02/04/2004 01:42 PM House RES
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 4, 2004
1:42 p.m.
MEMBERS PRESENT
Representative Nancy Dahlstrom, Co-Chair
Representative Beverly Masek, Co-Chair
Representative Cheryll Heinze, Vice Chair
Representative Carl Gatto
Representative Bob Lynn
Representative Nick Stepovich
Representative Kelly Wolf
Representative Beth Kerttula
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 344
"An Act relating to annual rental fees for mining claims, and
providing for reduced royalties during the first three years of
production."
- HEARD AND HELD
HOUSE BILL NO. 345
"An Act relating to fees for state park developed campsites; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 344
SHORT TITLE:MINING FEES, RENTALS, & ROYALTIES
SPONSOR(S): REPRESENTATIVE(s) FATE
Jrn-Date Jrn-Page Action
01/12/04 2286 (H) PREFILE RELEASED 1/2/04
01/12/04 2286 (H) READ THE FIRST TIME -
REFERRALS
01/12/04 2286 (H) RES, FIN
01/12/04 2286 (H) REFERRED TO RESOURCES
01/21/04 2363 (H) COSPONSOR(S): FOSTER
02/04/04 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 345
SHORT TITLE:CAMPSITE FEES: DISABLED VETERANS/SENIORS
SPONSOR(S): REPRESENTATIVE(s) FATE
Jrn-Date Jrn-Page Action
01/12/04 2286 (H) PREFILE RELEASED 1/2/04
01/12/04 2286 (H) READ THE FIRST TIME -
REFERRALS
01/12/04 2286 (H) RES, FIN
01/12/04 2286 (H) REFERRED TO RESOURCES
02/04/04 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
JIM POUND, Staff
to Representative Hugh Fate
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 344 on behalf of
Representative Fate, sponsor.
STAN FOO, Mining Section Manager
Division of Mining, Land and Water
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 344, provided
information and answered questions.
KERWIN KRAUSE, Geologist
Division of Mining, Land and Water
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 344, provided
information and answered questions.
CAROLINE ALLEN, Staff
to Representative Hugh Fate
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 345, on behalf of
Representative Fate, sponsor.
JOE MATHIS, Co-Owner
Montana Creek Campground
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 345.
SHEILA LANKFORD, Co-Owner
Montana Creek Campground
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 345.
SCOTT REISLAND, Vice President
Alaska Campground Association;
National Board of RV Parks;
Member, Board of Directors
Alaska Travel Industry Association
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 345.
PETE PANARESE, Field Operations Manager
Division of Parks and Outdoor Recreation
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 345, presented
information and answered questions.
ACTION NARRATIVE
TAPE 04-1, SIDE A
Number 0001
CO-CHAIR NANCY DAHLSTROM called the House Resources Standing
Committee meeting to order at 1:42 p.m. Representatives
Dahlstrom, Masek, Heinze, Wolf, Gatto, Stepovich, Guttenberg,
and Kerttula were present at the call to order. Representative
Lynn arrived as the meeting was in progress.
HB 344-MINING FEES, RENTALS, & ROYALTIES
CO-CHAIR DAHLSTROM announced that the first order of business
would be HOUSE BILL NO. 344, "An Act relating to annual rental
fees for mining claims, and providing for reduced royalties
during the first three years of production."
Number 0139
JIM POUND, Staff to Representative Hugh Fate, presented HB 344
on behalf of Representative Fate, sponsor. Mr. Pound
characterized HB 344 as a bill the would allow Alaska to
continue in [resource development]. In the past, he said Alaska
[had many] small precious metal mines operated by actual owners
with one or two employees. He explained that those mines
brought income to themselves, individual people, and the state.
Mr. Pound said many of those hardworking miners have been
forgotten over the years, with [the state] paying more attention
to oil and gas [development]. Today, the small mine is all but
gone from Alaska because [the state] has not given those miners
the incentives to go back into the field to work, he said.
MR. POUND said HB 344 is designed to start that process again.
