Legislature(2001 - 2002)

05/03/2001 06:25 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     ALASKA STATE LEGISLATURE                                                                                   
                    SENATE RESOURCES COMMITTEE                                                                                
                            May 3, 2001                                                                                         
                              6:25 pm                                                                                           
MEMBERS PRESENT                                                                                                               
Senator John Torgerson, Chair                                                                                                   
Senator Drue Pearce, Vice Chair                                                                                                 
Senator Pete Kelly                                                                                                              
Senator Robin Taylor                                                                                                            
Senator Kim Elton                                                                                                               
Senator Georgianna Lincoln                                                                                                      
MEMBERS ABSENT                                                                                                                
Senator Rick Halford                                                                                                            
COMMITTEE CALENDAR                                                                                                            
CS FOR HOUSE BILL NO. 244(FIN)                                                                                                  
"An Act relating to a grant  of state land to the Denali Borough for                                                            
a railroad and utility  corridor and a railroad development project;                                                            
repealing provisions  relating to a grant of a right-of-way  of land                                                            
for  a railroad  and  utility  corridor  to  the  Alaska  Industrial                                                            
Development  and Export Authority;  and providing  for an  effective                                                            
     MOVED SCSHB 244 (RES) OUT OF COMMITTEE                                                                                   
HOUSE BILL NO. 108                                                                                                              
"An Act  relating to the  accounting for  and appropriation  of fees                                                            
for recording  and  related services  by the  Department of  Natural                                                            
Resources; and providing for an effective date."                                                                                
     MOVED HB 108 OUT OF COMMITTEE                                                                                              
HOUSE BILL NO. 236                                                                                                              
"An Act relating  to the contracting and financing  authority of the                                                            
Alaska Industrial Development  and Export Authority; authorizing the                                                            
authority  to  issue bonds  in  a  principal  amount not  to  exceed                                                            
$76,000,000  to  finance  the  acquisition,  design,  construction,                                                             
inventory,   and  operation   of  natural   gas,  propane   air,  or                                                            
manufactured  gas public  utility facilities;  and providing  for an                                                            
effective date."                                                                                                                
     MOVED SCSHB 236 (RES) OUT OF COMMITTEE                                                                                   
PREVIOUS COMMITTEE ACTION                                                                                                     
HB 236 - See Resources minutes dated 4/30/01.                                                                                   
HB 108 - No previous action to consider.                                                                                        
HB 244 - See Resources minutes dated 4/30/01.                                                                                   
WITNESS REGISTER                                                                                                              
Ms. Valerie Mundt                                                                                                               
P.O. Box 149                                                                                                                    
McKinley AK 99785                                                                                                               
POSITION STATEMENT: Opposed HB 244.                                                                                           
Mayor John Gonzalez                                                                                                             
Denali Borough                                                                                                                  
POSITION STATEMENT: Supported HB 244.                                                                                         
Mr. Nico Bus, Director                                                                                                          
Division of Administrative Services                                                                                             
Department of Natural Resources                                                                                                 
400 Willoughby Ave.                                                                                                             
Juneau, AK  99801-1724                                                                                                          
POSITION STATEMENT: Supported HB 244.                                                                                         
Mr. Bob Poe, Executive Director                                                                                                 
Alaska Industrial Development and Export Authority (AIDEA)                                                                      
Department of Community and Economic Development                                                                                
813 W. Northern Lights Ave.                                                                                                     
Anchorage AK 99503                                                                                                              
POSITION STATEMENT: Commented on HB 236.                                                                                      
Mr. Randy Ruaro                                                                                                                 
