Legislature(2007 - 2008)BUTROVICH 205

02/27/2008 03:30 PM RESOURCES

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Moved CSSB 246(RES) Out of Committee
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                       February 27, 2008                                                                                        
                           3:38 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Charlie Huggins, Chair                                                                                                  
Senator Bert Stedman, Vice Chair                                                                                                
Senator Lyda Green                                                                                                              
Senator Lesil McGuire                                                                                                           
Senator Gary Stevens                                                                                                            
Senator Bill Wielechowski                                                                                                       
Senator Thomas Wagoner                                                                                                          
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 214                                                                                                             
"An Act relating to big game hunting by nonresident members of                                                                  
the military service and their dependents; and providing for an                                                                 
effective date."                                                                                                                
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 246                                                                                                             
"An Act establishing a working group to analyze the potential of                                                                
a hydroelectric power project on the Susitna River; and                                                                         
providing for an effective date."                                                                                               
     MOVED CSSB 246(RES) OUT OF COMMITTEE                                                                                       
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 214                                                                                                                  
SHORT TITLE: HUNTING BY MILITARY,COAST GD., DEPENDENTS                                                                          
SPONSOR(s): SENATOR(s) HUGGINS                                                                                                  
01/16/08       (S)       PREFILE RELEASED 1/4/08                                                                                
01/16/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/08       (S)       RES                                                                                                    
02/27/08       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
BILL: SB 246                                                                                                                  
SHORT TITLE: SUSITNA HYDRO WORKING GROUP; REPORT                                                                                
SPONSOR(s): SENATOR(s) THOMAS                                                                                                   
01/19/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/08       (S)       RES, FIN                                                                                               
02/13/08       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/13/08       (S)       Heard & Held                                                                                           
02/13/08       (S)       MINUTE(RES)                                                                                            
02/20/08       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/20/08       (S)       Heard & Held                                                                                           
02/20/08       (S)       MINUTE(RES)                                                                                            
02/27/08       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
WITNESS REGISTER                                                                                                              
JODY SIMPSON                                                                                                                    
Staff to Senator Huggins                                                                                                        
POSITION STATEMENT: Commented on SB 214 for the sponsor.                                                                      
KEVIN SAXBY, Sr., Assistant Attorney General                                                                                    
Department of Law (DOL)                                                                                                         
Juneau AK                                                                                                                       
POSITION STATEMENT: Commented on constitutional issues related                                                                
to SB 214.                                                                                                                      
ROBERT FITHIAN, Executive Director                                                                                              
Alaska Professional Hunters Association                                                                                         
Anchorage AK                                                                                                                    
POSITION STATEMENT:                                                                                                           
RIC DAVIDGE, State Counsel President                                                                                            
Viet Nam Veterans of America                                                                                                    
Chairman, Alaskan Veterans Foundation, and                                                                                      
Acting Chairman of JET PAC in Alaska                                                                                            
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 214.                                                                                         
KRISTIN WRIGHT, Finance and Licensing Supervisor                                                                                
Alaska Department of Fish and Game (ADF&G)                                                                                      
Juneau AK                                                                                                                       
POSITION STATEMENT: Supported SB 214.                                                                                         
SENATOR JOE THOMAS                                                                                                              
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of SB 246.                                                                                        
GRIER HOPKINS                                                                                                                   
Staff to Senator Thomas                                                                                                         
POSITION STATEMENT: Available to answer questions on SB 246.                                                                  
SARAH FISHER-GOAD, Acting Executive Director                                                                                    
Alaska Energy Authority (AEA)                                                                                                   
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 246.                                                                                         
EARLE AUSMAN, President                                                                                                         
Fullerton Consultants                                                                                                           
POSITION STATEMENT: Supported SB 246.                                                                                         
JIM HEMSATH,                                                                                                                    
Alaska Energy Authority (AEA)                                                                                                   
Anchorage AK                                                                                                                    
POSITION STATEMENT: Explained the fiscal note related to SB 246.                                                              
ACTION NARRATIVE                                                                                                              
CHAIR  CHARLIE  HUGGINS  called  the  Senate  Resources  Standing                                                             
Committee meeting to order at 3:38:52  PM. Present at the call to                                                             
order  were  Senators   Green,  Stevens,  Stedman,  Wielechowski,                                                               
Wagoner and Huggins.                                                                                                            
           SB 214-HUNTING BY MEMBERS OF THE MILITARY                                                                        
3:39:57 PM                                                                                                                    
CHAIR HUGGINS announced SB 214 to be up for consideration.                                                                      
JODY SIMPSON, staff to Senator Huggins, sponsor of SB 214,                                                                      
