Legislature(2005 - 2006)BUTROVICH 205

03/01/2005 01:30 PM Senate TRANSPORTATION


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 40 KUSKOKWIM PORT AUTHORITY TELECONFERENCED
Heard & Held
Public Testimony 1:30 - 2:30 pm
+ HB 115 AIRPORT CUSTOMER FACILITY CHARGES TELECONFERENCED
Moved SCS CSHB 115(TRA) Out of Committee
+= SB 92 AIRPORT CUSTOMER FACILITY CHARGES TELECONFERENCED
Heard & Held
+ HB 42 JOE WILLIAMS, SR., COASTAL TRAIL TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                                                                                                                                
                SB  40-KUSKOKWIM PORT AUTHORITY                                                                             
                                                                                                                                
1:34:29 PM                                                                                                                    
CHARLIE HUGGINS announced SB 40 to be up for consideration.                                                                     
                                                                                                                                
MS. KATHLEEN HOFFMAN, board  of directors, Kuskokwim Corporation,                                                               
testified the  Corporation is  in support  of development  of the                                                               
Donlin Creek  Mine. Their number  one goal  is to see  that their                                                               
shareholders get  jobs and benefit  from the mine.  Although they                                                               
have made it clear that they  are ready to meet the initiators of                                                               
SB 40, the sponsors have yet to meet with them.                                                                                 
                                                                                                                                
She expressed concern regarding the  make up of the proposed port                                                               
authority   board.  The   Kuskokwim   Corporation  would   prefer                                                               
development  of  a borough  with  elected  representation of  the                                                               
region.  Kuskokwim  Corporation  will hold  a  borough  formation                                                               
summit in  the spring of  2005. Testimony from the  Department of                                                               
Commerce  and  Community  Development  indicates  preference  for                                                               
borough   formation  also.   According  to   the  Department   of                                                               
Transportation &  Public Facilities (DOTPF), Placer  Dome intends                                                               
to develop the port and the road privately.                                                                                     
                                                                                                                                
1:37:04 PM                                                                                                                    
MS. HOFFMAN  added the Alaska  Industrial Development  and Export                                                               
Authority (AIDEA)  has advised they  could provide  financing for                                                               
the mine  as they did with  the Red Dog Mine  if requested. While                                                               
Kuskokwim does  not support SB 40  at this time, they  would like                                                               
to suggest  amendments. First would  be an amendment  which would                                                               
prohibit  the  authority  from  receiving  land  which  has  been                                                               
condemned by  the State of  Alaska. Secondly, if  the legislation                                                               
moves forward  it should include  an amendment, which  would turn                                                               
over operations of  the authority to an organized  borough in the                                                               
area when it is formed.                                                                                                         
                                                                                                                                
1:38:46 PM                                                                                                                    
SENATOR  JOHN  COWDERY  commented  board  members  would  be  the                                                               
Governor's choice.                                                                                                              
                                                                                                                                
1:39:09 PM                                                                                                                    
Senator Albert Kookesh joined the committee.                                                                                    
                                                                                                                                
SENATOR COWDERY noted Placer Dome is neutral on SB 40.                                                                          
                                                                                                                                
CHAIR HUGGINS asked Ms. Hoffman  to explain her comment regarding                                                               
condemned lands.                                                                                                                
                                                                                                                                
MR.  PAUL FUHS,  Kuskokwim  Corporation,  answered the  question.                                                               
Condemned land  is when the State  of Alaska comes in  to build a                                                               
road  and  seizes the  land  by  imminent domain.  Currently  the                                                               
authority does  not have  the power of  imminent domain  but they                                                               
could  ask the  state to  do it  for them  and then  transfer the                                                               
land.                                                                                                                           
                                                                                                                                
SENATOR  GENE THERRIAULT  stated borough  formation would  run up                                                               
against the same problem.                                                                                                       
                                                                                                                                
MR.  FUHS  agreed  but  it   would  be  a  locally  elected  body                                                               
representative of the people from the area.                                                                                     
                                                                                                                                
1:41:21 PM                                                                                                                    
CHAIR HUGGINS asked Ms. Hoffman  her interpretation of a timeline                                                               
for formation of the borough.                                                                                                   
                                                                                                                                
MS.  HOFFMAN said  it would  be similar  to that  of the  Red Dog                                                               
Mine. The Kuskokwim  Board is concerned that the  borough and the                                                               
mine come together at the same  time for the best interest of the                                                               
shareholders.                                                                                                                   
                                                                                                                                
