Legislature(2005 - 2006)BELTZ 211

04/22/2005 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HB 184 am Out of Committee
Bills Previously Heard/Scheduled
Moved HB 229 Out of Committee
Moved SB 171 Out of Committee
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         April 22, 2005                                                                                         
                           1:32 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Gary Stevens, Chair                                                                                                     
Senator Bert Stedman                                                                                                            
Senator Thomas Wagoner                                                                                                          
MEMBERS ABSENT                                                                                                                
Senator Johnny Ellis                                                                                                            
Senator Albert Kookesh                                                                                                          
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 171                                                                                                             
"An Act amending the National  Petroleum Reserve - Alaska special                                                               
revenue fund;  and establishing the  Special Legislative  Oil and                                                               
Gas NPR-A  Development Impact Review  Committee and  defining its                                                               
powers and duties."                                                                                                             
     MOVED SB 171 OUT OF COMMITTEE                                                                                              
HOUSE BILL NO. 229                                                                                                              
"An Act relating to the reinstatement of Native corporations;                                                                   
and providing for an effective date."                                                                                           
     MOVED HB 229 OUT OF COMMITTEE                                                                                              
HOUSE BILL NO. 184 am                                                                                                           
"An Act relating to firearms."                                                                                                  
     MOVED HB 184 am OUT OF COMMITTEE                                                                                           
SENATE BILL NO. 179                                                                                                             
"An Act relating to the taxation of mining property; relating to                                                                
contracts approved by municipalities for payments in lieu of                                                                    
taxes; and providing for an effective date."                                                                                    
     HEARD AND HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 171                                                                                                                  
SHORT TITLE: NPR-A COMMUNITY GRANT PROGRAM                                                                                      
SPONSOR(s): SENATOR(s) WILKEN                                                                                                   
04/12/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/12/05       (S)       CRA, FIN                                                                                               
04/20/05       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
04/20/05       (S)       Heard & Held                                                                                           
04/20/05       (S)       MINUTE(CRA)                                                                                            
BILL: HB 229                                                                                                                  
SHORT TITLE: REINSTATEMENT OF NATIVE CORPORATIONS                                                                               
SPONSOR(s): REPRESENTATIVE(s) FOSTER                                                                                            
03/22/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/22/05       (H)       CRA, FIN                                                                                               
03/31/05       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
03/31/05       (H)       Moved Out of Committee                                                                                 
03/31/05       (H)       MINUTE(CRA)                                                                                            
04/01/05       (H)       CRA RPT 4DP                                                                                            
04/01/05       (H)       DP: LEDOUX, SALMON, OLSON, THOMAS                                                                      
04/04/05       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/04/05       (H)       Moved Out of Committee                                                                                 
04/04/05       (H)       MINUTE(FIN)                                                                                            
04/05/05       (H)       FIN RPT 8DP 1NR                                                                                        
04/05/05       (H)       DP: HAWKER, HOLM, WEYHRAUCH, STOLTZE,                                                                  
                         MOSES, FOSTER, MEYER, CHENAULT;                                                                        
04/05/05       (H)       NR: KELLY                                                                                              
04/08/05       (H)       TRANSMITTED TO (S)                                                                                     
04/08/05       (H)       VERSION: HB 229                                                                                        
04/11/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/11/05       (S)       CRA, STA                                                                                               
04/20/05       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
04/20/05       (S)       Heard & Held                                                                                           
04/20/05       (S)       MINUTE(CRA)                                                                                            
BILL: HB 184                                                                                                                  
SHORT TITLE: MUNICIPAL FIREARM ORDINANCES                                                                                       
SPONSOR(s): REPRESENTATIVE(s) CHENAULT                                                                                          
02/28/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/28/05       (H)       CRA, JUD                                                                                               
03/22/05       (H)       CRA RPT 3DP 1DNP 3AM                                                                                   
03/22/05       (H)       DP: SALMON, NEUMAN, OLSON;                                                                             
03/22/05       (H)       DNP: CISSNA;                                                                                           
03/22/05       (H)       AM: LEDOUX, KOTT, THOMAS                                                                               
03/22/05       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
03/22/05       (H)       Moved Out of Committee                                                                                 
03/22/05       (H)       MINUTE(CRA)                                                                                            
04/01/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/01/05       (H)       Moved CSHB 184(JUD) Out of Committee                                                                   
04/01/05       (H)       MINUTE(JUD)                                                                                            
04/05/05       (H)       JUD RPT CS(JUD) 6DP 1NR                                                                                
04/05/05       (H)       DP:    KOTT,     GRUENBERG,    ANDERSON,                                                               
                         DAHLSTROM, COGHILL, MCGUIRE;                                                                           
04/05/05       (H)       NR: GARA                                                                                               
04/11/05       (H)       BEFORE THE HOUSE                                                                                       
04/13/05       (H)       TRANSMITTED TO (S)                                                                                     
04/13/05       (H)       VERSION: HB 184 AM                                                                                     
04/14/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/14/05       (S)       CRA, JUD                                                                                               
04/22/05       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
BILL: SB 179                                                                                                                  
SHORT TITLE: MINERALS TAX/PAYMENTS TO MUNIS IN LIEU                                                                             
SPONSOR(s): SENATOR(s) THERRIAULT                                                                                               
04/18/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/18/05       (S)       CRA, FIN                                                                                               
04/18/05       (S)       CRA AT 2:00 PM BELTZ 211                                                                               
04/18/05       (S)       Heard & Held                                                                                           
04/18/05       (S)       MINUTE(CRA)                                                                                            
WITNESS REGISTER                                                                                                              
Senator Gary Wilken                                                                                                             
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Sponsor SB 171                                                                                           
