Legislature(1995 - 1996)

04/29/1996 03:42 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                   SENATE RESOURCES COMMITTEE                                  
                         April 29, 1996                                        
                           3:42 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                                                    
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 Senator Lyman Hoffman                                                         
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
 CS FOR HOUSE BILL NO. 456(L&C)                                                
 "An Act relating to the Board of Storage Tank Assistance; and                 
 providing for an effective date."                                             
                                                                               
 CS FOR HOUSE BILL NO. 538(2d FSH)                                             
 "An Act relating to vessels participating in the Bering Sea Korean            
 hair crab fishery; relating to a vessel permit limited entry                  
 system; and providing for an effective date."                                 
                                                                               
 CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 191(FIN)                         
 "An Act relating to the management and disposal of state land and             
 resources; relating to certain remote parcel and homestead entry              
 land purchase contracts and patents; and providing for an effective           
 date."                                                                        
                                                                               
 HB 58 (CHICKALOON FLATS CRITICAL HABITAT AREA) was scheduled but              
 not taken up this date.                                                       
                                                                               
  PREVIOUS SENATE COMMITTEE   ACTION                                           
                                                                               
 HB 456 - See Resources minutes dated 4/27/96.                                 
                                                                               
 HB 538 - No previous action to record.                                        
                                                                               
 HB 191 - See Resources minutes dated 3/1/96.                                  
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 John Barnett, Executive Director                                              
 Board of Storage Tank Assistance                                              
 410 Willoughby Ave., Suite 105                                                
 Juneau, AK 99801-1795                                                         
  POSITION STATEMENT:     Offered information in support of CSHB               
        436(L&C)                                                               
                                                                               
 Jim Hayden, Program Manager                                                   
 Storage Tank Program                                                          
 Division of Spill Prevention & Response                                       
 Department of Environmental Conservation                                      
 410 Willoughby Ave., Suite 105                                                
 Juneau, AK 99801-1795                                                         
  POSITION STATEMENT:     Testified in support of CSHB 436(L&C)                
                                                                               
 Roger Poppe, Aide to Representative Pete Kott                                 
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Offered information on CSHB 436(L&C)                   
                                                                               
 Representative Alan Austerman                                                 
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Prime Sponsor of HB 538                                
                                                                               
 Gordon Blue                                                                   
 Sitka, AK                                                                     
  POSITION STATEMENT:   Testified in support of CSHB 538(2d FSH)               
                                                                               
 John Winther                                                                  
 P.O. Box 509                                                                  
 Petersburg, AK 99833                                                          
  POSITION STATEMENT:   Supports CSHB 538(2d FSH)                              
                                                                               
 Frank Homan, Commissioner                                                     
 Commercial Fisheries Entry Commission                                         
 8800 Glacier Highway, Suite 109                                               
 Juneau, AK 99801-8079                                                         
  POSITION STATEMENT:   Offered information on CSHB 538(2d FSH)                
                                                                               
 Representative Gene Therriault                                                
 Sara Fisher, Staff to Representative Gene Therriault                          
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Offered information on CSSSHB 191(FIN)                 
                                                                               
 Steve Borell, Executive Director                                              
 Alaska Miners Association                                                     
 501 W. 9th Ave., #203                                                         
 Anchorage, AK 99503                                                           
  POSITION STATEMENT:   Testified in support of CSSSHB 191(FIN)                
                                                                               
 Bill Barker                                                                   
 P.O. Box 2135                                                                 
 Kodiak, AK 99615                                                              
  POSITION STATEMENT:   Opposes Sections 24, 25 & 26 in CSSSHB                 
      191(FIN)                                                                 
                                                                               
 Duncan Fields                                                                 
 P.O. Box 25                                                                   
 Kodiak, AK 99615                                                              
  POSITION STATEMENT:   Has concerns with CSSSHB 191(FIN)                      
                                                                               
 Robert Purpura                                                                
 P.O. Box 423                                                                  
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Opposes Section 26 in CSSSHB 191(FIN)                  
                                                                               
 Ms. Lauren Carlton                                                            
 P.O. Box 198                                                                  
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Suggested changes to CSSSHB 191(FIN)                   
                                                                               
 Jules Tileston, Director                                                      
 Division of Mining & Water Management                                         
 Department of Natural Resources                                               
 3061 C St., Suite 800                                                         
 Anchorage, AK 99803-5935                                                      
  POSITION STATEMENT:   Available for questions on CSSSHB 191(FIN)             
                                                                               
