Legislature(2017 - 2018)BARNES 124

01/19/2018 01:00 PM RESOURCES

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01:01:49 PM Start
01:01:52 PM Presentation: Department of Natural Resources Update
03:00:05 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Dept. of Natural Resources Update TELECONFERENCED
by Commissioner Andrew Mack and Deputy
Commissioners Mark Wiggin & Heidi Hansen
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                        January 19, 2018                                                                                        
                           1:01 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Andy Josephson, Co-Chair                                                                                         
Representative Geran Tarr, Co-Chair                                                                                             
Representative Harriet Drummond                                                                                                 
Representative Justin Parish                                                                                                    
Representative Chris Birch                                                                                                      
Representative DeLena Johnson                                                                                                   
Representative George Rauscher                                                                                                  
Representative David Talerico                                                                                                   
Representative Chris Tuck (alternate)                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION:  DEPARTMENT OF NATURAL RESOURCES UPDATE                                                                           
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ED KING, Legislative Liaison                                                                                                    
Office of the Commissioner                                                                                                      
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Introduced a PowerPoint presentation                                                                     
entitled, "State of Alaska Department of Natural Resources 2017                                                                 
Highlights," dated 1/17/18.                                                                                                     
                                                                                                                                
MARK WIGGIN, Deputy Commissioner                                                                                                
Office of the Commissioner                                                                                                      
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT: Described  his  responsibilities within  the                                                             
Department  of Natural  Resources, presented  updates on  certain                                                               
divisions, and answered questions.                                                                                              
                                                                                                                                
STEVEN MASTERMAN, Director                                                                                                      
Central Office                                                                                                                  
Division of Geological and Geophysical Surveys                                                                                  
Department of Natural Resources                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:    Answered   questions  during  the  update                                                             
presented by the Department of Natural Resources.                                                                               
                                                                                                                                
HEIDI HANSEN, Deputy Commissioner                                                                                               
Office of the Commissioner                                                                                                      
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Described her  responsibilities, presented                                                             
updates  on certain  divisions within  the Department  of Natural                                                               
Resources, and answered questions.                                                                                              
                                                                                                                                
ARTHUR KEYES, Director                                                                                                          
Division of Agriculture                                                                                                         
Department of Natural Resources                                                                                                 
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:   Answered questions during  the presentation                                                             
by the Department of Natural Resources.                                                                                         
                                                                                                                                
CHRIS MAISCH, Director; State Forester                                                                                          
Division of Forestry                                                                                                            
Department of Natural Resources                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:    Answered   questions  during  the  update                                                             
presented by the Department of Natural Resources.                                                                               
                                                                                                                                
BRENT GOODRUM, Director                                                                                                         
Central Office                                                                                                                  
Division of Mining, Land and Water                                                                                              
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Answered questions during  the presentation                                                             
by the Department of Natural Resources.                                                                                         
                                                                                                                                
ETHAN TYLER, Director                                                                                                           
Central Office                                                                                                                  
Division of Parks and Outdoor Recreation                                                                                        
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Answered questions during  the presentation                                                             
by the Department of Natural Resources.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:01:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  ANDY  JOSEPHSON  called the  House  Resources  Standing                                                             
Committee  meeting  to  order  at   1:01  p.m.    Representatives                                                               
Josephson, Birch, Drummond, Johnson,  Parish, Talerico, Tarr, and                                                               
Rauscher were present at the  call to order.  Representative Tuck                                                               
(alternate) arrived as the meeting was in progress.                                                                             
                                                                                                                                
^PRESENTATION:  Department of Natural Resources Update                                                                          
     PRESENTATION:  Department of Natural Resources Update                                                                  
                                                                                                                                
1:01:52 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON announced  that  the only  order of  business                                                               
would be  an update from  the Department of Natural  Resources on                                                               
its activities in 2017 and anticipated activities in 2018.                                                                      
                                                                                                                                
1:03:53 PM                                                                                                                    
                                                                                                                                
ED  KING,  Legislative  Liaison,   Office  of  the  Commissioner,                                                               
Department  of Natural  Resources (DNR)  directed attention  to a                                                               
PowerPoint presentation entitled, "State  of Alaska Department of                                                               
Natural  Resources  2017 Highlights,"  dated  1/17/18.   Slide  2                                                               
illustrated DNR's  organization chart and he  noted the following                                                               
recent changes in  leadership:  Office of  Project Management and                                                               
Permitting Acting  Executive Director  Don Perrin;  Mental Health                                                               
Trust  Land Office  Executive Director  Wyn Menefee;  Division of                                                               
Parks and Outdoor Recreation Director  Ethan Tyler; Office of the                                                               
Commissioner Deputy Commissioner, Heidi Hansen.                                                                                 
                                                                                                                                