stated the sponsor statement as follows:                                                                                        
     Senate   Bill  214   allows  non-resident   active-duty                                                                    
     military   and   Coast   Guard  personnel   and   their                                                                    
     dependents  to  qualify  for  resident-rate,  big  game                                                                    
     hunting licenses  immediately upon report  date without                                                                    
     having   to  meet   the   current  12-month   residency                                                                    
     requirement. SB 214 also provides  for free hunting and                                                                    
     sport  fishing  licenses  for  active  members  of  the                                                                    
     Alaska National Guard and military reserves.                                                                               
     The  vast  majority  of states  have  unique  licensing                                                                    
     statutes for  active-duty military personnel.  At least                                                                    
     45 states offer resident  license rates, without regard                                                                    
     to  actual residency  status, to  active-duty personnel                                                                    
     or  personnel stationed  in the  state. Eight  of those                                                                    
     states,  including  Alaska,  require  personnel  to  be                                                                    
     stationed in  state for a  specific period of  time. At                                                                    
     twelve months, Alaska's waiting  period, as provided by                                                                    
     AS  16.05.415(c),  is  by far  the  longest  among  the                                                                    
     states.  Because  military  personnel  are  transferred                                                                    
     around the world, often without  having any real say in                                                                    
     where  they  are  stationed,  they  are  not  similarly                                                                    
     situated  to  others  who  choose  to  move  to  Alaska                                                                    
     voluntarily.  The  fact that transfers  are involuntary                                                                    
     and  frequent   means  that  they  may   be  unable  to                                                                    
     establish the  qualifications for normal  residency and                                                                    
     ever  be  able  to  take advantage  of  state  resident                                                                    
     preferences.  SB 214,  if enacted, benefits active-duty                                                                    
     military members  and their  dependents by  waiving the                                                                    
     12-month waiting period.                                                                                                   
     Current  statute, AS  16.05.340  (d), entitles  active-                                                                    
     duty non-resident military  members stationed in Alaska                                                                    
     to special  military licenses at the  resident rate for                                                                    
     sport-fishing  and small  game hunting.  This provision                                                                    
     does  not extend  to  big game  licenses  and tags.  If                                                                    
     military members who have  not reached residency status                                                                    
     want to  go big  game hunting,  they must  now purchase                                                                    
     big  game licenses  at the  non-resident rate  plus big                                                                    
     game tags  at one-half  the non-resident rate.  SB 214,                                                                    
     if enacted, would allow them  to purchase both big game                                                                    
     licenses and tags at that resident rate.                                                                                   
MS. SIMPSON noted a fiscal  impact of $31,000 from the Department                                                               
Of Fish  and Game. She said  the proposed change to  the resident                                                               
requirements  in  this  bill would  not  affect  eligibility  for                                                               
Permanent Fund Dividend checks or jury pool.                                                                                    
She  said this  bill also  eliminates the  guide requirement  for                                                               
hunting brown bear, grizzly, mountain  goat and sheep. The reason                                                               
is that members of the  military are trained to rigorous physical                                                               
and  technical  standards  that typically  exceed  those  of  the                                                               
average person  and are typically more  familiar with challenging                                                               
terrain  and  changing weather  patterns.  Currently  a guide  is                                                               
required to hunt those four species.                                                                                            
MS.  SIMPSON said  the  Alaska  Professional Hunters  Association                                                               
wrote a letter  in opposition to that component of  the bill. She                                                               
said the  January 1, 2009 effective  date in the bill  allows the                                                               
Department  of  Fish   and  Game  time  to   revise,  print,  and                                                               
distribute  application forms  that reflect  accurate information                                                               
and to  work with  vendors and  applicants to  achieve compliance                                                               
with the  new law and  it's their  standard practice to  start at                                                               
the beginning of a calendar year when changing an application.                                                                  
3:43:01 PM                                                                                                                    
SENATOR MCGUIRE joined the committee.                                                                                           
3:43:43 PM                                                                                                                    
MS. SIMPSON  said it has  been suggested that  the aim of  SB 214                                                               
could be  better accomplished by  amending the  current statutory                                                               
definition  of "residency"  within  the fish  and game  component                                                               
specifically; a copy of that language was in their packets.                                                                     
She  said  that Representative  Bill  Thomas  requested that  the                                                               
committee  consider  including  members of  the  National  Guard,                                                               
language in his HB  62. He said also if that  change is made that                                                               
a revised fiscal note would be necessary.                                                                                       
3:45:52 PM                                                                                                                    
SENATOR STEVENS asked if National  Guard members wouldn't already                                                               
be included as non-resident members of the military service.                                                                    
CHAIR HUGGINS helped  out saying that the  Department of Military                                                               
Affairs (DMVA)  has asked  them to look  at provisions  for using                                                               
hunting  and  fishing  licenses  by virtue  of  membership  in  a                                                               
military service as  a recruiting mechanism and he  had talked to                                                               
General  Fraser and  the Army  commander about  doing that.  This                                                               
weekend's paper said some soldiers  were apprehended because they                                                               
were buying  an in-state  license when  they weren't  entitled to                                                               
it. Each  of the  commanders said they  couldn't justify  it, but                                                               
because,  in fact,  all the  large troop  concentration states  -                                                               
Georgia, Alabama, Mississippi, North  Carolina and South Carolina                                                               
