Legislature(1997 - 1998)

04/17/1997 01:10 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                              
                         April 17, 1997                                        
                           1:10 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Bill Hudson, Co-Chairman                                       
 Representative Scott Ogan, Co-Chairman                                        
 Representative Beverly Masek, Vice Chair                                      
 Representative Ramona Barnes                                                  
 Representative Fred Dyson                                                     
 Representative Joe Green                                                      
 Representative William K. ("Bill") Williams                                   
 Representative Irene Nicholia                                                 
 Representative Reggie Joule                                                   
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 All members present                                                           
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 SENATE BILL NO. 19 am                                                         
 "An Act relating to enforcement of federal laws relating to fish              
 and game; and repealing the power and duty of the commissioner of             
 fish and game to assist in the enforcement of federal laws relating           
 to fish and game."                                                            
                                                                               
      - MOVED HCS SB 19(RES) OUT OF COMMITTEE                                  
                                                                               
 * HOUSE BILL NO. 238                                                          
 "An Act amending the program of exploration incentive credits for             
 activities involving locatable or leasable minerals or coal                   
 deposits on certain land in the state; and providing for an                   
 effective date."                                                              
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 * HOUSE BILL NO. 109                                                          
 "An Act relating to the management and disposal of state land and             
 resources; relating to certain remote parcel and homestead entry              
 land purchase contracts and patents; and providing for an effective           
 date."                                                                        
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 BRIEFING:  Board of Game                                                      
                                                                               
      - HEARD                                                                  
                                                                               
 CONFIRMATION HEARINGS:                                                        
 Board of Fisheries                                                            
 Alaska Commercial Fisheries Entry Commission                                  
 Alaska Oil and Gas Conservation Commission                                    
                                                                               
      - POSTPONED TO APRIL 19, 1997                                            
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  SB 19                                                                 
 SHORT TITLE:  REPEAL FED ENFORCEMENT DUTIES/F&G COMSNR                       
 SPONSOR(S): SENATOR(S) SHARP, Taylor, Donley                                  
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 01/03/97        19    (S)   PREFILE RELEASED 1/3/97                           
 01/13/97        19    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 01/13/97        19    (S)   RES, JUD                                          
 02/05/97              (S)   RES AT 3:30 PM BUTROVICH ROOM 205                 
 02/05/97              (S)   MINUTE(RES)                                       
 02/06/97       247    (S)   RES RPT  6DP 1NR                                  
 02/06/97       247    (S)   DP:HALFORD, TAYLOR, TORGERSON,                    
                             LEMAN,                                            
 02/06/97       247    (S)   GREEN, SHARP;    NR:  LINCOLN                     
 02/06/97       247    (S)   ZERO FISCAL NOTE (DPS)                            
 02/19/97              (S)   JUD AT 1:30 PM BELTZ ROOM 211                     
 02/19/97              (S)   MINUTE(JUD)                                       
 02/20/97       428    (S)   JUD RPT  3DP                                      
 02/20/97       428    (S)   DP:  TAYLOR, PARNELL, PEARCE                      
 02/20/97       428    (S)   PREVIOUS ZERO FN (DPS)                            
 02/21/97              (S)   RLS AT 10:45 AM FAHRENKAMP RM 203                 
 02/21/97              (S)   MINUTE(RLS)                                       
 02/24/97       469    (S)   RULES TO CALENDAR & 1NR    2/24/97                
 02/24/97       473    (S)   READ THE SECOND TIME                              
 02/24/97       473    (S)   AM NO  1     OFFERED BY SHARP                     
 02/24/97       473    (S)   AM NO  1     ADOPTED Y14 N5 A1                    
 02/24/97       474    (S)   ADVANCED TO THIRD READING                         
                             UNAN CONSENT                                      
 02/24/97       474    (S)   READ THE THIRD TIME  SB 19 AM                     
 02/24/97       474    (S)   COSPONSOR(S): DONLEY                              
 02/24/97       475    (S)   PASSED Y15 N4 A1                                  
 02/24/97       475    (S)   ADAMS  NOTICE OF RECONSIDERATION                  
 02/25/97       502    (S)   RECONSIDERATION NOT TAKEN UP                      
 02/25/97       502    (S)   TRANSMITTED TO (H)                                
 02/26/97       478    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/26/97       478    (H)   RESOURCES, JUDICIARY                              
 04/10/97              (H)   RES AT 1:00 PM CAPITOL 124                        
 04/10/97              (H)   MINUTE(RES)                                       
                                                                               
 BILL:  HB 238                                                               
 SHORT TITLE:  MINING EXPLORATION INCENTIVE CREDITS                            
 SPONSOR(S): REPRESENTATIVE(S) VEZEY                                           
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 04/08/97      1025    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/08/97      1025    (H)   RESOURCES                                         
 04/17/97              (H)   RES AT 1:00 PM CAPITOL 124                        
                                                                               
 BILL:  HB 109                                                               
 SHORT TITLE:  MANAGEMENT OF STATE LAND AND RESOURCES                          
 SPONSOR(S): REPRESENTATIVE(S) THERRIAULT                                      
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 02/03/97       219    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/03/97       219    (H)   RESOURCES, FINANCE                                
 04/17/97              (H)   RES AT 1:00 PM CAPITOL 124                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 JOSEPHINE HARDY, Legislative Secretary                                        
    to Senator Bert Sharp                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 516                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3004                                                    
 POSITION STATEMENT:  Presented sponsor's position on HCS SB
                      19(RES).                                                 
                                                                               
 JOHN GLASS, Colonel, Director                                                 
 Division of Fish and Wildlife Protection                                      
 Department of Public Safety                                                   
 5700 East Tudor Road                                                          
 Anchorage, Alaska  99507-1225                                                 
 Telephone:  (907) 269-5509                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HCS SB 19(RES).                      
                                                                               
 REPRESENTATIVE AL VEZEY                                                       
 Alaska State Legislature                                                      
 Capitol Building, Room 13                                                     
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3719                                                    
 POSITION STATEMENT:  Provided sponsor statement for HB 238.                   
                                                                               
 JULES TILESTON, Director                                                      
 Division of Mining and Water Management                                       
 Department of Natural Resources                                               
 3601 C Street, Suite 800                                                      
 Anchorage, Alaska  99503-5935                                                 
 Telephone:  (907) 269-8600                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 238.                              
                                                                               
 MILTON WILTSE, Director                                                       
 Division of Geological and Geophysical Surveys                                
 Department of Natural Resources                                               
 794 University Avenue, Suite 200                                              
 Fairbanks, Alaska  99707-3645                                                 
 Telephone:  (907) 451-5005                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 238.                              
                                                                               
 BOB BARTHOLOMEW, Deputy Director                                              
 Income and Excise Audit Division                                              
 Department of Revenue                                                         
 P.O. Box 110420                                                               
 Juneau, Alaska  99811-0420                                                    
 Telephone:  (907) 465-2320                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 238.                              
                                                                               
 DAVID ROGERS, Attorney/Lobbyist                                               
    for Council of Alaska Producers                                            
 P.O. Box 33932                                                                
 Juneau, Alaska 99803                                                          
 Telephone:  (907) 586-1107                                                    
 POSITION STATEMENT:  Testified on HB 238.                                     
                                                                               
 SARA FISHER, Legislative Assistant                                            
    to Representative Gene Therriault                                          
 Alaska State Legislature                                                      
 Capitol Building, Room 511                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4797                                                    
 POSITION STATEMENT:  Presented sponsor statement for HB 109.                  
                                                                               
 RICHARD LeFEBVRE, Deputy Director                                             
 Division of Land                                                              
 Department of Natural Resources                                               
 3601 C Street, Suite 1122                                                     
 Anchorage, Alaska  99503-5947                                                 
 Telephone:  (907) 269-8503                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 109.                              
                                                                               
 MARY KAYE HESSION, Program Support                                            
 Central Office                                                                
 Division of Land                                                              
 Department of Natural Resources                                               
 3601 C Street, Suite 1122                                                     
 Anchorage, Alaska  99503-5947                                                 
 Telephone:  (907) 269-8511                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 109.                              
                                                                               
 LARRY HOLMES, JR., Chairman                                                   
 Board of Game                                                                 
 P.O. Box 454                                                                  
 Girdwood, Alaska  99587                                                       
 Telephone:  (907) 783-2756                                                    
 POSITION STATEMENT:  Presented briefing on Board of Game.                     
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 97-44, SIDE A                                                            
 Number 0001                                                                   
                                                                               
 CO-CHAIRMAN SCOTT OGAN called the House Resources Standing                    
 Committee meeting to order at 1:10 p.m.  Members present at the               
 call to order were Representatives Hudson, Ogan, Dyson, Green and             
 Williams.  Representatives Masek, Joule, Nicholia and Barnes                  
 arrived at 1:16 p.m., 1:37 p.m., 1:39 p.m. and 1:52 p.m.,                     
 respectively.                                                                 
                                                                               
