Legislature(2003 - 2004)

04/16/2003 03:34 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 16, 2003                                                                                         
                           3:34 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Scott Ogan, Chair                                                                                                       
Senator Thomas Wagoner, Vice Chair                                                                                              
Senator Fred Dyson                                                                                                              
Senator Ralph Seekins                                                                                                           
Senator Kim Elton                                                                                                               
Senator Georgianna Lincoln                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Ben Stevens                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 31                                                                                                              
"An Act relating to a railroad utility corridor for extension of                                                                
the Alaska Railroad to Canada and to extension of the Alaska                                                                    
Railroad to connect with the North American railroad system."                                                                   
     SCHEDULED BUT NOT HEARD                                                                                                    
                                                                                                                                
SENATE BILL NO. 50                                                                                                              
"An Act amending the manner of determining the royalty received                                                                 
by the state on gas production as it relates to the manufacture                                                                 
of certain value-added products."                                                                                               
     MOVED CSSB 50(RES) OUT OF COMMITTEE                                                                                        
                                                                                                                                
SENATE BILL NO. 147                                                                                                             
"An Act relating to control of nuisance wild animals; and                                                                       
providing for an effective date."                                                                                               
     MOVED SB 147 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 151                                                                                                             
"An Act relating to the regulation of natural gas pipelines                                                                     
under the Pipeline Act."                                                                                                        
     MOVED CSSB 151(RES) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 90(FIN)                                                                                                   
"An Act relating to a salmon product development tax credit and                                                                 
a salmon utilization tax credit under the Alaska fisheries                                                                      
business tax; and providing for an effective date."                                                                             
     MOVED CSHB 90(FIN) OUT OF COMMITTEE                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
SB 31 - See Transportation minutes dated 2/11/03 and 3/27/03.                                                                   
                                                                                                                                
SB 50 - See Resources minutes dated 3/26/03, 4/11/03 and                                                                        
4/14/03.                                                                                                                        
                                                                                                                                
SB 147 - No previous action to record.                                                                                          
                                                                                                                                
SB 151 - See Labor and Commerce minutes dated 3/27/03 and 4/1/03                                                                
and Resources minutes dated 4/14/03.                                                                                            
                                                                                                                                
HB 90 - No previous action to record.                                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Mr. Mark Myers                                                                                                                  
Division of Oil and Gas                                                                                                         
Department of Natural Resources                                                                                                 
550 W 7th Ave.                                                                                                                  
Anchorage, AK  99501                                                                                                            
POSITION STATEMENT:  DNR supports SB 50 as amended                                                                            
                                                                                                                                
Ms. Lisa Parker                                                                                                                 
Agrium                                                                                                                          
Kenai, AK                                                                                                                       
POSITION STATEMENT:  Supports CSSB 50(RES)                                                                                    
                                                                                                                                
Senator Gary Stevens                                                                                                            
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Sponsor of HB 90                                                                                         
                                                                                                                                
Ms. Jacqueline Tupou                                                                                                            
Staff to Senator Green                                                                                                          
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified for the sponsor of SB 147                                                                      
                                                                                                                                
Mr. Gordy Williams                                                                                                              
Department of Fish & Game                                                                                                       
PO Box 25526                                                                                                                    
Juneau, AK  99802-5226                                                                                                          
POSITION STATEMENT:  Supports SB 147                                                                                          
                                                                                                                                
Mr. Doug Larsen                                                                                                                 
Assistant Director                                                                                                              
Division of Wildlife Conservation                                                                                               
Department of Fish & Game                                                                                                       
PO Box 25526                                                                                                                    
Juneau, AK  99802-5226                                                                                                          
POSITION STATEMENT:  Answered questions about SB 147                                                                          
                                                                                                                                
Mr. Robert Duran                                                                                                                
Wasilla, AK 99687                                                                                                               
POSITION STATEMENT:  Supports SB 147                                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-30, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR SCOTT  OGAN called the Senate  Resources Standing Committee                                                             
meeting to  order at  3:34 p.m. All  members were  present except                                                               
Senator  Stevens. Chair  Ogan announced  the committee  would not                                                               
hear  SB 31  today at  the sponsor's  request. The  issue of  the                                                               
location  of a  gas line  in relation  to the  railroad is  still                                                               
under discussion.  He informed members that  Mat-Su Borough Mayor                                                               
Tim Anderson and Assembly member  Kelly Ladeer (ph) were present.                                                               
The committee then took up SB 151 and Senator Stevens arrived.                                                                  
                                                                                                                                
           SB 151-REGULATION OF NATURAL GAS PIPELINES                                                                       
                                                                                                                                
CHAIR OGAN informed members that  he and Senator Wagoner met with                                                               
Jack Chenoweth, legal adviser on  oil and gas issues, who pointed                                                               
out the trend in the Lower 48 is to use contract pipelines.                                                                     
                                                                                                                                
