Legislature(1999 - 2000)
04/23/1999 08:07 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 23, 1999
8:07 A.M.
TAPES
SFC-99 #108, Side A & B
SFC-99 #109, Side A & B
CALL TO ORDER
Co-Chair John Torgerson convened the meeting at
approximately 8:07 A.M.
PRESENT
Co-Chair John Torgerson, Senator Randy Phillips, Senator
Dave Donley, Senator Loren Leman, Senator Gary Wilken,
Senator Al Adams, and Senator Pete Kelly.
Also Attending:
SENATOR ROBIN TAYLOR; MEL KROGSENG, Staff, Senator Robin
Taylor; PAT CARTER, Staff, Senator Drue Pearce; SENATOR DRUE
PEARCE; MARY JACKSON, Staff, Senator John Torgerson; LAMAR
COTTON, Deputy Commissioner, Department of Community and
Regional Affairs; ERIC YOULD, Executive Director, Alaska
Rural Electric Association (ARECA), Anchorage; BRETT HUBER,
Staff, Senator Rick Halford; DICK BISHOP, Vice-President,
Alaska Outdoor Council (AOC), Juneau; GERON BRUCE,
Legislative Liaison, Office of the Commissioner, Department
of Fish and Game.
Teleconferenced:
DICK MYLIUS, Resource Assessment & Development, Division of
Lands, Department of Natural Resources, Anchorage; JUDY
BRADY, Executive Director, Alaska Oil and Gas Commission,
Anchorage; CHARLES WALLS, President & CEO, Alaska Village
Electric Coop (AVEC), Anchorage; BRUCE KOVARIK, Executive
Director, Association of Alaska Housing Authority (AAHA),
Anchorage; DICK ENERMAN, Planner, Division of Energy,
Anchorage; BRAD REEVE, General Manager, Kotzebue Electric
Association (KEA), Kotzebue; WALTER SAMPSON, NANA
Corporation, Kotzebue; MIKE SALLEE, Commercial Fisherman,
Ketchikan; LANCE NELSON, Assistance Attorney General,
Natural Resources Section, Civil Division, Department of
Law, Anchorage.
SUMMARY INFORMATION
SB 7-INCREASE LAND GRANT TO UNIV. OF ALASKA
CSSB 7(FIN) was reported out of Committee with a "do pass"
recommendation and with fiscal notes by the Department of
Natural Resources dated 3/5/99, the University of Alaska
dated 1/22/99 and the Department of Fish and Game dated
1/29/99.
SB 68-COOPERATION WITH FEDERAL AGENCIES
SB 68 was HEARD and HELD in Committee for further
consideration.
SB 134-OIL & GAS CONS. COMN./CONSERV. TAX
CSSB 134(FIN) was reported out of Committee with a "do
pass" recommendation and with fiscal notes by the
Department of Revenue dated 4/14/99 and the Department of
Administration dated 4/12/99.
SB 157-POWER COST EQUALIZATION
SB 157 was HEARD and HELD in Committee for further
consideration.
Co-Chair Torgerson called the Senate Finance Committee
meeting to order at approximately 8:08 A.M.
SENATE BILL NO. 7
"An Act relating to the University of Alaska and
university land, and authorizing the University of
Alaska to select additional state land."
CS FOR SENATE BILL NO. 7(RES)
"An Act relating to the University of Alaska and
university land, and authorizing the University of
Alaska to select additional state land."
Senator Robin Taylor spoke to work draft version #1-
LS0072\K, Luckhaupt, 3/24/99. [Copy on File]. He
explained the changes between that version and the one
previously adopted in the Resources Committee. Senator
Taylor advised that the proposed version would be clearer
and easier for everyone to follow.
MEL KROGSENG, Staff, Senator Robin Taylor, commented that
Legal Counsel, Jerry Luckhaupt, had recommended the above
mentioned changes.
Senator Leman MOVED to adopt the "K" version as the
working document before the Committee. There being NO
OBJECTION, it was adopted.
Co-Chair Torgerson advised that Amendments #1 and #2 had
been incorporated into the new committee substitute.
[Copies on File].
Following discussion between Senator Donley and Co-Chair
Torgerson, it was decided that only the bottom portion of
Amendment #3 would be offered. [Copy on File]. That
language would insert: "Must be managed in a manner that
permits the continuation of subsistence, sport hunting and
sport fishing" to the maximum extent possible.