-  give resident  hunting and  fishing privileges  to people  who                                                               
live  there, they  talked  about  it and  this  bill would  bring                                                               
Alaska  in line  with other  places where  soldiers, sailors  and                                                               
airmen are  stationed. South Carolina  is the most  permissive by                                                               
letting North Carolina D831 on-leave personnel hunt there.                                                                      
He said there  are some hurdles because Alaska  has three species                                                               
- brown  bears, goats and  Dall sheep -  that require a  guide to                                                               
hunt if you're not a  resident. Exempting those species might put                                                               
them on weak ground.                                                                                                            
3:51:34 PM                                                                                                                    
SENATOR  WAGONER  said  Georgia  and South  Carolina  don't  have                                                               
grizzly bear, mountain sheep or goats,  but Alaska does and it is                                                               
a limited number.  He had no problem with making  it easier for a                                                               
military person  who has transferred  in on a permanent  basis to                                                               
go black and  brown  bear hunting where the  ADF&G has found that                                                               
there is  an overabundance  of those  bears. But  to take  a very                                                               
valuable  resource as  far as  income  that comes  in for  guided                                                               
hunts is not what he wants to do.                                                                                               
SENATOR  WIELECHOWSKI   asked  how  many  military   members  are                                                               
actually exercising  their right  to go on  guided hunts  now and                                                               
how many would take advantage of this bill if it were to pass.                                                                  
MS. SIMPSON answered a letter  from Alaska Department of Fish and                                                               
Game  (ADF&G) provided  that list  from 2006.  For example  three                                                               
licenses were actually sold for brown bear and grizzly bear.                                                                    
SENATOR STEDMAN asked how many of those were successful hunts.                                                                  
MS. SIMPSON said she didn't know.                                                                                               
3:55:20 PM                                                                                                                    
CHAIR HUGGINS  said Alaska has  lots of provisions  for residents                                                               
that don't require a guide.                                                                                                     
SENATOR  WIELECHOWSKI  wanted  to  know  if  they  had  any  best                                                               
estimates  on  how   many  members  of  the   military  or  their                                                               
dependents would take advantage of this law if it were passed.                                                                  
MS. SIMPSON  said she could  get him  a percentage, not  an exact                                                               
3:56:41 PM                                                                                                                    
KEVIN SAXBY,  Sr. Assistant Attorney  General, Department  of Law                                                               
(DOL),  said his  letter  addresses  constitutional concerns.  He                                                               
said the state constitution's  justification for requiring guides                                                               
for non residents is based  on dangerous conditions and dangerous                                                               
game, but secondly  these species with the  exception of mountain                                                               
goat are  unique to  Alaska and  mountain goat  are not  found in                                                               
very many  other places. There  are a  lot of unique  rules about                                                               
them that visitors can't know  about. Creating exceptions weakens                                                               
the defensibility of distinctions the state has already drawn.                                                                  
SENATOR WIELECHOWSKI asked  what the standard of  review would be                                                               
in looking at out of state  residents. Is it strict scrutiny or a                                                               
rational basis and what would  be the standard for upholding this                                                               
statute if it was applied to military members?                                                                                  
MS.  SAXBY answered  the  standard of  review  in federal  courts                                                               
would be the rational basis  test, the lowest standard of review,                                                               
but that is still a test that matters.                                                                                          
SENATOR WIELECHOWSKI  asked if the  state would have to  show the                                                               
rationale for  having a different  standard for  military members                                                               
as  opposed  to  a  different  standard  for  people  who  aren't                                                               
military members.                                                                                                               
MR. SAXBY  replied yes; practically  speaking they would  want to                                                               
show that  there is  a reason  to view  recently-arrived military                                                               
members  differently  from  the  general  run  of  the  mill  non                                                               
resident on both  their ability to face  dangerous conditions and                                                               
dangerous  game  and  their knowledge  of  Alaska's  very  unique                                                               
hunting regulations.                                                                                                            
4:01:29 PM                                                                                                                    
CHAIR  HUGGINS said  he  thought they  should  exclude the  three                                                               
species that are  guided to keep down the profile  of a potential                                                               
court challenge by eliminating section 2.                                                                                       
MR.  SAXBY said  eliminating section  2 would  remove all  of his                                                               
constitutional concerns.                                                                                                        
SENATOR WIELECHOWSKI asked if there  is a constitutional basis to                                                               
challenge the remainder of the bill.                                                                                            
MS.  SAXBY replied  yes; someone  could  always come  up with  an                                                               
argument.  Even in  section  1 residents  and  non residents  are                                                               
treated  differently.  Precisely,  they need  to  recognize  that                                                               
section 1 does  not currently authorize them  to receive resident                                                               
licenses, but  special non resident  military licenses  that cost                                                               
the same as resident licenses. That is an important distinction.                                                                
To get more to Senator  Wielechowski's question, people are still                                                               
getting treated differently, but it's  a different debate at this                                                               
point.  They  are not  talking  about  whether non  residents  in                                                               
general are qualified  to face dangerous conditions  and game and                                                               
are  aware  of  Alaska's  unique regulations.  Instead  they  are                                                               
talking about  whether there  is any  legitimate state  reason to                                                               
treat  military   non  residents   differently  from   other  non                                                               
residents.  It's a  different  debate and  an  easier defense  to                                                               
