Legislature(1995 - 1996)
03/31/1995 08:11 AM House RES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
March 31, 1995
8:11 a.m.
MEMBERS PRESENT
Representative Joe Green, Co-Chairman
Representative Bill Williams, Co-Chairman
Representative Scott Ogan, Vice Chairman
Representative John Davies
Representative Pete Kott
MEMBERS ABSENT
Representative Alan Austerman
Representative Ramona Barnes
Representative Eileen MacLean
Representative Irene Nicholia
COMMITTEE CALENDAR
*HR 7: Opposing a proposed international convention
classifying coal as a hazardous and noxious material.
MOVED HR 7 OUT OF COMMITTEE
*HB 225: "An Act authorizing the commissioner of fish and game to
issue permits to possess, import, or export African
elephants; and providing for an effective date."
MOVED CSHB 225(RES) OUT OF COMMITTEE
HB 191: "An Act relating to the management and disposal of state
land and resources; relating to certain remote parcel
and homestead entry land purchase contracts and patents;
and providing for an effective date."
HEARD AND HELD
(* First public hearing)
WITNESS REGISTER
NOEL LOWE, Legislative Assistant
Representative Jerry Sanders
State Capitol, Room 414
Juneau, AK 99801
Phone: 465-4945
POSITION STATEMENT: Prime Sponsor HR 7
JOHN SIMS, Vice President of Marketing
Usibelli Coal Mine, Inc.
122 First Avenue, Ste. 302
Fairbanks, AK 99701
Phone: 452-2625
POSITION STATEMENT: Supported HR 7
REPRESENTATIVE VIC KOHRING
Alaska State Legislature
State Capitol, Room 428
Juneau, AK 99801
Phone: 465-2186
POSITION STATEMENT: Prime Sponsor HB 225
KRISTIE LEAF, Legislative Assistant
Representative Vic Kohring
State Capitol, Room 428
Juneau, AK 99801
Phone: 465-2186
POSITION STATEMENT: Answered questions regarding HB 225
ROBERT HALL
P.O. Box 871986
Wasilla, AK 99687
Phone: 892-6555
POSITION STATEMENT: Supported HB 225
WAYNE REGELIN, Acting Director
Division of Wildlife Conservation
Alaska Department of Fish and Game
P.O. Box 25526
Juneau, AK 99802
Phone: 465-4190
POSITION STATEMENT: Supported HB 225
SARA FISHER, Legislative Assistant
Representative Gene Therriault
State Capitol, Room 421
Juneau, AK 99801
Phone: 465-4797
POSITION STATEMENT: Prime Sponsor HB 191
RON SWANSON, Director
Division of Land
Department of Natural Resources
3601 C Street, Suite 1122
Anchorage, AK 99503
Phone: 762-2692
POSITION STATEMENT: Answered questions regarding HB 191
JERRY LUCKHAUPT, Legislative Counsel
Legislative Legal Services
Legislative Affairs Agency
130 Seward Street, Suite 400
Juneau, AK 99801
Phone: 465-2450
POSITION STATEMENT: Answered questions regarding HB 191
PREVIOUS ACTION
BILL: HR 7
SHORT TITLE: OPPOSE COAL AS HAZARDOUS/NOXIOUS SUBSTNCE
SPONSOR(S): REPRESENTATIVE(S) SANDERS,Bunde
JRN-DATE JRN-PG ACTION
03/15/95 740 (H) READ THE FIRST TIME - REFERRAL(S)
03/15/95 740 (H) RESOURCES
03/31/95 (H) RES AT 08:00 AM CAPITOL 124
BILL: HB 225
SHORT TITLE: ELEPHANT PERMIT
SPONSOR(S): REPRESENTATIVE(S) KOHRING BY REQUEST,Barnes,Willis
JRN-DATE JRN-PG ACTION
03/03/95 564 (H) READ THE FIRST TIME - REFERRAL(S)
03/03/95 565 (H) STATE AFFAIRS, RESOURCES
03/10/95 713 (H) COSPONSOR(S): WILLIS
03/17/95 791 (H) STA REFERRAL WAIVED
03/31/95 (H) RES AT 08:00 AM CAPITOL 124
BILL: HB 191
SHORT TITLE: MANAGEMENT OF STATE LAND AND RESOURCES
SPONSOR(S): REPRESENTATIVE(S) THERRIAULT
JRN-DATE JRN-PG ACTION
02/22/95 448 (H) READ THE FIRST TIME - REFERRAL(S)
02/22/95 448 (H) RESOURCES, FINANCE
03/15/95 741 (H) SPONSOR SUBSTITUTE INTRODUCED-
REFERRALS
03/15/95 741 (H) READ THE FIRST TIME - REFERRAL(S)
03/15/95 741 (H) RESOURCES, FINANCE
03/22/95 (H) RES AT 08:00 AM CAPITOL 124
03/22/95 (H) MINUTE(RES)
03/29/95 (H) RES AT 08:00 AM CAPITOL 124
03/29/95 (H) MINUTE(RES)
03/31/95 (H) RES AT 08:00 AM CAPITOL 124
ACTION NARRATIVE
TAPE 95-44, SIDE A
Number 000
The House Resources Committee was called to order by Co-Chairman
Green at 8:11 a.m. Members present at the call to order were
Representatives Green, Williams, Ogan, and Davies. Members absent
were Representatives Austerman, Barnes, Kott, MacLean, and
Nicholia.
