Legislature(1995 - 1996)

01/24/1996 03:35 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE RESOURCES COMMITTEE                                  
                        January 24, 1996                                       
                           3:35 P.M.                                           
 MEMBERS PRESENT                                                               
 Senator Loren Leman, Chairman                                                 
 Senator Drue Pearce, Vice Chairman                                            
 Senator Steve Frank                                                           
 Senator Rick Halford                                                          
 Senator Robin Taylor                                                          
 Senator Georgianna Lincoln                                                    
 Senator Lyman Hoffman                                                         
  MEMBERS ABSENT                                                               
  COMMITTEE CALENDAR                                                           
 Alaska Mineral Commission Briefing                                            
 SENATE BILL NO. 190                                                           
 "An Act establishing a residency requirement for auctions of state            
 SPONSOR SUBSTITUTE FOR SENATE BILL NO. 128                                    
 "An Act reducing certain resident sport fishing, hunting, and                 
 trapping license fees, increasing certain nonresident sport                   
 fishing, hunting, and trapping license fees, and relating to                  
 nonresident sport fishing, hunting, and trapping licenses; and                
 providing for an effective date."                                             
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 190 - See Resources minutes dated 1/24/96.                                 
 SB 128 - See Resources minutes dated 1/17/96.                                 
  WITNESS REGISTER                                                             
 Earl Beistline, Commissioner                                                  
 Alaska Minerals Commission                                                    
 P.O. Box 80148                                                                
 Fairbanks, AK 99708                                                           
 Irene Anderson, Commissioner                                                  
 Alaska Minerals Commission                                                    
 P.O. Box 905                                                                  
 Nome, AK 99762                                                                
 Ron Sheardown, Commissioner                                                   
 Alaska Minerals Commission                                                    
 3512 Campbell Airstrip Rd.                                                    
 Anchorage, AK 99504                                                           
 Karl Hanneman, Commissioner                                                   
 Alaska Minerals Commission                                                    
 P.O. Box 10664                                                                
 Fairbanks, AK 99710                                                           
 Al Clough, Mining Specialist                                                  
 Division of Trade and Development                                             
 Department of Commerce and Economic Development                               
 P.O. Box 110804                                                               
 Juneau, AK 99811-0804                                                         
 Neil MacKinnon, Commissioner                                                  
 Alaska Minerals Commission                                                    
 1114 Glacier Ave.                                                             
 Juneau, AK 99801                                                              
 Ron Swanson, Deputy Director                                                  
 Division of Lands                                                             
 3601 C St., Ste. 1122                                                         
 Anchorage, AK 99503-5947                                                      
  POSITION STATEMENT:   Commented on SB 190.                                   
 Charles Forck                                                                 
 Delta Junction, AK 99737                                                      
  POSITION STATEMENT:   Supported SB 190.                                      
 Senator Donley                                                                
 State Capital                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Sponsor of SB 128                                      
 Wayne Regelin, Director                                                       
 Division of Wildlife                                                          
 Department of Fish and Game                                                   
 P.O. Box 25526                                                                
 Juneau, AK 99801-5526                                                         
  POSITION STATEMENT:   Commented on SB 128.                                   
 Neil Webster                                                                  
 Alaska Professional Hunters Association                                       
 11044 Tsusena Circle                                                          
 Eagle River, AK 99577                                                         
  POSITION STATEMENT:   Supported SB 128.                                      
 Don Westlund                                                                  
 P.O. Box 7883                                                                 
 Ketchikan, AK 99901                                                           
  POSITION STATEMENT:   Commented on SB 128.                                   
 Wayne Kubat                                                                   
 P.O. Box 874867                                                               
 Wasilla, AK 99687                                                             
  POSITION STATEMENT:   Opposed SB 128.                                        
 Rod Arno                                                                      
 P.O. Box 2790                                                                 
 Palmer, AK 99645                                                              
  POSITION STATEMENT:   Commented on SB 128.                                   