make.  Military  personnel  are transferred  here  against  their                                                               
will, for example, and for national security.                                                                                   
4:04:56 PM                                                                                                                    
SENATOR MCGUIRE  said she thought  it might  be better to  have a                                                               
specific license  granted on a  public policy basis to  honor our                                                               
military the  same as the  state did in making  disabled veterans                                                               
licenses free as  opposed to crafting it in a  way that redefines                                                               
resident.  She  was concerned  about  blurring  the line  between                                                               
residents and  non residents as  well and setting a  precedent so                                                               
that other entities would start blurring the legal line.                                                                        
MR. SAXBY said he  still thought the neatest way to  do it was to                                                               
authorize   recently  arrived   military   transferees  who   are                                                               
stationed  here to  be residents.  Military people  are here  for                                                               
different reasons  than anyone  else is and  it's easy  to defend                                                               
treating them differently in that instance.                                                                                     
SENATOR  MCGUIRE suggested  focusing on  the fact  that they  are                                                               
stationed here for a reason.                                                                                                    
MR.  SAXBY  said  he  supported   treating  them  differently  as                                                               
military, but as residents rather than as non residents.                                                                        
CHAIR  HUGGINS  thanked him  and  said  his experience  in  other                                                               
states  is that  for  the  purposes of  hunting  and fishing  PCS                                                               
military  and dependents  are considered  residents -  period. He                                                               
asked if  it was  complicated to  get people to  be able  to hunt                                                               
black or brown bears in unit 16B.                                                                                               
MR. SAXBY replied yes.                                                                                                          
4:09:50 PM                                                                                                                    
ROBERT FITHIAN,  Executive Director, Alaska  Professional Hunters                                                               
Association,  said  the  association  cannot  adequately  express                                                               
their  respect and  honor  for the  U.S.  military personnel  and                                                               
their dependents who  in times of war and non  war dedicate their                                                               
lives  for America.  They  are also  supportive  of the  concerns                                                               
brought forward in the sponsor  statement for this bill. However,                                                               
he said,  as the  bill is  written it  would provide  for special                                                               
treatment  of non  resident military  personnel to  hunt Alaska's                                                               
guide-required big  game species.  They recognize and  agree with                                                               
the desire to avoid posing  undue burdens on military members and                                                               
support acknowledging  and honoring  them for their  service, but                                                               
to preserve  the constitutionality of Alaska's  guide requirement                                                               
for  non  resident hunters,  their  expert  counsel on  fish  and                                                               
wildlife   matters,  Bill   Horn,   strongly  counseled   against                                                               
authorizing  any  exception  to  the guide  requirement  for  non                                                               
resident  military  and  their  dependents  on  active  duty  and                                                               
permanently stationed  in Alaska.  His letter provided  the basis                                                               
for his  recommendations. Mr. Fithian said  the association would                                                               
be very  willing to work with  the sponsor to generate  a version                                                               
of the bill that would meet their common goals and concerns.                                                                    
4:12:29 PM                                                                                                                    
CHAIR HUGGINS  agreed with him  that the three  dangerous species                                                               
complicates the  matter and said  to consider that  done mentally                                                               
at  this time  and  promised  to work  with  him  on language  to                                                               
correct it.                                                                                                                     
4:12:52 PM                                                                                                                    
RIC  DAVIDGE,  State  Council President,  Viet  Nam  Veterans  of                                                               
America,  Chairman,   Alaskan  Veterans  Foundation   and  Acting                                                               
Chairman of  JET PAC in  Alaska said military members  in Georgia                                                               
and the Carolinas  show their military I.D. and are  treated as a                                                               
resident.  However,  he  admitted  that  Alaska  has  differences                                                               
particularly with the big game species.                                                                                         
MR.  DAVIDGE  suggested making  it  clear  that the  active  duty                                                               
military service  includes members  of the  U.S. Coast  Guard and                                                               
their dependents. He  also observed that the harvest  of big game                                                               
is regulated  by the Alaska  Department of Fish and  Game (ADF&G)                                                               
and that should  take care of the harvesting  question and people                                                               
with guides are probably much  more successful in harvesting them                                                               
than people  who don't  have them.  He encouraged  having further                                                               
hearings on this bill.                                                                                                          
4:15:00 PM                                                                                                                    
KRISTIN   WRIGHT,  Finance   and  Licensing   Supervisor,  Alaska                                                               
Department  of  Fish   and  Game  (ADF&G),  said   she  said  the                                                               
department  supports the  bill and  she was  available to  answer                                                               
SENATOR MCGUIRE  noted that the  fiscal note indicates  the ADF&G                                                               
received  $52,100 in  2006 from  sport license  and big  game tag                                                               
sales  from  military personnel  and  if  all military  personnel                                                               
could purchase them at resident  rates, the department would lose                                                               
$31,900. So  if this policy goes  forward, that would have  to be                                                               
considered in their budgeting process.                                                                                          
MS.  WRIGHT  added that  the  department  would  also lose  a  25                                                               
percent matching requirement amounting to another $8,000.                                                                       
SENATOR MCGUIRE asked her to explain the match.                                                                                 
MS. WRIGHT answered that when  the department gets federal grants                                                               
it has to use matching funds  of usually 25 percent. They usually                                                               
use ADF&G  funds and  they would  lose the  ability to  use those                                                               