CO-CHAIRMAN JOE GREEN announced the committee will hear HR 7, due
to a witness needing to leave, hear HB 225, go back to HR 7 and
then finish with HB 191.
HRES - 03/31/95
HR 7 - OPPOSE COAL AS HAZARDOUS/NOXIOUS SUBSTANCE
NOEL LOWE, LEGISLATIVE ASSISTANT, REPRESENTATIVE JERRY SANDERS,
PRIME SPONSOR, stated if there are no immediate questions for him,
he would like to go to teleconference since Mr. Sims has to leave
shortly.
JOHN SIMS, VICE PRESIDENT OF MARKETING, USIBELLI COAL MINE, INC.,
testified via teleconference and stated he is also a member of the
Board of Directors of the U.S. Coal Exporters Association. He
expressed support for HR 7. He said HR 7 pertains to an issue
pending with the International Maritime Organization (IMO) which
seeks to include coal as a hazardous and noxious material in the
Hazardous and Noxious Substance (HNS) Convention, which has treaty
status. He told committee members the U.S. coal industry,
including the Alaska Coal Association and Usibelli Coal Mine, are
strongly opposed to the inclusion of coal in the HNS Convention and
the reasons are compelling.
MR. SIMS said the first reason is the IMO HNS Convention on the
Prevention of Pollution from Ships does not classify coal as a
hazardous material subject to that particular treaty. Second, the
IMO HNS Convention for the Safety of Life at Sea does not list coal
as a hazardous material. Third, coal is excluded from the
International Maritime Dangerous Goods Code. Fourth, the U.S.
Coast Guard does not list coal in its schedule of hazardous
maritime pollutants as published in the Federal Register of
November 5, 1992. He stated there is no evidence that coal has
created hazardous situations or pollution in the maritime
environment and along coast lines.
MR. SIMS stressed the message is quite clear--do not fix something
which does not need fixing. To forge ahead and ignore that advice
would be detrimental to the coal industry and unwarranted. He
stated in passing HR 7, the legislature will be sending a strong
message for the coal industry and the U.S. (indiscernible)
currently involved in drafting the U.S. position and to the
treaties. He said excluding coal is the ideal objective. He
pointed out if eventually a hazardous and noxious convention
emerges and comes before the U.S. Senate for ratification, Usibelli
would continue to urge the U.S. Senate to reject such a treaty.
Number 107
MR. SIMS stated in regard to the current status of agencies within
the U.S. Administration which are involved in the framing of the
U.S. position, the opinions seem to be divided. He said the
Department of Justice, the U.S. Coast Guard, and the U.S. State
Department are inclined to favor some form of inclusion of coal in
the treaty. The U.S. Department of Commerce, the Department of
Energy, and the Maritime Administration within the Department of
Transportation favor exclusion of coal. He noted that reportedly,
the U.S. Trade Office also favors exclusion of coal. He reiterated
that the official U.S. position is currently being formulated.
Therefore, the legislature's action through HR 7 could help sway
the outcome of that position. He urged committee members to pass
HR 7.
CO-CHAIRMAN GREEN noted that Alaska's coal is good because its only
real problem is water content and in some cases, high ash. He
noted Alaska's coal is extremely low sulphur. He wondered if HR 7
will pick up a lot of extra baggage because of some of the high
sulphur coal produced in other parts of the country, which is
ultimately shipped through the Maritime Service. He asked if there
was any merit in trying to exclude Alaska coal only or coals of
that quality or is this a matter of all or nothing.
MR. SIMS replied it is a matter of all or nothing. He said even
with the more elevated concentrations of sulphur, the potential for
slowly leaking sulphur or sulfuric acid into a maritime environment
is minimal. He stated Representative Green makes a good
observation that Alaska's coal is significantly more benign than
others. He pointed out the Cook Inlet has a high concentration of
coal in its sediments.
CO-CHAIRMAN GREEN stated the committee would come back to HR 7.
HRES - 03/31/95
HB 225 - ELEPHANT PERMIT
Number 200
REPRESENTATIVE VIC KOHRING, PRIME SPONSOR, stated HB 225 is the
Moxie the elephant bill. He said Moxie is an elephant who resides
in the Palmer area. A resolution was passed by the legislature
last year in support of Moxie and the predicament he is in. He
told committee members Moxie's predicament is he has a temporary
educational permit which has allowed him to stay in Alaska but it
is only temporary. He noted that Moxie has been given subsequent
permits over time but now is under his last permit. If a permanent
solution is not found, Moxie will have to leave the state this
summer.
(Representative KOTT joined the committee.)
REPRESENTATIVE KOHRING stated Moxie has broad support from all over
the state. He noted that Moxie is owned by James Clements from
Palmer who has a business, and is trying to establish an Alaska
circus. Moxie is an important part of that effort. He said he
introduced HB 225 to provide a mechanism for a commercial
exhibition permit for elephants as opposed to a temporary
educational permit. He pointed out that current law and
regulations do not provide for a commercial exhibition permit of
elephants in Alaska allowing them to stay in the state on a year-
round basis.