Senator Donley MOVED to adopt that language. Senator Taylor
explained the language had not been inserted because by
listing specific activities, then others are then precluded.
He recommended that rather than listing every conceivable
match, it was the intent to remove specific designations and
merely use; "Continuation of traditional uses of the
land", leaving the category broader. He reiterated that
the language had been intentionally left generic.
Senator Donley agreed with Senator Taylor and suggested that
the concern could be addressed by adding the language:
"Including, but not limited to".
Senator Donley MOVED to WITHDRAW Amendment #3. There being
NO OBJECTION, Amendment #3 was withdrawn.
Senator Adams MOVED to adopt Amendment #4, 1-LS0072\I.2,
Luckhaupt, 3/3/99. [Copy on File]. He stated that there
are statewide municipalities which have not completely
selected their lands.
Senator Taylor countered that there are municipalities
around the State, which over the years have been precluded
from making certain selections either by the Mental Health
Trust Fund litigation or other factors. He recognized that
it is a problem. He added that he was willing to work on a
viable solution to address the concern. Senator Taylor
pointed out that Line #8 of the amendment, stipulates that
the "guts" of the bill would only take effect if each
municipality of the State was in existence on the effective
date of that section. He recommended that a percentage
number be added in order to make the selection process. He
reiterated that he was willing to work on that concern,
however, he felt that the proposed language "went too
far".
Senator Adams MOVED to WITHDRAW Amendment #4. There being
NO OBJECTION, Amendment #4 was withdrawn.
Senator Adams MOVED to adopt Amendment #5. [Copy on File].
Co-Chair Torgerson OBJECTED for the purpose of discussion.
Senator Adams stated that the amendment would clarify that
if the University did not reimburse the Department for
reasonable costs incurred in the selection, platting and
surveying of the land, the Department could not convey the
land to the University of Alaska.
Senator Taylor commented that the situation should be worked
out between the University and the Department of Natural
Resources. Senator Adams argued that the land would not be
available if that portion of the Department of Natural
Resources budget was not addressed for the current year
budget. He stressed the concerns of adequately funding the
Lands Division in FY00.
A roll call vote was taken on the motion.
IN FAVOR: Adams, Phillips, Donley
OPPOSED: Leman, Wilken, P. Kelly, Torgerson
Senator Green and Senator Parnel were not present for the
vote.
The MOTION FAILED (3-4).
DICK MYLIUS, Resource Assessment & Development, Division of
Lands, Department of Natural Resources, Anchorage,
(Testified via Teleconference) offered to answer questions
of the Committee. He pointed out that the Department had
previously testified in opposition to SB 7.
Mr. Mylius testified the Department's concerns are that the
process for identifying the 250,000 acres would be time
consuming, expensive and a contentious process. He pointed
out that the Department had difficulty in identifying land
to constitute the Mental Health Trust and that there was
much public opposition. The Department estimates that it
would cost over $1 million dollars per year to survey and
transfer that land. He reiterated that the Senate Finance
Committee in this year's proposed budget had basically
"gutted" the Division of Lands, the agency responsible to
take the lead in providing this transfer.
Senator Phillips interjected that he "took exception" to
this testimony. Co-Chair Torgerson requested that Mr.
Mylius restrict his testimony to the bill and not the
budgetary actions.
Mr. Mylius continued, the Department has concerned regarding
the impact the proposed bill would have on the
municipalities because over 600,000 acres are currently owed
to the municipalities. The same lands that the University
wants are the ones which municipalities also request. Mr.
Mylius concluded that this bill would create an uncertainty
regarding land ownership in the State of Alaska.
Senator Phillips questioned if zero dollars had been given
to the Division of Lands. Mr. Mylius replied that cuts to
the Division of Lands were approximately at 17%.
Senator Leman MOVED to report CSSB 7(FIN) out of Committee
with individual recommendation and with the accompanying
fiscal notes. There being NO OBJECTION, it was so ordered.
CSSB 7(FIN) was reported out of Committee with a "do pass"
recommendation and with fiscal notes by the Department of
Natural Resources dated 3/5/99, the University of Alaska
dated 1/22/99 and the Department of Fish and Game dated
1/29/99.
