HOUSE FINANCE COMMITTEE May 7, 1994 2:15 P.M. TAPE HFC 94 - 163, Side 2, #000 - end. TAPE HFC 94 - 164, Side 1, #000 - end. TAPE HFC 94 - 164, Side 2, #000 - end. TAPE HFC 94 - 165, Side 1, #000 - #335. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 2:15 P.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Foster ALSO PRESENT Joshua Fink, Staff, Senator Tim Kelly; Dan Hickey, Alaska Railroad Corporation, Anchorage; Rick Solie, Staff, Senator Steve Frank; Thomas Boutin, Director, Division of Forestry, Department of Natural Resources; McKie Campbell, Deputy Commissioner, Department of Fish and Game; Mark LoPatin, LoPatin & Co., West Bloomfield, Michigan. SUMMARY SB 310 An Act relating to the management and sale of state timber; relating to the classification of state land that would preclude harvesting of timber or would designate harvesting of timber as an incompatible use; relating to the administration of forest land, proposals for state forest, and the determination of sustained yield; and providing for an effective date. CS SB 310 (FIN) was HELD in Committee for further discussion. SB 338 An Act relating to the issuance of revenue bonds for acquisition and construction of the Alaska Discovery Center for the Ship Creek Project in Anchorage; relating to a study of the feasibility and financial viability of the Alaska Discovery Center; relating to construction of the Alaska 1 Discovery Center; and providing for an effective date. CS SB 338 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Department of Revenue dated 3/02/94. SENATE BILL 338 "An Act relating to the issuance of revenue bonds for acquisition and construction of the Alaska Discovery Center for the Ship Creek Project in Anchorage; relating to a study of the feasibility and financial viability of the Alaska Discovery Center; relating to construction of the Alaska Discovery Center; and providing for an effective date." JOSHUA FINK, STAFF, SENATOR TIM KELLY, explained that the Alaska Railroad Corporation (ARRC) has a unique and rare federal authorization to issue non-recourse revenue bonds for private as well as public interests. SB 338 would authorize ARRC to sell $55 million dollars in non-recourse revenue bonds to be loaned to a public or private entity for the acquisition, design and construction of the Northern Discovery Center at Ship Creek Landings if the following conditions were met: 1. The potential developer pays for a feasibility and financial viability study to be performed by a person/business selected by the ARRC. 2. The ARRC board of directors reviews the feasibility study and determines the project is viable. Mr. Fink added that the payment of the bonds and interest would be made solely with assets and revenues received from the owner/operators of the facility, and that ARRC was prohibited from using any other financing or financial vehicle to repay the bonds. He concluded that prior to the start of construction, the developer must post a payment and completion bond in favor of ARRC. Representative Brown asked if the study was necessary before the bonds could be issued. Mr. Fink explained that in Section #1, Line #11, the inclusion of "if" would establish the condition: "They are allowed to issue the bonds if the Board of Directors determines after completion of the study conducted in Section #7". Representative Brown questioned why authorization was being granted for $55 million dollars when only $40 million was 2 needed. Mr. Fink replied that the language would clarify that "Not more than $55 million dollars" would be required. He stressed that $55 million would be the ceiling. MARK LOPATIN, LOPATIN & COMPANY, WEST BLOOMFIELD, MICHIGAN, echoed that $55 million would be the project ceiling. Representative Martin asked the bonding value of the Alaska Railroad. MARK HICKEY, ALASKA RAILROAD CORPORATION, ANCHORAGE, commented that provisions made in the 1988 State law would require a five year amendment, although, currently there is no specific mandate. The legislative intent would be to dispose of the railroad. Mr. Hickey said federal requirement provides that if the railroad is sold, arrangements for right-of-way would be made. He indicated that these provisions are not relevant to the bond issue before the Committee. Representative Brown asked the agreement terms between the government of St. Petersburg and the Northern Crossroads Discovery Center and if there was expectation for State support for the project. She stated there would be a public subsidy involved in the facility's construction. Mr. LoPatin briefed the Committee that there was no need for a government subsidy for the development or construction of Discovery Center. Following construction, it will become a private venture between the Discovery Center and the Museum of St. Petersburg. Representative Brown questioned if the Discovery Center would be compensating St. Petersburg for the loan of materials. Mr. LoPatin understood that the length of the agreement would be thirty five years and that the terms would be provided by a letter of intent between the two interests. Discovery Center will pay the Russian Museums for contributing