 Ron Swanson                                                                   
 Division of Land                                                              
 Department of Natural Resources                                               
 400 Willoughby Ave.                                                           
 Juneau, AK 99801-1724                                                         
  POSITION STATEMENT:   Offered information on CSSSHB 191(FIN)                 
                                                                               
 Reed Stoops                                                                   
 240 Main St., #600                                                            
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Suggested amendment to CSSSHB 191(FIN)                 
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
    TAPE 96-68, SIDE A                                                         
                                                                               
 Number 001                                                                    
                                                                               
        CSHB 456(L&C) BOARD OF STORAGE TANK ASSISTANCE                       
                                                                               
  CHAIRMAN LEMAN  called the Senate Resources Committee meeting to             
 order at 3:42 p.m.  He stated the meeting would be considered a               
 work session until a quorum as established.  He then introduced               
 CSHB 456(L&C) as the first order of business.                                 
                                                                               
  JOHN BARNETT , Executive Director of the Board of Storage Tank               
 Assistance, said the board was formed through legislation adopted             
 in 1990.  It is comprised of seven members:  the commissioner of              
 the Department of Transportation & Public Facilities; the                     
 commissioner of the Department of Environmental Conservation; and             
 five members from the private sector.  HB 456 replaces one of the             
 commissioners with a member of the general public that has no                 
 personal financial interest in underground storage tanks,  This               
 change, in addition to the actual extension of the board, was a               
 recommendation of a legislative audit conducted last year.                    
                                                                               
 Mr. Barnett explained the board is a judicial appeal board and acts           
 as a mediator between the regulated underground tank owners                   
 community and the Department of Environmental Conservation.  When             
 tank owners have disputes with DEC, they can go before the board              
 and the board can make rulings which affect DEC or affect the                 
 owner-operator.  Also, the board can make recommendations.                    
                                                                               
 The board also resolves disputes regarding eligibility for                    
 financial assistance, as well as providing educational assistance             
 and technical assistance to tank owners throughout the state.  Mr.            
 Barnett noted there are 1,000 unfunded financial assistance                   
 requests on file, which represent about $50 million.  The board               
 sets the ranking criteria to rank those sites.  He noted the board            
 has been very successful over the last four years in ensuring that            
 smaller businesses get the funds in general.                                  
                                                                               
 Mr. Barnett said the board has also been very successful at                   
 eliminating problems before they escalate.  By acting as a mediator           
 they can actually assist a tank owner in getting assistance, either           
 technical, financial or otherwise.                                            
                                                                               
 Mr. Barnett stated the board supports the legislative audit                   
 recommendation of continuation for four more years.                           
                                                                               
  CHAIRMAN LEMAN  asked how much the program costs, and if it breaks           
 even with the user fees.   MR. BARNETT  replied that the user fees            
 they've taken in through tank registration receipts are slightly              
 under $400,000 a year, and the board cost is approximately $114,000           
 a year.  He added that this year they are funded at about $1.9                
 million for financial assistance grants and loans, the source of              
 these funds is in the response fund.                                          
                                                                               
  CHAIRMAN LEMAN  asked if DEC supports the legislation, and  MR.              
 BARNETT  acknowledged that they do.                                           
                                                                               
 Number 172                                                                    
                                                                               
  JIM HAYDEN,  Program Manager, Storage Tank Program, Department of            
 Environmental Conservation, said in 1988 it was recognized that new           
 federal rules would impact the small businesses and that they would           
 have a very difficult time of administering or coming up to speed             
 with the new rules so the board was brought into play to try to               
 mediate between the department and the small tank owner.  He said             
 the program has worked very well, and the department is very much             
 in favor of the board's participation and continued participation.            
                                                                               
  ROGER POPPE,  aide to Representative Pete Kott who is prime sponsor          
 of HB 456, clarified the legislation applies to just underground              
 storage of which there are approximately 2,500 in the state at 900            
 facilities.  He said EPA already has a great many restrictions with           
 some new ones going into effect in 1998, which is a good argument             
 for continuation of the board just in anticipation of how to deal             
 with those new federal restrictions.                                          
                                                                               
 There being no further testimony on CSHB 456(L&C),  CHAIRMAN LEMAN            
 closed the public hearing and stated the bill would be set aside              
 until a quorum was established.                                               
                                                                               
