                                                                                      
     We asked  [Senator Seekins], the sponsor  on the Senate                                                                    
     side, to consider making the  language more flexible in                                                                    
     that  we didn't  feel it  was  wise to  have the  board                                                                    
     mandated to  establish all four  of these  things every                                                                    
     time there's  a predation control program.   We thought                                                                    
     that  allowing  some  flexibility would  make  it  more                                                                    
     likely that a program  would actually be implemented by                                                                    
     the executive branch.                                                                                                      
MR. ROBUS  acknowledged that  Senator Seekins  and his  staff had                                                               
worked with [ADF&G] quite a bit on  Sections 1 and 2.  He offered                                                               
the  belief  that some  pretty  significant  improvements in  the                                                               
language  have been  achieved through  the  committee process  to                                                               
Number 2306                                                                                                                     
MR. ROBUS advised  members that the current  version, on balance,                                                               
because the  commissioner is entirely  removed from  the process,                                                               
is  unacceptable  to  the  administration.   He  noted  that  the                                                               
original bill  left the  commissioner in the  process.   With the                                                               
assistance  of  the Department  of  Law,  therefore, [ADF&G]  had                                                               
worked  up  a  possible  amendment  that  is  intended  to  be  a                                                               
"compromise position between those  two poles"; he indicated this                                                               
proposed language had been given to the committee.                                                                              
MR. ROBUS explained the intent  of the proposed amendment:  after                                                               
the Board of  Game comes up with a predation  control program and                                                               
submits  it to  the  department, the  commissioner  would have  a                                                               
finite,  short period  of time  within  which to  justify why  it                                                               
should  not be  carried out;  if no  response was  forthcoming in                                                               
that short  time, the program  would go  forward.  He  added, "We                                                               
think this  addresses the pocket-veto issue  that Senator Seekins                                                               
...  has voiced,  and  which, I  think, based  upon  the way  the                                                               
statute's written, is a valid thing to be concerned about."                                                                     
MR. ROBUS told members:                                                                                                         
     I want to  emphasize that the situation  at McGrath was                                                                    
     purely a  technical inability  for the  commissioner to                                                                    
     make  a finding,  as requested  by the  Board of  Game,                                                                    
     because  the population  objective for  that particular                                                                    
     moose herd was  reduced as part of  a compromise during                                                                    
     [an]  adaptive wildlife  management  team process  that                                                                    
     was  underway  out  there  several  years  ago,  in  an                                                                    
     attempt to  get some sort  of redress for  the wildlife                                                                    
     management situation in Unit  19D East, where the moose                                                                    
     population is at  low levels and not  recovering and we                                                                    
     judge the predation as a significant reason for it.                                                                        
CHAIR  FATE asked  that questions  be held  if possible  and that                                                               
testifiers speak for two minutes only.                                                                                          
Number 2175                                                                                                                     
JESSE  VANDERZANDEN, Executive  Director, Alaska  Outdoor Council                                                               
(AOC), began  by saying AOC  represents about 50 outdoor  clubs -                                                               
approximately  12,000  hunters,  fishers,  trappers,  and  public                                                               
access advocates.  Testifying in support  of SB 155, one of AOC's                                                               
top priorities  this session, he  said the bill isn't  about fair                                                               
chase  or  ethics, providing  trophy  moose  hunters with  bigger                                                               
moose racks, eliminating wolves, or  being against predators.  He                                                               
opined that  these are  myths perpetuated by  people who  seek to                                                               
"put wolves on  a pedestal" and thereby create  sympathy for them                                                               
at  the  expense   of  other  wildlife  species;   he  said  this                                                               
undermines  the  integrity  of   wildlife  management  and  every                                                               
Alaskan who wishes to utilize wild food for sustenance.                                                                         
MR. VANDERZANDEN  offered that  the bill  is about  asserting the                                                               
state's right to  manage wildlife in a scientific  manner for the                                                               
benefit of  its citizenry; helping  the state meet  its statutory                                                               
and constitutional  obligations to manage wildlife  for sustained                                                               
yield; and  putting wildlife management  "back into the  hands of                                                               
professional managers  who know  it best -  people in  the field,                                                               
... close  to the ground,  who know what's  going on day  to day,                                                               
year in  and year  out."  He  cited population  levels, predation                                                               
impacts, habitat conditions, other  conditions, use patterns, and                                                               
"a  myriad of  factors that  must  be accounted  for in  managing                                                               
wildlife for sustained yield."                                                                                                  
MR. VANDERZANDEN  said the narrowly focused  bill limits airborne                                                               
or  same-day-airborne predation  management to  only areas  where                                                               
big-game   populations   are    depressed   and   predation   has                                                               
conclusively been  determined to be  a factor; it  requires Board                                                               
of Game  authorization to  conduct airborne  or same-day-airborne                                                               
management within the context of  an approved wildlife management                                                               
plan founded  upon the recommendations of  professional managers.                                                               
He said  these plans are  regularly scrutinized and  commented on                                                               
