Legislature(2005 - 2006)CAPITOL 124

02/16/2005 01:00 PM RESOURCES

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01:05:39 PM Start
01:07:31 PM Overview: Enstar Natural Gas Company
01:48:52 PM HB107
02:27:55 PM HB130
03:06:54 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Moved Out of Committee
Bills Previously Heard/Scheduled
Moved CSHB 107(RES) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                       February 16, 2005                                                                                        
                           1:05 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Jay Ramras, Co-Chair                                                                                             
Representative Ralph Samuels, Co-Chair                                                                                          
Representative Jim Elkins                                                                                                       
Representative Carl Gatto                                                                                                       
Representative Gabrielle LeDoux                                                                                                 
Representative Kurt Olson                                                                                                       
Representative Paul Seaton                                                                                                      
Representative Harry Crawford                                                                                                   
Representative Mary Kapsner                                                                                                     
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE JOINT RESOLUTION NO. 2                                                                                                   
Urging  the United  States Congress  to pass  legislation to  open                                                              
the  coastal  plain  of  the  Arctic   National  Wildlife  Refuge,                                                              
Alaska, to oil and gas exploration, development, and production.                                                                
     - MOVED SJR 2 OUT OF COMMITTEE                                                                                             
OVERVIEW:  ENSTAR NATURAL GAS COMPANY                                                                                           
     - HEARD                                                                                                                    
HOUSE BILL NO. 107                                                                                                              
"An Act providing  for the award of full actual  attorney fees and                                                              
costs to a  person aggrieved by unlawful obstruction  or hindrance                                                              
of hunting,  fishing, or viewing  of fish or game;  amending Rules                                                              
79 and  82, Alaska  Rules of  Civil Procedure;  and amending  Rule                                                              
508, Alaska Rules of Appellate Procedure."                                                                                      
     - MOVED CSHB 107 (RES) OUT OF COMMITTEE                                                                                    
HOUSE BILL NO. 130                                                                                                              
"An Act  granting certain state  land to the University  of Alaska                                                              
and  establishing the  university research  forest; and  providing                                                              
for an effective date."                                                                                                         
     - HEARD AND HELD                                                                                                           
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SJR  2                                                                                                                  
SHORT TITLE: ENDORSING ANWR LEASING                                                                                             
SPONSOR(S): RESOURCES                                                                                                           
01/11/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/11/05       (S)       RES                                                                                                    
01/26/05       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
01/26/05       (S)       Moved SJR 2 Out of Committee                                                                           
01/26/05       (S)       MINUTE(RES)                                                                                            
01/27/05       (S)       RES RPT 5DP 1DNP                                                                                       
01/27/05       (S)       DP:   WAGONER,    STEVENS   B,   STEDMAN,                                                              
                         SEEKINS, DYSON                                                                                         
01/27/05       (S)       DNP: ELTON                                                                                             
02/09/05       (S)       TRANSMITTED TO (H)                                                                                     
02/09/05       (S)       VERSION: SJR  2                                                                                        
02/14/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/14/05       (H)       RES                                                                                                    
02/16/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
BILL: HB 107                                                                                                                  
SHORT TITLE: ATTY FEES: HUNTING/FISHING INTERFERENCE                                                                            
SPONSOR(S): REPRESENTATIVE(s) RAMRAS                                                                                            
01/24/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/24/05       (H)       RES, JUD                                                                                               
02/02/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
02/02/05       (H)       Heard & Held                                                                                           
02/02/05       (H)       MINUTE(RES)                                                                                            
02/09/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
02/09/05       (H)       Heard & Held                                                                                           
02/09/05       (H)       MINUTE(RES)                                                                                            
02/16/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
BILL: HB 130                                                                                                                  
SHORT TITLE: UNIVERSITY LAND GRANT/STATE FOREST                                                                                 
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                                                                    
02/07/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/07/05       (H)       RES, FIN                                                                                               
02/09/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
02/09/05       (H)       Heard & Held                                                                                           
02/09/05       (H)       MINUTE(RES)                                                                                            
02/14/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
02/14/05       (H)       Heard & Held                                                                                           
02/14/05       (H)       MINUTE(RES)                                                                                            
02/16/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
WITNESS REGISTER                                                                                                              
TONY IZZO, President                                                                                                            
ENSTAR Natural Gas Company (ENSTAR)                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Presented information on ENSTAR's operations                                                                
and natural gas price predictions for the future.                                                                               
JIM POUND, Staff                                                                                                                
to Representative Jay Ramras                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented HB 107 on behalf of Representative                                                                
Ramras, sponsor.                                                                                                                
MYRL THOMPSON                                                                                                                   
Susitna Valley, Alaska                                                                                                          
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
JIM BRENNAN                                                                                                                     