  ACTION NARRATIVE                                                             
  TAPE 96-5, SIDE A                                                            
 Number 001                                                                    
  CHAIRMAN LEMAN  called the Senate Resources Committee meeting to             
 order at 3:35 p.m. and announced a briefing by the Alaska Minerals            
 Commission (AMC).                                                             
 EARL BEISTLINE, Chairman, gave a brief outline and introduced the             
 rest of the commissioners in attendance:  IRENE ANDERSON, Co-                 
 Chairman, RON SHEARDOWN, KARL HANNEMAN, AL CLOUGH of the DCED, and            
 NEIL MACKINNON.                                                               
 MR. BEISTLINE said the purpose of the Commission is to determine              
 what should be done to stimulate the mining industry in the State.            
 He presented a copy of the Alaska Minerals Commission Report to             
 Chairman Leman.                                                               
 Number 91                                                                     
 KARL HANNEMAN thanked the committee for passing the minerals                  
 incentives bill last year, the diminutive discharge bill, and the             
 geophysical mapping program.  He said it was heartening to see                
 action was taken to preclude more bureaucracy when it was                     
 appropriate.  He reviewed the Alaska Minerals Commission Report.            
 He said basically the graph on the back page shows if the                     
 additional mines are permitted, the number of jobs in the mining              
 industry would double before the year 2000.  They are high-paying,            
 year-round jobs and some of them would be in rural areas.                     
 MR. HANNEMAN said the user fees and the way regulatory agencies               
 charge for their efforts was one of their priorities this year.  He           
 asked, as a matter of policy, if the agencies could repeatedly and            
 continually charge for their services.  The more times they review            
 the permit, the more they can charge.  He said this delays                    
 permitting, because it's more in the Department's interest to                 
 continue the permit review.                                                   
 MR. MACKINNON said there was a philosophical problem when an agency           
 says they have to have a certain permit, and then the industry has            
 to pay for it.  If they were reasonable, there wouldn't be a                  
 problem, he said.                                                             
 MR. HANNEMAN said they thought the most basic way to do that was to           
 require legislative review of the fees.                                       
 Number 185                                                                    
 SENATOR TAYLOR said there was already a very close nexus between              
 the amount agencies are charging and whether or not they will be              
 able to save their secretary's job for the next year.  He believed            
 the legislature made a major mistake in allowing agencies to start            
 basing their own funding on how much they could charge in fees for            
 the services they were allegedly providing.                                   
 MR. MACKINNON said there was a good example of that in Juneau with            
 the local mining ordinance where it's an open-ended fee structure             
 that the mining company pays.  The A/J permit went on for 3 to 4              
 years and they studied everything.                                            
 MR. MACKINNON said they were looking for ways to help government              
 streamline itself.  They thought it would be good if agencies                 
 complied with last year's legislation that mandated DNR as the lead           
 MR. MACKINNON stated that he thought steps had been taken to change           
 industry's perception of how the State of Alaska is going to view             
 mineral development.  He urged continued support for the                      
 geophysical mapping program, especially in other parts of the                 
 SENATOR LEMAN asked if he had any comments on the Governor's                  
 Executive Order that merges the Division of Oil and Gas with the              
 other Division of Oil, Gas, and Geology.  MR. MACKINNON said that             
 in a State where so much of our revenue comes from oil and gas,               
 there is some merit to the idea.  At the same time, the functions             
 that DGGS perform are necessary functions.  He thought it would be            
 a close call.                                                                 
 Number 252                                                                    
 MR. MACKINNON also urged the Committee to support the access issue.           
 He said the State has a two-year opportunity to assert and prove              
 trails or the federal government will take them back.                         
 SENATOR LEMAN noted that several members of the Committee are very            
 concerned about the lack of commitment in the Department of Law in            
 this administration to forge ahead with RS 2477 assertion.                    
 MR. MACKINNON added that the navigability issue was also an issue             
 of access.                                                                    
 Number 310                                                                    
 MR. CLOUGH said there are two main themes the Commission is trying            
 to get across this year. There are a variety of issues that have              
 fiscal notes attached to them and there are also a variety of                 
 issues that are more of fixing things that are broken, such as the            
 regulatory scheme.  They both are needed to reach the end of more             
 jobs in Alaska.  There needs to be some certainty in the minerals             
 MR. BEISTLINE said the importance of the geophysical mapping has              
 been shown physically in the Fairbanks area.  He then asked Ms.               