SENATOR  WIELECHOWSKI  asked  if   she  expected  the  number  of                                                               
military licenses to increase if this bill passes.                                                                              
MS. WRIGHT  replied yes, because  the licenses are  too expensive                                                               
for some people  to purchase now. She also mentioned  that she is                                                               
somewhat concerned  that military members who  under this measure                                                               
would buy  a military  license at a  resident rate  would confuse                                                               
license vendors.  Right now  when you  go to a  vender and  buy a                                                               
resident  license, you  fill out  a box  on how  many months  and                                                               
years you have been in Alaska. But  if a person puts one month in                                                               
that box, the vendor wouldn't think  he was a resident. There are                                                               
1,600 vendors  throughout the state  including Wal-Mart  and Fred                                                               
Meyers  and  it  would  be  hard  to  educate  them  all  on  the                                                               
distinction.  If military  members buy  licenses at  the resident                                                               
rate, vendors will  not question why they have not  been here for                                                               
12 months.                                                                                                                      
4:19:40 PM                                                                                                                    
SENATOR WIELECHOWSKI  said military members would  having to live                                                               
in  the  state for  12  months  before  being able  to  undertake                                                               
subsistence fishing,  for instance,  or registration  hunts would                                                               
get into a  whole other protection issue of  treating them better                                                               
than actual residents.                                                                                                          
MS. WRIGHT replied that she  wasn't familiar with all the state's                                                               
hunting  requirements  and  she didn't  know  about  registration                                                               
MR. SAXBY  responded that all  the requirements  for registration                                                               
hunts are  driven by whether  one is defined  as a resident  or a                                                               
non resident.  If the  definition of resident  is changed  to add                                                               
military personnel who are permanently  stationed here, they will                                                               
qualify under all the rules that apply to residents.                                                                            
SENATOR  WIELECHOWSKI  asked if  certain  hunts  require being  a                                                               
resident for 12 months to do the hunt or get a resident rate.                                                                   
MR.  SAXBY  replied no;  the  12-month  requirement  is to  be  a                                                               
resident in the  first place. After that there  are no additional                                                               
requirements.   Many   hunts   require  being   a   resident   to                                                               
participate, all subsistence hunts, for example.                                                                                
SENATOR WIELECHOWSKI  asked if  they get  in legal  problems with                                                               
giving a  resident license to  a member  of the military  who has                                                               
not been here for 12 months.                                                                                                    
MR. SAXBY replied  yes, but you can  draw legitimate distinctions                                                               
at that  level. Military people  are stationed here  because they                                                               
are ordered here. Other peoples'  jobs require them to come here,                                                               
too, but  they can  quit that  job and  leave any  time; military                                                               
personnel  can't  and  face  severe penalties  if  they  do.  The                                                               
coercive level of  them being here is greater than  for any other                                                               
type  of  recent arrival.  Second,  there's  a national  security                                                               
reason for them being here and  the state could recognize that if                                                               
it wanted to.                                                                                                                   
4:24:26 PM                                                                                                                    
SENATOR WAGONER said the state  currently grants resident fishing                                                               
licenses to people from the Yukon  Territory and he asked if this                                                               
means  the  state would  grant  the  military member  a  resident                                                               
fishing license as well as a hunting license.                                                                                   
MS.  WRIGHT replied  that Yukon  residents can  purchase a  Yukon                                                               
license  at the  resident rate;  they don't  purchase a  resident                                                               
license. And yes, this would also be for fishing licenses.                                                                      
SENATOR  WAGONER  stated that  this  number  of personnel,  then,                                                               
would be  immediately eligible for  dip net  fisheries throughout                                                               
the  state of  Alaska,  because people  need  a resident  fishing                                                               
license to be eligible for a dip net fishery.                                                                                   
MS. WRIGHT said he was correct.                                                                                                 
MR. SAXBY said as he reads  the bill currently, the law would not                                                               
change as to non resident fishing licenses. He explained:                                                                       
     They  are  currently  allowed to  get  a  non  resident                                                                    
     fishing or sport fishing license  at the resident rate.                                                                    
     That   does  not   entitle  them   to  participate   in                                                                    
     subsistence and personal use  fisheries until they have                                                                    
     been here for  12 months. If you were to  go along with                                                                    
     my suggestion, which is  a very off-the-cuff suggestion                                                                    
     at this point.... but, qualify  them as residents. Then                                                                    
     the concerns  that were raised earlier  would come into                                                                    
     play.  They would  be residents  for  both hunting  and                                                                    
     fishing  purposes  and  they   would  qualify  for  any                                                                    
     resident opportunity.                                                                                                      
4:26:43 PM                                                                                                                    
CHAIR HUGGINS  said as  a testimonial,  that this  weekend Safari                                                               
Club  International had  its banquet  in Anchorage  and they  had                                                               
four  military  members that  all  walked  with some  distinctive                                                               
limp; some  had canes - because  it didn't work out  too well for                                                               
them in  Iraq. He  reminded them  that some  50 soldiers  went to                                                               
Iraq with the Airborne Brigade, but didn't come back.                                                                           
SENATOR MCGUIRE  said she  holds the highest  regard for  the men                                                               
and women  who serve our country  and the debate they  are having                                                               
today centers around  how to do that. She  supported honoring the                                                               
military and  hosting them  well; her only  concern is  about the                                                               
