Legislature(2003 - 2004)

04/16/2004 01:14 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 16, 2004                                                                                         
                           1:14 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Nancy Dahlstrom, Co-Chair                                                                                        
Representative Beverly Masek, Co-Chair                                                                                          
Representative Carl Gatto                                                                                                       
Representative Bob Lynn                                                                                                         
Representative Kelly Wolf                                                                                                       
Representative Beth Kerttula                                                                                                    
Representative David Guttenberg                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Cheryll Heinze, Vice Chair                                                                                       
Representative Nick Stepovich                                                                                                   
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARING                                                                                                            
                                                                                                                                
Board of Fisheries                                                                                                            
                                                                                                                                
     Robert Heyano - Dillingham                                                                                                 
     Art N. Nelson - Anchorage                                                                                                  
                                                                                                                                
     - CONFIRMATION(S) ADVANCED                                                                                                 
                                                                                                                                
HOUSE BILL NO. 531                                                                                                              
"An Act relating  to natural gas exploration  and development and                                                               
to  nonconventional gas,  and amending  the  section under  which                                                               
shallow natural  gas leases may  be issued; and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - MOVED CSHB 531(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 395                                                                                                              
"An Act relating to shallow natural gas leasing and the                                                                         
regulation of shallow natural gas operations."                                                                                  
                                                                                                                                
     - MOVED CSHB 395(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 498                                                                                                              
"An Act requiring the sale or trade of state land."                                                                             
                                                                                                                                
     - MOVED CSHB 498(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 531                                                                                                                  
SHORT TITLE: CONVENTIONAL & NONCONVENTIONAL GAS LEASES                                                                          
SPONSOR(S): RESOURCES                                                                                                           
                                                                                                                                
03/04/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/04/04       (H)       O&G, RES, FIN                                                                                          
03/16/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
03/16/04       (H)       Heard & Held                                                                                           
03/16/04       (H)       MINUTE(O&G)                                                                                            
03/18/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
03/18/04       (H)       Heard & Held                                                                                           
03/18/04       (H)       MINUTE(O&G)                                                                                            
03/22/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
03/22/04       (H)       <Pending Referral>                                                                                     
04/01/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
04/01/04       (H)       Moved CSHB 531(O&G) Out of Committee                                                                   
04/01/04       (H)       MINUTE(O&G)                                                                                            
04/05/04       (H)       O&G RPT CS(O&G) 7AM                                                                                    
04/05/04       (H)       AM: HOLM, KERTTULA, MCGUIRE, ROKEBERG,                                                                 
04/05/04       (H)       CRAWFORD, HEINZE, KOHRING                                                                              
04/14/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
04/14/04       (H)       Heard & Held <Assigned to Subcmte>                                                                     
04/14/04       (H)       MINUTE(RES)                                                                                            
04/16/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
                                                                                                                                
BILL: HB 395                                                                                                                  
SHORT TITLE: SHALLOW NATURAL GAS/ OIL AND GAS                                                                                   
SPONSOR(S): REPRESENTATIVE(S) HARRIS                                                                                            
                                                                                                                                
01/23/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/23/04       (H)       O&G, RES, JUD, FIN                                                                                     
02/05/04       (H)       O&G AT 1:00 PM CAPITOL 124                                                                             
02/05/04       (H)       Heard & Held                                                                                           
02/05/04       (H)       MINUTE(O&G)                                                                                            
02/24/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
02/24/04       (H)       Heard & Held                                                                                           
02/24/04       (H)       MINUTE(O&G)                                                                                            
02/26/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
02/26/04       (H)       Heard & Held                                                                                           
02/26/04       (H)       MINUTE(O&G)                                                                                            
03/09/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
03/09/04       (H)       Moved CSHB 395(O&G) Out of Committee                                                                   
03/09/04       (H)       MINUTE(O&G)                                                                                            
03/12/04       (H)       O&G RPT CS(O&G) NT 1DP 3NR 1AM                                                                         
03/12/04       (H)       DP: KOHRING; NR: ROKEBERG, CRAWFORD,                                                                   
03/12/04       (H)       HOLM; AM: KERTTULA                                                                                     
03/19/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
03/19/04       (H)       -- Meeting Canceled --                                                                                 
04/07/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
04/07/04       (H)       Heard & Held                                                                                           
04/07/04       (H)       MINUTE(RES)                                                                                            
04/14/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
04/14/04       (H)       Heard & Held <Assigned to Subcmte>                                                                     
04/14/04       (H)       MINUTE(RES)                                                                                            
04/16/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
                                                                                                                                
BILL: HB 498                                                                                                                  
SHORT TITLE: SALE OR TRADE OF STATE LAND                                                                                        
SPONSOR(S): REPRESENTATIVE(S) SEATON                                                                                            
                                                                                                                                
02/16/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/16/04       (H)       RES, FIN                                                                                               
04/16/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ROBERT HEYANO, Appointee                                                                                                        
to the Board of Fisheries                                                                                                       
Dillingham, Alaska                                                                                                              
POSITION STATEMENT:  Provided the committee with his                                                                            
qualifications and experience.                                                                                                  
                                                                                                                                
ART N. NELSON, Appointee                                                                                                        
to the Board of Fisheries                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided the committee with his                                                                            
qualifications and experience.                                                                                                  
                                                                                                                                
REPRESENTATIVE PAUL SEATON                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Asked questions of appointees during                                                                       
confirmation hearings on the Board of Fisheries, and as sponsor                                                                 
of HB 498, presented the bill.                                                                                                  
                                                                                                                                
ED DERSHAM, Chairman                                                                                                            
Board of Fisheries                                                                                                              
Homer, Alaska                                                                                                                   
POSITION STATEMENT:   Testified in support of Mr.  Heyano and Mr.                                                               
Nelson's appointment to the Board of Fisheries.                                                                                 
                                                                                                                                
JOHN JENSEN, commercial fisherman                                                                                               
Petersburg, Alaska                                                                                                              
POSITION STATEMENT:   Testified in support of Mr.  Heyano and Mr.                                                               
Nelson's appointment to the Board of Fisheries.                                                                                 
                                                                                                                                
RON RAINEY                                                                                                                      
Kenai River Sportfishing Association, Inc.                                                                                      
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:   Testified in  support of both  Mr. Nelson's                                                               
and Mr. Heyano's appointment to the Board of Fisheries.                                                                         
                                                                                                                                
MARK GLASSMAKER, Vice President                                                                                                 
Kenai Professional Guide Association                                                                                            
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:   Testified in support of Mr.  Heyano and Mr.                                                               
Nelson's appointment to the Board of Fisheries.                                                                                 
                                                                                                                                
STEVE McCLURE, President                                                                                                        
Kenai Professional Guide Association                                                                                            
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:   Testified in support of Mr.  Heyano and Mr.                                                               
Nelson's appointment to the Board of Fisheries.                                                                                 
                                                                                                                                
REUBEN HANKE, sport fishing guide owner/operator                                                                                
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:   Testified in support of Mr.  Heyano and Mr.                                                               
Nelson's appointment to the Board of Fisheries.                                                                                 
                                                                                                                                
JOE HANES, Guide;                                                                                                               
Member, Kenai River Special Management Area Board                                                                               
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:   Testified in support of Mr.  Heyano and Mr.                                                               
Nelson's appointment to the Board of Fisheries.                                                                                 
                                                                                                                                
