Legislature(1995 - 1996)

03/25/1996 03:38 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                   SENATE RESOURCES COMMITTEE                                  
                         March 25, 1996                                        
                           3:38 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                                                               
                                                                               
 All members present                                                           
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
 SENATE BILL NO. 201                                                           
 "An Act relating to the employment of emergency fire-fighting                 
 personnel by the commissioner of natural resources."                          
                                                                               
 SENATE BILL NO. 223                                                           
 "An Act approving an interim classification by the commissioner of            
 natural resources closing certain land within the Situk River                 
 system to new mineral entry; and providing for an effective date."            
                                                                               
 CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 397(FIN)                         
 "An Act relating to the fisheries resource landing tax and to the             
 seafood marketing assessment; and providing for an effective date."           
                                                                               
 CS FOR HOUSE BILL NO. 58(RES)                                                 
 "An Act establishing the Chickaloon Flats Critical Habitat Area."             
                                                                               
 SENATE BILL NO. 247                                                           
 "An Act relating to the fish and game fund; amending Rules 79(b)              
 and 82(b)(2), Alaska Rules of Civil Procedure; and providing for an           
 effective date."                                                              
                                                                               
  PREVIOUS SENATE COMMITTEE   ACTION                                           
                                                                               
 SB 201 - See Resources minutes dated 3/18/96.                                 
                                                                               
 SB 223 - See Resources minutes dated 3/20/96.                                 
                                                                               
 HB 397 - No previous action to record.                                        
                                                                               
 HB 58 -  See State Affairs minutes dated 2/22/96.                             
                                                                               
 SB 247 - See Resources minutes dated 3/20/96.                                 
                                                                               
  WITNESS REGISTER                                                             
 Nico Bus                                                                      
 Division of Support Services                                                  
 Department of Natural Resources                                               
 400 Willoughby Ave.                                                           
 Juneau, AK 99801-1724                                                         
  POSITION STATEMENT:   Offered information on fiscal note on                  
          SB 201                                                               
                                                                               
 Amy Daugherty, Staff to Representative Austerman                              
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Offered information on CSSSHB 397(FIN)                 
                                                                               
 Neil Slotnick, Assistant Attorney General                                     
 Department of Law                                                             
 P.O. Box 110300                                                               
 Juneau, AK 99811-0300                                                         
  POSITION STATEMENT:   Offered information on CSSSHB 397(FIN)                 
                                                                               
 Bob Bartholomew, Deputy Director                                              
 Income & Excise Audit Division                                                
 Department of Revenue                                                         
 P.O. Box 110420                                                               
 Juneau, AK 99811-0420                                                         
  POSITION STATEMENT:   Testified in support of CSSSHB 397(FIN)                
                                                                               
 Representative Con Bunde                                                      
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Prime Sponsor of CSHB 58(RES)                          
                                                                               
 Geron Bruce                                                                   
 Legislative Liaison                                                           
 Department of Fish & Game                                                     
 P.O. Box 25526                                                                
 Juneau, AK 99811-5526                                                         
  POSITION STATEMENT:   Testified in support of CSHB 58(RES)                   
      and testified on SB 247                                                  
                                                                               
  ACTION NARRATIVE                                                             
  TAPE 96-35, SIDE A                                                           
 Number 001                                                                    
                                                                               
          SB 201 FIRE FIGHTING PERSONNEL EMPLOYMENT                          
                                                                               
  CHAIRMAN LEMAN  called the Senate Resources Committee meeting to             
 order at 3:38 p.m.  He brought SB 201 before the committee as the             
 first order of business.  He noted that at the previous hearing on            
 the bill there was a question relating to the fiscal note, and that           
 a new fiscal note was provided by the department.                             
                                                                               
  NICO BUS , Director, Division of Support Services, Department of             
 Natural Resources, said at the last meeting the department                    
 testified that this money had already been appropriated and is in             
 the capital budget.  The new fiscal note shows the receipts coming            
 in as CIP receipts from this appropriation, which is already on the           
 books, in a component to be established.   He said this way there             
 is no commingling with fire suppression funding, and it is real               
 clear and easy to track.                                                      
                                                                               
 There being no further testimony on SB 201,  CHAIRMAN LEMAN  asked            
 for the pleasure of the committee.                                            
                                                                               
  SENATOR LINCOLN  moved SB 201 and the accompanying fiscal note be            
 passed out of committee with individual recommendations.  Hearing             
 no objection, it was so ordered.                                              
                                                                               