resident statute itself.                                                                                                        
CHAIR HUGGINS  said that was  understood and  he held SB  214 for                                                               
further work.                                                                                                                   
           SB 246-SUSITNA HYDRO WORKING GROUP; REPORT                                                                       
4:29:57 PM                                                                                                                    
CHAIR HUGGINS announced SB 246 to be up for consideration.                                                                      
SENATOR  JOE THOMAS,  sponsor of  SB 246,  commented that  absent                                                               
reviewing  Susitna  and  other hydro-electric  potential  in  the                                                               
state, they  are allowing  themselves to slip  back to  where the                                                               
state was  in 1984 and  expect that gas  and oil will  somehow be                                                               
the cheapest source of fuel for energy and power production.                                                                    
He elaborated:                                                                                                                  
     In the early 1980s gas  was $.21 - $.25/tcf; diesel was                                                                    
     about $1/gallon  and river water was  free. The Susitna                                                                    
     dam  was about  a $5.2  billion project  at that  time.                                                                    
     Today  Cook   Inlet  natural  gas  to   the  electrical                                                                    
     production facilities  is about $5.57/Mmbtu  and diesel                                                                    
     is $3 - $3.85/gallon on the  road system and as much as                                                                    
     $8/gallon  in   the  villages.   Oil  is   selling  for                                                                    
     $100/barrel   and  natural   gas   outside  Alaska   is                                                                    
     $9.22/Mmbtu - and river water is still free.                                                                               
     Recent  news stories  had highlighted  the decision  of                                                                    
     several  electric  utilities  to construct  a  new  260                                                                    
     megawatt   natural  gas   power  plant   in  Anchorage.                                                                    
     Contrast this  announcement with  the recent  news that                                                                    
     Texas  has passed  California as  our nation's  largest                                                                    
     producer of wind energy with  nearly 3,000 megawatts of                                                                    
     wind power generating capacity.  We may be entirely too                                                                    
     focused on  how we have  always done things  instead of                                                                    
     considering new more  efficient more beneficial courses                                                                    
     of  action.  Norway  is  an  oil  producer;  however  I                                                                    
     believe  that  90  percent of  their  power  is  hydro-                                                                    
     electric.  They  use  the most  efficient,  sustainable                                                                    
     resource that they have.                                                                                                   
     Nothing   indicates  that   natural  gas   prices  will                                                                    
     stabilize and certainly no one  believes the price will                                                                    
     ever  go down  other  than for  short  periods of  time                                                                    
     before  increasing beyond  its previous  high. This  is                                                                    
     and will  be the  trend as natural  gas and  oil become                                                                    
     more scarce.  Oil and  gas exploration  and development                                                                    
     costs continue  to rise;  a quick  look at  capital and                                                                    
     operating  expenses  at Prudhoe  Bay  and  the cost  of                                                                    
     drilling  confirms   these  facts.  These   costs  will                                                                    
     continue to increase.                                                                                                      
     Gas-fired electrical turbines are  not the solution nor                                                                    
     are they  the best and  most efficient use of  our gas.                                                                    
     Our gas  will no doubt  command the highest  price when                                                                    
     and if  it is sold outside  of Alaska and it  should be                                                                    
     to  maximize its  benefit to  Alaska and  her citizens.                                                                    
     Some  will  be  used  in  existing  infrastructure  for                                                                    
     heating purposes  or to  bolster industrial  efforts in                                                                    
     Alaska. This is  a reasonable and efficient  use of gas                                                                    
     in-state. However, gas is not  the most efficient power                                                                    
     generating fuel.  The top of  the line  next generation                                                                    
     natural gas  turbines only achieve an  efficiency of 60                                                                    
     percent and  even this modest  level of  efficiency was                                                                    
     thought impossible as recently as the early 1990s.                                                                         
     No plan  to date  suggests in-state use  of gas  is the                                                                    
     highest and best use of  our resource. I personally see                                                                    
     it as a great potential  for industrial use in heating,                                                                    
     but not  power generation. Trans-Canada and  all of the                                                                    
     AGIA  proposals are  export  proposals  other than  the                                                                    
     bullet line  to Southcentral Alaska. Our  resources are                                                                    
     stretched to the  point that Agrium closes  down and we                                                                    
     have  to  negotiate  with  Cook  Inlet  producers  over                                                                    
     exporting  LNG, which  Nikiski has  done  for 30  years                                                                    
     versus  consumer use  in  Southcentral  Alaska. We  are                                                                    
     still on the road. Let's  learn from the past; let's do                                                                    
     it differently;  let's do our  best to change  our ways                                                                    
     and see some different and better results....                                                                              
He said  $2-$3 million study is roughly the same amount of money                                                                
we expend as a state every two-three hours of every day of the                                                                  
year under the state's current budget.                                                                                          
4:34:40 PM                                                                                                                    
GRIER HOPKINS, staff to Senator Thomas, said he was available to                                                                
answer questions.                                                                                                               
SARAH  FISHER-GOAD,  Acting  Executive  Director,  Alaska  Energy                                                               
Authority  (AEA), said  the  Palin  administration supported  the                                                               
analysis  of  the Susitna  project  and  the additional  regional                                                               
planning that  is required in  SB 246.  Last week there  was some                                                               
discussion  on  whether this  project  could  be addressed  as  a                                                               
capital  project  and  that  is   technically  correct,  but  the                                                               