materials and displaying them. He added that the specifics have not yet been agreed upon. Co-Chair MacLean pointed out that the project was similar to a previously vetoed project - the Alaska Heritage Park. Mr. Fink advised that the projects were substantially different. Representative Martin questioned the collateral used. Mr. LoPatin explained that the collateral used would not be an obligation to the Alaska Railroad. Representative Hanley clarified that if the bonds were not backed, no one in the bond market would purchase them. Representative Brown warned that a comprehensive traffic 3 analysis should be under-taken in order to address the effect on port and railroad traffic. Mr. LoPatin reminded Committee members that $5.5 million dollars match would be provided through development of the World Trade Center. The cost of the World Trade Center and Hotel is expected to be $80 million dollars. The plans continue to move forward in anticipation of including the Discovery Center. Representative Hanley MOVED to report CS SB 338 (FIN) out of Committee with individual recommendations and with the accompanying zero fiscal note. There being NO OBJECTIONS, it was so ordered. CS SB 338 (FIN) was reported out of Committee with "no recommendations" and with a fiscal note by the Department of Revenue dated 3/02/94. SENATE BILL 310 "An Act relating to the management and sale of state timber; relating to the classification of state land that would preclude harvesting of timber or would designate harvesting of timber as an incompatible use; relating to the administration of forest land, proposals for state forest, and the determination of sustained yield; and providing for an effective date." Representative Therriault MOVED to adopt HFC CS SB 310 (FIN), #8-LS1558\M, dated 5/07/94, as the version before the Committee. The work draft was prepared to include the first twenty-four amendments addressed in Subcommittee. There being NO OBJECTIONS, it was adopted. [Copies of the amendments are on file]. Representative Therriault MOVED to adopt Amendment #7. Representative Brown asked for further explanation of the relationship between the process indicated in the legislation and the best interest determination of the findings. RICK SOLIE, STAFF, SENATOR STEVE FRANK, explained that the provisions in SB 310 would apply and that the best interest findings would be made prior to a FMA under the general land classification process. THOMAS BOUTIN, DIRECTOR, DIVISION OF FORESTRY, DEPARTMENT OF NATURAL RESOURCES, agreed with Mr. Solie. There being NO OBJECTIONS, Amendment #7 was adopted. Co-Chair MacLean MOVED to adopt Amendment #16. She thought that there should be legislative approval of any FMA land 4 sales. Large scale land disposal should be approved by the Legislature. Representative Therriault OBJECTED noting that amendments had already been included which accept that all state agencies, including the Commissioner of Fish and Game, would have the right to review the final document. Co-Chair MacLean disagreed, pointing out that a new precedence was begun by establishing land disposal for timber harvesting and at the same time would establish a track record for operations. Representative Parnell opposed injecting the political process to one which he thought should create a more scientific and economic determination. Representative Brown spoke in support of the amendment. A roll call vote was taken on the MOTION. IN FAVOR: Hoffman, Navarre, Brown, Grussendorf, MacLean, Larson. OPPOSED: Hanley, Hoffman, Parnell, Therriault, Foster. The MOTION PASSED (6-5). (Tape Change, HFC 94-164, Side 1). Representative Grussendorf MOVED to adopt Amendment #23 which would reincorporate the Department of Fish and Game in the legislation. Representative Therriault noted that Senator Frank supported the amendment. Representative Brown commented that ten days was too short of a time for review of the final agreement. MCKIE CAMPBELL, DEPUTY COMMISSIONER, DEPARTMENT OF FISH AND GAME, acknowledged that if the Department of Fish and Game was involved that they should be able to do a turn around in ten days. There being NO OBJECTIONS to Amendment #23, it was adopted. Co-Chair Larson MOVED TO RESCIND previous action taken on Amendment #16 and MOVED an additional language change as follows: "Within ten days of the convening of a regular legislative session, the Governor shall transmit to the President of the Senate and the Speaker of the House of Representatives, any proposed final forest management agreement. If the legislature, by joint resolution, fails to disapprove the final forest management agreement within 45 days, it is 5 considered approved". Co-Chair MacLean spoke in support of the language change. Representative Brown thought that 45 days would not be enough time to go through both Houses of the Legislature. Representative Navarre OBJECTED to the language change. A roll call vote was taken on the MOTION to rescind previous action. IN FAVOR: Martin, Parnell, Therriault, Foster, Hanley, Larson, MacLean. OPPOSED: Hoffman, Navarre, Brown, Grussendorf. The MOTION PASSED (7-4). Co-Chair MacLean MOVED to adopt the new language