        SB 223 APPROVE CLOSING SITUK TO MINERAL ENTRY                        
                                                                               
  CHAIRMAN LEMAN  brought SB 223 before the committee as the next              
 order of business.  He noted there was a proposed amendment                   
 submitted by the Alaska Miners Association for the committee's                
 approval.                                                                     
                                                                               
  SENATOR LINCOLN  moved the following amendment to SB 223:                    
                                                                               
 Amendment No. 1                                                             
                                                                               
 Page 1, line 13:  Delete [subsurface] and insert "surface                   
                                                                               
 Page 2, line 1:  Insert following "fisheries."  Such surface estate          
 closure will protect the fisheries without eliminating mineral                
 location of the subsurface minerals or development of the                     
 subsurface minerals by underground mining methods.                           
                                                                               
 Page 2, line 2:  Following "state-owned" insert:  surface estate             
 portion of the                                                               
                                                                               
 Hearing no objection to Senator Lincoln's motion,  CHAIRMAN LEMAN             
 stated the amendment was adopted and would be incorporated into a             
 Resources CS.                                                                 
                                                                               
 There being no further testimony on SB 223,  CHAIRMAN LEMAN  asked            
 for the pleasure of the committee.                                            
                                                                               
  SENATOR LINCOLN  moved that CSSB 223(RES) be passed out of committee         
 with individual recommendations.   SENATOR FRANK  objected and stated         
 he thinks the legislation is unnecessary because there was no                 
 evidence suggesting the area was being threatened by mining                   
 activity.  A roll call vote was taken with the following result:              
 Senators Lincoln, Hoffman and Leman voted "Yea" and Senators                  
 Halford and Frank voted "Nay."   CHAIRMAN LEMAN  stated the motion            
 failed for lack of receiving four affirmative votes and the                   
 legislation would be set aside for future consideration.                      
                                                                               
  CSSSHB 397(FIN) FISH LANDING TAX/SEAFOOD MARKETING ASSMT.                  
                                                                               
  CHAIRMAN LEMAN  brought CSSSHB 397(FIN) before the committee as the          
 next order of business.                                                       
                                                                               
  AMY DAUGHERTY , staff to Representative Austerman who is prime               
 sponsor of HB 397, explained that two years ago the Legislature               
 passed the fishery resources landing tax, which established a 3.3             
 percent tax on fishery resources.  However, that legislation has              
 had some legal challenges which have left some loopholes open and             
 are addressed in HB 397.                                                      
                                                                               
 Ms. Daugherty pointed out the 3.3 percent tax is the same as the              
 fisheries business tax as it applies to shore-based processors,               
 plus the ASMI .3 assessment; it is just the way it's applied.  The            
 legislation essentially repeals the 3.3 percent tax and puts it               
 back on as a 3 percent tax and a separate .3 assessment so that it            
 mirrors identically the fisheries business tax and the ASMI                   
 assessment, and, therefore, will not have further legal challenges.           
                                                                               
                                                                               
  NEIL SLOTNICK , Assistant Attorney General, Department of Law,               
 stated he has been handling the litigation concerning the fisheries           
 landing tax.  He explained that the American Factory Trollers                 
 Association filed suit in Superior Court soon after that                      
 legislation was passed.  The state moved to dismiss the suit,                 
 arguing that they need to go through the administrative tax appeal            
 structure.  The Superior Court agreed and dismissed the suit.  It             
 was then appealed to the Supreme Court which upheld the Superior              
 Court's ruling.                                                               
                                                                               
 The suit challenged the tax as discriminatory under the Interstate            
 Commerce Clause of the U.S. Constitution, arguing that it                     
 discriminated against interstate commerce.  The landing tax, by its           
 own terms, exempts any entity that already pays the fisheries                 
 business tax, so on its face, it is in a sense discriminatory                 
 because only certain tax payers are going to have to pay it.  It is           
 the state's argument that the two taxes are meant to be comparable.           
 Anytime there are two taxes that are meant to be comparable, they             
 must be essentially equal.                                                    
                                                                               
 Mr. Slotnick said one of the arguments that the factory trollers              
 raised in Superior Court was that there were more credits available           
 to the payers of the fisheries business tax than there were                   
 available to the payers of the fisheries landing tax.  He said the            
 department thought that perhaps this was an oversight in the                  
 original legislation, that because the two taxes are meant to be              
 comparable, it might be that the Legislature would want to                    
 reconsider this and make the two comparable by extending the same             
 credits over that are available to the fisheries business tax                 
 payers to the landing tax tax payers.  HB 397 balances the playing            
 field between the two businesses.                                             
                                                                               