Warm Springs Bay, Alaska                                                                                                        
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
CHRISTINE LUNDSTEDT                                                                                                             
Sitka and Baranof Warm Springs, Alaska                                                                                          
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
MELINDA HOFSTAD                                                                                                                 
Warm Springs Bay, Alaska                                                                                                        
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
ALBERT HOFSTAD, Commercial Fisherman                                                                                            
Warm Springs Bay, Alaska                                                                                                        
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
JIM SLATER, Engineer and Commercial Fisherman                                                                                   
Pelican, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
CAROL MARTINEZ                                                                                                                  
Mitkof Island                                                                                                                   
Petersburg, Alaska                                                                                                              
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
MIKE SALLEE, Sawmill Operator                                                                                                   
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
JENNIFER PRICE                                                                                                                  
Sitka and Warm Spring Bay, Alaska                                                                                               
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
JOHN HIRSCHENREIDER                                                                                                             
Warm Springs Bay, Alaska                                                                                                        
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
ROBERT LOEFFLER, Director                                                                                                       
Division of Mining, Land and Water                                                                                              
Department of Natural Resources (DNR)                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions regarding HB 130.                                                                        
BILL BURTON, Co-Owner                                                                                                           
Kodiak Game Ranch at Narrow Cape                                                                                                
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 130.                                                                          
ACTION NARRATIVE                                                                                                              
CO-CHAIR  RALPH  SAMUELS  called   the  House  Resources  Standing                                                            
Committee  meeting  to  order  at  1:05:39  PM.    Representatives                                                            
LeDoux,  Elkins,  Crawford,  Kapsner,   Ramras,  Samuels,  Seaton,                                                              
Olson, and Gatto were present at the call to order.                                                                             
SJR  2-ENDORSING ANWR LEASING                                                                                                 
CO-CHAIR  SAMUELS  announced  that  the first  order  of  business                                                              
would be  SENATE JOINT RESOLUTION  NO. 2 Urging the  United States                                                              
Congress  to pass legislation  to  open the coastal  plain  of the                                                              
Arctic  National   Wildlife  Refuge,   Alaska,  to  oil   and  gas                                                              
exploration, development, and production.                                                                                       
REPRESENTATIVE GATTO  moved to report SJR 2 out  of committee with                                                              
individual  recommendations  and  the accompanying  fiscal  notes.                                                              
There being no objection, it was so ordered.                                                                                    
^OVERVIEW: ENSTAR Natural Gas Company                                                                                         
1:07:31 PM                                                                                                                    
TONY  IZZO,  President,  ENSTAR  Natural Gas  Company,  said  that                                                              
ENSTAR has  been in  business for 44  years, serving  over 300,000                                                              
people.   He  said  that ENSTAR  has  400 miles  of  high-pressure                                                              
transmission  pipeline that  the  company has  owned and  operated                                                              
for  over 40  years.   Residential  homes comprise  88 percent  of                                                              
ENSTAR's customers,  and the remainder is mostly  small commercial                                                              
businesses.   Natural gas costs  consumers in Anchorage  $5.11 per                                                              
million BTUs, compared  with $13.28 per million BTUs  for fuel oil                                                              
and $26.98 for propane.                                                                                                         
Mr. IZZO  said he is concerned  about gas production  declining in                                                              
Cook Inlet.  Some  of the fields are not accessible  to utilities,                                                              
he  said.   He noted  that the  Department of  Energy studied  the                                                              
supply situation  in Cook Inlet.   In 2012,  supply will  go below                                                              
demand, he  noted, although there  are small discoveries  that may                                                              
briefly extend that date.                                                                                                       
Mr. IZZO  said he  asked the  Department of  Energy to  factor out                                                              
fields that are  not accessible, which then makes  demand out pace                                                              
supply  in  2009.   Cook  Inlet  gas impacts  473,000  people,  he                                                              
reported, and  about one third of  the power used in  Fairbanks is                                                              
generated in Southcentral with Cook Inlet gas.                                                                                  
Mr. IZZO said the  cost of gas to producers is  $3.93 per thousand                                                              
cubic feet.   Most of the  gas that ENSTAR distributes  comes from                                                              
Marathon, which  costs $3.33  per thousand  cubic feet,  he added.                                                              
He predicted  that the  gas ENSTAR  will be  buying in  the future                                                              
will cost  more because  it will  be a  supply and demand  market,                                                              
instead of  a buyer's market.  He  said that ENSTAR looks  for new                                                              
gas  supplies  everyday.   He  added  that  the company  needs  to                                                              
proceed as  if North  Slope gas  will never  come, even  though it                                                              
wishes that gas were available today.                                                                                           
CO-CHAIR  RAMRAS said he  has been  told that  natural gas  in the                                                              
ground is worth  less than nothing,  and it has no value  until it                                                              
gets  to the  market.    He asked  if  some small  operators  have                                                              
access  to  gas  but  not  to  the  pipes,  which  inhibits  their                                                              
motivation to explore.                                                                                                          
Mr. IZZO said  producers do have problems with  access to ENSTAR's                                                              
system.   "We will be  happy to bring on  any new supply  and move                                                              
it for any customer,"  he said, and he disagreed  that there is no                                                              
value,  because  in  2000  he  went  to  all  producers  and  they                                                              
