Legislature(1993 - 1994)

03/24/1993 03:45 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE RESOURCES COMMITTEE                                  
                         March 24, 1993                                        
                            3:45 p.m.                                          
  MEMBERS PRESENT                                                              
  Senator Mike Miller, Chairman                                                
  Senator Loren Leman, Vice Chairman                                           
  Senator Steve Frank                                                          
  Senator Drue Pearce                                                          
  Senator Al Adams                                                             
  Senator Fred Zharoff                                                         
  Senator Dave Donley                                                          
  MEMBERS ABSENT                                                               
  All Members Present                                                          
  OTHER MEMBERS PRESENT                                                        
  Representative Harley Olberg                                                 
  COMMITTEE CALENDAR                                                           
  SENATE BILL NO. 165                                                          
  "An Act making  an appropriation  to the Alyeska  Settlement                 
  Fund and making  appropriations from the  Alyeska Settlement                 
  Fund; and providing for an effective date."                                  
  SENATE BILL NO. 153                                                          
  "An Act relating to the exchange of certain fish for seafood                 
  products,  custom  processing of  certain  fish, and  use of                 
  certain fish for charitable purposes."                                       
  SENATE BILL NO. 159                                                          
  "An Act  prohibiting the  commissioner of natural  resources                 
  from classifying  state land,  water, or  land and water  so                 
  that   mining,   mineral   entry   and   location,   mineral                 
  prospecting,  and  mineral  leasing  are  precluded  or  are                 
  designated  an  incompatible  use  without  an  act  of  the                 
  legislature  if  the area  involved  contains more  than 640                 
  acres except  in certain  situations; and  providing for  an                 
  effective date."                                                             
  PREVIOUS SENATE COMMITTEE ACTION                                             
  SB 165 - No previous action to record.                                       
  SB 153 - No previous action to record.                                       
  SB 159 - No previous action to record.                                       
  WITNESS REGISTER                                                             
  Paul Fuhs, Commissioner                                                      
  Department of Commerce and Economic Development                              
  P.O. Box 110800                                                              
  Juneau, Alaska 99811-0800                                                    
  POSITION STATEMENT:  Supported SB 165.                                       
  Michael Brown                                                                
  Chugach Alaska Corporation                                                   
  560 E 34th Avenue, St. 200                                                   
  Anchorage, Alaska 99503                                                      
  POSITION STATEMENT: Supported SB 165.                                        
  Chuck Totemoff                                                               
  Chenega Corporation                                                          
  B333 Denali St., Suite 220-H                                                 
  Anchorage, Alaska 99503                                                      
  POSITION STATEMENT:  Supported SB 165.                                       
  Ann Wieland                                                                  
  Kachemak Bay Citizens Coalition                                              
  1421 N Street                                                                
  Anchorage, Alaska 99501                                                      
  POSITION STATEMENT:  Opposed SB 165.                                         
  Jerry McCutcheon                                                             
  Anchorage, Alaska                                                            
  POSITION STATEMENT:  Opposed SB 165.                                         
  Diane McBride                                                                
  Kachemak Bay Citizens Coalition                                              
  Homer, Alaska                                                                
  POSITION STATEMENT:  Supported SB 165.                                       
  Hugh Doogan                                                                  
  359 Slater Street                                                            
  Fairbanks, Alaska                                                            
  POSITION STATEMENT:  Opposed SB 165.                                         
  Joe Ambrose, Aide                                                            
  %Senator Robin Taylor                                                        
  State Capitol                                                                
  Juneau, Alaska 99801-1182                                                    
  POSITION STATEMENT:  Commented on SB 153.                                    