1:05:57 PM                                                                                                                    
                                                                                                                                
MARK WIGGIN, Deputy Commissioner,  DNR, said his responsibilities                                                               
are with the Division of Oil  and Gas, the Division of Geological                                                               
and  Geophysical  Surveys,  and  the  Mental  Health  Trust  Land                                                               
Office.   He reviewed the duties  of the Division of  Oil and Gas                                                               
(DOG) and informed the committee in  fiscal year 2017 (FY 17) DOG                                                               
managed  and  collected $1.1  billion  in  royalties, rents,  and                                                               
bonus bids.   Mr. Wiggin said  DOG has released a  total of eight                                                               
seismic datasets  - five under  a new regulatory fee  structure -                                                               
out of  the Geologic Materials  Center.   Also in 2017,  DOG held                                                               
the  third largest  lease sale  by dollar  amount since  1998 and                                                               
delivered  the  2018 production  forecast  to  the Department  of                                                               
Revenue  (DOR), which  has proven  to  be very  accurate.   Other                                                               
significant responsibilities  have been  to issue  royalty audits                                                               
and to collect additional state  revenue.  Finally, DOG processed                                                               
revised 2009-2016  Trans-Alaska Pipeline System  tariff reduction                                                               
royalty  reports that  are  expected to  garner  $141 million  in                                                               
additional revenue (slide 3).                                                                                                   
                                                                                                                                
1:11:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND asked  whether successful  lease bidders                                                               
make  one  lease payment  or  pay  for  the  lease on  a  payment                                                               
schedule.                                                                                                                       
                                                                                                                                
MR. WIGGIN  explained bidders make  a one-time bonus  bid payment                                                               
to hold a lease, and thereafter make annual rental payments.                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON inquired into  which fund lease bonus bids                                                               
are deposited.                                                                                                                  
                                                                                                                                
1:12:59 PM                                                                                                                    
                                                                                                                                
MR. KING said  the payments are split between  general funds (GF)                                                               
and the  Alaska Permanent Fund Corporation  (APFC), with one-half                                                               
of  1 percent  going to  the Public  School Trust  Fund, Treasury                                                               
Division, DOR.   In further  response to  Representative Johnson,                                                               
he  confirmed  all  oil  and  gas  revenue  is  directed  to  the                                                               
aforementioned funds,  except for audit settlements,  which go to                                                               
the Constitutional Budget Reserve (CBR), Treasury Division, DOR.                                                                
                                                                                                                                
MR. WIGGIN  continued the  presentation and said  in 2018  DOG is                                                               
working  to release  12 additional  tax credit  seismic datasets;                                                               
DOG will  also hold  a special  lease sale  of lands  adjacent to                                                               
land  that  has  new  seismic  data available.    There  will  be                                                               
continued work on spring and  fall 2018 production forecasts, and                                                               
continued  support for  the Alaska  Strategic Transportation  and                                                               
Resources (ASTAR)  infrastructure project  because of  DOG's role                                                               
in oil  and gas development.   Further,  DOG will issue  the 2018                                                               
North Slope  Best Interest Finding  which is performed  every ten                                                               
years,  and will  support ongoing  negotiations between  DNR, the                                                               
Alaska Gasline  Development Corp.,  and North Slope  (NS) working                                                               
interest owners  to advance the  Alaska LNG gas  pipeline project                                                               
by sourcing the  gas for the project.  Further,  DOG in 2018 will                                                               
work  with NS  communities, the  federal administration,  and the                                                               
[Alaska]   Congressional   delegation   to   support   reasonable                                                               
development in  the Arctic National  Wildlife Refuge,  1002 Area,                                                               
on the  outer continental  shelf, and  in the  National Petroleum                                                               
Reserve-Alaska.     Finally,  DOG  seeks  to   rationalize  fees,                                                               
regulations,  and administrative  leasing processes  to modernize                                                               
procedures and promote development (slide 4).                                                                                   
                                                                                                                                
1:18:59 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON  questioned DNR's position toward  the expense                                                               
of releasing the seismic datasets.                                                                                              
                                                                                                                                
MR. WIGGIN acknowledged  DOG had concerns related  to the expense                                                               
of acquiring,  checking for accuracy, and  distributing extremely                                                               
large  datasets; DOG  established  a regulatory  fee package  for                                                               
this work, and  expects the release costs to  be covered thereby.                                                               
In  further  response to  Co-Chair  Josephson,  he described  the                                                               
following  process:   contract seismic  firms  acquire the  data,                                                               
operators  pay the  contract firms  for the  data, and  data that                                                               
qualifies for  tax credits is held  by DOG for ten  years.  Thus,                                                               
data  from 2006  is  being released;  he  estimated some  seismic                                                               
shoots have cost  up to hundreds of millions of  dollars, and the                                                               
amount the state pays depends upon the percentage of the credit.                                                                
                                                                                                                                
REPRESENTATIVE PARISH expressed his  understanding the tax credit                                                               
program up  to 2016 has cost  the state $500-$600 million  in tax                                                               
credits.                                                                                                                        
                                                                                                                                
MR. WIGGIN said, "It's that or higher."                                                                                         
                                                                                                                                