wouldn't sell  their gas.  He  supposed that the  companies needed                                                              
to  obtain  capital   "and  get  approval  from   their  corporate                                                              
headquarters in Houston  or wherever - they needed  to compete for                                                              
returns that  they could get elsewhere  in the country  and in the                                                              
world."  He added  that producers look at openings  in the market,                                                              
so it might  be difficult to invest  now for an unknown  market in                                                              
the future.                                                                                                                     
CO-CHAIR RAMRAS asked if the pipe that ENSTAR owns is full.                                                                     
Mr. IZZO  said that ENSTAR  owns a good  portion of the  pipe, and                                                              
there is excess space, especially in non-winter months.                                                                         
REPRESENTATIVE GATTO  asked what would happen to the  price of gas                                                              
if a tanker shows up with gas in Cook Inlet.                                                                                    
Mr. IZZO  said he  didn't know,  but theoretically  it could  drop                                                              
the price.                                                                                                                      
Mr.  IZZO told  the committee  that the  DOE gas  study put  forth                                                              
three options  for meeting  supply.   The first,  he said,  was by                                                              
investing more money  into Cook Inlet fields and  hoping that they                                                              
can  squeeze   out  more   gas,  which   is  very  expensive   and                                                              
speculative,  and it  would likely  only  be a  small increase  in                                                              
supply.  The second  option is new exploration, but  it could cost                                                              
up to  $6 billion  to get  the gas,  and it  is also  speculative.                                                              
The  third option  is  to "look  north,"  which  is his  preferred                                                              
alternative,  he said.    A spur  line to  the  North Slope  could                                                              
access a 500-year  supply of gas at a good price,  Mr. Izzo noted,                                                              
and  it could  also provide  value-added opportunities.   He  said                                                              
his company is also looking at storage options and spur lines.                                                                  
1:33:58 PM                                                                                                                    
CO-CHAIR RAMRAS asked  Mr. Izzo about the potential  value of land                                                              
in the Nenana  Basin proposed to be transferred  to the university                                                              
in HB 130.                                                                                                                      
Mr. IZZO  said that  Fairbanks has  700 gas  customers, and  their                                                              
gas  is  liquefied in  the  Cook  Inlet  area and  trucked  north.                                                              
Fairbanks is  30 percent colder  than Anchorage, so Mr.  Izzo said                                                              
the  market is  similar  to Southcentral.    Alaska  has had  much                                                              
growth  based on  access to  cheap  energy, and  he believes  that                                                              
there  would  be  similar  growth spurts  if  there  is  long-term                                                              
access to energy.   The potential value to the  University will be                                                              
great, he concluded.                                                                                                            
1:39:40 PM                                                                                                                    
Mr.  IZZO  predicts  a significant  negative  impact  to  Alaska's                                                              
economy by  2009 if gas isn't  brought from the North  Slope soon.                                                              
Residents will have  to convert to oil systems and  then they will                                                              
have  to pay  two and  a half  times the  price of  gas.   Getting                                                              
North Slope gas quickly could be an economic boon, he said.                                                                     
REPRESENTATIVE  GATTO asked  what it  costs for  a building  to be                                                              
converted from gas to oil.                                                                                                      
Mr. IZZO said  home conversions would  be at least $5,000.   It is                                                              
his  opinion that  Alaska  may be  able to  postpone  the drop  in                                                              
supply with  new discoveries, but  he said that "living  from hand                                                              
to mouth"  is not comfortable,  and if  we wait until  2020, there                                                              
could be economic disaster.                                                                                                     
REPRESENTATIVE GATTO asked if there is a backup plan.                                                                           
Mr. IZZO  said that  ENSTAR operates  as if  North Slope  gas will                                                              
never  come.     So  there  are  backup  options,   but  from  DNR                                                              
information there will  be upward pressure on price.   So "why put                                                              
the  economy through  that  type of  negative  change with  prices                                                              
rising as supplies decline?" he asked.                                                                                          
REPRESENTATIVE SEATON asked about a plan of going into Homer.                                                                   
Mr. IZZO  said there  is a contract  in place, but  it will  be an                                                              
independent system.                                                                                                             
CO-CHAIR RAMRAS asked if any producers are holding back on gas.                                                                 
Mr. IZZO  said it is  difficult for him  to know the  big picture.                                                              
That  is why  the Department  of Energy  was asked  to gather  the                                                              
1:46:52 PM                                                                                                                    
CO-CHAIR  RAMRAS asked  what the  tariff is  for trucking  natural                                                              
gas, and what is involved in vaporizing the gas.                                                                                
MR. IZZO  said the  tariff is proprietary  information.   Prior to                                                              
being deregulated  the tariff was  50 percent higher  than ENSTAR.                                                              
Vaporization  turbines are used  to heat the  gas and  compress it                                                              
and push it out into the system.                                                                                                
1:48:52 PM                                                                                                                    
HB 107-ATTY FEES: HUNTING/FISHING INTERFERENCE                                                                                
CO-CHAIR RAMRAS  announced that the  next order of  business would                                                              
be HOUSE  BILL NO. 107   "An Act providing  for the award  of full                                                              
actual attorney fees  and costs to a person aggrieved  by unlawful                                                              
obstruction or hindrance  of hunting, fishing, or  viewing of fish                                                              
or  game;  amending  Rules  79  and  82,  Alaska  Rules  of  Civil                                                              
Procedure;  and  amending  Rule  508, Alaska  Rules  of  Appellate                                                              
REPRESENTATIVE  ELKINS  moved  to  adopt  the  proposed  committee                                                              
substitute  (CS)  for  HB  107,  Version  24-LS0444\Y,  Utermohle,                                                              
