Legislature(1993 - 1994)
03/14/1994 03:36 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 2/4/94. 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 Association. 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 unprecedented. 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 ordered. SENATOR MILLER announced SJR 38 (RESTRUCTURE PERMANENT FUND) to be e 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 questions. 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 fund. 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.