REPRESENTATIVE KOHRING said HB 225 establishes a safe and
reasonable method for permitting elephants to stay in Alaska as
long as the elephant meets the statutory requirements contained in
HB 225 and other criteria the Alaska Department of Fish and Game
(ADF&G) commissioner may establish. He stated he and his staff
have worked closely with the ADF&G in developing the language in HB
225.
Number 254
REPRESENTATIVE SCOTT OGAN asked if it would be acceptable to add an
amendment which would require a health permit for any elephant
coming into the state.
REPRESENTATIVE KOHRING said he did not have a problem with that
suggestion. He felt the issue should be discussed with a
representative from the ADF&G.
REPRESENTATIVE JOHN DAVIES noted an amendment has been included in
committee members folders which deletes the word "African" in HB
225. He asked Representative Kohring if he supports the amendment.
REPRESENTATIVE KOHRING replied he has no problem with the
amendment.
KRISTIE LEAF, LEGISLATIVE ASSISTANT, REPRESENTATIVE VIC KOHRING,
stated in regard to Representative Ogan's question, a health permit
is currently required for elephants coming into the state. She
said when an elephant is coming into the state, the Department of
Environmental Conservation (DEC) is in touch with the veterinarian
in the state where the elephant is coming from and under the U.S.
Department of Agriculture Animal Health and Welfare Act, the
elephants require a current health certificate. She noted those
certificates are required currently when circus elephants come into
the state. She explained HB 225 does not affect that requirement.
She pointed out that HB 225 does allow the ADF&G commissioner to
assess any additional health requirements.
CO-CHAIRMAN GREEN asked if HB 225 would allow elephants to come
from another country instead of another state, and if so, would a
health permit also be required.
MS. LEAF replied if an elephant is going to be imported, the
elephant is required to have the import permit from the DEC and the
state veterinarian in Palmer has to certify the elephant has its
required papers.
REPRESENTATIVE OGAN said he asked the question because disease was
an issue with the Board of Game.
Number 334
REPRESENTATIVE DAVIES asked why there is a limitation to commercial
exhibition on page 1, line 9.
MS. LEAF responded currently the ADF&G issues an educational permit
and there is a system set up for that permit in regulation.
Currently, zoo elephants, circus elephants, Moxie, etc., are being
permitted under the educational permit, when in fact that is not
their intended use. She noted the Board of Game has also directed
the ADF&G to develop a temporary commercial permit system in
regulation to better suit permits for circus elephants. She added
the educational permit system would remain in place and HB 225
would add a commercial permit system.
REPRESENTATIVE DAVIES wondered what permit would be issued if a
person wanted to have an elephant as a private pet.
MS. LEAF stated HB 225 does not affect the clean list whatsoever.
She said the language was proposed for exhibiting animals
commercially to avoid a large number of elephants coming into the
state for any purpose. She stated Representative Kohring would not
object to changing HB 225 to allow individuals wanting to have an
elephant and who meet the requirements to be able to have one.
Number 400
ROBERT HALL, WASILLA, testified via teleconference and expressed
support for HB 225. He stated Moxie is an experienced performing
elephant who has performed in thousands of performances throughout
the U.S. He said it has been very frustrating because Alaska is
one of few states in the U.S. that does not have provisions in
current statutes to allow Moxie to reside in the state permanently.
He noted what is attractive about Moxie is that in Alaska, children
do not get the opportunity to touch, feel, smell, and ride an
African elephant. He reiterated Moxie is popular throughout the
state.
MR. HALL said as a business owner, he has employed Moxie to give
rides to children and adults. Last year, thousands of free
elephant rides were given. He stressed HB 225 is not just helping
one individual who owns the elephant. He stated the time the
legislature is taking to address the issue will help thousands of
people who enjoy elephants. He noted the Board of Game, despite
tremendous support from the department, did not put elephants on
the clean list because the board did not want to set a precedent
that any exotic animal brought into the state would have to be
added to the clean list.
WAYNE REGELIN, ACTING DIRECTOR, DIVISION OF WILDLIFE CONSERVATION,
ADF&G, said the ADF&G supports HB 225 and does not feel the bill
poses any risks to wildlife in Alaska. He stated HB 225 will solve
a problem for the elephant which already resides in the state.
Without HB 225, the ADF&G does not have the type of permit
necessary.
CO-CHAIRMAN GREEN noted there appears to be safeguards built into
HB 225 which take care of the humanity toward the animal. He
clarified the department is satisfied there are no health risks
involved.
MR. REGELIN replied yes.
REPRESENTATIVE GREEN asked if there are any risks of disease to
other animals if an elephant escapes.
MR. REGELIN responded that is one of the issues he discussed with
elephant breeders in Florida where most elephants in the U.S. are,
and they do not feel there is a problem. He stated Moxie has been
in captivity most of his life and has been tested numerous times.
He said Moxie is disease free. He pointed out the chances of
anyone wanting to bring an elephant to reside in the state
permanently are slim. However, there are federal and DEC laws
which require that any animal brought into the state be safe.
REPRESENTATIVE PETE KOTT made a MOTION to AMEND HB 225 on page 1,
line 2: delete the word "African"; page 1, line 5: delete the
word "African"; and on page 1, line 7, delete the word "African".