2/11/05, as  a work draft.   There being  no objection,  Version Y                                                              
was before the committee.                                                                                                       
JIM POUND,  Staff to  Representative Ramras,  noted the  change on                                                              
page  2,  line  20,  which  allows  the  prevailing  party  to  be                                                              
entitled to reasonable actual attorney fees and costs.                                                                          
REPRESENTATIVE SEATON  said he was going to offer  an amendment to                                                              
exclude  commercial fishermen  from HB  107 because  he thinks  it                                                              
could lead  to numerous lawsuits  between fishermen,  since anyone                                                              
who receives  a citation can be  considered unlawful.   He said he                                                              
is not  going to offer  an amendment because  he wants  to protect                                                              
fishermen  from other  kinds of  intentional  obstruction, but  he                                                              
wanted to discuss it.                                                                                                           
REPRESENTATIVE  LEDOUX  said she  is  not concerned,  because  the                                                              
fishermen  would still  have to  prove how much  they lost,  which                                                              
might be difficult.                                                                                                             
REPRESENTATIVE  ELKINS  said he  thinks  "the potential  here  for                                                              
commercial fishermen to be suing one another is horrendous."                                                                    
CO-CHAIR  RAMRAS  said  the  intent was  to  protect  hunters  and                                                              
trappers, "and now  we seem to be inside of a fishnet."   He asked                                                              
if  Representative  Seaton  would   like  to  offer  a  conceptual                                                              
REPRESENTATIVE  SEATON  said  he  wants  to  protect  the  fishing                                                              
industry  without  allowing  the  kind  of lawsuits  he  spoke  of                                                              
previously.  He  added that he supports the exemptions  of the law                                                              
enforcement officials.                                                                                                          
REPRESENTATIVE   CRAWFORD   said  that   Representative   Seaton's                                                              
concern is  valid, so  he suggested  keeping commercial  fishermen                                                              
under Rule 82 of the Alaska Rules of Civil Procedure.                                                                           
REPRESENTATIVE SEATON said that might be a good suggestion.                                                                     
REPRESENTATIVE  GATTO   said  he  could  not  get   by  the  words                                                              
"reasonable,  actual" in  the bill  because they  can be  mutually                                                              
MR. POUND  said that  the definition  of "intentionally  obstruct"                                                              
would not be relevant to fishing competition.                                                                                   
2:02:02 PM                                                                                                                    
REPRESENTATIVE CRAWFORD  said the  bill also says  "hinder," which                                                              
will have as much weight at "intentionally obstruct."                                                                           
REPRESENTATIVE  SEATON  said  that  is exactly  what  a  fishermen                                                              
wants to do: try to get situated in a superior position.                                                                        
REPRESENTATIVE LEDOUX  said that either person who  loses must pay                                                              
full  attorney fees,  so  that may  eliminate  the possibility  of                                                              
frivolous lawsuits.                                                                                                             
REPRESENTATIVE SEATON offered Conceptual Amendment 1:                                                                           
     Section 3;                                                                                                                 
       Insert "Commercial fishing operations will remain                                                                        
          under Rule 82, Alaska Rules of Civil Procedure."                                                                      
REPRESENTATIVE  GATTO made  an objection  and asked if  commercial                                                              
hunters should be included.                                                                                                     
CO-CHAIR  RAMRAS said there  is a  significant difference  between                                                              
commercial fishing and commercial hunting.                                                                                      
REPRESENTATIVE  GATTO said if  a guiding service  were to  move in                                                              
on a  competitor, someone  might be  hindered, and  he said  it is                                                              
worth discussing.                                                                                                               
REPRESENTATIVE   SEATON   explained    that   lawful   competitive                                                              
practices will protect those guides, as far as he knows.                                                                        
REPRESENTATIVE GATTO  said he wished a commercial  guide were here                                                              
to make sure.                                                                                                                   
MR.  POUND  said  that  the  committee  addressed  that  issue  in                                                              
reviving the  guide board, and  there is existing  statute dealing                                                              
with guiding.                                                                                                                   
REPRESENTATIVE  ELKINS said  he  forgot that  they discussed  that                                                              
bill, and he can support the bill with the Amendment 1.                                                                         
REPRESENTATIVE GATTO withdrew objection.                                                                                        
CO-CHAIR RAMRAS asked  whether there was any further  objection to                                                              
adopting conceptual  Amendment 1.   There  being no objection,  it                                                              
was so ordered.                                                                                                                 
REPRESENTATIVE  LEDOUX  moved  to  report CSHB  107,  Version  24-                                                              
LS0444\Y,  Utermohle, 2/11/05,  out of  committee with  individual                                                              
recommendations and the accompanying fiscal notes.                                                                              
REPRESENTATIVE  GATTO objected to  discuss the terms  "reasonable"                                                              
and "actual."    He said he  doesn't think  the two  words can  be                                                              
combined sensibly.                                                                                                              
REPRESENTATIVE SEATON  explained that  as long as  actual attorney                                                              
fees  were reasonable,  the prevailing  party will  get the  full,                                                              
actual  fees, but it  would have  to be  determined reasonable  by                                                              
the judge.                                                                                                                      
REPRESENTATIVE LEDOUX  said Representative Seaton is  accurate; it                                                              
just gives the judge discretion on what is reasonable.                                                                          
REPRESENTATIVE GATTO asked why not just say reasonable.                                                                         
REPRESENTATIVE LEDOUX  replied that if it just  said reasonable it                                                              
gives too much leeway  to the judge, who might not  even take into                                                              
account what the fees actually were.                                                                                            