 SB 19 am - REPEAL FED ENFORCEMENT DUTIES/F&G COMSNR                         
                                                                               
 CO-CHAIRMAN OGAN announced the first order of business was Senate             
 Bill No. 19 am, "An Act relating to enforcement of federal laws               
 relating to fish and game; and repealing the power and duty of the            
 commissioner of fish and game to assist in the enforcement of                 
 federal laws relating to fish and game."                                      
                                                                               
 Number 0059                                                                   
                                                                               
 JOSEPHINE HARDY, Legislative Secretary to Senator Bert Sharp, came            
 forward on behalf of the sponsor.                                             
                                                                               
 CO-CHAIRMAN OGAN asked whether Ms. Hardy was aware of the proposed            
 committee substitute.                                                         
                                                                               
 Number 0116                                                                   
                                                                               
 MS. HARDY explained that the committee substitute is the original             
 version of the bill.  It no longer adds new section AS 16.05.145              
 but simply repeals AS 16.05.050(1).  She said in light of                     
 aggressive federal actions to assume management of fish and game              
 over large areas of Alaska, in violation of the statehood compact,            
 the sponsor believes repealing AS 16.05.050(1) is prudent and in              
 the best interests of Alaskans.  She advised that Senator Sharp               
 fully supports the committee substitute and believes it should                
 satisfy concerns of the Department of Public Safety.                          
                                                                               
 Number 0252                                                                   
                                                                               
 REPRESENTATIVE JOE GREEN asked whether there are contractual, or at           
 least understood, obligations for the state and federal governments           
 to mutually enforce regulations.                                              
                                                                               
 MS. HARDY responded that taking away the mandate will not do any              
 harm as far as working together in federal areas, and that it would           
 be beneficial to enforcing state regulation or laws.  She said                
 eliminating this mandate does not mean there will be no assistance            
 to the federal government in enforcing their laws.  This only                 
 pertains to when state and federal laws are in conflict.                      
                                                                               
 Number 0347                                                                   
                                                                               
 CO-CHAIRMAN BILL HUDSON discussed AS 16.05.050, which states in               
 part:  "The commissioner has, but not by way of limitation, the               
 following powers and duties:  (1) to assist the United States Fish            
 and Wildlife Service in the enforcement of federal laws and                   
 regulations pertaining to fish and game."  He noted that the only             
 thing the bill would now do is eliminate subsection (1).  He asked            
 whether it is the sponsor's view that by removing the powers and              
 duties under subsection (1), the commissioner of the Department of            
 Fish and Game would be able to cooperate or work with the U.S. Fish           
 and Wildlife Service in other matters.                                        
                                                                               
 Number 0426                                                                   
                                                                               
 MS. HARDY replied that the bill repeals a mandated duty, not a                
 power.  She said it simply gives discretion to the commissioner in            
 allowing the department to enter into agreements and enforcement              
 protocols they wish to enter into.  By repealing the mandate, it              
 removes the "hammer" if the department does not feel comfortable or           
 appropriate in going out and assisting.                                       
                                                                               
 Number 0481                                                                   
                                                                               
 CO-CHAIRMAN OGAN advised that Colonel Glass was now on                        
 teleconference and asked him to address the proposed committee                
 substitute.                                                                   
                                                                               
 JOHN GLASS, Colonel, Director, Division of Fish and Wildlife                  
 Protection, Department of Public Safety, testified via                        
 teleconference.  He said the proposed committee substitute removes            
 concerns he voiced at the earlier hearing.  Repeal of AS                      
 16.05.050(1) will have no effect on his division, which obtains               
 enforcement authority under Title 18, not Title 16.  Therefore, his           
 division will be able to continue the cooperative efforts they                
 currently enjoy with federal agencies.                                        
                                                                               
 Number 0591                                                                   
                                                                               
 REPRESENTATIVE GREEN asked whether enforcement is done by the                 
 Department of Public Safety rather than by the Department of Fish             
 and Game (ADF&G).                                                             
                                                                               
 COLONEL GLASS replied for the most part, yes.  His division is the            
 enforcement arm for fish and game regulations.  Although some                 
 people within the ADF&G do enforcement, it is extremely limited in            
 scope.                                                                        
                                                                               
 Number 0624                                                                   
                                                                               
 REPRESENTATIVE GREEN suggested by enacting this, nothing is really            
 being accomplished.  It removes a duty, but the duty is being done            
 by the Department of Public Safety rather than the ADF&G.                     
                                                                               
 COLONEL GLASS agreed for the most part.  However, he could not                
 speak for the ADF&G as to the exact numbers.                                  
                                                                               
 REPRESENTATIVE GREEN said that would certainly relieve one of his             
 big concerns.  The way the bill was written previously was                    
 unacceptable.  He had been concerned that if the state openly does            
 not do enforcement as agreed, the federal government could do                 
 likewise.                                                                     
                                                                               
 Number 0773                                                                   
                                                                               
 REPRESENTATIVE BEVERLY MASEK made a motion to adopt the committee             
 substitute, version 0-LS0173\E, Utermohle, 4/15/97, and to move it            
 from committee with individual recommendations and attached zero              
 fiscal note.                                                                  
                                                                               
 CO-CHAIRMAN OGAN asked if there was any objection.  There being               
 none, the committee substitute, 0-LS0173\E, was adopted and moved             
 as HCS SB 19(RES) from the House Resources Standing Committee.                
                                                                               
 CO-CHAIRMAN OGAN turned the gavel over to Co-Chairman Hudson.                 
                                                                               
 HB 238 - MINING EXPLORATION INCENTIVE CREDITS                               
                                                                               
 Number 0819                                                                   
                                                                               
 CO-CHAIRMAN HUDSON announced the next item of business was House              
 Bill No. 238, "An Act amending the program of exploration incentive           
 credits for activities involving locatable or leasable minerals or            
 coal deposits on certain land in the state; and providing for an              
 effective date."                                                              
                                                                               
 Number 0844                                                                   
                                                                               
 REPRESENTATIVE AL VEZEY, sponsor, explained that HB 238 resulted              
 from trying to come up with a method or means to expand the                   
 airborne geomagnetic survey program that the state has been                   
 conducting on a small scale.  It is one of several things the state           
 has done over the last few years that resulted in an economic boom            
 in Alaska.  Despite its small scale, it has generated a tremendous            
 amount of excitement and economic activity.                                   
                                                                               
 REPRESENTATIVE VEZEY advised that in 1995, the Mineral Exploration            
 Incentive Program, a tax credit program, was enacted.  He noted               
 that airborne geomagnetic mapping is a form of geophysical                    
 research.  Geophysical surveying, geochemical surveying and                   
 geological mapping, which provide valuable data in cataloging the             
 state's resources, have clearly resulted in an economic boom.                 
                                                                               
 Number 0988                                                                   
                                                                               
 REPRESENTATIVE VEZEY said in today's environment, he does not                 
 believe it is feasible for the legislature to appropriate more                
 money to conduct surveys, catalog information and release it after            
 compilation.  That is where HB 238 comes in.  There has been                  
 tremendous success with the mineral exploration tax credit.  Now              
 they want a tax credit for companies that do this type of work and            
 release information to the public.                                            
                                                                               
 REPRESENTATIVE VEZEY explained that right now, such information is            
 considered proprietary and not released to the public.  In essence,           
 vast amounts of geological data about the state are hidden in                 
 vaults of various companies.  Giving companies an incentive for               
 releasing data would allow great expansion of the library of                  
 geological information available to the public.                               
                                                                               
 REPRESENTATIVE VEZEY said frequently when one party sees no value             
 in certain data, others looking from a different perspective will             
 see great value.  He cited an example in Fairbanks and said it is             
 common throughout the mineral exploration industry.  This bill                
 places an incentive to get the private sector to use private sector           
 dollars and then put information into the public domain, at minimum           
 cost to the state.                                                            
                                                                               
 REPRESENTATIVE VEZEY said the state will benefit in several ways.             
 If a tax credit is used, there is a tremendous time lag between               
 when the information is obtained, when it is made available to the            
 public, and when the tax credit can actually be used.  It expires             
 after 15 years.  Representative Vezey said he suspects only a small           
 fraction of exploration tax credits will actually ever be utilized,           
 even for those that are filed.  There is a tremendous amount of               
 leverage for the state without any direct appropriation.                      
                                                                               