                                                                               
  CSHB 538(2d FSH) HAIR BRAB VESSELS; LTD ENTRY FOR VESSELS                  
                                                                               
  CHAIRMAN LEMAN  brought CSHB 538(2d FSH) before the committee as the         
 next order of business.                                                       
                                                                               
  REPRESENTATIVE AUSTERMAN  said he introduced HB 538 as a result of           
 discussions with fishermen, the Department of Fish & Game and the             
 Limited Entry Commission.                                                     
                                                                               
 Representative Austerman said the Bering Sea hair crab fisheries is           
 a very delicate and rather small fishery in the Bering Sea that               
 first started back in about 1980, ran for a couple of years, and              
 then crashed because of over-fishing.  It started up again in about           
 1990, but with the way the other crab fisheries are going out in              
 the Bering Sea, there is more and more of a concentrated effort on            
 the Korean hair crab.  It has become apparent that because of the             
 small fishery that it is and hair crab being such a delicate crab             
 itself, that a moratorium should be placed on this fishery until              
 Fish & Game has a chance to take a hard look at it to see if it               
 needs to be limited on the number of boats that are operating out             
 there.                                                                        
                                                                               
  CHAIRMAN LEMAN  asked if there has been any opposition to the                
 legislation.   REPRESENTATIVE AUSTERMAN  acknowledged there was some          
 opposition from some of the small fishing boats in the Bering Sea             
 and the St. Paul-St. George area.  The legislation was then amended           
 to allow smaller vessels to be involved.                                      
                                                                               
  CHAIRMAN LEMAN  asked if the legislation disallows larger vessels            
 from being involved.   REPRESENTATIVE AUSTERMAN  replied that within          
 five miles of the shore, a vessel may not be longer than 58 feet,             
 but it does not disallow larger vessels outside that five-mile                
 limit.                                                                        
                                                                               
  REPRESENTATIVE AUSTERMAN  pointed out that the legislation provides          
 that the moratorium will be repealed on July 1, 2000.  During the             
 moratorium period, these are interim permits that are non-                    
 transferrable and with no value to them.  He said it has been                 
 suggested to the Limited Entry Commission that they take a look at            
 setting up a system that if they do limited entry, they make them             
 non-transferrable permits that could possibly be returned to the              
 state and then given out either through some type of an auction, or           
 all allocation, or a drawing of some kind, so that we're not really           
 getting into giving away the state resources.                                 
                                                                               
  CHAIRMAN LEMAN  opened the hearing on HB 538 to public comment.              
                                                                               
 Number 279                                                                    
                                                                               
  GORDON BLUE , testifying from Sitka, stated he shares the ownership          
 of two vessels that are in the Bering Sea crab fisheries and also             
 engaged in the Korean hair crab fishery around St. Paul Island.               
 The partners in the vessels include TDX Corporation, which is the             
 village corporation for St. Paul, and the Central Bering Sea                  
 Fishermen's Corporation, which is a subsidiary of Central Bering              
 Sea Fishermen's Association, a community development group for St.            
 Paul Island.                                                                  
                                                                               
 Mr. Blue said they helped to restart the fishery in 1990, as well             
 as helping to develop a special gear tact that's now in the                   
 regulations that is designed to limit by-catch and other kinds of             
 crab, and to run a clean fishery for hair crab in this area.  They            
 have developed techniques to try to handle these animals as little            
 as possible and as delicately as possible in the conditions that              
 are out there.                                                                
                                                                               
 He noted the Bering Sea red king crab fishery in Bristol Bay has              
 been closed for the last two seasons, it will probably be closed              
 again this year, and possibly for years in the future according to            
 the Department of Fish & Game.  This has resulted in going from a             
 pioneering effort of two vessels to a total of 18 vessels last                
 year.  He said they have been told that if this progression                   
 continues, the Department of Fish & Game will close the fishery,              
 deeming it unmanageable with the kind of effort that's near                   
 doubling every year.  If the red king crab fishery is closed again            
 this year and they don't have some sort of protection, they                   
 probably won't have a fishery at all.                                         
                                                                               
 Mr. Blue stressed the fishery has been vital to their business plan           
 for the small boats and the relatively small crab boats that they             
 are operating in that area.  These are 100 foot boats so they are             
 not the same small boats that were also included in the bill under            
 the five-mile language.  The intent there was to allow community              
 members in the partnership to try to operate within the shelter and           
 lee of the islands and take some of the crab that is near shore.              
                                                                               