SENATE BILL NO. 134
"An Act authorizing the Alaska Oil and Gas
Conservation Commission to determine the amount of and
to collect a charge for operating wells subject to the
commission's jurisdiction, and to allocate expenses of
investigation and hearing, and repealing the oil and
gas conservation tax; and providing for an effective
date."
CS FOR SENATE BILL NO. 134(RES)
"An Act authorizing the Alaska Oil and Gas
Conservation Commission to determine the amount of and
to collect a charge for operating wells subject to the
commission's jurisdiction, and to allocate expenses of
investigation and hearing; repealing the oil and gas
conservation tax; and providing for an effective
date."
PAT CARTER, Staff, Senator Drue Pearce, explained that the
Alaska Oil and Gas Conservation (AOGCG) had been created to
protect the public interest through enforcement of the
Alaska Oil and Gas Conservation Act. The goal of the
Commission is to ensure that no hydrocarbons are wasted and
that operations are conducted in a manner that provides
maximum recovery of the resources. SB 134 repeals the
existing Oil and Gas Conservation Tax and institutes a
stable funding source to assure that the Commission is
capable of carrying out their objectives.
Mr. Carter continued, the original intent of the legislation
was to have the oil and gas industry pay for the function of
the Commission through the Oil and Gas Conservation Tax.
While this system may have been adequate in the past, it no
longer is sufficient to cover the costs associated with the
operation of that Commission. The conservation tax is
directly proportional to production with a four mils per
barrel fee rate. The work of the Commission, however, is
not proportional to the production of oil and gas.
Production is declining but the work of the Commission is
not.
Mr. Carter pointed out that SB 134 would create a program
receipt system in which the regulatory cost charge is
directly associated with the total volume of fluids produced
or injected. This type of system more accurately reflects
with the factors directly associated with the workload of
the Commission. He advised that the Commission had
experienced budget difficulties in the past, even when the
tax proceeds exceeded annual appropriations. He testified
that AOGCC is currently encountering budget difficulties
that are directly related to the decline in oil production.
SB 134 would create a stable funding source that will enable
the AOGCC to provide the monitoring services necessary to
protect the future of Alaskan interests.
Senator Adams inquired if the oil industry supported the
bill. Mr. Carter responded that the oil industry had not
yet spoken with Senator Pearce's office.
Senator Adams requested clarification of changes made in the
Senate Resources Committee. Mr. Carter stated that changes
had been made to the cost allocations. He added that there
had been concerns regarding the past unitization agreements,
which are unforeseen costs that occur throughout the
budgetary year.
Co-Chair Torgerson questioned if any municipal government
would be exempted through Section #5. Mr. Carter did not
know of any exemptions other than those directly related to
SB 134.
Co-Chair Torgerson referenced Page #1, Lines 11-12, which
refers to regulatory charges, paid by the permittee. He
questioned the inclusion of that language: "The ability to
pay". Mr. Carter commented that he did not know why that
language had been included, which had been brought forward
from the AOGCC document. Co-Chair Torgerson asked if the
sponsor would object to removing that language. Mr. Carter
replied that there would be no objection.
Senator Donley MOVED a conceptual Amendment #1, to delete
the above mentioned language on Page #1, Line 12, "ability
to pay".
Mr. Carter noted that there was a committee substitute
available containing the technical corrections made by the
legal department at AOGCC, the "Z" version of the proposed
legislation. Co-Chair Torgerson requested that version be
copied for Committee members.
Senator Donley MOVED to WITHDRAW Amendment #1. There being
NO OBJECTION, Amendment #1 was withdrawn.
JUDY BRADY, Executive Director, Alaska Oil and Gas
Commission, Anchorage, (Testified via Teleconference),
stated that the Commission has reviewed SB 134 and that
comments and concerns were voiced. She emphasized that the
Commission does not support SB 134 because they believe that
the bill would weaken oversight and control over State
taxation and spending. She added that it is critical that
AOGCC maintains its ability to issue permits and decisions
that are required for on-going oil field operations. To
that end, AOGCC recommends that they remain appropriately
funded so to be a fully functional and independent entity.
Ms. Brady informed members that there are concerns with the
funding source and the funding mechanism embodied in SB 134.
All these concerns were conveyed to both the Administration
and the Legislature.
