Legislature(1995 - 1996)

04/10/1996 03:52 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE RESOURCES COMMITTEE                                  
                         April 10, 1996                                        
                           3:52 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                                                           
 CS FOR HOUSE BILL NO. 59(RES)                                                 
 "An Act relating to raffles and auctions of certain permits to take           
 big game; and providing for an effective date."                               
 CS FOR HOUSE JOINT RESOLUTION NO. 54(RES) am                                  
 Encouraging the lessees of Alaska's vast North Slope natural gas              
 reserves to reach agreement to market gas, expressing the                     
 legislature's support for an Alaska North Slope (ANS) gas                     
 transmission pipeline, and requesting the President of the United             
 States and the Governor of the State of Alaska to publicly support            
 and take action that will help expedite the construction of that              
 CS FOR HOUSE BILL NO. 357(RES)                                                
 "An Act relating to the issuance of hunting, trapping, and                    
 noncommercial fishing licenses, tags, and permits and to residency            
 for fish and game purposes; and providing for an effective date."             
 SENATE BILL NO. 284                                                           
 "An Act relating to the four dam pool transfer fund and the power             
 development fund."                                                            
 HB 329 am (RESTITUTION FOR CERTAIN GAME VIOLATIONS) was scheduled,            
 but not taken up this date.                                                   
 SB 180 (VALUE-ADDED TIMBER SALES; MARKETING) was scheduled, but not           
 taken up this date.                                                           
  PREVIOUS SENATE COMMITTEE ACTION                                             
 HB 59 - No previous action to record.                                         
 HB 357 - See Resources minutes dated 4/3/96.                                  
 HJR 54 - No previous action to record.                                        
 SB 284 - See Resources minutes dated 3/6/96 and 4/3/96.                       
  WITNESS REGISTER                                                             
 Patti Swenson, Staff                                                          
 Representative Con Bunde                                                      
 State Capitol Bldg.                                                           
 Juneau, Alaska 99801-1182                                                     
  POSITION STATEMENT:   Staff to sponsor of HB 59.                             
 Mr. Wayne Regelin, Director                                                   
 Division of Wildlife Conservation                                             
 Department of Fish and Game                                                   
 P.O. Box 25526                                                                
 Juneau, AK 99802-5526                                                         
  POSITION STATEMENT:   Commented on HB 59.                                    
 Duayne Buell, Chairman                                                        
 Southeast Alaska Fish and Wildlife Safeguard                                  
 5700 Tudor Rd.                                                                
 Anchorage, AK 5700                                                            
  POSITION STATEMENT:   Supported HB 59.                                       
 Captain Richard Graham                                                        
 Division of Fish and Wildlife                                                 
 Alaska Department of Fish and Game                                            
 4500 W 50th                                                                   
 Anchorage,AK 99502                                                            
  POSITION STATEMENT:   Supported HB 59 and HB 357.                            
 Representative Gene Kubina                                                    
 State Capitol Bldg.                                                           
 Juneau, Alaska 99801-1182                                                     
  POSITION STATEMENT:   Sponsor of HJR 54.                                     
 Mr. Wayne Lewis, Manager                                                      
 External Affairs                                                              
 Yukon Pacific Corp.                                                           
 1049 W. 5th Ave.                                                              
 Anchorage, AK 99501                                                           
  POSITION STATEMENT:   Supported SCS CSHJR 54(RES) am.                        
 Mr. Jeff Lowenfels, President and CEO                                         
 Yukon Pacific Corp.                                                           
 1049 W. 5th Ave.                                                              
 Anchorage, AK 99501                                                           
  POSITION STATEMENT:   Supported SCS CSHJR 54(RES) am.                        
 Mayor Dennis Eagan                                                            
 155 S. Seward St.                                                             
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Supported SCS CSHJR 54(RES) am                         
 Jerry Hood, Vice President                                                    
 211 4th Street                                                                
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Supported SCS CSHJR 54 (RES) am.                       
 Representative Scott Ogan                                                     
 State Capitol Bldg.                                                           
 Juneau, Alaska 99801-1182                                                     
  POSITION STATEMENT:   Prime Sponsor of HB 357.                               
 Lance Nelson                                                                  
 Department of Law                                                             
 1039 W. 4th Ave., Suite 200                                                   
 Anchorage, AK 99501-1994                                                      
  POSITION STATEMENT:   Available to comment on HB 357.                        
 Randy Simmons                                                                 
 Alaska Energy Authority                                                       
 480 W. Tudor Rd.                                                              
 Anchorage, AK 99503-6690                                                      
  POSITION STATEMENT:   Commented on SB 284.                                   