Senator Donny Olson                                                                                                             
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Asked the committee to wait to hear from                                                                 
communities before acting on SB 171                                                                                             
Kathy Ashby, Administrator                                                                                                      
P.O. Box 148                                                                                                                    
City of Nuiqsut 99789                                                                                                           
POSITION STATEMENT:  Testified on SB 171                                                                                      
Paul Labolle                                                                                                                    
Staff to Representative Richard Foster                                                                                          
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Available for questions on HB 229                                                                        
Erich DeLand                                                                                                                    
Staff to Representative Mike Chenault                                                                                           
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 184 for sponsor                                                                            
Brian Judy, Alaska Liaison                                                                                                      
National Rifle Association (NRA)                                                                                                
POSITION STATEMENT: Supported HB 184.                                                                                         
Jennifer Yuhas, Executive Director                                                                                              
Alaska Outdoor Council                                                                                                          
P.O. Box 73902                                                                                                                  
Fairbanks, AK 99709                                                                                                             
POSITION STATEMENT:  Supported HB184                                                                                          
Cherrie Ruesch                                                                                                                  
POSITION STATEMENT:  Supported HB184                                                                                          
Shannon Day                                                                                                                     
Bethel Resident                                                                                                                 
POSITION STATEMENT:  Supported HB184                                                                                          
Ashlee Mcdougal                                                                                                                 
Houston Resident                                                                                                                
POSITION STATEMENT:  Supported HB184                                                                                          
Victoria Coan                                                                                                                   
Wasilla Resident                                                                                                                
POSITION STATEMENT:  Supported HB184                                                                                          
Heidi Shephard                                                                                                                  
Fairbanks Resident                                                                                                              
POSITION STATEMENT:  Supported HB184                                                                                          
Sasha Ruesch                                                                                                                    
Chugiak Resident                                                                                                                
POSITION STATEMENT:  Supported HB184                                                                                          
Benjamin Smith                                                                                                                  
Eagle River Resident                                                                                                            
POSITION STATEMENT:  Supported HB184                                                                                          
Justin Shattuck                                                                                                                 
Chugiak Resident                                                                                                                
POSITION STATEMENT:  Supported HB184                                                                                          
Kathie Wasserman                                                                                                                
Policy and Program Coordinator                                                                                                  
Alaska Municipal League                                                                                                         
216 Seward Street                                                                                                               
Juneau, AK 99801                                                                                                                
POSITION STATEMENT:  Testified on HB 184                                                                                      
Scott Hammon                                                                                                                    
Kenai Resident,                                                                                                                 
POSITION STATEMENT:  Testified on HB 184                                                                                      
Cary Graves, Attorney                                                                                                           
City of Kenai                                                                                                                   
210 Fidalgo Ave., Ste 200                                                                                                       
Kenai, AK 99611                                                                                                                 
POSITION STATEMENT:  Testified on HB 184                                                                                      
Denny K. Weathers                                                                                                               
POSITION STATEMENT:  Spoke in support of HB 184                                                                               
Senator Gene Therriault                                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Sponsor of SB 179                                                                                        
Al Clough, Deputy Commissioner                                                                                                  
Department of Commerce, Community & Economic Development (DCCED)                                                                
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT:  Testified on SB 179                                                                                      
Steve Van Sant, State Assessor                                                                                                  
Department of Commerce, Community & Economic Development (DCCED)                                                                
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT:  Available for questions on SB 179                                                                        
Mr. Fueg                                                                                                                        
Placer Dome Representative                                                                                                      
POSITION STATEMENT:  Reiterated support for SB 179                                                                            
Pat Schlicting                                                                                                                  
Delta Junction Resident                                                                                                         
POSITION STATEMENT:  Spoke in opposition to SB 179                                                                            
ACTION NARRATIVE                                                                                                              
CHAIR  GARY  STEVENS called  the  Senate  Community and  Regional                                                             
Affairs  Standing  Committee  meeting  to order  at  1:32:39  PM.                                                             
Present were Senators Stedman, Wagoner, and Chair Gary Stevens.                                                                 
              SB 171-NPR-A COMMUNITY GRANT PROGRAM                                                                          
CHAIR GARY STEVENS announced SB 179 to be up for consideration.                                                                 
1:33:06 PM                                                                                                                    
SENATOR  GARY  WILKEN, Sponsor,  distributed  a  map to  indicate                                                               
community  proximity  to  oil  &  gas  drilling  and  exploration                                                               
activity in the National Petroleum Reserve - Alaska.                                                                            
With  regard to  Ms.  Burke's earlier  challenge questioning  the                                                               
authority and  latitude of the  Legislature to analyze,  rank and                                                               
fund grants  to communities, he  said the  bill is on  course and                                                               
does  just  what Judge  Carpeneti  told  the Legislature  to  do.                                                               
[Susan  Burke  testimony, 4/22/05  SCRA  hearing  on SB  171]  He                                                               
