Legislature(1993 - 1994)

03/14/1994 03:36 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE RESOURCES COMMITTEE                                  
                         March 14, 1994                                        
                           3:36 P.M.                                           
 MEMBERS PRESENT                                                               
 Senator Mike Miller, Chairman                                                 
 Senator Loren Leman, Vice Chairman                                            
 Senator Steve Frank                                                           
 Senator Drue Pearce                                                           
 Senator Dave Donley                                                           
 Senator Fred Zharoff                                                          
  MEMBERS ABSENT                                                               
 Senator Al Adams                                                              
  COMMITTEE CALENDAR                                                           
 CS FOR SENATE BILL NO. 280(STA)                                               
 "An Act establishing the Afognak Island State Park."                          
 SENATE JOINT RESOLUTION NO. 38                                                
 Proposing amendments to the Constitution of the State of Alaska               
 relating to revenues from natural resources, the Alaska permanent             
 fund, the appropriation limit and the budget reserve fund; and                
 providing for an effective date for the amendments.                           
  PREVIOUS ACTION                                                              
 SB 280 - See State Affairs minutes dated 3/2/94.                              
 SJR 38 - See State Affairs minutes dated 1/26/94, 1/28/94, and                
  WITNESS REGISTER                                                             
 Craig Tillery, Assistant Attorney General                                     
 Department of Law                                                             
 1031 W. 4th, Ste. 200                                                         
 Anchorage, Ak. 99501-1994                                                     
  POSITION STATEMENT:   Commented on SB 280.                                   
 Charles Meacham, Deputy Commissioner                                          
 Department of Fish and Game                                                   
 P.O. Box 25526                                                                
 Juneau, Ak. 99802-5526                                                        
  POSITION STATEMENT:   Supported SB 280.                                      
 Neil Johannsen, Director                                                      
 Division of Parks                                                             
 Department of Natural Resources                                               
 P.O. Box 107001                                                               
 Anchorage, Ak. 99510-7001                                                     
  POSITION STATEMENT:   Supported SB 280                                       
 Representative Johnny Ellis                                                   
 State Capitol                                                                 
 Juneau, Ak. 99801-1182                                                        
  POSITION STATEMENT:   Sponsor of SJR 38.                                     
 Roger Cremo                                                                   
 Anchorage, Ak.                                                                
  POSITION STATEMENT:   Commented on SJR 38.                                   
  ACTION NARRATIVE                                                             
  TAPE 94-19, SIDE A                                                           
 Number 001                                                                    
 CHAIRMAN MILLER called the Resources Committee meeting to order at            
 3:36 p.m. and announced  SB 280  (ESTABLISH AFOGNAK ISLAND STATE              
 PARK) to be up for consideration.                                             
 CRAIG TILLERY, Department of Law, said SB 280 establishes Afognak             
 Island State Park from lands that were acquired by the Exxon Valdez           
 Trustee Council from the Seal Bay Timber Company.  This area was              
 ranked as second in importance in habitat value.  The United States           
 expressed a strong desire to acquire these lands.  The state                  
 trustees said no and indicted that if they were to be acquired it             
 was to be under state ownership.  The United States agreed, but               
 added that the lands would have to go within a state park within              
 one year, by November 23, 1994.                                               
 MR. TILLERY said SB 280 is supported by the Kodiak Island Borough,            
 the City of Kodiak, the Kodiak Chamber of Commerce, fishing                   
 organizations, tour operators, visitor associations, and many                 
 Kodiak area citizens.  It is supported by Koncor Forest Products,             
 the timber company that operates in the area and the Alaska Forest            
 Mayor Selby has written a letter to the Governor saying no jobs               
 were lost as a result of this acquisition, MR. TILLERY said.                  
 Number 85                                                                     
 There is a new provision in this bill on page 1, line 5 adding to             
 existing rights, "including those rights created by the Afognak               
 Island Road Use Agreement executed on July 24, 1991 and as amended            
 from time to time."                                                           
 There is a new section on page 2, line 7 relating to existing                 
 rights, as well.                                                              
 SENATOR LEMAN asked if subsurface estate becomes part of the park             
 with its purchase.  MR. TILLERY said that is correct.                         