by the  public "in one of  the most open and  deliberative public                                                               
processes in the nation."                                                                                                       
MR.  VANDERZANDEN indicated  this practice  is available  in most                                                               
states, and should be available  in Alaska, given its challenging                                                               
topography.  He  said it ties predation  management to population                                                               
objectives, which seek to establish  how many moose and predators                                                               
exist in  a long-term sustainable manner  in a certain area.   He                                                               
told members that  predators are part of  the management equation                                                               
- conserved  for, accounted for, and  managed for.  They  are not                                                               
managed against.  It's not a  question of how wolves are managed,                                                               
but how wildlife  is managed.  Noting  that population objectives                                                               
also account  for human  harvest, he concluded,  "We urge  you to                                                               
put Alaskans  who utilize wild  food for sustenance, who  share a                                                               
strong conservation  ethic for nature's  predators and  prey, and                                                               
[who]   rely  on   individual  responsibility,   back  into   the                                                               
management equation by passing this bill today."                                                                                
Number 1958                                                                                                                     
DICK BISHOP  testified on his  own behalf  in support of  SB 155,                                                               
which  he said  makes clear,  when allocating  big-game prey  for                                                               
various uses,  that the  buck stops  at the Board  of Game.   The                                                               
board is  bound by the same  sideboards as ADF&G:   wildlife must                                                               
be   managed  on   the  sustained   yield  or   self-perpetuating                                                               
principle,  and sustained  yield includes  hunting and  trapping.                                                               
He said the board and department  are obligated by law to provide                                                               
for "continued,  important hunting  opportunities"; the  board is                                                               
obligated to make  allocations among various uses,  and relies on                                                               
the  department's  data  and professional  advice  regarding  the                                                               
condition  of   the  particular  population  and   what  sort  of                                                               
management would enable the board to meet its obligations.                                                                      
MR. BISHOP  said SB 155 provides  authority for the board  to use                                                               
more  of   the  available  management  methods   to  fulfill  its                                                               
responsibilities.     Its  decisions  still  must   be  based  on                                                               
information  and  interpretation   provided  by  the  department;                                                               
implementation  of predator-prey  management through  the use  of                                                               
aircraft  also  requires ADF&G's  cooperation  in  order to  meet                                                               
conditions  of the  federal airborne-hunting  Act.   He said  the                                                               
paradox  in  predator-prey management  is  that  while Alaska  is                                                               
huge, only  10-20 percent is  available for active  management of                                                               
predator-prey systems or even of habitat.  He explained:                                                                        
     Federal  nonmanagement  on  50  to 60  percent  of  the                                                                    
     state,  state-closed  areas,  urban areas,  and  barren                                                                    
     lands combined  make up 80  to 90 percent of  the state                                                                    
     lands.    But  then  the 20  percent  of  Alaska  where                                                                    
     management can be done  has become critically important                                                                    
     to those  who pursue the Alaskan  tradition of hunting,                                                                    
     whether for food,  for cultural values such  as my own,                                                                    
     or as  guides who make  a living serving  the interests                                                                    
     of our visitors.                                                                                                           
MR.  BISHOP  concluded by  saying  SB  155  will help  the  state                                                               
fulfill its  constitutional mandate of managing  on the sustained                                                               
yield principle,  subject to  preferences among  beneficial uses,                                                               
for the maximum benefit of the people.                                                                                          
Number 1808                                                                                                                     
PAUL  JOSLIN, Conservation  Biologist, Alaska  Wildlife Alliance,                                                               
expressed concern that  SB 155 would allow members  of the public                                                               
who can afford it  to again be able to play  "cowboys in the sky,                                                               
chasing wolves  across the landscape."   He said it  is barbaric;                                                               
raises public safety issues; and  is inexcusable, even if done in                                                               
the name  of predator control.   Noting that proponents  of same-                                                               
day-airborne  hunting of  wolves  argue that  it's necessary,  he                                                               
said the opposite is true.  He told members:                                                                                    
     We are now  killing more wolves than ever.   And I have                                                                    
     provided  each  of  you  with   copies  of  the  Alaska                                                                    
     Department of  Fish & Game  harvest summary  records on                                                                    
     wolf  take in  Alaska over  the  past 25  years.   From                                                                    
     these records,  you can  see for  yourself that  it has                                                                    
     been steadily increasing, from about  600 wolves a year                                                                    
     to now  over 1,500 wolves  a year, which is  a whopping                                                                    
     increase of nearly 150 percent.                                                                                            
     This trend appears to be  continuing.  In the winter of                                                                    
     2001-2002,  1,741 wolves  were listed  as killed.   The                                                                    
     increase has  come about  largely because  hunters have                                                                    
     better equipment  in the way of  semi-automatic weapons                                                                    
     and  fast, reliable  snow machines  that can  outpursue                                                                    
     any wolf  on open ground.   I attend a lot  of Board of                                                                    
     Game  meetings.    And   having  personally  heard  the                                                                    