1:23:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH questioned how  much the state is expecting                                                               
to collect in fees up to 2027 to cover the aforementioned cost.                                                                 
                                                                                                                                
MR. WIGGIN explained the fee schedule  was set to recover all the                                                               
cost - not of the tax  credits - but of managing and distributing                                                               
the  data, and  DOG calculated  the cost  would be  "in the  many                                                               
millions  of dollars,  which  would  be enough  to  pay for  that                                                               
process  of distributing  the data."   He  gave an  example of  a                                                               
dataset  being successfully  used  for exploration.   In  further                                                               
response  to Representative  Parish and  in response  to Co-Chair                                                               
Josephson, he  said he  would provide information  on why  DOG is                                                               
prohibited by statute to sell the data.                                                                                         
                                                                                                                                
MR. KING  added DNR believes  the highest value from  the state's                                                               
resources is  garnered from reaching the  market; therefore, much                                                               
of  the  value  in  the  release of  the  seismic  data  will  be                                                               
generated  through  finding  and developing  new  prospects,  not                                                               
through collecting fees.                                                                                                        
                                                                                                                                
MR. WIGGIN  turned attention  to the  Division of  Geological and                                                               
Geophysical Surveys  (DGGS), located  in Fairbanks, and  which is                                                               
staffed by scientists, geophysicists,  and geologists who conduct                                                               
mineral,  mining,  and  oil  and gas  studies,  and  other  work.                                                               
[DGGS]  collects  and  publishes   data,  maps,  and  reports  to                                                               
stimulate  oil,  gas,  and mineral  development,  and  identifies                                                               
geologic  hazards, such  as  volcanic activity.    In 2017,  DGGS                                                               
released  its  5,000th  publication, responded  to  nearly  3,200                                                               
requests for geologic information, and  - with DOG - was involved                                                               
in releasing tax credit seismic data.                                                                                           
                                                                                                                                
1:29:45 PM                                                                                                                    
                                                                                                                                
STEVE MASTERMAN,  Director, Central  Office, DGGS,  DNR, referred                                                               
to  volcanic  activity  and  said the  Bogoslof  volcano  in  the                                                               
Aleutian Islands was very active  last year and erupted 60 times;                                                               
DGGS  has  a  responsibility  to alert  aviation  of  hazards  to                                                               
airspace.                                                                                                                       
                                                                                                                                
MR.  WIGGIN  returned to  DGGS  in  2017  and said  the  division                                                               
established  erosion  and  flood   monitoring  sites  in  Western                                                               
Alaska,  and its  coastal manager  assigned village  residents to                                                               
inform DGGS of  incidents.  Further, DGGS  documented new mineral                                                               
occurrences, led  a Nanushuk workshop  at the  Geologic Materials                                                               
Center, and  discovered and  documented new  oil in  western Cook                                                               
Inlet (slide 5).                                                                                                                
                                                                                                                                
CO-CHAIR  JOSEPHSON asked  what is  meant by  "documented 20  new                                                               
mineral occurrences."                                                                                                           
                                                                                                                                
MR. MASTERMAN  explained when DGGS field  crews complete geologic                                                               
mapping in mineral-rich  areas they are also  looking for surface                                                               
concentrations of metal; if found,  rock samples are taken - such                                                               
as the  new prospects found  near Tok -  which can result  in new                                                               
claims made by mining companies.                                                                                                
                                                                                                                                
CO-CHAIR  JOSEPHSON  asked which  DNR  lands  are ineligible  for                                                               
mining.                                                                                                                         
                                                                                                                                
1:34:22 PM                                                                                                                    
                                                                                                                                
MR.  MASTERMAN  advised all  state  lands  are open  for  mineral                                                               
location unless otherwise closed.                                                                                               
                                                                                                                                
HEIDI HANSEN,  Deputy Commissioner,  Office of  the Commissioner,                                                               
DNR, nodded in agreement with Mr. Masterman's response.                                                                         
                                                                                                                                
1:35:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO  asked if information on  whether certain                                                               
state  land is  closed  to  mining would  be  found in  "areawide                                                               
plans."                                                                                                                         
                                                                                                                                
MR. MASTERMAN said yes.                                                                                                         
                                                                                                                                
MR. WIGGIN  directed attention to  DGGS 2018  planned activities:                                                               
publish airborne surveys  over the Porcupine River  and the Yukon                                                               
River; publish bedrock  geology map to assist Cook  Inlet oil and                                                               
gas  development; focus  research on  formations in  NS; complete                                                               
geology  mapping  in  a  portion  of  the  Tanacross  Quadrangle;                                                               
utilize  an in-house  Light Detection  and Ranging  (LIDAR) radar                                                               
system for  landslide and  avalanche assessments;  continue flood                                                               
hazard maps  and flood forecasting  for Western  Alaska; continue                                                               
mapping in  villages; support ASTAR regarding  materials sourcing                                                               
for construction (slide 6).                                                                                                     
                                                                                                                                