The incentives include a reduction in the rental fees and claims
for the first five years, and the miner will also get a credit
on his or her royalties for the first three years. He said the
small miner is what made Alaska what it is today. Furthermore,
it is a small business that buys locally and is an industry that
can prosper statewide. He urged support for HB 344. Mr. Pound
noted that the sponsor had some amendments he would like to
offer.
Number 0421
REPRESENTATIVE HEINZE asked if all claims are of equal size and
cost.
Number 0450
STAN FOO, Mining Section Manager, Division of Mining, Land and
Water, Department of Natural Resources (DNR), testified. He
said one of DNR's concerns is that there is currently no
distinction in state law between placer mining claims and hard
rock mining claims, although it is a distinction in federal law.
Mr. Foo said that is an issue that would have to be addressed.
REPRESENTATIVE HEINZE mentioned Donlin Creek. She asked for
clarification on [various sizes of operations].
MR. FOO, in response, said Donlin Creek is on private grounds
controlled by the Calista Corporation and the Kuskokwim
Corporation. He said it seems like the bill is distinguishing
between the small placer operator and the hard rock operator,
which is a distinction that isn't available under state law.
However, federal law does differentiate between placer mines and
hard rock mines. With regard to size of operations, he said
there is an obvious difference between Fort Knox and a small
placer operator in the size of the property and production and
the possible royalties that might be generated.
Number 0626
REPRESENTATIVE STEPOVICH asked if the bill reflects that.
MR. FOO, in response, said the bill seemed to distinguish
between placer operations and hard rock operations.
Number 0735
REPRESENTATIVE KERTTULA said she has some major concerns, one if
which is that it looks like the sponsor wants to make the
differentiation between placer and hard rock claims, which the
state doesn't make. She said she is not sure that the language
is really clear [in distinguishing] between small and large
mines, which she thought was the intent. Representative
Kerttula indicated she would like Mr. Foo's help to be
absolutely certain of that. She asked Mr. Foo how this plan is
going to interact with exploration incentive credits currently
in place.
MR. FOO said this bill would provide additional tax or royalty
reductions. He said currently, most of the large hard rock
operators do qualify for the $20 million in royalty reductions
and exploration credit. There is also a break given for the
first three years of operation. This would be in addition to
that, he said.
REPRESENTATIVE KERTTULA asked Mr. Pound if the real intent is to
"touch" the placer mines.
MR. POUND, in response, said correct. He said he had some
"clean up" language.
Number 0893
REPRESENTATIVE GATTO pointed out that the fiscal note had a page
and a half of notes at the bottom. He turned attention to page
2 of the fiscal note, which read in part:
Therefore, it would not be possible to apply the
provisions of this bill exactly as they are written.
This fiscal note assumes that this technical issue is
resolved ....
REPRESENTATIVE GATTO said apparently [the technical issue] is
not [resolved]. Suggesting that the fiscal note is confusing,
he said the question cannot be addressed because the differences
between [placer mining and hard rock mining] are not resolved
yet. He remarked, "They are lumped together and yet we're
taking them apart in the bill, but they haven't been taken apart
yet."
Number 0973
MR. POUND, in response, said those are technical issues that
he'd just found out about. He said he had some conceptual
language that he thought would resolve the issue.
REPRESENTATIVE GATTO asked how much money the operator would
save because of this bill.
MR. POUND, in response, said a lot of it has to do with the
viability of the mine, especially with the royalties aspect. He
said if a mine operator has a relatively viable mine that starts
producing and the operator can save on royalties within the
first five years, it will return the cost of getting that mine
into operation. Mr. Pound remarked, "A small mine is probably a
D6 or 8." He said in a placer mining operation, the other
equipment that is involved is a fairly large investment.
Number 1082
REPRESENTATIVE STEPOVICH turned attention to page 3, lines 10-
13, which read:
(B) a credit equal to the total amount of net losses
during the first three years of production; this
credit may be applied to the production royalty owed
in the first three years during which production
yields a net income.