 Number 1127                                                                   
                                                                               
 REPRESENTATIVE VEZEY acknowledged that the Department of Natural              
 Resources (DNR) had raised questions.  However, he believes those             
 have been answered in the bill.  It is not intended to create an              
 additional state function.  In fact, information can be released by           
 the private sector directly to the public for a tax credit.                   
 Representative Vezey concluded by saying the bill is complex                  
 because it puts this fairly simple idea into the same statute as              
 the existing tax incentive tax credit, and the two are radically              
 different from each other.                                                    
                                                                               
 Number 1217                                                                   
                                                                               
 CO-CHAIRMAN HUDSON asked whether this is a one-time tax                       
 application.                                                                  
                                                                               
 REPRESENTATIVE VEZEY said no, although a company could use any                
 given tax credit one time.  The program would be ongoing.  He does            
 not believe there would be many tax credits; he believes that is              
 the smallest part of the bill.  He stated, "The major part of the             
 bill is that hopefully it will be a shot that's heard around the              
 world."  He advised that because of the mineral exploration                   
 incentive tax credit, the whole mineral exploration industry knows            
 that Alaska wants to work with them.                                          
                                                                               
 Number 1268                                                                   
                                                                               
 REPRESENTATIVE GREEN referred to HB 200 from the Eighteenth Alaska            
 State Legislature, a similar tax incentive bill for the oil                   
 industry.  He said larger exploration companies had been a little             
 reticent to share information; when they had agreed to share it,              
 they experienced "all kinds of trouble" with the DNR.  He asked               
 whether Representative Vezey had checked with the mining industry             
 and the DNR to see whether they would honor something like this.              
                                                                               
 REPRESENTATIVE VEZEY replied that he expects most exploration                 
 entities to consider the information proprietary and not release it           
 in a manner that would make it acceptable.  They would probably sit           
 on it so long that the industry format for data would change by the           
 time they were ready to release it, and it probably never would               
 become a tax credit.  He stated, "It's really the message that                
 we're sending."                                                               
                                                                               
 REPRESENTATIVE VEZEY noted there is an airborne geomagnetic program           
 in place, with regulations as to data format.  He suggested a small           
 portion of the data collected could fall in this domain, and he               
 expects that the DNR would work with those providing it.                      
                                                                               
 REPRESENTATIVE GREEN commented that he wishes the mining industry             
 better luck with the DNR than the oil industry has had.                       
                                                                               
 Number 1463                                                                   
                                                                               
 CO-CHAIRMAN HUDSON suggested as these incentives are put in the               
 hands of public officials regulating these industries, that there             
 should be a responsibility to report to the legislature annually              
 about applications and justifications for turning them down, for              
 example.                                                                      
                                                                               
 Number 1515                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked what kinds of parameters there are.  For               
 example, what prevents a company from trying to obtain tax credits            
 for unloading data?                                                           
                                                                               
 REPRESENTATIVE VEZEY said there are several parameters.  He does              
 not believe it is possible for the legislature to write a law that            
 defines the quality of professional data.  The intent under the               
 bill is to give the DNR "total edit authority" over what they                 
 accept.  Unacceptable, for example, would be duplicative data or              
 data in a format the industry cannot use.  The other control is               
 that the credit is only good for up to 50 percent of the taxes                
 owed, within a 15-year period.                                                
                                                                               
 Number 1591                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked whether this is retroactive.                           
                                                                               
 REPRESENTATIVE VEZEY said it has an effective date of January 1,              
 1997.  He advised that there is a whole set of problems in trying             
 to collect old data.                                                          
                                                                               
 Number 1619                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked whether it would apply to geological surveys           
 conducted from the effective date forward.                                    
                                                                               
 REPRESENTATIVE VEZEY replied that the intention is really not to              
 give away tax dollars but to provide an incentive.  "And you can't            
 give people an incentive to do something last year," he said.                 
                                                                               
 Number 1640                                                                   
                                                                               
 CO-CHAIRMAN HUDSON referred to page 6, line 10, and pointed out it            
 says the act is retroactive to January 1, 1997, and applies to                
 activities that qualify for this incentive credit that are                    
 undertaken after December 1, 1996.                                            
                                                                               
 REPRESENTATIVE VEZEY said, "We have to remember that if this                  
 property goes into production, those expenses related to the                  
 production site, as defined in our original bill, are a tax-                  
 creditable item.  What we're doing here is bringing in the data               
 that is outside that zone.  So in all likelihood - I would say in             
 most cases - there would probably be a ten-year lag between the               
 information being collected and the company saying that `we see no            
 value here; we want to let it go.'"                                           
                                                                               
 Number 1697                                                                   
                                                                               
 JULES TILESTON, Director, Division of Mining and Water Management,            
 Department of Natural Resources, testified via teleconference from            
 Anchorage.  He reported that the "three entities that are directly            
 involved" had met a couple of times, and they had recently held               
 informal, preliminary discussions with the Alaska Miners                      
 Association relating to HB 238.                                               
                                                                               
 MR. TILESTON said the overall concept of increasing the                       
 availability of basic geologic survey data in Alaska, regardless of           
 land ownership, is definitely meritorious and deserving of serious            
 consideration.  However, he agrees it is radically different from             
 the exploration incentive credits now in place.  Given that, he               
 believes it is important to proceed carefully, so they do not                 
 inadvertently disrupt a program now recognized worldwide for its              
 importance to Alaska.                                                         
                                                                               
 MR. TILESTON said there are areas of uncertainty.  Although he                
 believes those can be resolved, when he reads the bill and the                
 sponsor's intent, he does not know the answers but must make                  
 assumptions.  "And if you have to assume on legislation, that's               
 probably not good," he commented.                                             
                                                                               
 MR. TILESTON listed areas of uncertainty.  When does data for a               
 mineral property or area that does not otherwise qualify for an               
 exploration incentive become stale?  Is it 5, 15 or 30 years?  How            
 is data that partially or fully duplicates information already                
 available in the public arena to be credited?  How is the new                 
 credit to be considered when it involves a mineral property that              
 subsequently qualifies for the existing program because it went to            
 production with a history of a series of companies taking action?             
 For example, what if the fifth company actually developed the                 
 mineral property but the second company took the credit?  How can             
 that be taken into account, and is it part of the $20 million cap?            
                                                                               
 Number 1837                                                                   
                                                                               
 MR. TILESTON suggested there are reasonable answers and that these            
 questions should be discussed to ensure everyone is on the same               
 wavelength.  He continued:  What is the standard of public                    
 availability?  A professional publication?  A draft report on file            
 in a company office in Alaska or elsewhere?  A report on file with            
 the Division of Geological and Geophysical Surveys?  How are new              
 credits that are totally or partially developed with federal, state           
 or other public funding to be treated?  He advised there are                  
 programs that provide federal funding; for example "small operators           
 on coal" can get 100 percent federal funding to develop this type             
 of information.  He then asked what the standard is for determining           
 whether eligible costs for a new credit are reasonable.                       
                                                                               
 MR. TILESTON advised that applications for the existing exploration           
 incentive program over the past two years involve 139 individual              
 mineral properties, for a total of about $50 million.  Supporting             
 information suggests that up to $37 million might be eligible costs           
 under HB 238 if none ever resulted in a producing mine.  He                   
 questioned whether that is the intent of the legislature.                     
                                                                               
 Number 1909                                                                   
                                                                               
 MR. TILESTON stated, "Another minor thing is the existing bill has            
 a three-year confidentiality on data that is provided to the                  
 department.  Is that to be provided to this one?"  He emphasized              
 that a close working relationship has resulted among the                      
 legislature, the mining industry, the Office of the Attorney                  
 General, the Department of Revenue and the DNR during development             
 of the basic program that this would amend, which is under AS                 
 27.30.                                                                        
                                                                               
 MR. TILESTON discussed the bottom line, stating, "It is our                   
 recommendation that we use the existing stakeholders' relationships           
 to 1) respond to the variety of questions that I've just asked and            
 some of the questions that the committee itself asked and 2) as               
 appropriate, develop specific amendments to HB 238 to make sure               
 that we're all on the same page.  This could take place over this             
 summer, with amendments developed with the sponsor prior to next              
 session.  At that time, the Administration, the sponsor and the               
 mining industry can be in a position to develop consensus to the              
 maximum extent possible, and for all to understand any rationale              
 for any differences, because there might be some."                            
                                                                               
 MR. TILESTON concluded that they support the concept.  They believe           
 it merits consideration.  They also believe there are reasonable              
 answers to the questions.  However, these questions need to be                
 addressed.                                                                    
                                                                               
 Number 2006                                                                   
                                                                               
 MR. TILESTON responded to an earlier question by Representative               
 Green, saying he was not personally familiar with the DNR's actions           
 relating to oil and gas.  "But I can tell you for a fact that there           
 have been no appeals, so far, over the way we have been handling              
 the mining side of the exploration incentive credit," he said.                
 "And again, I think that's in part because we had a complete and              
 full understanding of how we were going to proceed, and we've had             
 the direct involvement of all of the players."  He stated that the            
 Administration is not, when it comes to the mining side, setting up           
 road blocks; at least he has heard no adverse feedback relating to            
 that.                                                                         
                                                                               
