Legislature(1999 - 2000)
03/06/2000 02:08 PM House RES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
March 6, 2000
2:08 p.m.
MEMBERS PRESENT
Representative Bill Hudson, Co-Chair
Representative Beverly Masek, Co-Chair
Representative John Cowdery, Vice Chair
Representative John Harris
Representative Carl Morgan
Representative Jim Whitaker
Representative Reggie Joule
MEMBERS ABSENT
Representative Ramona Barnes
Representative Mary Kapsner
COMMITTEE CALENDAR
HOUSE BILL NO. 204
"An Act relating to elk farming."
- MOVED CSHB 204(RES) OUT OF COMMITTEE
HOUSE BILL NO. 58
"An Act relating to certain audits regarding oil and gas royalty
and net profits and to audits regarding costs relating to
exploration incentive credits and oil and gas exploration
licenses; and providing for an effective date."
- MOVED HB 58 OUT OF COMMITTEE
HOUSE BILL NO. 344
"An Act authorizing a land exchange between the Department of
Natural Resources and Alaska Hard Rock, Inc.; and providing for
an effective date."
- MOVED HB 344 OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 204
SHORT TITLE: ELK FARMING
Jrn-Date Jrn-Page Action
4/20/99 883 (H) READ THE FIRST TIME - REFERRAL(S)
4/20/99 883 (H) RES, FIN
3/06/00 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 58
SHORT TITLE: OIL & GAS AUDITS
Jrn-Date Jrn-Page Action
1/22/99 65 (H) READ THE FIRST TIME - REFERRAL(S)
1/22/99 65 (H) O&G, RES, FIN
1/22/99 65 (H) 2 FISCAL NOTES (DNR, REV)
1/22/99 65 (H) GOVERNOR'S TRANSMITTAL LETTER
3/04/99 (H) O&G AT 10:00 AM CAPITOL 17
3/04/99 (H) HEARD AND HELD
3/04/99 (H) MINUTE(O&G)
3/05/99 376 (H) JUD REFERRAL ADDED AFTER RES
3/11/99 (H) O&G AT 10:00 AM CAPITOL 17
3/11/99 (H) -- MEETING CANCELED --
4/20/99 (H) O&G AT 5:00 PM CAPITOL 17
4/20/99 (H) <BILL POSTPONED TO 4/29>>
4/22/99 (H) O&G AT 5:00 PM CAPITOL 17
4/22/99 (H) MOVED OUT OF COMMITTEE
4/22/99 (H) MINUTE(O&G)
4/23/99 943 (H) O&G RPT 4DP 4NR
4/23/99 944 (H) DP: PORTER, SMALLEY, HARRIS,
WHITAKER;
4/23/99 944 (H) NR: OGAN, KEMPLEN, PHILLIPS, BRICE
4/23/99 944 (H) 2 FISCAL NOTES (DNR, REV) 1/22/99
3/06/00 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 344
SHORT TITLE: DEPT NAT RES & AK HARD ROCK LAND EXCHANGE
Jrn-Date Jrn-Page Action
2/07/00 2116 (H) READ THE FIRST TIME - REFERRALS
2/07/00 2117 (H) RES, FIN
2/07/00 2117 (H) ZERO FISCAL NOTE (DNR)
2/07/00 2117 (H) LAND EXCHANGE AGREEMENT ATTACHED
2/07/00 2117 (H) GOVERNOR'S TRANSMITTAL LETTER
3/06/00 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
JOHN MANLY, Legislative Aide
for Representative John Harris
Alaska State Legislature
Capitol Building, Room 110
Juneau, Alaska 99801
POSITION STATEMENT: Introduced HB 204 on behalf of the sponsor.
BILL WARD
Ward Farms
P.O. Box 1087
Delta Junction, Alaska 99737
POSITION STATEMENT: Testified in support of HB 204.
MARCIA WARD
Ward Farms
P.O. Box 1087
Delta Junction, Alaska 99737
POSITION STATEMENT: Testified in support of HB 204 on behalf of
herself and Scott Miller.
EDNA ANDERSON, President
Kenai Peninsula Farm Bureau
P.O. Box 441
Homer, Alaska 99603
POSITION STATEMENT: Testified in support of HB 204.
GERON BRUCE, Legislative Liaison
Office of the Commissioner
Alaska Department of Fish and Game
P.O. Box 25526
Juneau, Alaska 99802-5526
POSITION STATEMENT: Testified on HB 204.
KEVIN BANKS, Petroleum Marketing Analyst
Division of Oil & Gas
Department of Natural Resources
550 West Seventh Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Testified on HB 58.
JIM STRATTON, Director
Division of Parks & Outdoor Recreation
Department of Natural Resources
550 West Seventh Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Testified on HB 344.
RUDY VETTER
P.O. Box 70342
Fairbanks, Alaska 99707
POSITION STATEMENT: Testified in support of HB 344.
SCOTT EUBANKS, President
Alaska Hard Rock, Incorporated
P.O. Box 2832
Wasilla, Alaska 99645
POSITION STATEMENT: Testified on HB 344.