  BOB BARTHOLOMEW , Deputy Director, Income & Excise Audit Division,           
 Department of Revenue, said the department has been working with              
 the sponsor of the legislation to basically try and rectify where             
 there may be potential weaknesses in the statute.  He noted in FY             
 95 the fisheries business tax collected $7 million, portions of               
 which will get shared back to the local governments, but is being             
 held in escrow by the local governments pending the challenges to             
 the tax.                                                                      
                                                                               
  SENATOR HALFORD  asked why the bill contains numerous sections               
 dealing with the ASMI tax at .2 percent, .3 percent, etc.   MR.               
 BARTHOLOMEW  responded that throughout the ASMI statute there was a           
 potential loophole with the word "purchase" because some people do            
 not purchase seafood; they catch it themselves and either export it           
 out of state or do their own processing.  In order to close that              
 potential loophole, the word "purchase" was replaced with                     
 "produce."  He added that the mechanism for self-assessment and the           
 rate of self-assessment will be exactly the same as it is in                  
 current statute.                                                              
                                                                               
 There being no further testimony on HB 397,  CHAIRMAN LEMAN  said the         
 bill would be held over for final action at the next meeting.                 
                                                                               
     CSHB 58(RES) CHICKALOON FLATS CRITICAL HABITAT AREA                     
                                                                               
  CHAIRMAN LEMAN  brought CSHB 58(RES) before the committee.                   
                                                                               
  REPRESENTATIVE CON BUNDE , prime sponsor of HB 58, explained                 
 Chickaloon Flats is an extremely accessible area across the inlet             
 from Anchorage, and there is some concern among hunters about the             
 existence of resting and hunting areas for waterfowl.  The                    
 legislation will create a critical habitat area that does not                 
 preclude but, in fact, encourages hunting and access.  However, it            
 provides that if there is anything that would disrupt the nesting             
 of waterfowl, it would have to go through the Department of Fish &            
 Game.  The legislation is to assure adequate habitat for waterfowl,           
 and it does not create any stumbling blocks for future development,           
 nor will it inhibit access for any outdoor recreational purpose.              
                                                                               
 Number 368                                                                    
                                                                               
  CHAIRMAN LEMAN  asked what potential encroaching dangers the hunters         
 are concerned about.   REPRESENTATIVE BUNDE  responded that he                
 doesn't think there is any potential development in that area                 
 planned at this time, but that the hunters are just looking down              
 the road twenty or thirty years to protect the habitat of the area            
 and the access to the area.                                                   
                                                                               
 Number 400                                                                    
                                                                               
  SENATOR LINCOLN  commented that a section of the bill permits entry          
 within the Chickaloon Flats Critical Habitat Area for the                     
 exploration and development of oil and gas resources when it is               
 compatible with the purposes for which the critical habitat area is           
 established, but she didn't how that entry could ever be compatible           
 with the guarantees that have been established for the area.                  
                                                                               
  SENATOR FRANK  asked if there is any scientific data to support the          
 notion that oil and gas development on the North Slope has affected           
 waterfowl in that area.   REPRESENTATIVE BUNDE , speaking from his            
 own experience of working on the slope for 15 years, said                     
 production has had not any serious impact.  However, he thinks                
 exploration and seismic activity during the nesting and staging               
 area could create a problem.                                                  
                                                                               
  SENATOR FRANK  voiced concern about allowing access to the area by           
 all-terrain vehicles and possibly horses because of the potential             
 tearing up of the vegetation.                                                 
                                                                               
  GERON BRUCE , Legislative Liaison, Department of Fish & Game, stated         
 the department is in support of HB 58.  He noted this area is                 
 authorized under AS 16.20.500, which is the enabling legislation              
 setting up the fish and game critical habitat areas.  He believes             
 some of the concerns expressed are addressed by the linkage between           
 that enabling legislation and this particular bill that sets out              
 this specific critical habitat area.  He said it is basically a               
 multiple-use area, but the significance of authorizing it as a                
 critical habitat area is that other uses conducted there have to be           
 compatible with its primary function.  In the case of an all-                 
 terrain vehicle, there might be certain circumstances in which it             
 would not be damaging to the primary purpose of protecting that               
 habitat, but there might be other situations where it would be, and           
 the department has the flexibility within this program to make                
 those calls.                                                                  
                                                                               