MR. FUHS added around the  state nearby boroughs are reaching out                                                               
to grab  mining properties.  That is an  added concern  worthy of                                                               
local borough formation.                                                                                                        
                                                                                                                                
CHAIR HUGGINS said  the intent of the committee is  to make SB 40                                                               
happen. He challenged everyone to  work together to capitalize on                                                               
the value of the region.                                                                                                        
                                                                                                                                
1:44:32 PM                                                                                                                    
SENATOR  THERRIAULT  referred  to  a  letter  sent  by  Kuskokwim                                                               
Corporation last  year indicating  support of an  interior rivers                                                               
port authority. He asked Mr. Fuhs the difference.                                                                               
                                                                                                                                
MR. FUHS advised SB 40 legislation  is more expansive in terms of                                                               
the area.  There is also  the added concern  over the make  up of                                                               
the  board. Much  of  the  concern could  be  facilitated if  the                                                               
initiators  of  the  bill  would  sit  down  and  meet  with  the                                                               
community.                                                                                                                      
                                                                                                                                
SENATOR THERRIAULT  asked whether last years  bill covered Donlin                                                               
Creek.                                                                                                                          
                                                                                                                                
MR. FUHS said yes but Placer  Dome did not have development plans                                                               
in  place and  they determined  they do  not want  to use  public                                                               
financing for the project because of  the effect it would have on                                                               
their  EIS.  The  DOTPF  completely pulled  out  of  the  project                                                               
because Placer  Dome told them  they wanted to  do it all  as one                                                               
EIS as  a private  development. They  also said  the cost  of the                                                               
port  and the  road are  not cost  prohibitive to  developing the                                                               
mine and  that they  would even  pre-position equipment  there in                                                               
advance of  the EIS being  granted. The  speed of doing  it meant                                                               
more to them  than the two or three percent  points of tax exempt                                                               
financing.                                                                                                                      
                                                                                                                                
1:48:06 PM                                                                                                                    
SENATOR  THERRIAULT asked  whether  the  state providing  conduit                                                               
financing triggers the heightened EIS.                                                                                          
                                                                                                                                
MR. FUHS said yes and it  also triggers the Davis-Bacon wages and                                                               
the issue  of doing the entire  project under one EIS  - the mine                                                               
and the road and the port.                                                                                                      
                                                                                                                                
SENATOR THERRIAULT voiced uncertainty  that the Legislature could                                                               
trust the community to move on formation of a borough.                                                                          
                                                                                                                                
MR. FUHS  agreed and said  that is  why the community  is holding                                                               
the  summit. He  asked  the committee  to  consider the  proposed                                                               
amendments.                                                                                                                     
                                                                                                                                
1:50:41 PM                                                                                                                    
CHAIR HUGGINS promised a member  of the committee would meet with                                                               
the community in the summer.                                                                                                    
                                                                                                                                
MS.  HOFFMAN  agreed they  would  be  prepared. She  advised  the                                                               
community  has tried  many  times to  communicate  with the  bill                                                               
sponsor.                                                                                                                        
                                                                                                                                
1:53:32 PM                                                                                                                    
MS. BEVERLY  HOFFMAN, shareholder, Calista Corporation  and owner                                                               
of  Kuskokwim  Wilderness  Adventures,  introduced  herself.  She                                                               
expressed concern  regarding the power  that SB 40 would  give to                                                               
the  port  authority  without   local  consideration.  She  added                                                               
concern for the environmental impact on the fish and wildlife.                                                                  
                                                                                                                                
1:56:53 PM                                                                                                                    
MS.  HOFFMAN added  she  was  offended by  a  comment by  Senator                                                               
Cowdery last  week regarding  how community  members in  the area                                                               
don't speak English and live in their own world.                                                                                
                                                                                                                                
2:01:35 PM                                                                                                                    
MS.  ANNA   HOFFMAN,  chief  operating  officer,   Bethel  Native                                                               
Corporation (BNC), expressed concern over  SB 40. BNC prefers the                                                               
bill  have   language  that   recognizes  current   private  land                                                               
ownership  within  the  proposed   operating  area.  BNC  opposes                                                               
language regarding  the make  up of the  board and  would require                                                               
board  members  include those  in  the  community. BNC  does  not                                                               
support  the proposed  operating area  as presented.  BNC opposes                                                               
the collection  of rates, fees,  rents and other charges  for the                                                               
execution of duties since the  proposed duties are not limited to                                                               
port  related  functions. The  villages  are  under budgeted  and                                                               
would not have the means to pay charges imposed by SB 40.                                                                       
                                                                                                                                
