Legislature(1995 - 1996)
04/10/1996 03:52 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 system. 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 AFL/CIO 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 consideration. 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 ordered. 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 amount. 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 organizations. CAPTAIN RICHARD GRAHAM, Division of Fish and Wildlife Protection, said they support the concept in HB 59. CSHJR 54(RES) am FAVOR TRANS-ALASKA GAS SYSTEM & LNG SALES 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 scheme. 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 statute. 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 questions. 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 subjective. 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 fund. 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 added. SENATOR LEMAN said he would prefer that these mature within 10 years. 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 version. 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.