DALE BONDURANT                                                                                                                  
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  During  confirmation hearings, discussed the                                                               
McDowell v.  State case and the  common use clause of  the Alaska                                                             
State Constitution.                                                                                                             
                                                                                                                                
JACK CHENOWETH, Attorney                                                                                                        
Legislative Legal Counsel                                                                                                       
Legislative Legal and Research Services                                                                                         
Legislative Affairs Agency                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:      Explained   the   proposed   committee                                                               
substitutes for HB 531, Version V, and HB 395, Version G.                                                                       
                                                                                                                                
MARK MYERS, Director                                                                                                            
Division of Oil & Gas                                                                                                           
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    During discussion  of  HB  395,  answered                                                               
questions.                                                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-21, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIR  NANCY DAHLSTROM  called  the  House Resources  Standing                                                             
Committee  meeting  to  order  at   1:14  p.m.    Representatives                                                               
Dahlstrom,  Masek, Gatto,  Lynn, Wolf,  Guttenberg, and  Kerttula                                                               
were present at the call to order.                                                                                              
                                                                                                                                
^CONFIRMATION HEARING(S)                                                                                                      
                                                                                                                                
^Board of Fisheries                                                                                                           
                                                                                                                                
Number 0058                                                                                                                     
                                                                                                                                
CO-CHAIR DAHLSTROM brought before  the committee the appointments                                                               
of Robert  Heyano and Art  N. Nelson  to the Board  of Fisheries.                                                               
[Packets contained biographical information on the appointees.]                                                                 
                                                                                                                                
Number 0161                                                                                                                     
                                                                                                                                
ROBERT HEYANO, Appointee to the  Board of Fisheries, provided the                                                               
committee with  his qualifications and  experience.  He  told the                                                               
members  that  he is  a  lifelong  resident  of the  Bristol  Bay                                                               
region.   Mr. Heyano  said that  for 31 years  he has  operated a                                                               
Bristol Bay salmon drift gill net  operation, and for 24 years he                                                               
has  participated  in  the  Togiak herring  seine  fishery.    In                                                               
addition, he  and his  wife own  and operate  a small  sport fish                                                               
camp.    Mr.  Heyano  emphasized   that  he  is  also  an  active                                                               
subsistence user.   He shared that  he has served on  a number of                                                               
committees,  including the  Nushagak  Advisory  Committee for  20                                                               
years,  10 years  of which  he served  as the  chairman, and  the                                                               
Federal Subsistence Bristol Bay Rural Advisory Council.                                                                         
                                                                                                                                
CO-CHAIR DAHLSTROM  noted that Representative Seaton  was present                                                               
and invited him to join the members at the table.                                                                               
                                                                                                                                
Number 0334                                                                                                                     
                                                                                                                                
ART N. NELSON, Appointee to  the Board of Fisheries, provided the                                                               
committee with  his qualifications and  experience.  He  told the                                                               
committee that he  lives in Anchorage with his  wife, Joanie, and                                                               
three young  boys.  Since  being appointed by  Governor Murkowski                                                               
early last year  to complete a term on the  Board of Fisheries he                                                               
has enjoyed  the opportunity to serve.   Mr. Nelson said  that it                                                               
can  be  very  frustrating  and  challenging  when  dealing  with                                                               
divisive issues.  It has been  a good experience to work with the                                                               
stakeholders,  learn   their  fisheries,  and  help   them  craft                                                               
solutions to the problems they face,  he added.  While Alaska can                                                               
boast some  of the healthiest  fisheries in the world,  there are                                                               
still  many  challenges such  as  dealing  with sustained  yield,                                                               
allocation, or maximizing  values.  Sometimes the  issues are all                                                               
wrapped into the same issue, he commented.                                                                                      
                                                                                                                                
Number 0501                                                                                                                     
                                                                                                                                
MR. NELSON commented that he believes  he brings a broad range of                                                               
experience to  the board; from  growing up commercial  fishing on                                                               
his  parents'  boat  in  Prince   William  Sound  to  working  on                                                               
biological,  subsistence,  and  small  boat  issues  for  Western                                                               
Alaska.   He  shared  that  he also  worked  for  the Bering  Sea                                                               
Pollock  industry.   Mr. Nelson  added that  he did  all of  this                                                               
while still  being an  avid sport  fisherman.   These experiences                                                               
help him  to look  at issues  that come before  the board  from a                                                               
variety  of perspectives,  he explained.    He acknowledged  that                                                               
when dealing with  fisheries issues it is not  always possible to                                                               
make  everyone happy.   Mr.  Nelson  summarized that  he and  the                                                               
other  members of  the board  have done  their best  to make  the                                                               
right decisions to protect the resources  and do what is best for                                                               
the residents of  Alaska.  He asked that the  members support him                                                               
in continuing  his service on the  board.  In closing,  he stated                                                               
that he has  known Mr. Heyano for many years;  he is an excellent                                                               
individual  and  a straight  shooter,  and  would be  a  valuable                                                               
addition to the board.                                                                                                          
                                                                                                                                
Number 0571                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WOLF asked  Mr. Heyano  if he  has fished  in the                                                               
Bristol Bay region.                                                                                                             
                                                                                                                                
MR. HEYANO replied yes.                                                                                                         
                                                                                                                                
REPRESENTATIVE WOLF noted that there  were letters of support for                                                               
Mr. Heyano from the Bristol  Bay Native Association, Mr. Heyano's                                                               
state senator,  and Dillingham Electric Company.   Representative                                                               
Wolf asked if Mr. Heyano solicited the letters of endorsement.                                                                  
                                                                                                                                
MR. HEYANO  responded that he  has not  asked for any  letters of                                                               
support.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  WOLF asked  Mr. Heyano  what he  believes he  can                                                               
contribute to  the Board of  Fisheries to move Alaska  forward in                                                               
the next three years.                                                                                                           
                                                                                                                                
MR.  HEYANO replied  that as  an Alaskan  with a  strong personal                                                               
interest in  renewable resources such  as fish and  wildlife, and                                                               
his experience in Bristol Bay he  is aware of the need to protect                                                               
the resource.   He  commented that the  salmon industry  is going                                                               
through a tough  time and he looks forward to  working to make it                                                               
a more viable industry.                                                                                                         
                                                                                                                                
Number 0834                                                                                                                     
                                                                                                                                
REPRESENTATIVE WOLF  commented that the Board  of Fisheries deals                                                               
with issues that can be "testy"  at times, with respect to public                                                               
input and the decisions board members  have to make.  He asked if                                                               
Mr.  Heyano believes  he  has the  experience  necessary to  help                                                               
resolve some of the issues between different user groups.                                                                       
                                                                                                                                
MR. HEYANO  replied that he believes  he does have the  skills to                                                               
address these  issues.  He  explained that  he has been  a public                                                               
participant in  the Board of Fisheries  process for approximately                                                               
20 years.   During  that time he  has been on  both sides  of the                                                               
issues.   Mr.  Heyano  told the  members that  he  has served  on                                                               
committees that  have developed  management plans  that allocated                                                               
the resources to  users on the local level where  the members are                                                               
dealing  with the  subsistence  board  and commercial  fisheries.                                                               
Anytime  a decision  is made  on the  resource, there  has to  be                                                               
support by the majority of users or the problems continue.                                                                      
                                                                                                                                