 Number 2050                                                                   
                                                                               
 REPRESENTATIVE GREEN commended Mr. Tileston and stated his belief             
 that the attitude of the director involved has a major impact on              
 cooperation between industry and the state.  He suggested there               
 might be answers to Mr. Tileston's questions that could be taken              
 from the "oil and gas arena" and applied as a starting point for              
 the mining industry.  He said Mr. Tileston's questions are "very,             
 very valid."                                                                  
                                                                               
 Number 2125                                                                   
                                                                               
 CO-CHAIRMAN HUDSON encouraged Mr. Tileston and others in this                 
 professional field to look for recommendations on actions the                 
 legislature could take to try to expand access to critical                    
 information, for example.                                                     
                                                                               
 Number 2187                                                                   
                                                                               
 MILTON WILTSE, Director, Division of Geological and Geophysical               
 Surveys, Department of Natural Resources, testified via                       
 teleconference from Fairbanks.  He said as the scientific arm of              
 the DNR, for years they had known this type of information existed.           
 However, there had been no way to tap into it.  Mr. Wiltse said               
 this is intriguing to them.  He stated his hope that if the                   
 glitches or questions, such as those pointed out by Mr. Tileston,             
 could be worked out, that this would not simply result in sending             
 a message to the mining companies encouraging them to invest in               
 Alaska; he also hoped they could acquire a great deal of                      
 information.                                                                  
                                                                               
 MR. WILTSE discussed a similar program begun in British Columbia in           
 1947.  He had contacted the director of the geological survey there           
 to find out how their program functions.  The minimum requirement             
 is a property report of 10 to 15 pages in length.  In addition,               
 there is a voluntary contribution in some cases of geological drill           
 hole, geochemical and geologic mapping information.                           
                                                                               
 MR. WILTSE reported that the down-side of maintaining that data               
 base has amounted to one full-time professional geologist to audit            
 the reports to ensure they pass the threshold of acceptance; two              
 full-time professional geologists dedicated to organizing and                 
 archiving the reports and information; a systems analyst who works            
 one-quarter- to one-half-time; and a contractor who microfilms the            
 data and puts it out for public consumption.                                  
                                                                               
 Number 2321                                                                   
                                                                               
 MR. WILTSE advised that microfilming is not a technology the state            
 would want to pursue.  Furthermore, there are more mineral                    
 properties in British Columbia than in Alaska.  However, he                   
 believes if HB 238 is successful in getting companies to generate             
 data, potentially there would be a multimillion-dollar volume of              
 data coming to the DNR annually.  That data would only be valuable            
 if organized and readily accessible.                                          
                                                                               
 MR. WILTSE emphasized that this is not a pitch for immediate                  
 addition of three more geologists, a program analyst and                      
 contractual money.  "But I am saying that somewhere we have to pull           
 together that type of roster of resources," he stated.  "Because I            
 don't believe allowing the data to stay in the hands of the                   
 individual companies, to be doled out, would be a long-term                   
 workable model for the state.  Companies are ephemeral in Alaska.             
 They come and they go.  They form, they merge, they go out of                 
 business.  And this data is valuable.  And it becomes more valuable           
 as it is accumulated and organized and made accessible easily to              
 various people."                                                              
                                                                               
 MR. WILTSE said if details can be worked out, he would work hard to           
 ensure data is available statewide via the Internet and in physical           
 form.  He agreed there are questions that need worked out.                    
 However, they find the idea intriguing and would willingly go to              
 work to find solutions.                                                       
                                                                               
 Number 2402                                                                   
                                                                               
 REPRESENTATIVE VEZEY said this gave him food for thought.  They had           
 tried with HB 238 to recognize the DNR's limited resources.  For              
 $10 million a year, there could be an aggressive geophysical                  
 exploration program in Alaska.  But lacking that, HB 238 gives the            
 DNR edit authority over accepting the data.  He acknowledged that             
 still takes time and effort.                                                  
                                                                               
 REPRESENTATIVE VEZEY suggested, "I'm not sure that it's necessary             
 that we put it in the bill, but we could put it in the bill                   
 authorizing the DNR to designate certain professional consulting              
 geologists in the state of Alaska to be authorized to do this                 
 review at the expense of the applying party.  They would have to              
 contract as independent consultants to give the DNR assurance that            
 the data was of use."                                                         
                                                                               
 Number 2447                                                                   
                                                                               
 MR. WILTSE replied that these innovative ideas are the same types             
 of things he himself would be trying to come up with.  He stated              
 his belief that if they sat down and worked together, they could              
 find a way to make this work.                                                 
                                                                               
 Number 2457                                                                   
                                                                               
 CO-CHAIRMAN HUDSON asked, "Do we do any proactive marketing of                
 minerals possibilities up in here?"                                           
                                                                               
 MR. WILTSE said yes, and that a lot of that is done by Richard                
 Swainbank and Al Clough of the Department of Commerce and Economic            
 Development.                                                                  
                                                                               
 TAPE 97-44, SIDE B                                                            
 Number 0006                                                                   
                                                                               
 MR. WILTSE commended those two men for spreading the word through             
 the industry, including articles in international journals.  He               
 said there is vigorous marketing done by just a few people.  He               
 said it was creative and has obviously been effective.                        
                                                                               
 Number 0062                                                                   
                                                                               
 BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division,           
 Department of Revenue, came forward to testify.  He addressed the             
 technicalities of how HB 238 would work regarding tax credits and             
 changes from the current program.  He advised that they had                   
 provided a list of issues and questions to the sponsor.                       
                                                                               
 MR. BARTHOLOMEW explained that the impetus of the current mining              
 credit on the books was the hope that once the state began                    
 receiving tax revenues from the mining industry, they could give              
 the industry some sort of credit or pay-back for the heavy                    
 investment for exploration.  At the time they would start paying              
 revenues, companies would get a tax break to help recover prior               
 exploration costs so that they might do more exploration.                     
                                                                               
 MR. BARTHOLOMEW said the main difference with HB 238 is that some             
 mines that do not go into production and produce tax revenues for             
 the state may still receive credits if they have other productive             
 mines.  He said the trade-off is that the state will receive                  
 geological data that may end up in a public library.                          
                                                                               
 Number 0122                                                                   
                                                                               
 MR. BARTHOLOMEW stated that the fiscal impact would be small.  The            
 two tax programs that the Department of Revenue has with the                  
 industry are the mining license tax, from which they currently                
 collect only about $400,000, and the corporate income tax, from               
 which they collect somewhere between $300,000 and $400,000 a year.            
 These are relatively small numbers.  They hope that as the industry           
 matures and the recent growth in exploration leads to production,             
 that will lead to profitability for the companies and revenues for            
 the state.  "And if that happens, then you might be able to take              
 advantage of the tax credit programs," Mr. Bartholomew stated.                
 "And that would be part of the work you'd go through in estimating            
 the fiscal impact of the bill."                                               
                                                                               
 MR. BARTHOLOMEW said in addition, there are questions about whether           
 the credit would be towards one or both taxes.  That needs to be              
 clarified.  He restated that the other big change is that the prior           
 credit only was allowed when mines became successful and went into            
 production.  This would open up to all companies and to all                   
 exploration that meets the definition of mapping and surveying.               
 Those costs would, upon approval of the DNR, be eligible for tax              
 credits.  Mr. Bartholomew said the Department of Revenue had not              
 yet come up with a fiscal estimate.                                           
                                                                               
 Number 0192                                                                   
                                                                               
 CO-CHAIRMAN HUDSON advised that there are no fiscal notes in the              
 packet because they are trying to understand the bill and will not            
 know the fiscal impact until a final version and understanding are            
 reached.                                                                      
                                                                               
 Number 0220                                                                   
                                                                               
 DAVID ROGERS, Attorney/Lobbyist for Council of Alaska Producers,              
 came forward to testify, saying the council is a nonprofit                    
 corporation that consists of most of the major mining companies               
 doing business in Alaska today.  He said they really like the idea.           
 They believe it is an innovative approach that makes a lot of                 
 sense.  However, they are not ready to sign off on details; the               
 bill is complicated and he is still reviewing it.  Mr. Rogers said            
 they would like to sit down with the DNR, the Department of                   
 Revenue, the sponsor, the committee and anyone else who is                    
 interested, as they have in the past, to try to work out remaining            
 issues.  He concluded by commending Jules Tileston.                           
                                                                               