 Concluding his testimony, Mr. Blue said he has a lot of hope that             
 this bill will do what it sets out to do, which is to shelter the             
 existing fleet, to prevent the fishery from being decimated by too            
 much effort, or alternatively, from losing all economic benefit and           
 having the fishery closed, and to just give a little breathing room           
 for a program to be fully developed.                                          
                                                                               
  CHAIRMAN LEMAN  asked Mr. Blue if he supports the bill as currently          
 written.   MR. BLUE  answered that he does.                                   
                                                                               
  JOHN WINTHER,  a resident of Petersburg testifying from Anchorage in         
 support of CSHB 536(2d FSH), stated he has been involved in the               
 Bering Sea crab fishery since 1973.                                           
                                                                               
 Mr. Winther pointed out that the hair crab fishery is one of the              
 few fisheries in that area totally managed by the state of Alaska.            
 Most of them are managed through the federal system or the North              
 Pacific Fisheries Management Council.  This is why the fishermen              
 came to the Legislature asking for help to implement a moratorium.            
 Because it is state managed, it's one of the few fisheries that's             
 not included in the current moratorium in the Bering Sea.                     
                                                                               
 Mr. Winther said he thinks the level of effort right now is as much           
 as the fishery can sustain.  The quotas are roughly 1.5 million to            
 2 million pounds a year, the stocks seem fairly healthy, and the              
 harvest looks like it can sustain that level.  He urged passage of            
 the legislation so that the fishermen can work with the Commercial            
 Fisheries Entry Commission to get something into place that will              
 benefit those already involved in the fishery.  He also noted that            
 probably 75 percent of the harvest is being done by Seattle boats.            
                                                                               
  FRANK HOMAN,  Commissioner, Commercial Fisheries Entry Commission,           
 said the Commission has been working with the sponsor and the                 
 fishermen in the development of the moratorium legislation since              
 late last year when they were petitioned to investigate limited               
 entry for the hair crab fishery.  The current system, which is a              
 individual license program, didn't fit the type of fishery that's             
 in the Bering Sea, which is larger boats that have relief skippers.           
 If they had gone ahead with their traditional system that's in                
 place, it would have allowed for eligibility from whatever skippers           
 had been on the vessels in the last four or five years, and that              
 would have substantially increased the numbers because some of them           
 have two or three different skippers.  So they were looking for               
 another management system under a moratorium or limited entry, and            
 HB 538 directs the commission to look at a vessel licensing system            
 while providing a moratorium for up to four years.                            
                                                                               
 Mr. Homan pointed out that the bill calls for a five-mile offshore            
 boundary and the moratorium would start at that point.  The inshore           
 would be open to small boats, and the idea around that was to                 
 protect an area for some of the local fishermen on some of the                
 resource there.  Page 3, lines 2-5, allows the Commission to                  
 establish administrative areas for the fishery.  He said within               
 Fish & Game there are statistical areas that are used for                     
 reporting, and one of them is a three-mile radius around the                  
 islands of St. Paul and St. George.  It would be the Commission's             
 intention to extend that by another two miles and call that the               
 administrative area so that the moratorium would apply outside of             
 that five miles.                                                              
                                                                               
 There being no further testimony on CSHB 538(2d FSH),  CHAIRMAN               
 LEMAN  closed the public hearing and stated the bill would be set             
 aside until a quorum was established.                                         
                                                                               
 Number 435                                                                    
                                                                               
    CSSSHB 191(FIN) MANAGEMENT OF STATE LAND AND RESOURCES                   
                                                                               
  CHAIRMAN LEMAN  brought CSSSHB 191(FIN) before the committee as the          
 next order of business. He noted there was a draft Resources SCS              
 before the committee, but suggested waiting until a quorum was                
 established before going through the entire bill section by                   
 section.                                                                      
                                                                               
  CHAIRMAN LEMAN  asked why the sponsor and the department are                 
 proposing to change the rate for the shore fishery leases from the            
 way it is now, which is a system that recovers the cost of                    
 operating that program, to one in which it not only does that, but            
 goes beyond and establishes a rental rate based on a percentage of            
 the permit value.   SARA FISHER , staff to Representative Gen                 
 Therriault who is prime sponsor of HB 191, said basically there is            
 a use of state land that has a commercial value and the                       
 restructuring of these sections would recognize the commercial use            
 of these sites.  She pointed out that in Section 25 of the new                
 draft Resources SCS, the reference to the term "action" has been              
 removed which restores it to the original language requiring the              
 director to attempt to determine who is the most qualified                    
 applicant for the site.  If one application is received, the                  
 commissioner may issue a lease at a rental rate, as opposed to the            
 administrative rate which is set in regulation and is currently               
 $300.  Many of the leases that had been signed many years ago are             
 still under the old lease rate of $150 per year.                              
                                                                               