REPRESENTATIVE GATTO  said he does not  get it and thinks  it is a                                                              
matter  of  grammar and  not  interpretation.   Adding  actual  to                                                              
reasonable adds silt to the water, he said.                                                                                     
REPRESENTATIVE  LEDOUX  suggested  the committee  ask  Legislative                                                              
Legal Services.                                                                                                                 
CO-CHAIR  RAMRAS said  that  the bill  will  find its  way to  the                                                              
House Judiciary Standing Committee, which can deal with it.                                                                     
REPRESENTATIVE  CRAWFORD  suggested  the  committee  get  a  quick                                                              
The committee took an at-ease from 2:13 PM to 2:21 PM.                                                                          
2:21:52 PM                                                                                                                    
MR.  POUND stated  that he  found  the terminology  in the  Alaska                                                              
Rules  of  Civil  Procedure:  "and  shall  pay  reasonable  actual                                                              
attorney fees incurred..."                                                                                                      
REPRESENTATIVE GATTO withdrew his objection.                                                                                    
REPRESENTATIVE  LEDOUX  moved  to  report CSHB  107,  Version  24-                                                              
LS0444\Y, Utermohle,  2/11/05,, as amended, out of  committee with                                                              
individual  recommendations  and  the accompanying  fiscal  notes.                                                              
There  being no  further  objection,  CSHB 107(RES)  was  reported                                                              
from the House Resources Standing Committee.                                                                                    
HB 130-UNIVERSITY LAND GRANT/STATE FOREST                                                                                     
CO-CHAIR RAMRAS announced  that the final order  of business would                                                              
be HOUSE  BILL NO.  130  "An  Act granting  certain state  land to                                                              
the  University   of  Alaska   and  establishing  the   university                                                              
research forest; and providing for an effective date."                                                                          
MYRL  THOMPSON, Susitna  Valley,  said  he has  been  a victim  of                                                              
another  fast-track  bill,  and  skirting the  public  process  is                                                              
problematic.   He  said he  called his  community council  members                                                              
and community leaders  regarding HB 130, and across  all political                                                              
parties only one  person had heard that 1,700 acres  of land along                                                              
Willow  Creek and  Frying Pan  Lake were  up for  disposal to  the                                                              
university, and  all were concerned.   He related a vignette  of a                                                              
mountain  adjacent  to lands  his  family owns  in  the lower  48.                                                              
Developers took  the trees,  then the topsoil,  and then  the rock                                                              
and gravel.   After seven  years the mountain  was gone,  he said.                                                              
Mr. Thompson  is concerned  that the same  could happen on  HB 130                                                              
lands,  because there  is a  very aggressive  timber chip  company                                                              
that is interested  in university land.   He said that  the public                                                              
needs to be  brought into the process,  and "it is a  good idea to                                                              
go  local and  check  with people  before  you  fast track  public                                                              
lands into  private industry,  which is  probably what's  going to                                                              
happen to  this.  I would  rather see you  give $5 million  a year                                                              
in cash  to the university  and go about  public lands  in another                                                              
2:27:55 PM                                                                                                                    
JIM BRENNAN, Warm  Springs Bay, noted that there are  two units in                                                              
DNR's area  plan that  are subsumed  by HB 130:  the lagoon  and a                                                              
parcel  bordering Baranof  Lake.   The area plan  noted that  both                                                              
parcels are  largely wetland, he  said, and even though  the lands                                                              
were  selected  by  the state  from  the  federal  government  for                                                              
remote  settlement, the  selection  document had  noted that  land                                                              
suitable for  development is very  limited and should  be directed                                                              
where the  town site  community now  is, at the  head of  the bay.                                                              
There are  numerous, small private  parcels in that area,  many of                                                              
which are still undeveloped, he said.                                                                                           
MR. BRENNAN said  that DNR's area plan classifies the  units in HB                                                              
130   as   mini-dispersed   recreation,   which  is   defined   as                                                              
"recreational  pursuits  that  are not  site-specific  in  nature,                                                              
such  as   beach  combing,   recreational  boating,   or  wildlife                                                              
viewing."   DNR's  management  intent  is to  retain  it in  state                                                              
ownership  "to  protect  the salt  lagoon,  maintain  the  natural                                                              
resources/scenic values  of the parcel and insure  continuation of                                                              
its  use for  dispersed  recreation."   He  said  he  is a  third-                                                              
generation Alaskan  from Southeast, and he has been  going to Warm                                                              
Springs Bay  since he was  a kid.   "Unique Alaskan  places shared                                                              
and appreciated  by the public  the way  they are now,  should not                                                              
be irrevocably  given up  for some  small development  in exchange                                                              
for what's going to amount to chump change," he said.                                                                           
2:31:44 PM                                                                                                                    
CHRISTINE  LUNDSTEDT, Sitka  and Baranof  Warm Springs,  expressed                                                              
concern  that the  governor  has been  working  on the  university                                                              
land  transfer  for more  than  a year,  and  the  public is  just                                                              
becoming aware  of it.  She said  that at the first  hearing of HB                                                              
130,  only "a  handful" of  people  were allowed  to testify,  and                                                              
then  during the  next hearing  each witness  was initially  given                                                              
three  minutes, then  the  committee co-chair  changed  it to  two                                                              
minutes.  She  added that less than  half of the hearing  time was                                                              
devoted to  public testimony.   She said  that "people  have taken                                                              
time  off from  their  jobs  for  two days  to  try to  talk,  and                                                              
couldn't."   She added  that Joe Beedle  and Mary Montgomery  were                                                              
allowed  to "lobby  for  this  give-away.   They  took  up a  huge                                                              
amount of public time."                                                                                                         