1:39:00 PM                                                                                                                    
                                                                                                                                
MR.  WIGGIN turned  attention  to the  Mental  Health Trust  Land                                                               
Office  (TLO), which  is responsible  for managing  the land  and                                                               
other natural resources  owned by the Alaska  Mental Health Trust                                                               
Authority (Trust).   Activities in  2017 by TLO were:   generated                                                               
$11.1  million in  revenues to  fund programs  for 85,000  Alaska                                                               
Mental Health  Trust beneficiaries; initiated work  to complete a                                                               
land exchange  in Southeast Alaska  with the U.S.  Forest Service                                                               
(USFS),   Department   of   Agriculture  (USDA);   initiated   an                                                               
exploratory drilling program near  Yakutat to further delineate a                                                               
potential beach  mine; leased Trust properties;  facilitated sale                                                               
of  Trust land  on  the  Homer Spit  (slide  7).   [TLO]  planned                                                               
activities  for 2018  are:   continue  land  exchange with  USFS;                                                               
exploratory  drilling at  Icy Cape;  keep commercial  real estate                                                               
properties   fully   leased;   digitize  workflow   process   for                                                               
authorization  processing;  create   over-the-counter  land  sale                                                               
program  for  Trust  lands; complete  first  wetlands  mitigation                                                               
sale; continue feasibility  work on the Palmer hard  rock mine in                                                               
Haines on Trust land (slide 8).                                                                                                 
                                                                                                                                
1:43:23 PM                                                                                                                    
                                                                                                                                
MS.  HANSEN directed  attention  to the  Division of  Agriculture                                                               
(division),  DNR.   She said  Alaska Grown  membership has  grown                                                               
from three  members in  1988 to  eight hundred  and seventy-seven                                                               
members today.   In  2017, the  division inspected  and certified                                                               
80.3 million board feet of  timber for export; leveraged $189,867                                                               
in funds for Farm to  School activities, including funds from the                                                               
USDA  Farm  to  School  Network and  funds  from  a  reimbursable                                                               
service  agreement with  the Department  of  Education and  Early                                                               
Development; administered  $650,000 of multi-year  USDA Specialty                                                               
Crop  Block  Grant  projects over  three  years,  including  seed                                                               
potato, peony,  and marketing studies;  launched a  successful $5                                                               
Alaska Grown  Challenge campaign, which has  directly resulted in                                                               
additional farm production; sold  Matanuska Maid and Mt. McKinley                                                               
Meat and Sausage; cleaned 210,000  pounds of seed; treated twelve                                                               
invasive Canada Thistle outbreaks (slide 9).                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  asked how many Canada  Thistle outbreaks                                                               
occur.                                                                                                                          
                                                                                                                                
1:47:20 PM                                                                                                                    
                                                                                                                                
ARTHUR  KEYES,  Director,  Division   of  Agriculture,  DNR,  was                                                               
unsure;  however,  Alaska's  situation  of  geographic  isolation                                                               
makes eradication  possible, thus  the division responds  to each                                                               
reported outbreak of invasive weeds.                                                                                            
                                                                                                                                
CO-CHAIR  TARR congratulated  the division  on its  successful $5                                                               
Alaska  Grown   Challenge  Campaign   awards  ceremony   and  the                                                               
division's efforts to engage communities and support farmers.                                                                   
                                                                                                                                
REPRESENTATIVE   PARISH  asked   whether  any   Farm  to   School                                                               
activities and  Specialty Crop Block  Grant programs  occurred in                                                               
Southeast Alaska.                                                                                                               
                                                                                                                                
MR. KEYES will provide the requested information.                                                                               
                                                                                                                                
REPRESENTATIVE  TALERICO   inquired  as  to  the   operation  and                                                               
production of Mt. McKinley Meat and Sausage.                                                                                    
                                                                                                                                
MR. KEYES advised Mt. McKinley  Meat and Sausage has successfully                                                               
transitioned to  the private sector  thus certain  information is                                                               
confidential;  however, the  new owner  is making  investments to                                                               
upgrade the facility  with new lighting and  efficiencies.  There                                                               
is  direct slaughter  of  animals  coming in  from  the Lower  48                                                               
because  Alaska  doesn't have  enough  livestock  to support  the                                                               
facility, but the facility is creating a market for local pigs.                                                                 
                                                                                                                                
1:53:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER  asked  whether the  facility  is  still                                                               
supporting Alaska 4-H.                                                                                                          
                                                                                                                                
MR. KEYES  said his  understanding is the  needs of  industry and                                                               
Alaska 4-H are being met.                                                                                                       
                                                                                                                                
MS. HANSEN  directed attention to division  planned activities in                                                               
2018:  auction  663 acres of agricultural  land parcels; increase                                                               
support  for  the  livestock industry,  including  meetings  with                                                               
industry  and  adding  a  livestock   section  to  the  division;                                                               
generate  a  revegetation  plan   for  the  Alaska  LNG  pipeline                                                               
project;  treat Elodea  infestations; expand  export and  promote                                                               
the $5 Alaska Grown Challenge Campaign (slide 10).                                                                              
                                                                                                                                
