Legislature(1995 - 1996)
04/29/1996 03:42 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CSSSHB 191(FIN) MANAGEMENT OF STATE LAND AND RESOURCES
CHAIRMAN LEMAN brought CSSSHB 191(FIN) before the committee as the
next order of business. He noted there was a draft Resources SCS
before the committee, but suggested waiting until a quorum was
established before going through the entire bill section by
section.
CHAIRMAN LEMAN asked why the sponsor and the department are
proposing to change the rate for the shore fishery leases from the
way it is now, which is a system that recovers the cost of
operating that program, to one in which it not only does that, but
goes beyond and establishes a rental rate based on a percentage of
the permit value. SARA FISHER , staff to Representative Gen
Therriault who is prime sponsor of HB 191, said basically there is
a use of state land that has a commercial value and the
restructuring of these sections would recognize the commercial use
of these sites. She pointed out that in Section 25 of the new
draft Resources SCS, the reference to the term "action" has been
removed which restores it to the original language requiring the
director to attempt to determine who is the most qualified
applicant for the site. If one application is received, the
commissioner may issue a lease at a rental rate, as opposed to the
administrative rate which is set in regulation and is currently
$300. Many of the leases that had been signed many years ago are
still under the old lease rate of $150 per year.
CHAIRMAN LEMAN pointed out the shore fishery lease program is a
voluntary program to help sort out conflicts between adjoining or
adjacent shore fishery participants. His concern is that by
raising the price and going beyond what is taken out to cover the
program, it will drive people out. He wondered if an analysis has
been done on what percentage of people will be driven out and what
the impact will be on the program if the fee is raised.
CHAIRMAN LEMAN opened the hearing to public comment.
STEVE BORELL, Executive Director, Alaska Miners Association,
testifying from Anchorage, stated their support for CSSSHB 191(FIN)
and in particular Sections 30-35.
Mr. Borell said earlier in the session, Representative Therriault
removed a section from this legislation and place it into CSHB
331(RES), and he suggested the section be reinserted in HB 191. He
said the issue in HB 331 is to clarify the existing statute and
establish in statute the current interpretation of practice that
has been followed by DNR and by industry effectively since
statehood. The change is needed to ensure that the rights of the
state to its subsurface mineral resources where the surface estate
has been sold or otherwise transferred to a third party. Unless
specifically closed to mineral entry, this land is still available
for staking of mining claims. It has been the interpretation and
practice of the state that claims staking alone can be allowed and
without giving permission of the third party surface estate owner.
He pointed out that in the Fairbanks area there are various small
homesites of a few acres that run the risk of causing existing
mining claims to be void.
Number 545
BILL BARKER, a set netter testifying from Kodiak, voiced his
opposition to Section 24, 25 & 26. He said there doesn't appear to
be any reason to change the fee structure at this time. If the
basis for the fee structure is placed on the limited entry permit
and the value of the limited entry permit, then we have a tax being
placed on the fishery resource, not on the land resources. He
suggested if there is going to be a tax placed on the fisheries
resource, then it needs to be placed on all of the fishermen. As
far as the operation of the shore fisheries leases and the pursuit
of the shore-based gillnet operation, he said everybody understands
the rules, and with some of the language being proposed in HB 191,
the rules start to change and he can see many problems with
bringing these changes.
TAPE 96-68, SIDE B
Number 025
CHAIRMAN LEMAN informed Mr. Barker that the Resources SCS before
the committee addresses some of the issues he spoke to.
DUNCAN FIELDS, testifying from Kodiak, concurred that it is the
consensus of his community that the shore fishery lease program is
paying for itself, in fact current information shows that revenues
in excess of expenditures in FY 95 is about $150,000. He
questioned why the lease rate for set net leases is being increased
when the program is paying for itself. He pointed out many of the
current lease holders pay a rate of $150, and with the current
language in the bill, that will jump to approximately $556, which
is approximately a $400 increase per permit holder. He believes
this will drive people away from the program, and the net result
will be less revenue than the program currently enjoys. He also
suggested a lease rate of a definite amount makes much more sense
than a sliding scale based on a percentage of permit value.
Number 086
CHAIRMAN LEMAN commented that it appears that the only section
that's really in conflict in the bill is the new Section 26. He
said Sections 25 and 27 were reworked to accommodate the concerns
that were expressed by a lot of people.
ROBERT PURPURA, representing the Katsitsna Bay Salmon Producers and
testifying from Homer, stated their objection to the language in
Section 26, namely the 0.6 percent assessment on limited entry
permits with a $600 cap. They believe it is unfair to target a
small group of other set netters, and they do not feel that any
extra cost at this time is warranted in their fishery. He urged
that the committee not support the language to determine the fee of
the leases be tied in with the permit.