SENATOR TOM  WAGONER, sponsor  of SB  151, informed  members that                                                               
Mr.   Chenoweth  differentiated   between  common   carriers  and                                                               
contract lines and said that  during the last two years, contract                                                               
lines  are becoming  more common.  He told  members, regarding  a                                                               
question that came up at the  last hearing, the line is currently                                                               
at 63 percent capacity with  gas that has already been discovered                                                               
and gas that  is expected to be discovered prior  to the start of                                                               
operation of the  pipeline. The pipeline can be  expanded to take                                                               
an  equal amount  of gas  to provide  capacity for  contract with                                                               
other exploration companies.                                                                                                    
                                                                                                                                
SENATOR  ELTON  asked if  the  committee  will be  taking  public                                                               
testimony on this legislation today.                                                                                            
                                                                                                                                
CHAIR OGAN  indicated that no  one signed  up to testify  at this                                                               
time.                                                                                                                           
                                                                                                                                
MR. BEN  SCHOFFMANN, Marathon Oil Company,  informed members that                                                               
he was available to answer questions.                                                                                           
                                                                                                                                
CHAIR  OGAN  indicated there  were  no  questions from  committee                                                               
members.                                                                                                                        
                                                                                                                                
SENATOR WAGONER  moved CSSB 151(RES),  Version D,  from committee                                                               
with individual recommendations and its attached fiscal notes.                                                                  
                                                                                                                                
CHAIR OGAN announced that without objection, the motion carried.                                                                
                                                                                                                                
                  SB 50-ROYALTY GAS CONTRACTS                                                                               
                                                                                                                                
CHAIR  OGAN announced  that Version  Q of  SB 50  was before  the                                                               
committee and that an amendment  was adopted at the last meeting.                                                               
A second amendment, labeled Q.1, has been proposed.                                                                             
                                                                                                                                
SENATOR  DYSON  moved  to  adopt  Amendment  2  (Q.1,  Chenoweth,                                                               
4/15/03), which reads as follows:                                                                                               
                                                      23-LS0429\Q.1                                                             
                                                         Chenoweth                                                              
                                                                                                                                
                                                                                                                                
                      A M E N D M E N T  2                                                                                  
                                                                                                                                
                                                                                                                                
OFFERED IN THE SENATE                        BY SENATOR WAGONER                                                                 
     TO:  CSSB 50(   ), Draft Version "Q"                                                                                       
                                                                                                                                
                                                                                                                                
Page 2, line 23, following "acceptance of":                                                                                     
     Delete "the use of the contract price"                                                                                     
     Insert "an amount that is different than the amount due                                                                
under the lease [THE USE OF THE CONTRACT PRICE]"                                                                            
                                                                                                                                
Page 2, line 31, following "commissioner":                                                                                      
     Delete "shall"                                                                                                             
     Insert "may"                                                                                                               
                                                                                                                                
Page 3, line 4, following "agreement":                                                                                          
     Insert "if it is in the best interest of the state"                                                                        
                                                                                                                                
Page 3, line 17:                                                                                                                
     Delete "and"                                                                                                               
     Insert "or"                                                                                                                
                                                                                                                                
Page 3, line 19, following "state":                                                                                             
     Delete ";"                                                                                                                 
     Insert "."                                                                                                                 
                                                                                                                                
Page 3, lines 20 - 22:                                                                                                          
     Delete all material.                                                                                                       
                                                                                                                              
CHAIR OGAN objected for the purpose of discussion.                                                                              
                                                                                                                                
SENATOR  WAGONER explained  that  he, his  chief  of staff,  Mary                                                               
Jackson,  and  Mark  Myers  discussed  this  amendment  with  Mr.                                                               
Chenoweth on  Monday. Everyone  concurred these  amendments clean                                                               
up the  bill and accomplish  the intent.  He noted Mr.  Myers was                                                               
available via teleconference to answer any questions.                                                                           
                                                                                                                                
CHAIR OGAN  asked Mr. Myers  to discuss the overall  effect these                                                               
amendments will have on SB 151.                                                                                                 
                                                                                                                                
MR.  MARK  MYERS,  Director  of  the Division  of  Oil  and  Gas,                                                               
Department  of Natural  Resources  (DNR), told  members that  the                                                               
amendments  give the  commissioner some  discretion to  decide on                                                               
the  amount of  royalty  relief to  grant.  The commissioner  can                                                               
choose  one of  three values:  the  higher of  value; the  market                                                               
value;  or  the  contract  price. The  (aa)  treatment  says  the                                                               
commissioner  shall  only  use  the  contract  price  if  certain                                                               
conditions are  met so  it gives  the commissioner  discretion to                                                               
use  the contract  price or  something  in between  that and  the                                                               
higher  price  associated with  market  value  or the  higher  of                                                               
price. DNR  supports that language. However,  the amendments will                                                               
have  a  dramatic  effect  on  the  fiscal  note,  which  is  now                                                               
indeterminate. Because  the commissioner  has the  discretion, in                                                               
the  public interest,  to adjust  the royalty,  DNR believes  the                                                               
amendments will protect the state's interest.                                                                                   
                                                                                                                                