  Janice Adair, Assistant Commissioner                                         
  Department of Environmental Conservation                                     
  410 Willoughby Ave., Suite 105                                               
  Juneau, Alaska 99801-1795                                                    
  POSITION STATEMENT:  Supported SB 153.                                       
  Michelle Bugni                                                               
  Alaska Troller's Association                                                 
  130 Seward Street                                                            
  Juneau, Alaska 99801                                                         
  POSITION STATEMENT:   Opposed SB 153  as written, but  would                 
  support with certain changes.                                                
  Richard Peifer                                                               
  HIRA Fisheries Joint Ventures                                                
  P.O. Box 235                                                                 
  Klawock, Alaska 99925                                                        
  POSITION STATEMENT:  Supported SB 153.                                       
  Rick Lauber                                                                  
  Pacific Seafood Processors Association                                       
  321 Highland Dr.                                                             
  Juneau, Alaska 99801                                                         
  POSITION STATEMENT:  Supported SB 153.                                       
  Steve Borrell, Executive Director                                            
  Alaska Miners Association                                                    
  501 Northern Lites, #203                                                     
  Anchorage, Alaska 99503                                                      
  POSITION STATEMENT:  Supported SB 159.                                       
  Raga Elim, Special Assistant                                                 
  Department of Natural Resources                                              
  400 Willoughby Ave.                                                          
  Juneau, Alaska 99801-1724                                                    
  POSITION STATEMENT:  Supported SB 159 with two amendments.                   
  Jack Phelps, Aide                                                            
  % Representative Kott                                                        
  State Capitol                                                                
  Juneau, Alaska 99801-1182                                                    
  POSITION STATEMENT:  Commented on SB 159.                                    
  ACTION NARRATIVE                                                             
  TAPE 93-17, SIDE A                                                           
  Number 001                                                                   
  SENATOR  MILLER called  the  Resources Committee  meeting to                 
  order at  3:45 p.m.  and  announced SB  165 APPROP:  ALYESKA                 
  SETTLEMENT FUND to be up for consideration.                                  
  SENATOR  PEARCE  said this  bill  comes  as a  result  of an                 
  agreement  that  was   signed  by  the  State   and  Federal                 
  Government and Alyeska  Pipeline Service Company.   The bill                 
  appropriates  $28,200,000  to  several  projects around  the                 
  state from the Alyeska Settlement Fund.   She said since the                 
  agreement  has  a  September  15 "drop  dead  date,"  if the                 
  legislature does not appropriate these  funds, the agreement                 
  will not longer  be in force.  The communities  who were the                 
  most affected have  an opportunity for some  jobs coming not                 
  only  from  the   construction,  but  from  the   long  term                 
  SENATOR  LEMAN  asked what  restrictions  there were  on the                 
  grant  to  Chugach.     SENATOR  PEARCE  answered   she  was                 
  interested  in  having the  funding  go  as a  grant  to the                 
  corporation, and  not go to DOTPF, because  she didn't think                 
  the projects would  ever get built  for the amount of  money                 
  that's in the agreement otherwise.                                           
  PAUL FUHS, Commissioner, Department of Commerce and Economic                 
  Development, said he  would feel very comfortable  being the                 
  agency doing the grants.  They would do it with a minimum of                 
  state overhead.  He said they  had already been working with                 
  several communities with their projects.                                     
  Number 128                                                                   
  SENATOR ADAMS remarked  that any money  left over was to  be                 
  returned to the joint trust account,  yet SB 165, in Section                 
  6 says  it  lapses.   Where  does  it lapse  and  does  this                 
  conflict with the  agreement, he asked.  SENATOR PEARCE said                 
  the lapse in Section  6 is "as determined by  the Department                 
  of Commerce and  Economic Development,"  because we have  to                 
  follow the  agreement and it  would have  to go back  to the                 
  Number 155                                                                   
  MICHAEL BROWN,  President, Chugach Alaska  Corporation, said                 
  he  prepared a  briefing document  that is  in  the members'                 
  packets.    Briefly, he  said  they believe  this settlement                 
  would  serve  to  protect  the  economic interest  of  these                 
  communities.   A grant  of this  nature is  exempt from  the                 
  state  procurement   regulations  which  will   allow  these                 
  projects to proceed  on a  much faster basis  and "get  much                 
  more  bang  for  the  buck."     They  have  done  extensive                 
  negotiations  with  the village  corporations  of  which all                 
  support this vehicle.   Chugach Alaska Corporation  would be                 
  in   a  position  to   guarantee  that  Alaska  consultants,                 
  contractors, and laborers would be used on this project.                     