 Number 0294                                                                   
                                                                               
 CO-CHAIRMAN HUDSON advised that the committee would hold HB 238               
 over.                                                                         
                                                                               
 CO-CHAIRMAN HUDSON turned the gavel over to Co-Chairman Ogan.                 
                                                                               
 HB 109 - MANAGEMENT OF STATE LAND AND RESOURCES                             
                                                                               
 Number 0319                                                                   
                                                                               
 CO-CHAIRMAN OGAN announced the next order of business was House               
 Bill No. 109, "An Act relating to the management and disposal of              
 state land and resources; relating to certain remote parcel and               
 homestead entry land purchase contracts and patents; and providing            
 for an effective date."                                                       
                                                                               
 Number 0330                                                                   
                                                                               
 SARA FISHER, Legislative Assistant to Representative Gene                     
 Therriault, came forward to present the sponsor statement.  She               
 advised that she had received a copy of the fiscal note 15 minutes            
 before the meeting.                                                           
                                                                               
 MS. FISHER stated that HB 109 is meant to be a housekeeping measure           
 and is intended primarily to clarify certain Title 38 statutes                
 governing the Department of Natural Resources' management of state            
 land and resources.  It is intended to bring greater efficiency to            
 the management of state lands by simplifying programs and reducing            
 costs to the DNR.                                                             
                                                                               
 MS. FISHER noted that the sponsor statement outlines highlights of            
 HB 109.  The bill is not intended to be a complete rewrite of Title           
 38 but is a step in the effort to streamline state government.  She           
 advised that an extensive sectional analysis was included in                  
 committee packets.  She further advised that Mr. LeFebvre of the              
 Division of Land could answer technical questions.                            
                                                                               
 Number 0401                                                                   
                                                                               
 CO-CHAIRMAN OGAN noted that this "housekeeping bill" is 20 pages              
 long.                                                                         
                                                                               
 MS. FISHER said the previous year's HB 46 contained more sections,            
 including sections on mining that were removed and introduced as a            
 separate bill; she believes that bill has made it completely                  
 through the system.  This one is related strictly to the Division             
 of Land statutes.                                                             
                                                                               
 Number 0457                                                                   
                                                                               
 RICHARD LeFEBVRE, Deputy Director, Division of Land, Department of            
 Natural Resources (DNR), testified via teleconference from                    
 Anchorage.  He advised that Mary Kaye Hession was also on                     
 teleconference; they were there primarily to answer questions.                
                                                                               
 MR. LeFEBVRE agreed this is primarily a housekeeping bill, although           
 there are a couple of items such as the "remote recreational sale             
 or lease program" being included.  The bill will make operations a            
 little more efficient.  Over the years, Title 38 has been amended,            
 and many of these are "clean-up" issues that need addressed.  Most            
 had been discussed in more detail the previous year.  Everything              
 controversial that he is aware of had been removed from the bill.             
                                                                               
 Number 0513                                                                   
                                                                               
 CO-CHAIRMAN OGAN advised that he had just received a copy of the              
 fiscal note.  He asked whether $93,000 would be saved by this bill.           
                                                                               
 MR. LeFEBVRE said that was what was proposed.  He pointed out that            
 there is further explanation in the bill analysis.  He explained,             
 "Our zero fiscal impact assumes that the bill's improvement to the            
 land management and disposal laws will partially offset the                   
 division's recent proposed budget cuts or past budget cuts,                   
 allowing us to do a lot of the processing more efficiently.  So               
 that's where we've added the $93,000, that that would be money,               
 then, that would be able to be deposited in the general fund for              
 appropriation, however you feel is necessary."                                
                                                                               
 Number 0558                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked what the changes are in the homestead and              
 home site programs.  He further asked whether it will cost Alaskans           
 more money to obtain those.                                                   
                                                                               
 MR. LeFEBVRE said he does not see that it would cost Alaskans any             
 more than it probably would today.  It clarifies language and                 
 provides for a purchase option.  He deferred to Ms. Hession for               
 details.                                                                      
                                                                               
 Number 0595                                                                   
                                                                               
 MARY KAYE HESSION, Program Support, Central Office, Division of               
 Land, Department of Natural Resources, testified via teleconference           
 from Anchorage.  She explained that changes to the homestead law              
 would increase one initial fee.  There would be a $20-per-acre, up-           
 front payment instead of the current $5-per-acre payment.                     
 Essentially, this is a one-time rental fee that lasts for the                 
 duration of a homestead entry permit, which is five years.  The               
 homesteader during that time could either live on the parcel and              
 then get title to it, paying only the survey costs that the state             
 paid up-front to offer it as a surveyed parcel, or within the five            
 years, the person could buy it at fair market value.                          
                                                                               
 MS. HESSION said currently, there is another way to purchase                  
 homesteads.  However, it is quite complicated and confusing to some           
 applicants.  At present, in order to buy it at fair market value at           
 the end of the five years, the person needs to have built a                   
 permanent, habitable dwelling.  Similarly, to prove up on the                 
 parcel and obtain it by just paying survey costs, without paying              
 fair market value of the land, the person also has to have built a            
 permanent, habitable dwelling.                                                
                                                                               
 MS. HESSION said this housekeeping measure would remove the                   
 requirement of constructing a permanent, habitable dwelling.  They            
 expect that people who want to prove up on a parcel would go ahead            
 and build a house, but they would not be forced to do so.  They see           
 this as a savings for the agency because it is expensive to travel            
 repeatedly to homesteads to check whether a house has been built              
 and if so, whether it satisfies the standard of being a permanent,            
 habitable dwelling.  Furthermore, it has resulted in a number of              
 appeals.  Ms. Hession believes it is simpler to provide two                   
 options:  either live there and acquire it for the survey costs or            
 simply buy it.                                                                
                                                                               
 Number 0680                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked which section of the bill Ms. Hession was              
 addressing.                                                                   
                                                                               
 MS. HESSION said the changes in the homestead law are in Sections             
 36 and 37.  However, there are "associated repealers" in Section              
 41.                                                                           
                                                                               
 Number 0709                                                                   
                                                                               
 CO-CHAIRMAN HUDSON asked whether there are any major new land                 
 programs indicated in the rewrite; whether any opportunity                    
 currently enjoyed by the public through one or more programs is               
 being eliminated; and whether this simply brings Title 38 into line           
 with what the DNR already does.                                               
                                                                               
 MS. HESSION replied that this bill would repeal what is currently             
 called "remote cabin permits."  That has been on the books for a              
 number of years but never used.  However, it replaces that with a             
 program similar to the original "open to entry program" or the                
 "remote parcel program," where people would acquire a cabin site              
 for recreational purposes, obtaining a five-year lease that was               
 renewable for an additional five years.  At any time during the               
 ten-year period of the two leases, if they wanted to survey the               
 parcel and buy it, they had that option.  Both of those programs              
 were quite attractive to people to get cabin sites outside of                 
 subdivisions.                                                                 
                                                                               
 Number 0786                                                                   
                                                                               
 REPRESENTATIVE GREEN stated his understanding that this is                    
 essentially the same as a bill unanimously passed two years ago by            
 the House.  Language relating to set-net sites, controversial in              
 the Senate, had been removed.                                                 
                                                                               
 Number 0837                                                                   
                                                                               
 MS. FISHER affirmed that.  She said the only difference between HB
 46 last year and this bill is they pulled out the mining sections.            
                                                                               
 Number 0856                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked whether this bill would help facilitate more           
 land disposal.                                                                
                                                                               
 MR. LeFEBVRE replied that it provides the DNR with the means to               
 make additional offerings but not the funding to prepare the land,            
 where necessary, prior to making an offering.                                 
                                                                               
 Number 0907                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked whether that requires a capital                        
 appropriation.                                                                
                                                                               
 MR. LeFEBVRE said yes, the department would propose it through the            
 capital program requests.                                                     
                                                                               
 CO-CHAIRMAN OGAN asked, assuming the legislature received a capital           
 request for that, whether the quadrupling of the per-acre fee until           
 a homestead was proved up on would entirely offset the DNR's                  
 operating costs.                                                              
                                                                               
 MR. LeFEBVRE asked whether Co-Chairman Ogan was talking                       
 specifically about homesteads.                                                
                                                                               
 CO-CHAIRMAN OGAN mentioned the fee going up from $5 to $20 per acre           
 until the person proved up on the land.                                       
                                                                               
 MR. LeFEBVRE said that is correct; it is a one-time fee.                      
                                                                               
 Number 0953                                                                   
                                                                               
 MS. HESSION clarified that what she was explaining earlier was just           
 for homesteads.  However, the division has quite a few different              
 ways to offer land.  For example, they can offer subdivision lots             
 either through a lottery or an auction.  In addition, they can                
 offer homesteads, which are usually larger parcels, or home sites,            
 which generally are not larger than five acres.  The $20-per-acre             
 fee only applies to homesteads.  It is a one-time fee that lasts              
 for the duration of a homestead entry permit, which is five years.            
                                                                               