 Anderson to comment on activity in the Nome area.                             
 Number 337                                                                    
 MS. ANDERSON explained there was geological/ geophysical mapping in           
 Nome in 1994.  Since the Native Corporations owned the land and               
 were very interested in the data, they did cooperative agreements             
 with the State DNR for access and samples.  They offered the use of           
 their older airborne geophysic maps.  Cooperative agreements                  
 between industry, private owners, and the State of Alaska are a               
 wave of the future.  She said there are already a lot of claims               
 staked in the Nome area.                                                      
 MR. BEISTLINE remarked that their suggestions are going to cost               
 money, but they figure the money will be returned many times by the           
 finding of discoveries.  He said it was a claim-staking rush in the           
 Nome and Fairbanks areas.                                                     
 Number 388                                                                    
 SENATOR LINCOLN said she appreciated their presentation and their             
 report, which was well-done.  It was easy for the public to read              
 and to identify specific recommendations.                                     
 She said she supported the general idea of diversifying our                   
 economic base and the $5 million per year recommendation, Mr.                 
 Beistline said, would not in the long-run cost us, but would create           
 jobs and economic development throughout the whole State.  She said           
 a weakness we have had is to not have the economic development in             
 all areas of the State.  She asked what reaction the Governor had             
 when he presented the report.  MR. BEISTLINE said it was very well            
 MR. MACKINNON said that the geophysical data would also be a                  
 capital investment, because we would always have that data.  It               
 would be throughout the whole State.                                          
 Number 447                                                                    
 SENATOR TAYLOR said he heard about this mapping technique about               
 three years ago from Senator Halford who strongly fought for the              
 funding for it.                                                               
 SRES 1/24/96                                                                  
        SB 190 RESIDENCY REQUIREMENT/STATE LAND AUCTION                       
 SENATOR LEMAN announced an at-ease from 4:10 p.m. to 4:12 p.m. and            
 announced  SB 190 .                                                           
 SENATOR TAYLOR, Sponsor of SB 190, said the purpose of this bill is           
 to make certain that Alaskans have first option at purchasing our             
 State lands, those lands that are residential and recreational in             
 nature.  He filed the bill as a response to what occurred this                
 summer when people were attempting to "sell the Alaskan mystique."            
 The Alaska Tourism Marketing Council had advertised on the Internet           
 for people to come up and buy land.  Looking at the actual bids, he           
 found there was a resident of Fairbanks who submitted a bid on                
 State land, only to be outbid by a resident of Washington state by            
 $61.80.  A couple from Wasilla lost their chance to own a piece of            
 Alaska to a Minnesota woman, because she outbid them by $442. An              
 Anchorage woman lost out to a man from Michigan for $214.                     
 SENATOR TAYLOR said he didn't think the revenue was significant               
 enough to justify to him turning down Alaskans who might want a               
 chance of owning a piece of the State that they live in.  He                  
 thought they should be allowed first option.  He thought                      
 establishing sufficient residency for the Permanent Fund would be             
 good to use for this purpose.                                                 
 SENATOR TAYLOR provided the Committee with an amendment saying that           
 this bill does not interfere with commercial sales, the development           
 of agriculture, or the development of industries.  His "purpose is            
 to allow Alaskan individuals to own residential land and                      
 recreational land, and not to impede the development of an                    
 economy," he said.                                                            
 Number 501                                                                    
 SENATOR TAYLOR moved to adopt the amendment.  He explained that it            
 removed the restriction on commercial, industrial, or agricultural            
 land being available to only Alaskans.  SENATOR HALFORD objected              
 for a question.                                                               
 SENATOR HALFORD said he understood the industrial and commercial              
 exemption, but didn't understand the agricultural.  He did not want           
 to see the agricultural opportunities advertised outside, in farm             
 journals particularly, with such a pattern of subsidy.  SENATOR               
 TAYLOR said the concern comes from the agricultural community who             
 said SB 190 was very restrictive, because frequently in the history           
 of Alaska, farms have been developed by people from outside Alaska.           