Number 0933                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG  commented   that  the  House  Special                                                               
Committee on Fisheries  has before it legislation  dealing with a                                                               
moratorium in the  Gulf of Alaska and the assigning  of rights to                                                               
either  the vessels,  the captains,  or the  permit holders.   He                                                               
inquired as to Mr. Heyano's opinion on the matter.                                                                              
                                                                                                                                
MR.  HEYANO replied  that he  does not  have an  opinion at  this                                                               
time.                                                                                                                           
                                                                                                                                
Number 0980                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO  asked if Mr.  Heyano believes  there should                                                               
be  some kind  of  controlled  access to  the  fish  in order  to                                                               
preserve the resource.                                                                                                          
                                                                                                                                
MR. HEYANO replied  that he is not fully versed  on the fisheries                                                               
in  the  Gulf  of  Alaska,  so  he  could  not  comment  on  that                                                               
particular  fishery  at  this  time.    It  appears  that  a  lot                                                               
fisheries, particularly  those in  federal waters, are  moving in                                                               
the direction  of controlled access,  he added.  Mr.  Heyano told                                                               
the members  that if his  appointment is confirmed he  expects to                                                               
be brought up to speed on that issue.                                                                                           
                                                                                                                                
Number 1050                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON asked if Mr.  Heyano is familiar with SB 69                                                               
which would  allow board members to  participate in deliberations                                                               
and  vote   [even  when]   they  have   either  a   financial  or                                                               
participatory conflict  of interest  in the  issue that  is being                                                               
addressed.  He inquired as to Mr. Heyano's opinion.                                                                             
                                                                                                                                
MR. HEYANO said  if the concept behind the Board  of Fisheries is                                                               
to have a layman board rather  than a professional board, then he                                                               
said  he believes  it is  important that  the most  knowledgeable                                                               
participants from the  public be able to serve on  the board.  It                                                               
is a step in the right direction, he added.                                                                                     
                                                                                                                                
Number 1129                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON asked  if  he sees  a distinction  between                                                               
participating in a  fishery and being knowledgeable,  and being a                                                               
lobbyist  or being  paid  to  be on  the  board  to represent  an                                                               
organization or viewpoint.                                                                                                      
                                                                                                                                
MR.  HEYANO replied  that he  does see  the distinction.   If  an                                                               
individual is paid  to be on the  board, then there is  a move of                                                               
the board to the professional arena, he said.                                                                                   
                                                                                                                                
REPRESENTATIVE WOLF  commented that Mr. Heyano  has received nine                                                               
letters of  endorsement from around the  state.  He asked  if any                                                               
members of these organizations interviewed him.                                                                                 
                                                                                                                                
MR. HEYANO stated  that no one interviewed him.   He acknowledged                                                               
that he has  not seen either letters of support  or opposition to                                                               
his appointment.                                                                                                                
                                                                                                                                
REPRESENTATIVE WOLF  told Mr.  Heyano that  he would  forward him                                                               
copies of the letters of endorsement.                                                                                           
                                                                                                                                
Number 1311                                                                                                                     
                                                                                                                                
ED DERSHAM,  Chairman, Board of  Fisheries, testified  in support                                                               
of Mr. Heyano's  appointment to the Board of Fisheries.   He told                                                               
the members  that he very  much supports Mr. Heyano's  service to                                                               
the  board because  he has  worked with  him in  his capacity  as                                                               
chairman  of  the Dillingham  Advisory  Committee,  as a  private                                                               
individual, and as  a commercial fisherman.   Mr. Heyano provided                                                               
valuable input  to the process,  he said.  Mr.  Dersham commented                                                               
that  he has  found Mr.  Heyano to  be a  fair-minded individual.                                                               
The  board  has  considered  his  input  on  the  salmon  fishing                                                               
industry restructuring  issue.   He explained  that as  the board                                                               
goes forward there  will be more participation from  the board on                                                               
the salmon restructuring  debate.  Mr. Heyano will  be a valuable                                                               
asset  with respect  to  that issue,  and is  well  aware of  the                                                               
commitment  involved.   Mr.  Dersham  said  he knows  Mr.  Heyano                                                               
deliberated long and hard with  his family before agreeing to put                                                               
his name forward.                                                                                                               
                                                                                                                                
Number 1311                                                                                                                     
                                                                                                                                
JOHN JENSEN,  commercial fisherman,  testified in support  of Mr.                                                               
Heyano, whom he met him last  year during the board process.  Mr.                                                               
Jensen related  that he was  impressed with Mr.  Heyano's ability                                                               
to see all [sides] of the  problems facing the board.  Mr. Jensen                                                               
applauded Mr. Heyano's  willingness to put his  name forward, and                                                               
expressed the hope that Mr. Heyano's confirmation is advanced.                                                                  
                                                                                                                                
Number 1539                                                                                                                     
                                                                                                                                
RON   RAINEY,  Kenai   River   Sportfishing  Association,   Inc.,                                                               
testified in  support of the  appointment of both Mr.  Nelson and                                                               
Mr. Heyano to  the Board of Fisheries.  He  told the members that                                                               
he lives  on the  Kenai River  and is  an avid  sports fisherman.                                                               
Mr. Rainey said  that he has observed Mr. Nelson  and his service                                                               
on the  board for  the last  two sessions  and is  very impressed                                                               
with his fairness and ability to see both sides of an issue.                                                                    
                                                                                                                                
CO-CHAIR  DAHLSTROM interjected  that  the  committee is  hearing                                                               
testimony only on Mr. Heyano.                                                                                                   
                                                                                                                                
MR. RAINEY commented that he  only knew Mr. Heyano by reputation.                                                               
He said he  has seen him at the Board  of Fisheries meetings, and                                                               
is impressed  with the fact  that he has both  commercial fishing                                                               
experience and participation in the  sport fishery as well as the                                                               
subsistence  fishery.    Mr.  Rainey  opined  that  Mr.  Heyano's                                                               
background  will  bring  a  balanced   view  to  the  board,  and                                                               
therefore he would like Mr. Heyano to be confirmed.                                                                             
                                                                                                                                
Number 1607                                                                                                                     
                                                                                                                                
MARK  GLASSMAKER,   Vice  President,  Kenai   Professional  Guide                                                               
Association,  testified  in support  of  the  appointment of  Mr.                                                               
Heyano.  He noted  that although he has yet to  meet or work with                                                               
Mr. Heyano,  he looked  forward to  his open-mindedness  with the                                                               
sport fishing industry.                                                                                                         
                                                                                                                                
STEVE  McCLURE, President,  Kenai Professional  Guide Association                                                               
(KPGA),  related  KPGA's  support  for  the  appointment  of  Mr.                                                               
Heyano.  It's  important, he further related, that  the makeup of                                                               
the board continues to have a member from the Dillingham region.                                                                
                                                                                                                                
REUBEN HANKE, owner/operator of a  sport fishing guide service on                                                               
the  banks of  the Kenai  River,  said that  although he  doesn't                                                               
personally know  Mr. Heyano, he  comes highly recommended  from a                                                               
group of  his peers.   Furthermore, Mr. Heyano has  been involved                                                               
in the board  process for a number of years.   For those reasons,                                                               
Mr. Hanke  said he is comfortable  that Mr. Heyano is  up to date                                                               
with many of the issues facing the Board of Fisheries today.                                                                    
                                                                                                                                