Ms. Brady continued, AOGCC members have concerns with moving
funding from AOGCC general fund appropriation to a non-
general fund category since it would lessen legislative
oversight of the Commission's budget. This legislation
would create a virtually unfunded taxing mechanism. It is
the combination of how the tax would be established to a
regulatory process plus moving to the non-general fund
combination which will be of great concern to the
Commission. She noting that AOGCC was willing and committed
to work with the Legislature during the interim to develop
an appropriate and accountable way to fund AOGCC in the
future.
Senator Phillips viewed the above testimony as inconsistent
with previous recommendations of that Commission. Ms. Brady
replied that there has been a struggle in the State in how
to address non-general funds. She emphasized that moving a
budget would require a different accounting system. The
concern for AOGCC is how the bill proposes to tax so that
the regulatory group can establish the taxes. She pointed
out that AOGCC already pays tax and regulation fees. The
Legislature did not always appropriate the money as it was
competing with other needs. The amount of funds that were
paid to that tax now has declined as the needs have risen.
SENATOR PEARCE explained the change in the funding
mechanism. She noted that there were no complaints from the
industry when that was added; they did not want to pay for
other utilities. The mechanism does charge a portion of the
fees to re-inject the liquids, which definitely differs from
other oil producing states. She indicated that the re-
injection process is a portion of the AOGCC's
responsibility.
Mr. Carter explained the changes made to the Senate
Resources version of the legislation.
TAPE SFC-99 #108 Side B
Senator Leman pointed out that language on Page 2, Lines 15-
22, was very confusing. Mr. Carter replied that the total
volume of liquid would be approximately 3.3 billion. He
further explained the mathematical procedure involved in
determining that number. Senator Leman recognized that it
was intended to be the volumetric procedure of the volume
and he recommended that language be rewritten.
Senator Pearce agreed that section needed further work.
Senator Leman voiced concerns for future litigation with the
current proposed language.
Senator Donley MOVED to adopt work draft version 1-LS0259\V,
Chenoweth, 4/20/99, as the version before the Committee.
There being NO OBJECTION, it was adopted.
Senator Donley MOVED a change to Page 1, Lines 11 and 12,
delete "ability to pay". There being NO OBJECTION, the
change was made to Amendment #1.
Senator Phillips requested that the Department of Revenue
address the proposed fiscal note. Co-Chair Torgerson asked
if Senator Pearce understood the positions for requesting
funds listed in the fiscal note. Senator Pearce stated that
she did not endorse the use of designated receipts. She
emphasized that the bill before the Committee does not
address the supplemental request currently being made.
Senator Pearce added that SB 133 and SB 134 had been
introduced together and that SB 133 would add new funding to
AOGCC. She stated that the bill before the Committee would
staff AOGCC as they currently are.
Senator Phillips voiced his concern regarding the proposed
funding for computer enhancement. Senator Pearce explained
that AOGCC currently resides in an unsafe office in
Anchorage. The employees are concerned about the darkness
that surrounds the building because it is located in an
unsafe neighborhood. If SB 133 passes, the office will be
moving to a different facility. If SB 133 does not pass,
that fiscal note will "fall out" as will the moving costs
associated with the above-mentioned concerns.
Co-Chair Torgerson asked if the capital costs would be added
into the regulatory costs. Senator Pearce believed they
would.
Senator Wilken MOVED to adopt the amended CSSB 134 (FIN).
Senator Adams OBJECTED.
Senator Adams noted that he would not vote for any tax
unless he was presented with a long-range plan.
Co-Chair Torgerson pointed out that the bill would repeal
the tax. Senator Adams stated that was not his
interpretation of the way the bill was written. Co-Chair
Torgerson pointed out the repealler section, AS 43.57 &
10(a) are the tax.
Senator Adams WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered and the bill was moved
from Committee.
CSSB 134(FIN) was reported out of Committee with a "do
pass" recommendation and with fiscal notes by the
Department of Revenue dated 4/14/99 and the Department of
Administration dated 4/12/99.
SENATE BILL NO. 157
"An Act relating to power cost equalization; and
providing for an effective date."
MARY JACKSON, Staff, Senator John Torgerson, reviewed the
bill. She noted that the working group who addressed
concerns of this bill included Senator P. Kelly and Senator
Adams.
Ms. Jackson spoke to the importance of the Power Cost
Equalization (PCE) program to areas of Alaska that are
reliant upon diesel generated power. It is recognized and
that the bill is intended to extend the life of the program
by restructuring some of its components.
