Legislature(1997 - 1998)
04/17/1997 01:10 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.