JOE  HANES, Guide;  Member, Kenai  River Special  Management Area                                                               
Board, echoed earlier  comments that although he  didn't have any                                                               
personal experiences  with Mr. Heyano, he  respected the opinions                                                               
of other  board members who  are looking forward to  working with                                                               
Mr.  Heyano.    Therefore,  Mr.   Hanes  supported  Mr.  Heyano's                                                               
appointment.                                                                                                                    
                                                                                                                                
Number 1758                                                                                                                     
                                                                                                                                
DALE  BONDURANT informed  the committee  that he  participated in                                                               
the McDowell  v. State  case and  believes his  participation was                                                             
actively considered in  the Alaska Supreme Court's  decision.  In                                                               
the  aforementioned case  Article  8, SECTION  3.   "Common  Use.                                                               
Wherever occurring  in their natural  state, fish,  wildlife, and                                                               
waters are reserved to the people  for common use." of the Alaska                                                               
State  Constitution  was  cited.   He  related  that  the  Alaska                                                               
Supreme Court found  in McDowell v. State as well  as other cases                                                             
the following:   "We  believe that  a professional  hunting guide                                                               
uses a resource that is  sufficiently direct, therefore, it falls                                                               
within  the  common  use  clause.   The  work  of  the  guide  is                                                               
sufficiently  directed  to   the  taker,  and  so   there  is  no                                                               
meaningful biased  for extinguishing the guide's  right under the                                                               
common  use  clause."    Mr.  Bondurant  said  that  Judge  Moore                                                               
basically stated that  McDowell v. State was  an equal protection                                                             
case and  an easy one at  that.  Furthermore, the  Alaska Supreme                                                               
Court  has, on  a number  of occasions,  stated that  the limited                                                               
entry fishery is an exclusionary  fishery and thus isn't a common                                                               
use fishery.   Mr. Bondurant asked  Mr. Nelson and Mr.  Heyano if                                                               
they would accept the Alaska  Supreme Court's 6-1 decision in the                                                               
McDowell v. State  case and support the common use  clause of the                                                             
Alaska State Constitution.                                                                                                      
                                                                                                                                
MR. HEYANO opined  that the resources of the state  belong to all                                                               
Alaskans.                                                                                                                       
                                                                                                                                
Number 1917                                                                                                                     
                                                                                                                                
MR.  NELSON  said that  he  isn't  intimately familiar  with  the                                                               
McDowell case,  but as a  member of the  board one must  abide by                                                             
all of the laws that are currently in place.                                                                                    
                                                                                                                                
REPRESENTATIVE   GUTTENBERG   restated   his   earlier   question                                                               
regarding the legislation  dealing with a moratorium  in the Gulf                                                               
of Alaska  and assignment of  rights.   He noted that  Mr. Nelson                                                               
represents   some   catcher-processor  vessels,   and   therefore                                                               
questioned whether he had a position  on that or has been part of                                                               
the dialogue on the matter.                                                                                                     
                                                                                                                                
MR. NELSON said that he is  familiar with the matter, and has sat                                                               
on  the   board's  three-member  committee  that   is  addressing                                                               
rationalization.  Mr. Nelson emphasized  that although in his day                                                               
job he  works for an  association of  companies that work  in the                                                               
Bering Sea,  he doesn't represent them  in his seat on  the Board                                                               
of Fisheries.   He noted that when he attends  Board of Fisheries                                                               
meetings he  takes unpaid leave and  in no way feels  beholden to                                                               
that association  of companies.   However, he  said that  he does                                                               
bring the  experience of the Bering  Sea fishery to the  Board of                                                               
Fisheries,  which is  valuable along  with his  other experience.                                                               
With  regard  to the  moratorium,  the  assignment of  rights  is                                                               
certainly in  the purview  of the legislation.   He  offered that                                                               
the reason the  [rights were assigned] to vessels  was because it                                                               
was the best way in which to  get a handle on the participants in                                                               
the  fishery  while not  necessarily  having  a proliferation  of                                                               
effort.  Still, he acknowledged  that there are good arguments to                                                               
go  to  an  individual  [based  moratorium],  although  it  would                                                               
possibly allow a significant increase in effort.                                                                                
                                                                                                                                
REPRESENTATIVE  GUTTENBERG   noted  that  there  has   also  been                                                               
dialogue with  regard to the  number of vessels that  might enter                                                               
[the  fishery], which  would  result  in the  same  effect as  an                                                               
individual-based  moratorium.   Therefore,  he  asked  if in  Mr.                                                               
Nelson's reasoning  there could be  a place for a  combination of                                                               
individual- and vessel-based [rights].                                                                                          
                                                                                                                                
MR. NELSON  agreed that  there could  be a  combination approach.                                                               
He  reminded  the  committee  that   the  North  Pacific  Fishery                                                               
Management Council  (NPFMC) is proceeding with  rationalizing the                                                               
federal side of  the fishery.  Although the  [state] isn't forced                                                               
to react to  the aforementioned, if the state doesn't  there is a                                                               
significant possibility  for the  influx of  effort in  the state                                                               
waters.  Also, the participants  in the state water fisheries may                                                               
face  significant economic  disadvantage through  markets and  an                                                               
influx of competition  if the federal system  is rationalized and                                                               
the state system is not.                                                                                                        
                                                                                                                                
REPRESENTATIVE GUTTENBERG  noted that  there has  been discussion                                                               
that  there  is  time  to  see what  happens  [with  the  federal                                                               
rationalization].   He asked if Mr.  Nelson felt that there  is a                                                               
specific need to act on this matter.                                                                                            
                                                                                                                                
MR.  NELSON pointed  out  that  NPFMC has  been  working on  Gulf                                                               
rationalization for a number of  years, and only recently was the                                                               
issue "punted"  to Alaska  with regard  to how  it would  want to                                                               
deal with it.   He opined that he and the board  would want to be                                                               
sure it make the correct decisions  on this matter, which has led                                                               
the board  to move slower  than NPFMC  would like.   However, Mr.                                                               
Nelson said  that he wasn't  comfortable making a  decision until                                                               
he  understands  the  issues  better   and  has  dealt  with  the                                                               
stakeholders.  The  fact that NPFMC is  rationalizing compels the                                                               
board to consider what it might or  might not want to do in state                                                               
waters, but  Mr. Nelson stated that  he wouldn't act on  a strict                                                               
timeline solely because of federal  rationalization.  In fact, to                                                               
some extent  NPFMC can't move  forward with the specifics  of its                                                               
plan until  it knows  how the  state will  deal with  state water                                                               
fisheries.                                                                                                                      
                                                                                                                                
Number 2373                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WOLF asked  Mr.  Nelson if  his experience  could                                                               
lend  credibility and  provide commonality  within  the board  in                                                               
order to remove some of the divisiveness.                                                                                       
                                                                                                                                
MR.  NELSON answered  that he  would hope  so and  felt that  his                                                               
broad spectrum of  supporters lends to his  credibility to listen                                                               
to various points of view.  Mr.  Nelson said that he would do his                                                               
best.   In further  response to  Representative Wolf,  Mr. Nelson                                                               
confirmed that he  hasn't seen the list of  endorsements from the                                                               
governor's office.  However, he  mentioned that he had heard that                                                               
both  the  United  Fishermen  of   Alaska  and  the  Kenai  River                                                               
Sportfishing Association  had endorsed his appointment.   He also                                                               
confirmed that  he wasn't interviewed  for the  endorsements that                                                               
he received.                                                                                                                    
                                                                                                                                