The bill would:
* Reduce the current 700 kWh to 350 kWh per month.
* Expand the method of establishing the base rate by
including Kenai and Palmer in the weighted average
retail residential rate which currently only
included Anchorage, Fairbanks and Juneau.
? Restructure the program so that the equalization
rate applies only to residential customers, as
opposed to the current residential and commercial
structure.
? Add new language to the program to ensure that the
rate charged by a PCE utility is not lower than a
rate charged by a non-PCE utility, so to ensure
that a customer who does not receive PCE pays a
higher rate than a customer who does receive a
PCE.
Ms. Jackson provided a sectional analysis of the bill.
Section 1 adds Kenai and Palmer into the statewide average,
which would expand the base of the statewide average.
Section 2 decreases the kilowatt-hours from 700 to 350 for
consumptive use. Section 3 adds Kenai and Palmer into the
statewide average as does Section 1. Section 4 decreases
the kWh from 700 to 350 kWh and restricts it to residential
use. Sections 5 & 6 are housekeeping references to the new
sub Section (j). Section 7 establishes the effective date
of the legislation.
Ms. Jackson referenced the April 22, 1999, Power Cost
Equalization (PCE) spread sheet contained in members
packets. The sheet provides the most recent findings of the
working group. [Copy on File].
Co-Chair Torgerson pointed out that the State has been
funding the current rate, however, the hoped for is 85%
funding. Senator Adams stated that the last supplemental
decreased that number to 78%.
Co-Chair Torgerson asked if the working group had any
recommendations which the full Committee should consider.
[Copy on File]. Ms. Jackson replied that the analysis of
that group was currently before the Committee. She
suggested that it could be approached either from the floor
(9.9 to 10.9 cents/kWh) or raising the ceiling. The working
group approached the situation from both places and the
premise was to have less of an impact on the small Bush
Communities.
Senator Kelly referenced the handout. He explained how the
floor was established including the calculations for Pelican
and Skagway. The group is waiting to determine the actual
cost to the residential consumer. The formula used to
increase the floor and the impact of combining the ceiling
from dropping down would establish the impact on the actual
consumer. He advised that new spreadsheets would be
forthcoming in the following week.
Senator Phillips asked the average residential use per month
in Alaska.
ERIC YOULD, Executive Director, Alaska Rural Electric
Cooperative Association (ARECA), Anchorage, replied that the
average in rural Alaska was 326 kWh. The average kWh usage
in the Railbelt area is 688 kWh. He accessed that rural
Alaska is roughly half of the other areas.
Senator Phillips asked the basic differences between the
rural area and the Railbelt regarding use of electricity.
Mr. Yould pointed out that the Blue Ribbon Commission
gathered profiles as to what the 326 kWh hours would
accomplish. It is very different from urban areas versus
rural Alaska, especially the refrigeration needs are higher.
Senator Wilken requested further clarification of the
spreadsheet. Senator P. Kelly pointed out that the
spreadsheet was not accurate.
Mr. Yould suggested that it would be beneficial to go to the
500 kWh; the 326 kWh is a monthly average and during the
winter months, the usage increases. He stated that there
are individual opportunities throughout the State and that
some of the other systems being investigated are very
costly. The State does have the resources; however, the
problem is an economy of scale. He added that diesel
generation exists but that there is no natural gas in rural
Alaska. Mr. Yould noted that the State is looking for
alternatives but that they are generally capital intensive.
Senator Wilken inquired about diesel efficiency and working
in conjunction with the University. Mr. Yould replied that
ARECA was not working with the University at this time. He
understood that the University was working with Department
of Education with a $2.6 million dollar grant to develop a
fuel cell using diesel power.
Senator Wilken asked if the bill would exclude schools from
PCE participation in the rural areas. Ms. Jackson
acknowledged that it would exclude schools. She noted that
Senator Torgerson had sent a letter to the Department of
Education regarding this concern.
Senator Wilken asked if Mr. Yould was aware of work being
done on fuel cells. Mr. Yould acknowledged that he was
aware of the work which in Anchorage was being funded by
Chugiach Electric. He explained that the problem with fuel
cells is that they are all natural gas and that it is
difficult to distribute natural gas in rural Alaska.
CHARLES WALLS, President & CEO, Alaska Village Electric Coop
(AVEC), Anchorage, (Testified via Teleconference), pointed
out that the statistics being referenced were three years
old. He requested that the cap cut be reconsidered. Mr.