     testimony  of  many  snowmachiners  talking  about  the                                                                    
     number of  wolves they take, I'm  especially concerned.                                                                    
     In  one  individual case  I'll  never  forget, ...  the                                                                    
     fellow  bragged  about  how he  single-handedly  chased                                                                    
     after and  shot some 18  wolves.  Pursuing wolves  on a                                                                    
     snow machine is now legal  on about 20 percent of state                                                                    
MR. JOSLIN  said enacting  legislation that  returns Alaska  to a                                                               
time in the  past when there were "cowboys in  the sky" is wrong.                                                               
If anything, legislation should be  enacted to stop the legalized                                                               
but  unfair  chasing of  wolves  on  the  ground and  the  steady                                                               
increase  of killing  of wolves  in  Alaska until  more is  known                                                               
about its impact on Alaska's natural ecosystems.                                                                                
MR. JOSLIN  contended that  this isn't  about logic  and science,                                                               
but  about  dealing with  entrenched  attitudes  about wolves  by                                                               
people  in power.   He  disagreed that  wolves reproduce  twice a                                                               
year, and  he said wolves aren't  vermin.  "The voters  of Alaska                                                               
know that, and  they have told you twice that  they are not about                                                               
to  support you  when  it comes  to allowing  the  public to  use                                                               
aircraft when  it comes to  killing them,"  he said.   "Why isn't                                                               
that message getting through?"                                                                                                  
MR. JOSLIN  said Alaska has  lost its preeminent position  as the                                                               
wild-frontier  state  with  the  highest  density  of  wolves  in                                                               
America because of the antiquated  attacks on predators.  He told                                                               
members that  Minnesota, for example, proudly  proclaims that its                                                               
hunting industry is  able to coexist with a  population of wolves                                                               
that is 2.5  times Alaska's per square mile.   He asked that more                                                               
wolf-related education and a whole lot less killing be done.                                                                    
Number 1537                                                                                                                     
JENNA WHITE testified as follows:                                                                                               
     The   failure   of   a  democratic   government,   when                                                                    
     representatives  of   the  people  vote  in   favor  of                                                                    
     regulations that are  in opposition to the  will of the                                                                    
     people that  elected them:  the  public already clearly                                                                    
     voted to disallow the practice  of aerial and land-and-                                                                    
     shoot hunting of  wolves by the public.   One cannot be                                                                    
     an  expert   on  all  subjects,  and   the  breadth  of                                                                    
     information in  the world today  is overwhelming.   And                                                                    
     the  systems  have  been  devised   so  that  the  most                                                                    
     qualified  individuals  make   decisions  pertinent  to                                                                    
     their area of expertise.                                                                                                   
     Establishment of  regulations that can  have tremendous                                                                    
     impact on  wildlife populations should  be administered                                                                    
     by  biological  professionals.    Nonetheless,  certain                                                                    
     [legislators]  and  Board  of  Game  members  ...  will                                                                    
     acquire personal gain by  acting as wildlife management                                                                    
     professionals.    These  same  individuals  are  active                                                                    
     members  of a  group which  tells that  [moose] numbers                                                                    
     are plummeting by astronomical  accounts.  For example,                                                                    
     it  has  been  claimed  in Unit  13  [that]  the  moose                                                                    
     population  has  dropped  from 27,000  to  7,000  in  a                                                                    
     decade,  and that  in Unit  19D the  moose density  has                                                                    
     fallen from  3 to  4 per  square mile  to 1  per square                                                                    
     mile, a 75 percent reduction.                                                                                              
     It has  further been  stated that this  is not  a fair-                                                                    
     chase issue,  but a scientific  management issue.   And                                                                    
     this  is exactly  the  point:   that  science is  being                                                                    
     manipulated to suit their own  desires.  The scientific                                                                    
     reality  is  that  the true  population  estimates  for                                                                    
     moose and many  species are not known in  most parts of                                                                    
     the  state  because  these surveys  are  expensive  and                                                                    
     Previous high  estimates of moose numbers  in the 1980s                                                                    
     are pure  speculation based on no  scientific data, and                                                                    
     were  the  result  of long-term  state-  and  privately                                                                    
     sponsored  wolf bounties,  extensive  aerial and  land-                                                                    
     and-shoot killing, and poisoning.   For example, in the                                                                    
     previously mentioned Unit  13, where intensive predator                                                                    
     control has been adopted, ADF&G  biologists do not know                                                                    
     the extent  of the  moose population because  this area                                                                    
     is  very  large   and  encompasses  much  topographical                                                                    
     variation.  And the area simply has not been censused.                                                                     
Number 1390                                                                                                                     
MS. WHITE continued:                                                                                                            
     But in  a recent  ADF&G discussion item  concerning the                                                                    
     review  of  predator-prey status  in  Unit  13, it  was                                                                    
     stated  that, quote,  there are  about 22,000  moose in                                                                    
     Unit 13 and an overall  density of 0.9 moose per square                                                                    
