Legislature(1995 - 1996)
01/24/1996 03:35 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 None COMMITTEE CALENDAR Alaska Mineral Commission Briefing SENATE BILL NO. 190 "An Act establishing a residency requirement for auctions of state land." 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 agency. 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 State. 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 business. 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 received. 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 application. 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 exclusion. 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 parcels. 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 administratively. 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 fishing. 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.