REPRESENTATIVE DRUMMOND  asked whether only the  Anchorage School                                                               
District is using Alaska Grown foods in school lunches.                                                                         
                                                                                                                                
MS. HANSEN  said the  program has expanded  into the  Bristol Bay                                                               
region.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  PARISH  questioned   whether  Barnacle  Foods  in                                                               
Juneau would qualify for support from the division.                                                                             
                                                                                                                                
MR. KEYES  said kelp is not  covered in the Alaska  Grown program                                                               
at this time, but remains under discussion.                                                                                     
                                                                                                                                
REPRESENTATIVE PARISH  referred to other wild  harvested products                                                               
and inquired  as to  where one finds  support for  wild harvested                                                               
vegetable products.                                                                                                             
                                                                                                                                
1:59:10 PM                                                                                                                    
                                                                                                                                
MR.  KEYES  said  he  would  confirm  whether  the  Alaska  Grown                                                               
trademark covers  any wild harvested  products because  its focus                                                               
is  on cultivated  products; however,  he acknowledged  there are                                                               
opportunities for said  products, such as mushrooms.   In further                                                               
response to  Representative Parish,  he said  he would  provide a                                                               
later response  in writing  as to  whether legislation  is needed                                                               
for the  division to recognize  wild harvested products  grown in                                                               
Alaska.                                                                                                                         
                                                                                                                                
REPRESENTATIVE    TALERICO    questioned   whether    there    is                                                               
collaboration  between the  division,  the  University of  Alaska                                                               
Fairbanks, 4-H, and Future Farmers of America.                                                                                  
                                                                                                                                
MR. KEYES will provide a later response.                                                                                        
                                                                                                                                
MS. HANSEN directed attention to  the Division of Forestry (DOF),                                                               
DNR,  and  said in  2017,  DOF  safely  managed  353 fires  -  in                                                               
cooperation with  federal partners  - with 652,904  acres burned,                                                               
which are lower  than average numbers for acreage  burned and the                                                               
frequency of  fires.   In addition, DOF  filled 2,053  orders for                                                               
firefighting  assignments  in the  Lower  48;  sold 11.3  million                                                               
board  feet of  timber;  completed construction  of Vallenar  Bay                                                               
road; held the first Good  Neighbor Authority timber sale on USFS                                                               
land,  selling   the  timber  for  twice   its  appraisal  value;                                                               
conducted widespread social media engagement (slide 11).                                                                        
                                                                                                                                
CO-CHAIR JOSEPHSON  asked for the  recipient of the  revenue from                                                               
the Good Neighbor Authority timber sale.                                                                                        
                                                                                                                                
MS.  HANSEN clarified  the  $2.6 million  for  the Good  Neighbor                                                               
Authority  sale was  USFS revenue.   In  further response  to Co-                                                               
Chair Josephson, she said state  revenue from timber sales was $1                                                               
million.                                                                                                                        
                                                                                                                                
2:04:58 PM                                                                                                                    
                                                                                                                                
CHRIS MAISCH, Director and State  Forester, DOF, DNR, in response                                                               
to  Co-Chair Josephson,  said  Vallenar Bay  road  is a  resource                                                               
extraction  road  on  Gravina Island  built  with  Department  of                                                               
Transportation  &  Public Facilities  funds  at  a cost  of  $4.6                                                               
million.                                                                                                                        
                                                                                                                                
2:05:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   RAUSCHER   inquired   as  to   how   firefighter                                                               
deployments are handled.                                                                                                        
                                                                                                                                
2:06:19 PM                                                                                                                    
                                                                                                                                
MR. MAISCH  said deployments  to or  from Alaska  are facilitated                                                               
through  resource orders  for crews  or equipment;  the state  is                                                               
responsible for  the costs  to fight  fires on  state land.   For                                                               
federal land, in the state service  area, costs are billed to the                                                               
Alaska  Fire  Service,  Bureau of  Land  Management  (BLM),  U.S.                                                               
Department of  the Interior (DOI).   When  crews are sent  to the                                                               
Lower 48, all  the costs are paid by the  ordering entities after                                                               
a  fire  season's  total  costs  are  balanced  by  the  National                                                               
Interagency  Coordination   Center,  National   Interagency  Fire                                                               
Center.    In further  response  to  Representative Rauscher,  he                                                               
explained  compensation  is paid  only  for  the actual  cost  of                                                               
transportation,   support,   and   wages,   and   some   indirect                                                               
administration costs.                                                                                                           
                                                                                                                                
REPRESENTATIVE  BIRCH questioned  what impacts  there will  be to                                                               
the timber industry  from changes to the  roadless rule affecting                                                               
the  Tongass   National  Forest,  and  from   the  Good  Neighbor                                                               
Authority.                                                                                                                      
                                                                                                                                