for Amendment #16 as provided by Representative Larson. Representative Navarre MOVED TO AMEND the language by adding that: "The Legislature must vote within forty-five days, or it will be considered dead". Co-Chair MacLean OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Navarre, Brown, Grussendorf, Hoffman. OPPOSED: Martin, Parnell, Therriault, Foster, Hanley, Larson, MacLean. The MOTION FAILED (4-7). Representative Martin OBJECTED to adopting the new Amendment A roll call vote was taken on the MOTION. IN FAVOR: Navarre, Parnell, Therriault, Brown, Foster, Grussendorf, Hanley, Hoffman, Larson, MacLean. OPPOSED: Martin. The MOTION PASSED (10-1). Representative Brown MOVED to adopt Amendment #24 which would restore the necessary contents to statute of a forest use land plan. Mr. Boutin advised that the drafting deleted the immediate and long term effects of forest activities. Mr. Solie added that small timber operators want a site specific forest plan. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre. 6 OPPOSED: Therriault, Foster, Hanley, Martin, Parnell, Larson. Co-Chair MacLean was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED TO WITHDRAW Amendments #26 & #27. There being NO OBJECTIONS, they were withdrawn from consideration. Representative Brown MOVED to adopt Amendment #28 which would clearly define that subsistence and personal, recreational and commercial uses of fish and wildlife are among the uses of forest land for non timber purposes that must be considered by the Commissioner. Mr. Boutin agreed that it would be important to accommodate those concerns. There being NO OBJECTIONS to Amendment #28, it was adopted. Representative Brown MOVED to adopt Amendment #29 requesting to withdrawn the portion relating to Section (10). Mr. Boutin commented that the proposed language would improve the drafting of the legislation. There being NO OBJECTIONS, it was adopted. Representative Brown MOVED to adopt Amendment #30. There being NO OBJECTIONS, it was adopted. Representative Brown MOVED to adopt Amendment #31 which would add "or" providing that the land use plan was consistent with one or the other land use plans. Mr. Boutin advised the language would be an improvement to current wording. There being NO OBJECTIONS, it was adopted. Representative Brown MOVED to adopt Amendment #32 which would add a new sentence at the end of the existing Subsection (f) and that would insure that public review includes the (g) (1) & (2) provisions. Mr. Boutin noted that the timing for providing information for public process was important and that he agreed to the proposed amendment. There being NO OBJECTIONS, it was adopted. Representative Brown MOVED TO WITHDRAW Amendments #33 - #36 pointing out that they had been addressed by other amendments adopted in subcommittee. There being NO OBJECTIONS, they were withdrawn. Representative Brown MOVED to adopt Amendment #37. (Tape Change, HFC 94-164, Side 2). Representative Brown explained that Amendment #37 would 7 provide that the operational level force inventory be every two years instead of every five years and that it include provisions to adjust harvest plans. Mr. Boutin replied that the cost benefit could not be increased with only an update. Representative Brown recommended adding language to the portion of the amendment on Page 7, Line 31, by inserting "update of the" before the "operational force inventory every two years". Mr. Solie stressed that they could not comply with a sustained yield without having an inventory prior to a timber sale. Representative Brown MOVED to divide the question and then to amend Amendment #37 by adding the previous referenced language. There being NO OBJECTIONS to the language addition in Amendment #37(a), it was added. Representative Brown MOVED to adopt Amendment #37(b) which would insert provisions to adjust the harvest plans based on the information provided by the inventory. Mr. Boutin informed Committee members that the language was not clear. Representative Martin OBJECTED to adopting Amendment #37(b). A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre, Larson. OPPOSED: Foster, Hanley, Martin, Parnell, Therriault. Co-Chair MacLean was not present for the vote. The MOTION FAILED (5-5). Representative Brown MOVED to adopt Amendment #38 which would add a new subsection providing that if the final agreement differs from the proposed agreement then the Commissioner must provide a written finding. Mr. Solie supported the intent of the amendment and suggested inserting "significantly" following the language "if the final agreement differs". Representative Brown MOVED TO AMEND Amendment #38 by adding "significantly" to the first line. There being NO OBJECTIONS, it was adopted. Representative Therriault OBJECTED to adopting the amended Amendment #38. A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, Hoffman, Navarre, Brown. OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Larson. 