     mile, or  a density  of 1.4 moose  per square  [mile in                                                                    
     areas]  below 4,000-foot  ... elevation.   And  this is                                                                    
     considered a  relatively high-density  moose population                                                                    
     for Interior habitats.                                                                                                     
     This number certainly is not  written in stone.  But it                                                                    
     is  nowhere  near  the   "7,000"  number  purported  by                                                                    
     supporters of this  bill.  The report goes  on to state                                                                    
     that moose populations now  appear comparable to levels                                                                    
     observed in the early  1980s.  Simultaneously, the most                                                                    
     recent  study  showed  that  the  wolf  population  has                                                                    
     decreased  by  some  27  percent in  Unit  13,  due  to                                                                    
     extensive hunting and trapping. ...                                                                                        
     The real problem is,  ... localized hunting overhunting                                                                    
     has reduced  bull ratios to as  low as 9 bulls  ... per                                                                    
     100 moose in  certain areas.  And this  has reduced the                                                                    
     resiliency   ...   of   the  herd   and   the   overall                                                                    
     availability of moose to take.                                                                                             
MS.  WHITE concluded  that overall,  this is  a scientific  issue                                                               
that needs  to be  resolved by  professionals who  have integrity                                                               
and  are looking  out for  the welfare  of wildlife  and habitat,                                                               
instead of "playing politics."                                                                                                  
Number 1279                                                                                                                     
VIC VANBALLENBERGHE told  the committee he is a  former member of                                                               
the Board of Game appointed in  1985 by Governor Sheffield and in                                                               
1996  and  2002  by  Governor  Knowles.    First  discussing  the                                                               
public's using  airplanes to take  wolves, he said that  while he                                                               
was on the  Board of Game in 1985-87, the  board began to address                                                               
problems related to this issue; the  board acted first in 1986 to                                                               
restrict   land-and-shoot  hunting   because  the   practice  had                                                               
numerous problems in relation to  hunters' shooting directly from                                                               
the  air or  hazing  and  harassing wolves,  both  of which  were                                                               
illegal  under state  and federal  law.   He said  that led  to a                                                               
series  of  well-publicized  court  cases in  Alaska  and  public                                                               
outrage over the practice.                                                                                                      
MR. VANBALLENBERGHE offered his belief  that whether or not land-                                                               
and-shoot  or  same-day-airborne  hunting  is  done  as  predator                                                               
control,  it is  a bad  practice that  the public  still strongly                                                               
opposes.   Highlighting the 1996  initiative and  2000 referendum                                                               
dealing with this  issue, he said they  demonstrated the strength                                                               
of that opposition.  He opined  that passage of this [SB 155] may                                                               
result   in  yet   another  referendum   vote  to   overturn  the                                                               
legislature's action.                                                                                                           
MR.   VANBALLENBERGHE   said,   second,   the   bill   cuts   the                                                               
commissioner, and hence  the governor, out of  decision making on                                                               
wolf  control.   Emphasizing  that  the Board  of  Game isn't  an                                                               
elected body, he said only the  governor, who is elected, can see                                                               
the broad  public policy issues involved  in controversial issues                                                               
like wolf  control and  can make  the ultimate  decision, through                                                               
the commissioner of  ADF&G, as to whether  these practices should                                                               
MR. VANBALLENBERGHE  referred to  Mr. Robus's testimony  and said                                                               
there  is  a  legal  problem  in  that  Public  Law  92-159,  the                                                               
airborne-hunting Act passed by Congress,  requires state fish and                                                               
game agencies, rather  than boards of game, to  issue permits for                                                               
aerial  control.   Thus  [SB 155],  by  overriding that  process,                                                               
generates  some serious  and  perhaps  intractable problems  that                                                               
need to be rectified.                                                                                                           
Number 1031                                                                                                                     
ROBERT  FITHIAN, Executive  Director, Alaska  Professional Hunter                                                               
Association  (APHA),  who  is  a   master  guide  and  "eco-tour"                                                               
operator,  said APHA  represents Alaska's  oldest tourism-related                                                               
industry,  the guided  sport-hunting industry,  which contributes                                                               
more  than $120  million "new"  dollars to  Alaska each  year and                                                               
contributes  to  ADF&G's  annual  wildlife  conservation  budget.                                                               
Referring to  the state constitution,  Article I,  Section 1, and                                                               
Article VIII, Sections 3 and 4, he told members:                                                                                
     During  the  past decade  we  have  seen a  steady  and                                                                    
     continual  decline  in  the cow  moose  populations  in                                                                    
     Alaska  of  at least  55  percent.   The  annual  calf-                                                                    
     survival rate is under 7  percent.  Only 3.5 percent of                                                                    
     the  surviving calves  are female,  and  fewer of  that                                                                    
     percentage  are  living to  be  of  recruitment age  to                                                                    
     replenish the declining populations.                                                                                       
     The  average annual  harvest  rate  of moose  statewide                                                                    
     currently is as follows:   86 percent die by predation,                                                                    
     10 percent die  of natural mortality, and  4 percent by                                                                    
     human harvest.   What these  facts prove is that  if we                                                                    