2:09:05 PM                                                                                                                    
                                                                                                                                
MR.  MAISCH explained  the 2001  Roadless Area  Conservation Rule                                                               
(roadless rule) applied  to federal lands and the  state sued for                                                               
an  exemption  that was  place  for  about eight  years;  current                                                               
ongoing litigation seeks  a rulemaking process with  USFS and the                                                               
U.S. Department of Agriculture with  the objective to restore the                                                               
Tongass National Forest exemption to  the roadless rule.  For the                                                               
timber industry, the  roadless rule means access to  lands in the                                                               
forest plan  classified for  forestry use  is only  by helicopter                                                               
logging; also, during the time  of the exemption, some roads were                                                               
built that now  cannot be used.  He pointed  out roads are better                                                               
and   more  efficient   access  to   facilitate  the   industry's                                                               
transition  from old  growth to  young growth  wood.   Mr. Maisch                                                               
further explained the Good Neighbor  Authority is a new authority                                                               
that allows states to enter  into [good neighbor agreements] with                                                               
USFS  or BLM  in  activities such  as  timber sales,  restoration                                                               
projects, and other forest management services.                                                                                 
                                                                                                                                
REPRESENTATIVE   JOHNSON   asked   for  information   on   beetle                                                               
infestation.                                                                                                                    
                                                                                                                                
MR. MAISCH stated the bark  beetle population is increasing again                                                               
in the Kenai  Peninsula and in the  Matanuska-Susitna region; DOF                                                               
is providing pertinent information to residents.                                                                                
                                                                                                                                
REPRESENTATIVE PARISH returned attention to firefighting costs.                                                                 
                                                                                                                                
MR. MAISCH  said last  year the  state spent  $23.4 million.   In                                                               
further  response to  Representative Parish,  he said  DOF begins                                                               
each year  with $18.4  million in a  preparedness fund  and $19.4                                                               
million in  a fire  suppression activity  component.   During the                                                               
fire  season,  DOF  can  get  more  money  through  the  disaster                                                               
declaration process or by a supplemental budget.                                                                                
                                                                                                                                
MS. HANSEN returned  to DOF planned activities  in 2018: increase                                                               
involvement  with Good  Neighbor  Authority projects;  facilitate                                                               
full allowable  and surplus  cut in  the Southeast  State Forest;                                                               
increase  use   of  Unmanned  Aerial  Vehicles   (UAVs)  in  fire                                                               
operations;   secure   grant   funding  for   projects;   collect                                                               
additional  data for  management;  prepare succession  management                                                               
plan for DOF (slide 12).                                                                                                        
                                                                                                                                
2:17:37 PM                                                                                                                    
                                                                                                                                
MS. HANSEN  continued to the  Division of Mining, Land  and Water                                                               
(DMLW), DNR, noting in 2017,  DMLW generated $29.7 million in [FY                                                               
17]  revenue   as  follows:  $10.8  million   related  to  mining                                                               
activity; $7.8  million related to  land leases; $5.7  related to                                                               
material  sales; $4.8  million  related to  land sales;  $350,000                                                               
related to shore fish; $240,000  related to water authorizations.                                                               
Further, DMLW conveyed 9,700 acres  to boroughs, authorized 135.5                                                               
miles  of ice/snow  roads and  65  acres of  ice pads  in FY  17,                                                               
cleared title  to 165.9  river miles  of submerged  lands; issued                                                               
188  temporary   water  use  authorizations;   reduced  statewide                                                               
platting review  time; deployed  the Unified  Permit reconfigured                                                               
platform for primary DMLW authorizations (slide 13).                                                                            
                                                                                                                                
CO-CHAIR JOSEPHSON asked  for the location of the  lands on which                                                               
DMLW cleared title.                                                                                                             
                                                                                                                                
MS. HANSEN  said the title  was cleared on submerged  lands along                                                               
the Knik, Stikine, and George rivers.                                                                                           
                                                                                                                                
2:19:50 PM                                                                                                                    
                                                                                                                                
BRENT  GOODRUM, Director,  Central Office,  DMLW, DNR,  confirmed                                                               
title was  cleared to  submerged lands along  the George  River -                                                               
which in the vicinity of Crooked  Creek village - the Knik River,                                                               
the  Stikine River  in Southeast,  and the  Kisaralik River  near                                                               
Bethel.                                                                                                                         
                                                                                                                                
CO-CHAIR  TARR  asked  whether the  aforementioned  title  issues                                                               
relate to Stikine River transboundary issues.                                                                                   
                                                                                                                                
MS. HANSEN will provide a response.                                                                                             
                                                                                                                                
MS.  HANSEN, in  response  to Co-Chair  Josephson, explained  the                                                               
Unified Permit (UP) reconfigured platform  is a program that will                                                               
modernize and unify the administration  of permits within DMLW to                                                               
help with its backlog.                                                                                                          
                                                                                                                                
MR. GOODRUM  recalled the  UP program was  initially set  up with                                                               
IBM business  process management; recently DMLW  converted to dot                                                               
net coding  to utilize a  more common coding language  for better                                                               
cost efficiency.                                                                                                                
                                                                                                                                