Walls recommended that the Committee carefully scrutinize
Section 7, the new section being added. That section could
result in a village utility in not receiving the Power Cost
Equalization (PCE) which would establish a new floor for all
others. At the present time, the average revenue per
kilowatt-hour for a non-PCE utility is regulated by the
Alaska Public Utility Commission (APUC). He urged that the
bill be reconsidered.
Co-Chair Torgerson asked Mr. Walls to verify that used in
the bill were dated from 1996. Mr. Walls replied that the
handout referred to was the last published statistics
available and was complied in 1996.
Co-Chair Torgerson requested that Mr. Walls fax pertinent
information to the Committee dealing with the proposed bill.
BRUCE KOVARIK, Executive Director, Association of Alaska
Housing Authority (AAHA), Anchorage, (Testified via
Teleconference), testified that the Association supports the
PCE program for residential and community customers. The
State's regional housing authority has developed and
operated home ownership of housing programs for over 7,000
families. He emphasized that the worse case scenario would
be the loss of that program.
TAPE SFC-99 #109 Side A
Mr. Kovarik continued his testimony.
Co-Chair John Torgerson commented that it would take time to
consolidate the State's commitment and that of AAHA. Mr.
Kovarik noted that a certain amount of funding could be
taken from the Native Self-Determination Act and placed into
a PCE fund. That fund would be invested and the interest
generated from the fund would go to PCE.
Co-Chair John Torgerson questioned how to get all parties to
agree. Mr. Kovarik reiterated that the participation in the
plan would have to be voluntary and flexible. The Housing
Authority has investment strategies and cash flow
considerations based upon work to be developed. It would
need to be a plan which allows for the investment of funds.
There are federal requirements and regulations. The hope is
for assistance from the Department of Community and Regional
Affairs.
Co-Chair John Torgerson stressed his intention to move the
bill through the Legislature this session. He commented
that if the Housing Authority was to be used as a potential
funding source, it is important to finalize that commitment.
He was not sure about the possibility of using Alaska
Industrial Development Export Authority (AIDEA) funds.
Senator Randy Phillips questioned if there had been
consideration by the Office of the Governor to use AIDEA
funding. Mr. Kovarik replied that the only comments he had
heard were at press conference regarding the consolidation
of the Department of Commerce and Economic Development and
the Department of Community and Regional Affairs.
DICK ENERMAN, Planner, Division of Energy, Anchorage,
(Testified via Teleconference) offered to answer any
technical questions of the Committee.
Senator Pete Kelly noted that Mr. Enerman would be preparing
a spreadsheet for the Committee's review for the following
week and recommended any suggestions be given to him. Mr.
Enerman detailed the information he had been requested to
present on the spreadsheet. The spreadsheet would indicate
for each of the PCE utilities, an impact of various changes
to the PCE would affect the financial impact.
Co-Chair John Torgerson asked if the average use by month
would be included. Mr. Enerman responded that information
was not available and would not be included. The total
residential kWh under PCE and for each utility and the
number residential customers would be included. The
calculated average annual use per customer could be made
with that information, otherwise, only estimates can be
made.
Co-Chair John Torgerson asked about the data. Mr. Enerman
replied he would be using data from FY96. Data from FY97
and FY98 had not been compiled and examined at present time,
however, if possible, he would use more current information.
Co-Chair Torgerson asked if the data would be more current
than 1986. Mr. Enerman did not believe that it would be
because at this time, that is all which has been published.
Senator Adams asked Mr. Enerman's spreadsheet could indicate
the effect of changing the floor from 9.9 to 10.9. Mr.
Enerman acknowledged that was his intent.
BRAD REEVE, General Manager, Kotzebue Electric Association
(KEA), Kotzebue, (Testified via Teleconference), testified
that having power is an important aspect of the future. He
stated that a flat 350 kWh per month rate would not
adequately recognize the actual use patterns in Alaska.
Mr. Reeve added that KEA has raised two other utility grade
wind turpins in Kotzebue. He suggested that would be the
technology that will benefit rural Alaska. The goal is to
reduce annual diesel consumption by about 300 thousand
gallons annually. The program allowed communities to
maintain power plants while they investigated alternate
power sources that were less expensive. Mr. Reeve
anticipated that diesel would continue to play a large part
of power for communities in the future.