REPRESENTATIVE STEPOVICH asked if he understands this language
to mean that if the losses outweigh royalties, then it would be
possible to receive a credit.
Number 1143
MR. POUND responded that is correct.
REPRESENTATIVE STEPOVICH asked if the state will be giving back
money to companies in which [the losses far outweigh the
royalties].
MR. POUND responded that he does not foresee a situation where
the state will be giving back money.
REPRESENTATIVE STEPOVICH asked for clarification on how the
credit works.
MR. POUND replied DNR may be able to explain [how the credit
works] better than he can. He said as he understands it, the
mine operators are allowed to take net losses and apply it as
part of their credit against royalties [owed to the state]. If
the mine is viable and profitable in three years, then the mine
operator would get an additional royalty credit.
REPRESENTATIVE STEPOVICH turned attention to page 3, line 11, he
asked if the word "may" leaves [the interpretation of this bill]
open.
MR. POUND responded that this language would leave it wide open
for the miner. He said with this wording, the miner may or may
not choose to apply the credit this way, as opposed to using the
word "shall". He added that the miner could have another way to
write off the losses.
Number 1269
REPRESENTATIVE GUTTENBERG asked if anyone has done an economic
model to [examine] the viability of this plan.
MR. POUND replied that he is not aware of any.
REPRESENTATIVE GUTTENBERG asked Mr. Foo if this bill actually
separates the placer [miners] from hard rock [miners].
Number 1300
MR. FOO replied that he believes it would be necessary to
distinguish between the placer and hard rock mines to enact this
legislation.
REPRESENTATIVE GUTTENBERG asked Mr. Foo if this bill clearly and
definitively makes a distinction between the two [types of
mining].
REPRESENTATIVE GUTTENBERG, in response to Mr. Foo's comments,
said the bill says the distinction must be made, but does not
actually make that distinction. It leaves DNR to make that
decision, he commented.
Number 1368
REPRESENTATIVE GATTO said it appears a placer miner could save
$20 for a placer mine and a hard rock miner could save $50 for a
hard rock mine. According to the fiscal note this savings would
cost the state $15,000. He said he is concerned that this bill
would cost $15,000 to give out $20 or $50 credits.
Representative Gatto questioned that a miner would be concerned
about $20, and he said he does not believe that this is
something that should be offered. He asked Mr. Pound to provide
a justification for spending $15,000.
MR. POUND advised the committee that he was told this morning
that the cost of "MTRSC" has gone up. He added that he only
received the fiscal note today and has not had the opportunity
to look at it to determine if the figures are completely valid.
REPRESENTATIVE STEPOVICH asked what the maximum savings would be
for the miner under subsections (f) and (g).
MR. POUND responded that it would depend on the viability of the
mine. He explained that there would not be any kind of major
savings for the rent, but there could be a savings on the
royalties if it is a viable mine.
Number 1506
CO-CHAIR MASEK asked for clarification on what happens to the
sites mentioned in the sponsor statement and if big corporations
are letting these sites go [back to the state to be leased].
MR. FOO asked for clarification of Co-Chair Masek's question.
Number 1554
CO-CHAIR MASEK said the intent of this legislation is to
encourage more mining. She asked if there are there a lot of
big corporations that are holding onto leased mining sites which
are not being mined.
MR. POUND responded that the statement was inserted into the
sponsor statement based on information provided by [Fairbanks
Gold Mining, Inc.] that in the Fairbanks area there are a
considerable number of mining claims that from a corporate
perspective, they do not consider viable for them to mine. He
said their process is to just hold on to the properties and pay
the rent; therefore, no royalties are being paid to the state.
He said this bill would provide such companies to consider some
kind of a sublease program to sublease [the sites] to a smaller
mining company thus making it a viable operation [capable of]
$50,000 to $70,000 [in production] each year.
REPRESENTATIVE STEPOVICH asked who would qualify under this
plan.
MR. POUND responded that a new mining operation or any mining
company that has been in operation less than five years would
qualify.
REPRESENTATIVE STEPOVICH surmised that a company that had been
in operation for more than five years would not qualify.