REPRESENTATIVE KOTT said this amendment would make the bill all
inclusive to include Indian or Asian elephants.
CO-CHAIRMAN GREEN stated it was his understanding there are many
more domesticated Asian elephants than African elephants.
REPRESENTATIVE GREEN asked if there were any objections to the
motion. Hearing none, the MOTION PASSED.
REPRESENTATIVE OGAN made a MOTION to MOVE CSHB 225(RES) with
attached zero fiscal note out of committee with individual
recommendations.
CO-CHAIRMAN GREEN asked if there were any objections to the motion.
Hearing none, the MOTION PASSED.
CO-CHAIRMAN GREEN announced the committee would go back to HR 7.
HRES - 03/31/95
HR 7 - OPPOSE COAL AS HAZARDOUS/NOXIOUS SUBSTANCE
Number 500
CO-CHAIRMAN GREEN recalled his question to Mr. Sims regarding
possible baggage to HR 7 because it would also be addressing poor
quality coal. He wondered if Mr. Lowe thought there would be a
problem.
MR. LOWE replied he did not. He stated he would explain the tier
structure the proposed IMO treaty would insert coal into. He
thought with that explanation the committee would better understand
why that is not a concern for any type of coal. He said the
current structure was fashioned after an oil insurance-type of
structure which is a post-disaster payment scheme. Currently, the
insurance of materials shipped overseas fall into two tiers. The
first tier is insurance carried by the ship owner or pilot which is
up to a preset, at this time, undetermined level. The second tier
is the tier which would be paid in an event or catastrophe were to
exceed the first tier.
MR. LOWE said the second tier is made up of two levels which
include solid liquids or gases defined as noxious. The second
level within the second tier contains coal, wood chips, ammonium
nitrate, and other less or nontoxic, nonhazardous materials. He
explained currently the first section within the second tier
contributes to a fund that would kick in if a catastrophe exceeded
the first tier. The second level within the second tier is
designed to kick in if, and only if, one of the substances within
that second group were to be involved in an incident which exceeded
the first tier level of insurance coverage.
MR. LOWE pointed out there has never been, in the history of the
transport of coal, an incident which exceeded the first tier level
of insurance.
Number 556
CO-CHAIRMAN GREEN asked if the tiers are based on the materials
likely to get into the environment rather than a dollar amount.
MR. LOWE replied that is correct. He said the tier structure is
post-incident insurance mechanisms to cover personal loss, property
loss, or damage to the environment. He stated within the second
tier, there are two sections and items are classified either in the
first or second section based on their estimated potential damage
and hazardous qualities. He explained the opposition brought
forward in HR 7 is to the inclusion of coal within the second
section of the second tier.
REPRESENTATIVE DAVIES clarified coal would be included in the first
structure of the second tier.
MR. LOWE said within the second tier there are two levels. Coal is
being proposed to be included in the second level of the second
tier.
CO-CHAIRMAN GREEN asked what part of the second level.
MR. LOWE replied there is only one second level. He reiterated
there are two tiers of insurance. The first tier is the liability
of the ship owner. The ship owners are required to carry a certain
amount of liability which as of yet has not been determined. The
second tier includes all of the goods being transported and they
are subdivided within the second tier into a group A and group B.
He stated group A are more hazardous materials and group B are
solid materials which are less toxic, less hazardous, less noxious.
He noted it is proposed that coal be included in the IMO treaty to
be in group B of the second tier.
MR. LOWE reiterated there has never been, in the history of the
transport of coal, an incident that exceeded the first tier. He
felt there is no insurance-wise need at this point for coal to be
included. He said the inclusion of coal is based on the HNS
Hazardous Materials Commission's recommendations. For example, if
there was an incident involving ammonium nitrate, which is in group
B of the second tier, instantly all members of group B would be
determined active and from that date forward, they would be
required to contribute to a fund. Their contribution to the fund
would be determined on a tonnage basis.
MR. LOWE said should any future incidents happen, monies from that
fund would be applied, in excess of the first tier, when the ship
transporter's insurance did not cover it. He stated anything over
tier one would be paid out of the fund. He noted it is believed
that the purpose of the inclusion of coal in group B of the second
tier is because of its large tonnage quantities. He pointed out
this is somewhat of a tonnage-based tax on the coal industry
because of the large amount of coal shipped.
Number 600
REPRESENTATIVE DAVIES clarified once the requirement to contribute
to the fund is activated, then the requirement is in place forever.
MR. LOWE replied that is correct.
REPRESENTATIVE DAVIES clarified the fund would not end no matter
how much money is generated by the fund.
MR. LOWE said there is no mechanism to shut off contributions to
the fund if a certain monetary level is reached. He noted the
contribution to the fund is a per tonnage rate every time the coal
is handled. He stated when the U.S. Department of Energy became
aware of this by Senator Stevens, they concluded there is no
necessity to include coal as a hazardous and noxious material in
group B of the second tier of the IMO treaty.
CO-CHAIRMAN GREEN felt that while support would be gained from all
the coal producing states, there would also be a drag down by the
negativism of the high sulphur and other impurities in coals. He
thought allowing the country to know that Alaska's coal is
nonpolluting as opposed to some that might be would be a good idea.