WALTER SAMPSON, NANA Corporation, Kotzebue, (Testified via
Teleconference), voiced his appreciation of the Committee's
effort to address the rural power situation. He restated
the high cost of fuel in rural Alaska and the difficulty in
getting it those remote areas. He pointed out that there
are fears in many communities that power systems will be
shut down. Mr. Sampson urged the Committee to give
communities an opportunity to look at alternative fuel
sources.
Co-Chair John Torgerson noted that the bill would be held in
Committee.
SB 157 was HEARD and HELD in Committee for further
consideration.
SENATE BILL NO. 68
"An Act relating to cooperation with federal programs
relating to management of fish and game."
CS FOR SENATE BILL NO. 68(RES)
"An Act relating to cooperation with federal programs
relating to management of fish and game."
BRETT HUBER, Staff, Senator Rick Halford, testified that the
intent of the proposed legislation is that the State should
not be left with the burden of unfunded federal mandates.
He pointed out that the Court system has agreed with this.
Alaska became a state in 1959. In accordance with the
Statehood Act, Secretary Fred Seaton transferred the fish
and wildlife management responsibilities to the new State in
1960. Since then, Alaskans have witnessed the continued
erosion of their fish and wildlife management authorities.
Mr. Huber pointed out that passage of federal legislation
such as the Marine Mammal Protection Act, the Endangered
Species Act, the Magnuson Fishery Conservation and
Management Act, and the Alaska National Interest Lands
Conservation Act have all contributed directly or
indirectly to the loss of jurisdiction. Mr. Huber
continued, equally important are the administrative actions
and legislative interpretations developed by the various
federal agencies. In a recent transmittal to the
Superintendent of Glacier Bay National Park and Preserve,
Governor Knowles clearly indicated the growing conflict
with the federal agencies.
Mr. Huber commented that the Governor has commented on the
proposed rule to phase out commercial fishing in Glacier Bay
proper and to develop a cooperative management and planning
system for the remainder of the marine waters. The 1998
Congressional amendments to Glacier Bay National Park and
Preserve (NPP) did require cooperation in the development of
a management plan. Mr. Huber pointed out that it was
obvious from the environmental assessment that the agency
would attempt to exercise its prerogative of overriding
State management when the agency decides the necessity to
protect the park "resources and values."
Mr. Huber noted that Alaska's fisheries management has been
more successful than the Federal management it succeeded.
Although most resources are transient to the Park, it is
believed that Alaska will now be required to establish a
much expanded and expensive research and management program
just to satisfy the demands of the National Park Service,
which has taken the form of an unnecessary and unfunded
mandate.
Mr. Huber stressed that there are a growing number of
unfunded mandates associated with the preempted actions of
the federal agencies. On June 6 and 7, 1996, the U.S. Fish
and Wildlife Service released material related to the
implications of Federal Management of Subsistence Fisheries
in Alaska. The document states that two scenarios could
occur for Federal subsistence management.
The first scenario would assume that the State of Alaska
would cooperate with the federal managers, allowing federal
management activities to supplement State management in a
partnership effort. The second scenario assumes that the
State would not cooperate, requiring a complete duplication
of the State system with federal staff to perform all
management. He warned that would be more expensive.
Mr. Huber continued, Congress and the Federal Courts have
made it clear that states should not be faced with unfunded
Federal mandates. During this period of severe State budget
deficits, Mr. Huber noted that it is important that the
Federal government pay its share, especially when it is the
intent to preempt traditional State management of resources.
Mr. Huber advised that the bill would not prohibit the
cooperation of the Federal agencies. It would require that
when Federal actions restrict State management of fish and
game resources, the State would be fully reimbursed for any
action taken in that cooperative effort.
Mr. Huber listed the points of the Alaska National Interest
Lands Conservation Act (ANILCA) unfunded federal mandate.
? To date, the federal preemption under ANILCA of
State fish and game management has been mostly
applied to wildlife.
? State management costs have increased
significantly in an attempt to comply with
federal law.
? ANILCA provided for reimbursement of up to $5
million for 50% of the State's effort to implement
subsistence provisions in law.
? The federal government has never provided over $1
million, despite the fact that the State has
consistently submitted $2.0 to $3.5 million in
reimbursable expenses.