 Number 0987                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked what size a typical homestead is.                      
                                                                               
 MS. HESSION said homesteads of nonagricultural land are limited by            
 law to 40 acres, and usually they are that size.  However,                    
 sometimes the division had offered 20-acre parcels.  Agricultural             
 homesteads can be up to 160 acres; they are usually between 80 and            
 160 acres.                                                                    
                                                                               
 Number 1010                                                                   
                                                                               
 CO-CHAIRMAN OGAN said a person could then get a 40-acre homestead             
 for $800 until proved up on; for a 160-acre site, that would be               
 $3,200.                                                                       
                                                                               
 MS. HESSION said she believed his math was correct.  However, a               
 person who proves up on a homestead would also be required to                 
 reimburse the state for the cost of surveying that parcel.  The               
 state must survey it before it is offered.  Costs run in the $3,000           
 range for a "good-size parcel."                                               
                                                                               
 Number 1052                                                                   
                                                                               
 CO-CHAIRMAN OGAN referred to another, unspecified piece of                    
 legislation and advised there was an exemption relating to                    
 cadastral surveys on whole sections.  He asked whether it would be            
 worthwhile to possibly amend this to not require those on the                 
 larger home site parcels.                                                     
                                                                               
 MS. HESSION said that other legislation exempts the state from one            
 survey requirement but not others.  Usually, before a section can             
 be further subdivided, to break it down into individual homesteads,           
 home sites or subdivision lots, for example, the cadastral                    
 surveyors set monuments on the township corners.  In addition, they           
 usually set them at two-mile intervals between the township corners           
 and at the section corners.  This way, the property buyer has a               
 much better chance of locating his or her lot.                                
                                                                               
 MS. HESSION explained that although it is common for private land             
 owners to do further subdivision of their parcels by aliquot parts,           
 meaning they do not do any additional field surveys or place                  
 monuments on each subdivision parcel being offered, they have                 
 corners to start with.  However, the state starts with nothing.               
 They must put in some corners initially, before they can break it             
 down into more manageable parcels to be offered for sale or for               
 homesteads, for example.                                                      
                                                                               
 Number 1164                                                                   
                                                                               
 CO-CHAIRMAN HUDSON said there was "some sentiment about offering              
 land to Alaskans before they were offered outside the state of                
 Alaska."  He asked if that would be in any of these provisions.               
                                                                               
 MS. HESSION said that is an existing law.  Before the department              
 offers land at auction, the first offering must be to Alaska                  
 residents.   However, if no Alaskan bids on the parcel or expresses           
 interest in buying it, the department can make it available for               
 sale on a first-come, first-served basis to anybody.  The only                
 exception is when the department offers agricultural, commercial or           
 industrial land, which can be offered to anyone.                              
                                                                               
 Number 1231                                                                   
                                                                               
 CO-CHAIRMAN HUDSON noted there is a provision that a person does              
 not have to personally appear in land lottery proceedings.  He                
 asked the reason for that and what credentials an Alaskan resident            
 must show.                                                                    
                                                                               
 MS. HESSION said dropping the requirement to appear in person was             
 in response to a court decision ruling it unconstitutional to, in             
 effect, limit participation to people who lived closest to the                
 parcels being offered.  She said that needs to be cleaned up in the           
 statute.  However, to apply for a lottery sale of land, people must           
 be Alaskan residents.  They must submit "satisfactory evidence" of            
 residency.  Normally, their names can be looked up in the rolls of            
 the permanent fund dividend program.  Other evidence such as voter            
 registration information can be used as well.                                 
                                                                               
 Number 1334                                                                   
                                                                               
 CO-CHAIRMAN OGAN said he understands that remote cabin sites and              
 other disposals can only be done if the land has been classified              
 for the appropriate purpose.  He asked whether all state lands, or            
 substantial parts, are suitably classified to make these disposals,           
 or whether there is a realistic possibility of that in the near               
 future.                                                                       
                                                                               
 MS. HESSION advised that although she could obtain figures from the           
 department's current land use plans, she did not have them in her             
 head.  She said a substantial portion of the state has gone through           
 the planning process, through various area plans.  A lot of acreage           
 has been classified for either settlement purposes, which are                 
 unrestricted sales, or for agricultural purposes, which under                 
 previous law had to be sold in a special way.  She indicated the              
 latter would probably change shortly.  She said a substantial                 
 inventory of land could be made available.                                    
                                                                               
 Number 1414                                                                   
                                                                               
 CO-CHAIRMAN OGAN announced that he would hold HB 109 over until the           
 following week.                                                               
                                                                               
 BRIEFING:  Board of Game                                                    
                                                                               
 CO-CHAIRMAN OGAN announced the final item of business was a                   
 briefing on the Board of Game.  He had asked Mr. Holmes to present            
 a basic overview and answer questions.                                        
                                                                               
 Number 1451                                                                   
                                                                               
 LARRY HOLMES, JR., Chairman, Board of Game, explained that the                
 board has seven members.  Presently, three members are confirmed:             
 Mr. Holmes; Walter Sampson, vice-chair; and Greg Roczicka from                
 Bethel.  There are four unconfirmed members:  Greg Streveler from             
 Gustavus, Mike Fleagle from McGrath, Lori Quakenbush from Fairbanks           
 and Nicole Evans from Palmer.                                                 
                                                                               
 MR. HOLMES stated, "Our authorities, duties and responsibilities              
 are described under Title 16, Section 16.05.221 and .255.  For the            
 record, some of our major authorities under 16.05.255 are                     
 establishing open and closed seasons and areas for the taking of              
 game; establishing the means and methods employed in the pursuit,             
 capture and transport of game, including regulations consistent               
 with resource conservation and development goals; establishing                
 means and methods that may be employed by persons with physical               
 disabilities; setting quotas, bag limits, harvest levels and sex,             
 age and size limitations on the taking of game; methods, means and            
 harvest levels necessary to control predation and competition among           
 game; watershed and habitat improvement and management;                       
 conservation, protection, use, disposal, propagation and stocking             
 of game; and also, the implementation for the most recently enacted           
 intensive management law that was enacted in 1994."                           
                                                                               
 MR. HOLMES said in fiscal year 1997, the board will have had three            
 regulatory meetings, one in Sitka, one in Anchorage and the                   
 upcoming one in Juneau.  The current board typically makes                    
 extensive use of the committee system to incorporate the public               
 into the decision-making process.  Mr. Holmes advised that as of              
 mid-March, the seven-person board had six years' collective                   
 experience.                                                                   
                                                                               
 Number 1630                                                                   
                                                                               
 MR. HOLMES discussed evolution of the board's process.  He stated,            
 "In 1959, we went from territory to statehood.  And at that point             
 in time, the first legislature had the task of organizing the                 
 government.  And they did it under House Bill 114, which was the              
 governmental organizational bill."  He said within the confines of            
 that bill, an eight-person board of game and fish was provided,               
 which served at the pleasure of the governor and did not work under           
 Administrative Procedure Act (APA) requirements.  He said it also             
 provided for the Department of Fish and Game (ADF&G), and basically           
 the commissioner ran the boards.                                              
                                                                               
 MR. HOLMES said, "Somewhere in the middle of the evolution of the             
 governmental reorganization process, another bill surfaced,                   
 submitted by a commercial fisherman, a Republican from Southeast              
 Alaska, that in fact ... would have required the Board of Game to             
 work under the Alaska Administrative Procedure Act.  It would allow           
 the governor to only fire for cause, and at that point, also                  
 require charges to be specified and provide for counsel for those             
 particular individuals that were charged.  It also provided for a             
 significant public process and for the boards to establish a local            
 fish and game advisory committee process."                                    
                                                                               
 MR. HOLMES continued, "The justification behind the change was                
 primarily because prior to statehood, the federal government had              
 managed our fish and wildlife though the Fish and Wildlife Service.           
 There were significant abuses with fisheries.  The fisheries were             
 primarily managed from outside the state, through the Washington-             
 based fisheries.  They typically allocated most of the fish through           
 fish trap processes to Washington state fishermen, and very few               
 Alaskans actually received any benefit from those particular                  
 management practices."                                                        
                                                                               
 MR. HOLMES continued, "The game suffered significantly because of             
 commercial hunting and unregulated sport hunting.  Commercial                 
 hunting basically was to benefit the development of mines and                 
 timber interests in the state and to provide meat for developing              
 urban areas."  He emphasizsed that the reorganization bill                    
 eventually adopted by the first legislature provided for                      
 significant public opportunity to participate and required a                  
 citizen-based process to direct management of fish and game in                
 Alaska.                                                                       
                                                                               
 MR. HOLMES stated, "And the point I would make is:  The drive to              
 statehood in the mid-to-late 50s was primarily because of the                 
 abuses of federal managers regarding fish and game management.  And           
 we are, in my opinion, headed in that direction again.  We are not            
 funding our management processes.  Clearly, the public does not               
 have an interest in the boards' processes.  And again we have                 
 special interests and political interests that dominate in the                
 management of fish and game in the state of Alaska.  And I would              
 suggest that it would be helpful for the Board of Game and [Board             
 of] Fisheries, the legislature, the Governor, as well as other                
 interests in the public, to sit down and try to work out some                 
 resolution to budgeting and to the management of fish and game in             
 the state of Alaska."  Mr. Holmes concluded by saying that is an              
 abstract of the presentation he wished he had more time to present.           
                                                                               
 Number 1892                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked how the advisory councils make                         
 recommendations to the Board of Game.                                         
                                                                               
 Number 1939                                                                   
                                                                               
 MR. HOLMES said advisory committees are established under statute.            
 A set of policies adopted by the joint boards guides their actions.           
 Although they may meet on an irregular schedule, they must meet at            
 least twice a year to remain active.  If they meet, they are                  
 required to forward their minutes to the Board of Game, Board of              
 Fisheries or the joint boards; the appropriate board is required to           
 consider their recommendations.                                               
                                                                               
 Number 2001                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked Mr. Holmes how often the boards accept those           
 recommendations.                                                              
                                                                               
 MR. HOLMES replied, "I think it would be very difficult to                    
 speculate on how often the boards adopted recommendations from the            
 advisory committee.  I would think it's safe to say, with this                
 board that's seated at this point in time, that we, in fact I, in             
 putting together the road map at our most recent meeting, in                  
 several instances put advisory committee proposals in front of                
 other proposals on the same subject matter.  And I would say that             
 we weigh what they present to us quite heavily."                              
                                                                               
 Number 2065                                                                   
                                                                               
 CO-CHAIRMAN OGAN said he interprets the role of the ADF&G as                  
 advising about biological justifications, for example.  He asked              
 whether the ADF&G had made recommendations on allocations.                    
                                                                               
 MR. HOLMES said he was unsure he understood the question.  He                 
 explained that the Division of Wildlife Conservation is the one the           
 board primarily works with, although they also work with the                  
 Division of Subsistence.  The Division of Wildlife Conservation               
 typically provides information for the board to make decisions.  He           
 said, "They are not permitted to enter into deliberations with the            
 board when the board is deliberating a proposal.  They are not                
 allowed to communicate with board members during deliberations,               
 either physically or orally."                                                 
                                                                               
 Number 2165                                                                   
                                                                               
 CO-CHAIRMAN OGAN stated, "Recent actions by the board seem to                 
 indicate maybe a little bit of misunderstanding in relation to                
 allocation decisions.  Do you view actions which close hunting or             
 trapping opportunities as allocative, and especially those actions            
 that are based on other than biological concerns?"  He referred to            
 the Paint River as an example where he believed decisions were made           
 on other than biological concerns.                                            
                                                                               
 MR. HOLMES asked for clarification.  He said he was on the board              
 when they dealt with the McNeil River.                                        
                                                                               
 Number 2257                                                                   
                                                                               
 CO-CHAIRMAN OGAN responded, "Well, Paint River is a good thing to             
 be specific about.  I believe the department testified that there             
 was no biological reason to close that because there was more than            
 adequate bear populations and the fact that, you know, that the               
 experts tell me that it might even overall hurt the populations               
 because the big boars are not going to be taken out, and the big              
 boars prey on the cubs.  And yet that area was closed, which could            
 ultimately, in theory, hurt the bear population."                             
                                                                               
 MR. HOLMES asked whether the question applied to the board's                  
 collective action regarding the McNeil refuge or to him personally.           
                                                                               
 CO-CHAIRMAN OGAN said the board.                                              
                                                                               
 MR. HOLMES stated, "Several years ago, if my memory serves me, the            
 justification for the board's action, I believe on a 4-to-3 vote,             
 was that it was not a biological issue of whether to close the                
 McNeil refuge to the hunting of brown bears.  The area is a world-            
 renowned viewing area for brown bears.  It had been in place for              
 quite awhile.  There were those of us on the board, and myself                
 included, that felt there are other places to provide opportunities           
 for hunting brown bears.  And we, at that same meeting that we took           
 action on that, we provided opportunities for hunting brown bears             
 all across the North Slope; we liberalized brown bear hunting in              
 unit 20D as well as in unit 13."                                              
                                                                               
 MR. HOLMES continued, "And we felt that the battle over three bears           
 in a two-year period just wasn't worth the political and/or the               
 fiscal costs.  And so our alternative was to look at providing                
 opportunities elsewhere.  And I would like to point out that the              
 board goes well beyond biological concerns.  This is a political              
 process, as evidenced by the policies generated by the legislature            
 and the board in the most recent past."  He said in addition to               
 biology, there are sociological and cultural aspects to consider.             
 "And we do accommodate situations where we fear there may be a                
 serious conflict between users," he said, adding that they have a             
 variety of statutory tools.                                                   
                                                                               
 TAPE 97-45, SIDE A                                                            
 Number 0006                                                                   
                                                                               
 MR. HOLMES said looking back, it was not a difficult situation for            
 him.  "I didn't see the point in getting in a fight over several              
 bears in a two-year period to be harvested, when there were                   
 adequate opportunities elsewhere," he concluded.                              
                                                                               
 Number 0038                                                                   
                                                                               
 REPRESENTATIVE IRENE NICHOLIA said having been a former advisory              
 council member, she fully understood what Mr. Holmes was talking              
 about in terms of proposals submitted to the boards.  She said                
 while advisory members are required to have two meetings, with the            
 budget her council had, they held one meeting plus one trip to                
 either the Board of Game or Board of Fisheries meeting.  She                  
 referred to cuts of over $400,000 on the Senate side, which would             
 have a negative impact on advisory councils across the state.  She            
 asked Mr. Holmes' interpretation of that cut and how it would                 
 affect the board process.                                                     
                                                                               
 MR. HOLMES replied, "Personally, I think they are going to be                 
 devastating.  I can give you examples as we speak of advisory                 
 committees that have become inactive because the residents reside             
 on federal land or adjacent land, and they are being provided for             
 under federal law.  I can name one here in Southeast, in Angoon.              
 It's not in the best interests of this state to push their                    
 residents into federal management.  And if we cut the advisory                
 committee process by $400,000 plus, that's exactly what we're going           
 to do."                                                                       
                                                                               
 MR. HOLMES explained there are a number of communities and regions            
 around the state in which state fish and game advisory committee              
 members also serve on federal advisory committees.  He cautioned,             
 "And if we cut the funding for those state advisory committees,               
 they're going to be working in a federal advisory process.  And               
 we're going to lose our management abilities.  The public part of             
 this process is critical to management.  It has been since                    
 statehood.  Our first legislature recognized how important it was.            
 They established the local advisory committees and the first                  
 organizational act for the state of Alaska, and they funded it."              
                                                                               
 Number 0227                                                                   
                                                                               
 REPRESENTATIVE RAMONA BARNES asked for clarification.                         
                                                                               
 MR. HOLMES stated, "What I said was, there are folks that work in             
 both arenas.  They work in the federal advisory committee system              
 and the local advisory committee system.  If we fail to fund the              
 state advisory committee system, they are going to be working in              
 the federal system.  And I think what's important here is to                  
 encourage state residents to work in the state system."                       
                                                                               
 MR. HOLMES explained,  "Most recently, the Board of Game took up an           
 issue when a community asked for a moose hunt in Southwest Alaska.            
 And we had information initially that led the board to vote to deny           
 those people a moose hunt on state lands, because we were given               
 information that there may be a conflict or conservation problem              
 caused by a potential federal hunt.  The very next day, the Board             
 of Game came back in session, and we provided those people in                 
 Southwest Alaska a moose hunt.  And we did the right thing, because           
 they were a state advisory committee coming to the state board for            
 hunts on state land for, in my opinion, what are state moose.  And            
 ... if the Board of Game and the Board of Fisheries and the                   
 resource management agencies don't act on behalf of their own                 
 residents, there are folks out there, in the federal arena, that              
 are willing to do it.  And that's the point I was trying to make."            
                                                                               
 Number 0368                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked, "Mr. Holmes, would you say that given the             
 constitution and the statutes, that the principal responsibility of           
 the board is to address sustained yield and consumptive uses                  
 through regulation?"                                                          
                                                                               