  CHAIRMAN LEMAN  pointed out the shore fishery lease program is a             
 voluntary program to help sort out conflicts between adjoining or             
 adjacent shore fishery participants.  His concern is that by                  
 raising the price and going beyond what is taken out to cover the             
 program, it will drive people out.  He wondered if an analysis has            
 been done on what percentage of people will be driven out and what            
 the impact will be on the program if the fee is raised.                       
  CHAIRMAN LEMAN  opened the hearing to public comment.                        
                                                                               
  STEVE BORELL,  Executive Director, Alaska Miners Association,                
 testifying from Anchorage, stated their support for CSSSHB 191(FIN)           
 and in particular Sections 30-35.                                             
                                                                               
 Mr. Borell said earlier in the session, Representative Therriault             
 removed a section from this legislation and place it into CSHB                
 331(RES), and he suggested the section be reinserted in HB 191.  He           
 said the issue in HB 331 is to clarify the existing statute and               
 establish in statute the current interpretation of practice that              
 has  been followed by DNR and by industry effectively since                   
 statehood.  The change is needed to ensure that the rights of the             
 state to its subsurface mineral resources where the surface estate            
 has been sold or otherwise transferred to a third party.  Unless              
 specifically closed to mineral entry, this land is still available            
 for staking of mining claims.  It has been the interpretation and             
 practice of the state that claims staking alone can be allowed and            
 without giving permission of the third party surface estate owner.            
 He pointed out that in the Fairbanks area there are various small             
 homesites of a few acres that run the risk of causing existing                
 mining claims to be void.                                                     
                                                                               
 Number 545                                                                    
                                                                               
  BILL BARKER,  a set netter testifying from Kodiak, voiced his                
 opposition to Section 24, 25 & 26.  He said there doesn't appear to           
 be any reason to change the fee structure at this time.  If the               
 basis for the fee structure is placed on the limited entry permit             
 and the value of the limited entry permit, then we have a tax being           
 placed on the fishery resource, not on the land resources.  He                
 suggested if there is going to be a tax placed on the fisheries               
 resource, then it needs to be placed on all of the fishermen.  As             
 far as the operation of the shore fisheries leases and the pursuit            
 of the shore-based gillnet operation, he said everybody understands           
 the rules, and with some of the language being proposed in HB 191,            
 the rules start to change and he can see many problems with                   
 bringing these changes.                                                       
                                                                               
  TAPE 96-68, SIDE B                                                           
 Number 025                                                                    
                                                                               
  CHAIRMAN LEMAN  informed Mr. Barker that the Resources SCS before            
 the committee addresses some of the issues he spoke to.                       
                                                                               
  DUNCAN FIELDS,  testifying from Kodiak, concurred that it is the             
 consensus of his community that the shore fishery lease program is            
 paying for itself, in fact current information shows that revenues            
 in excess of expenditures in FY 95 is about $150,000.  He                     
 questioned why the lease rate for set net leases is being increased           
 when the program is paying for itself.  He pointed out many of the            
 current lease holders pay a rate of $150, and with the current                
 language in the bill, that will jump to approximately $556, which             
 is approximately a $400 increase per permit holder.  He believes              
 this will drive people away from the program, and the net result              
 will be less revenue than the program currently enjoys.  He also              
 suggested a lease rate of a definite amount makes much more sense             
 than a sliding scale based on a percentage of permit value.                   
                                                                               
 Number 086                                                                    
                                                                               
  CHAIRMAN LEMAN  commented that it appears that the only section              
 that's really in conflict in the bill is the new Section 26.  He              
 said Sections 25 and 27 were reworked to accommodate the concerns             
 that were expressed by a lot of people.                                       
                                                                               