MR.  MYERS  said  the  previous  version of  the  bill  gave  the                                                               
commissioner  discretion, but  the amendments  make the  language                                                               
consistent  by changing  "shall"  to "may"  throughout. He  noted                                                               
(aa) treatment  for utilities  originally meant  that all  of the                                                               
conditions had to  be met. Changing "and" to "or"  means that any                                                               
one of  the conditions is  sufficient to deny an  application and                                                               
provides more protection for the state.                                                                                         
                                                                                                                                
CHAIR OGAN asked  if the Administration took a position  on SB 50                                                               
previous to the amendments.                                                                                                     
                                                                                                                                
MR. MYERS said  he was only speaking for DNR  but he believes the                                                               
Administration will support the legislation.                                                                                    
                                                                                                                                
CHAIR OGAN asked what these changes will do to the fiscal note.                                                                 
                                                                                                                                
MR. MYERS  said the changes  make the fiscal  note indeterminate.                                                               
Prior to  the amendments, DNR  felt there was  minimal discretion                                                               
in the  amounts. In the  particular case of Agrium,  the division                                                               
could calculate  the volume of  gas it expected would  fall under                                                               
this  contract.   The  fiscal  note  was   reasonable  given  the                                                               
uncertainty of the volumes that  might potentially be used by the                                                               
plant. Now, the fiscal note says  that number could be the higher                                                               
number  if  all  of  the  conditions are  met  but  it  could  be                                                               
significantly lower.  He said because  the commissioner  can only                                                               
enter  into a  contract if  it  is in  the best  interest of  the                                                               
state, there could be increased value in other areas.                                                                           
                                                                                                                                
SENATOR SEEKINS referred  to the change from "shall"  to "may" on                                                               
line 31, page  2, and asked if  that will have any  effect on the                                                               
90-day provision. He  asked if the commissioner  could, after the                                                               
written request, decide not to enter into an agreement.                                                                         
                                                                                                                                
MR. MYERS said  if the commissioner determined it was  not in the                                                               
public interest, he  could deny it; the  amendment just clarifies                                                               
the "or"  conditions if the price  is unreasonably low or  if the                                                               
reduction is not balanced by employment or other opportunities.                                                                 
                                                                                                                                
SENATOR SEEKINS asked if the  90-day provision is useless because                                                               
nothing compels the commissioner to say yes or no.                                                                              
                                                                                                                                
MR. MYERS said  he believes the commissioner has 90  days to make                                                               
the decision.                                                                                                                   
                                                                                                                                
SENATOR SEEKINS  disagreed and said the  bill says at the  end of                                                               
90 days the commissioner may enter into an agreement.                                                                           
                                                                                                                                
MR. MYERS  said if the commissioner  determines it is not  in the                                                               
best interest  of the state  and denies the application,  he will                                                               
obviously not enter into the agreement.                                                                                         
                                                                                                                                
SENATOR  SEEKINS   said  he  would   prefer  that   provision  be                                                               
clarified.                                                                                                                      
                                                                                                                                
SENATOR BEN STEVENS  said he shares Senator  Seekins' concern but                                                               
pointed  out   the  language  on   page  3,  line  3,   says  the                                                               
commissioner may  enter into the agreement  if it is in  the best                                                               
interest of  the state.  He agrees with  that principle.  He said                                                               
the language  on page  2 says the  commissioner shall  enter into                                                               
the  agreement  so the  commissioner  must  determine, within  90                                                               
days,  whether the  agreement  is  in the  best  interest of  the                                                               
state.                                                                                                                          
                                                                                                                                
SENATOR SEEKINS agreed but said  his concern is that the previous                                                               
language called  for an  action within  a specified  time period.                                                               
The  new  language does  not  call  for  any action  within  that                                                               
specified time period.                                                                                                          
                                                                                                                                
CHAIR  OGAN  said  his  interpretation is  the  same  as  Senator                                                               
Stevens'; that  being there is  a 90-day window during  which the                                                               
commissioner may  enter into an  agreement if  it is in  the best                                                               
interest of the  state. He noted the word "shall"  cannot be used                                                               
since the commissioner has the leeway  to decide whether it is in                                                               
the best interest of the state.                                                                                                 
                                                                                                                                
SENATOR SEEKINS  said he would prefer  the bill to say  within 90                                                               
days, the  commissioner will decide whether  or not it is  in the                                                               
best  interest of  the  state  and, if  so,  may  enter into  the                                                               
contract.                                                                                                                       
SENATOR STEVENS commented that Senator  Seekins wants the bill to                                                               
say  within  90  days  the commissioner  shall  issue  a  written                                                               
decision.                                                                                                                       
                                                                                                                                
CHAIR OGAN said he is not  prepared to offer an amendment at this                                                               
time.                                                                                                                           
                                                                                                                                