     stopped all human  harvest of moose today,  a year from                                                                    
     now we will still have  fewer moose.  Hunting and human                                                                    
     harvest is having no significant  effect on the state's                                                                    
     moose population.                                                                                                          
     Let me  advise you on another  commonly overlooked fact                                                                    
     here.   If  the  facts were  known  regarding our  Dall                                                                    
     sheep and, in many  areas, our caribou populations, and                                                                    
     they  had ...  an  important role  throughout the  main                                                                    
     river  corridor  communities  of  Alaska  as  meat-and-                                                                    
     subsistence species,  you would find that  their plight                                                                    
     is   as  bad   as   our  moose.      It's  a   terrible                                                                    
     representation of the stewardship of these resources.                                                                      
     It's important for you to  note that during the past 10                                                                    
     years  the nonresident  sportsman has  lost opportunity                                                                    
     to hunt on  over 50 million acres of  public lands that                                                                    
     are  open  to  sport  hunting,  due  to  the  continual                                                                    
     reducing numbers of Alaska's  moose, sheep, and caribou                                                                    
     populations   and   the   mandate's  of   the   state's                                                                    
     subsistence law.                                                                                                           
     Only  two times  in the  history of  our state  have we                                                                    
     seen  such detriment  dealt  to  our precious  wildlife                                                                    
     populations as  we have  in the past  15 years.   These                                                                    
     two  instances  were  the near-extinction  of  the  sea                                                                    
     otter by the  Russians and the demise  of Alaska's wild                                                                    
     salmon during the territorial years. ...                                                                                   
Number 0846                                                                                                                     
MR. FITHIAN concluded:                                                                                                          
     The  APHA  warrants  that  what  Alaska  will  gain  by                                                                    
     passage  of Senate  Bill 155  and the  administration's                                                                    
     mandates   of    management   of    Alaska's   wildlife                                                                    
     populations for abundance will do  far more benefit for                                                                    
     Alaska's  tourism industries  and ...  the vision  that                                                                    
     the  world has  of Alaska  than any  boycott can  do us                                                                    
     harm.  It's time for us  to stand up for Alaska and the                                                                    
     vision that  the world  has of our  state, a  vision of                                                                    
     incomparable  wildlands  and bountiful  populations  of                                                                    
     wildlife.     Our  civil,  constitutional,   and  moral                                                                    
     stewardship requirements  need to  be adhered to.   The                                                                    
     APHA urges you,  for the sake of  our precious wildlife                                                                    
     resources and  the people of  rural Alaska,  to support                                                                    
     this bill.                                                                                                                 
CHAIR FATE asked people on teleconference who had written                                                                       
testimony to provide it to the committee.                                                                                       
Number 0772                                                                                                                     
REPRESENTATIVE  CISSNA  pointed  out  that she  didn't  have  the                                                               
handout Mr. Joslin said he'd provided.                                                                                          
Number 0750                                                                                                                     
CHAIR  FATE closed  public testimony,  asking people  to stay  on                                                               
teleconference  for questions.    He announced  his intention  of                                                               
moving the bill from committee this day.                                                                                        
REPRESENTATIVE MASEK  asked Mr. Robus  to address a  topic raised                                                               
in  a  letter  in  committee   packets  from  Jenny  Pursell  [in                                                               
opposition to SB 155, dated May 8,  2003] that says under SB 155,                                                               
aerial  predator control  can be  declared by  the Board  of Game                                                               
without the backing of ADF&G.                                                                                                   
MR. ROBUS responded:                                                                                                            
     Our reading - and one thing  that may not be clear - is                                                                    
     that  under  the  existing statute,  let  alone  what's                                                                    
     before  you, the  public can  be involved  in predation                                                                    
     control  programs  ... involving  same-day-airborne  or                                                                    
     airborne hunting  if this  complicated process  is gone                                                                    
     through that I mentioned before.                                                                                           
     The  ...  Board of  Game,  under  the language  in  ...                                                                    
     SB 155, would  be able to  go ahead and put  together a                                                                    
     predation control program and  hand it to the executive                                                                    
     branch  without the  involvement  of the  commissioner.                                                                    
     But,  as I  said  before, in  two  ways the  department                                                                    
     still  would  have  some  authority  and  some  say  in                                                                    
     whether  or not  a program  went forward.   And  one is                                                                    
     that the board does not  have any fiscal authority over                                                                    
     the  department, and  the  commissioner still  controls                                                                    
     the purse strings for what  happens and, therefore, can                                                                    
     direct that something either be done or not done.                                                                          
     And  then, secondly,  the provisions  of the  airborne-                                                                    
     hunting Act means that ...  if nondepartment people are                                                                    
     involved  in  predation  control  activities  involving                                                                    