MR. POUND replied that is correct.
Number 1689
REPRESENTATIVE KERTTULA asked how the regulations would be
rewritten to make the program work.
MR. FOO responded that it would be necessary to sort out the
distinction between the placer miners and hard rock miners.
REPRESENTATIVE KERTTULA asked about current regulations and how
the plan would work. She said she assumes some of the costs of
developing the regulations are in the fiscal note.
Number 1752
KERWIN KRAUSE, Geologist, Division of Mining, Land and Water,
Department of Natural Resources, testified. He responded that
with the exploration incentive credit Act, the largest mining
companies as well as the small placer miners have availed
themselves to that set of laws. Even though quite few people
have filed applications to get preliminary approval on [this
credit], the only mine that could actually take the credit will
be the Pogo Mine, he commented. There have not been any
applications from small miners, he said. He indicated this
credit allows deductions of 50 percent from production,
royalties, mine license taxes, or corporate tax requirements.
REPRESENTATIVE KERTTULA asked if the department has implemented
any regulations to run the incentive program. She clarified
that she is interested in any sidebars that may have been
established. She asked what sidebars the department plans to
put into place to determine when it would be productive and
correct to allow for the reduction.
MR. KRAUSE responded that the department is not enacting any
regulations for the exploration incentive credit Act. The
division has a lengthy application process that has sidebars, he
said. The department would scrutinize and adjudicate those
applications. Mr. Krause told members that he could not say
whether the department would use the same process with this
proposed legislation.
REPRESENTATIVE KERTTULA asked if the committee could be provided
with a copy of the application for the exploration incentive
credit Act.
Number 1940
REPRESENTATIVE GUTTENBERG referred to page 2, lines 18, 19, 25,
and 26, subsections (f) and (g), and he asked Mr. Foo what the
basis was for establishing those numbers [with regard to the
acreage amount].
MR. FOO commented that typically placer mine operations are
smaller than hard rock operations.
REPRESENTATIVE GUTTENBERG asked if there is a "break point" on
permits or applications [reflected in the sizes set out in
subsections (f) and (g)].
MR. FOO replied that he is not aware of any.
REPRESENTATIVE STEPOVICH commented that anything that can be
done to help miners is a good thing, so he hoped the details
could be worked out. He asked how the rental fees are paid.
MR. KRAUSE responded that the rental fee is a three-tiered
rental plan in which the first 5 years is $25 for the smaller
sized claims and $100 for the larger claims. From years 6
through 10 it is $55 for the smaller sized claims and $220 for
larger ones. At the 11th year and thereafter, the rental is
fixed at that point, and the rent is $130 for smaller claims to
$520 for the larger claims, those are billed out every year on
September 1, and every 10 years there is a consumer price index
adjustment.
CO-CHAIR DAHLSTROM announced her intention to hold the bill in
committee while amendments are being produced and the members
have an opportunity to review additional materials.
[HB 344 was held over.]
HB 345-CAMPSITE FEES: DISABLED VETERANS/SENIORS
Number 2119
CO-CHAIR DAHLSTROM announced that the final order of business
would be HOUSE BILL NO. 345, "An Act relating to fees for state
park developed campsites; and providing for an effective date."
Number 2138
CAROLINE ALLEN, Staff to Representative Hugh Fate, Alaska State
Legislature, presented HB 345 on behalf of Representative Fate,
sponsor. She told the committee that HB 345 provides for
Alaskan residents who are senior citizens or disabled veterans
to obtain a camping permit for a non-urban campsite at a
discounted price from a $100 annual fee to $10 annual fee. She
said that this is a considerable savings [to them] because the
Division of Parks and Outdoor Recreation has decided to do away
with seasons passes, except for disabled veterans, and instead
charge $20 per night per campsite. Ms. Allen explained that
non-urban campsites are campsites that do not fall within or
adjacent to an urban city. The developed campsites provide
restrooms, picnic tables, cooking facilities, and approved water
sources. She suggested that the bill provides an incentive for
seniors and disabled veterans who are Alaskan residents to
travel throughout the state. This bill will keep tourism
dollars in the state, she added.