8 Co-Chair MacLean was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED TO WITHDRAW Amendment #39. There being NO OBJECTION, it was withdrawn. Representative Brown MOVED to adopt Amendment #40 which would delete all material on Page 8 from Line 16-20. She pointed out that material had been covered under the first sentence of Subsection (i). There being NO OBJECTION, it was adopted. Representative Brown MOVED TO WITHDRAW Amendment #41. There being NO OBJECTION, it was withdrawn. Representative Brown MOVED to adopt Amendment #42 which would add a new subsection which would clarify that when an operator seeks concessions from the State, the Commissioner shall determine whether the concessions are necessary to protect the public interest and that language would address royalty oil concerns. Mr. Boutin asked if the measure would be cost effective. He recommended inserting "concession". Representative Brown recommended deleting "from a provision or" and inserting "affecting the consideration paid under the agreement" providing a monetary term. Mr. Solie noted concern that the public notice would occur with small changes in the contract. Representative Brown felt that such a policy would be important in a twenty year process and that it would be in the best interest of the State. She MOVED TO AMEND the language as proposed in Amendment #42. There being NO OBJECTIONS, the language was amended. Mr. Solie requested deletion of the last sentence, "Proposed changes to a forest management agreement are subject to the public notice and comment requirements under AS 38.05.122(b)-(i)". Co-Chair Larson MOVED TO AMEND Amendment OBJECTIONS, the amendment was amended. Representative Brown MOVED TO WITHDRAW Amendment #42. There being NO OBJECTIONS, it was withdrawn. Representative Brown MOVED to adopt Amendment #43 which would address the forest practices act. Representative Therriault OBJECTED. 9 A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, Navarre, Brown, MacLean. OPPOSED: Hanley, Hoffman, Martin, Parnell, Therriault, Foster, Larson. The MOTION FAILED (4-7). Representative Brown MOVED to adopt Amendment #44 which would state the ground rules and the operational plans being reviewed under the forest management plans or the forest management agreement. She urged that the public be involved in that process. Mr. Solie spoke in opposition to the amendment. He reminded Committee members that agencies would be involved in the forest practices act. Title #41 clarifies that the agencies would have oversight throughout that period of time. He added that the level of scrutiny provided within the amendment was not necessary. Representative Brown argued that any plan made for twenty years should be detailed at the time it is drawn up. (Tape Change, HFC 94-165, Side 1). Mr. Boutin explained that Title #41 currently would address those concerns. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Hoffman, Navarre, Brown. OPPOSED: Hanley, Martin, Parnell, Therriault, Foster, Grussendorf, MacLean, Larson. The MOTION FAILED (3-8). Representative Brown MOVED to adopt Amendment #45 which would insert a new Section (G). The amendment would address those items left out of the forest management agreement. Mr. Solie thought that provision had been more adequately addressed on Page 7, Line 6. Representative Brown indicated that language referenced by Mr. Solie would clarify who is responsible for paying for the roads but would not state the location or construction standards used for building. Mr. Solie proposed an amendment which would delete "maintained and paid for by the proposer" and would simply require provisions for construction standards. Representative Parnell suggested deleting all material after the word "agreement" in Line #2. Representative Brown MOVED TO AMEND Amendment #45 by deleting the language proposed by Representative Parnell. There being NO OBJECTIONS, it was so ordered. 10 There being NO OBJECTION, Amendment #45 was adopted as amended. Representative Brown MOVED to adopt Amendment #46 which would delete language on the new subsection to Section #7 relating to managing state forest, including the responsibilities of the Commissioner. Mr. Boutin replied that except for safety reasons, DNR would not need to become involved. He noted concern with removal of that language. Representative Martin OBJECTED, stating that the addition of the clause would not allow the state to protect their assets. Representative Brown MOVED TO AMEND Amendment #46, deleting "carry off purposes of this chapter" and inserting "of public safety". A roll call vote was taken on the MOTION TO AMEND. IN FAVOR: Hoffman, Navarre, Parnell, Therriault, Brown, Grussendorf, Larson, MacLean. OPPOSED: Martin, Foster, Hanley. The MOTION PASSED (8-3). Representative Navarre MOVED TO ADD additional language inserting after "of the public". Representative Parnell OBJECTED. A roll call vote was taken on the MOTION TO AMEND. IN FAVOR: Navarre, Brown, Grussendorf, Hoffman, Larson. OPPOSED: Martin, Parnell, Therriault, Foster, Hanley, MacLean. The MOTION FAILED (5-6). A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Navarre, Brown, Grussendorf, Hoffman, MacLean. OPPOSED: Parnell, Therriault, Foster, Hanley, Martin, Larson. The MOTION FAILED (5-6). SB 310 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 4:40 P.M. 11 HOUSE FINANCE COMMITTEE May 7, 1994 2:15 P.M. TAPE HFC 94 - 163, Side 2, #000 - end. TAPE HFC 94 - 164, Side 1, #000 - end. TAPE HFC 94 - 164, Side 2, #000 - end. TAPE HFC 94 - 165, Side 1, #000 - #335. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 2:15 P.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Foster ALSO PRESENT Joshua Fink, Staff, Senator Tim Kelly; Dan Hickey, Alaska Railroad Corporation, Anchorage; Rick Solie, Staff, Senator Steve Frank; Thomas Boutin, Director, Division of Forestry, Department of Natural Resources; McKie Campbell, Deputy Commissioner, Department of Fish and Game; Mark LoPatin, LoPatin & Co., West Bloomfield, Michigan. SUMMARY SB 310 An Act relating to the management and sale of state timber; relating to the classification of state land that would preclude harvesting of timber or would designate harvesting of timber as an incompatible use; relating to the administration of forest land, proposals for state forest, and the determination of sustained yield; and providing for an effective date. CS SB 310 (FIN) was HELD in Committee for further discussion. SB 338 An Act relating to the issuance of revenue bonds for acquisition and construction of the Alaska Discovery Center for the Ship Creek Project in Anchorage; relating to a study of the feasibility and financial viability of the Alaska Discovery Center; relating to construction of the Alaska 12 Discovery Center; and providing for an effective date. CS SB 338 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Department of Revenue dated 3/02/94. SENATE BILL 338 "An Act relating to the issuance of revenue bonds for acquisition and construction of the Alaska Discovery Center for the Ship Creek Project in Anchorage; relating to a study of the feasibility and financial viability of the Alaska Discovery Center; relating to construction of the Alaska Discovery Center; and providing for an effective date." JOSHUA FINK, STAFF, SENATOR TIM KELLY, explained that the Alaska Railroad Corporation (ARRC) has a unique and rare federal authorization to issue non-recourse revenue bonds for private as well as public interests. SB 338 would authorize ARRC to sell $55 million dollars in non-recourse revenue bonds to be loaned to a public or private entity for the acquisition, design and construction of the Northern Discovery Center at Ship Creek Landings if the following conditions were met: 1. The potential developer pays for a feasibility and financial viability study to be performed by a person/business selected by the ARRC. 2. The ARRC board of directors reviews the feasibility study and determines the project is viable. Mr. Fink added that the payment of the bonds and interest would be made solely with assets and revenues received from the owner/operators of the facility, and that ARRC was prohibited from using any other financing or financial vehicle to repay the bonds. He concluded that prior to the start of construction, the developer must post a payment and completion bond in favor of ARRC. Representative Brown asked if the study was necessary before the bonds could be issued. Mr. Fink explained that in Section #1, Line #11, the inclusion of "if" would establish the condition: "They are allowed to issue the bonds if the Board of Directors determines after completion of the study conducted in Section #7". Representative Brown questioned why authorization was being granted for $55 million dollars when only $40 million was 13 needed. Mr. Fink replied that the language would clarify that "Not more than $55 million dollars" would be required. He stressed that $55 million would be the ceiling. MARK LOPATIN, LOPATIN & COMPANY, WEST BLOOMFIELD, MICHIGAN, echoed that $55 million would be the project ceiling. Representative Martin asked the bonding value of the Alaska Railroad. MARK HICKEY, ALASKA RAILROAD CORPORATION, ANCHORAGE, commented that provisions made in the 1988 State law would require a five year amendment, although, currently there is no specific mandate. The legislative intent would be to dispose of the railroad. Mr. Hickey said federal requirement provides that if the railroad is sold, arrangements for right-of-way would be made. He indicated that these provisions are not relevant to the bond issue before the Committee. Representative Brown asked the agreement terms between the government of St. Petersburg and the Northern Crossroads Discovery Center and if there was expectation for State support for the project. She stated there would be a public subsidy involved in the facility's construction. Mr. LoPatin briefed the Committee that there was no need for a government subsidy for the development or construction of Discovery Center. Following construction, it will become a private venture between the Discovery Center and the Museum of St. Petersburg. Representative Brown questioned if the Discovery Center would be compensating St. Petersburg for the loan of materials. Mr. LoPatin understood that the length of the agreement would be thirty five years and that the terms would be provided by a letter of intent between the two interests. Discovery Center will pay the Russian Museums for contributing