 Number 175                                                                    
 SENATOR LEMAN moved to adopt the CS to SB 280 (RES) for discussion            
 purposes.  There were no objections and it was so ordered.                    
 SENATOR FRANK asked what kind of restrictions there were.  MR.                
 TILLERY said there is a restriction against commercial timber                 
 harvest and a restriction on the disposal, also.  If there is an              
 attempt to convey the property to an entity other than the state,             
 it would revert to the Nature Conservancy which would be required             
 to deed it over to the federal government, he explained.                      
 SENATOR LEMAN asked if the state could, at some time in the future,           
 change the classification of the land and then have to repay the              
 trustee council.  MR. TILLERY guessed that it could be changed, but           
 it would have to be done before the trustee council was out of                
 business or done through a court action.                                      
 SENATOR MILLER asked if any new commercial hunting and fishing                
 lodges could be added.  MR. TILLERY said there is no lodge in the             
 park, but the lodges use the park.  They do not want to prohibit              
 that, because it is a restoration purpose.                                    
 Number 245                                                                    
 SENATOR FRANK asked if there were other examples of this type of              
 ownership.  MR. TILLERY explained that this was not dissimilar to             
 other parks, but that the Exxon Valdez settlement was                         
 Number 266                                                                    
 SENATOR FRANK asked what was the purchase price.  MR. TILLERY                 
 answered $38.7 million, or about $900 per acre.                               
 CHUCK MEACHAM, Deputy Commissioner, Department of Fish and Game,              
 said they strongly support this legislation.                                  
 NEIL JOHANNSEN, Director, Division of Parks, said the DNR supports            
 the legislation.                                                              
 Number 340                                                                    
 SENATOR ZHAROFF moved to pass CSSB 280 (RES) from Committee with              
 individual recommendations.  There were no objections and it was so           
 up for consideration.                                                         
 REPRESENTATAIVE JOHNNY ELLIS, sponsor, said if this passed it would           
 significantly change they way the state conducts its finances.  It            
 proposes that all the natural resource revenues of the state flow             
 into the Permanent Fund (PF) and that they adopt a system of                  
 gradually reigning in our expenditures and front loading the PF.              
 The advantages to this are many.  We could have a long range fiscal           
 plan for the state.  We would be able to capture windfalls for                
 future use and not have the boom and bust cycle in state spending.            
 We would be able to have a bigger PF and spend just earnings, not             
 the principle.                                                                
 Number 381                                                                    
 ROGER CREMO, author of the resolution, testified from Anchorage               
 that the resolution is self explanatory and he would answer their             
 SENATOR FRANK asked how the fluctuating value of the PF would be              
 reflected in the amount the legislature could appropriate?  MR.               
 CREMO said there is a provision for averaging the value of the                
 fund.  It is a 12 quarter average and is purposely done on a                  
 calendar basis so that the last of the 12 quarters is the one                 
 ending on December 31 just before the legislature convenes which              
 allows them to know to the penny how much money will be coming from           
 the fund.                                                                     
 SENATOR FRANK asked if they had considered writing the bill so that           
 people could see how it was changed rather than just repealing and            
 reenacting.  MR. CREMO explained that the drafting attorney, Tamara           
 Cook, suggested this way would be by far the clearest approach                
 since the change was so radical.                                              
 SENATOR LEMAN asked if he had given any more thought to the                   
 transition number.  MR. CREMO said it could easily be less than 20.           
 He used 20, because it seemed to produce numbers that at least                
 started with the level of spending that the legislature is                    
 currently using.  He said the lower the start of the percentage,              
 the better the system will perform.                                           
 SENATOR FRANK asked what opportunities there would be to take                 
 things off the budget.  MR. CREMO said there isn't much room for              
 the legislature as far as how much can come out of the fund.  The             
 percentage would be fixed in the constitution and the value of the            
 fund would be fixed by the market average.  There is no restriction           
 on what the legislature could raise with non-resource revenues.               
 There is no spending limit, nor does it tell the legislature what             
 to do - anywhere.  If the legislature would tax resources in the              
 future, that money would go into the PF rather than the general               
 SENATOR LEMAN moved to pass SJR 38 from Committee with individual             
 recommendations.  There were no objections and it was so ordered.             
 SENATOR MILLER adjourned the meeting at 4:15 p.m.                             

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