  Number 189                                                                   
  CHUCK  TOTEMOFF,  President, Chenega  Corporation, supported                 
  the concepts in SB 165.                                                      
  MR.  BROWN  commented that  if  this appropriation  is made,                 
  Chugach Alaska Corporation  will not  be a contractor  doing                 
  the work in field  on this.  They would be in  the role of a                 
  project manager.                                                             
  SENATOR  LEMAN  said  there  were  a  number  of  activities                 
  starting now and he asked  how they were being funded -  the                 
  permitting and design?  MR. BROWN said that it was  done in-                 
  Number 244                                                                   
  SENATOR  PEARCE  explained  that the  money  flows  in three                 
  separate  checks and  the first one  has been  received, but                 
  additional funding won't be coming in until next year.                       
  Number 282                                                                   
  ANN WIELAND, Kachemak Bay Citizens  Coalition, said the $7.5                 
  million for the  purchase of inholdings  within Kachemak Bay                 
  State  Park,  contained  within  SB   165  is  an  essential                 
  component of  a funding  mechanism of  a purchase  agreement                 
  that was negotiated through the state and the private owners                 
  of  the  surface,  subsurface,  and  timber  estates  within                 
  Kachemak  Bay  State  Park.   It  is  supported  by a  broad                 
  spectrum  of interests from  tourism, recreation  and timber                 
  industry representatives, conservation, commercial, charter,                 
  and sport  fishing boats, native  corporations and education                 
  interests.  The purchase of these holdings will maintain the                 
  integrity of Kachemak Bay State Park  and will restore it to                 
  its original configurations created in 1971.                                 
  Number 296                                                                   
  JERRY MCCUTCHEON, Anchorage, said timber in the Kachemak Bay                 
  area  has spruce  bark  beetles.   The legislature  needs to                 
  appropriate  the  money to  selectively  log and  remove the                 
  spruce  bark  beetles.   He  advised  they  were  buying  an                 
  Number 333                                                                   
  DIANE  MCBRIDE,  Kachemak  Bay  Citizens  Coalition,  Homer,                 
  supported SB 165.                                                            
  Number 372                                                                   
  HUGH DOOGAN, Fairbanks,  said he wanted money  spent for all                 
  Alaskans and not money spent for just a few.  He spoke about                 
  the problems  with spruce  beetles.   He said  we needed  to                 
  support the  Alaskan people by turning down the Kachemak Bay                 
  buy back, because it  would give people jobs to  harvest the                 
  trees  through  selective clear  cutting.   He  said  no one                 
  should have the right to appropriate state money  except the                 
  legislature.  He  thought a  big chunk of  the Exxon  Valdez                 
  money should be put into an educational construction fund so                 
  we could build schools  in the state  of Alaska for all  the                 
  Number 438                                                                   
  SENATOR PEARCE said she hoped he  had an opportunity to vote                 
  on dedicating the  funds for school construction  next year.                 
  She  said purchase  of Kachemak  Bay  timber came  under the                 
  "acquisition  of  equivalent   resources"  section  of   the                 
  agreement we made  with Alyeska.   She pointed  out that  we                 
  would lose all  $31.5 million  if we don't  go forward  with                 
  this bill and the agreement.                                                 
  Number 452                                                                   
  SENATOR ZHAROFF said  he is  dissatisfied with the  Kachemak                 
  Bay buy back.  He had  reservations with classifying land in                 
  a protected status that has a  potential of creating jobs or                 
  assisting  the economy  of a  given area.   Purchasing  this                 
  timber causes a  problem with  availability of resource  for                 
  the saw mill that's open in that part of the state.                          
  SENATOR PEARCE  said so far  the trustees have  spent almost                 
  $200 million doing assessments  and the six of  them approve                 
  the Kachemak Bay buy back.                                                   
  SENATOR  ZHAROFF said the trustees  have secure jobs and are                 
  well secured  in their retirements.   The current  plant has                 
  approximately  100  people  employed and  they  want  to add                 
  another 150 people.   He  asked if Senator  Little had  been                 
  contacted regarding this legislation.                                        
  SENATOR PEARCE said she and her  staff are fully agreed with                 
  this legislation.                                                            
  SENATOR ADAMS asked  what the  Department of Law's  position                 
  was  on this  legislation.   SENATOR  PEARCE  said they  are                 
  SENATOR  ADAMS  asked  if we  are  setting  a  precedent for                 
  utilizing  capital  projects  for   the  purchase  of  land.                 