 Mr. Keith Laufer, Assistant Attorney General                                  
 Department of Law                                                             
 P.O. Box 110300                                                               
 Juneau, AK 99811-0300                                                         
  POSITION STATEMENT:   Commented on SB 284.                                   
  ACTION NARRATIVE                                                             
  TAPE 96-49, SIDE A                                                           
 Number 001                                                                    
       CSHB 59(RES) RAFFLE OR AUCTION OF BIG GAME PERMITS                     
    CHAIRMAN LEMAN  called the Senate Resources Committee meeting to         
 order at 3:52 p.m. and announced  CSHB 59(RES)  to be up for                  
 Patti Swenson, Staff for Representative Con Bunde, explained that             
 under statute the only organization that is qualified to raffle a             
 permit for the Delta bison herd is Safeguard.  HB 59 expands the              
 definition of "qualified organization" to allow the ADF&G to issue            
 through competitive auction or raffle up to two harvest permits               
 each year for each of the following species: dall sheep, bison,               
 musk ox, brown or grizzly bear, moose, caribou, and wolf.                     
 At least 11 western states have the provision for auctioning or               
 raffling big game harvest permits.  Every State with a similar                
 program has had a positive impact on their budget.  This                      
 legislation would provide another revenue source for ADF&G and                
 would enable the continuation of game management programs for the             
 common use of the people.                                                     
 MS. SWENSON said there was a proposed amendment allowing for an               
 increased number of permits for Safeguard.                                    
 MR. WAYNE REGELIN, Director, Division of Wildlife Conservation,               
 explained that Safeguard would get all the proceeds from the raffle           
 rather than sharing them with the Division.  He said if they share            
 the proceeds, they could only get 10% because of federal grant-in-            
 aid regulations.                                                              
 He said there are two parts to the bill.  One part reads that the             
 organization that does the raffle or auction can keep 10%.  Ninety            
 percent comes back to the Department (to comply with federal grant-           
 in-aid requirements).  The amendment that's suggested by                      
 Representative Bunde donates one permit without sharing of receipts           
 so they can keep all of the funding.                                          
 SENATOR TAYLOR asked why they couldn't give that same opportunity             
 to other nonprofit organizations that promote hunting and fishing.            
 MR. REGELIN replied that they worked with hunting organizations               
 when writing this legislation.  There is such a big demand for                
 hunting Delta Bison and they did not want to create a situation               
 that would limit the number of permits available by draw permit for           
 the regular hunter.                                                           
 Number 180                                                                    
 SENATOR TAYLOR moved to amend the first section so that the                   
 Department could donate one bison permit to Safeguard instead of              
 just 10% of the proceeds. There were no objections and it was so              
 SENATOR LINCOLN asked if Delta supported this legislation.  MR.               
 REGELIN replied that the Delta Fish and Game Advisory Committee had           
 been working with them through Safeguard for some time, but he                
 hadn't dealt with the city.                                                   
 SENATOR LINCOLN asked if any other nonprofit group could qualify              
 for a permit.  MR. REGELIN replied that the statute allows them to            
 donate one bison permit to a nonprofit supporting ADF&G.  Because             
 of the federal grant-in-aid requirements of sharing those receipts            
 it's not profitable for Safeguard to continue that and this is a              
 way for Safeguard to have enough funding to continue their                    
 operations which are very beneficial to ADF&G.                                
 DUAYNE BUELL, Chairman, Southeast Board, Alaska Fish and Wildlife             
 Safeguard, said they had been in existence since 1984.  He said               
 they have put hundreds and hundreds of hours into previous bison              
 permit raffles and the most they have gained from them is about               
 $3,000.  This is mainly because of the Pitman - Roberts restriction           
 saying they can only have 10 percent if they are a licensing agent            
 for the State.  As a nonprofit corporation with a donation of the             
 permit they are not a licensing agent and can retain the full                 
 Number 304                                                                    
 SENATOR TAYLOR said he wanted to amend this bill to make it as user           
 friendly to other groups as possible.  MR. REGELIN commented that             
 it is limited to two permits per species per year.                            
 SENATOR TAYLOR said he would like to insert elk because he thought            
 there are enough of them now to do that and he wanted to remove the           
 10 percent so they could donate to different associations.                    
 MR. REGELIN said they make money when there are a lot more people             
 who apply than receive the benefit.  With elk there wasn't a lot of           
 interest and they didn't think they could make a lot of money on              
 those.  He said this is targeted mostly at large groups from out-             
 of-state (because they bring in a lot of money).                              