Number 2548                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  returned  to  SB  69  and  the  financial                                                               
conflict of  interest and  said that  he understood  Mr. Nelson's                                                               
position  as an  employee.   Representative Seaton  asked if  Mr.                                                               
Nelson  viewed  hired  lobbyists  or individuals  hired  to  come                                                               
before the board as problematic.                                                                                                
                                                                                                                                
MR. NELSON mentioned  that whether he had a  conflict of interest                                                               
on a particular interest was  addressed at a meeting earlier this                                                               
year.   The Department  of Law suggested  that Mr.  Nelson remove                                                               
himself from  the vote, which  he did.   Mr. Nelson said  that he                                                               
does support addressing the conflict  of interest issue, which SB                                                               
69 partially  addresses.  Currently, the  [legislation] certainly                                                               
allows  fishermen and  ground level  participants to  be involved                                                               
with the Board  of Fisheries.  Many individuals  wouldn't want to                                                               
put   their   name  forward   because   the   fishery  they   are                                                               
knowledgeable about wouldn't be able  to participate in the votes                                                               
and decision-making.   Mr. Nelson  characterized SB 69 as  a step                                                               
in  the right  direction, although  he wasn't  sure how  it would                                                               
impact him.                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  asked if  Mr. Nelson would  support people                                                               
who take  money to lobby on  an issue or be  hired as consultants                                                               
and then participate in board deliberations and votes.                                                                          
                                                                                                                                
MR. NELSON replied no, he wouldn't support such.                                                                                
                                                                                                                                
Number 2710                                                                                                                     
                                                                                                                                
REPRESENTATIVE    GUTTENBERG    returned     to    the    NPFMC's                                                               
rationalization and  the moratorium legislation.   He related his                                                               
understanding that Mr.  Nelson had said that NPFMC  is waiting to                                                               
see how  the state deals with  this.  However, the  House Special                                                               
Committee on Fisheries is operating  under the premise that NPFMC                                                               
will "do it first."   Therefore, he questioned what the situation                                                               
really is.                                                                                                                      
                                                                                                                                
MR.  NELSON recalled  that  the process  started  in the  federal                                                               
arena three to four  years ago.  Part of the  problem is that the                                                               
fish aren't aware of the  three-mile boundary.  He explained that                                                               
NPFMC can't  really determine  how to  manage outside  the three-                                                               
mile  boundary until  there is  an idea  with regard  to how  the                                                               
state will react within the three  miles.  Fishermen in the state                                                               
fisheries and the  parallel fisheries are often  the same people,                                                               
and therefore  the assignment of  quota shares could  depend upon                                                               
how  much  the  state  and  the Board  of  Fisheries  decides  to                                                               
integrate or create a definite distinction.                                                                                     
                                                                                                                                
Number 2856                                                                                                                     
                                                                                                                                
MR. HANES noted  that he had quite a bit  of involvement with Mr.                                                               
Nelson at the  last Board of Fisheries meeting.   He recalled Mr.                                                               
Nelson  being easy  to work  with and  proposing some  innovative                                                               
ideas for  problems.   Therefore, he  related his  strong support                                                               
for the appointment of Mr. Nelson to the Board of Fisheries.                                                                    
                                                                                                                                
MR.  HANKE voiced  support  for the  appointment  of Mr.  Nelson.                                                               
After working  with Mr. Nelson  over a  few board cycles,  he has                                                               
found  him to  be fair  and equitable  on the  issues facing  the                                                               
state's fisheries.                                                                                                              
                                                                                                                                
MR. McCLURE  stated that  KRPGA has nothing  but respect  for the                                                               
effort,  work, and  time Mr.  Nelson has  given to  the Board  of                                                               
Fisheries.   Although  Mr.  Nelson  and the  KRPGA  have been  on                                                               
different  sides of  various issues,  Mr. Nelson  has been  fair,                                                               
unbiased, and  professional in his  actions.   The aforementioned                                                               
is  all  one  can  ask  of anyone  on  the  Board  of  Fisheries.                                                               
Therefore,  KRPGA  strongly  supports   the  appointment  of  Mr.                                                               
Nelson.                                                                                                                         
                                                                                                                                
MR.  GLASSMAKER  expressed support  for  the  appointment of  Mr.                                                               
Nelson.  He noted  that he has met and worked  with Mr. Nelson in                                                               
past board  proceedings.  He characterized  Mr. Nelson's presence                                                               
on the Board  of Fisheries as an asset to  the state's fisheries.                                                               
Mr. Nelson's  level-heading understanding  of the  diverse issues                                                               
facing the board make him  an excellent choice for this difficult                                                               
position, he commented.                                                                                                         
                                                                                                                                
MR. RAINEY reiterated that he  has observed Mr. Nelson at several                                                               
Board  of Fisheries  hearings at  which  he was  straightforward,                                                               
fair,  and  representative  of  all  user  groups.    Mr.  Rainey                                                               
reiterated  his  strong endorsement  of  the  appointment of  Mr.                                                               
Nelson.                                                                                                                         
                                                                                                                                
TAPE 04-21, SIDE B                                                                                                            
                                                                                                                                
MR.  JENSEN spoke  in favor  of Mr.  Nelson's appointment  to the                                                               
board, and  remarked that Mr. Nelson  is doing a good  job as the                                                               
current  vice chair  of the  Board of  Fisheries.   He felt  that                                                               
given the opportunity, Mr. Jensen will  continue to do a good job                                                               
on the board.                                                                                                                   
                                                                                                                                
MR.  DERSHAM said  that he  has worked  with Mr.  Nelson for  two                                                               
cycles  of meetings.    He  characterized Mr.  Nelson  as a  hard                                                               
worker and adept at taking on  tough issues and developing all of                                                               
the possible  information.   Mr. Dersham  said that  he supported                                                               
the continued service of Mr. Nelson.                                                                                            
                                                                                                                                
Number 2878                                                                                                                     
                                                                                                                                
REPRESENTATIVE WOLF expressed concern  with the endorsements from                                                               
the Kenai  River Sportfishing Association,  which is  a 501(c)(3)                                                               
nonprofit organization.  Under the  Internal Revenue System code,                                                               
a 501(c)(3)  cannot endorse a  candidate for public office.   The                                                               
governor's  office  has  accepted  the  endorsements.    However,                                                               
Representative  Wolf requested  that  the  endorsements from  the                                                               
Kenai  River Sportfishing  Association and  the Cook  Inlet Sport                                                               
fish  Caucus  be   stricken  [from  the  record]   due  to  close                                                               
association  with  the governor.    Representative  Wolf said  he                                                               
would object unless those were stricken [from the record].                                                                      
                                                                                                                                
CO-CHAIR  DAHLSTROM  said  that   she  wasn't  sure  whether  the                                                               
committee could strike  those endorsements from the  record.  She                                                               
opined that it's appropriate for  Representative Wolf to make his                                                               
statements and  then the  committee will  proceed with  its vote.                                                               
She  noted  that  she  would  pass  along  Representative  Wolf's                                                               
concerns.                                                                                                                       
                                                                                                                                
Number 2748                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK moved that the  committee forward the names of Mr.                                                               
Robert  Heyano  and   Mr.  Art  Nelson  to  the   full  body  for                                                               
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE WOLF objected.                                                                                                   
                                                                                                                                
