Legislature(1995 - 1996)
03/25/1996 03:38 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.