Staff to Representative Williams                                                                                                
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Supported original version of HB 236.                                                                     
ACTION NARRATIVE                                                                                                              
TAPE 01-37, SIDE A                                                                                                            
Number 001                                                                                                                      
          HB 244-RIGHT-OF-WAY TO DENALI BOR. FOR RR/UTIL.                                                                   
CHAIRMAN JOHN TORGERSON called the Senate Resources Committee                                                                 
meeting  to order  at 6:25  pm and  announced  HB 244  to be up  for                                                            
SENATOR TAYLOR  moved to adopt the Cook 5/1/01 committee  substitute                                                            
to HB 244. There were no objections and it was so ordered.                                                                      
Staff  to  Representative  Dyson  said  the  sponsor  supported  the                                                            
committee substitute.                                                                                                           
MS. VALERIE MUNDT,  Anchorage, said she has businesses  in Kantishna                                                            
and Fairbanks.  She opposed HB 244 because it eliminates  the public                                                            
process by preselecting  engineering and contracting firms to do the                                                            
work. There  is no  EIS and public  hearings in  Denali or  anywhere                                                            
north of the park on whether  there should be a railroad corridor or                                                            
a transportation corridor. She said:                                                                                            
     Nenana has  long been in favor of a northern one-way  loop                                                                 
     road  through  the Park  that has  a regulated  amount  of                                                                 
     traffic  for  viewing.  This bill  eliminates  all animal                                                                  
     viewing  from the north  side. The train  doesn't stop  to                                                                 
     see the bears, so it further  reduces access of the public                                                                 
     and  limits  the experience.   Last, but  not  least,  the                                                                 
     Greater Fairbanks  Chamber of Commerce has voted  in favor                                                                 
     of  a northern access  corridor. On  many occasions,  they                                                                 
     were specifically asked  to put forward a resolution on HB
     244,  but  because of  objections  on  the floor,  it  was                                                                 
     returned  to the Government Affairs  Committee, which  has                                                                 
     not acted  on it, which is a voice in itself.  Finally, HB
     244 strains the already  existing businesses in Kantishna,                                                                 
     of which  there are five. The  Park Service has taken  the                                                                 
     stand that  inholders have one access to their  inholdings                                                                 
     and the Park Service gets  to decide what it is. All those                                                                 
     companies  that have  further  limited access  to a  train                                                                 
     that  they  don't  own  and  control.   I  thank  you  for                                                                 
     listening to my comments.                                                                                                  
CHAIRMAN  TORGERSON responded  that  there is $1.8  million for  the                                                            
planning,  EIS  and public  hearings  for  this issue  that  Senator                                                            
Murkowski put in the budget.  There's $350,000 in the capital budget                                                            
to match that for the same thing.                                                                                               
MAYOR JOHN  GONZALES, Denali  Borough, said  they have talked  for a                                                            
long time  about northern  access to Kantishna.  Whenever there's  a                                                            
way to  do something  about it,  it gets blocked.  The Assembly  has                                                            
supported  a northern access  by a railroad  because it is  the wise                                                            
thing  to do.  They wrote  a resolution  supporting  the efforts  of                                                            
Kantishna Holdings  to try and build an access into  Wonder Lake via                                                            
a railroad. "If  we can build a project that will  allow us to lease                                                            
land to  a group that is  willing to develop  something, we  believe                                                            
that as long as  it's safely done and the borough  agreed with that,                                                            
that we  should go  forth."   He said  they believe  that the  older                                                            
citizens  who cannot backpack  or kayak into  the wilderness  should                                                            
not be denied the beauty of the park.                                                                                           
SENATOR  PEARCE asked  why this was  a railroad  corridor and  not a                                                            
transportation corridor.                                                                                                        
MAYOR  GONZALES answered  that  the railroad  come to  them and  are                                                            
willing to put  up their dollars to do the project.  No one else has                                                            
done that.                                                                                                                      
SENATOR PEARCE  asked him if the borough  was going to make  sure an                                                            
EIS or an EA was done on this project.                                                                                          