2:04:30 PM                                                                                                                    
SENATOR COWDERY asked Ms. Hoffman  whether the BNC was supportive                                                               
of development of the Donlin Creek Mine.                                                                                        
                                                                                                                                
MS.  HOFFMAN  said  they have  environmental  concerns  regarding                                                               
development.                                                                                                                    
                                                                                                                                
CHAIR  HUGGINS   asked  whether   the  BNC  supports   a  borough                                                               
formation.                                                                                                                      
                                                                                                                                
MS. HOFFMAN advised they oppose it at this time.                                                                                
                                                                                                                                
CHAIR HUGGINS asked whether they support a port authority.                                                                      
                                                                                                                                
MS. HOFFMAN said they would  like to research other options, such                                                               
as the enterprise and advisory boards in Valdez.                                                                                
                                                                                                                                
SENATOR HOLLIS FRENCH asked Ms.  Hoffman whether the BNC would be                                                               
more supportive  if they  knew meetings  would take  place within                                                               
the community.                                                                                                                  
                                                                                                                                
MS. HOFFMAN said yes.                                                                                                           
                                                                                                                                
SENATOR  FRENCH asked  Senator Cowdery  whether he  could support                                                               
that.                                                                                                                           
                                                                                                                                
SENATOR COWDERY agreed with Chair Huggins that would be a goal.                                                                 
                                                                                                                                
SENATOR  FRENCH  offered  to  draft  an  amendment  to  add  that                                                               
language.                                                                                                                       
                                                                                                                                
2:07:27 PM                                                                                                                    
CHAIR  HUGGINS invited  Ms. Hoffman  to take  part in  a planning                                                               
group to carry the initiative forward.                                                                                          
                                                                                                                                
MS.  HOFFMAN  advised they  would  participate  in any  meetings,                                                               
information  gathering, and  research.  She would  not commit  to                                                               
helping move  the bill forward.  She noted the effective  date of                                                               
SB 40  was July 1, 2005  and asked when the  committee would meet                                                               
with the community.                                                                                                             
                                                                                                                                
2:09:48 PM                                                                                                                    
CHAIR HUGGINS advised her to disregard the effective date.                                                                      
                                                                                                                                
2:11:12 PM                                                                                                                    
MR.   ERIC  MIDDLEBROOK,   local   resident,   testified  SB   40                                                               
legislation was going too fast.  Area residents have not had time                                                               
to digest  the bill  and the  magnitude of it.  The bill  has the                                                               
potential  to  keep  community  representation  out  and  invites                                                               
outsiders  to  development the  area.  Other  authorities in  the                                                               
state have  clear limitations of their  power but SB 40  does not                                                               
address that.  Imminent domain is  a major concern. He  feels the                                                               
mine should be solely responsible for  its own waste. He does not                                                               
agree with borough formation because  they have the power to levy                                                               
taxes  that could  be funneled  to support  the operation  of the                                                               
mine. The  proposed area the  port authority would  cover appears                                                               
to be unchecked  development as a way to funnel  public monies to                                                               
private enterprises.                                                                                                            
                                                                                                                                
2:15:03 PM                                                                                                                    
CHAIR  HUGGINS   challenged  Mr.   Middlebrook  to   work  toward                                                               
solutions.                                                                                                                      
                                                                                                                                
MR. MIDDLEBROOK  said a borough  costs too  much money and  SB 40                                                               
would railroad the community leaving them stuck with liability.                                                                 
                                                                                                                                
2:18:53 PM                                                                                                                    
MR.  DARIO  NOTTI,  Calista  shareholder,  Kuskokwim  Corporation                                                               
member and  Georgetown member,  asked questions  on the  bill. He                                                               
wanted to  know who would  be responsible for the  waste disposal                                                               
and expressed  concerns regarding  toxic waste. Both  Calista and                                                               
Placer Dome  have a  history of  leaving others  responsible with                                                               
large debt.  He expressed concern  over the board members  of the                                                               
proposed port authority.                                                                                                        
                                                                                                                                
2:27:31 PM                                                                                                                    
SENATOR  THERRIAULT asked  Mr. Notti  whether he  saw no  benefit                                                               
from a regional waste disposal or regional power generation.                                                                    
                                                                                                                                
MR.  NOTTI admitted  there was  potential for  a benefit  but the                                                               
bill does not clarify who would be responsible for those things.                                                                
                                                                                                                                
2:31:22 PM                                                                                                                    
CHAIR HUGGINS held SB 40 in committee.                                                                                          

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