  ROBERT PURPURA,  representing the Katsitsna Bay Salmon Producers and         
 testifying from Homer, stated their objection to the language in              
 Section 26, namely the 0.6 percent assessment on limited entry                
 permits with a $600 cap.  They believe it is unfair to target a               
 small group of other set netters, and they do not feel that any               
 extra cost at this time is warranted in their fishery.  He urged              
 that the committee not support the language to determine the fee of           
 the leases be tied in with the permit.                                        
                                                                               
  MS. LAUREN CARLTON , a setnetter testifying from Homer, referred to          
 language on page 12, line 2, which provides that the rental rate              
 shall be adjusted annually, and she said she would like to see it             
 only adjusted every five years, which would provide the opportunity           
 to look at the long-term values and how they have changed.  She               
 said their permit value might be high because they are part of Cook           
 Inlet, but their sites are not valued as high, so just going on a             
 permit value is not really being equitable to those who do not have           
 a valuable site.  She pointed out her area has seen a drastic                 
 decline in their salmon runs.  She also pointed out that when                 
 someone goes in to buy a permit at a set net price, they are paying           
 for the right to use that area, and there are also added costs that           
 are not seen up front.                                                        
                                                                               
 Number 240                                                                    
                                                                               
  CHAIRMAN LEMAN  said his recommendation is that Section 26 be                
 deleted in its entirety which would mean that there would be no               
 change to the existing system.                                                
                                                                               
  JULES TILESTON , Director, Division of Mining & Water Management,            
 Department of Natural Resources, testified from Anchorage that he             
 was present to respond to questions dealing with the amendments               
 associated with mining when they came before the committee.                   
                                                                               
  RON SWANSON , Division of Land, Department of Natural Resources,             
 said after a hearing earlier in the session, he thinks the concerns           
 relating to the bidding war were addressed by taking care of the              
 problem of the department having to try to figure out who is most             
 qualified, and if they can't, they would then draw the name out of            
 the hat.  It was also made clear that somebody with an existing               
 lease would get a preference to renew.                                        
                                                                               
 Mr. Swanson said the shore fishery lease is the only voluntary                
 program that the Division of Land administers, and they consider it           
 a commercial use of state land, so they believe that the                      
 compensation rate should go up rather than just covering the                  
 administrative cost.  He said when it comes to budget cuts, the               
 first thing that they have to look at is non-voluntary programs.              
 He sated the Administration is neutral on what the compensation               
 rate should be.                                                               
                                                                               
  CHAIRMAN LEMAN  asked if it would be acceptable to the department to         
 delete that section which would leave it as it is now which says              
 that it must cover administrative costs.   MR. SWANSON  responded             
 that the department would not oppose the deletion of that section.            
                                                                               
  REED STOOPS , testifying on behalf of AJ Associates and speaking to          
 a proposed amendment dealing with the right of entry on private               
 land by a party for the sake of filing mining claims, said the                
 reason for the amendment is the result of a Superior Court decision           
 in a lawsuit that AJ Associates is involved with.  There is a                 
 dispute over whether mining claims were validly filed on property             
 that AJ                                                                       
 Associates is the surface owner of.  Judge Jahnke, in his decision,           
 interpreted existing law to mean that anybody that's going to file            
 a mining claim on land that has been conveyed by the state to a               
 private party either has to have the permission of the land owner             
 or alternatively permission of the Department of Natural Resources            
 in order to file that claim.  He said if the Legislature were to              
 adopt the amendment the way it's drafted, it is not only                      
 prospective but retroactive, and by making it retroactive, it would           
 have a direct impact on their case which is pending before the                
 Supreme Court.  He added if the Supreme Court overturns Judge                 
 Janke's ruling, the amendment may not be necessary.  Their                    
 preference would be to not have to go litigate the case again                 
 because it will have effectively changed the decision is that case.           
 For that reason, he said he would recommend that if the Legislature           
 thinks it is good policy, it ought to do it prospectively at this             
 pint, at least until the Supreme Court has rendered a decision.               
                                                                               
  CHAIRMAN LEMAN  said he was not sure he wanted to take that issue up         
 in this bill, that it is something that should fly on its own, but            
 he wanted to discuss that with the bill's sponsor.                            
                                                                               
  CHAIRMAN LEMAN  recessed the meeting at 5:05 p.m. until a quorum             
 could be established.  The meeting was called back to order at 5:50           
 p.m. with a quorum of committee members present.                              
                                                                               