MAYOR GONZALES answered  that the borough would make sure the EIS is                                                            
SENATOR PEARCE  asked what  confidence they  have that the  National                                                            
Park Service  won't close road access  once there is another  right-                                                            
of-way, even if it's not a usable right-of-way in place.                                                                        
MAYOR GONZALES answered that they don't have any assurance.                                                                     
SENATOR TAYLOR  moved to  pass SCSHB 244  (RES) from committee  with                                                            
individual recommendations.  There were no objections  and it was so                                                            
           HB 108-DEPT NATURAL RESOURCES RECORDING FEES                                                                     
CHAIRMAN TORGERSON announced HB 108 to be up for consideration.                                                                 
MR. NICO  BUS, Department  of Natural Resources,  supported  HB 108.                                                            
He felt  that the Recorder's  Office would  be a good program  to be                                                            
funded by  a receipt supported  service because  we have 14  offices                                                            
around the state  and under the current funding law,  they have been                                                            
reducing  them and  their  staff, because  they are  competing  with                                                            
other DNR programs.  Annual revenues  are about $4 million  and they                                                            
have about  $2.4 million for expenditure  authorizations.  There are                                                            
other  expenditures  for the  recorders office  that  are tucked  in                                                            
different state  departments, such as leasing. Their  annual capital                                                            
budget for archival and  equipment is general funded and it would be                                                            
good  to use  the  receipt  system.  He said  their  customers  from                                                            
various industries support  this proposal - the Credit Union League,                                                            
Miners Association,  the Association of Realtors,  Title Association                                                            
and the Bankers Association.                                                                                                    
SENATOR TAYLOR  moved to pass HB 108 from committee  with individual                                                            
recommendations. There were no objections and it was so ordered.                                                                
            HB 236-AIDEA BONDS FOR GAS PUBLIC UTILITIES                                                                     
CHAIRMAN TORGERSON  announced HB 236 to be up for  consideration. He                                                            
said he  wanted to see due  diligence done  on the report before  he                                                            
could support  this bill,  but he won't block  it, if the  committee                                                            
wanted to move it forward.                                                                                                      
COMMISSIONER   BOB  POE,  Executive   Director,  Alaska   Industrial                                                            
Development and  Export Authority (AIDEA), said that  they have done                                                            
development  projects under  both scenarios,  where the legislature                                                             
has approved  bonding authorization  (not  an appropriation)  before                                                            
due diligence is done and  after due diligence was done. In fact, we                                                            
have $328 million of bonding  authorizations on the books today that                                                            
have not gone to projects."                                                                                                     
He  thought  it was  interesting  that  HB  244  repeals  provisions                                                            
relating to a  grant of right-of-way of land for a  railroad utility                                                            
corridor to  AIDEA. There was $28  million in bonding authority  for                                                            
that project,  but it didn't  prove to be  financially feasible,  so                                                            
AIDEA did not move ahead with the project. He explained:                                                                        
     In  this  case,  Alaska  Interstate  Gas came  to  us  mid                                                                 
     session  in a particularly  busy  time for  us with a  few                                                                 
     large projects  we are trying to get wrapped up  and said,                                                                 
     "We  think we have equity  investors.  We think we have  a                                                                 
     good  project for gas  to southeast  Alaska. We have  been                                                                 
     monitoring  the project  over the last  several months  or                                                                 
     maybe  a year.  They  said our  equity [indisc.]  will  be                                                                 
     ready to move in the short  term in the summer or fall, if                                                                 
     you go forward  with it. But the equity partner,  from our                                                                 
     understanding,  didn't want to  dive into the project  and                                                                 
     didn't  know  there  was  a good  chance  of  getting  the                                                                 
     bonding authority.  So, we agreed that we would  work with                                                                 
     Interstate  Gas,  but that  they would  try  and move  the                                                                 
     bonding authority  through. We don't know if this  project                                                                 
     makes financial  sense. I'm sure you and I could  sit down                                                                 
     and  identify six or  seven weaknesses  right off the  bat                                                                 
     that would  need to be proven  true. It doesn't mean  they                                                                 
     can't.  It   doesn't  mean  that  we  don't  see   a  good                                                                 