  SENATOR MILLER said  the Commissioner  of the Department  of                 
  Commerce  and   Economic  Development  would   probably  not                 
  consider it so.                                                              
  Number 515                                                                   
  SENATOR PEARCE  moved to  pass  SB 165  from committee  with                 
  individual recommendations.  There were no objections and it                 
  was so ordered.                                                              
  SENATOR MILLER  announced SB  153 EXCHANGE OF  RAW FISH  FOR                 
  SEAFOOD PRODUCT to be up for consideration.                                  
  JOE AMBROSE, Staff  for Senator  Robin Taylor, read  Senator                 
  Taylor's statement on SB 153.                                                
  SENATOR  LEMAN  said his  concern  was  with the  volume  of                 
  seafood product that was being shipped  out of state and the                 
  potential of that entering some commercial market.   He said                 
  that tourists ship  their fish out of state and then sell it                 
  in  the  winter to  pay for  their  trip up  here.   This is                 
  contrary to state law and it is very hard to prosecute them.                 
  MR. AMBROSE  said Senator Taylor  was aware of  his concerns                 
  and didn't  think SB  153 was  the proper  vehicle for  some                 
  export limit.   He suggested  inserting on page  4, line  15                 
  after the word "exchange" insert "during a 24-hour  period a                 
  person  who may exchange seafood products for raw fish under                 
  the ..."                                                                     
  TAPE 17, SIDE B                                                              
  Number 580                                                                   
  "...section,  may  not  accept  or  exchange more  than  one                 
  possession limit of each species of  raw fish from that same                 
  person.    Possession  limit   is  determined  according  to                 
  regulation in effect  on the date applicable to  the fishery                 
  where the raw fish was taken."                                               
  Senator Taylor  is  willing to  restrict the  amount of  raw                 
  product that can be exchanged, he added.                                     
  SENTOR  ADAMS  asked  the definition  of  "wholesome."   MR.                 
  AMBROSE said it meant  food that was  not spoiled.  This  is                 
  language  that  was  suggested  last  year  when  they  were                 
  discussing quality control.                                                  
  SENATOR   ADAMS    asked   him   to    define   "small-scale                 
  manufacturing."  MR. AMBROSE said the intent  was to address                 
  the mom and pop type operations and encourage their growth.                  
  SENATOR ZHAROFF  asked on page  4, lines  8 - 9,  how "sport                 
  use" was  being defined.   MR.  AMBROSE said  this would  be                 
  someone  with  a  sport fishing  license  in  his possession                 
  whether they are in a charter boat or a dinghy of their own.                 
  SENATOR ZHAROFF asked  if the  fishing guides were  excluded                 
  from  this  bill.   MR.  AMBROSE  said  the  intent of  that                 
  language  was  not to  include  the services  provided  by a                 
  charter operator.  He explained that  folks coming in on the                 
  cruise ships, go out fishing.  The custom processing that is                 
  available in some  areas is  time consuming.   They have  to                 
  keep the fish  separated throughout  the entire process,  so                 
  you get the same fish back. The fish has to be  shipped back                 
  to the customer which is very expensive.  A lot of people do                 
  not use that service because of the expense.  What they want                 
  to offer is the  chance to get an Alaskan  processed product                 
  in exchange for the raw fish.                                                
  Number 470                                                                   
  JANICE ADAIR, Department of Environmental Conservation, said                 
  the seafood  inspection program is within  their department.                 
  She said their first  amendment is on page 2, line  18 after                 
  "exchanging" adding "thermally  processed, vacuum  packaged,                 
  smoked, cured, or pickled" to clarify what  kinds of seafood                 
  products might be exchanged for raw fish.                                    
  The next two amendments relate to the definition of raw fish                 
  and seafood products to exclude bivalve molluscan shellfish.                 
  SENATOR FRANK  asked  if  she would  have  problems  if  the                 
  legislature determined  what the ratios  would properly  be?                 