SENATOR SEEKINS  said he is not  either, but the intent  that the                                                               
commissioner cannot delay the decision forever is on the record.                                                                
                                                                                                                                
SENATOR  WAGONER  commented that  no  response  in 90  days  will                                                               
conclude the negotiation.                                                                                                       
                                                                                                                                
SENATOR LINCOLN  said she agrees  with Senator Seekins.  She said                                                               
she  believes  the word  "shall"  should  be used  because  three                                                               
conditions follow.                                                                                                              
                                                                                                                                
MR. MYERS  said in order  to deny,  the commissioner must  make a                                                               
written  finding   so  positive  action   on  the  part   of  the                                                               
commissioner  is  required.  Therefore, this  language  leans  in                                                               
favor of approving the agreement.                                                                                               
                                                                                                                                
CHAIR  OGAN asked  if  the parties  that  drafted this  amendment                                                               
discussed this matter with Mr. Chenoweth.                                                                                       
                                                                                                                                
MR. MYERS  said they didn't  talk about  the timing but  the word                                                               
"shall" on page 2, line 31,  was inconsistent with the word "may"                                                               
on the  following page.  He said he  interpreted the  language to                                                               
mean the  commissioner must  make a decision  within 90  days. If                                                               
the  commissioner denies  the contract,  he must  make a  written                                                               
finding within that time period.                                                                                                
                                                                                                                                
SENATOR  ELTON asked  if  a company  that is  asked  for data  to                                                               
support  a  decision  might  stall  because  after  90  days  the                                                               
agreement would be  valid if a written finding to  deny could not                                                               
be  done.  He  pointed  out  the   burden  of  proof  is  on  the                                                               
commissioner to deny.                                                                                                           
                                                                                                                                
MR. MYERS  said without reasonable information,  the commissioner                                                               
would have grounds  to deny. He said DNR has  had that experience                                                               
in the past.  Although a lack of information  can be problematic,                                                               
when it  is essential to the  decision, DNR stresses the  need to                                                               
get  it from  the applicant  and acquiring  that information  has                                                               
generally not  been a  problem. He  said it  is in  the company's                                                               
interest to make a clear showing to DNR.                                                                                        
                                                                                                                                
SENATOR  ELTON  said  he  understands  the  impulse  behind  this                                                               
legislation  but   the  indeterminate   fiscal  note   gives  him                                                               
heartburn. The state treasury will  be losing several millions of                                                               
dollars over time.  He feels the legislature  should be cognizant                                                               
of  that as  this  bill  moves forward,  especially  while it  is                                                               
trying to "nickel  and dime a whole bunch of  people in the state                                                               
for additional revenues  to cover the budget gap." He  said it is                                                               
a bit disingenuous  to say the fiscal note  is indeterminate when                                                               
the impact could be millions of dollars per year.                                                                               
                                                                                                                                
CHAIR  OGAN said  this is  the fourth  or fifth  hearing on  this                                                               
piece  of   legislation,  and  the  committee   has  had  several                                                               
discussions  on  the  fiscal  note. He  said  he  shares  Senator                                                               
Elton's concerns. However, he has  to trust the Administration to                                                               
bring forth an  appropriate fiscal note. The bill  has a referral                                                               
to the Senate Finance Committee  where the fiscal note will again                                                               
be scrutinized.                                                                                                                 
                                                                                                                                
SENATOR  WAGONER said  the Agrium  plant is  not likely  to close                                                               
down, but  the state receives a  fair amount of revenue  from the                                                               
sale of royalty gas to Agrium so,  if it did close, that would be                                                               
a  negative to  the treasury.  He said  SB 50  has been  reworked                                                               
several  times. If  a royalty  reduction contract  is not  in the                                                               
best interest  of the  state, the commissioner  does not  have to                                                               
enter into a  contract. He questioned how the fiscal  note can be                                                               
very high if the commissioner has that authority.                                                                               
                                                                                                                                
SENATOR SEEKINS  said he  agrees with  Senator Wagoner  that this                                                               
legislation  provides a  way to  support Alaskan  workers through                                                               
value-added  processing. He  said in  his business,  he long  ago                                                               
learned that half a loaf is better than none.                                                                                   
                                                                                                                                
CHAIR  OGAN noted  that Senator  Wagoner has  worked with  him on                                                               
this bill and appreciates the spirit of cooperation.                                                                            
                                                                                                                                
SENATOR LINCOLN asked Mr. Myers if  he said DNR supports the bill                                                               
but he was not sure of  the Administration's position and, if so,                                                               
why he does not know since this bill has been around awhile.                                                                    
                                                                                                                                
MR. MYERS said  he asked the Administration  for clarification of                                                               
its position. He  noted the bill has changed over  time, with the                                                               
most recent  amendments being proposed  as late as this  week. He                                                               
said he  has talked with  his commissioner who supports  the bill                                                               
with  these  changes.   He  said  it  is  his   belief  that  the                                                               
Administration is  leaning toward supporting the  legislation but                                                               
he has not heard a direct statement to support that belief.                                                                     
                                                                                                                                