 Number 455                                                                    
                                                                               
  SENATOR PEARCE  moved the adoption of SCS CSSSHB 191(RES), version           
 "W" dated 4/26/96.  Hearing no objection, the motion carried.                 
  REPRESENTATIVE THERRIAULT , speaking to deleting Section 26 in the           
 Resources SCS, explained an agreement had been reached on Section             
 26, that instead of trying to attach the lease fee to a sliding               
 scale, they were agreeable to just go to a flat $300 fee.  He                 
 suggested deleting all the language in Section 26 and replacing it            
 with language saying that the annual rental rate shall be set at              
 $300.   CHAIRMAN LEMAN  added that the understanding is that existing         
 leases do not shift to the rate until they expire.   RON SWANSON              
 added that their current fee is $300, although a lot of the leases            
 are at $150, and this would fix them all at $300 and bring in a               
 revenue to the state of a little over $400,000.  It costs about               
 $250,000 to administer the program.                                           
                                                                               
 Number 515                                                                    
                                                                               
  SENATOR PEARCE  moved as Amendment No. 1 to delete the language in           
 Section 26 and replace it with language saying that the annual                
 rental rate shall be set at $300.  Hearing no objection, the                  
 Chairman stated the amendment was adopted.                                    
                                                                               
  RON SWANSON , speaking to the issue in HB 331 relating to access for         
 mining staking, explained that the proposed Amendment No. 2 is to             
 exclude private land until the Supreme Court rules.  It would make            
 it very clear that a bond does not have to be posted before the               
 claim is staked.                                                              
                                                                               
  SENATOR TAYLOR  moved to adopt Amendment No. 2.  Hearing no                  
 objection, the amendment was adopted.                                         
                                                                               
  CHAIRMAN LEMAN  said he would like to have a conceptual amendment to         
 the amendment stating that this would apply only to municipal and             
 state lands and would not get into the private land dispute right             
 now.   SENATOR TAYLOR  moved the conceptual amendment.  Hearing no            
 objection, it was adopted.                                                    
                                                                               
 Number 600                                                                    
                                                                               
  SENATOR PEARCE  noted Section 21 of CSSSHB 191(FIN) was not in the           
 Resources SCS, and she asked if this means we are now going back to           
 the mandatory preference right that is in current law about                   
 agricultural land.   RON SWANSON  explained that originally if you            
 were an adjacent farmer you would not have a preference to pick up            
 the land next to you, even if you needed it for expansion of your             
 facility, and this will allow that to happen.  It only goes to an             
 Alaskan bidder, and it gives them a first preference to meet high             
 bid.                                                                          
                                                                               
  SENATOR LINCOLN  referred to page 18, line 29, and the language "an          
 operated exclusively."  She said she had an amendment which would             
 delete the word "exclusively."  She said the reason for the                   
 amendment was because of an old school that was no longer in use in           
 one of the communities, and the community wanted to use it but they           
 couldn't under present law.  By deleting "exclusively" they would             
 then be able to utilize the abandoned school.   MR. SWANSON  stated           
 the department would support the amendment.                                   
                                                                               
  TAPE 96-69, SIDE A                                                           
 Number 025                                                                    
  SENATOR LINCOLN  moved the adoption of Amendment No. 3, which would          
 delete the word "exclusively."  Hearing no objection, the amendment           
 was adopted.                                                                  
                                                                               
  SENATOR PEARCE  asked if anything in the bill changes the liability          
 that the purchaser or recipient of state lands would have for                 
 previous hazardous substance releases on state lands.   MR. SWANSON           
 responded that there are a couple of sections in the bill saying              
 that the holder of the lease at the time the problem occurred is              
 responsible for cleaning up anything.   SENATOR PEARCE  pointed out           
 that AIDEA can't lease lands that they got back from Mark Air after           
 the bankruptcy because DOT is trying to force AIDEA to do all the             
 cleanup from even pre-Mark Air days.   MR. SWANSON  acknowledged that         
 there is nothing in the bill that changes the liability standard if           
 somebody leases state land.                                                   
                                                                               
  CHAIRMAN LEMAN  directed attention to a memorandum from the                  
 legislative drafter suggesting technical changes to page 25, lines            
 13 & 14 relating to effective dates.  Hearing no objection, he                
 stated the drafter would be instructed to make the changes.                   
                                                                               
  SENATOR TAYLOR  moved as Amendment No. 4, on page 14, line 5 delete          
 "private residential" and delete all references to "residential" in           
 subsection (f).                                                               
                                                                               