REPRESENTATIVE   TALERICO  asked   whether  classifications   are                                                               
finished for any of the boroughs.                                                                                               
                                                                                                                                
MR.  GOODRUM  will provide  a  list  of the  municipalities  with                                                               
completed conveyances.                                                                                                          
                                                                                                                                
MR.  GOODRUM confirmed  earlier testimony  by Mr.  Masterman that                                                               
all  state lands  are open  [to mineral  entry] unless  otherwise                                                               
closed; furthermore,  areas of activity  are initially  closed to                                                               
mineral entry  to avoid potential  conflicts between  surface and                                                               
subsurface rights,  however, mineral entry closing  orders can be                                                               
subsequently  reopened.   He  offered  to  provide the  committee                                                               
information as to where closing order information is posted.                                                                    
                                                                                                                                
2:26:49 PM                                                                                                                    
                                                                                                                                
MS. HANSEN said  DMLW planned activities in 2018 are:   work with                                                               
all  parties  to address  federal  actions  relating to  resource                                                               
management plans  and the BLM  Resource Management  Planning rule                                                               
BLM 2.0;  finalize statehood land  entitlements from  the federal                                                               
government;  support federal  permit  reform  and automate  DNR's                                                               
permitting processes;  finalize fee regulation  updates; finalize                                                               
a land  exchange at Point  Bridget [State Park]; finalize  a land                                                               
exchange with the City and Borough of Yakutat.                                                                                  
                                                                                                                                
MR. GOODRUM,  returning attention to  the land exchange  at Point                                                               
Bridget, said  documents have been  signed and the  exchange will                                                               
be finalized in 30 days.                                                                                                        
                                                                                                                                
MS. HANSEN  said the final planned  activity for DMLW in  2018 is                                                               
continued development of the North  Slope Area Plan, with a draft                                                               
issued within 60 days (slide 14).                                                                                               
                                                                                                                                
2:30:20 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
2:30:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON passed the gavel to Co-Chair Tarr.                                                                           
                                                                                                                                
REPRESENTATIVE  BIRCH informed  the committee  DOI is  planning a                                                               
restructure to  common regional boundaries  and to move  staff to                                                               
regional offices.   He asked  how these changes would  impact the                                                               
state.                                                                                                                          
                                                                                                                                
MS. HANSEN opined  Secretary of the Interior Ryan  Zinke seeks to                                                               
make DOI  more agile,  robust, and  effective; although  she said                                                               
she  has   not  seen  restructure  plans,   DOI  clearly  remains                                                               
committed to its  mission and will take steps to  avoid delays in                                                               
its  objectives.   She  said Secretary  Zinke  regards the  early                                                               
reorganization  efforts  as  positive  steps in  the  growth  and                                                               
evolution of the agency.                                                                                                        
                                                                                                                                
MS.  HANSEN  directed attention  to  the  Division of  Parks  and                                                               
Outdoor   Recreation   (DPOR),   DNR,  noting   in   2017,   DPOR                                                               
accommodated 3.6  million visitors and collected  over $4 million                                                               
in fees  divided by region  as follows:   31 percent  Chugach, 15                                                               
percent Southeast,  2 percent Wood-Tikchik;  25 percent  Kenai, 6                                                               
percent Northern Region; 17  percent Matanuska-Susitna; 3 percent                                                               
Kodiak.   [DPOR] issued  626 commercial  use permits  and special                                                               
use  permits  for  weddings  and   events  and  sold  $15,300  of                                                               
merchandise in  an emerging program.   Further, Delta  Area parks                                                               
were  converted  to  private  management,  and  the  K'esugi  Ken                                                               
campground  in Denali  State Park  was completed  with campsites,                                                               
cabins, and interpretive services.   Also in 2017, DPOR initiated                                                               
an online reservation system for  cabins, expanded electronic pay                                                               
options,  collected over  $800,000 in  parking pass  revenue, and                                                               
promoted the Kids Don't Float program (slide 15).                                                                               
                                                                                                                                
REPRESENTATIVE  RAUSCHER asked  whether all  four parks  in Delta                                                               
are open.                                                                                                                       
                                                                                                                                
2:38:39 PM                                                                                                                    
                                                                                                                                
ETHAN  TYLER, Director,  Central Office,  DPOR, DNR,  advised all                                                               
the park areas  in the Delta region are being  operated by permit                                                               
holders.   He  then  recognized Office  of  Boating Safety  staff                                                               
members Jeff  Johnson and Kelly (indisc.),  who received national                                                               
awards,  and  Joe  Hall,  a   park  specialist,  whose  work  was                                                               
acknowledged by Alaska Geographic.                                                                                            
                                                                                                                                