CHAIR OGAN  noted this  bill has  morphed considerably  since the                                                               
last hearing. He then asked if anyone else wished to testify.                                                                   
                                                                                                                                
MS.  LISA PARKER,  representing  Agrium, stated  support for  the                                                               
committee substitute before the committee.                                                                                      
                                                                                                                                
CHAIR  OGAN removed  his objection  to adopting  Amendment 2  and                                                               
announced the motion carried.                                                                                                   
                                                                                                                                
SENATOR BEN  STEVENS moved CSSB  50(RES) from committee  with its                                                               
forthcoming indeterminate fiscal note.                                                                                          
                                                                                                                                
CHAIR OGAN  announced without objection, the  motion carried. The                                                               
committee then took a brief at-ease.                                                                                            
                                                                                                                                
        HB 90-TAX CREDIT: SALMON DEVELOPMENT/UTILIZATION                                                                    
                                                                                                                                
SENATOR  GARY  STEVENS, sponsor  of  HB  90, gave  the  following                                                               
explanation  of   the  measure.  HB   90  is  the  result   of  a                                                               
recommendation by  the Salmon Industry  Task Force to  expand the                                                               
economy in  the area of  fisheries by encouraging  new investment                                                               
to  retool  processing  plants  and raise  the  value  of  salmon                                                               
products. The Administration supports this measure.                                                                             
                                                                                                                                
HB 90  provides two investment  tax credits: the first  credit is                                                               
for salmon product development; the  second is for utilization of                                                               
salmon. The purpose is to  improve the marketability of new value                                                               
added products,  to diversify salmon  products, and  to encourage                                                               
full utilization  of salmon  parts. Alaska  salmon is  a premiere                                                               
product  in the  food  market  but an  enormous  increase in  the                                                               
supply of salmon over the last  few years has caused a tremendous                                                               
decrease in  its value, threatening  the livelihood  of thousands                                                               
of people who depend on the  industry. HB 90 will help to improve                                                               
Alaska's  position in  the salmon  market and  to develop  value-                                                               
added salmon.                                                                                                                   
                                                                                                                                
SENATOR BEN STEVENS  clarified that fiscal note  number 1 applied                                                               
to  CSHB  90(FSH),  which  was   amended  by  the  House  Finance                                                               
Committee.  Fiscal note  number 2  applies to  the House  Finance                                                               
Committee version, which is before members.                                                                                     
                                                                                                                                
CHAIR  OGAN commented  that the  federal government's  investment                                                               
tax credit was a factor in  his decision to invest and expand his                                                               
business.  He said,  like  a  lot of  fishermen,  he  was a  sole                                                               
proprietor. He asked if this bill provides a $49,000 tax credit.                                                                
                                                                                                                                
SENATOR  BEN STEVENS  explained the  $49,000 in  the fiscal  note                                                               
relates to  the increased  cost of  personnel anticipated  by the                                                               
Department  of Revenue.  He  pointed out  the  House debated  the                                                               
fiscal note and  the fact that it is indeterminate.  No one knows                                                               
how  many  industry participants  will  use  this investment  tax                                                               
credit. The House concluded that  the potential cost to the state                                                               
could be anywhere from zero to  $2.8 million because in FY 03 the                                                               
fisheries  business  tax collected  by  the  state will  be  $5.6                                                               
million. If the tax credit is  fully utilized, it could cost $2.8                                                               
million.  He added  that  the fisheries  business  tax is  levied                                                               
against persons or  businesses that buy fish  for reprocessing or                                                               
resale but  the tax  credit will be  limited to  salmon fisheries                                                               
businesses. In the year 2000,  that tax revenue amounted to $14.7                                                               
million; in  2001, it  was $11.2  million; in  2002, it  was $8.5                                                               
million; and  the anticipated revenue  for 2003 is  $5.6 million.                                                               
He  said  the other  question  to  ask  is,  under that  rate  of                                                               
decline,  what will  happen  if  the state  does  not provide  an                                                               
incentive to invest in the salmon industry.                                                                                     
                                                                                                                                
SENATOR  GARY STEVENS  told members  half of  the projected  $5.6                                                               
million fisheries business  tax will go to  the communities; half                                                               
will go to the state.                                                                                                           
                                                                                                                                
4:20 p.m.                                                                                                                     
                                                                                                                                
CHAIR OGAN informed members that  he planned to hold CSHB 90(FIN)                                                               
in committee  today and that  Landa Baily from the  Department of                                                               
Revenue was available to answer questions.                                                                                      
                                                                                                                                