  SENATOR HALFORD  directed attention to Section 29, and said to make          
 it conforming under (a) it would necessitate deleting (2) which is            
 all buildings and fixtures including gravel pads, foundations and             
 slabs not belonging to the state within 60 days of termination of             
 the lease.  He also suggested in subsection (c) deleting "buildings           
 and fixtures" on lines 23, 25, 27 & 28.  The effect of these                  
 changes would be there would still be the cleanup requirements and            
 the requirements regarding everything but essentially the real                
 property improvements that can't be removed, and then they are                
 treated in the same way that (f) would treat them for a residence.            
                                                                               
  SENATOR LINCOLN  asked if the effect of the amendment was just               
 removing "private residential" and "residential" in subsection (f).           
  SENATOR HALFORD  responded that it was, so that condition and that           
 method still applies to commercial improvements.  All of the                  
 cleanup requirements still apply to everything but buildings and              
 fixtures, which are the permanent fixtures.                                   
                                                                               
  SENATOR TAYLOR  suggested as part of Amendment No. 4, on page 14,            
 line 7 to insert the words "shall be leased or purchased."                    
                                                                               
 After extensive discussion relating to Amendment No. 4 as outlined            
 by Senator Taylor and Senator Halford,  CHAIRMAN LEMAN  stated the            
 amendment was adopted.                                                        
                                                                               
 Number 305                                                                    
                                                                               
  SENATOR HALFORD  moved as a conceptual Amendment No. 5 to insert             
 exactly the same language in exactly the same way in whatever title           
 deals with DOT on airports.  He explained the amendment would fit             
 into the title of the bill and it would fix an area where there are           
 numerous problems for rural airports all across the state.                    
  REPRESENTATIVE THERRIAULT  said he made a commitment that he would           
 not allow a lot of different issues to be added to this bill, and             
 he also pointed out that Representative Hanley has done a lot of              
 work on a House bill that is in the system.   SENATOR HALFORD  stated         
 he would withdraw the amendment.                                              
                                                                               
 Number 459                                                                    
                                                                               
  SENATOR HALFORD  moved as Amendment No. 5 to page 5, line 19, to             
 delete the word "should" and insert "may" in its place.  He said              
 the change would take out at least some of the preload of the                 
 section toward anything but sale to private ownership.  Hearing no            
 objection, the Chairman stated Amendment No. 5 was adopted.                   
                                                                               
  SENATOR HALFORD  said Sections 16, 17 and others which repeal the            
 bidder must appear in person at the auction provisions are contrary           
 to a general intent of the Legislature to always try and load any             
 of these programs to be the most beneficial to Alaska residents.              
  MR. SWANSON  explained these provisions relate to a Superior Court           
 case dealing with a Kodiak land disposal six years ago, and this              
 brings the statute into compliance with that decision.                        
                                                                               
 After further questions and discussion on section of the bill, the            
 committee took a brief at ease at 6:50 p.m., coming back to order             
 at 7:19 p.m.                                                                  
                                                                               
  CHAIRMAN LEMAN  asked for the pleasure of the committee on HB 191.           
                                                                               
  SENATOR PEARCE  moved SCS CSSSHB 191(RES) be passed out of committee         
 with individual recommendations.  Hearing no objection, it was so             
 ordered.                                                                      
                                                                               
  TAPE 96-69, SIDE B                                                           
                                                                               
       CSHB 456(L&C)  BOARD OF STORAGE TANK ASSISTANCE                       
                                                                               
  CHAIRMAN LEMAN  brought CSHB 456(L&C) back before the committee and          
 asked for the pleasure of the committee.                                      
                                                                               
  SENATOR TAYLOR  moved CSHB 456(L&C) be passed out of committee with          
 individual recommendations.  Hearing no objection, it was so                  
 ordered.                                                                      
                                                                               
  CSHB 538(2d FSH)  HAIR CRAB VESSELS; LTD ENTRY FOR VESSELS                 
                                                                               
  CHAIRMAN LEMAN  brought CSHB 538(2d FSH) back before the committee,          
 and asked for the pleasure of the committee.                                  
                                                                               
  SENATOR TAYLOR  moved CSHB 538(2d FSH) be passed out of committee            
 with individual recommendations.  Hearing no objection, it was so             
 ordered.                                                                      
                                                                               
 There being no further business to come before the committee, the             
 meeting was adjourned at 7:38 p.m.                                            
                                                                               

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