acknowledged she had  several good suggestions and  they would be                                                               
incorporated in the Finance Committee.                                                                                          
He  asked the  committee  to  pass the  bill  on  to the  Finance                                                               
Committee where it is already scheduled pending referral.                                                                       
CHAIR GARY STEVENS noted the bill has two fiscal notes.                                                                         
1:36:23 PM                                                                                                                    
SENATOR DONNY OLSON said his  district includes the NPR-A and his                                                               
perspective is different than the  sponsor's. Because a number of                                                               
legal  questions  were raised  during  the  previous hearing,  he                                                               
asked  the committee  to  take  no action  until  it receives  an                                                               
opinion from  the attorney  general. It makes  sense to  wait and                                                               
get detailed  answers to  some of the  legal questions  that were                                                               
raised because the issue has  a history of legal questions. Also,                                                               
it's important to  wait and hear about the impacts  to the people                                                               
that are  living in  the communities. That's  difficult to  do on                                                               
short notice when the whaling/subsistence time is near.                                                                         
He pointed out that in the  past, the people from the North Slope                                                               
have partnered with  the State of Alaska and  the successful vote                                                               
on ANWAR  bears witness to  that. He suggested  that relationship                                                               
would  be strained  if the  Legislature were  to meddle  with the                                                               
impact money that  goes to these communities. He  noted there was                                                               
already  one lawsuit  challenging the  impacts to  the area  that                                                               
went in favor of the plaintiffs.                                                                                                
Impact  means  different  things  to different  people  and  it's                                                               
shortsighted to  simply look at  well locations to  determine the                                                               
impact  on the  North  Slope  and in  the  NPR-A. He  distributed                                                               
several  maps  of  the  area  showing  that  active,  trial,  and                                                               
abandoned oil and gas wells  are located throughout the NPR-A and                                                               
seismic activity  crisscross the  entire region.  Certainly these                                                               
maps indicate impact to the land  and to the animals that live on                                                               
the land, he said.                                                                                                              
A  map showing  current  and  proposed oil  and  gas lease  areas                                                               
indicates that  leases are  reaching farther  to the  west, which                                                               
makes  it clear  that  the  impact isn't  in  just the  northeast                                                               
corner. The impact is spread  throughout the NPR-A area. Although                                                               
rivers and streams  aren't shown, he estimated that  at least 100                                                               
fish and caribou  camps operate in the area  and seismic activity                                                               
would definitely impact the people and animals in the area.                                                                     
Noting  that  the  sponsor  had already  scheduled  the  bill  in                                                               
another committee, he asked members  to recognize the people that                                                               
are impacted and  to wait to hear from them  before taking action                                                               
on the bill.                                                                                                                    
1:45:45 PM                                                                                                                    
SENATOR  THOMAS WAGONER  said he  would  like to  hear about  the                                                               
positive impacts.                                                                                                               
SENATOR OLSON  said he  didn't want to  give the  impression that                                                               
all the  impact is  negative. As the  sponsor pointed  out, there                                                               
are  more positive  impacts to  the  activity in  the NPR-A  than                                                               
negative. People going  up to the NPR-A do business  when they go                                                               
through  Fairbanks  and as  a  result,  there  are more  jobs  in                                                               
1:47:08 PM                                                                                                                    
SENATOR BERT  STEDMAN asked if  the residents in the  area derive                                                               
benefit from the activity in the  NPR-A in terms of improved jobs                                                               
and better lifestyles.                                                                                                          
SENATOR OLSON  said he doesn't know  if there are more  jobs, but                                                               
speaking as a physician, the  lifestyle of Native and non-Natives                                                               
in the area has improved.                                                                                                       
The sponsor  questioned the  merit of using  funds for  the small                                                               
boat launch ramp in Wainwright, but  it does make sense, he said.                                                               
As seismic  activity increases and  the caribou are  driven away,                                                               
the  area  residents   need  to  venture  farther   up  river  to                                                               
subsistence  hunt.  That's  why   the  launch  ramp  facility  is                                                               
reasonable  even  though  it's  a   long  way  from  the  closest                                                               
SENATOR WAGONER suggested the new  type of seismic activity might                                                               
not affect calving season as much as it has in the past.                                                                        
SENATOR OLSON reiterated  it's a good idea to wait  and hear from                                                               
area residents.                                                                                                                 
1:52:03 PM                                                                                                                    
KATHY ASHBY,  City Administrator, City of  Nuiqsut, reported that                                                               
the council members were sending  a letter. She applauded Senator                                                               
Olson for  taking such a strong  and loyal stand for  people from                                                               
the  North  Slope  Borough  and for  understanding  many  of  the                                                               
She  remarked that  it's ironic  how very  well informed  Nuiqsut                                                               
people  are if  they want  to be.  Industry has  meetings in  the                                                               
community on  a regular basis  to explain  what and how  they are                                                               
doing.  Residents are  very involved  and frequently  voice their                                                               
opinions regarding how they will be impacted.                                                                                   
Although  some argue  that the  bill  opens NPR-A  funds so  that                                                               
people that  don't live in the  NPR-A can apply for  them, that's                                                               
already being  done, she  said. The  North Slope  Borough applies                                                               
for funds on behalf of villages not all of which are in NPR-A.                                                                  
As   a   city  administrator   with   a   background  in   public                                                               
administration,  her  personal  contention is  with  the  runaway                                                               
engine  that   DCCED  has  in  administering   grant  funds.  Her                                                               
interpretation  of federal  law  and state  statute  is that  the                                                               
compact is for DCCED to  administer funds to impacted communities                                                               
on behalf of NPR-A. What has  happened in Nuiqsut is anything but                                                               
that.  She likened  the community  to  a stepchild  to the  North                                                               
Slope Borough. She said "It would  take me days to compile all of                                                               