MR. LOWE said the IMO's Marine Environment Pollution Committee
asked the GESAMP EHS Group (he did not know what the letters stood
for) to evaluate the potential marine pollution hazards from the
discharge of solid bulk cargoes in July 1992 and they evaluated the
hazardous properties of coal. He stated coal was given a zero
rating for bioaccumulation and tainting, hazard to human health
(oral intake and skin contact) and for reduction in amenities. It
was noted: Coal dust may cause mild skin irritation if it comes in
contact with the skin; coal, with regard to damaging living
resources, is not hazardous but it may blanket the bottom of the
sea; and coal, with regard to the reduction of amenities, may be
slightly objectionable but will not interfere with the use of
beaches.
MR. LOWE stated the basic determination for the inclusion of coal
is the large tonnage amount, the personal injury potential in
loading and off-loading that quantity of coal and the potential for
a fire to be started on a ship. He noted it is not that the
sulphur content of coal makes it a noxious mineral, but rather coal
in bulk.
CO-CHAIRMAN GREEN noted coal dust, because of rapid oxidation,
could explode.
REPRESENTATIVE OGAN asked if all countries in the world who ship
coal would be subject to the treaty. He also asked where the money
contributed goes.
MR. LOWE replied all countries who transport coal would be
required, under the IMO treaty, to contribute to the fund which
would begin in the event a catastrophe exceeded the first tier of
the liability. He stated he did not know what bank the money would
be accumulating in. He said the money would go into an insurance
fund that would be utilized if a substance within group B of the
second tier was responsible for the accident that exceeded the
first tier. He noted ammonium nitrate is very explosive and does
present a hazard. Therefore, if ammonium nitrate was involved in
an accident that exceeded the first tier, coal would automatically,
because of its large tonnage, be taxed every time it is loaded and
unloaded to pay for future incidents that will most likely not be
as a result of coal but another substance being transported.
MR. LOWE stressed there is international opposition to the IMO
treaty. He stated there has been a couple of ideas proposed. One
proposal would be to set up a separate appendix for nothing but
coal and make that appendix have a zero rating until coal causes an
accident exceeding the first tier. He noted coal producing
countries, the Alaska Coal Association, and the Coal Export
Association opposed that proposal because insurance rates for coal
would go up due to coal's inclusion in a hazardous and noxious
treaty. He said the cost of coal around the world is going to
rise and the ability to market Alaska coal will be hindered.
Number 682
REPRESENTATIVE OGAN stated it would be interesting to know who the
players are in the proposal to include coal in the treaty and what
their motivation is.
TAPE 95-44, SIDE B
Number 000
MR. LOWE indicated the oil industry does support the treaty as it
currently is written.
REPRESENTATIVE DAVIES recalled Mr. Lowe had stated the tier one
insurance is paid by the ship owners, so presumably the coal
industry contributes to the maintenance of that insurance through
the tonnage paid to ship owners.
MR. LOWE said that is correct.
REPRESENTATIVE DAVIES said one might draw the conclusion that the
industry is paying its fair share of the insurance currently.
MR. LOWE agreed. He felt all people using carriers are
contributing. He noted there is no other organization, worldwide,
that classifies coal as noxious and hazardous. He said this will
be the first time ever that coal has been classified as noxious and
hazardous.
CO-CHAIRMAN BILL WILLIAMS made a MOTION to MOVE HR 7 out of
committee with individual recommendations.
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
HRES - 03/31/95
HB 191 - MANAGEMENT OF STATE LAND AND RESOURCES
CO-CHAIRMAN GREEN stated the committee would be using the committee
substitute (CS) of the sponsor substitute, version F of HB 191 as
its working draft.
SARA FISHER, LEGISLATIVE ASSISTANT, REPRESENTATIVE GENE THERRIAULT,
PRIME SPONSOR, stated she would review the changes from the sponsor
substitute of HB 191 contained in the work draft CS of HB 191,
version F. She said Section 1 reduces the purchaser's expectation
of no further disposals or development in the area. This section
clarifies that when the department determines separation of
residences, they consider the availability of timber, firewood, and
water resources but does not imply a person has exclusive use of
these resources.
Number 199
MS. FISHER stated Sections 2-5 are the same as the sponsor
substitute. She said Section 6 is a technical amendment and is
similar to Section 5 but removes references to staking. She
explained Section 8 is a technical change needed as a result of
Sections 22 and 23. Section 20 is a new section which allows
agricultural land to be sold at true market value by making
preference right to the adjacent agriculture land owners at the
discretion of the department. She noted that Mr. Swanson had
pointed out earlier that mandating the preference right tends to
depress the competition or eliminate the competition altogether,
while unaffected parcels are bid up past appraised value.
MS. FISHER stated Sections 22-23 amend the remote cabin permit
program. She said these permits have never been offered because of
the cost to implement the program. These changes will allow the
department to provide for the sale or lease of state land for
remote recreational cabin sites. She explained sales must be at
fair market value and the purchaser must reimburse the state for
appraisal, survey, and platting costs. She pointed out this change
provides that the term of a lease permit is no more than five
years, which may be renewed for one additional five year period.
During the term of the lease, the permittee may purchase the site
by paying fair market value for the site.