 Many other enterprises, like barley, came in from outside the                 
 State.  His concern was for the fellow who lives here who wants to            
 buy the adjoining 40 acres to his already established parcel.                 
 Should he have to compete against outside agricultural purposes.              
 Number 540                                                                    
 RON SWANSON, Deputy Director, Division of Lands, said there already           
 is a preference right.  If you are an adjoining agricultural land             
 owner, you do have the preference to the adjacent parcel.  You                
 would have to meet the high bid to get it, though.                            
 MR. SWANSON said Alaskans should have the opportunity to obtain               
 lands first.  Of the almost 500 parcels that were available for               
 disposal, 287 of them have been sold to date.  The others are still           
 available over-the-counter about a week and a half ago.  He said              
 the land in Southeast has particularly high interest.                         
 SENATOR LINCOLN said she was also concerned about adding the                  
 agricultural lands.  She wanted to see any agricultural lands in              
 the future, whether it is an individual with adjacent land, she               
 would like to see it go to an Alaskan, first.                                 
 She was puzzled with the fiscal note of $5,000 for residency                  
 verification.  MR. SWANSON said to date the residency requirement             
 for homesteading is an affidavit for residency on the application             
 which has to be notarized by a postmaster.  Unless there is a                 
 question by someone, they do not verify the information.  If the              
 intent of the bill is to find out if the individual is truly a                
 resident, they would have to take that extra step.                            
 SENATOR LINCOLN said she couldn't see why it would cost so much               
 with today's technology to verify against a Permanent Fund                    
 Number 586                                                                    
 TAPE 96-5, SIDE B                                                             
 Number 590                                                                    
 SENATOR FRANK asked for the logic behind exempting industrial and             
 commercial land.  SENATOR TAYLOR explained that primarily there is            
 a market.  That market is determined by the business you're in, not           
 necessarily by State boundaries.  We have never excluded based on             
 residency before in those areas, nor have we on the residential or            
 recreational.  He is beginning a process of providing some                    
 SENATOR FRANK asked if we sell commercial land much.  MR. SWANSON             
 answered that the State doesn't sell commercial land; that it is              
 leased.  This is still considered "disposal."                                 
 Number 575                                                                    
 CHARLES FORCK, Delta Junction, supported SB 190 and the proposed              
 amendment.  The residency requirement for agriculture is                      
 counterproductive to agricultural development.  "Agricultural                 
 expertise is in short supply in Alaska, as are people who want to             
 do the work.  Also, capital is in short supply for development."              
 SENATOR TAYLOR noted for the record that on line 11 the word                  
 "proceeding" should be changed to "preceding."                                
 Number 544                                                                    
 SENATOR HALFORD said he wanted to differentiate between the high              
 value, high popularity, small, agricultural parcels where there are           
 plenty of residents and a lot of people competing for them and the            
 big farms that require the outside expertise.  He thought the                 
 agricultural auction could be advertised across the country and the           
 reaction of the local people would be exactly the same thing in as            
 in Southeast, when people lost parcels to outsiders.                          
 MR. SWANSON agreed that there could be a problem and suggested that           
 a possible solution would be to leave the agricultural                        
 resident/non-resident decision up to the commissioner who would               
 make a best-interest-finding of which way to do it.  SENATOR LEMAN            
 asked if that's the way it is done now.  MR. SWANSON replied, no,             
 that currently all land is available to residents and non-                    
 residents.  That is the purpose of this amendment.  The                       
 prequalification language for agricultural land currently in law is           
 for financial reasons, not inability to develop agricultural                  
 SENATOR TAYLOR said he would be willing to work with Senator                  
 Halford and Mr. Swanson for a solution.  If they can't find a                 
 solution, he thought it better to leave the law as it's been for              
 the last 20 years.                                                            
 MR. SWANSON said the bill they passed Monday, dealing with                    
 agricultural lands, deleted the prequalification requirements.  If            
 that passes, the Department would have no ability to screen out who           
 does not qualify.  He said he would be happy to work with the two             
 Senators on a solution.                                                       
 SENATOR LEMAN asked if there were any other objections to amendment           
 He noted the change of "proceeding" on line 11 to "preceding."                