CO-CHAIR RAMRAS  interposed and  said that  Ms. Lundstedt  was not                                                              
getting to  her testimony, "which  we would appreciate,"  and that                                                              
there are 60 to 80 people that would like to testify.                                                                           
MS.  LUNDSTEDT  responded  that,  "You're  taking up  my  time,  I                                                              
think, right  now."  She  added that the  way the public  has been                                                              
received  has  been  very  much  "in  line  with  the  legislation                                                              
itself, and  it was very  sad to see  that you interrupted  person                                                              
after   person   after  asking   them   transparently   irrelevant                                                              
questions and  using up their time."   She pointed out  to the co-                                                              
chair that  he is on television  and many people have  remarked at                                                              
how  he has  been  smirking and  rolling  his  eyes during  public                                                              
testimony.    "A  lot  of  people  have  seen  this  contempt  and                                                              
derision, and it has been impossible to ignore," she added.                                                                     
MS. LUNDSTEDT  said that  Co-Chair Ramras  stated that  the public                                                              
and local  governments  are not  being short  changed on the  time                                                              
allowed for  involvement.  She  countered that in  Petersburg "the                                                              
university called from  the airport and said they  would meet with                                                              
residents  two hours  in  advance."   She  said that  HB 130  will                                                              
never  pass public  scrutiny  and  will "transform  our  beautiful                                                              
Sitka Sound"  without Sitka  being able to  do anything  about it.                                                              
HB 130 "carves  the heart" out of  Warm Spring Bay, she  said, and                                                              
is "in direct defiance"  to DNR's area plans.   "Joe Beedle talked                                                              
around  the real  issue, here,  and  that is  once the  university                                                              
gets 270,000 acres...of  public land...the university  system owns                                                              
it  [and] does  not  need to  ask  anyone's permission  to  strike                                                              
their deals  and get  cash."   She added  that any easement  given                                                              
for  the  benefit  of  locals  can  be  vacated  as  soon  as  the                                                              
university sells  its land.   The university  can meet  with local                                                              
people if  it wants to,  but it has  no obligation to  include the                                                              
public in  decision-making, she said.   Ms. Lundstedt  opined that                                                              
HB 130  is a  terrible way to  fund the  university.   "The public                                                              
land  transfer  will  provide  one  percent  of  the  university's                                                              
budget,  and our  precious  public lands  are  gone forever,"  she                                                              
REPRESENTATIVE  CRAWFORD  asked   about  the  Lisianski  area  and                                                              
Biorka  Island, which  he heard  was a  sea lion  pullout and  the                                                              
marine mammal act won't allow its use.                                                                                          
MS. LUNDSTEDT  responded that  the city already  made its  move to                                                              
make Middle  Island  available for  the public.   People are  very                                                              
steamed,  she said.   She  added that  the university  has to  say                                                              
they want this  land, but the land  will be hard to  sell.  Access                                                              
and  utilities will  be  difficult,  particularly  for Biorka  and                                                              
Middle Islands.                                                                                                                 
REPRESENTATIVE  ELKINS commented  that the  co-chair has  "gone to                                                              
length  to try  to  pacify  the public  in  relation  to 130,  and                                                              
they've taken a  big step here to continue these  hearings, at the                                                              
same  time to  reassess  any movement  on  this legislation  until                                                              
they can work out some of these problems."                                                                                      
CO-CHAIR RAMRAS said that he will work on his freshman form.                                                                    
MELINDA  HOFSTAD, Warm  Springs Bay,  said she  went to a  meeting                                                              
last week  with representatives  from DNR  and the university  and                                                              
was shocked  that there is a  267-acre parcel in Warm  Springs Bay                                                              
that has  already been  determined to  be transferred  from public                                                              
hands.  She  said she has been  a property owner there  for almost                                                              
30 years,  and it  was the  first she  heard about  it.  She  said                                                              
that  the DNR  representative told  the attendees  that there  had                                                              
been  no  public  hearings  to  determine  which  lands  would  be                                                              
included in  HB 130, "because  he only had  four months to  do his                                                              
work  and the  governor  wanted  this bill,  this  session."   She                                                              
added that  the majority  of the Baranof  property is  wetland and                                                              
steep  terrain.   DNR has  said that  the land  is unsuitable  for                                                              
home  sites, she  said,  which seems  to  be  what the  university                                                              
wants to do with it.                                                                                                            
MS. HOFSTAD  said that HB 130 has  had no public process,  and she                                                              
requests that the  legislation be pulled and that  the state start                                                              
over with  an open  public process.   She  said that Baranof  Warm                                                              
Springs is  in the Sitka Borough,  and the Sitka Assembly  held an                                                              
emergency  meeting  and  unanimously  opposed HB  130  because  it                                                              
knows  it could  not  afford  sewer  and water  systems,  schools,                                                              
docks,   harbors,  and   fire  protection   that   this  type   of                                                              
development  would  require.     "In  the  case  of  Baranof  Warm                                                              
Springs, you  would be  taking a  century-old historic  village of                                                              
15.4  private  acres  and  adding   an  additional  267  acres  of                                                              
development to  it with absolutely no  input from those  of us who                                                              
already live  here," she  said.   And she  asked the committee  to                                                              
think  about how  they  would feel  if a  bureaucracy  arbitrarily                                                              
increased the size  of their community by 18  times without public                                                              
2:43:39 PM                                                                                                                    
ALBERT HOFSTAD,  Commercial Fisherman,  Warm Springs Bay,  said he                                                              
has been  going to Baranof  Warm Springs for  50 years, and  he is                                                              
worried  about the  impact of  development  on the  wild stock  of                                                              
