SENATE RESOURCES COMMITTEE February 4, 1994 3:40 P.M. MEMBERS PRESENT Senator Mike Miller, Chairman Senator Loren Leman, Vice Chairman Senator Steve Frank Senator Drue Pearce Senator Al Adams Senator Fred Zharoff MEMBERS ABSENT Senator Dave Donley COMMITTEE CALENDAR SENATE BILL NO. 210 "An Act relating to disposal of state land within five miles of the right-of-way of the Dalton Highway to a licensed public utility or a licensed common carrier." SENATE BILL NO. 240 "An Act relating to an optional municipal tax credit for costs of certain river habitat protection improvements." SENATE BILL NO. 202 "An Act relating to the removal, appropriation, and purchase of state water by municipalities; and providing for an effective date." SCHEDULED, BUT NOT HEARD THIS DAY PREVIOUS ACTION SB 210 - No previous action to record. SB 240 - See Resources minutes dated 2/4/94. SB 202 - See Community & Regional Affairs minutes dated 1/13/94, 1/20/94. WITNESS REGISTER Senator Sharp State Capitol Juneau, Ak. 99801-1182 POSITION STATEMENT: Sponsor of the CS to SB 210. Rick Smith, Manager Northern Regional Office Department of Natural Resources 3700 Airport Way Fairbanks, Ak. 99709-4699 POSITION STATEMENT: Supported SB 210. Judy Stoop Summit Telephone 2014 Eagan Ave. Fairbanks, Ak. 99701 POSITION STATEMENT: Supported SB 210. Mick Manns Paradise Valley Bettles, Ak. 99726 POSITION STATEMENT: Supported SB 210. Dave Lacey P.O. Box 71372 Fairbanks, Ak. 99707 POSITION STATEMENT: Opposed SB 210. Earl Finkler City of Barrow Box 629 Barrow, Ak. 99723 POSITION STATEMENT: Commented on SB 210. Gerald Gallagher, Director Division of Mining Department of Natural Resources P.O. Box 107016 Anchorage, Ak. 99510-7016 POSITION STATEMENT: Supported and commented on SB 210. Representative Gene Therriault State Capitol Juneau, Ak. 99801-1182 POSITION STATEMENT: Supported SB 210. Leo Oberts 1440 Chinook Ct. Kenai, Ak. 9961 POSITION STATEMENT: Commented on SB 210. Don Gilman Kenai Peninsula Borough 144 N. Binkley Soldotna, Ak. 99669 POSITION STATEMENT: Supported SB 210. Jim Richardson 308 G Street Anchorage, Ak. 99501 POSITION STATEMENT: Supported and commented on SB 210. ACTION NARRATIVE TAPE 94-5, SIDE A Number 001 CHAIRMAN MILLER called the Resources Committee meeting to order at 3:10 p.m. and announced SB 210 (DISPOSAL OF DALTON HWY RIGHT-OF-WAY AY LAND) to be up for consideration. SENATOR SHARP explained the proposed CS to SB 210. Under current statute the state is prohibited from disposing of or leasing state land within five miles of the right-of-way of the Dalton Highway. He said total prohibition seems harsh since they have received testimony saying we need better communications up there. Number 75 SENATOR ADAMS asked if he preferred lease or sale of the property. SENATOR SHARP said he had no preference as long as the lease would be long enough to allow amortization of the type of facility that would be considered on utilities. SENATOR ADAMS said he agreed with that, but his real concern is lease/owning around the Dalton Highway because of the environment and subsistence migration. Number 94 RICK SMITH, Department of Natural Resources, said they support SB 210, because they have had difficulties because of the prohibitions. DOT has applied for material for upgrading the Dead- Horse airport that they are prohibited from issuing. They have had indications from Coldfoot Services that they would like to expand their lease to provide additional telephone services, among others. SENATOR ADAMS said the North Slope Borough did not have a position on this issue, yet, and asked how much land they were talking about and what is the market value of it. MR. SMITH said he didn't know the acreage. He said the state, a year ago, received and additional 615,000 acres from the federal government along the Dalton Highway. No market value has been done on that. The present fiscal note is $0, because they don't think it would substantially impact their operations at the time. Number 130 SENATOR FRANK asked if they were bound by some fair market value requirement in law? MR. SMITH answered they had that requirement when they process a lease. SENATOR ADAMS clarified his comment earlier stating he wanted a positive fiscal note if they were going to lease or sell land. SENATOR LEMAN asked him to describe in more detail the federal land the state received recently along the Dalton Highway. MR. SMITH said the land consisted of approximately 10 miles south of the Yukon River Crossing, the development at Coldfoot and Happy Valley, and a fairly large block of land located on the federal land north of Happy Valley, which went east/west. Number 155 SENATOR ADAMS asked how this would affect the portion of the Highway that is not open to the public. MR. SMITH answered that this legislation would not have any affect other than allowing telephone service at Coldfoot. If the Dalton Highway was every opened to the public, it would provide opportunity to supply service the public would need. Number 187 SENATOR ZHAROFF asked what was the length of the Dalton Highway. SENATOR FRANK said it was