Number 236
MS. FISHER said Section 26 is a new section intended to clarify
that a person holding a shore fisheries permit has the right to
renew that permit. She stated Sections 43 and 44 are technical
changes. She told committee members Sections 45 and 46 are new
sections that amend the homestead entry program. These changes
allow for a person to reside on the homestead land and reimburse
the state for survey and platting, or within five years, pay the
state the fair market value of the homestead at the time of patent
and reimburse the state for the survey. She noted this change
removes the staking and brushing requirements, and references to
"habitable, permanent dwelling."
MS. FISHER stated Section 48 is a new section which clarifies the
state has no obligation to provide services to disposals of state
land, and a disposal does not by itself limit further disposals.
She noted Section 49 contains repealers.
Number 263
REPRESENTATIVE DAVIES noted the language in Section 2 in the
sponsor substitute referring to land banks is being changed and the
work draft now calls it a land disposal program. He felt the use
of the word "program" is inconsistent with the way the word is used
later on in the bill. He thought it made more sense to use the
word "inventory." He wondered if Mr. Swanson had any objections to
using the word "inventory" instead of "program" on page 2, lines 6
and 9. He felt that word works better because it is a list of
objects as opposed to events.
RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF NATURAL
RESOURCES (DNR), testified via teleconference and said he did not
object to the suggested change.
MS. FISHER stated if Mr. Swanson does not have a problem with those
changes, then the sponsor probably will not either. She thought
the word "program" was used in order to conform with the planning
process the DNR has used for the past ten years.
MR. SWANSON said Ms. Fisher's comments are correct. The department
goes through the land planning process which creates the inventory.
Once the inventory has been developed, then the inventory goes into
the disposal program and actual disposal. He stated while changing
the word "program" to "inventory" does not create any heartburn, he
really felt "program" would be the better word because the
inventory had been created in the planning process already.
Number 304
REPRESENTATIVE DAVIES thought it was confusing to talk about a list
of lands as a program. He felt the word "program" means a
prescription of things to do or a process.
CO-CHAIRMAN GREEN wondered if there was any merit to having the
words inventory/program or does that further confuse the issue.
MR. SWANSON thought the words "inventory and/or program" might be
better.
REPRESENTATIVE DAVIES stated page 7, lines 6-8, in the work draft
CS of HB 191, version F, pertains to the disposal of land and where
the auction sale should be located. He said he understood the
arguments as to why the commissioner should have some discretion as
to where the disposals are held. However, he felt as a matter of
policy, the legislature should be suggesting to the commissioner
that wherever it is practicable, the auction should be in a
community near where the land is being sold or disposed of.
REPRESENTATIVE DAVIES expressed concern that by changing the word
"shall" to "may" on line 7, that policy intent is lost. He felt
the same discretion on the part of the commissioner could be
effectuated while leaving the policy intent in place by keeping the
word "shall" and then on line 8, inserting the words "unless the
commissioner issues a written finding that it is impractical." He
felt that change would allow the commissioner to find in certain
cases that it is not practical to have an auction in an area close
by but would leave the general intent to hold the auctions close to
the actual land being sold.
Number 356
MR. SWANSON stated the history of this section is that previously
it was required that the applicant and the department appear, in
person, in the location where the land was going to be disposed of.
He said the Superior Court ruled that requirement was
unconstitutional. He explained the idea behind this section is why
make the state spend a lot of money to appear in a particular
community if the applicant is not required to be there for all
types of disposals. He pointed out the department would certainly
hold an outcry auction in the community where the land is being
sold, but he saw no point in the state appearing if the disposal is
going to be a sealed bid or a lottery and the applicant is not
required to be there.
REPRESENTATIVE DAVIES noted he knows it is the department's intent
to hold outcry auctions in the communities. His concern is the
language contained in Section 14 does not explicitly suggest that
intent.
MR. SWANSON suggested adding that only outcry auctions be held in
the location where the land is to be sold.
CO-CHAIRMAN GREEN wondered how many times auctions get submissions
from people not in attendance.
MR. SWANSON stated outcry auctions are normally only held for
agricultural sales and usually the person or a representative of
the person is always present.
CO-CHAIRMAN GREEN asked if the word "may" would cause the
department to not do business as usual except for streamlining it.
MR. SWANSON replied the word "shall" is currently in the statute
and the department is required to appear. He said the word "may"
is much better for the department as it streamlines it and will
provide a cost saving.
REPRESENTATIVE DAVIES asked how the disposal of land is handled for
homesites.
MR. SWANSON responded homesites are always done by lottery.
REPRESENTATIVE DAVIES questioned how the public becomes aware of
homesite disposals.
MR. SWANSON replied the homesite disposals are advertised in all
major newspapers in the state at least once, sometimes up to four
times. The department also has a land disposal sale brochure which
is available to the public through department offices and some
libraries across the state. He said the department also uses
public service announcements on radio and television where
possible.
REPRESENTATIVE DAVIES asked how does a person enter the lottery.
MR. SWANSON stated within the sale brochure there is an application
which the person can mail in, along with the $10 entry fee.
Number 412
REPRESENTATIVE DAVIES asked Mr. Swanson how he would feel about
changing lines 6-8 to read, "An outcry auction sale shall be held
in a community that is near the land to be sold or disposed of."
MR. SWANSON stated that language is fine. He said that is
certainly what the department would do.