A  roll  call  vote  was   taken.    Representatives  Guttenberg,                                                               
Kerttula, Gatto,  Lynn, Masek,  and Dahlstrom  voted in  favor of                                                               
forwarding the  names of  Mr. Heyano  and Mr.  Art Nelson  to the                                                               
full body  for consideration.  Representative  Wolf voted against                                                               
it.   Therefore, the names  were forwarded  to the full  body for                                                               
consideration by a vote of 6-1.                                                                                                 
                                                                                                                                
REPRESENTATIVE  WOLF  clarified  that  his objection  is  to  the                                                               
endorsements not the appointees.                                                                                                
                                                                                                                                
CO-CHAIR DAHLSTROM passed the gavel to Co-Chair Masek.                                                                          
                                                                                                                                
HB 531-CONVENTIONAL & NONCONVENTIONAL GAS LEASES                                                                              
                                                                                                                                
[Contains discussion of HB 395.]                                                                                                
                                                                                                                                
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be  HOUSE  BILL  NO.  531,   "An  Act  relating  to  natural  gas                                                               
exploration  and  development  and to  nonconventional  gas,  and                                                               
amending the section  under which shallow natural  gas leases may                                                               
be issued; and providing for an effective date."                                                                                
                                                                                                                                
CO-CHAIR  MASEK   reminded  the  committee  that   prior  to  the                                                               
committee's last meeting she appointed  a subcommittee on HB 531,                                                               
which  met  yesterday.   She  requested  that  the chair  of  the                                                               
subcommittee present the information it found to the committee.                                                                 
                                                                                                                                
Number 2600                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO  moved  to  adopt  CSHB  531,  Version  23-                                                               
LS1818\V, Chenoweth,  4/15/04,  as  the working document.   There                                                               
being no objection, Version V was before the committee.                                                                         
                                                                                                                                
CO-CHAIR  DAHLSTROM  explained  that basically  the  subcommittee                                                               
reviewed HB  395 and HB 531  and determined that HB  395 pertains                                                               
to the  present and  HB 531  to the future.   Some  agreement was                                                               
reached with regard  to the terminology, which  she requested the                                                               
drafter address.  The subcommittee  agreed that the two pieces of                                                               
legislation would be compatible.                                                                                                
                                                                                                                                
Number 2518                                                                                                                     
                                                                                                                                
JACK CHENOWETH, Attorney,  Legislative Legal Counsel, Legislative                                                               
Legal   and  Research   Services,  Legislative   Affairs  Agency,                                                               
explained that  the goal of  the subcommittee was to  ensure that                                                               
the  two pieces  of legislation  weren't in  conflict.   Very few                                                               
changes were  made to HB 531  and the changes are  encompassed in                                                               
Version  V.   The  subcommittee  desired  for the  provisions  to                                                               
covering the  waiver of the  local planning authority,  which was                                                               
added  last  year in  HB  69,  to  be  repealed.   Therefore,  AS                                                               
31.05.125, AS  38.05.177(n), and a particular  provision that was                                                               
amended when those  changes were added were repealed.   The other                                                               
change in  Version V  was to AS  46.03.100(f) where  the language                                                               
was changed  to conform to language  used in HB 524  in which the                                                               
legislature   addressed  the   exclusion  from   the  water   and                                                               
wastewater discharge permits.                                                                                                   
                                                                                                                                
REPRESENTATIVE GUTTENBERG  asked if  any consideration  was given                                                               
to melding HB 531 and HB 395 together.                                                                                          
                                                                                                                                
MR. CHENOWETH said that he wasn't given that instruction.                                                                       
                                                                                                                                
CO-CHAIR  DAHLSTROM confirmed  that there  was mention  of having                                                               
one  piece of  legislation  come  out of  the  subcommittee.   In                                                               
discussing the  pros and cons  of the aforementioned,  one member                                                               
felt that one piece of legislation  should be put forth while the                                                               
other two  members of the  subcommittee felt that [two  pieces of                                                               
legislation should be put forth].                                                                                               
                                                                                                                                
REPRESENTATIVE  GATTO said  that  the  subcommittee labored  over                                                               
this matter and  decided that it would be more  practical to keep                                                               
the two  pieces of legislation  separate.  He mentioned  that the                                                               
two pieces of legislation were clearly aligned.                                                                                 
                                                                                                                                
MR. CHENOWETH  explained that  HB 531  reflects an  approach that                                                               
eliminates  shallow natural  gas leasing  as a  separate form  of                                                               
leasing and  brings that leasing  under the conventional  oil and                                                               
gas leasing provisions  of AS 38.05.180.   The aforementioned was                                                               
done  per the  general direction  provided by  the Department  of                                                               
Natural  Resources (DNR).   Substantial  drafting is  required to                                                               
allow  DNR  to  act  on  leasing  on  a  gas  only  basis.    The                                                               
legislation  also  includes  DNR's   suggestion  to  replace  the                                                               
language "shallow natural gas" with  "nonconventional gas."  "All                                                               
of  the changes  made in  [HB] 531,  generally are  made to  move                                                               
leasing in that  direction so that ... we're back  to one general                                                               
form of leasing whether it's for  conventional oil and gas or ...                                                               
whether it's for ... nonconventional gas leasing," he explained.                                                                
                                                                                                                                
Number 2248                                                                                                                     
                                                                                                                                
CO-CHAIR DAHLSTROM moved to report CSHB 531, Version 23-                                                                        
LS1818\V, Chenoweth,  4/15/04, out  of committee  with individual                                                               
recommendations and the accompanying fiscal notes.                                                                              
                                                                                                                                
REPRESENTATIVE  KERTTULA  said  that   she  wanted  to  offer  an                                                               
amendment.                                                                                                                      
                                                                                                                                
CO-CHAIR MASEK said that Representative  Kerttula, as a member of                                                               
the  subcommittee,  had  a  "shot  at  it."    She  reminded  the                                                               
committee  that  there is  a  motion  to  report Version  V  from                                                               
committee pending.                                                                                                              
                                                                                                                                
REPRESENTATIVE KERTTULA objected to the motion.                                                                                 
                                                                                                                                
A roll  call vote was  taken.  Representatives  Gatto, Dahlstrom,                                                               
Masek, and  Lynn voted  in favor of  reporting CSHB  531, Version                                                               
23-LS1818\V,    Chenoweth,    4/15/04,    out    of    committee.                                                               
Representatives  Guttenberg   and  Kerttula  voted   against  it.                                                               
Therefore, CSHB 531(RES) was reported  out of the House Resources                                                               
Standing Committee by a vote of 4-2.                                                                                            
                                                                                                                                
HB 395-SHALLOW NATURAL GAS/ OIL AND GAS                                                                                       
                                                                                                                                
[Contains discussion of HB 531.]                                                                                                
                                                                                                                                
CO-CHAIR MASEK  announced that the  next order of  business would                                                               
be HOUSE  BILL NO. 395, "An  Act relating to shallow  natural gas                                                               
leasing and the regulation of shallow natural gas operations."                                                                  
                                                                                                                                
Number 2162                                                                                                                     
                                                                                                                                
CO-CHAIR DAHLSTROM moved to adopt  CSHB 395, Version 23-LS1314\G,                                                               
Chenoweth,  4/16/04, as  the working  document.   There being  no                                                               
objection, Version G was before the committee.                                                                                  
                                                                                                                                
CO-CHAIR  MASEK  reminded the  committee  that  HB 395  had  been                                                               
assigned to  a subcommittee.   She  requested that  Mr. Chenoweth                                                               
explain Version G.                                                                                                              
                                                                                                                                