? The reimbursable expenses submitted to the
federal agencies should have been much higher, as
expenses associated with data gathering required
by the Advisory Committees and Regional Boards,
although, they qualified for federal
reimbursement and were never submitted.
? The federal agencies used the State technical
staff as management instructors until they
reached a point of self-sufficiency and technical
independence. This is clearly illustrated by the
areas where State wildlife management decisions
have been preempted by the federal process.
? The federal agencies are now proposing to
duplicate the same process for fisheries.
? To illustrate how much the State is spending to
facilitate federal management, the "Implications
of Federal Management" booklet indicates that it
would cost $9 million dollars to implement with
State cooperation and $31 million dollars to
implement without State cooperation. In other
words, the State is subsidizing the federal
program to the tune of almost $22 million per
year.
Senator Adams questioned if Senator Halford would support
cooperation between the State and the federal government in
the management of the State's fish and game resource. Mr.
Huber believed that Senator Halford did not favor duel
management.
Senator Al Adams questioned if the bill would send a message
to the public that the Legislature has given up on the
possibility of a resolution. Mr. Huber advised that there
are other bills that recognize these issues.
MIKE SALLEE, Commercial Fisherman, Ketchikan, (Testified via
Teleconference), spoke in support of the proposed
legislation. He stated that if there was a federal takeover
that the State should not be required to pay the costs of
operation. Mr. Sallee voiced concern with Section 1(a) and
the viability of the fish and game population.
LANCE NELSON, Assistance Attorney General, Natural Resources
Section, Civil Division, Department of Law, Anchorage,
(Testified via Teleconference), stated that there were
several legal concerns with the proposed legislation. Mr.
Nelson noted that the restriction of cooperation with the
federal government could be unconstitutional and that the
Legislature can not restrict the Executive Branch. He felt
that the Court system would rule the law unconstitutional in
relationship to the separation of power rules.
Mr. Nelson was concerned that the restrictions would
prohibit the State's ability to take legal action against
the federal government for regulations on the management of
fish and game.
DICK BISHOP, Vice-President, Alaska Outdoor Council (AOC),
Juneau, testified that the Council supported the bill. He
stated that a stronger incentive or requirement for
compensation for the State for costs associated with federal
fish and wildlife management agencies is essential.
Mr. Bishop added that even when the State was in compliance
with ANILCA, the federal support that had been authorized by
Congress was not fulfilled. He emphasized that fair
compensation for services rendered are important in this
concern.
GERON BRUCE, Legislative Liaison, Office of the
Commissioner, Department of Fish and Game, testified against
the proposed legislation. He emphasized that it is a "sad
day" when the Department of Fish and Game must testify
before the Legislature on such a bill under consideration.
He qualified that statement, noting that the preference
would be to testify on a solution to prevent such a law.
Mr. Bruce suggested that the way to accomplish that would be
to put the vote before the people.
Mr. Bruce reviewed the intention of the bill. Under SB68,
the federal manager would be prohibited from speaking with
the State manager, unless the agency from which that federal
manager worked, had entered into an agreement to pay the
State judicial costs to cooperate with the federal program.
TAPE SFC-99 #109 Side B
Mr. Bruce voiced concern that the information gathered by
the Department would then be used against it. The
obligation of the Department's activities is a function to
fulfill the constitution mandate for sustained yield
management. He questioned if the State assumes that the
federal managers are going to assume the costs of a
significant portion of the basic State responsibility. Mr.
Bruce stressed that the Department does not believe that
will occur. Under that situation, there are several
possibilities which could happen and that none of them are
good.
Senator Lyda Green voiced her offense with the reference to
the constitutional amendments and the issue of subsistence.
Co-Chair John Torgerson requested Mr. Bruce to direct his
testimony to the proposed legislation. Mr. Bruce stressed
that SB 68 is about subsistence. He noted that the
Department of Fish and Game has urged the Senate Finance
members not to move the bill from Committee. He advised
that such a move would not be of benefit to the Alaska
fishery, resources or the people of the State.
Co-Chair John Torgerson advised that the "sad day" was
when Governor Knowles failed to defend the State of Alaska's
rights issue through the Court System. He believed that was
the "problem".
Co-Chair John Torgerson ordered the bill to be HELD in
Committee.
SB 64 was HEARD and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting adjourned at 10:50 A.M.
SFC-99 (18) 4/23/99
| Document Name | Date/Time | Subjects |
|---|