REPRESENTATIVE DAVIES made a MOTION to AMEND the work draft CS of
HB 191, version F, on page 7, lines 6-8, delete the current
sentence and rewrite it to read, "An outcry auction sale shall be
held in a community that is near the land to be sold or disposed
of."
CO-CHAIRMAN GREEN announced there is no quorum present.
REPRESENTATIVE DAVIES stated on page 9, lines 13-15, of the work
draft CS of HB 191, version F, it says "If more than one Alaska
resident qualifies for a first option under this section,
eligibility for the first option shall be determined by lot and the
option must be exercised on the conclusion of the public auction."
He asked in that instance, what happens if the person who wins the
lot does not choose to exercise it.
MR. SWANSON replied the next person in line would assume the role.
Number 469
REPRESENTATIVE DAVIES said in Section 21, page 9, the definition of
adjacent says, "a tract of land has a common boundary or corner to
presently held land or is separated from the presently held land
only by a physical barrier such as a road or stream." He stated
there is also another configuration of land where the boundaries
could be touching but not satisfy this definition. He told
committee members to imagine two squares where one corner of one
square is touching the center of the side of the other square. He
noted they would be touching each other but would not have a corner
in common nor would they have a line segment in common. He pointed
out he has seen land actually divided up that way.
REPRESENTATIVE DAVIES suggested the problem with the definition
could be fixed by changing lines 21-23, on page 9, of the work
draft CS of HB 191, version F, to read "adjacent" means that a
tract of land has at least one common boundary point with presently
held land or is separated from the presently held land only by a
physical barrier such as a road or stream."
MR. SWANSON stated that language is fine. He added that he did not
read the current language as common boundary or common corner but
rather read it to say common boundary or corner touching.
CO-CHAIRMAN GREEN said if everyone could picture a square with a
diamond sitting on top of it--adjacent at the north boundary but
not at the corner.
REPRESENTATIVE DAVIES asked Mr. Swanson if he has any problem with
the suggested change in language.
MR. SWANSON replied no.
REPRESENTATIVE DAVIES referring to line 23, page 9, asked if there
is going to be a problem if there is a stream paralleled by a road.
MR. SWANSON responded no.
Number 515
REPRESENTATIVE DAVIES asked on page 10, line 6, of the work draft
CS, version F, why the words "lease permit" is used. He wondered
if the word "permit" could be eliminated.
MR. SWANSON replied yes. He said there must have been an error in
the rewrite.
REPRESENTATIVE DAVIES thought the language should say "cabin site
lease" throughout Section 23. He said wherever the language says
"permit", it should say "lease" and where it says "permittee", it
should say "lessee". He wondered if Mr. Swanson had any problem
with those suggested changes.
MR. SWANSON said no. He stated the section had just been drafted
the day previous and some technical changes still need to be made.
REPRESENTATIVE DAVIES said his next question was in regard to page
10, line 21, of the work draft CS of HB 191, where it gives the
director the discretion to invite applications. He wondered what
assurance is there a public notice will be given.
MR. SWANSON replied the language refers to a disposal of land.
Therefore, the state Constitution requires public notice.
REPRESENTATIVE DAVIES asked what the purpose is of line 21, on page
10, changing the word "shall" to "may." He thought it might be
redundant since the department does that anyway. He thought the
line was there to perhaps set up the next sentence.
MR. SWANSON stated the department advertises a given area sale
which may be open to shore fishery leases. Within that given area,
the department does not necessarily say how many leases will be
issued. Therefore, the department is trying to make the language
discretionary. He said the department will tell the public that
the department will be issuing leases or a lease within a given
area but only certain people can qualify. He wondered why the
department would want to advertise for applications or invite
applications if people do not qualify.
REPRESENTATIVE DAVIES reiterated he does not understand how the
discretionary invitation works.
CO-CHAIRMAN GREEN clarified if in fishery site A, a preference is
given to the existing permittee or lessee and if the department had
to go to the expense of publicly inviting applicants, yet fishery
site A is still going to have a preference, the question becomes is
there any merit to continuing the process just to establish a fair
market value.
MR. SWANSON said that is correct.
CO-CHAIRMAN GREEN said if there is no other person wanting the
permit or lease or if there are others who want it but the existing
permittee or lessee wants it, would the department under a "may" go
ahead and publicly invite to try and get a fair market value
established or would the department have other means to determine
what the fair market value is.
MR. SWANSON replied the department does not currently use a fair
market value for shore fishery leases. The department can only get
what it costs to administer the program. He said the change on
line 21, page 10, will allow the department to have the discretion
to get fair market value. He was not sure how the department would
do that, but added there are several options.
CO-CHAIRMAN GREEN clarified having the word "shall" in the language
would assist the department in establishing a fair market value or
since the lease or permit is going to the person who currently has
it anyway should the person want it, "may" still might be a
preferable word to avoid an unnecessary notification to the public,
when none of the public is going to have a chance at the lease or
permit anyway, unless the owner does not want to come up with the
fair market value.
MR. SWANSON said that is correct.
Number 610
REPRESENTATIVE DAVIES clarified the public invitation for
applications, in some cases, is an additional step the department
would go through to establish the fair market value.
MR. SWANSON replied that is correct and added that the department
may go through.