Number 2260
JOE MATHIS, Owner, Montana Creek Campground, testified in
opposition to HB 345. He told the members that he believes this
bill is well intended, but is poor public policy. Noting that
he operates one of the state campgrounds, he said the revenues
that come from that campground go to provide services for state
government. Mr. Mathis said if the intention of the legislature
is to continue the idea of privatization of campgrounds, this
bill provides no incentive for potential entrepreneurs. He told
members that anyone considering [entering into this industry]
would have to think about what other revenues the legislature
would take away from them. Mr. Mathis summarized his comments
by saying at a time when the state is trying to devise ways to
bring in revenue to cover the revenue shortfalls, this is not
good public policy and would be a disincentive for the
privatization of campgrounds.
Number 2348
MR. MATHIS said he believes this is encouraging an environment
of entitlements. He said he is approaching the age of 60, and
he does not feel like a senior citizen. He warned that this is
a "slippery slope." Mr. Mathis said he sees no problem in
providing disabled veterans with free camping; however, he sees
the inclusion of senior citizens as a whole new class of
entitlements for people who are not entitled to it.
Number 2404
SHEILA LANKFORD, Owner, Montana Creek Campground, testified in
opposition to HB 345. She said that as a business owner, she
has a problem with state government competing with private
enterprise. She explained that there is a state campground
across the highway from their [campground], and although she
currently leases the property, in the future if this bill
passes, seniors will be able to drive across the road and camp
for free. The current tourism boycott due to wolf control will
adversely affect the private campground, and offering free
camping alternatives will only compound the problem, she
commented.
MS. LANKFORD told members as an Alaskan, she truly cares about
state parks, and the availability and maintenance of those
parks. Declining revenues and a lack of funding have already
impacted parks with closures and lack of maintenance. She said
she sees no logic in providing free camping under these
circumstances, because user fees are essential to offset limited
funding for maintenance. Ms. Lankford said she believes state
park closures and the lack of maintenance look terrible to
tourists, and reflect badly on Alaska. Negative images are
displayed instantly through chat rooms and are devastating to
all campgrounds, she added.
Number 2489
MS. LANKFORD told members that a 60-year old should no longer be
considered a senior citizen. This bill is aimed at "baby-
boomers" who are the largest segment of the population in the
United States, she commented. Ms. Lankford pointed out that the
baby-boomer [generation] is part of the wealthiest in the
country, she said so why would the legislature consider giving
them free camping [privileges]. Anyone who can afford to buy or
rent a motor home does not need the incentive of free parking to
go camping. There are few seniors who tent camp anymore, she
added. In summary, Ms. Lankford quoted Dr. Phil in asking
Representative Fate, "What were you thinking?"
Number 2539
REPRESENTATIVE GATTO phrased his question in reference to Ms.
Lankford's comment that a 60 year old is not a senior citizen,
and he asked what age would she find appropriate to be a senior
citizen.
MS. LANKFORD responded that she believes that 75 years old would
be appropriate.
Number 2575
SCOTT REISLAND, Vice President, Alaska Campground Association;
National Board of RV Parks; Member, Board of Directors, Alaska
Travel Industry Association, testified in opposition to HB 345.
He told members that he was born and raised in Alaska and
currently owns two RV parks. The senior citizen of today is
much different that those of the past, he commented. Seniors
live longer, healthier lives and pursue a dynamic and active
lifestyle, and the majority of senior citizens have a high level
of disposable income, he said. Mr. Reisland said there have
been a record-breaking number of motor homes sold in the last
few years and baby-boomers are a large part of this.
Number 2678
MR. REISLAND pointed out that the state campgrounds are in
serious trouble. Budget constraints have severely impacted
state parks to the point that parks are not adequately
maintained or staffed, he said. Mr. Reisland told members that
the Division of Parks and Outdoor Recreation have announced the
increase in camping fees and the elimination of the commercial
pass program. He said the division has turned to outsourcing
through bid contracts of the day-to-day operations of many state
parks. Prior contractors will be less willing to participate in
this outsourcing program and it will be cost prohibitive if
there is a lot of free camping, he suggested. Mr. Reisland said
he believes HB 345 would work in direct opposition to state park
efforts.