 MR. HOLMES replied that the Board of Game works under Title 16;               
 that direction comes from the legislature, through the                        
 constitution.  He said, "So we do work under the sustained yield              
 principle, yes."                                                              
                                                                               
 CO-CHAIRMAN OGAN asked, "And that its principal responsibility is             
 to not only sustained yield but consumptive use?"                             
                                                                               
 MR. HOLMES replied, "Absolutely -- in certain situations, depending           
 on the situation."                                                            
                                                                               
 CO-CHAIRMAN OGAN asked for clarification.                                     
                                                                               
 Number 0424                                                                   
                                                                               
 MR. HOLMES said in the past, they have set aside areas and closed             
 them to certain types of hunting for conservation reasons.  He                
 cited the McNeil refuge as an example.  There, the board                      
 collectively felt that because of conflicts that would occur from             
 having a hunt adjacent to the sanctuary, the benefits of providing            
 opportunities elsewhere far outweighed the problems that would                
 evolve from having a hunt there.  He noted that bear hunting                  
 parallels consumptive use but is not quite the same thing.                    
                                                                               
 CO-CHAIRMAN OGAN suggested the area in question was adjacent to the           
 refuge.                                                                       
                                                                               
 MR. HOLMES specified, "The sanctuary is the area that's closed to             
 hunting.  And the board voted to close bear hunting in the refuge,            
 which is adjacent to the sanctuary."                                          
                                                                               
 Number 0518                                                                   
                                                                               
 REPRESENTATIVE BARNES recalled when the legislature established the           
 Paint River fish ladder, that caused bears to congregate.  She                
 stated, "And it caused people that oppose bear hunting, I think, a            
 lot of problems, because you were causing those bears to congregate           
 near an area that could be easily hunted."  Noting that her                   
 daughter is a wildlife photographer, she said, "And I think that if           
 you'd let anybody hunt those bears, that she would come hunting for           
 you."                                                                         
                                                                               
 MR. HOLMES indicated she would not have been the only one.                    
                                                                               
 Number 0583                                                                   
                                                                               
 CO-CHAIRMAN HUDSON asked what kind of communications and                      
 interrelations the board has with the Administration with regard to           
 policy, as far as Mr. Holmes has seen.                                        
                                                                               
 MR. HOLMES replied, "Absolutely none.  I'm not sure exactly what              
 occurs between, for example, the Administration and the Department            
 of Fish and Game, the cabinet.  But as far as the Board of Game               
 goes, I have on several occasions met with the Governor on                    
 different issues that aren't related to fish and game management,             
 that may be involved with internal issues.  I've not once had the             
 Governor or any of his staff suggest a direction for the board.               
 I'm not aware of any other board member communicating with anyone             
 in that regard.  My suspicions are that any governor would be very            
 careful in that regard."                                                      
                                                                               
 Number 0680                                                                   
                                                                               
 CO-CHAIRMAN HUDSON said over the years, he had seen different                 
 philosophies emanating from various board combinations.  He said he           
 presumes the reason for rotating members is to provide fresh                  
 concepts and ideas, as well as different dynamics.  He said on the            
 boards on which he has served, there was a tendency, once people              
 got acquainted, to develop a philosophy of sorts, which all members           
 agreed to.  He asked whether four new members were coming on board.           
                                                                               
 MR. HOLMES said yes.                                                          
                                                                               
 CO-CHAIRMAN HUDSON asked how, as chairman, Mr. Holmes tries to                
 maintain impartiality, a broad-based view and balance in the                  
 public's interest.                                                            
                                                                               
 Number 0774                                                                   
                                                                               
 MR. HOLMES responded, "I think it's very difficult when you have a            
 seven-person board that has a collective experience level of six              
 years.  And given the level of interest in the board process at               
 this time, and the confirmation process, it's very distracting.               
 And I'd love to have the opportunity to sit down off and on with a            
 couple of board members and kind of get a feel for fixing a                   
 direction."                                                                   
                                                                               
 MR. HOLMES stated, "My personal feeling is, I go into these                   
 processes looking at every issue on its merit.  But in general, I             
 try to follow the statute, which says we should ... conserve and              
 develop the resource.  And I look at a meeting like we just came              
 out of, with 250 proposals, and I don't see any reason why we can't           
 come out of it doing good conservation and good development.  And             
 I would hope that ... the other board members do that, and I think            
 for the most part that they do.  But we just don't have the luxury            
 of those kinds of discussions and relationships when we just                  
 haven't been together very long."                                             
                                                                               
 Number 0839                                                                   
                                                                               
 CO-CHAIRMAN HUDSON said it had been suggested to him that the Board           
 of Fisheries receives too many proposals and that there needs to be           
 some way to cull them.  He asked for comments or suggestions.                 
                                                                               
 MR. HOLMES indicated there has been much discussion about that.  He           
 said under the Administrative Procedure Act, all of the public has            
 equal standing.  "As I understand it, we are required to publish              
 every single proposal, even if they are identical," he said, citing           
 an example where they had 20 nearly identical proposals to close an           
 area to hunting.  He said the Board of Game responds to that by               
 picking out the most representative proposal to work off of; they             
 take no action on the others.                                                 
                                                                               
 Number 0919                                                                   
                                                                               
 CO-CHAIRMAN HUDSON asked whether that is decided by a majority of             
 board members.                                                                
                                                                               
 MR. HOLMES replied that typically, after taking action on initial             
 proposal, the chair will ask other board members whether there is             
 any objection to taking no action on a block of proposals.                    
                                                                               
 Number 0951                                                                   
                                                                               
 CO-CHAIRMAN OGAN thanked Mr. Holmes.  He concurred with Mr. Holmes'           
 concern about only having six years' collective experience on the             
 board.  He read a passage from a book by Wallace Kaufman, an                  
 environmental lobbyist for a number of years, who likened                     
 environmental meetings to religious gatherings.  He expressed                 
 concern over members who were appointed to the board having past              
 professional affiliations with environmental groups, which he views           
 as an inherent conflict.  He asked Mr. Holmes to comment.                     
                                                                               
 Number 1076                                                                   
                                                                               
 MR. HOLMES replied, "I think it's safe for me to comment as chair             
 of the Board of Game that your concerns are covered under the                 
 Ethics Act, in my opinion."  He said he had served on an advisory             
 committee for over a decade and was chair for six years; he had               
 spent a lot of time attending Board of Game and Board of Fisheries            
 meetings.  In fisheries in particular, individuals with significant           
 investments and interests participate in regulatory activities.               
 Sometimes they must step down or are conflicted out.  But in many             
 instances, they go ahead and participate.                                     
                                                                               
 MR. HOLMES stated, "And in regards to the Board of Game, we have              
 members that also hold membership in all sorts of groups:  sport              
 hunting groups; conservation groups; to a greater or lesser extent,           
 environmental groups."  He said in the past, at least four members            
 of the Board of Game were members of the largest sport hunting                
 group in the state; some felt that was a significant conflict.  He            
 stated, "So I don't see that as really an issue or a concern for              
 membership on the board.  I think the relationship to the group is            
 important when it comes down to the issue, when we're in                      
 deliberating.  And at that point in time, the chair and/or the                
 board itself will have to make a decision as to whether that                  
 individual will serve or not on that particular issue."                       
                                                                               
 Number 1180                                                                   
                                                                               
 MR. HOLMES stated his personal belief that the most important                 
 aspect to look at is the board's ability to be autonomous between             
 an administration and the legislature, divorced from significant              
 special public interests.  He had served with many people from                
 different arenas on advisory committees and boards.  There was no             
 one in the past who he felt should not be on the board.  And in his           
 opinion, everyone on the current board is both qualified and                  
 competent to serve.  "And I'm not suggesting directions for the               
 legislature to take," he said.  "But I think that you should weigh            
 carefully the value of having a board that's seated and                       
 experienced, an ability to function, or a board that's continually            
 off-balance because of lack of experience."                                   
                                                                               
 Number 1247                                                                   
                                                                               
 CO-CHAIRMAN OGAN asked whether Mr. Holmes agrees that wildlife                
 managed for sustained yield and optimum utilization by human                  
 consumption is also wildlife managed for other uses such as                   
 viewing.                                                                      
                                                                               
 MR. HOLMES said yes, for the most part he agrees.  He cited Chugach           
 State Park as an example.  A heavily used multiple-use area, it has           
 one of the most productive Dall sheep areas in the state and many             
 people both hunt and view the animals.                                        
                                                                               
 CO-CHAIRMAN OGAN commented on the controversy over whether wildlife           
 viewers should be on the board for balance.  He said for years, it            
 was a hunting-only board and did such a good job that people                  
 flocked to Alaska to see the wildlife.                                        
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 CO-CHAIRMAN OGAN adjourned the House Resources Standing Committee             
 meeting at 3:07 p.m.                                                          
                                                                               

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