     aerial methods, the state must,  as we read it, issue a                                                                    
     permit to  protect people from federal  prosecution ...                                                                    
     under that law.  People can  be made legal if there's a                                                                    
     state permit that says that  they're participating in a                                                                    
     program to protect a wildlife  population.  And in this                                                                    
     case it would either be moose  or caribou or one of the                                                                    
     ungulate  populations identified  under the  intensive-                                                                    
     management law.                                                                                                            
MR. ROBUS added that he hadn't  read the letter, but thought he'd                                                               
answered Representative Masek's question.                                                                                       
Number 0522                                                                                                                     
REPRESENTATIVE MASEK  reiterated that  the letter says  the board                                                               
can  declare  aerial  predator control  without  the  backing  of                                                               
MR.  ROBUS  replied, "I  think  that's  true.   But,  again,  the                                                               
department and  the administration  would still retain  the final                                                               
say as to whether or not to implement that program."                                                                            
REPRESENTATIVE MASEK  referred to  oral testimony and  to written                                                               
testimony to the  Board of Game from the board's  March 6 meeting                                                               
[in  packets].   She  paraphrased  from a  letter  from Lewis  F.                                                               
Egrass  of McGrath  that  says  [original punctuation  provided]:                                                               
"Just  last night  March 5th  on Alaska  State news,  Paul Joslin                                                               
stated  that  their survey  showed  that  75% of  rural  Alaskans                                                               
opposed predator control.   I have contacted all  the villages in                                                               
this area  and none of them  have any knowledge of  this survey."                                                               
Representative Masek said she just wanted to put that on record.                                                                
Number 0362                                                                                                                     
CHAIR FATE asked about the  allegation that the moose count isn't                                                               
accurate and has no scientific basis.                                                                                           
MR. ROBUS responded:                                                                                                            
     It's true that  there's a lot of art in  the science of                                                                    
     wildlife management.  And it's  true that these surveys                                                                    
     are expensive.  And we  have to try to hopscotch around                                                                    
     the state, and  there are a lot of areas  that we don't                                                                    
     survey every year.   But we try to  keep hopping around                                                                    
     and checking up  on places from time to time.   And the                                                                    
     department  is  among  the  leaders  in  the  world  in                                                                    
     developing aerial  survey techniques, and we  have done                                                                    
     what we can  to try to develop ways to  do the best job                                                                    
     we  can of  estimating  - not  directly counting  every                                                                    
     last one,  but estimating  moose populations  and other                                                                    
     wildlife populations in the state.                                                                                         
CHAIR FATE asked whether the figures are valid.                                                                                 
MR. ROBUS replied:                                                                                                              
     I  believe   they  are,  Mr.  Chairman,   although  ...                                                                    
     depending on where you're  looking specifically, we may                                                                    
     have less  scientific data than  in other places.   But                                                                    
     in  places  where   we've  got  significant  management                                                                    
     problems, we try  to allocate our resources  so that we                                                                    
     do fly high-quality surveys and  do the best job we can                                                                    
     under the  conditions. ...  We can  still be  foiled by                                                                    
     weather conditions or other anomalies,  but we have, we                                                                    
     believe, valid  results and estimates that  are as good                                                                    
     as you can get under the circumstances.                                                                                    
Number 0187                                                                                                                     
REPRESENTATIVE GUTTENBERG  referred to one  of the graphs  in the                                                               
packet.   He said  some game  management biologists  and resource                                                               
managers  have mentioned  that the  1988 number  was an  anomaly,                                                               
that taking out the bottom and  top numbers would give more of an                                                               
average, and that shooting for an all-time high isn't feasible.                                                                 
MR. ROBUS responded:                                                                                                            
     You make a good point,  and the department is on record                                                                    
     repeatedly as  trying to make sure  that population and                                                                    
     harvest objectives that  are established are reasonable                                                                    
     and  ...  achievable.  ...  There's  no  doubt  and  no                                                                    
     argument  from  the department  that  we  don't have  a                                                                    
     management  problem  for  ungulates   in  Unit  13  and                                                                    
     Unit 19D and  several other places.   But in  trying to                                                                    
     correct those problems,  we need to be  careful that we                                                                    
     aim towards  objectives that can be  sustained, and ...                                                                    
     don't create more problems when we get there.                                                                              
     Anybody who  knows the history of  the Nelchina caribou                                                                    
     herd knows  that populations do  fluctuate the  way ...                                                                    
     Senator Seekins mentioned.  And  we have to be careful,                                                                    
     when trends  are going up,  not to  stimulate something                                                                    
     that gets so high that it creates damage.                                                                                  
TAPE 03-43, SIDE A                                                                                                            
Number 0001                                                                                                                     