JACK CHENOWETH, Attorney,  Legislative Legal Counsel, Legislative                                                               
Legal and  Research Services,  Legislative Affairs  Agency, noted                                                               
that  the committee  should have  a copy  of an  April 16,  2004,                                                               
memorandum he prepared.  Mr.  Chenoweth related that the goal was                                                               
to ensure that  HB 395 operate in some fashion  whether it passed                                                               
by itself or if HB 531 passed as  well.  Section 1 of [Version G]                                                               
amends  the requirements  regarding how  the Alaska  Oil and  Gas                                                               
Conservation  Commission  (AOGCC)   involves  itself  in  shallow                                                               
natural gas.   The language  in Section 1 is  the same as  in the                                                               
prior draft, no  change has been made to this  section.  The only                                                               
change  in Section  2  is to  repeal and  reenact  Section 1  and                                                               
change   all    references   to   "shallow   natural    gas"   to                                                               
"nonconventional gas."   Therefore, Section  1 will be  in effect                                                               
if HB  395 becomes law  while Section 2  will operate if  both HB                                                               
395 and HB 531 become law.   Section 3, he explained, is a public                                                               
forum provision  that's imposed upon  the AOGCC  covering shallow                                                               
natural gas  and will operate  if HB 395  alone becomes law.   If                                                               
both HB 395  and HB 531 become law, it's  necessary to change the                                                               
references  to "shallow  natural gas"  to "nonconventional  gas,"                                                               
which is accomplished in Section 4.                                                                                             
                                                                                                                                
MR. CHENOWETH  continued to review Version  G.  Section 5  is the                                                               
same definition of "shallow natural  gas" as in the prior version                                                               
with  the adjustment  in the  reduction  of depth  from 4,000  to                                                               
3,000 feet  in an attempt  to standardize  that.  However,  if HB                                                               
531 becomes law,  AS 31.05.170(14) is repealed,  which is located                                                               
on  page  17,  line  14,   and  replaced  by  the  definition  of                                                               
"nonconventional  gas."   Section  7 of  Version  G will  operate                                                               
under passage of either legislation  or passage of both.  Section                                                               
7  addresses  how mineral  interests  are  to  be dealt  with  in                                                               
situations when  the access to  the minerals isn't  covered under                                                               
the  Alaska Land  Act, the  reservation of  the mineral  interest                                                               
under  Section 6(i)  of the  Statehood Act.   The  aforementioned                                                               
would be  pre-Statehood Act lands  and some of the  split estates                                                               
that have occurred under the  Alaska Native Claims Settlement Act                                                               
(ANCSA)  when the  regional Native  corporations and  the village                                                               
corporations  own  separate  estates.     There  is  no  need  to                                                               
establish an alternative to Section 7 because it stands alone.                                                                  
                                                                                                                                
MR. CHENOWETH pointed  out that Section 8-11  are amendments that                                                               
all dealing  with existing shallow  natural gas provisions  in AS                                                               
38.05.177.    The  aforementioned   sections  maintain  the  same                                                               
language  as  in  the  prior   draft  and  utilize  some  of  the                                                               
safeguards  for water-well  tasting,  noise abatement,  setbacks,                                                               
and the  termination or abandonment  obligations at the  time the                                                               
lease  comes to  an  end.   Mr.  Chenoweth  related  that he  was                                                               
instructed  to  make  sure  that  those  provisions  survived  if                                                               
shallow  natural   gas  is   replaced  by   nonconventional  gas.                                                               
Therefore, in  Section 12  paragraphs (3) and  (4) [and  (5)] are                                                               
applicable  when  leases  are   issued  for  nonconventional  gas                                                               
leasing.   He  highlighted that  Section 11  is a  provision that                                                               
provides  additional  safeguards  to cover  shallow  natural  gas                                                               
leasing  and the  requirement  of  what's to  be  included in  an                                                               
agreement between  an owner and a  lessee or things that  have to                                                               
be dealt with in  the event a lessee seeks to  enter land under a                                                               
bond.  The aforementioned provisions  are carried over in Section                                                               
12(ff)(4)(E).                                                                                                                   
                                                                                                                                
MR. CHENOWETH turned to Section 13,  which is an amendment to the                                                               
notice  provision  in  the event  existing  shallow  natural  gas                                                               
leasing  goes forward  under nomination.   The  specifics of  the                                                               
notice provisions  are specified  in AS 38.05.945(b),  Section 14                                                               
of Version G.   Section 15 simply reverses Section  14 if shallow                                                               
natural gas is  eliminated.  The amendment to  reverse Section 13                                                               
is dealt  with in the  repeal of  AS 38.05.945(a)(7) on  page 17,                                                               
line 14.  Section 16  appears because the [subcommittee] insisted                                                               
that the language having to do  with the exclusion from the water                                                               
well and  the wastewater permitting requirements  mirror what was                                                               
done in HB 524.  Section 17 is  a conforming event.  In the event                                                               
that HB 531  becomes law, Sections 18 and 19  operate the same as                                                               
earlier  provisions  for  retaining the  definition  of  "shallow                                                               
natural   gas"   or  replacing   it   with   the  definition   of                                                               
"nonconventional gas."   Sections 20-21 repeal the  waiver of the                                                               
local approval authority that's given to the commissioner.                                                                      
                                                                                                                                
Number 1661                                                                                                                     
                                                                                                                                
MR.  CHENOWETH  highlighted  Section  23,  which  sets  out  some                                                               
repealers that  are contingent.   He reminded the  committee that                                                               
various sections  of Version G take  effect only if HB  531 takes                                                               
effect.   Section  24 is  an  effective date  for the  contingent                                                               
provisions and  ensures that those  provisions [take  effect] one                                                               
day later than HB 531.  Section  25 is the effective date for the                                                               
noncontingent provisions in Version G.                                                                                          
                                                                                                                                
REPRESENTATIVE  GUTTENBERG directed  attention to  page 12,  line                                                               
18,  paragraph (7),  and inquired  as to  the notice  requirement                                                               
that is required.                                                                                                               
                                                                                                                                
Number 1525                                                                                                                     
                                                                                                                                
MARK  MYERS,  Director, Division  of  Oil  & Gas,  Department  of                                                               
Natural   Resources  (DNR),   specified   that  [paragraph   (7)]                                                               
basically puts in place the same  [notice] standard as used for a                                                               
conventional lease  sale.   Therefore, there  is a  best interest                                                               
finding and  a notification of the  sale.  The call  for comments                                                               
would  also  be  incorporated  into  the  best  interest  finding                                                               
process.                                                                                                                        
                                                                                                                                
MR. CHENOWETH  directed attention to  page 5, lines  28-29, which                                                               
specifies that there  must be the opportunity  for public comment                                                               
for a  period of not  less than 60  days.  The  aforementioned is                                                               
"picked up" on  page 12, lines 18-19.  He  reminded the committee                                                               
that shallow natural  gas proceeds on the basis  of an individual                                                               
expressing  an  interest in  developing  a  particular parcel  of                                                               
land.  Based  on the identification of the  parcel, the potential                                                               
lessee makes  application.  Therefore,  the obligation of  DNR to                                                               
provide notice of  receipt of a lease application  is being added                                                               
[in Section 14].   The call for public comment  refers back to AS                                                               
.177(c).  Under  HB 531 there would be no  division of initiating                                                               
a lease  rather it  would all take  place under  the conventional                                                               
oil and  gas leasing methodology.   When the state  initiates the                                                               
decision to lease in a particular  area, it isn't on the basis of                                                               
an individual  making an application  for a lease rather  it's on                                                               
the basis of  the state specifying the area  which it's proposing                                                               
to put  up for lease.   In the latter situation  AS .177 wouldn't                                                               
need  to be  retained  and thus  is eliminated  if  HB 531  takes                                                               
effect.                                                                                                                         
                                                                                                                                