materials and displaying them. He added that the specifics have not yet been agreed upon. Co-Chair MacLean pointed out that the project was similar to a previously vetoed project - the Alaska Heritage Park. Mr. Fink advised that the projects were substantially different. Representative Martin questioned the collateral used. Mr. LoPatin explained that the collateral used would not be an obligation to the Alaska Railroad. Representative Hanley clarified that if the bonds were not backed, no one in the bond market would purchase them. Representative Brown warned that a comprehensive traffic 14 analysis should be under-taken in order to address the effect on port and railroad traffic. Mr. LoPatin reminded Committee members that $5.5 million dollars match would be provided through development of the World Trade Center. The cost of the World Trade Center and Hotel is expected to be $80 million dollars. The plans continue to move forward in anticipation of including the Discovery Center. Representative Hanley MOVED to report CS SB 338 (FIN) out of Committee with individual recommendations and with the accompanying zero fiscal note. There being NO OBJECTIONS, it was so ordered. CS SB 338 (FIN) was reported out of Committee with "no recommendations" and with a fiscal note by the Department of Revenue dated 3/02/94. SENATE BILL 310 "An Act relating to the management and sale of state timber; relating to the classification of state land that would preclude harvesting of timber or would designate harvesting of timber as an incompatible use; relating to the administration of forest land, proposals for state forest, and the determination of sustained yield; and providing for an effective date." Representative Therriault MOVED to adopt HFC CS SB 310 (FIN), #8-LS1558\M, dated 5/07/94, as the version before the Committee. The work draft was prepared to include the first twenty-four amendments addressed in Subcommittee. There being NO OBJECTIONS, it was adopted. [Copies of the amendments are on file]. Representative Therriault MOVED to adopt Amendment #7. Representative Brown asked for further explanation of the relationship between the process indicated in the legislation and the best interest determination of the findings. RICK SOLIE, STAFF, SENATOR STEVE FRANK, explained that the provisions in SB 310 would apply and that the best interest findings would be made prior to a FMA under the general land classification process. THOMAS BOUTIN, DIRECTOR, DIVISION OF FORESTRY, DEPARTMENT OF NATURAL RESOURCES, agreed with Mr. Solie. There being NO OBJECTIONS, Amendment #7 was adopted. Co-Chair MacLean MOVED to adopt Amendment #16. She thought that there should be legislative approval of any FMA land 15 sales. Large scale land disposal should be approved by the Legislature. Representative Therriault OBJECTED noting that amendments had already been included which accept that all state agencies, including the Commissioner of Fish and Game, would have the right to review the final document. Co-Chair MacLean disagreed, pointing out that a new precedence was begun by establishing land disposal for timber harvesting and at the same time would establish a track record for operations. Representative Parnell opposed injecting the political process to one which he thought should create a more scientific and economic determination. Representative Brown spoke in support of the amendment. A roll call vote was taken on the MOTION. IN FAVOR: Hoffman, Navarre, Brown, Grussendorf, MacLean, Larson. OPPOSED: Hanley, Hoffman, Parnell, Therriault, Foster. The MOTION PASSED (6-5). (Tape Change, HFC 94-164, Side 1). Representative Grussendorf MOVED to adopt Amendment #23 which would reincorporate the Department of Fish and Game in the legislation. Representative Therriault noted that Senator Frank supported the amendment. Representative Brown commented that ten days was too short of a time for review of the final agreement. MCKIE CAMPBELL, DEPUTY COMMISSIONER, DEPARTMENT OF FISH AND GAME, acknowledged that if the Department of Fish and Game was involved that they should be able to do a turn around in ten days. There being NO OBJECTIONS to Amendment #23, it was adopted. Co-Chair Larson MOVED TO RESCIND previous action taken on Amendment #16 and MOVED an additional language change as follows: "Within ten days of the convening of a regular legislative session, the Governor shall transmit to the President of the Senate and the Speaker of the House of Representatives, any proposed final forest management agreement. If the legislature, by joint resolution, fails to disapprove the final forest management agreement within 45 days, it is 16 considered approved". Co-Chair MacLean spoke in support of the language change. Representative Brown thought that 45 days would not be enough time to go through both Houses of the Legislature. Representative Navarre OBJECTED to the language change. A roll call vote was taken on the MOTION to rescind previous action. IN FAVOR: Martin, Parnell, Therriault, Foster, Hanley, Larson, MacLean. OPPOSED: Hoffman, Navarre, Brown, Grussendorf. The MOTION PASSED (7-4). Co-Chair MacLean MOVED to adopt the new language