about 430 miles. Number 203 JUDY STOOP, Summit Telephone Co, Fairbanks, said they support SB 210, because they need it for efficient communications, especially at Coldfoot and Wiseman. They feel, as much as possible, that land should not be held by the state, but be available for purchase by the people of Alaska. Number 217 MICK MANNS, Paradise Valley, Bettles, supported SB 210, because of all the reasons listed. Also, he said it is unconstitutional and illegal to keep the road closed according to the Statehood Act. He said the Dalton Highway would have to be developed if we were to be competitive with other Pacific Rim nations and tourism. Number 241 DAVE LACEY, Manager, Yukon River Tours, Fairbanks, said he is involved in eco-tourism along the Dalton Highway. He opposed SB 210, because his clients want to see wilderness and undeveloped areas. They can see development anywhere in the lower 48. Tourism as an industry needs to protect what people come up here to see. Number 273 EARL FINKLER, City of Barrow, recalled that the original purpose of the prohibition was to protect the transportation and industrial functions of the corridor. He asked if there had been any study of how this would impact the future needs. He asked if there was a land use plan for the areas under question. Number 288 JERRY GALLAGHER, Department of Natural Resources, said this is a very limited piece of legislation authorizing only the Department to issue long term leases in some very specific and few development nodes that are already identified and have existing facilities - Coldfoot, Happy Valley, Franklin Bluffs, Yukon Crossing, and Dead Horse. He explained that their leases will soon expire. Number 327 REPRESENTATIVE THERRIAULT supported the proposed CS to SB 210. He thought there was some misunderstanding as to the intent. He supported Mr. Gallagher's testimony. The needs and areas are addressed very specifically and these activities are already going on along the road. Construction material can already be taken from the 5 mile corridor for maintenance of the road, but not for the airports. In addition, when many of the federal leases that have been taken over by the state expire, the state has no authority to reissue them without a change in statute. Number 327 SENATOR LEMAN moved to adopt the CS to SB 210(RES) (8-LS1110/E Luckhaupt). There were no objections and it was so ordered. SENATOR LEMAN moved to discharge CSSB 210 (RES) with individual recommendations. There were objections and Senator Miller asked for a roll call vote: Senator Miller, Senator Leman, Senator Frank, and Senator Pearce voted yes; Senator Adams and Senator Zharoff voted no and CSSB 210 (RES) passed. SENATOR MILLER announced SB 240 (MUNICIPAL TAX CREDIT/HABITAT PROTECTION) to be up for consideration. SENATOR PEARCE, Sponsor, said there is 80 - 90 acres along the Kenai River that provide the habitat for the salmon fishery. She hoped to encourage people who owned private land along the Kenai to undertake stream rehabilitation with property tax credit incentives. SENATOR ADAMS noted that this could just be special interest legislation directed only at the Kenai River and asked if the Chena River and other areas could be included. SENATOR PEARCE said Tam Cook believed the bill to be constitutional. SENATOR LEMAN asked if any other municipality had expressed interest in this type of credit. SENATOR PEARCE answered not to her. SENATOR ZHAROFF said he has a policy of staying out of other district's business and he thought it seemed unusual to have a piece of legislation that affects one area of the state. Number 472 LEO OBERTS, Kenai, said keeping the river in its natural test is the highest and best use for the river when setting the value. He said this refers to the lower tidal area which is completely different from other areas of the river. He questioned using the "ordinary high water" language. SENATOR PEARCE said this language was provided by the Borough attorney. SENATOR LITTLE commented that this bill currently involves not only the Kenai River, but all of the tributaries. She was concerned that it was very far reaching. MR. OBERTS pointed out on page 17 that he didn't know what an "untitled river" meant. DON GILMAN supported Senator Pearce's comments. He said the municipalities need this legislation to help deal with problems along the river. SENATOR ZHAROFF commented on the definition of "ordinary high water line." He asked what kinds of activities would allow for the tax credit to be used. MR. GILMAN said they are for improvements along the river. Right now nothing is required above high water. TAPE 94-5, SIDE B Number 580 SENATOR ZHAROFF asked if the activity would take place within or beyond 150 feet. MR. GILMAN said it was within 150 feet. Number 573 JIM RICHARDSON, property owner on the Kenai River, supported SB 240. He hoped that tax incentives would be allowed for people who leave the land in its natural state as well as for those who build some beneficial project. SENATOR MILLER thanked everyone for their testimony and adjourned the meeting at 4:32 p.m.