SENATOR ELTON commended  the members of the  Salmon Industry Task                                                               
Force  who were  behind this  idea. He  sees this  as a  keystone                                                               
issue  because  success  in the  marketplace  depends  on  varied                                                               
product form.  He pointed  out that 25  years ago,  whole turkeys                                                               
were the  only turkey products on  the market.  Turkey  is now on                                                               
the market year  round because it is available  in many different                                                               
product forms.  The salmon  industry needs to  catch up  and CSHB
90(FIN) will  provide a  way to  get the  technology to  help the                                                               
salmon industry  do that. He said  he does not object  to holding                                                               
the bill  in committee,  but he hopes  this legislation  can move                                                               
through  the  process  quickly   because  businesses  are  making                                                               
decisions predicated on the next season right now.                                                                              
                                                                                                                                
CHAIR OGAN said  he believes there is  precious little investment                                                               
capital  in  the  salmon  industry  right now.  He  said  if  the                                                               
committee is ready  to move the legislation, he  would be willing                                                               
to do so.                                                                                                                       
                                                                                                                                
SENATOR WAGONER told  members that about 14 years  ago, a similar                                                               
program  was available  to shore  based processors,  which worked                                                               
very well.  CSHB 90(FIN)  goes a  bit further.  He said  he would                                                               
support the legislation.                                                                                                        
                                                                                                                                
SENATOR  SEEKINS  said  he  is sure  this  legislation  has  been                                                               
[scrutinized] by  Senator Gary Stevens  and Senator  Ben Stevens.                                                               
He trusts their lead and feels comfortable with the bill.                                                                       
                                                                                                                                
TAPE 03-30, SIDE B                                                                                                            
                                                                                                                                
SENATOR  DYSON  moved  CSHB  90(FIN)   from  committee  with  its                                                               
indeterminate fiscal note.                                                                                                      
                                                                                                                                
CHAIR OGAN announced that without objection, the motion carried.                                                                
                                                                                                                                
            SB 147-CONTROL OF NUISANCE WILD ANIMALS                                                                         
                                                                                                                                
MS. JACQUELINE TUPOU, staff to  Senator Lyda Green, sponsor of SB
147, gave the following testimony.                                                                                              
                                                                                                                                
     This legislation  before you provides authority  to the                                                                    
     Alaska  Board of  Game to  adopt regulations  that will                                                                    
     allow  the   issuance  of   permits  and   licenses  to                                                                    
     sanctioned  designees to  control  nuisance wild  birds                                                                    
     and nuisance  wild small  mammals. Currently,  there is                                                                    
     no  statutory authority  for nuisance  wildlife control                                                                    
     and  the means  by which  ADF&G can  sell a  license or                                                                    
     issue a permit... The first  thing this bill does is it                                                                    
     creates a  new professional license that  can be issued                                                                    
     by the  Department of Fish  and Game, and  that doesn't                                                                    
     go into  effect, if you'll  notice, until July  '04. It                                                                    
     gives  the  department  sufficient time  to  write  the                                                                    
     [regulations].                                                                                                             
                                                                                                                                
MS. TUPOU said  the bill also gives the  department the authority                                                               
to work with persons and  families who need assistance in getting                                                               
rid  of nuisance  wild animals.  The department  can provide  the                                                               
names of people who are licensed to deal with these problems.                                                                   
                                                                                                                                
CHAIR OGAN asked who this bill  attempts to help and what kind of                                                               
animals fall into this category.                                                                                                
                                                                                                                                
MS. TUPOU  said she is  not completely familiar with  the history                                                               
of   this  legislation   but  Senator   Green   has  heard   from                                                               
constituents who have had wild  animals in their yards that cause                                                               
problems with their  children and livestock. She  pointed out the                                                               
department has  knowledge of  the behavior  of these  animals and                                                               
can advise a proper course of action.                                                                                           
                                                                                                                                
CHAIR OGAN noted  that beavers can be very  destructive. He asked                                                               
if SB 147  gives ADF&G the discretion to decide  whether to issue                                                               
a permit for a specific animal.                                                                                                 
                                                                                                                                
MS.   TUPOU  deferred   to  a   representative  from   ADF&G  for                                                               
information  on specific  animals  but said  the department  will                                                               
have ample time to write regulations.                                                                                           
                                                                                                                                
CHAIR OGAN  asked if this  legislation will allow someone  to set                                                               
up a business to control nuisance animals.                                                                                      
                                                                                                                                
MS. TUPOU said that could well  be a financial by-product of this                                                               
legislation. The department will  issue licenses to businesses to                                                               
perform these services.                                                                                                         
                                                                                                                                
SENATOR SEEKINS  asked if this  bill would create two  classes of                                                               
permittees -  one for the  homeowner for  non-commercial control,                                                               
the other for  a professional who is compensated  and that person                                                               
would be regulated by ADF&G.                                                                                                    
                                                                                                                                
MS. TUPOU said that is correct but  it is up to the department as                                                               
to whether  it wants  to issue  permits. She  said if  she called                                                               
ADF&G about  a wild animal in  her yard, ADF&G could  confer with                                                               
her about her plan of action  and grant her authority to carry it                                                               
out. Otherwise,  ADF&G could  choose to  refer her  to a  list of                                                               
licensed professionals.                                                                                                         
                                                                                                                                