salmon that  enters the bay and  spawn by the falls and  the dock.                                                              
He said  that the salmon  go in  and out of  the salt lagoon.   He                                                              
said his  main worry  is development  with drilling and  blasting,                                                              
which could divert the hot springs.                                                                                             
2:45:14 PM                                                                                                                    
JIM  SLATER,  Engineer  and Commercial  Fisherman,  Pelican,  said                                                              
Pelican will  be significantly  affected by  HB 130.   He  said he                                                              
made his home in  Lisianski Inlet for business and  because of its                                                              
natural  beauty and  subsistence opportunities,  and the  proposed                                                              
land grant threatens  his way of life and his business.   He noted                                                              
that the  amount of  land to  be transferred  is over 1000  acres,                                                              
dwarfing the amount  of private land now in Lisianski  Inlet.  The                                                              
effect  of   the  land  transfer   on  the  environment   and  the                                                              
surrounding communities  is overwhelming, unstudied,  and unknown,                                                              
he said.   He added  that the local  utilities are  overloaded and                                                              
most  of the  surrounding subdivisions  discharge sewage  directly                                                              
into the inlet,  so he requested a study of any  increase in waste                                                              
into the  inlet.  He  said that the  Northern Southeast  Area Plan                                                              
went through  a public  process,  and the university  will  not be                                                              
required to  stay with that  plan.  "If  you transfer any  of this                                                              
land out  of the public domain  without safeguarding the  needs of                                                              
local  communities, I  believe it  is a  failure of  your duty  as                                                              
elected officials,"  he stated.   He said  the lands are  used for                                                              
water supply and subsistence.                                                                                                   
CO-CHAIR RAMRAS  interjected to  ask how  Mr. Slater accesses  the                                                              
land for subsistence uses.                                                                                                      
MR. SLATER  answered that  mostly the  national forest  comes down                                                              
to the  shore, but that  if people own a  lot, they walk  onto the                                                              
Tongass without  trails.  Others  moor their skiffs to  access the                                                              
forest.  He  continued to discuss  the parcel in HB 130  on Yakobi                                                              
Island, where most  of the surrounding land is wilderness.   It is                                                              
also  a boater's  refuge from  rough  weather, he  said, and  most                                                              
local fishing  boats sell fish there.   "Yakobi Island  is premier                                                              
wilderness," and  the local community  has worked hard  to protect                                                              
it, he said.   The mechanism of  land grants to fund  a university                                                              
is antiquated and  robs the public of its right to  be involved in                                                              
the disposal of public assets.                                                                                                  
MR.  SLATER requested  that parcel  MF1001 is  eliminated from  SB                                                              
130, and  that parcel SP1002 is  substantially reduced in  size to                                                              
be consistent with  the community development plan and  that it go                                                              
through  a  public process.    He  also requested  that  committee                                                              
members  consider all  communities  and not  just  those in  their                                                              
particular  district.   He stated  that he  had written  testimony                                                              
from Norm  Carson,  who was not  given time  to speak  previously.                                                              
Mr. Slater was denied the opportunity to read it.                                                                               
2:50:26 PM                                                                                                                    
CAROL  MARTINEZ,  Mitkof  Island,  Petersburg,  said  her  Tlingit                                                              
ancestors  have  lived on  Mitkof  Island since  time  immemorial.                                                              
"Giving  all  of  these  lands  for  possible  private  sales,  or                                                              
whatever UAF  intends, would devastate  my Native  community," she                                                              
said.   She  added that  access  to native  foods  for food,  art,                                                              
culture  and  teaching  children  is a  necessity  to  the  tribal                                                              
heritage.  There  are less than 400 tribal members  in Petersburg,                                                              
and  "having  access   to  these  native  foods   is  imperative."                                                              
Subsistence means  survival, she  said.  She  added that  she just                                                              
found out  about HB 130  and its fast  track, and she  is appalled                                                              
that  the "state  government is  not  taking into  heart our  best                                                              
interests,"   and  she   respectfully  asked   the  committee   to                                                              
2:52:12 PM                                                                                                                    
MIKE  SALLEE, Sawmill  Operator,  Ketchikan, Alaska,  said he  was                                                              
born in Ketchikan.   He expressed unease about  how the University                                                              
of  Alaska logs  their lands.    He added,  "Southeast Alaska  has                                                              
been coughing up  timber at an unsustainable rate  for the last 50                                                              
plus  years  through  grand-scale  harvest...consisting  of  clear                                                              
cuts on federal,  state and private lands.  Now  we are squabbling                                                              
over the remote  and scattered dregs of commercial  timber that is                                                              
MR. SALLEE said  he objects to both Senator  Murkowski's promotion                                                              
of  giving  the  university  250,000 acres  of  federal  land  and                                                              
Governor Murkowski's  desire to match  that with state land.   "If                                                              
by some  stretch of  the law  the Murkowski's  succeed in  pulling                                                              
off  these land  grabs,  I would  insist  on  extremely rigid  and                                                              
binding   covenants   in  perpetuity   through   all   prospective                                                              
ownerships  that prohibit  clear  cutting, round  log export,  and                                                              
any other timber  extractions exceeding the 10,000  board foot per                                                              
year personal  use allocation  the U.S.  Forest Service  currently                                                              
administers  on federal lands."   Specifically,  Mr. Sallee  said,                                                              
the  Moser Bay  parcel is  mostly  steep ground  not suitable  for                                                              
home sites,  and he is "very  apprehensive" about  developing Wolf                                                              
Lakes trail  for industrial tourism.   He said he was  a member of                                                              
the  Cleveland  Users  Coalition  which opposed  road  access  and                                                              