Number 2734
MR. REISLAND told members that there has been a decrease in
independent travelers to the state because Alaska is no longer
as competitive as other destinations due to severely limited
tourism marketing dollars. He said Alaska Campground
Association members are preparing for another boycott [because
of the new wolf control program]. The private campground sector
has worked collaboratively with the state and federal parklands
in an effort to eliminate unfair competition between the public
and private sector camping facilities, he said. The bill will
undermine much of the work the association has done with state
and federal parks. It will limit user fees, reduce the state's
ability to provide a quality camping experience, and will
undermine a level playing field between private and public
sector camping, he summarized. This is unfair government
competition, he stated. He said he hopes members consider the
Alaska Campground Association's views on this issue.
Number 2829
REPRESENTATIVE GATTO asked Mr. Reisland to comment on the age of
baby boomers. He said he believes the leading edge of baby
boomers is about 53 years of age.
MR. REISLAND responded that is probably correct.
REPRESENTATIVE GATTO responded that assuming that is correct,
there are no baby boomers that are senior citizens. He said he
would prefer not to mix the two [terms] since they are not
equal.
Number 2861
REPRESENTATIVE HEINZE said that she believes baby boomers were
born in 1946 and 1947 and people 55 years of age and older are
considered seniors. She asked what the definition of a senior
citizen is.
Number 2897
REPRESENTATIVE WOLF asked Mr. Reisland if he knows how many
season passes were honored in the park last year.
MR. REISLAND responded that he does not know that number. He
told members that there are a lot of seniors who stay in private
campgrounds because there is a marketing effort to attract them.
REPRESENTATIVE WOLF asked Mr. Reisland who would have that
information.
MR. REISLAND replied that the Division of Parks and Outdoor
Recreation would have it.
Number 2950
PETE PANARESE, Field Operations Manager, Division of Parks and
Outdoor Recreation, testified. He said last year, the Alaska
state parks system sold approximately 1,700 camping passes to
residents of the state and gave away 1,100 disabled veterans
passes.
CO-CHAIR MASEK turned attention to the number of people that use
the campgrounds [tape ends midspeech].
TAPE 04-1, SIDE B
Number 2985
CO-CHAIR MASEK continued by saying that last year, the state had
some state parks that were closed one in the Matanuska-Susitna
("Mat-Su") area and one in the Kenai area. Noting that there
have been budget shortfalls, she said she wondered how the park
service would be maintained and managed if there was going to be
another revenue shortfall with this bill. She stated that she
is reluctant to [put forth] her support for it until more
details can be found out with regard to the fiscal impact and
what it would do to the park system in FY 05.
REPRESENTATIVE STEPOVICH asked Mr. Panarese if those were
resident numbers.
MR. PANARESE said last year, decals were only sold to Alaska
residents. Several years ago, benefits for nonresidents of the
state were stopped. He said only Alaskan residents and resident
disabled veterans are eligible for the annual camping permit.
REPRESENTATIVE STEPOVICH asked if the parks could be opened back
up by using the fees that Co-Chair Masek spoke of.
MR. PANARESE said the state park system had experienced a bunch
of reductions for the summer of 2003 that forced campground
closures. The majority of those closed campgrounds in the
valley and in the Northern area near Fairbanks were reopened
through the use of private contractors. He said the division
was successful in opening 9 of the 11 facilities that it had to
close temporarily until contractors were found. Mr. Panarese
remarked, "The testimony that I've heard is a testament to
that." The state was successful in getting people to run its
parks for it. He said this is one of the strategies being used
to keep parks open and structure the budget for many years.
This isn't a new strategy, he said.