SENATOR SEEKINS  commented that anyone  making money must  have a                                                               
license.                                                                                                                        
                                                                                                                                
SENATOR WAGONER asked whether this  legislation has been reviewed                                                               
to ensure compliance with federal law.                                                                                          
                                                                                                                                
MS. TUPOU  said that ADF&G  will have to address  compliance with                                                               
federal laws.                                                                                                                   
                                                                                                                                
MR.  GORDY  WILLIAMS,  legislative  liaison  to  ADF&G,  informed                                                               
committee members  that SB 147  is identical, with  the exception                                                               
of the  effective date, to SB  205, which passed the  Senate last                                                               
year but did not make it  through the House prior to adjournment.                                                               
ADF&G  worked with  Senator Green  last year;  its concerns  were                                                               
addressed  in  that  bill  and  are  contained  in  SB  147.  The                                                               
effective date of July 1, 2004  in SB 147 will provide ample time                                                               
to  allow the  Board of  Game  to adopt  regulations. ADF&G  also                                                               
requested  the language  on page  2, paragraph  B, [Sec.  4] that                                                               
pertains to permitting  be included. He stated  the bill provides                                                               
two  routes  to address  problems:  the  licensing of  commercial                                                               
entities and  permits to individuals  issued by ADF&G.  He stated                                                               
support for SB 147.                                                                                                             
                                                                                                                                
MR. DOUG LARSEN,  Assistant Director of the  Division of Wildlife                                                               
Conservation,  ADF&G, said  when this  legislation was  discussed                                                               
last year, ADF&G and the  Department of Transportation and Public                                                               
Facilities  had  differing  opinions   on  how  beaver  would  be                                                               
addressed. He asked if that issue was resolved.                                                                                 
                                                                                                                                
MR. WILLIAMS  said it was  resolved. Currently, DOTPF  deals with                                                               
beaver  problems  on  a case-by-case  basis.  It  wanted  blanket                                                               
authority to get an annual permit  for a specific area. ADF&G and                                                               
DOTPF have addressed that concern.                                                                                              
                                                                                                                                
CHAIR  OGAN asked  what animals  will come  under the  purview of                                                               
this bill.                                                                                                                      
                                                                                                                                
MR. DOUG LARSEN,  Assistant Director of the  Division of Wildlife                                                               
Conservation,  ADF&G,  said that  hunting  seasons  are open  for                                                               
several  species   of  small   animals,  however   people  cannot                                                               
discharge a firearm within city  limits. In addition, some people                                                               
are  unable  to, or  might  not  want  to,  deal with  an  animal                                                               
themselves.                                                                                                                     
                                                                                                                                
CHAIR OGAN asked if the Board  of Game could write regulations to                                                               
encourage humane capture rather than killing.                                                                                   
                                                                                                                                
MR. LARSEN said he envisions  the board setting up guidelines for                                                               
these  permits so  that every  effort would  be made  to rid  the                                                               
animal with non-lethal  actions; lethal actions would  be used as                                                               
a last resort.                                                                                                                  
                                                                                                                                
SENATOR LINCOLN  said when she  lived in Fairbanks,  her neighbor                                                               
loved pigeons and  encouraged their presence by  feeding them. At                                                               
first, a few pigeons perched  on the neighbor's house but, within                                                               
a short  period of time,  the number multiplied and  many perched                                                               
on her home. She asked how ADF&G would address that situation.                                                                  
                                                                                                                                
MR.  LARSEN said  that is  a good  question. He  felt any  time a                                                               
person  attracts  an animal,  there  will  have to  be  [special]                                                               
provisions.  He said  as an  example, ADF&G  does all  it can  to                                                               
discourage people  from doing certain things  that attract bears,                                                               
such as  putting out  birdseed. He said  he believes  ADF&G would                                                               
want to  approach the nuisance  wildlife animal  issue similarly.                                                               
He pointed out that pigeons  are classified as deleterious exotic                                                               
wildlife so there is no limit and no season.                                                                                    
                                                                                                                                
SENATOR  SEEKINS asked  for a  definition of  "small mammal"  and                                                               
whether it includes coyotes.                                                                                                    
                                                                                                                                
MR.  LARSEN  said  ADF&G  does  not  have  a  definition  in  its                                                               
regulations.  The Board  of Game  will  have to  figure out  what                                                               
species fall  in that category.  ADF&G would consider  coyotes to                                                               
be a small mammal but it is up  to the board to decide whether to                                                               
include them.                                                                                                                   
                                                                                                                                
MS. TUPOU  noted that  members' packets contain  a list  of small                                                               
mammals suggested by constituents that should be included.                                                                      
                                                                                                                                