  SENATOR FRANK  said he thought the legislation should be clear that          
 users of all-terrain vehicles have to have permission from the                
 commissioner of the department before taking them into the area.              
                                                                               
  TAPE 96-35, SIDE B                                                           
 Number 001                                                                    
                                                                               
  SENATOR LINCOLN  noted that subsection (c) on page 2 provides that           
 the state may acquire more lands for inclusion in the Chickaloon              
 Flats Critical Habitat Area, so it appears that the area could be             
 expanded beyond what is currently shown on the map.   She then                
 proposed an amendment to page 2, line 23, changing the word "shall"           
 to "may."  She said if there is going to be an expansion of the               
 area and then the exploration of development of oil and gas, it               
 shouldn't be automatic.   REPRESENTATIVE BUNDE  pointed out that              
 there are two small islands out in the bay that are privately owned           
 and that is the only private property that would be available for             
 expansion, and the only reason that was considered was so that                
 those people wouldn't be frozen out of access to their property.              
                                                                               
  SENATOR FRANK  asked Mr. Bruce if the department feels that there is         
 adequate protection in state law and existing authority to handle             
 any threat to this bird area rather than passing this legislation.            
  MR. BRUCE  responded that he doesn't think that impetus for it is            
 motivated so much by a threat as it is more from the standpoint               
 that these people regard it as a special area and they look at this           
 provision as a way to gain that kind of recognition.                          
                                                                               
  SENATOR FRANK  asked if this area is open to mineral entry.   MR.            
 BRUCE  acknowledged that it is a multiple use area, and unless                
 specifically prohibited in the statute establishing the critical              
 habitat area, it would be open to mineral entry as long as it was             
 compatible with the fish and wildlife habitat in the area.                    
  REPRESENTATIVE BUNDE  pointed out it is below mean high tide, and            
 the only reason the exploration and development of oil and gas is             
 mentioned is that they are the only resources that anybody has                
 indicated that there's a possibility of locating there.                       
                                                                               
 Number 150                                                                    
                                                                               
  SENATOR TAYLOR  questioned the total number of acres involved in             
 this critical habitat area, and what number of acres do they                  
 propose removing from another critical habitat area so that it will           
 be available for multiple use.                                                
                                                                               
 Number 200                                                                    
                                                                               
  SENATOR LINCOLN  moved the following amendment to CSHB 58(RES):              
                                                                               
 Amendment No. 1                                                             
                                                                               
 Page 2, line 23:  Delete "shall" and insert "may"                             
                                                                               
  SENATOR FRANK  objected to the adoption of the amendment.  After             
 further discussion on the amendment, the roll was taken with the              
 following result: Senator Lincoln voted "Yea" and Senators Frank,             
 Halford, Pearce, Hoffman and Leman voted "Nay."  The Chairman                 
 stated the motion failed.                                                     
                                                                               
  SENATOR TAYLOR  moved the following amendment to CSHB 58(RES):               
                                                                               
 Amendment No. 2                                                             
                                                                               
 Page 2, line 13:  Between the words "boat" and "aircraft" insert              
 "hovercraft, helicopter, ultra lite and crawler tractor"                      
                                                                               
  SENATOR LINCOLN  objected to the adoption of the amendment.  The             
 roll was taken with the following result:  Senator Taylor voted               
 "Yea" and Senators Halford, Lincoln, Hoffman, Leman, Pearce and               
 Frank voted "Nay."  The Chairman stated the motion failed.                    
                                                                               
 There being no further discussion on CSHB 58(RES),  CHAIRMAN LEMAN            
 asked for the pleasure of the committee.                                      
                                                                               
  SENATOR HALFORD  moved CSHB 58(RES) be passed out of committee with          
 individual recommendations.  SENATOR TAYLOR objected.  The roll was           
 taken with the following result:  Senators Hoffman, Leman and                 
 Halford voted "Yea" and Senators Taylor, Lincoln, Pearce and Frank            
 voted "Nay."  The Chairman stated the motion failed.                          
                                                                               
        SB 247 USE OF FISH & GAME FUND/COMM'R'S POWERS                       
                                                                               
  CHAIRMAN LEMAN  brought SB 247 before the committee as the final             
 order of business.  It was noted there was a Resources CS for the             
 committee's consideration.                                                    
                                                                               
  SENATOR TAYLOR  moved the adoption of CSSB 247(RES), version "F," as         
 a working document.  Hearing no objection, the motion carried.                
                                                                               