administration is  not taking  a position  with respect  to which                                                               
vehicle  the legislature  chooses  to address  it.  On a  broader                                                               
note, the  governor and the AEA  board of directors will  soon be                                                               
announcing  the appointment  of an  energy coordinator  that will                                                               
also be the  AEA executive director. This person will  be the one                                                               
that will direct this Railbelt  regional planning and a statewide                                                               
comprehensive planning effort.                                                                                                  
CHAIR HUGGINS asked her to  review what they could anticipate the                                                               
AEA will bring back to the body as a product.                                                                                   
MS.  GOAD replied  that the  product  is detailed  in the  fiscal                                                               
note. SB 246 addresses 13  objectives and those have been grouped                                                               
into specific work tasks. For example  work task one would be the                                                               
feasibility  study and  the  estimate  of the  plant  and of  the                                                               
generated power  costs; work task  two would be  an environmental                                                               
and the  socio-economic impact  study; work  task three  would be                                                               
the cost of power for  selected alternatives. This issue would be                                                               
to look  at Susitna  not as  itself in a  vacuum, but  with other                                                               
energy sources  and other potential Railbelt  projects. Work task                                                               
four  is the  financial  options  for the  project.  There is  an                                                               
integrated  systems energy  plan for  the Railbelt  as work  task                                                               
five  and creation  of a  project advisory  group. Limited  field                                                               
work has  been suggested. If  SB 246 passes, they  have suggested                                                               
that those  be capital appropriations  of $2.8 million  in FY2009                                                               
and in FY2010 of $1.5 million.                                                                                                  
4:39:10 PM                                                                                                                    
SENATOR STEDMAN  agreed with broader scope,  especially objective                                                               
four, and  asked if this  wasn't more  of a broader  energy study                                                               
than a concentration on just the Susitna dam.                                                                                   
MS.  GOAD replied  that they  interpreted SB  246 to  include the                                                               
previous study  of the  Susitna project as  an important  part of                                                               
the entire  Railbelt study.  There is  no idea  to not  pursue or                                                               
analyze those other projects; Susitna needs a second look.                                                                      
SENATOR  STEDMAN said  it appears  that Susitna  creates its  own                                                               
wake  because of  its size.  He asked  if this  isn't more  of an                                                               
energy analysis  of the Railbelt  population centers  in relation                                                               
to more comprehensive planning.                                                                                                 
MS. GOAD answered yes.                                                                                                          
CHAIR HUGGINS clarified  that Susitna power could  reach to Homer                                                               
and Fairbanks.  He asked  about the difference  in the  version E                                                               
fiscal note.                                                                                                                    
MS. GOAD  answered that the  tasks are  the same, but  they would                                                               
not necessarily  need the project advisory  group. Other projects                                                               
have been  conducted this way, including  the Railbelt Electrical                                                               
Grid Authority Study.                                                                                                           
CHAIR HUGGINS asked  Senator Thomas his thoughts  on the advisory                                                               
4:43:41 PM                                                                                                                    
SENATOR THOMAS  said he  was concerned  about creating  an unruly                                                               
study,  so  he  changed  incorporating  various  departments  and                                                               
stakeholder groups  into a working  group into  simply consulting                                                               
with those groups.                                                                                                              
MS. GOAD said she supported the change.                                                                                         
4:45:22 PM                                                                                                                    
SENATOR  STEDMAN moved  to  adopt  version E  of  SB  246 as  the                                                               
working  document.  There  were  no  objections  and  it  was  so                                                               
SENATOR MCGUIRE  asked if they  intended to include  fisheries in                                                               
the term "wildlife" on page 3, line 6.                                                                                          
4:46:05 PM                                                                                                                    
SENATOR  THOMAS answered  the  original  study realized  concerns                                                               
about a dam  project impacting fish and  wildlife. Although those                                                               
impacts would  be negligible with  the Susitna dam because  it is                                                               
so far  up the river, other  impacts need to be  reevaluated. For                                                               
instance,  as  the  dam  backs  up  water,  some  areas  will  be                                                               
SENATOR MCGUIRE  said the committee  might want to  consider more                                                               
specific  language   about  the   impacts,  either   positive  or                                                               
negative, on  fisheries and she  moved a conceptual  amendment to                                                               
specifically include "fish, wildlife, and land use" on line 6.                                                                  
SENATOR  THOMAS responded  that  he had  no  problem with  adding                                                               
"fish  and wildlife"  and assumed  that study  would take  place.                                                               
There  were  no  objections  and  the  conceptual  amendment  was                                                               
SENATOR WAGONER asked how many  acres the Susitna reservoir would                                                               
SENATOR THOMAS  didn't know because  there are  several different                                                               
plans  for the  river. The  Devils Canyon  is a  relatively small                                                               
footprint; the up-river Watana project is quite a bit larger.                                                                   
4:49:40 PM                                                                                                                    
MS. GOAD said she didn't have  any comments on the amendment, but                                                               
she  mentioned  he had  wanted  to  know  last week  about  AEA's                                                               
accomplishments  and she  wanted  to  mention specifically  their                                                               
efforts in alternative energy, in  particular they just completed                                                               
an  alternative  energy  solicitation  in  partnership  with  the                                                               
Denali Commission.  This is the  first time  AEA has done  one of                                                               
these studies.  At the  same time  they did  a fifth  energy cost                                                               
reduction solicitation.                                                                                                         
To give  the committee  an idea  of how  many proposals  and what                                                               