the grants  that have been taken  away from it and  been given to                                                               
the North Slope  Borough." If Nuiqsut realized  anything that was                                                               
instructive or  contributed to  local self-sufficiency  or strong                                                               
local  government,  one  might   remain  silent  with  the  award                                                               
process. However,  that process  seems to  have been  onerous and                                                               
heavy handed.                                                                                                                   
CHAIR GARY  STEVENS asked her  to make certain her  comments were                                                               
directed to the bill under consideration.                                                                                       
MS. ASHBY  said the bill  would take  the authority to  grant the                                                               
NPR-A  awards  from  DCCED.  Another   review  process  would  be                                                               
established  with   a  six  member  committee   and  the  finance                                                               
committees  would  make the  final  award.  She lauds  that  idea                                                               
because, in  her opinion, DCCED  isn't doing a credible  job. The                                                               
current grant  process won't  stand the  light of  day if  a good                                                               
audit were conducted.                                                                                                           
She  applauded  Senator  Wilken for  introducing  the  bill,  but                                                               
cautioned against going too far.                                                                                                
1:59:17 PM                                                                                                                    
SENATOR WAGONER  noted there was  a transportation  proposal last                                                               
year  to  build a  bridge  and  he  was  curious where  that  was                                                               
SENATOR OLSON told  him it would cross the  Coleville River south                                                               
of Nuiqsut.                                                                                                                     
2:00:22 PM                                                                                                                    
CHAIR  GARY STEVENS  referenced  page 3,  lines  19-21 and  asked                                                               
Senator   Wilken   for   clarification  regarding   whether   the                                                               
recommendations had gone through the full legislative process.                                                                  
SENATOR WILKEN acknowledged it  might need further clarification.                                                               
The  intent and  the way  the system  works is  that the  special                                                               
committee recommendations will go  to the full Finance Committees                                                               
and be incorporated into the capital budget.                                                                                    
SENATOR WAGONER  asked what  the procedure would  be if  the bill                                                               
moves to  finance. With regard  to Senator Olson's  suggestion he                                                               
noted  that during  the  interim, hearings  pertaining  to SB  85                                                               
would be  held on the  North Slope.  Dealing with the  two issues                                                               
during the same timeframe might be advantageous.                                                                                
SENATOR WILKEN said  his intention is to get the  bill to finance                                                               
where he  will make a  presentation and get input.  Decisions are                                                               
required  regarding what  the Legislature  wants to  do with  the                                                               
existing  $24 million  in grants,  he said.  He didn't  intend to                                                               
move the bill out of finance this year.                                                                                         
2:05:30 PM                                                                                                                    
SENATOR WAGONER  motioned to  report SB  171 and  attached fiscal                                                               
notes  from  committee  with  individual  recommendations.  There                                                               
being no objection, it was so ordered.                                                                                          
CHAIR  GARY STEVENS  said he  had been  asked to  do a  roll call                                                               
vote. The  motion carried 3  to 0 with Senators  Stedman, Wagoner                                                               
and Chair Gary Stevens voting yea.                                                                                              
CHAIR GARY STEVENS called a brief recess at 2:06:46 PM.                                                                       
          HB 229-REINSTATEMENT OF NATIVE CORPORATIONS                                                                       
CHAIR GARY STEVENS  announced HB 229 to be  up for consideration.                                                               
He noted  the committee heard  the bill previously and  asked Mr.                                                               
Labolle why the bill comes back so frequently.                                                                                  
2:08:23 PM.                                                                                                                   
PAUL LABOLLE,  Staff to Representative Richard  Foster, explained                                                               
that  as  village  Native corporations  rotate  leadership,  some                                                               
incoming leaders neglect  to fulfill all the  legal and financial                                                               
requirements  to  keep  the corporations  in  good  standing.  He                                                               
clarified   that   this   doesn't  apply   to   regional   Native                                                               
2:09:51 PM                                                                                                                    
SENATOR THOMAS  WAGONER motioned  to report  HB 229  and attached                                                               
fiscal notes from committee with individual recommendations.                                                                    
CHAIR  GARY  STEVENS asked  for  a  roll  call vote.  The  motion                                                               
carried  3 to  0 with  Senators Stedman,  Wagoner and  Chair Gary                                                               
Stevens voting yea.                                                                                                             
            HB 184 AM -MUNICIPAL FIREARM ORDINANCES                                                                         
CHAIR GARY STEVENS announced HB 184 to be up for consideration.                                                                 
Erich DeLand, Staff for  Representative Mike Chenault, introduced                                                               
HB 184 saying  the intent is "to ensure that  citizens be able to                                                               
look  to one  law as  the  single and  final authority  regarding                                                               
firearm  regulation." It  will guarantee  consistency in  firearm                                                               
laws within Alaska.                                                                                                             
2:11:44 PM                                                                                                                    
BRIAN  JUDY,  Alaska  State Liaison  for  the  National  Rifleman                                                               
Association  (NRA), urged  support  for HB  184. The  legislation                                                               
would broaden  and strengthen the  existing statute.  Current law                                                               
narrowly  limits   local  municipalities'  ability   to  restrict                                                               
firearms in  two areas. First  is the  right to own  or possesses                                                               
firearms within a residence and  the second is the transportation                                                               
of  unloaded firearms  in  a vehicle.  Under  current law,  local                                                               
municipalities can impose any other restrictions.                                                                               
Existing law  would allow restrictions  in those  two affirmation                                                               
categories if  approved by  the voters.  The NRA  doesn't believe                                                               
that's  right. The  fundamental constitutional  rights of  even a                                                               
minority of the people should not  be restricted by a majority of                                                               
voters at some  point in the future should they  decide that they                                                               
want to support such a restriction.                                                                                             
HB 184  would standardize  all the  firearms laws  throughout the                                                               
state  based  on  current  and future  statutes  enacted  by  the                                                               
Legislature. It would  void any ordinances that are  more or less                                                               