REPRESENTATIVE DAVIES stated his next question is in regard to page
18, lines 14-17, of the work draft CS of HB 191, version F. He
asked someone to explain the changes contained in the language.
TAPE 95-45, SIDE A
Number 000
MS. FISHER replied Section 32 of the sponsor substitute clarifies
the department can allow livestock grazing, commercial berry
picking or mushroom harvesting, and similar minimal-value
consumptive uses by issuing permits, an authority the Department of
Law recently questioned.
MR. SWANSON stated that is correct. The Department of Law said if
a person removes a resource in any way, a lease has to be issued,
not a permit. He said the language Representative Davies has asked
about allows the department to do some basic things under the
permit process which are not so time consuming. For example, after
a forest fire, mushrooms come up and people like to harvest them.
He explained because the mushrooms are harvested, the department
would have to issue a lease and by the time the lease is issued,
the mushrooms would be long gone.
REPRESENTATIVE DAVIES asked if all the repealers in Section 49 are
conforming to other things done in the bill and also questioned if
there is anything substantive in the repealers.
MR. SWANSON stated the intent was to not do anything substantive
but just conform to everything else in the bill.
Number 063
JERRY LUCKHAUPT, LEGISLATIVE COUNSEL, LEGISLATIVE LEGAL SERVICES,
LEGISLATIVE AFFAIRS AGENCY, stated Mr. Swanson is correct to a
certain extent. He said many of the repealers are necessitated by
changes made in the bill. He explained there are a few repealers
that work on their own which were requested by the department such
as the removal of the requirement for bonding. He noted the
repealers were all a part of the original bill.
REPRESENTATIVE DAVIES asked if there are any other substantive
things in the repealers.
MR. LUCKHAUPT replied AS 38.05.040 is the bonding requirement. AS
38.05.035(e)(6)(F) removes the requirement for a written finding
before a public hearing related to a production license issued
under AS 38.05.207 which is a change necessitated by the repeal of
AS 38.05.027, which was necessitated by the oil and gas changes
made last year. He said the AS 38.057 changes are reflected by
changes made to AS 38.05.057 in the bill. The changes to AS
38.05.855 and AS 38.05.856 are not necessarily reflected by things
going on in the bill but relate to the fact that AS 38.05.855 and
AS 38.05.856 are repeals of the aquatic farm sites program--the
identification program the commissioner must go through in the
tideland land use permits for aquatic farming.
REPRESENTATIVE OGAN made a MOTION to ADOPT CSSSHB 191(RES), version
F.
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
Number 150
REPRESENTATIVE DAVIES noted for the record he still has concerns on
page 2 about the distinction between program and inventory.
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSSHB 191(RES) on
page 7, line 6, insert "outcry" after "An" and delete ", a". On
line 7, page 7, delete "lottery sale, or a disposal of land for
homesites may" and insert the word "shall". He said lines 6-8
would now read, "An outcry auction sale shall be held in a
community that is near the land to be sold or disposed of."
MS. FISHER said the proposed amendment might pose a conflict with
Section 15.
MR. LUCKHAUPT stated an outcry auction is not defined anywhere in
statute. Therefore, a term is going to be contained in the bill
which is not defined anywhere. Secondly, in Section 15, sections
are being repealed which require the presence of bidders at auction
sales. He thought maybe Mr. Swanson had an idea of how these two
sections could be put together to accomplish Representative Davies'
purpose.
MR. SWANSON said he did not have an idea how to accomplish
Representative Davies' purpose. He stated he understands his
concerns. He noted the department would do what he is suggesting
anyway, but he was not sure how to put that in statute.
REPRESENTATIVE OGAN clarified that Section 15 is for sealed bids.
Number 206
MR. SWANSON replied the department does two different types of
auctions. The majority of the auctions are sealed bids but
occasionally the department does an outcry auction.
REPRESENTATIVE OGAN asked if it is most cost effective to do a
sealed bid auction.
MR. SWANSON responded yes. He stated sealed bids are normally what
the department does.
REPRESENTATIVE DAVIES WITHDREW his MOTION.
REPRESENTATIVE DAVIES made a MOTION to AMEND CSSSHB 191(RES) on
page 9, line 21, delete "a" and insert "at least one"; delete "or"
and insert "point". On line 22, page 9, delete "corner to" and
insert "with". He said the line would read "(2) "adjacent" means
that a tract of land has at least one common boundary point with
presently held land or is separated from the presently held land
only by a physical barrier such as a road or stream."
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
REPRESENTATIVE DAVIES made a MOTION to CONCEPTUALLY AMEND CSSSHB
191(RES), page 10, lines 6-16, deleting the word "permit"
everywhere it appears in Section 23 and where appropriate
substitute the word "lease." He added where the word "permittee"
appears, change it to the word "lessee."
MR. LUCKHAUPT said he understood the sense of the amendment and
would make the changes.
REPRESENTATIVE DAVIES thought line 6, page 10, would read better if
it said "cabin site lease".
CO-CHAIRMAN GREEN noted there was no quorum present.
REPRESENTATIVE DAVIES WITHDREW his motion.
ADJOURNMENT
There being no further business to come before the House Resources
Committee, Co-Chairman Green adjourned the meeting at 9:53 a.m.
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