kinds  of projects  are  out there,  Ms. Goad  said  they had  96                                                               
proposals  requesting $118  million  for total  project costs  of                                                               
over  $1 billion.  Of  those 96  proposals,  71 were  feasibility                                                               
analysis  of   alternative  energy  projects  or   roughly  $12.3                                                               
million. She said  it is an important part of  their work to look                                                               
at  objective  ways  to  analyze   projects  and  do  feasibility                                                               
analyses. She  said the  energy cost  solicitation has  been very                                                               
successful. The  four solicitations have had  cost/benefit ratios                                                               
of 2:1  and have  realized over  $40 million  of fuel  cost life-                                                               
cycle savings of projects that have been funded through that.                                                                   
4:51:37 PM                                                                                                                    
EARLE  AUSMAN, President,  Fullerton Consultants,  said he  was a                                                               
hydro-engineer representing  himself and his firm  in the process                                                               
of developing 4  megawatts of hydro for the MEA  system; the firm                                                               
also sells power  to MEA. He said they are  developing a paradigm                                                               
shift in technology by developing  a DC transmission project that                                                               
promises to  reduce energy costs for  Alaska's rural communities.                                                               
He said  a small  fraction of his  previous hydro  experience was                                                               
working with the Corps of  Engineers with the Snettisham, Rampart                                                               
and Bradley  dams as  well as doing  reconnaissance work  of many                                                               
other potential hydro plants throughout Alaska.                                                                                 
MR. AUSMAN explained  that he was approached by  some people last                                                               
year who  wanted an alternative to  the MEA coal plan.  There are                                                               
more than 50 megawatts of  under-the-river hydro potential in the                                                               
Matanuska Valley  as well  as wind sites.  To be  effective, they                                                               
need to  be combined with a  peaking system and hydro  is perfect                                                               
for  this. For  instance, hydro  is what  makes the  300-megawatt                                                               
Columbia  River state  line wind  system feasible.  He said  that                                                               
system sells its wind power  for $.4/kWh on a long-term contract.                                                               
His first thought was that  a full-sized Susitna project, because                                                               
of its possible  cost and environmental opposition,  would not be                                                               
an  acceptable candidate  and that  a reduced-size  Devils Canyon                                                               
portion  of this  project may  be  economical and  would be  more                                                               
acceptable.  So he  proposed the  dam at  Devils Canyon  that was                                                               
one-half the height  of the existing proposal to  reduce costs. A                                                               
50-percent reduction  in height on  one of these dams  can reduce                                                               
the volume  of concrete to  20 percent or  so. This dam  would be                                                               
equipped  with  extra turbines  to  provide  the peak  power  and                                                               
although the  reservoir is smaller,  it would have  some storage.                                                               
If  more power  would be  needed, it  could be  augmented by  the                                                               
upper  Watana part  of the  project, which  could also  be scaled                                                               
back if necessary.                                                                                                              
He  strongly recommended  that Alaska  look at  renewables as  is                                                               
proposed in  these bills.  They should  include both  Susitna and                                                               
Chakachamna because  they could work together  to provide peaking                                                               
power and  would be key in  replacement of new gas  turbines or a                                                               
coal plant proposed to power  the Railbelt. He also believed that                                                               
the power  from the  Railbelt system could  be shared  with rural                                                               
localities by using DC transmission.                                                                                            
MR. AUSMAN  said wind or water  energy not used is  lost forever,                                                               
but the fossil fuel that  is replaced by renewable energy sources                                                               
can  be reserved  and  used  or sold  to  the  people outside  of                                                               
Alaska, like Norway is doing.  The Department of Energy indicates                                                               
that  the State  of Alaska  has 45,000  megawatts of  developable                                                               
4:57:03 PM                                                                                                                    
He advised that  an initial analysis of the  economics of Susitna                                                               
and  Chakachamna  as well  as  other  renewable energy  resources                                                               
should  be done  to  determine  if any  of  those  projects or  a                                                               
combination of them appears fruitful.  The work should be done by                                                               
a group  that includes two  hydro-plant constructors,  one should                                                               
be Norwegian because  that is where the expertise  comes from and                                                               
the second  should be  from the  U.S. It  should also  include an                                                               
engineering firm that knows Alaska  and its special position, and                                                               
an  economist   and  report  writer.   The  report   should  make                                                               
recommendations on the  best course of action  provided a project                                                               
appears  to be  feasible,  and  a more  detailed  study could  be                                                               
4:59:09 PM                                                                                                                    
JIM HEMSATH,  AEA, explained  that the  fiscal note  is organized                                                               
specifically to focus around the  Susitna project and to look for                                                               
fatal  flaws  in the  engineering  and  cost  of power  that  may                                                               
prohibit the project from moving  ahead. The bottom of the fiscal                                                               
note indicates that at any time  during the course of the project                                                               
from the  Susitna perspective that  they find it is  not feasible                                                               
all  the work  on  it will  stop and  efforts  would be  directed                                                               
elsewhere. He said  there is never a guarantee that  a study will                                                               
get the answer you would like to have.                                                                                          
5:00:32 PM                                                                                                                    
SENATOR STEDMAN  moved to  report CSSB  246 (RES)  from committee                                                               
with individual  recommendations and attached fiscal  note. There                                                               
were no objections and it was so ordered.                                                                                       
There being  no further  business to  come before  the committee,                                                               
Chair Huggins adjourned the meeting at 5:01:04 PM.                                                                            

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