logging on  the Cleveland Peninsula.   "The Cleveland is  one of a                                                              
dwindling  number of  places  accessible to  local  hunters."   He                                                              
concluded that  DNR has not  responded adequately to  the public's                                                              
comments on  the Central  and Southern  Southeast Area  Plans, and                                                              
it  is  irresponsible  to  use HB  130  to  avoid  addressing  the                                                              
public's  concerns.    He  added   that  he  does  not  trust  the                                                              
university's  promise  to  address   public  concerns  after  "the                                                              
egregious   breach  of  public   trust  that   occurred   here  in                                                              
Ketchikan" with regard to logging at south Tongass.                                                                             
2:56:12 PM                                                                                                                    
JENNIFER PRICE,  Sitka and Warm  Springs Bay, said she  is opposed                                                              
to HB 130  because large-scale development will  negatively impact                                                              
the  settlement  at Warm  Springs  Bay.   She  added  that she  is                                                              
disillusioned by  the way this  bill was  made public.   Ms. Price                                                              
has  a charter  business, and  she is  familiar with  many of  the                                                              
Southeast  lands in  HB  130, and  most  of them  are  "glittering                                                              
jewels...which  would  be  negatively transformed  by  any  large-                                                              
scale development."   She concluded that she hopes  that HB 130 is                                                              
thrown out.                                                                                                                     
JOHN HIRSCHENREIDER,  Warm Springs Bay, stated that  he is opposed                                                              
to HB  130 for all  reasons previously  mentioned.  "I  would like                                                              
you to  consider completely  canning the bill,"  he said.   "And I                                                              
believe that  most Alaskans  would be in  favor of a  small income                                                              
tax if it was  earmarked for the university," which  would be more                                                              
dependable, he said.                                                                                                            
CO-CHAIR  RAMRAS asked  Mr. Loeffler  to update  the committee  on                                                              
how  DNR  is  changing  HB  130, "so  the  folks  will  feel  more                                                              
comfortable about this process."                                                                                                
ROBERT LOEFFLER,  Director,  Division of  Mining, Land and  Water,                                                              
Department of Natural  Resources (DNR), Juneau, said  DNR is going                                                              
through testimony  "and we  will look  at things we  can do."   He                                                              
said,  "Examples  of  parcels  being  the  Kodiak  launch  parcel,                                                              
problems   at   Neet[s]   Bay,   some  of   the   public   process                                                              
questions...of section  6, some of  the questions with  respect to                                                              
borough  entitlements that  I think  the mayor  of Craig and  some                                                              
others discussed,  some of  the other  properties that  we've also                                                              
heard from,  and questions of easements  and trails that  have not                                                              
been  reviewed, or  that  should  be reserved  out  and/or find  a                                                              
process  to do  that,  and examples  of  facilities...such as  the                                                              
watershed   or   water   system   at   P[ort]   Alexander,   Point                                                              
Protection."   He said  DNR and  the university  will continue  to                                                              
listen to testimony and try to accommodate them.                                                                                
REPRESENTATIVE  CRAWFORD requested  that DNR  find parcels  closer                                                              
to  population  centers of  Alaska,  like  Willow where  there  is                                                              
60,000 acres.   He said  part of that  is suitable  for settlement                                                              
and it is closer to people and more easily turned into cash.                                                                    
BILL BURTON, Co-Owner,  Kodiak Game Ranch at Narrow  Cape, Kodiak,                                                              
said HB 130  includes 2,800 acres  of the ranch's lease  area.  He                                                              
said the  leases keep  the land  open to  the public; without  the                                                              
leases it  would have been  in private lands.   "If this  is taken                                                              
by the  university  it could prevent  public  access, not  only to                                                              
the Narrow  Cape  area but  also to the  rest of  the ranch  which                                                              
includes...hunting  and fishing  areas  that the  public has  been                                                              
using ever  since we've had  the place," he  said.  He  noted that                                                              
he is opposed  to HB 130 unless  the university can give  both the                                                              
borough and  the ranch a written  agreement that all  current land                                                              
agreements remain in  effect.  He added that the  ranch may not be                                                              
able to renew  the lease.  He  said SB 130 will take  the majority                                                              
of his  livestock winter range,  which is absolutely  essential to                                                              
his operation.   He spoke of a  fencing contract with  DNR, and he                                                              
has already  bought the fencing.   He would need to  be reimbursed                                                              
for the materials  or continue with the signed contract.   He said                                                              
he is not against  the launch complex and he believes  in military                                                              
research, but  he doesn't  see where  it qualifies the  university                                                              
to take  all that  land.   He said he  would like  to see  a lease                                                              
renewal right written into the bill.                                                                                            
3:05:46 PM                                                                                                                    
CO-CHAIR  RAMRAS  suspended public  testimony  and  said that  the                                                              
university and  DNR will  work on SB  130.  He  said, "One  of the                                                              
wonderful things about  living in America and living  in Alaska is                                                              
access to  private land.   I think  folks are...thinking  of tract                                                              
homes  going  into  these  remote sites;  this  is  about  private                                                              
people...having  access to  land  slowly in  a careful  methodical                                                              
way over the next  20 years and more, and expanding  the ownership                                                              
of private  lands in  Alaska which  is a  noble effort,  but we're                                                              
going  to be  very sensitive  to  the issues  and  as they  effect                                                              
individual communities along the way."                                                                                          
[HB 130 was held over.]                                                                                                         
There being  no further business  before the committee,  the House                                                              
Resources  Standing Committee  meeting  was  adjourned at  3:06:54                                                            

Document Name Date/Time Subjects