 SENATOR PEARCE moved to pass SB 190 am from committee with                    
 individual recommendations and the accompanying fiscal note.  There           
 were no objections and it was so ordered.                                     
 SRES 1/24/96                                                                  
         SB 128 NONRESIDENT HUNT, SPORT FISH, TRAP FEES                       
  SENATOR LEMAN announced  SB 128  to be up for consideration.                
 SENATOR DONLEY, sponsor, said one of the first things he thought of           
 when he was elected were the out-of-state fishing interests coming            
 to Alaska and using our fish resources, but taking that money out-            
 of-state.  Because of the commerce clause in the U.S. Constitution,           
 we are limited as to how much we can charge out-of-state commercial           
 fishing interests for licensing of not more than three to one.  In            
 the private area the fees are much more liberal in allowing states            
 to discriminate between residents and non-residents.                          
 Several people have complained about abuse by non-residents who buy           
 a sport-fish license and fish all summer on the beaches of Alaska,            
 and as they caught their fish day-by-day, they were processing,               
 canning, and shipping it home.  This amounts to almost a commercial           
 license amount of fish.                                                       
 SB 128 addresses the issue of what we charge residents vs. non-               
 residents for sport fishing licenses and also, what we charge for             
 sport hunting licenses.  It also addresses the issue of what we               
 charge our residents for multiple use licenses.                               
 As the law is now, there is no incentive for an individual Alaskan            
 to buy a combination license, but it costs the State more when they           
 buy three separate licenses, because we pay vendors $1 per                    
 individual license issued.  He thought some people would go ahead             
 and buy a combination, if there was any incentive at all to do so.            
 This bill would save them some money, $5, and save the State a lot            
 of paper work.  The $5 negative impact would be offset by the                 
 savings realized by not having to pay a vendor $1 for every                   
 individual license they issue.                                                
 The way to fix the other problem of people fishing for a year on              
 one license and exporting their fish is to not let them buy a                 
 license for a year.  Have them buy a license for a shorter period             
 of time and have them repeatedly go back and buy them, if they want           
 to.  This isn't a solution, but it limits the duration of the                 
 license and the added fees adds a little to revenue.                          
 SENATOR DONLEY said the hunting section is more complex.  He looked           
 at what other states were charging and said that his fees were not            
 terribly out of line with what we would encounter going to another            
 state for hunting.  He said he has heard from some people in the              
 guiding business that this would be cost-prohibitive for some folks           
 coming up here.  The majority of the revenue generated for the                
 Department from fees comes from non-residents and this would reduce           
 the Department's income significantly.                                        
 One basis for this was a survey done by the ADF&G.  He found that             
 the survey didn't really ask these questions in a manner that would           
 lead to the conclusions that they draw.                                       
 Number 364                                                                    
 SENATOR DONLEY said he found that Alaska is rather unique in that             
 most states don't have a separate alien non-resident classification           
 which he wanted to preserve.                                                  
 SENATOR TAYLOR said in Canada, you only buy a trophy tag after                
 you've harvested an animal.  He noted that Debra Lyons was not kept           
 on the Board of Fish, because she tried to correct the same problem           
 Senator Donley is trying to correct with this legislation.                    
 Number 281                                                                    
 SENATOR TAYLOR applauded Senator Donley for introducing this                  
 legislation and added that he would like to see the issue targeted            
 even more.                                                                    
 SENATOR HALFORD agreed that there was definitely a problem.  He               
 said that Sections 4, 5, 6, 9, 11, and 12 all deal with the                   
 duration of license in one way or another.  He suggested that the             
 change in resident licenses in sections 1,2, and 3 is                         
 insignificant.  The changes in the tag fees are probably so                   
 progressive that they would result in a reduction of over-all                 
 income, so he suggested dropping that portion.  He would make all             
 resident and non-resident hunting and fishing consistently 30-day             
 licenses, with the exception of the king salmon tag which he has at           
 14-days.  He thought that would work logically and                            
 SENATOR HALFORD also thought that the possession limit shouldn't be           
 defined the way it is with regards to fish, because that means                
 there is no limit to what you can catch, if you have a freezer on-            
 board.  He thought there should be an ultimate limit for sports               
 SENATOR TAYLOR added that he didn't want "fish in possession" to              
 include the captain of charter boat and the captain's helper.                 