  MS. ADAIR answered that wouldn't be a problem.                               
  Number 434                                                                   
  MICHELLE BUGNI, Alaska Troller's Association, opposed SB 164                 
  as written.   If it is  amended to include provisions  which                 
  limit the amount  of raw and  processed seafood that can  be                 
  transported from Alaska  to an  angler's permanent place  of                 
  residence, they will  endorse it.   If they  are pressed  to                 
  compromise on the language, she suggested using, "The export                 
  of raw and processed sport-caught  seafood transported to an                 
  individual's permanent place of residence  be limited to one                 
  possession limit for  each species  harvested."  They  would                 
  like  the  Board of  Fisheries  to address  this  matter and                 
  provide an  effective date  after it  has made  a ruling  on                 
  export limitations.                                                          
  SENATOR  ZHAROFF  said  he   wanted  clarification  on   the                 
  definition of one possession limit as opposed  to bag limit.                 
  MS. BUGNI said there is a  difference between bag limits and                 
  possession limits.  It is per area.                                          
  SENATOR LEMAN said they  were dealing with two limits  - one                 
  was the bag limit and the other was the export limit.                        
  SENATOR  ZHAROFF  asked  how  this  would be  monitored  and                 
  enforced and what would the penalties be for a processor who                 
  knowingly takes in more than an individual is allowed.                       
  MS.  BUGNI  said the  intent  of the  bill  would not  be to                 
  encourage anglers to  go out  and catch more  fish, but  she                 
  thought  they  might be  tempted to  take more,  because the                 
  whole process would be a lot easier.                                         
  Number 325                                                                   
  RICHARD  PEIFER, HIRA Fisheries Joint Venture, Klawock, said                 
  they are interested in adding value processing.  There is an                 
  inequity in enforcement in  current statutes that  prohibits                 
  the exchange of sport  caught fish.  Basically, he  said, it                 
  costs the tourist way  too much money to process  their fish                 
  in-state.  Aside  from the fact  that many fish are  shipped                 
  out of state before they are  processed, he pointed out that                 
  many people  throw away  their catch  that is  too small  to                 
  consider for  shipping or  processing and  that is  throwing                 
  away a resource.  We lose the opportunity in these cases  to                 
  expose them to  value-added Alaskan  products.  If  30 -  50                 
  people  bring  their fish  in to  have  it processed  as one                 
  normal production batch, he can do that very efficiently and                 
  pass  the  savings  on  to  them,  plus  save  the  cost  of                 
  transportation and shipping.                                                 
  MR. PEIFER  added that  processors are  very experienced  at                 
  recognizing contaminated or decomposing fish.   He said that                 
  wholesome means fit for human consumption.                                   
  The negative  issues revolve around how many fish people are                 
  taking out  of this state.  This is  a management issue.  It                 
  doesn't  change  the  jobs  that  are going  to  create  the                 
  additional  revenues we  are  going to  keep  in the  state.                 
  Custom processing is one of the  ways small business can get                 
  started  and grow.  He  discussed the product recovery rates                 
  due to differences in individual processing techniques.                      
  Number 117                                                                   
  RICK LAUBER,  Pacific Seafood Processors  Association, asked                 
  them  to  not  put the  product  recovery  rate in  statute,                 
  because it  is very hard  to change a  statute.  One  of the                 
  things he likes about this bill is that it is going to bring                 
  custom  processors  under  DEC,  because  one of  the  fears                 
  established processors have  is that someone could  get sick                 
  from  eating salmon processed  in a new  uninspected mom and                 
  pop operation which would hurt the whole industry.                           
  SENATOR LEMAN asked if he thought this was the right vehicle                 
  for export limits  and whether  this would encourage  abuses                 
  which may  or may  not conflict  with commercial  fisheries.                 
  MR.  LAUBER  said he  wasn't sure  that  issue needed  to be                 
  addressed.  If  it does, then it  needs more study.   In the                 
  mean time, this bill could pass.                                             
  TAPE 93-18, SIDE A                                                           
  Number 001                                                                   
  SENATOR ZHAROFF said processors are very possessive of their                 
  records and wouldn't  make them  available to just  anybody.                 