     opportunity  here, but  we can't attest  to the financial                                                                  
     feasibility  of this. What we can attest to is  that AIDEA                                                                 
     does  do its job and  the faith that  the legislature  has                                                                 
     frequently given AIDEA,  which is to say, "We trust you to                                                                 
     do your  job," is proven out  in those $328 million  worth                                                                 
     of  projects that  we haven't  done, because  they didn't                                                                  
     prove to be financially feasible.                                                                                          
     I'll  wrap   up  by  saying  there  are  seven  different                                                                  
     qualifications  that a development  project needs to  have                                                                 
     before  AIDEA goes  to the  step of making  a development                                                                  
     project.  I can swear  to you  that AIDEA  will do all  of                                                                 
     those and  only when this project is financially  feasible                                                                 
     and has the  support of the communities involved  would we                                                                 
     do the project.                                                                                                            
CHAIRMAN TORGERSON  asked, "Why don't  you lend them $10  million to                                                            
get them started?"                                                                                                              
MR. POE answered,  "We don't do a  project that way. Typically,  the                                                            
way we do it…"                                                                                                                  
CHAIRMAN TORGERSON  said, "I know about typically,  but that doesn't                                                            
stop you from doing it."                                                                                                        
MR. POE answered, "Fiscal  prudence would. There is no reason to put                                                            
$10  million  into  a  project  that  you  don't  know  is  fiscally                                                            
feasible. The  way we tend to do it is to enter into  a reimbursable                                                            
agreement with the sponsors  of a project where they reimburse AIDEA                                                            
for the cost of doing the due diligence…"                                                                                       
Number 340                                                                                                                      
SENATOR TAYLOR asked how long it would take.                                                                                    
MR. POE answered  that it could take  several months. It  depends on                                                            
the proponents  of the  project and  how well  they have done  their                                                            
SENATOR ELTON asked if  it would take another act of the legislature                                                            
to approve the final issuance of the bonds.                                                                                     
MR. POE  answered  that's not  correct.  "Once you  give us  bonding                                                            
authority,  you leave it up to the  AIDEA Board to decide."  He said                                                            
he  would  be  happy  to  keep  the  legislature   apprised  of  the                                                            
MR. RANDY RUARO,  Staff to Representative Williams,  said, "It's the                                                            
sponsor's  position  that  the  original  version  of  the  bill  be                                                            
SENATOR TAYLOR  moved to adopt the Cook 5/3/01 committee  substitute                                                            
to HB 236.                                                                                                                      
SENATOR ELTON objected for an explanation of the changes.                                                                       
CHAIRMAN TORGERSON  explained that it says that the  applicant bears                                                            
the cost.                                                                                                                       
SENATOR ELTON asked if  there would be the additional step of coming                                                            
back to the legislature  for the authority to issue bonds if the due                                                            
diligence got done.                                                                                                             
CHAIRMAN TORGERSON said that was correct.                                                                                       
SENATOR ELTON  said one of his concerns  was that, "If we  take this                                                            
out  from under  the  wing  of AIDEA,  what  we're  going  to do  is                                                            
complicating passage  this session…" The House would  have to concur                                                            
and  they voted  unanimously  for  their  version. He  continued  to                                                            
prefer the original version.                                                                                                    
CHAIRMAN TORGERSON  called for the  roll.  SENATORS TAYLOR,  PEARCE,                                                            
TORGERSON voted yeah; SENATORS  LINCOLN AND ELTON voted nay; and the                                                            
committee substitute was adopted by 3 to 2.                                                                                     
SENATOR TAYLOR  moved to pass SCS  HB 236 (RES) from committee  with                                                            
individual recommendations.  There were no objections  and it was so                                                            
SENATOR PEARCE  moved to  forward the nominations  for the  Board of                                                            
Fisheries, Dr.  John White and Mr. Russell Nelson,  and Commissioner                                                            
of the Department  of Natural Resources, Pat Pourchot,  to the joint                                                            
session. There were no objections and it was so ordered.                                                                        
CHAIRMAN TORGERSON adjourned the meeting at 6:55 pm.                                                                            

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