The committee took an at-ease from 2:34 p.m. to 2:37 p.m.                                                                       
                                                                                                                                
Number 1204                                                                                                                     
                                                                                                                                
CO-CHAIR  DAHLSTROM  moved  to   report  CSHB  395,  Version  23-                                                               
LS1314\G, Chenoweth,  4/16/04, out  of committee  with individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no objection, CSHB 395(RES) was reported out of committee.                                                                      
                                                                                                                                
CO-CHAIR MASEK returned the gavel to Co-Chair Dahlstrom.                                                                        
                                                                                                                                
HB 498-SALE OR TRADE OF STATE LAND                                                                                            
                                                                                                                                
CO-CHAIR  DAHLSTROM announced  that the  final order  of business                                                               
would be HOUSE BILL NO. 498,  "An Act requiring the sale or trade                                                               
of state land."                                                                                                                 
                                                                                                                                
Number 1120                                                                                                                     
                                                                                                                                
REPRESENTATIVE  PAUL SEATON,  Alaska State  Legislature, sponsor,                                                               
stated that  HB 498 is  meant to  help the state  acquire special                                                               
purpose lands.   He  recalled that  last year  he worked  hard on                                                               
creating  a  public recreational  area  outside  of Homer,  which                                                               
required the  acquisition of  private lands.   The  private lands                                                               
were  acquired by  the state  being the  conduit for  100 percent                                                               
federal legacy  lands.  The  argument against acquiring  the land                                                               
was  that it  was private  land and  the state  taking it  for an                                                               
economic development project  would remove the land  from its tax                                                               
base.   Furthermore, it was  argued that the state  acquiring the                                                               
land would further deplete the  amount of privately owned land in                                                               
the state.  Trying to get  through and balance the acquisition of                                                               
private land by the state is the intent of HB 498.                                                                              
                                                                                                                                
REPRESENTATIVE SEATON  explained that  if the  state is  going to                                                               
acquire private  land for a  public purpose, HB 498  requires the                                                               
Department  of Natural  Resources  (DNR) to  review  the area  to                                                               
determine whether  there is  other settlement  land, agricultural                                                               
land, or  resource designated  lands that  could be  available to                                                               
put up  for sale  on an  equal value  basis.   He noted  that the                                                               
acquisition  of park  land or  land for  recreational development                                                               
wouldn't  be  held  up  waiting  for  the  sale  to  take  place.                                                               
Representative  Seaton pointed  out  that in  some  areas of  the                                                               
state  the problem  is that  there  isn't very  much state  land,                                                               
although  there may  be  parcels  of land  that  are  vital to  a                                                               
community's  economic base.   If  DNR  can't find  land within  a                                                               
reasonable  distance, then  the requirements  would be  fulfilled                                                               
and  the purchase  of  the [private  land]  wouldn't be  stopped.                                                               
Representative Seaton  highlighted that the  legislation includes                                                               
a provision such  that the review for other state  lands could be                                                               
fulfilled,  if  a  trade  with  the  landowner  is  accomplished.                                                               
Basically,  this   legislation  results  in  no   net  loss,  and                                                               
therefore the amount  of private ownership isn't  lost.  Although                                                               
more  amounts  of  state  land  are  offered  for  sale  than  is                                                               
purchased, often the state lands are remote.                                                                                    
                                                                                                                                
Number 0739                                                                                                                     
                                                                                                                                
CO-CHAIR  MASEK moved  to adopt  CSHB  498, Version  23-LS1230\Q,                                                               
Bullock,  3/31/04,  as the  working  document.   There  being  no                                                               
objection, Version Q was before the committee.                                                                                  
                                                                                                                                
The committee took a brief at-ease at 2:45 p.m.                                                                                 
                                                                                                                                
REPRESENTATIVE GATTO posed  a situation in which there  is an "in                                                               
holding"  for a  series  of  parcels that  are  needed.   If  the                                                               
individual with  the in  holding doesn't want  to leave  the area                                                               
and accept another  parcel of land, does the state  have a way to                                                               
deal with it, he asked.                                                                                                         
                                                                                                                                
REPRESENTATIVE SEATON  clarified that this legislation  in no way                                                               
forces an individual  to sell any land.   This legislation merely                                                               
requires  that the  state,  DNR,  when it  acquires  land from  a                                                               
willing private  owner, offer  other state land  for sale  to the                                                               
private  property owner.   The  land offered  by the  state would                                                               
only  be development  lands.   A trade  isn't required  and would                                                               
probably be  an unusual circumstance,  he noted.  With  regard to                                                               
obtaining additional  federal lands by the  state, Representative                                                               
Seaton  said  those  lands  would  be  [available]  as  they  are                                                               
classified as developmental  lands.  Currently, there  is a small                                                               
amount  of  state  land  that  is  actually  in  the  settlement,                                                               
agricultural  category because  local  governments have  selected                                                               
much of the proximate developable land.                                                                                         
                                                                                                                                
Number 0447                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK noted that the  committee packets includes a Homer                                                             
News  article  regarding when  the  governor  vetoed the  federal                                                             
grant  for  the  Kachemak  Heritage   Land  Trust  (KHLT).    The                                                               
committee packet also includes a  letter to Representative Seaton                                                               
from  KHLT  and  a  letter  from  Representative  Seaton  to  the                                                               
governor.    She   inquired  as  to  why   this  legislation  was                                                               
introduced.                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON informed the  committee that last year KHLT                                                               
applied for the purchase of the  Baycrest Ski Trails, which was a                                                               
parcel that  the federal  government had listed  as number  14 in                                                               
parcels that  should be  acquired for public  use.   The Baycrest                                                               
Ski Trails provided the area of  Homer with access to many of the                                                               
area's ski trails.  This was  pulled out of the capitol budget in                                                               
the  Senate  last  year  because  of  the  philosophical  concern                                                               
regarding  taking   private  land   and  placing  it   in  public                                                               
ownership.  However, in the House  it was returned to the budget.                                                               
After convincing  the Senate Finance  Committee that this  was an                                                               
economic development  project for  the local economy,  the Senate                                                               
concurred  and  put  it  back   in  the  budget.    However,  the                                                               
aforementioned concern ultimately lead  to the governor's veto of                                                               
that.   Later it was decided  that the veto shouldn't  have taken                                                               
place and it  was agreed that the Joint  Committee on Legislative                                                               
Budget  and Audit  could  accept the  money for  the  land.   The                                                               
intent of  this legislation is to  get past the concern  and help                                                               
everyone realize that  so that these valuable  pieces of property                                                               
can be obtained.                                                                                                                
                                                                                                                                
Number 0111                                                                                                                     
                                                                                                                                
CO-CHAIR  MASEK moved  to report  CSHB 498,  Version 23-LS1230\Q,                                                               
Bullock,    3/31/04,   out    of   committee    with   individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no  objection,   CSHB  498(RES)  was  reported   from  the  House                                                               
Resources Standing Committee.                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 2:55 p.m.                                                                 
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects