Legislature(2005 - 2006)BUTROVICH 205
02/08/2005 01:30 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB63 | |
| SB40 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | SB 63 | ||
| = | SB 40 | ||
| * | SB 85 | ||
SB 40-KUSKOKWIM PORT AUTHORITY
2:06:03 PM
MR. RYAN MAKINSTER, staff to Senator John Cowdery, introduced SB
40, which would establish a port authority for the Kuskokwim
River area.
Senator Hoffman joined the committee.
MR. MAKINSTER continued the boundary for the authority would
extend along the river ten miles on either side. The purpose of
the authority would be to develop and improve infrastructure in
the area such as transportation, energy and waste disposal.
Revenue bonds bring together infrastructure. Revenue bonds would
fund regional projects and would be secured by the mechanism
used to pay back the bond with no obligation to the state. The
board of the port authority would consist of nine members
nominated by private and public people.
2:08:51 PM
Unemployment rates in the Kuskokwim area are high as are
associated transportation costs. Many people will benefit from
the associated regional projects, which would include mining.
2:10:47 PM
Locals would not see any benefit from the mine except for
possible job creation. Development of the mine should benefit
the area and not just a limited populace.
SENATOR THERRIAULT referred to a map included in the bill packet
and asked Mr. Makinster to explain where the port authority
would be.
MR. MAKINSTER referenced the crosshatched area outlined on the
map.
CHAIR HUGGINS asked about a road from Donlin to Yukon River.
MR. MAKINSTER stated the road was no longer being considered.
2:12:18 PM
CHAIR HUGGINS asked for a larger version of the map.
SENATOR COWDERY asked whether the governor's office was slated
to testify.
CHAIR HUGGINS said no.
2:13:27 PM
SENATOR FRENCH asked how the Kuskokwim Port Authority would
differ from AIDEA (Alaska Industrial Development and Export
Authority).
MR. MAKINSTER said that hadn't been thought out yet.
SENATOR COWDERY interjected the Kuskokwim Port Authority would
be appointed by the governor. In turn the board would hire an
executive director. He said that was different from AIDEA. The
Donlin Creek Mine is proven to have more than 12 million ounces.
SENATOR THERRIAULT asked Mr. Makinster to go over the list on
page 2, lines 17-20. He noted the breadth of it is one of the
criticisms from those suspicious of the bill.
2:16:07 PM
MR. MAKINSTER responded the language was used for other port
authorities, such as the Anchorage Port Authority. It doesn't
dictate but allows them to work in the areas for the betterment
of the region. Some of the current concerns of the local
residents are misguided because the port authority would not
dictate everything in the region. It gives them the ability to
revenue bond and to gather as a group.
2:18:02 PM
CHAIR HUGGINS asked Mr. Makinster to address the concerns of
those in opposition to the bill.
MR. MAKINSTER explained the Kuskokwim Corporation concerns have
been addressed. They feel the port authority will try to
override control of their areas. That is not the intent of the
sponsor. The port authority would allow them a better economic
base. Economies of scale prove the infrastructure set up by a
port authority would be better economically for the entire
region.
CHAIR HUGGINS asked whether the intent of SB 40 is to add value
to the region.
MR. MAKINSTER replied yes.
SENATOR KOOKESH noted a major concern of the people of the
Kuskokwim community is that none of their committees were spoken
to regarding formation of a borough. He asked Mr. Makinster
whether he has contacted the community.
MR. MAKINSTER affirmed they spoke with Kuskokwim Corporation two
weeks ago. Their concerns include not being adequately
represented on the board. Specific language in SB 40 states
members of the board should come from many different arenas.
SENATOR KOOKESH asked whether the sponsor talked to either the
State Representative or State Senator who represents the
communities.
MR. MAKINSTER replied no.
SENATOR KOOKESH asked Senator Cowdery whether he has talked to
the State Representative or State Senator who represents the
communities. He said six of the ten communities are in his
district.
SENATOR COWDERY said he spoke to Senator Hoffman.
SENATOR KOOKESH expressed concern that he was not considered
when drafting of the bill. The communities have valid concerns.
SENATOR COWDERY said he asked Chair Huggins not to move SB 40
today.
2:23:43 PM
CHAIR HUGGINS encouraged Senator Kookesh to speak to the bill
sponsor regarding any concerns.
SENATOR KOOKESH admonished Senator Cowdery for failure to speak
to the State Senator and State Representative who represent the
communities before introducing SB 40.
2:25:16 PM
SENATOR FRENCH asked whether anyone has spoken to the Donlin
Creek and Placerville stakeholders to find out their position on
the bill.
MR. MAKINSTER said they are working with them but no
determination has been made yet as to the course of development.
SENATOR COWDERY said it was not his intention to ram anything
through or to bypass anybody. He said he was disappointed that
someone from the governor's office was not present.
CHAIR HUGGINS asked Mr. Makinster to remain with the committee.
2:27:19 PM
MR. LEO MORGAN, chairman of Kuskokwim Corporation, testified in
opposition of SB 40. Neither the Corporation nor the communities
were contacted regarding the bill. Their lands include 10
village corporations that merged in 1977. One hundred and twenty
linear miles of the proposed port authority is on Kuskokwim
land. Kuskokwim Corporation supports development of the
exploratory mine. SB 40 does not include communities east of the
proposed port authority and they are members of the merged
corporation, including Georgetown, Red Devil, Sleetmute, and
Stony River.
2:29:21 PM
The scope of the proposed port authority is too broad and
includes activities that would normally be done by a borough
with elected representation. The governor would appoint the port
authority board and there would be no assurance that the
villages would be adequately represented. The Port Authority
could discourage formation of local government.
2:30:54 PM
CHAIR HUGGINS asked Mr. Morgan whether the community supports
mining activity.
MR. MORGAN responded yes.
SENATOR COWDERY asked Mr. Morgan how he would like the board
members appointed.
MR. MORGAN said he would appoint members from the affected area.
SENATOR COWDERY asked Paul Fuhs to describe the role of a board
member.
MR. PAUL FUHS, lobbyist, Kuskokwim Corporation, said he helped
write Alaska's Port Authority laws in 1993 with Senator Drue
Pearce. One of the most important jobs of the board is to lay
forward a development plan.
2:33:55 PM
The board sets the direction and is the actual decision makers.
The executive director executes day-to-day operations,
negotiates, and makes recommendations to the board. The majority
actions of the board determine what the port authority does.
SENATOR LYMAN HOFFMAN informed the committee the Kuskokwim
Corporation is a for profit corporation. Their primary interest
is to make money for their shareholders.
2:36:24 PM
SENATOR KOOKESH asked Mr. Fuhs if he would be more comfortable
if SB 40 listed specifically where the board members come from.
MR. FUHS answered under the Alaska Constitution you cannot
specify where a board member comes from and you specifically
cannot specify a board member from a private corporation.
2:38:27 PM
CHAIR HUGGINS invited Senator Olson to join the committee.
MR. FUHS continued a port authority works when people in the
community all want it to happen and municipalities generally
form them. People have to vote on it and local people have to
support it. When the boundaries were drawn people were left out.
Placer Dome wants to see the local people working together.
Calista owns the subsurface and Kuskokwim Corporation owns the
surface. The right-of-way would go across Kuskokwim Corporation
land so they will have a huge role in the development.
SENATOR KOOKESH asked whether there would be continued
discussion between the Kuskokwim Corporation and Senator
Cowdery.
MR. FUHS said they met with Senator Cowdery's staff immediately
upon hearing about the bill and put their issues on the table.
2:41:35 PM < Recess > 2:50:56 PM
MR. THOR WILLIAMS, city council member, City of Bethel,
testified. Bethel is the largest port in western Alaska. The
city supports the communities and would offer to help with
economic development.
2:53:00 PM
CHAIR HUGGINS asked Mr. Williams to expound.
MR. WILLIAMS said they understand that issues are out there with
several parties. They have questions whether their port would
have a role in the proposed port authority. The City of Bethel
supports development.
2:55:10 PM
SENATOR COWDERY asked Mr. Williams whether he had ideas for the
make up of the board.
MR. WILLIAMS said they would support representation of the
corporations and the local communities as well as the City of
Bethel and the City of Napakiak.
2:58:12 PM
CHAIR HUGGINS asked Mr. Williams to state their major concerns.
MR. WILLIAMS said predominantly it is the question of the impact
to their own port authority. It is a seasonal port that supplies
needs for the lower Kuskokwim and for the upper Kuskokwim up to
McGrath.
3:01:39 PM
MR. BOB CHARLES, vice president, Calista Corporation, affirmed
they do own the subsurface resource acreage in the region.
Calista has participated in numerous meetings around the region
to talk about the project. They determined an opportunity
existed to bring the communities together in financing and
developing infrastructure. Cultivating and developing their
resources presents opportunity for long-term sustainable
development. The port authority could help bring the different
stakeholders together to directly participate in the financing
of other projects.
3:04:43 PM
SENATOR COWDERY asked Mr. Charles whether he knew of any other
minerals in the area.
MR CHARLES advised there is primarily gold, platinum, and small
quantities of other minerals.
SENATOR COWDERY asked the amount of gold.
MR CHARLES said Donlin Creek is indicated to have 11.1 million
ounces of gold. The grade is an average of three grams per ton.
SENATOR COWDERY asked how power would get to the mine.
MR CHARLES stated they are currently looking at renewable energy
and a power plant.
3:08:39 PM
SENATOR COWDERY asked whether shallow gas was available.
MR CHARLES said there was potential but probably not feasible.
SENATOR COWDERY asked the amount of power needed.
MR CHARLES said there is 70 mega watts of power plant
requirement for the mine.
3:09:48 PM
SENATOR COWDERY asked where the road would be.
MR CHARLES advised it was proposed to be below Crooked Creek
towards Donlin Creek.
CHAIR HUGGINS asked whether Calista Corporation was supportive
of a port authority.
MR CHARLES said yes. It would bring all the stakeholders
together.
3:14:16 PM
SENATOR COWDERY asked the labor needs for a full scale
operation.
MR CHARLES expects to see 700 jobs created.
SENATOR COWDERY asked the depth to pay dirt.
MR CHARLES speculated 1/2 billion tons of overburden.
3:18:01 PM
MS. EVELYN THOMAS, vice president, Crooked Creek Traditional
Council, testified. The Council met and concluded they must
support SB 40. They hope to have the port authority in the mid
Kuskokwim region.
CHAIR HUGGINS asked her to characterize the view of the Crooked
Creek Traditional Council.
MS. THOMAS assured him they are very supportive. The tribe's
position is they must have some input in the development of the
area.
3:21:08 PM
CHAIR HUGGINS held SB 40 in committee. He invited the governor's
administration to the next hearing on SB 40. There being no
further business to come before the committee, he adjourned the
meeting at 3:23:05 PM.
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