restrictive than  state law.  He emphasized  it would  not lessen                                                               
the existing body of state or federal laws.                                                                                     
The problem with  local firearm ordinances is that  they create a                                                               
complex patchwork of differing laws,  which is unfair to citizens                                                               
because they are  at risk of violating laws that  can vary widely                                                               
from community to community.                                                                                                    
Currently 45  states deal with  the problem of  patchwork firearm                                                               
laws by  having firearm  preemption laws  on the  books. Alaska's                                                               
firearm  preemption law  is now  among  the weakest  and the  NRA                                                               
believes it should be strengthened and broadened.                                                                               
2:15:05 PM                                                                                                                    
SENATOR  BERT   STEDMAN  asked   how  many   municipalities  have                                                               
ordinances that are more restrictive than the state's.                                                                          
MR.  JUDY replied  he could  speak to  that with  respect to  one                                                               
specific issue. The Legislature  passed legislation two years ago                                                               
repealing the requirement that a person  hold a permit to carry a                                                               
firearm   concealed   for    self-protection.   Currently   eight                                                               
municipalities have laws that require permits.                                                                                  
Some municipalities would oppose the  bill based on the fact that                                                               
their  municipal  ordinances  would  be  overturned.  Except  for                                                               
carrying  concealed firearms,  he  believes  most ordinances  are                                                               
consistent  with state  law.  There's a  state  law dealing  with                                                               
firearms in  schools and  a state  law restricting  possession of                                                               
firearms in  bars. The  bill was  amended on  the House  floor to                                                               
allow municipalities to enact discharge ordinances.                                                                             
The NRA  is concerned about what  could happen in the  future and                                                               
wants to prevent  future passage of restrictive  gun control laws                                                               
on the local level.                                                                                                             
2:17:36 PM                                                                                                                    
JENNIFER  YUHAS,  Executive   Director,  Alaska  Outdoor  Council                                                               
(AOC), echoed  Mr. Judy's  testimony and  noted she  sent written                                                               
testimony  to the  committee. The  AOC enthusiastically  endorses                                                               
the bill,  which would more fully  recognize the constitutionally                                                               
guaranteed right to own firearms.  Furthermore it would eliminate                                                               
confusion  for   law-abiding  citizens   and  remove   the  undue                                                               
pressures of the already extended enforcement authorities.                                                                      
2:18:53 PM                                                                                                                    
CHERRIE RUESCH,  Chugiak resident, said  she trains 4-H  youth in                                                               
shooting  sports and  the consistency  provided by  HB 184  would                                                               
help 4-H clubs as they  expand their shooting educations programs                                                               
She  would  no longer  have  to  worry  about knowing  all  local                                                               
firearm ordinances  when she travels  to other communities  to do                                                               
SENATOR  THOMAS  WAGONER  questioned  how  many  4-H  clubs  have                                                               
shooting programs.                                                                                                              
MS.  RUESCH  replied  not  every 4-H  club  works  with  firearms                                                               
because  not all  firearms  instructors  are comfortable  working                                                               
with youths.                                                                                                                    
SENATOR WAGONER  asked what the  requirements are for a  youth to                                                               
get a hunting license.                                                                                                          
MS.  RUESCH replied  those born  after  1986 must  take a  hunter                                                               
safety course.                                                                                                                  
2:21:19 PM                                                                                                                    
SHANNON DAY, Bethel resident, spoke in support of the bill.                                                                     
ASHLEE MCDOUGAL, Houston resident, spoke in support of the bill.                                                                
VICTORIA COAN, Wasilla resident, spoke in support of the bill.                                                                  
HEIDI  SHEPHARD,  Fairbanks resident,  spoke  in  support of  the                                                               
SASHA RUESCH, Chugiak resident, spoke in support of the bill.                                                                   
LUKE ENGVALL, Kodiak resident, spoke in support of the bill.                                                                    
BENJAMIN SMITH,  Eagle River  resident, spoke  in support  of the                                                               
JUSTIN SHATTUCK, Chugiak resident, spoke in support of the bill.                                                                
2:28:11 PM                                                                                                                    
KATHIE  WASSERMAN, Public  Policy  Coordinator, Alaska  Municipal                                                               
League (AML), said AML had  reservations with the bill related to                                                               
the word  "use" but that  appears to  be resolved with  the House                                                               
amendment.  Hopefully,  the   word  "reasonable"  doesn't  become                                                               
similarly problematic.  She though AML discomfort  would cease as                                                               
long as  municipalities are able  to prohibit the firing  of arms                                                               
within certain areas of the municipality.                                                                                       
CHAIR GARY  STEVENS summarized that  AML is comfortable  with the                                                               
House  amendment  to  allow  municipalities   to  deal  with  the                                                               
discharge of firearms within municipal boundaries.                                                                              
MS.  WASSERMAN   replied  she  believes  AML   would  remove  its                                                               
objection as long as the House amendment is in the bill.                                                                        
2:30:06 PM                                                                                                                    
CHAIR GARY STEVENS opened teleconference testimony.                                                                             
SCOTT HAMMON, Kenai resident, testified  that the bill is prudent                                                               
and reasonable.                                                                                                                 
CARY  GRAVES,  Attorney,  City   of  Kenai,  testified  that  his                                                               
testimony  is  similar  to  Ms.  Wasserman's.  The  city  has  an                                                               
ordinance   that  prohibits   the   discharge   of  firearms   in                                                               
residential areas,  but allows it  in non-residential  areas. The                                                               
concern with  the original version  of HB  184 was that  it would                                                               
repeal the  ordinance. The House  floor amendment  alleviates the                                                               
concern   by  allowing   municipalities  to   provide  reasonable                                                               
restrictions on  the discharge of  firearms. He urged  members to                                                               
keep the amended language in the bill.                                                                                          
DENNY K. WEATHERS, spoke in support  of HB 184 and noted she also                                                               
faxed her testimony to the committee.                                                                                           
CHAIR GARY STEVENS noted there was no further testimony.                                                                        
2:34:23 PM                                                                                                                    