MR. ROBUS noted that [the graph] has some error associated with                                                                 
it; it's an estimate.  He explained:                                                                                            
     If you draw the type of  error bars that we have around                                                                    
     our estimates, you  might find that that line  is a lot                                                                    
     less lumpy  than it  appears here.   And  if we  had no                                                                    
     snow on the  ground that winter, it would  be very hard                                                                    
     to find  moose during  a survey anyway,  so we'd  get a                                                                    
     low estimate.   So I think  what you need to  look at -                                                                    
     and what  wildlife biologists  get used  to doing  - is                                                                    
     instead of  worrying too much about  the absolute place                                                                    
     where  that point  is, you  look at  the general  line.                                                                    
     And  that  general trend  for  moose  in [Unit]  13  is                                                                    
     definitely down over  the long term, and  we agree that                                                                    
     we've got  some serious management concerns  there that                                                                    
     need to be addressed.                                                                                                      
Number 0071                                                                                                                     
REPRESENTATIVE  CISSNA recalled  that the  environments in  which                                                               
moose live  must be specifically  beneficial for them;  they need                                                               
to  be able  to reach  what they  forage on,  for example,  and a                                                               
growing forest  can actually  outgrow the  range which  moose can                                                               
reach.   She asked whether there  has been any kind  of change in                                                               
the environment [in the game management units being discussed].                                                                 
MR. ROBUS replied:                                                                                                              
     One  thing that  is  often forgotten  is  ... that  the                                                                    
     habitat  is  constantly   changing  everywhere  in  the                                                                    
     state.  And  numbers of animals in the  woods or tundra                                                                    
     or  wherever are  also constantly  changing.   And  the                                                                    
     challenge  of wildlife  management  is to  try to  keep                                                                    
     things  in  balance  and at  adequate  levels  so  that                                                                    
     people can  use the wildlife  in the various  ways they                                                                    
     And, yes, our area  biologists ... become very familiar                                                                    
     with the areas,  and we know that  there are situations                                                                    
     where  habitat is  the primary  problem for  ungulates.                                                                    
     But there's a whole variety  of factors ... that affect                                                                    
     ungulate  populations   or  any   wildlife  population,                                                                    
     predation  being  one  of  them,  habitat  quality  and                                                                    
     quantity another,  disease, parasites - you  can on and                                                                    
     on; weather is a big one for moose.                                                                                        
      And  so that's  why the  current statute  and the  ...                                                                    
     bill in front  of you talks about ...  the board having                                                                    
     to making the judgment  that predation is a significant                                                                    
     cause for  a depressed ungulate population,  because it                                                                    
     doesn't  do  any good  to  remove  predation or  reduce                                                                    
     predation if  that's not  what's causing  the depressed                                                                    
     moose herd or caribou herd.   So, obviously, we need to                                                                    
     look at make sure that  predation is a problem, and ...                                                                    
     not something else controlling the situation.                                                                              
Number 0329                                                                                                                     
REPRESENTATIVE GUTTENBERG  said this bill  seems to want  to take                                                               
authority from the governor and  the commissioner, and give it to                                                               
the board.  He asked whether  that is a real situation, since the                                                               
governor, in the end, controls the  purse strings of the board or                                                               
even the department.  He surmised  that if a governor didn't want                                                               
predator control, it wouldn't happen, regardless of this bill.                                                                  
MR.  ROBUS  offered  his belief  that  [Governor  Murkowski]  has                                                               
stated repeatedly  that he's  in favor  of predator  control; has                                                               
voiced a policy  that certain techniques will not  be employed at                                                               
this time;  and is very interested  in having predator-management                                                               
problems  addressed by  local people,  as  opposed to  department                                                               
staff, in  part because of  the cost to  the state involved  in a                                                               
staff  effort.    In  further   reply,  he  reiterated  that  the                                                               
administration presently  finds the bill unacceptable  because of                                                               
the commissioner's  diminished role  in Section  1, which  is the                                                               
process whereby the board produces the predation-control plan.                                                                  
CHAIR FATE recalled  that the governor, in a speech  to the joint                                                               
session,  had talked  about active  management, which  Chair Fate                                                               
said connotes  "active management including, if  needed, predator                                                               
REPRESENTATIVE  MASEK  commented  that  almost  everyone  in  the                                                               
Senate had  voted for this  bill and  urged moving it  forward to                                                               
the House floor.                                                                                                                
Number 0562                                                                                                                     
REPRESENTATIVE MORGAN  told members he  is from the Unit  19 area                                                               
and  is  very familiar  with  Unit  19D;  he's been  involved  in                                                               
predator control since  1998 and pushed legislation  at that time                                                               
for  predator control.  He  said the  moose  population is  going                                                               
down.  Representative  Morgan told how bears  change their eating                                                               