  SENATOR TAYLOR , the legislation's prime sponsor, said the primary           
 purpose of the bill is to constrain the department in the                     
 utilization of funds that are derived from the user public.  He               
 said receipts from specific taxes imposed on those people have                
 become the primary budget of all of the Department of Fish and                
 Game, with the exception of the Division of Commercial Fisheries.             
                                                                               
                                                                               
  SENATOR TAYLOR  moved the following amendment to CSSB 247(RES)               
                                                                               
 Amendment No. 1                                                             
                                                                               
 Page 2, line 8:  Delete "or"                                                  
                                                                               
 Page 2, line 13:  Following "tags;" insert "or                                
    (D)  construction and protection of shooting                               
 ranges;"                                                                      
                                                                               
 Page 3, line 27:  Delete "or"                                                 
                                                                               
 Page 4, line 1:  Following "tags;" insert  "or                                
    (D) construction and protection of shooting ranges;"                       
                                                                               
  SENATOR HOFFMAN  objected to the adoption of the amendment.                  
                                                                               
  SENATOR TAYLOR , speaking to the amendment to CSSB 247(RES), said            
 rifle ranges seem to be coming under greater and greater attack all           
 across the state, and it was felt that since it is one specific               
 funding mechanism that is provided for in federal fund it should be           
 in the bill to make certain those shooting and rifle ranges                   
 continue to exist.  He said the amendment contains the phrase                 
 "construction and protection of shooting ranges," but he thought              
 replacing the word "protection" with the word "preservation" would            
 be more suitable because it would allow the upgrade and improvement           
 of the shooting range.                                                        
                                                                               
  TAPE 96-36, SIDE A                                                           
 Number 010                                                                    
                                                                               
  SENATOR TAYLOR  moved as an amendment to the amendment to replace            
 the word "protection" with "preservation."  Hearing no objection,             
 the Chairman stated the amendment to the amendment was adopted.               
                                                                               
  CHAIRMAN LEMAN  stated Amendment No. 1, as amended, was before the           
 committee.  Hearing no objection, he stated the amendment was                 
 adopted.                                                                      
                                                                               
  CHAIRMAN LEMAN  noted that at the previous hearing on the bill, Jeff         
 Parker expressed concern that because the legislation included                
 sport fish stocks that it would result in the loss of federal                 
 revenues, and he had suggested that the references to fish be                 
 deleted and the bill just refer to wildlife.  He questioned if that           
 is a valid concern, and said it was not his intent that that                  
 happen.                                                                       
                                                                               
  SENATOR TAYLOR  said he thinks a good portion of the monies received         
 from the federal government is specifically allocated to sport fish           
 to enhance access for sport and recreational fisheries, and he                
 thinks Mr. Parker is incorrect that federal funds will be lost.  In           
 fact he thinks the way the department has been operating, they were           
 running a risk of losing some federal funds should an audit reveal            
 that they were using them for commercial hatchery type operations             
 instead of sport fish.                                                        
                                                                               
  GERON BRUCE , Legislative Liaison, Alaska Department of Fish & Game,         
 said he thought Mr. Parker had a valid concern.  He pointed out the           
 fiscal notes prepared by the department showed a reversion of                 
 federal funds to the federal government.  They do not believe that            
 under the original version of the bill that the purposes for which            
 those funds are authorized to be spent would be broad enough to               
 include many of the things that they do and are vital to their                
 sport fish and recreational hunting management programs.  He also             
 said the problem is not with the federal law and regulations; the             
 problem will be with this proposed state law.                                 
                                                                               
  SENATOR LINCOLN  said she would be interested in knowing how much            
 money the department believes the state would be losing in federal            
 dollars.                                                                      
                                                                               
  SENATOR TAYLOR  moved CSSB 247(RES), as amended, and the                     
 accompanying fiscal notes be passed out of committee with                     
 individual recommendations.   SENATOR HOFFMAN  objected, stating that         
 as a hunter and fisherman, he does not see a problem with of the              
 way the dollars are being spent by the Department of Fish and Game.           
 The roll was taken with the following result:  Senator Taylor,                
 Halford, Pearce and Leman voted "Yea" and Senators Hoffman and                
 Lincoln voted "Nay."  The Chairman stated the motion carried.                 
                                                                               
 There being no further business to come before the committee, the             
 meeting was adjourned at approximately 5:30 p.m.                              
                                                                               

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