 SENATOR TAYLOR said he wanted an amendment saying that those local            
 organizations in Southeast Alaska that put in the time and money              
 have the right to, at least, an elk permit.                                   
 SENATOR LINCOLN asked in section (a) why they are only talking                
 about bison.  MR. BUELL said the statute giving them the bison                
 permit was passed in 1990 and at the time they thought it was                 
 sufficient.  They did not realize they would fall under the 10                
 percent provision.  They still feel that one bison permit is all              
 they need, if they can get one.  The return to the State on the               
 this over the last five or six years has been in excess of $20                
 million through fines, forfeitures, and civil penalties.  He didn't           
 think they would have a return like that from management oriented             
 CAPTAIN RICHARD GRAHAM, Division of Fish and Wildlife Protection,             
 said they support the concept in HB 59.                                       
  SENATOR LEMAN announced  CSHJR 54(RES)  to be up for discussion.            
 REPRESENTATIVE GENE KUBINA, sponsor, said a lot of people have had            
 input into the writing of this bill and do not oppose it.  It                 
 requests all the lessees to intensify their efforts to get a                  
 contractual relationship to market our huge quantities of natural             
 gas to the Asian market.  It asks the President of the United                 
 States to demonstrate national support and to basically "plug it"             
 with our Asian trading partners.  It asks the Governor to assure              
 the buyers that the State will provide continuity in regards to its           
 supply, tax structure, and regulatory policy.  It encourages                  
 private developers to use the State's labor force and have an                 
 Alaskan hire agreement for any project that would market it.                  
 REPRESENTATIVE KUBINA said there was a very good article from the             
 Ketchikan Daily News by Lew Williams which very accurately spells             
 out the issues that need to be addressed.  It says the problem is             
 not necessarily the price and that there's not a market, but that             
 it is the internal structure we have and the way the North Slope              
 companies work with gas.                                                      
 Number 456                                                                    
 SENATOR TAYLOR moved to adopt SCS CSHJR 54(RES) and asked                     
 unanimous consent.  There were no objections and it was so ordered.           
 MR. WAYNE LEWIS, Manager, External Affairs, Yukon Pacific Corp.               
 urged them to unanimously pass HJR 54.  This resolution represents            
 a significant advancement in the evolution of the TAGS project                
 which is so important to Alaskans, he said.  It also sends a clear            
 message to our Asian markets and competitors in the Middle East and           
 on the Pacific Rim that Alaska recognizes our gas resource                    
 potential and we understand the need to forge a unified project               
 MR. LEWIS said the problem isn't that Alaska isn't competitive, but           
 that it's not competing.                                                      
 MR. JEFF LOWENFELS, President and CEO, stressed that the problem we           
 have is that we are not alone in this race.  Last week they had a             
 visit from the Japanese National Oil Company who wanted our gas.              
 They brought an attorney who represented six utilities in Japan.              
 He said this is a project they are ready to build.  They can do it            
 with producer help or they can do it simply with the gas the                  
 producers have an obligation to produce.  Either way, Yukon Pacific           
 and CSX are committed to move this project forward, he said.  They            
 are committed to a project labor agreement.                                   
 MAYOR DENNIS EAGAN, City and Borough of Juneau, said even though we           
 the people of Juneau don't benefit directly, they would surely                
 benefit from the wealth to the State treasury to be brought in by             
 revenues from a trans Alaska gas line.  He said the Assembly had              
 passed Resolution 1806 in support of HJR 54.  The Municipal League            
 and the Alaska Congress of Mayors unanimously support this                    
 legislation also.                                                             
 JERRY HOOD, Vice-President, Alaska AFL/CIO, said they emphatically            
 support this legislation.  He said one of the things that concerns            
 them most is Alaskan hire and they will discuss a project labor               
 agreement for the Yukon Pacific gas line project as soon as the               
 State has time to negotiate with them.  They will discuss a plan of           
 action where residents in rural Alaska and Alaska natives will not            
 be excluded from job opportunities on the project.                            
 SENATOR LEMAN asked if there was anyone opposed to this resolution            
 and there were no indications.                                                
 Number 575                                                                    
 SENATOR PEARCE moved to pass SCS CSHJR 54 (RES) out of committee              
 with individual recommendations and the appropriate fiscal note.              
 There were no objections and it was so ordered.                               
         CSHB 357(RES) FISH & GAME:LICENSES & RESIDENCY                       
 SENATOR LEMAN announced  CSHB 357(RES)  to be up for consideration.           