SENATOR WAGONER motioned to report  HB 184 AM and attached fiscal                                                               
notes from committee with individual recommendations.                                                                           
CHAIR GARY  STEVENS asked  for a  roll call  vote. The  motion to                                                               
move HB 184 AM carried 3  to 0 with Senators Stedman, Wagoner and                                                               
Chair Gary Stevens voting yea.                                                                                                  
         SB 179-MINERALS TAX/PAYMENTS TO MUNIS IN LIEU                                                                      
CHAIR GARY STEVENS announced SB 179 to be up for consideration.                                                                 
2:35:07 PM                                                                                                                    
SENATOR THERRIAULT,  Sponsor, said he  wanted to give  members an                                                               
update  on the  ongoing discussions,  which address  the concerns                                                               
voiced by various entities.                                                                                                     
He clarified  that the intent  is that only the  state assessor's                                                               
office would  do the assessment  for the  full and true  value of                                                               
the  mining  property  that  would   be  subject  to  tax  in  AS                                                               
43.67.010. He would work with  legislative legal to clear up that                                                               
There is no intent that any area  that is annexed remain at the 4                                                               
mil rate.  The intent is  that if a borough  forms or an  area is                                                               
annexed into  an existing borough,  the mill rate  would increase                                                               
by 2 mills to a cap of 6  mills. That too would be addressed with                                                               
modified language.                                                                                                              
He  said  that  language  on  page  6,  lines  16-17  also  needs                                                               
modification  to  make  it  clear   that  property  used  in  the                                                               
production of  minerals is  subject to taxation.  The idea  is to                                                               
tax  the  economic  activity  associated   with  the  mining  and                                                               
production of the  ore. He submitted language to  the drafters to                                                               
clarify that point.                                                                                                             
2:38:12 PM                                                                                                                    
The  major  question  is  whether   the  bill  leaves  sufficient                                                               
flexibility  to  allow an  area  to  incorporate while  providing                                                               
certainty for  the purpose of  securing financing for  very large                                                               
projects. He mentioned that the  Donlin Project infrastructure is                                                               
likely to amount to more than $1 billion.                                                                                       
In reviewing  the taxes  levied around the  state, he  found that                                                               
the total mill  rate levied against mines is  single digit. Often                                                               
it  is complemented  with some  other sort  of revenue  base. The                                                               
Northwest Arctic  Borough is  an exception in  that a  payment in                                                               
lieu  of taxes  is  paid  and the  Fairbanks  North Star  Borough                                                               
levies  a  double digit  property  tax  against Fort  Knox.  It's                                                               
primarily the  Railbelt areas  that tax at  the higher  rate, but                                                               
it's also there that higher-level services are provided.                                                                        
Another  issue is  the  level  of services  provided  by a  given                                                               
municipality.  Although   the  Railbelt   municipalities  provide                                                               
services such as water, sewer,  garbage, roads, and police & fire                                                               
protection, they don't necessarily  provide those services in all                                                               
parts of the borough. The City  and Borough of Juneau divided the                                                               
roaded  and  non-roaded  areas  of  the  borough  into  different                                                               
service areas  and they are  taxed differently. The  Greens Creek                                                               
Mine and  the prospective  Kensington Mine are  taxed at  a lower                                                               
rate of 6.6 mills in recognition  of the fact that fewer services                                                               
are provided.                                                                                                                   
He suggested the  bill strikes a reasonable  balance. Although he                                                               
is very willing  to work with others to  resolve differences, the                                                               
reality  is  that  if  some  certainty isn't  given  to  the  tax                                                               
consequences and  tax load going  forward, some  mineral deposits                                                               
won't be developed.                                                                                                             
2:42:42 PM                                                                                                                    
AL   CLOUGH,  Deputy   Commissioner,   Department  of   Commerce,                                                               
Community   and   Economic    Development   (DCCED),   said   the                                                               
department's   first   reaction   is  that   the   proposal   has                                                               
considerable merit and it thanks  the sponsor and industry groups                                                               
that worked on  the legislation. That being  said, several issues                                                               
merit attention.                                                                                                                
The  sponsor spoke  to  the  issue of  the  state assessor  being                                                               
involved and  the department  would concur.  The bill  deals with                                                               
three areas and DCCED is statutorily involved with all three.                                                                   
First is the role of the  state assessor. The issue of assessment                                                               
fairness  and  statewide  valuations  is important  and  will  be                                                               
discussed as the bill moves foreword.                                                                                           
Second, because DCCED  has a community role  through the Division                                                               
of  Community  Advocacy,  statutory restrictions  on  what  would                                                               
normally be  the powers  of a municipality  are of  concern. It's                                                               
not unusual for a state to  impose on a lower form of government,                                                               
but the department wouldn't want  the legislation to be viewed as                                                               
a  disincentive to  forming regional  governments. Although  they                                                               
don't necessarily see  that it is, the question  is pertinent and                                                               
requires discussion.                                                                                                            
Finally  the  economic development  aspect  is  important to  the                                                               
department.  Adding stability  into a  long-term and  significant                                                               
investment  in a  major mining  project is  a huge  incentive for                                                               
people to come to Alaska and  explore and develop mines that will                                                               
take billion dollar investments.                                                                                                
Each issue is  valid and merits discussion.  The department views                                                               
the bill in terms of an  algebraic equation which is to marry the                                                               
economic development  interest, the  community interest,  and the                                                               
interest  of  the  state  assessor  in  a  fair  tax  regime  for                                                               
everyone. The  department hopes  the equation  can be  solved and                                                               
looks  forward  to   working  with  the  sponsor   to  help  with                                                               
2:46:25 PM                                                                                                                    
CHAIR GARY STEVENS  expressed surprise at the  testimony in terms                                                               