MS. LAUREN CARLTON , a setnetter testifying from Homer, referred to
language on page 12, line 2, which provides that the rental rate
shall be adjusted annually, and she said she would like to see it
only adjusted every five years, which would provide the opportunity
to look at the long-term values and how they have changed. She
said their permit value might be high because they are part of Cook
Inlet, but their sites are not valued as high, so just going on a
permit value is not really being equitable to those who do not have
a valuable site. She pointed out her area has seen a drastic
decline in their salmon runs. She also pointed out that when
someone goes in to buy a permit at a set net price, they are paying
for the right to use that area, and there are also added costs that
are not seen up front.
Number 240
CHAIRMAN LEMAN said his recommendation is that Section 26 be
deleted in its entirety which would mean that there would be no
change to the existing system.
JULES TILESTON , Director, Division of Mining & Water Management,
Department of Natural Resources, testified from Anchorage that he
was present to respond to questions dealing with the amendments
associated with mining when they came before the committee.
RON SWANSON , Division of Land, Department of Natural Resources,
said after a hearing earlier in the session, he thinks the concerns
relating to the bidding war were addressed by taking care of the
problem of the department having to try to figure out who is most
qualified, and if they can't, they would then draw the name out of
the hat. It was also made clear that somebody with an existing
lease would get a preference to renew.
Mr. Swanson said the shore fishery lease is the only voluntary
program that the Division of Land administers, and they consider it
a commercial use of state land, so they believe that the
compensation rate should go up rather than just covering the
administrative cost. He said when it comes to budget cuts, the
first thing that they have to look at is non-voluntary programs.
He sated the Administration is neutral on what the compensation
rate should be.
CHAIRMAN LEMAN asked if it would be acceptable to the department to
delete that section which would leave it as it is now which says
that it must cover administrative costs. MR. SWANSON responded
that the department would not oppose the deletion of that section.
REED STOOPS , testifying on behalf of AJ Associates and speaking to
a proposed amendment dealing with the right of entry on private
land by a party for the sake of filing mining claims, said the
reason for the amendment is the result of a Superior Court decision
in a lawsuit that AJ Associates is involved with. There is a
dispute over whether mining claims were validly filed on property
that AJ
Associates is the surface owner of. Judge Jahnke, in his decision,
interpreted existing law to mean that anybody that's going to file
a mining claim on land that has been conveyed by the state to a
private party either has to have the permission of the land owner
or alternatively permission of the Department of Natural Resources
in order to file that claim. He said if the Legislature were to
adopt the amendment the way it's drafted, it is not only
prospective but retroactive, and by making it retroactive, it would
have a direct impact on their case which is pending before the
Supreme Court. He added if the Supreme Court overturns Judge
Janke's ruling, the amendment may not be necessary. Their
preference would be to not have to go litigate the case again
because it will have effectively changed the decision is that case.
For that reason, he said he would recommend that if the Legislature
thinks it is good policy, it ought to do it prospectively at this
pint, at least until the Supreme Court has rendered a decision.
CHAIRMAN LEMAN said he was not sure he wanted to take that issue up
in this bill, that it is something that should fly on its own, but
he wanted to discuss that with the bill's sponsor.
CHAIRMAN LEMAN recessed the meeting at 5:05 p.m. until a quorum
could be established. The meeting was called back to order at 5:50
p.m. with a quorum of committee members present.
Number 455
SENATOR PEARCE moved the adoption of SCS CSSSHB 191(RES), version
"W" dated 4/26/96. Hearing no objection, the motion carried.
REPRESENTATIVE THERRIAULT , speaking to deleting Section 26 in the
Resources SCS, explained an agreement had been reached on Section
26, that instead of trying to attach the lease fee to a sliding
scale, they were agreeable to just go to a flat $300 fee. He
suggested deleting all the language in Section 26 and replacing it
with language saying that the annual rental rate shall be set at
$300. CHAIRMAN LEMAN added that the understanding is that existing
leases do not shift to the rate until they expire. RON SWANSON
added that their current fee is $300, although a lot of the leases
are at $150, and this would fix them all at $300 and bring in a
revenue to the state of a little over $400,000. It costs about
$250,000 to administer the program.
Number 515
SENATOR PEARCE moved as Amendment No. 1 to delete the language in
Section 26 and replace it with language saying that the annual
rental rate shall be set at $300. Hearing no objection, the
Chairman stated the amendment was adopted.
RON SWANSON , speaking to the issue in HB 331 relating to access for
mining staking, explained that the proposed Amendment No. 2 is to
exclude private land until the Supreme Court rules. It would make
it very clear that a bond does not have to be posted before the
claim is staked.
SENATOR TAYLOR moved to adopt Amendment No. 2. Hearing no
objection, the amendment was adopted.
CHAIRMAN LEMAN said he would like to have a conceptual amendment to
the amendment stating that this would apply only to municipal and
state lands and would not get into the private land dispute right
now. SENATOR TAYLOR moved the conceptual amendment. Hearing no
objection, it was adopted.