 SENATOR PEARCE moved to adopt SCS CSHB 357 (RES), version K.                  
 SENATOR LEMAN noted that was not the latest version.  SENATOR                 
 PEARCE moved to withdraw her motion and asked for unanimous                   
 consent.  There were no objections.                                           
 SENATOR PEARCE moved to adopt the SCS CSHB 357 (RES), Utermohle               
 4/9/96 version M as the workdraft.  There were no objections and it           
 was so ordered.                                                               
 REPRESENTATIVE SCOTT OGAN, sponsor, supported the changes in the              
 bill regarding people who move to the State.                                  
 SENATOR TAYLOR asked if this treated Coast Guard personnel                    
 differently from other branches of the military.  REPRESENTATIVE              
 OGAN replied that it put them on the same par as other military               
 members.  In the past it was done out of courtesy, but it wasn't in           
 CAPTAIN RICHARD GRAHAM, Division of Fish and Wildlife, said they              
 support the bill.                                                             
 Number 560                                                                    
 MR. LANCE NELSON, Department of Law, said he would answer                     
 SENATOR TAYLOR said he was concerned that people working with our             
 congressional staff or young people on missions would not be                  
 precluded by this change.  MR. NELSON said it wasn't the intent of            
 the legislation to exclude those people and he suggested that they            
 put specific language in to address that.                                     
 SENATOR TAYLOR said he thought they were o.k. under current                   
 regulations, but he wanted to make sure they weren't doing anything           
 here additionally that would preclude them.                                   
 SENATOR LINCOLN responded that she wanted to see specific language            
 put in regarding resident qualifications.  She said she was mostly            
 concerned about students and families of military people.                     
 REPRESENTATIVE OGAN said the military isn't a problem and students            
 were covered if they use their parent's address as their domicile.            
 Number 480                                                                    
 SENATOR LINCOLN asked why the fiscal note didn't reflect the                  
 possible increase of thousands of dollars of revenue.                         
 REPRESENTATIVE OGAN replied that the analysis was pretty                      
 SENATOR TAYLOR said he thought they had deleted the phrase "Alaska            
 State drivers license."                                                       
 LINDA DAHL, Staff to Representative Ogan, explained that the                  
 driver's license is not the only test.  When they suspect someone             
 is not a resident, they will look for several things.  One is has             
 the person applied for a resident hunting and fishing license in              
 another state, another is have they applied for unemployment                  
 benefits or to vote.                                                          
 Number 447                                                                    
 MR. NELSON said Ms. Dahl's comments regarding use of a driver's               
 license to help determine residency were accurate.                            
 SENATOR PEARCE moved to pass SCS CSHB 357 (RES) out of committee              
 with individual recommendations and individual fiscal notes.  There           
 were no objections and it was so ordered.                                     
          SB 284 FOUR DAM POOL: RELATED FUNDS & BONDS                         
 SENATOR LEMAN announced  SB 284  to be up for consideration.  He said         
 there were two proposed committee substitutes.                                
 SENATOR LINCOLN said she wanted some clarification on how the PCE             
 would be reduced and more information on the rural capitalization             
 RANDY SIMMONS, Alaska Energy Authority, responded that the Four Dam           
 Pool Utilities make approximately $11 million per year in payments            
 to the State for debt service for construction of the Four Dam Pool           
 projects.  Right now that money is appropriated 40 percent to PCE,            
 40 percent to the Southeast Intertie, and 20 percent to DCRA's                
 power project fund for small grants.                                          
 He explained with the long term power sales agreement the State has           
 with the utilities the State is responsible for certain repairs and           
 improvements to those projects.  In this case the repairs are for             
 the Tyee and Terror Lake Projects.  Those repairs are around $20 -            
 $23 million.  AEA has no funding to make those repairs, he                    
 explained.  Their option is to come to the legislature and try to             
 get a general fund appropriation or to try to do bonds or allow the           
 utilities to use their self help right.  Under their self help                
 right they can withhold any or all of the monies that are paid in             
 on the debt service.  If there is self help, therefore, there would           
 be a reduction of the amount of money that will go into PCE.                  
 This bill would issue bonds and they would like to defer payments             
 for one year to try to get a long term solution to the Four Dam               
 Pool issues and PCE's.  So there wouldn't be any effect for that              
 one year period.  If they cannot float the bonds, the utilities               
 will exercise their self help right and no monies would be coming             
 into the State for the next two years.                                        
 SENATOR LEMAN asked him which committee substitute he preferred.              