  In the bill it just says an  "employee of the Department" so                 
  he thought that needed to be made tighter.   He also thought                 
  the Department of Revenue should be  added to the list since                 
  that is  where a  lot of  the licensing and  bonding is  put                 
  together for the licensing of the processing.                                
  SENATOR MILLER said it was his intent to  put this bill into                 
  a subcommittee of  one, Senator Leman,  and have him get  it                 
  ready for Monday and pass it out at that time.                               
  Number 61                                                                    
  SENATOR MILLER  announced SB  159 LIMIT  ADMINISTRATIVE LAND                 
  CLOSURES to be up for consideration.                                         
  SENATOR FRANK,  sponsor, said the  purpose was to  limit the                 
  power  of  the  Commissioner of  the  Department  of Natural                 
  Resources in  closing lands to  mineral entry.   The current                 
  theory is that land  should be used for the  maximum benefit                 
  of the people and all the  land should be open for  multiple                 
  use.  There is a provision saying the Commissioner can close                 
  lands to multiple  use under 640 acres.   He said the  power                 
  should be reserved for the legislature.                                      
  STEVE BORRELL,  Alaska Miners Association, supported SB 159.                 
  He told them there  were actually three mechanisms  by which                 
  state lands can  be closed to mineral entry.   The first way                 
  is for  the legislature  to pass  bills establishing  parks,                 
  refuges, etc.   The second mechanism  is the application  of                 
  Title  16  by  ADF&G  in  areas where  anadromous  fisheries                 
  resources may be affected.  The third mechanism is the focus                 
  of this  bill.  Passage of  this bill would send  a positive                 
  signal to the international mining industry.                                 
  Number 191                                                                   
  RAGA   ELIM,  Department  of  Natural  Resources,  said  the                 
  administration  will  support   this  bill   with  the   two                 
  amendments he  passed to the  committee.  He  explained that                 
  the first one  tightens up some  of the wording so  that the                 
  term contiguous  is inserted helping to define  "area."  The                 
  second  one  was  designed  to  maintain  the Commissioner's                 
  flexibility  in  proper  land  management  when time  is  of                 
  essence  in  issuing some  of  these mineral  closing orders                 
  while recognizing the appropriate role of the legislature in                 
  certifying any  mineral closing  orders of  over 640  acres.                 
  The  Commissioner  could  issue  the  mineral closing  order                 
  effective immediately and the legislature  would be asked to                 
  ratify  that.    If  that  didn't  happen, the  order  would                 
  automatically lapse.                                                         
  Number 238                                                                   
  SENATOR FRANK and MR. BORREL supported both amendments.  MR.                 
  BORRELL  said it  should be  clarified  that there  could be                 
  several 640  acres  blocks  2 feet  apart.    SENATOR  FRANK                 
  SENATOR FRANK  moved to  adopt  amendment #1  and asked  for                 
  unanimous consent.  SENATOR  LEMAN objected to say that  the                 
  language should be  run by  the bill drafter  because it  is                 
  different than what  he normally  sees.   Amendment #1  was,                 
  then, adopted.                                                               
  Number 320                                                                   
  JACK PHELPS, Aide  for Representative Pete Kott,  sponsor of                 
  HB 2135 which contains the "contiguous" amendment offered by                 
  DNR, wasn't  a problem.   Although  there  is potential  for                 
  abuse, he pointed out that, as it is proposed, it would also                 
  apply to the closures of multiple-purpose use lands which is                 
  a change in the existing statute.                                            
  SENATOR  FRANK said they would  check with the Department of                 
  Law to make sure it wouldn't raise additional points.                        
  MR.  PHELPS  said  he  thought  amendment  #1  was  a   good                 
  SENATOR LEMAN moved  to adopt amendment  #2.  There were  no                 
  objections and it was so ordered.                                            
  Number 362                                                                   
  SENATOR LEMAN  moved  to discharge  SB 159  as amended  with                 
  accompanying  fiscal  notes from  committee  with individual                 
  recommendations.   There  were no  objections and it  was so                 
  SENATOR MILLER adjourned the meeting at 6:42 p.m                             

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