of community  protection. Although  he could understand  the idea                                                               
of  wanting  to  make  sure  that  industry  operates  with  some                                                               
stability,   the   testimony   seems  to   have   abrogated   the                                                               
responsibility of caring for and representing communities.                                                                      
MR. CLOUGH replied he didn't intend to give that impression.                                                                    
CHAIR GARY STEVENS  said the issue as he sees  it is to encourage                                                               
industry, while  dealing with the  constitutional mandate  to try                                                               
to  get the  entire state  into organized  boroughs. You  glossed                                                               
over that, he said.                                                                                                             
MR. CLOUGH replied  he didn't intend to do  that. Furthermore, he                                                               
could  state that  the department  has had  considerable internal                                                               
discussion  on whether  or not  this  bill would  be contrary  to                                                               
borough government  formation. That  is a  major concern  of both                                                               
the commissioner  and the  department. He meant  to say  that the                                                               
local government  has a legitimate  concern and  DCCED recognizes                                                               
and acknowledges  that. From  the department's  perspective, they                                                               
hope the  local government concern, the  development concern, and                                                               
the assessor concern  can be melded and that  the agreement makes                                                               
2:48:24 PM                                                                                                                    
STEVE VAN SANT said he was  available to answer questions, but he                                                               
had no testimony.                                                                                                               
CHAIR GARY  STEVENS expressed surprise  that he had  no testimony                                                               
since  this is  a  major issue  with  enormous repercussions.  He                                                               
noted the memo in the  packets clarifying the value estimates for                                                               
the Tanana Basin Borough and asked for comment.                                                                                 
MR. VAN  SANT, State Assessor, Department  of Commerce, Community                                                               
&  Economic  Development  (DCCED),   explained  the  memo  is  an                                                               
estimate of  value for the  proposed Upper Tanana  Basin Borough.                                                               
He issued it  in response to requests to use  values the assessor                                                               
has established for  REAAs. Those estimates were  based on models                                                               
that were built in the office  and they haven't been in the field                                                               
to check how much property is there.                                                                                            
For the last  year they have been working in  the Delta/Tok area.                                                               
They built  over 200 value  models to  come up with  an estimated                                                               
value of  the proposed  borough. The  summary page  memo reflects                                                               
the total estimate. He mentioned there  is a value in the summary                                                               
for  the Pogo  Mine because  they  had little  paperwork for  the                                                               
value. They  used the  estimate from  the mine  representative of                                                               
total expected  expenditure, which is  about $250 million.  As of                                                               
2005 they  were about 50  percent complete  so 50 percent  of the                                                               
value was used.  If the borough were to form,  the assessor would                                                               
conduct  a  detailed inspection  and  analysis  of the  books  to                                                               
derive an estimated  value. That was done with the  Red Dog Mines                                                               
in the Northwest Arctic Borough.                                                                                                
2:51:19 PM                                                                                                                    
CHAIR GARY STEVENS asked Mr. Fuge  with Placer Dome if he had any                                                               
Mr.  Fuge  said  he  had  no comments  other  than  to  reiterate                                                               
industry support for the bill.                                                                                                  
2:52:13 PM                                                                                                                    
PAT SCHLICTING,  Delta Junction resident, spoke  in opposition to                                                               
SB  179  saying it  isn't  good  for Alaska,  existing  boroughs,                                                               
unorganized areas, or  communities considering borough formation.                                                               
The tax  amount offered is  paltry and  the terms locking  in the                                                               
proposed  tax   rate  for  15   years  are   reprehensible.  This                                                               
represents corporate greed by primarily foreign companies.                                                                      
The  terms set  forth would  stifle  growth in  new boroughs  and                                                               
create  disparate  tax  rates  between  existing  and  developing                                                               
boroughs.  Legislators   have  the   responsibility  to   levy  a                                                               
responsible  mining  tax  in  the   absence  of  organized  local                                                               
government. He  suggested a severance  tax would be  fair because                                                               
it would share the risk and the wealth.                                                                                         
When a borough forms, that  responsibility should transfer to the                                                               
municipality along with  the tax dollars generated  by the mining                                                               
assets. He is alarmed by the  suddenness of the bill and the lack                                                               
of public  input that has  been solicited from  constituents. The                                                               
message  is  that  rich  corporations   have  special  access  to                                                               
lawmakers and are allowed to set their own tax rates and terms.                                                                 
2:55:04 PM                                                                                                                    
SENATOR  THOMAS  WAGONER  asked  if   he  is  aware  that  mining                                                               
operations currently  have corporate  taxes, licensing  taxes and                                                               
royalties levied.                                                                                                               
MR.  SCHLICTING said  he is  aware  of the  taxes. He  recognizes                                                               
there is  a cost for  state oversight  and he recognizes  that in                                                               
some instances  playing the tax  game allows  mining corporations                                                               
to pay no state tax.                                                                                                            
SENATOR STEDMAN said  his understanding is that the  tax would be                                                               
at the  true value  of the  tangible property and  not at  a book                                                               
value carried by  the corporation. The state  assessor would make                                                               
the assessment.                                                                                                                 
He  recalled   that  when   industrialized  logging   started  in                                                               
Southeast   Alaska,   the    communities   brought   in   outside                                                               
professional assessors. This structure  appears to be similar and                                                               
the state assessor would place the value.                                                                                       
Putting a  cap on the property  tax or coming up  with some other                                                               
mechanism so industry  will know whether or not to  go forward is                                                               
a positive thing  for the state to do.  A 6 mill tax or  a 4 mill                                                               
tax could  be a  substantial revenue  stream for  the surrounding                                                               
area and he doesn't' agree with the last testimony.                                                                             
2:58:26 PM                                                                                                                    