 He answered the G version because, although it doesn't give them              
 the flexibility they wanted of 10 years, they thought they could              
 live with eight years.  Under F they like the way the bonds are set           
 up better, but there are a number of provisions that concern them             
 if the State and the utilities do not reach agreement by June 30,             
 1997.  Then there would be a new way the monies are allocated.                
 They are allocated first to the bond payments which is good.  But             
 secondly they could go to the utilities for repairs, improvements,            
 or new capital projects that are related to the projects; and the             
 way the new capital projects are written now the State would have             
 no veto right at all.  They also have other legal concerns, he                
 SENATOR LEMAN said he would prefer that these mature within 10                
 SENATOR TAYLOR clarified that the legislation that created his                
 entity specified the creation of the Southeast Intertie Fund, the             
 amount of money that would flow to it, and how those monies would             
 be returned.  The legislature was never intended to have a veto               
 over the funds.  They didn't have a veto over them right now.                 
 MR. SIMMONS said he was not trying to specify that the                        
 Administration is opposed to the Southeast Intertie.  He was trying           
 to give an example of a project that the utilities could decide to            
 build.  They could all use a different one.  They could decide to             
 hook a new intertie up to the projects that no one has even                   
 contemplated.  AEA would have no say so as to whether they went               
 forward with that project.                                                    
 SENATOR TAYLOR said the question is whether this administration is            
 going to meaningfully enter into discussions on divestiture.  He              
 said he wanted to make sure there was good faith bargaining and               
 finality here.                                                                
 Number 281                                                                    
 SENATOR TAYLOR moved to adopt CSSB 284(RES), version F.  SENATOR              
 LEMAN objected for the reasons stated by the witnesses.  SENATORS             
 LINCOLN, PEARCE, LEMAN, and FRANK voted "Nay"; SENATOR TAYLOR voted           
 "Yes"; and so, the motion failed.                                             
 SENATOR LEMAN asked if the committee wanted to consider the G                 
 SENATOR TAYLOR said he had a question on page 3, line 7 where it              
 talks about the 50 years mature date for the bonds.                           
 MR. KEITH LAUFER, Assistant Attorney General, explained that was a            
 provision included in AEA's general bonding statutes.  It pertains            
 to bonds that AEA otherwise issued.                                           
 SENATOR FRANK asked what kind of incentive the State has to settle            
 the divestiture issue.  MR. SIMMONS replied that in 1993 the State            
 made it clear they wanted AEA to divest of all of its projects.               
 SENATOR FRANK asked for clarification about what money would come             
 back to the State.  MR. SIMMONS replied that if they were to sell             
 the projects they would be getting a sales price and they would be            
 selling them that debt.                                                       
 SENATOR FRANK asked if they were discounting that stream of cash.             
 MR. SIMMONS replied that they discount the stream of cash depending           
 on the interest rate at the time and then they would reduce that              
 discount by what they call the risk of the ownership of those                 
 projects, such as known repairs for those projects that they don't            
 have funding for.                                                             
 SENATOR FRANK asked what their value was.  MR. SIMMONS replied                
 their value was somewhere between $87 - $108 million depending on             
 who does the repairs.                                                         
 SENATOR FRANK asked if they did the repairs what it would cost.               
 MR. SIMMONS answered $108 million and roughly $25 million less if             
 someone else does the repairs.                                                
 Number 78                                                                     
 SENATOR PEARCE moved to CSSB 284(RES), version G.  SENATOR TAYLOR             
 objected.  SENATORS LINCOLN, LEMAN, PEARCE, FRANK, and HALFORD                
 voted "Yea"; SENATOR TAYLOR voted "Nay"; and so, the motion passed.           
 SENATOR TAYLOR commented that from talks with the utilities he                
 found they would rather pay the debt off earlier rather than later.           
 MR. LAUFER said he recommended putting a certain date in the bill             
 to make the statute easier to read.                                           
 SENATOR FRANK moved on page 3, lines 4 and 5 to delete the words              
 "the effective date of this bill" section and insert "May 1, 1996."           
 There were no objections and it was so ordered.                               
 SENATOR LINCOLN moved to amend line 7 to delete "eight years" and             
 insert "10 years."  SENATOR HALFORD objected.  SENATORS LINCOLN and           
 LEMAN voted "Yea"; SENATORS PEARCE, FRANK, HALFORD, and TAYLOR                
 voted "Nay"; and so, the motion failed.                                       
 SENATOR FRANK moved to pass CSSB 284(RES), as amended, from                   
 committee with individual recommendations.  There were no                     
 objections and it was so ordered.                                             
 SENATOR LEMAN recessed the meeting at 5:30 p.m.                               

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