MR. PANARESE said it is working, the parks were opened with the
existing fee program, which supported the 1,700 decals that were
sold and the 1,100 passes issued to the state's disabled
veterans. Offering his perspective, he said this is a
legislative decision and he didn't believe the department had
taken a position. Mr. Panarese remarked, "At least my bill
analysis does not have that block filled in, we defer to you on
that." He said it's particularly the support of the disabled
veterans pass. However, he said the current package seems to be
working and the privatization/partnership was a major factor in
the department's decision to do away with the annual camping
pass for state residents. Mr. Panarese stated that it wasn't an
idle decision, it was looked at hard for many years, and this
year the [department] had to make that move. It provides more
accurate cost recovery for what is being done and a platform for
which the [department] can continue privatizing, he said.
Number 2817
REPRESENTATIVE GATTO asked if the money collected for passes and
fees goes into the general fund or if it is kept by the
[Division of Parks and Outdoor Recreation].
MR. PANARESE said the legislation that allows fees to be charged
requires that all money be deposited into the general fund, and
the legislature, in its discretion, can "reappropriate" that
back to the Division of Parks and Outdoor Recreation for its
use. He remarked, "We have been very fortunate that for much of
our history of collecting fees, the legislature has seen fit to
do that."
REPRESENTATIVE GATTO asked if the fees that are returned are an
equal [amount] to those submitted or if it is more in line with
what the legislature feels is appropriate and is not connected
to the amount of money collected.
MR. PANARESE explained that there is a dynamic in the situation
of collecting fees. He remarked:
We collect the majority of our fees during the very
end of the fiscal year and the beginning of a new
fiscal year. We routinely will ... deposit all of our
funds into the general fund and have been reliably
lapsing about $100,000 to $150,000, maybe even more of
those funds that ... was not authorized for us to
spend by the previous year's ... legislative budget
decision. So we seem to run behind the curve for us
to most efficiently use our budget because of the
position of the fiscal year. Right in the middle of
our busiest season.
Number 2735
REPRESENTATIVE LYNN expressed concern about [how the fee would
apply to] disabled veterans. Noting that there was not
currently a fee for disabled veterans, he asked if this bill
would raise the fee to $10 and bring in an additional $11,000
[in revenue]. He asked if there were 1,100 disabled passes
given out during the prior year. Representative Lynn said he
wonders how that compares to the amount of money that was spent
to decorate the elevators in the Capitol building. He remarked,
"I think we owe our disabled veterans."
REPRESENTATIVE HEINZE asked if this includes state cabin
rentals.
MR. PANARESE said no.
Number 2668
REPRESENTATIVE GUTTENBERG said the operations of its state parks
had been outsourced to private contractors. He asked what
changing the fee structure would do to the contractual
obligation that the state has.
MR. PANARESE said he was not sure he could respond to the
question stated that way. He asked Representative Guttenberg to
restate the question.
Number 2640
REPRESENTATIVE GUTTENBERG said the economic relationship with
the operators of the state parks is being changed by changing
the fee structure. He asked what would happen to those
contracts that the state has outsourced to operate its parks.
Is the obligation broken, he asked.
MR. PANARESE said he did not believe the obligation will be
broken, rather it will just make it far more difficult for [the
state] to obtain qualified private contractors to operate state
campgrounds. He remarked:
Cause when they pencil what their revenue will be to
pay for the service they're providing, it's difficult
for them to figure how much revenue they won't be able
to collect. If a senior is in their state park
campground, we could very well require them to honor
the pass and that revenue goes away from them.
... The people that we had operating in our
campgrounds the last summer, the new operators, were
commenting quite regularly that this was a detriment
to them and they were trying to improvise in the field
such as saying to us, "... Why don't we allow the
decal users to have a price break rather than free
camping."
... We tried to reconcile that and came ... with the
decision that ... it's probably best to not have that
benefit available, that everybody pays the fees with
the exception of the disabled veterans. That has been
not a negotiable item. We require our private
contractors to honor that group of people.