for Amendment #16 as provided by Representative Larson. Representative Navarre MOVED TO AMEND the language by adding that: "The Legislature must vote within forty-five days, or it will be considered dead". Co-Chair MacLean OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Navarre, Brown, Grussendorf, Hoffman. OPPOSED: Martin, Parnell, Therriault, Foster, Hanley, Larson, MacLean. The MOTION FAILED (4-7). Representative Martin OBJECTED to adopting the new Amendment A roll call vote was taken on the MOTION. IN FAVOR: Navarre, Parnell, Therriault, Brown, Foster, Grussendorf, Hanley, Hoffman, Larson, MacLean. OPPOSED: Martin. The MOTION PASSED (10-1). Representative Brown MOVED to adopt Amendment #24 which would restore the necessary contents to statute of a forest use land plan. Mr. Boutin advised that the drafting deleted the immediate and long term effects of forest activities. Mr. Solie added that small timber operators want a site specific forest plan. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre. 17 OPPOSED: Therriault, Foster, Hanley, Martin, Parnell, Larson. Co-Chair MacLean was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED TO WITHDRAW Amendments #26 & #27. There being NO OBJECTIONS, they were withdrawn from consideration. Representative Brown MOVED to adopt Amendment #28 which would clearly define that subsistence and personal, recreational and commercial uses of fish and wildlife are among the uses of forest land for non timber purposes that must be considered by the Commissioner. Mr. Boutin agreed that it would be important to accommodate those concerns. There being NO OBJECTIONS to Amendment #28, it was adopted. Representative Brown MOVED to adopt Amendment #29 requesting to withdrawn the portion relating to Section (10). Mr. Boutin commented that the proposed language would improve the drafting of the legislation. There being NO OBJECTIONS, it was adopted. Representative Brown MOVED to adopt Amendment #30. There being NO OBJECTIONS, it was adopted. Representative Brown MOVED to adopt Amendment #31 which would add "or" providing that the land use plan was consistent with one or the other land use plans. Mr. Boutin advised the language would be an improvement to current wording. There being NO OBJECTIONS, it was adopted. Representative Brown MOVED to adopt Amendment #32 which would add a new sentence at the end of the existing Subsection (f) and that would insure that public review includes the (g) (1) & (2) provisions. Mr. Boutin noted that the timing for providing information for public process was important and that he agreed to the proposed amendment. There being NO OBJECTIONS, it was adopted. Representative Brown MOVED TO WITHDRAW Amendments #33 - #36 pointing out that they had been addressed by other amendments adopted in subcommittee. There being NO OBJECTIONS, they were withdrawn. Representative Brown MOVED to adopt Amendment #37. (Tape Change, HFC 94-164, Side 2). Representative Brown explained that Amendment #37 would 18 provide that the operational level force inventory be every two years instead of every five years and that it include provisions to adjust harvest plans. Mr. Boutin replied that the cost benefit could not be increased with only an update. Representative Brown recommended adding language to the portion of the amendment on Page 7, Line 31, by inserting "update of the" before the "operational force inventory every two years". Mr. Solie stressed that they could not comply with a sustained yield without having an inventory prior to a timber sale. Representative Brown MOVED to divide the question and then to amend Amendment #37 by adding the previous referenced language. There being NO OBJECTIONS to the language addition in Amendment #37(a), it was added. Representative Brown MOVED to adopt Amendment #37(b) which would insert provisions to adjust the harvest plans based on the information provided by the inventory. Mr. Boutin informed Committee members that the language was not clear. Representative Martin OBJECTED to adopting Amendment #37(b). A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre, Larson. OPPOSED: Foster, Hanley, Martin, Parnell, Therriault. Co-Chair MacLean was not present for the vote. The MOTION FAILED (5-5). Representative Brown MOVED to adopt Amendment #38 which would add a new subsection providing that if the final agreement differs from the proposed agreement then the Commissioner must provide a written finding. Mr. Solie supported the intent of the amendment and suggested inserting "significantly" following the language "if the final agreement differs". Representative Brown MOVED TO AMEND Amendment #38 by adding "significantly" to the first line. There being NO OBJECTIONS, it was adopted. Representative Therriault OBJECTED to adopting the amended Amendment #38. A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, Hoffman, Navarre, Brown. OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Larson. 