CHAIR  GARY  STEVENS stated  that  the  bill causes  him  serious                                                               
concern. Mining companies  do require some stability  so they can                                                               
develop, but  if a maximum 6  mill property tax is  locked in, it                                                               
might  be a  disincentive for  borough development.  The question                                                               
requires further discussion  and study and he would  also like to                                                               
hear from the department and the commissioner.                                                                                  
Directing his  comments to the  sponsor, he said  the Legislature                                                               
sits  as  the   assembly  of  the  unorganized   borough  and  he                                                               
questioned  why the  Legislature shouldn't  decide what  level of                                                               
tax  would  be  reasonable  in the  areas  that  develop  mining.                                                               
Certainly  we don't  want to  overtax  the mines,  but it's  this                                                               
committee's responsibility to take care of communities.                                                                         
3:00:35 PM                                                                                                                    
SENATOR THERRIAULT said his intent is  to work with the CRA staff                                                               
on a proposed  committee substitute (CS) to clarify  the issue of                                                               
the  assessing  entity,  depreciation  and  other  questions.  In                                                               
addition, he  would meet with  the commissioner over  the weekend                                                               
to iron out any difficulties.                                                                                                   
Part  of  the  discussion  is complicated  because  the  economic                                                               
activity and level of sophistication  to support local government                                                               
isn't  uniform in  the  unorganized borough.  The  balance is  to                                                               
craft something that not only fits  an area with no services, but                                                               
also  fits  a situation  such  as  the  Pogo  Mine, which  is  on                                                               
Fairbanks North  Star Borough boundary.  It is in  potential play                                                               
for the formation of a borough in the Delta Junction area.                                                                      
With regard  to whether the  suggested millage rate  is adequate,                                                               
he  reminded  members  that  currently  the  projects  that  move                                                               
forward in  the unorganized area  pay nothing. The balance  is to                                                               
have a contribution  and ensure that jobs  and infrastructure are                                                               
SENATOR  STEDMAN  remarked  the   Legislature  could  modify  the                                                               
millage rate if it saw fit.                                                                                                     
SENATOR  THERRIAULT replied  that's  an area  they could  discuss                                                               
with the assessor to make sure the mechanism is adequate.                                                                       
CHAIR GARY STEVENS said his  understanding of the language is for                                                               
a 4 mill tax if the area is  unorganized and a maximum of 6 mills                                                               
if government  forms around the  mine. That rate would  be locked                                                               
in for 15 years.                                                                                                                
SENATOR  THERRIAULT  said  the   Legislature  certainly  has  the                                                               
authority to modify  the legislation, but if  balance is achieved                                                               
legislation that  is reasonable  now will  also be  reasonable in                                                               
the future.                                                                                                                     
SENATOR  STEDMAN pressed  the point  that  the Legislature  would                                                               
have the authority  to change the mill rate  without exposing the                                                               
state to litigation.                                                                                                            
SENATOR  THERRIAULT said  yes,  but to  remember  that state  law                                                               
applies everywhere and millage  rates impact different properties                                                               
very  differently. The  Donlin Creek  Mine  expenditures will  be                                                               
more  that   $1  billion  and   a  low  rate  would   generate  a                                                               
considerable revenue stream. On the  other hand, Pogo will have a                                                               
much smaller infrastructure.                                                                                                    
SENATOR STEDMAN compared the proposal  to the logging industry in                                                               
the  1950s and  1960s in  Southeast  Alaska and  observed that  6                                                               
mills seems  low, but the  ability to  change that exists  if the                                                               
need arises.                                                                                                                    
SENATOR THERRIAULT  remarked the  comparison between  logging and                                                               
oil development  is good. Oil  and gas resources  have tremendous                                                               
value and  although the  North Slope Borough  is remote  and it's                                                               
hard to build infrastructure, the  return on the commodity that's                                                               
produced is so high that no  other resource in the state provides                                                               
the same kind of return for the investment.                                                                                     
SENATOR STEDMAN agreed  with the Chair that  the committee should                                                               
hear from the commissioner and the assessor.                                                                                    
CHAIR  GARY STEVENS  said he  understands there  are negotiations                                                               
going on  with the  Deltana borough  charter commission  and with                                                               
Pogo   Mine   representatives   and  this   would   trump   those                                                               
SENATOR THERRIAULT  pointed out  that they  could form  a borough                                                               
and under  this proposal they  would have a  6 mill tax  cap plus                                                               
the opportunity  for a sales  tax and the Legislature  could talk                                                               
about  whether   or  not   the  15   years  that's   proposed  is                                                               
appropriate. In  the Pogo  area they hope  to find  reserves that                                                               
will extend the life of the mine  and they have done that at Fort                                                               
Knox. Keep  in mind, he said,  we do want the  initial investment                                                               
to be made; we don't want  to discourage the activity from taking                                                               
place at all.                                                                                                                   
3:11:21 PM                                                                                                                    
CHAIR  GARY  STEVENS  noted there  are  ongoing  developments  in                                                               
organized areas  of the state  and local government has  the duty                                                               
of looking  at what benefits  itself in  terms of jobs  while not                                                               
overtaxing to the point that it discourages investment.                                                                         
SENATOR  THERRIAULT  said  when  there's a  local  government  to                                                               
conduct  the debate  that's  one thing,  but  in the  unorganized                                                               
borough  there is  no local  government so  the debate  is taking                                                               
place in the Capitol.                                                                                                           
3:12:33 PM                                                                                                                    
CHAIR GARY STEVENS repeated SB  179 has enormous consequences and                                                               
he  would  hold it  in  committee  to  learn more  before  moving                                                               
forward with a CS.                                                                                                              
There being  no further  business to  come before  the committee,                                                               
Chair Gary Stevens adjourned the meeting at 3:12:51 PM.                                                                       

Document Name Date/Time Subjects