REPRESENTATIVE GUTTENBERG asked Mr. Panarese if he'd had any
feedback concerning this bill about whether operations would be
continued. He said the state's been successful in outsourcing
these things to keep them open. He explained that he is worried
that if something is changed, the [state] is going to lose the
operations of the parks and they will close.
MR. PANARESE said the private campground operators hadn't been
in contact with him directly. Noting that a public notice had
been issued, he said one of the things that was done earlier is
[the division] stopped offering the annual camping pass to
residents and the annual pass to RV [recreational vehicle]
rental companies effective January 1, 2004. It reduced one of
the major impediments for recruiting operators and outsourcing
state campgrounds. He said the major impediment was honoring
decals that were perhaps going to be "in their units for weeks
at a time with no revenue coming to them." Mr. Panarese said he
expects that if this legislation were to pass, [operators] would
be concerned.
Number 2494
REPRESENTATIVE KERTTULA asked if there was a charge to veterans
for a replacement permit.
MR. PANARESE said the state park system had to have a
contingency for replacing all of its decals. He remarked:
If a person comes in with a bit of the decal that they
scraped ... off their window and sold the car, we'll
give them another one for $10. If they give us a
reasonable excuse as to why ... they need another
decal and it's something of the nature that the
vehicle was damaged, they replaced the window or
something of that nature, we charge them $10 to
replace it.
REPRESENTATIVE KERTTULA asked if there was an increased fee for
people to get a replacement decal.
MR. PANARESE remarked:
Currently, if a disabled veteran loses their fee or
... if a campground pass holder that was a resident
lost it, ... we would replace it for $10. If they
wanted to purchase an additional pass ... for a second
vehicle or ... a third vehicle, and that is a
situation that we've had to accommodate over the
years, we would charge them half price for the second
pass and then full price for the third pass.
With the veterans we had to come up with a little bit
different situation .... We would sell them a second
pass for $50 and we issue the passes for two years and
if they bought a third pass in the first year, we
would sell it to them for $100. If they bought a
third pass in the second year, we'd sell it them for
$200, I believe ....
REPRESENTATIVE KERTTULA asked why disabled veterans are charged
more for the second and third pass and why [the cost] isn't
always the same. She asked if this bill would change that.
MR. PANARESE responded:
The legislation that we have in AS 41.21.026 basically
instructs us to issue a ... annual camping pass
permit, and we've all ... assumed that was one. ...
Each veteran would get a free pass. The second pass,
we would sell to them at the same price we would sell
it to everybody else. ... The regime I just mentioned
is now no longer going to be in place because we no
longer offer the camping pass.
So we have got to go to work right away and amend our
director's order and the information online - do the
public notice that would put the word out widely that
this is a change in the benefits. We no longer offer
a camping pass, there's no need to sell the veterans
or other recipients of this that's being considered by
the bill, a second and third pass. We would issue
them a pass free and thereafter we would want them to
pay the nightly fee.
REPRESENTATIVE KERTTULA asked how many second and third passes
had already been issued.
MR. PANARESE said he didn't have that information.
REPRESENTATIVE KERTTULA suggested that it might not be a
significant number.
MR. PANARESE said that would be his estimate.
Number 2296
REPRESENTATIVE WOLF asked how many nonresidents ask for annual
passes.
MR. PANARESE replied:
They haven't asked. It was an issue that was very
demanding on us. When we ... eliminated that
nonresident pass, we had great trepidation that it
would affect our visitation and people would be very
concerned about it, but we didn't get a lot of concern
registered. I think I had eight calls and I had to
write a few letters.
REPRESENTATIVE WOLF said he could foresee this causing a real
quagmire on the Kenai Peninsula, similar to what Representative
Masek had mentioned about [the Matanuska-Susitna] Valley. He
said a park closed on the [Kenai Peninsula] and he viewed this
as being a mess.
Number 2239
CO-CHAIR DAHLSTROM said it is her intention to hold the bill.
She indicated the committee is waiting to receive more
information and would need to do more work. She mentioned that
several members had questions and concerns about the attached
fiscal note.
[HB 345 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:47 p.m.
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