habits as they  become more expert, going from  eating the entire                                                               
carcass  in  the  spring  to   only  eating  the  fattest  parts.                                                               
Similarly, he said, elders have  told him that wolves become very                                                               
persistent and  expert at catching  [moose], and know  what parts                                                               
to eat.   He recounted being  told by someone that  he'd run into                                                               
four moose  [carcasses] for which  the only parts eaten  were the                                                               
nose; tongue,  which has a lot  of fat; heart and  kidneys, which                                                               
have a lot of fat; and rump.  Then they move on.                                                                                
Number 0727                                                                                                                     
REPRESENTATIVE LYNN emphasized  the responsibility of legislators                                                               
to be  responsible stewards of  the natural  resources, including                                                               
animal  populations.   He  said  these  [wolves] aren't  mythical                                                               
Disneyland  animals, but  a  "four-legged  natural resource  that                                                               
needs to  be managed with  the best scientific knowledge  that we                                                               
have, in  the most practical, commonsense  way to do it,  for the                                                               
benefit  of  all  of  us."   He  said  he  believes  that  active                                                               
management is required and that he will support the bill.                                                                       
Number 0815                                                                                                                     
REPRESENTATIVE  HEINZE  moved  to  report CSSB  155(RES)  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal notes.                                                                                                                   
REPRESENTATIVE GUTTENBERG  objected for discussion purposes.   He                                                               
told members  he believes in  predator control, but said  on this                                                               
issue he's been  troubled because both sides seem  to get stymied                                                               
in rhetoric  and locked  into positions.   He  said he  looks for                                                               
good,  scientific data  and  hears  conflicting information  from                                                               
both  sides.   Referring  to  the top  of  page  2, he  indicated                                                               
concern  that  it seems  to  amend  statute  with regard  to  the                                                               
philosophy  of   predator  control  for  objectives.     He  also                                                               
expressed concern  about taking authority away  from the governor                                                               
in theory in  the bill, when the governor actually  has it in the                                                               
end.   He indicated that  whether one  agrees with a  governor or                                                               
not, there are  larger public policy issues involved in  a lot of                                                               
what the legislature does.                                                                                                      
REPRESENTATIVE  GUTTENBERG  also  noted that  two  ballot  issues                                                               
which  passed [relating  to same-day-airborne  hunting] were  big                                                               
public policy calls.  Indicating  the need to further educate the                                                               
public,  he said  that  all  he's hearing  is  "bears and  wolves                                                               
versus moose."   Referring to Representative  Cissna's discussion                                                               
of habitat  issues, he said  there are water issues  and [effects                                                               
from fires]  as well,  and yet  he never  seems to  hear dialogue                                                               
about what  is happening out there  on the ground.   He explained                                                               
that he  hasn't been satisfied  that an answer has  come forward,                                                               
and said he doesn't think [this bill] does it.                                                                                  
Number 1051                                                                                                                     
CHAIR FATE  said he didn't presume  to be an expert,  but offered                                                               
his belief  that ADF&G has  ample evidence  that in some  areas -                                                               
though  it may  not  be  the total  cause  of  diminution of  the                                                               
ungulate population  - "it has  been the balance that  has caused                                                               
the  decrease."   He said  he  knows of  times when  a deep  snow                                                               
coupled with  cold has probably  been much more  devastating than                                                               
wolves to  the game  population; however, wolves  on top  of that                                                               
can just about  devastate an entire moose population  in an area.                                                               
He  agreed in  part with  Representative Guttenberg,  but offered                                                               
his assessment  that in  some areas it  really is  predation that                                                               
has caused the diminution of the herd.                                                                                          
CHAIR  FATE stressed  the desire  for  active management,  saying                                                               
there  has been  too much  passive management  where people  have                                                               
just said  to let nature  take its  course.  He  recalled hearing                                                               
from elders that  there have been times of starvation  as well as                                                               
times of plenty.  "We're trying  to keep away from those times of                                                               
starvation," he concluded.                                                                                                      
Number 1171                                                                                                                     
REPRESENTATIVE CISSNA  said she'd  talked to  people in  her area                                                               
and believes  they understand that  in some areas  it's important                                                               
to have  predator control, even  though they'd voted  strongly in                                                               
favor of banning  aerial wolf control.  However,  they'd told her                                                               
it should be  professional.  She also expressed  concern that she                                                               
hadn't seen the proposed amendment  [mentioned by Mr. Robus], and                                                               
said  she'd  like  to  hear  debate over  the  problem  that  the                                                               
administration has with the current version.                                                                                    
Number 1268                                                                                                                     
REPRESENTATIVE GUTTENBERG withdrew his objection.                                                                               
CHAIR FATE asked whether there  was any further objection.  There                                                               
being no  objection, CSSB  155(RES) was  reported from  the House                                                               
Resources Standing Committee.                                                                                                   
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 3:07 p.m.                                                                 

Document Name Date/Time Subjects