MS.  HANSEN  continued  to  DPOR   planned  activities  in  2018:                                                               
increase  state  park  sustainability through  the  expansion  of                                                               
electronic fee  stations and electronic  pay options  and through                                                               
the sale  of park  merchandise.  Also,  DPOR seeks  to streamline                                                               
permitting  processes,  make  improvements  to  Eagle  Rock  boat                                                               
launch  area on  the Kenai  River, grow  inventory of  public use                                                               
cabins and  fee areas,  add campsites  to its  online reservation                                                               
system,  and increase  partnerships with  regional and  statewide                                                               
nonprofits,  volunteer  groups,  and  private  sector  businesses                                                               
(slide 16).                                                                                                                     
                                                                                                                                
2:44:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON asked who  reports avalanche danger within                                                               
the state parks.                                                                                                                
                                                                                                                                
MR.  TYLER advised  DPOR  does not  issue  avalanche reports  but                                                               
relies on partners such as  the Chugach National Forest Avalanche                                                               
Information Center  and a similar  organization in  Hatcher Pass.                                                               
In further  response to Representative  Johnson, he  explained no                                                               
fees are paid  to either organization, and he  offered to provide                                                               
a list of DPOR partnerships.                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  recalled the  Matanuska-Susitna  Borough                                                               
attempted  to  regulate  trapping  on its  park  land  and  asked                                                               
whether trapping is regulated in  state parks differently than on                                                               
other state lands.                                                                                                              
                                                                                                                                
MR. KING said  there is no law that restricts  trapping on trails                                                               
"on  general  state  land";  he   was  unsure  of  specific  park                                                               
regulations.                                                                                                                    
                                                                                                                                
MR. TYLER will provide a response to Representative Johnson.                                                                    
                                                                                                                                
MR.  TYLER,  in response  to  Co-Chair  Tarr,  said at  web  site                                                               
[dnr.alaska.gov/parks/] one can  purchase state park merchandise,                                                               
parking passes, and boat launch yearly passes.                                                                                  
                                                                                                                                
CO-CHAIR   TARR   suggested   committee  members   inform   their                                                               
constituents about electronic reservations.                                                                                     
                                                                                                                                
2:51:03 PM                                                                                                                    
                                                                                                                                
MS.  HANSEN   directed  attention   to  the  Office   of  Project                                                               
Management   and  Permitting   (OPMP),  noting   in  2017,   OPMP                                                               
coordinated  over  20  major  projects,  including  oil  and  gas                                                               
projects  Greater  Mooses  Tooth 2  (GMT-2),  Liberty,  Nanushuk,                                                               
Point  Thomson,  and  Alaska LNG,  and  mine  projects  including                                                               
Pebble, Donlin Creek, Fort Knox,  Pogo, Kensington, Greens Creek,                                                               
Red  Dog,  Livengood,  Nixon Fork,  and  the  Palmer  exploration                                                               
project.   In addition, OPMP  coordinated the  aforementioned BLM                                                               
resource management  plans, a road  project to the  Ambler Mining                                                               
District,  one  ASTAR  project,  and  protected  3,000  acres  of                                                               
coastal  habitat  through  the  Exxon Valdez  Oil  Spill  Trustee                                                               
Council  and one  mitigation project.    Further, OPMP  collected                                                               
$1.2  million  in  contracting   fees,  signed  a  memorandum  of                                                               
agreement  for  GMT-2,  coordinated  state  interests  on  Alaska                                                               
National  Interest   Lands  Conservation  Act   (ANILCA)  issues,                                                               
assisted the  Department of  Law with  DOI regulatory  reform and                                                               
National Park  Service Wildlife  regulations, and  mapped 371,488                                                               
square miles of Alaska (slide 17).                                                                                              
                                                                                                                                
MS.  HANSEN  continued  to  OPMP   planned  activities  in  2018:                                                               
coordinate state  and federal environmental review  processes for                                                               
mining and  oil and  gas projects;  coordinate audits  and permit                                                               
renewals for  mining projects and  Point Thomson;  through ANICLA                                                               
program,  seek to  lift public  land order  (PLO) 5150;  continue                                                               
with  BLM  management  plans; conserve  4,200  acres  of  coastal                                                               
habitat; map data  discovery and access for  wetlands and surface                                                               
hydrography mapping; finalize ASTAR  contracts on several aspects                                                               
of the project (slide 18).                                                                                                      
                                                                                                                                
REPRESENTATIVE DRUMMOND asked what  would result from lifting PLO                                                               
5150.                                                                                                                           
                                                                                                                                
MS.  HANSEN  explained  lifting  a  PLO  means  the  current  BLM                                                               
management  authority  would be  removed  thus  the lands  become                                                               
available  for  state  selection.     She  stressed  this  is  an                                                               
important  priority  for  the  state,   not  only  for  the  land                                                               
associated with the Trans-Alaska  Pipeline System and Alaska LNG,                                                               
but  for the  Ambler  Road;  in addition,  the  state could  sell                                                               
gravel and  other natural resources  sourced from  land currently                                                               
restricted by PLOs.                                                                                                             
                                                                                                                                
3:00:05 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 3:00 p.m.