Number 600
SENATOR PEARCE noted Section 21 of CSSSHB 191(FIN) was not in the
Resources SCS, and she asked if this means we are now going back to
the mandatory preference right that is in current law about
agricultural land. RON SWANSON explained that originally if you
were an adjacent farmer you would not have a preference to pick up
the land next to you, even if you needed it for expansion of your
facility, and this will allow that to happen. It only goes to an
Alaskan bidder, and it gives them a first preference to meet high
bid.
SENATOR LINCOLN referred to page 18, line 29, and the language "an
operated exclusively." She said she had an amendment which would
delete the word "exclusively." She said the reason for the
amendment was because of an old school that was no longer in use in
one of the communities, and the community wanted to use it but they
couldn't under present law. By deleting "exclusively" they would
then be able to utilize the abandoned school. MR. SWANSON stated
the department would support the amendment.
TAPE 96-69, SIDE A
Number 025
SENATOR LINCOLN moved the adoption of Amendment No. 3, which would
delete the word "exclusively." Hearing no objection, the amendment
was adopted.
SENATOR PEARCE asked if anything in the bill changes the liability
that the purchaser or recipient of state lands would have for
previous hazardous substance releases on state lands. MR. SWANSON
responded that there are a couple of sections in the bill saying
that the holder of the lease at the time the problem occurred is
responsible for cleaning up anything. SENATOR PEARCE pointed out
that AIDEA can't lease lands that they got back from Mark Air after
the bankruptcy because DOT is trying to force AIDEA to do all the
cleanup from even pre-Mark Air days. MR. SWANSON acknowledged that
there is nothing in the bill that changes the liability standard if
somebody leases state land.
CHAIRMAN LEMAN directed attention to a memorandum from the
legislative drafter suggesting technical changes to page 25, lines
13 & 14 relating to effective dates. Hearing no objection, he
stated the drafter would be instructed to make the changes.
SENATOR TAYLOR moved as Amendment No. 4, on page 14, line 5 delete
"private residential" and delete all references to "residential" in
subsection (f).
SENATOR HALFORD directed attention to Section 29, and said to make
it conforming under (a) it would necessitate deleting (2) which is
all buildings and fixtures including gravel pads, foundations and
slabs not belonging to the state within 60 days of termination of
the lease. He also suggested in subsection (c) deleting "buildings
and fixtures" on lines 23, 25, 27 & 28. The effect of these
changes would be there would still be the cleanup requirements and
the requirements regarding everything but essentially the real
property improvements that can't be removed, and then they are
treated in the same way that (f) would treat them for a residence.
SENATOR LINCOLN asked if the effect of the amendment was just
removing "private residential" and "residential" in subsection (f).
SENATOR HALFORD responded that it was, so that condition and that
method still applies to commercial improvements. All of the
cleanup requirements still apply to everything but buildings and
fixtures, which are the permanent fixtures.
SENATOR TAYLOR suggested as part of Amendment No. 4, on page 14,
line 7 to insert the words "shall be leased or purchased."
After extensive discussion relating to Amendment No. 4 as outlined
by Senator Taylor and Senator Halford, CHAIRMAN LEMAN stated the
amendment was adopted.
Number 305
SENATOR HALFORD moved as a conceptual Amendment No. 5 to insert
exactly the same language in exactly the same way in whatever title
deals with DOT on airports. He explained the amendment would fit
into the title of the bill and it would fix an area where there are
numerous problems for rural airports all across the state.
REPRESENTATIVE THERRIAULT said he made a commitment that he would
not allow a lot of different issues to be added to this bill, and
he also pointed out that Representative Hanley has done a lot of
work on a House bill that is in the system. SENATOR HALFORD stated
he would withdraw the amendment.
Number 459
SENATOR HALFORD moved as Amendment No. 5 to page 5, line 19, to
delete the word "should" and insert "may" in its place. He said
the change would take out at least some of the preload of the
section toward anything but sale to private ownership. Hearing no
objection, the Chairman stated Amendment No. 5 was adopted.
SENATOR HALFORD said Sections 16, 17 and others which repeal the
bidder must appear in person at the auction provisions are contrary
to a general intent of the Legislature to always try and load any
of these programs to be the most beneficial to Alaska residents.
MR. SWANSON explained these provisions relate to a Superior Court
case dealing with a Kodiak land disposal six years ago, and this
brings the statute into compliance with that decision.
After further questions and discussion on section of the bill, the
committee took a brief at ease at 6:50 p.m., coming back to order
at 7:19 p.m.
CHAIRMAN LEMAN asked for the pleasure of the committee on HB 191.
SENATOR PEARCE moved SCS CSSSHB 191(RES) be passed out of committee
with individual recommendations. Hearing no objection, it was so
ordered.
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