 Number 281                                                                    
 WAYNE REGELIN, Director, Division of Wildlife, said the increases             
 in the fees could significantly reduce their income.  About half of           
 their income is from license fees and tags.  Doubling those would             
 make us non-competitive with British Columbia and the Yukon which             
 are our primary competitors for non-resident hunters.  About 10% of           
 hunters in Alaska take about 10% of game each year, but they pay              
 for 75% of the bill.  Most of them don't compete with resident                
 hunters.  They have to be careful to maintain a reasonable ratio              
 between the cost for a resident and non-resident to hunt.  Courts             
 have never said what that ratio needs to be.  A recent appeals                
 court ruled that 1:7 was reasonable, but they didn't go on to say             
 where that became unreasonable.  Right now, current fees are $25              
 for a resident moose license, and $485 for a non-resident (a ratio            
 of 1:19).  The proposed change would make it 1:34.  He thought that           
 might get us in trouble.                                                      
 The final concern was with helping out people who move to Alaska,             
 who can't buy a resident hunting or fishing license until they've             
 been here a full year.  They have to buy a series of licenses until           
 they become official residents.                                               
 Number 236                                                                    
 SENATOR TAYLOR said it's probably appropriate that a wealthy                  
 European pays for the privilege of hunting over here, but he had a            
 problem with relatives of residents coming to visit for just three            
 weeks and being charged $80 a piece just so they can fish.  He also           
 said that it was prohibitive for his son to come home for a week              
 and hunt deer on Wrangell Island.                                             
 NEIL WEBSTER, Alaska Professional Hunters Association, applauded              
 Senator Donley's bill.  The only problem he has is with the fee               
 structure for non-residents and non-resident aliens.  He thought we           
 have to be competitive with B.C. where they have tag fees after the           
 animal has been harvested.  In Alaska, we sell hunts, not the                 
 killing of animals, but increased fees will have a negative impact            
 on our tourism industry, he said.                                             
 Number 157                                                                    
 DON WESTLUND said he was concerned with having to be in the State             
 for 365 days consecutively to get a resident license.  He was                 
 concerned that this looked like a revenue-generating bill.  If you            
 compare what commercial people take out of Alaska to what sport               
 people take out, the commercial take far more resource for far less           
 money.  He wanted a higher fee for commercial fishing, because they           
 take more resource.  He also commented that enough people would               
 still come to the State with the higher fees.                                 
 WAYNE KUBAT said he was a registered hunting guide for the past 11-           
 years.  He said he grossed $130,000 last year and netted $30,000.             
 He thought it would be a lot tougher to book hunts, if fees are               
 raised.  He said we have world-wide competition, like in Russia               
 where there aren't many regulations.                                          
 Number 61                                                                     
 ROD ARNO said he had been a wilderness hunting and fishing guide in           
 Alaska for the last 20 years.  He supported Senator Donley's idea             
 of increasing revenues to the State through the non-resident sport            
 fishermen.  They make up 50% of sport fishermen.  They are marketed           
 by the Alaska Tourism Marketing Council.  He opposed an increase in           
 the non-resident hunting tags and fees.  Non-resident hunters                 
 harvest less than 10% of the annual harvest of wild game.  Yet the            
 non-resident fees pay for over 75% of the $150 million spent by the           
 Division of Wildlife since 1980.  The Alaska State game hunting               
 industry continues to have no representation on the Alaska Tourism            
 Marketing Council.                                                            
 SENATOR TAYLOR asked what percentage of these fees are dedicated as           
 program receipts by the Department.  MR. REGELIN replied, 100%; it            
 first goes into a dedicated fish and game fund and then                       
 it goes back to either the Division of Sport Fish or Division of              
 Wildlife Conservation.                                                        
 TAPE 96-6, SIDE A                                                             
 SENATOR LEMAN thanked everyone for their testimony and adjourned              
 the meeting at 5:10 p.m.                                                      

Document Name Date/Time Subjects