SENATOR ELTON asked  if there is a reason  that invasive species,                                                               
such as Northern Pike, were not included.                                                                                       
                                                                                                                                
MR. LARSEN  replied, "...I  believe that they  are. When  we talk                                                               
about deleterious exotic wildlife,  we're talking strictly on the                                                               
wildlife  side  and  not  the  fish side  but  there  are  exotic                                                               
examples on the fish side, as  well as plant communities that are                                                               
classified so  I think  that those are  covered but  they're just                                                               
not covered in the wildlife side."                                                                                              
                                                                                                                                
SENATOR ELTON asked if those  species could be included under the                                                               
business permit from ADF&G.                                                                                                     
                                                                                                                                
MR. LARSEN  said he hadn't  thought about fish  related resources                                                               
and does not know how that would  be handled. He said the bill is                                                               
specific to nuisance  wild birds and nuisance wild  animals so he                                                               
assumes  fish and  plant species  would not  be included  for the                                                               
purposes of this bill.                                                                                                          
                                                                                                                                
MR. WILLIAMS added  that ADF&G is developing  an invasive species                                                               
policy  and  that  he  would   get  back  to  members  with  more                                                               
information.                                                                                                                    
                                                                                                                                
CHAIR OGAN took public testimony.                                                                                               
                                                                                                                                
MR. ROBERT  DURAN, a resident of  Wasilla, told members he  has a                                                               
vested  interest in  this legislation  as he  started a  business                                                               
last  year named  Nuisance Wildlife  Management. He  has been  in                                                               
constant  contact   with  ADF&G,  the  U.S.   Fish  and  Wildlife                                                               
Protection Agency, the  Alaska State Troopers, the  U.S. Fish and                                                               
Wildlife  Service and  local animal  control shelters  about this                                                               
issue. He supports this legislation.                                                                                            
                                                                                                                                
MR.  DURAN   said  with   more  and   more  development   in  the                                                               
Southcentral area, there is more  impact from wildlife. He is not                                                               
always able to respond to the  phone calls he gets about nuisance                                                               
wildlife because  a particular  species might  be outside  of the                                                               
regular  hunting  or  trapping  season.  Alaska  law  contains  a                                                               
provision for  defense of life  and property, but  the individual                                                               
homeowner  would have  to deal  with the  animal him  or herself.                                                               
Oftentimes, that is not possible  because the person may not have                                                               
the equipment  to do so or  is physically incapable of  doing so.                                                               
He  believes  his business  will  be  able to  assist  government                                                               
agencies with nuisance  wildlife complaints, as they  do not have                                                               
the time to  deal with them. He has received  a positive response                                                               
from  those  agencies. He  told  members  that nuisance  wildlife                                                               
businesses are  operating in the  Lower 48; they relieve  a great                                                               
deal  of pressure  from wildlife  management  agencies. He  said,                                                               
regarding  endangered or  other species  that come  under federal                                                               
jurisdiction, his business would be  accountable to the U.S. Fish                                                               
and Wildlife  Service. He pointed  out that nuisance  mammals can                                                               
be taken live.                                                                                                                  
                                                                                                                                
SENATOR  LINCOLN  asked  Mr.  Duran  to  respond  to  the  pigeon                                                               
scenario she described earlier.                                                                                                 
                                                                                                                                
MR. DURAN said  he would set a live trap  for those birds, remove                                                               
them from  the premises and  try to  relocate them. He  said that                                                               
pigeon droppings  near ventilation systems can  cause illness. He                                                               
would  not want  to cause  strife between  neighbors so  he would                                                               
have to  address both parties and  then act in the  best interest                                                               
of all of the people involved.                                                                                                  
                                                                                                                                
CHAIR OGAN said that geese are  very messy and considered to be a                                                               
nuisance by many people. He asked  how one would relocate a goose                                                               
and  whether  Mr. Duran  anticipates  having  to deal  with  wild                                                               
geese.                                                                                                                          
                                                                                                                                
MR. DURAN said  he does and has already received  one call from a                                                               
local golf course  owner. He said it is not  feasible to relocate                                                               
a bird  that is capable  of flying hundreds  of miles at  a time.                                                               
However, effigies  could be  put up  on properties  to discourage                                                               
them from stopping  on that property. He said by  effigies, he is                                                               
referring to predator decoys or loud noisemakers.                                                                               
                                                                                                                                
5:00 p.m.                                                                                                                     
                                                                                                                                
CHAIR OGAN  noted that this  legislation already made  it through                                                               
the Senate last  year and is not terribly controversial  so he is                                                               
willing to move it from committee.                                                                                              
                                                                                                                                
SENATOR  WAGONER  moved SB  147  from  committee with  individual                                                               
recommendations and its attached fiscal notes.                                                                                  
                                                                                                                                
CHAIR OGAN announced that without  objection, the motion carried.                                                               
There being no further business  to come before the committee, he                                                               
adjourned the meeting at 5:02 p.m.                                                                                              

Document Name Date/Time Subjects