19 Co-Chair MacLean was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED TO WITHDRAW Amendment #39. There being NO OBJECTION, it was withdrawn. Representative Brown MOVED to adopt Amendment #40 which would delete all material on Page 8 from Line 16-20. She pointed out that material had been covered under the first sentence of Subsection (i). There being NO OBJECTION, it was adopted. Representative Brown MOVED TO WITHDRAW Amendment #41. There being NO OBJECTION, it was withdrawn. Representative Brown MOVED to adopt Amendment #42 which would add a new subsection which would clarify that when an operator seeks concessions from the State, the Commissioner shall determine whether the concessions are necessary to protect the public interest and that language would address royalty oil concerns. Mr. Boutin asked if the measure would be cost effective. He recommended inserting "concession". Representative Brown recommended deleting "from a provision or" and inserting "affecting the consideration paid under the agreement" providing a monetary term. Mr. Solie noted concern that the public notice would occur with small changes in the contract. Representative Brown felt that such a policy would be important in a twenty year process and that it would be in the best interest of the State. She MOVED TO AMEND the language as proposed in Amendment #42. There being NO OBJECTIONS, the language was amended. Mr. Solie requested deletion of the last sentence, "Proposed changes to a forest management agreement are subject to the public notice and comment requirements under AS 38.05.122(b)-(i)". Co-Chair Larson MOVED TO AMEND Amendment OBJECTIONS, the amendment was amended. Representative Brown MOVED TO WITHDRAW Amendment #42. There being NO OBJECTIONS, it was withdrawn. Representative Brown MOVED to adopt Amendment #43 which would address the forest practices act. Representative Therriault OBJECTED. 20 A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, Navarre, Brown, MacLean. OPPOSED: Hanley, Hoffman, Martin, Parnell, Therriault, Foster, Larson. The MOTION FAILED (4-7). Representative Brown MOVED to adopt Amendment #44 which would state the ground rules and the operational plans being reviewed under the forest management plans or the forest management agreement. She urged that the public be involved in that process. Mr. Solie spoke in opposition to the amendment. He reminded Committee members that agencies would be involved in the forest practices act. Title #41 clarifies that the agencies would have oversight throughout that period of time. He added that the level of scrutiny provided within the amendment was not necessary. Representative Brown argued that any plan made for twenty years should be detailed at the time it is drawn up. (Tape Change, HFC 94-165, Side 1). Mr. Boutin explained that Title #41 currently would address those concerns. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Hoffman, Navarre, Brown. OPPOSED: Hanley, Martin, Parnell, Therriault, Foster, Grussendorf, MacLean, Larson. The MOTION FAILED (3-8). Representative Brown MOVED to adopt Amendment #45 which would insert a new Section (G). The amendment would address those items left out of the forest management agreement. Mr. Solie thought that provision had been more adequately addressed on Page 7, Line 6. Representative Brown indicated that language referenced by Mr. Solie would clarify who is responsible for paying for the roads but would not state the location or construction standards used for building. Mr. Solie proposed an amendment which would delete "maintained and paid for by the proposer" and would simply require provisions for construction standards. Representative Parnell suggested deleting all material after the word "agreement" in Line #2. Representative Brown MOVED TO AMEND Amendment #45 by deleting the language proposed by Representative Parnell. There being NO OBJECTIONS, it was so ordered. 21 There being NO OBJECTION, Amendment #45 was adopted as amended. Representative Brown MOVED to adopt Amendment #46 which would delete language on the new subsection to Section #7 relating to managing state forest, including the responsibilities of the Commissioner. Mr. Boutin replied that except for safety reasons, DNR would not need to become involved. He noted concern with removal of that language. Representative Martin OBJECTED, stating that the addition of the clause would not allow the state to protect their assets. Representative Brown MOVED TO AMEND Amendment #46, deleting "carry off purposes of this chapter" and inserting "of public safety". A roll call vote was taken on the MOTION TO AMEND. IN FAVOR: Hoffman, Navarre, Parnell, Therriault, Brown, Grussendorf, Larson, MacLean. OPPOSED: Martin, Foster, Hanley. The MOTION PASSED (8-3). Representative Navarre MOVED TO ADD additional language inserting after "of the public". Representative Parnell OBJECTED. A roll call vote was taken on the MOTION TO AMEND. IN FAVOR: Navarre, Brown, Grussendorf, Hoffman, Larson. OPPOSED: Martin, Parnell, Therriault, Foster, Hanley, MacLean. The MOTION FAILED (5-6). A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Navarre, Brown, Grussendorf, Hoffman, MacLean. OPPOSED: Parnell, Therriault, Foster, Hanley, Martin, Larson. The MOTION FAILED (5-6). SB 310 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 4:40 P.M. 22