ACTION NARRATIVE
TAPE 00-19, SIDE A
Number 0001
CO-CHAIR MASEK called the House Resources Standing Committee
meeting to order at 2:08 p.m. Members present at the call to
order were Representatives Hudson, Masek, Cowdery, Harris,
Morgan, Whitaker and Joule.
HB 204 - ELK FARMING
Number 0118
CO-CHAIR MASEK announced that the first order of business would
be HOUSE BILL NO. 204, "An Act relating to elk farming."
Number 0184
JOHN MANLY, Legislative Aide for Representative John Harris,
Alaska State Legislature, explained HB 204 on behalf of the
sponsor. He informed members that HB 204, a simple bill, would
transfer the licensing requirements, oversight and fencing
requirements for elk farming from the Alaska Department of Fish &
Game (ADF&G) to the Division of Agriculture, Department of
Natural Resources (DNR). He noted that elk are being raised in
the state as domestic farm animals.
CO-CHAIR MASEK announced that the proposed committee substitute
(CS) needed to be adopted.
CO-CHAIR HUDSON made a motion to adopt the proposed CS for HB
204, version 1-LS0528\H, Utermohle, 1/29/00, as a work draft.
There being no objection, proposed CSHB 204 was before the
committee.
MR. MANLY addressed the changes in the proposed CS. He indicated
a request had been received from the Division of Wildlife
Conservation (ADF&G) to insert the language on page 1, line 11:
Before issuing or renewing an elk farming license, the
commissioner shall conduct a physical inspection of the
elk farming facilities and determine that the
facilities are in good repair and comply with the
fencing standards established under (d) of this
section.
MR. MANLY noted that along with transferring the responsibilities
from ADF&G to the Division of Agriculture (DNR), the bill also
provides that fencing standards would no longer be managed by
ADF&G. Instead, the Division of Agriculture would consult ADF&G.
In response to questions from members, he specified that the elk
are being farmed only for the meat and the antlers. The farms
are in Delta Junction and in Kodiak.
CO-CHAIR HUDSON wondered where the original breed stock come
from.
REPRESENTATIVE HARRIS indicated that people on teleconference
could probably answer that question.
Number 0593
BILL WARD, Ward Farms, testified via teleconference from Delta
Junction. He indicated that he had requested the legislation
through Representative Harris. He explained that presently there
are nine elk licenses in Alaska, with ranches scattered from
Kodiak clear up through Delta Junction; he estimates there are
300 to 350 elk in the state. The first elk were brought to
Alaska in 1990 after the original legislation; some came from
Montana and some from Canada, and all of the elk that are in the
state currently came out of their herd, except for a few animals.
MR. WARD explained that he had requested the [current]
legislation because when the legislation first passed in 1988, it
was also happening in other states; it was a new growth industry
in the United States and Canada. At that time, everyone followed
the same pattern that brought the dual administration about.
Other states have found, however, that the administration works
cleaner and easier when it is all transferred to one entity.
MR. WARD noted that in Alaska the two agencies have had a good
relationship, but ADF&G really has no authority with fencing
regulations, for example. A couple of years back, he had met
with Wayne Regelin, Director, Division of Wildlife Conservation,
ADF&G; Bert Gore, State Veterinarian, Division of Environmental
Health Animal Industries, Department of Environmental
Conservation; and the director of the Division of Agriculture.
He explained that they had discussed the whole concept, and out
of it came this legislation.
MR. WARD indicated that they are trying to get in line with other
states. The bill transfers responsibility to the Division of
Agriculture, where the regulatory authority really is. The
United States Department of Agriculture (USDA) is in the process
of identifying elk as domestic livestock; for the purpose of meat
inspection, elk will be an identified species. Therefore, it is
necessary to have the Division of Agriculture as the lead agency
to do USDA inspections. Mr. Ward concluded that he is pleased
with HB 204 and really has no problems with it.
Number 1075
REPRESENTATIVE COWDERY wondered if most of the meat is sold in-
state.
MR. WARD replied yes. They are doing mostly private sales where
people contact them to purchase the elk meat.
REPRESENTATIVE COWDERY wondered how much it costs per pound and
where in Anchorage it could be purchased.
MR. WARD replied that it is sold on a hanging-weight basis at
about $4 to $5 per pound of hanging weight. He indicated that if
elk meat can be found in Anchorage, it is most likely from New
Zealand. He explained that he can sell elk meat directly to the
consumer for more money than he can sell it to the wholesaler.
Number 1260
MARCIA WARD, Ward Farms, testified via teleconference from Delta
Junction. She indicated that she was testifying on behalf of
Scott Miller, who is president of the Delta Farm Bureau and who
presides over the elk subcommittee. She said he supports HB 204
and believes that the consolidation of regulations under one
heading in the Division of Agriculture will be a lot smoother for
new operators coming into the business. She noted that for those
same reasons she also supports the bill.
CO-CHAIR MASEK pointed out that Scott Miller's letter of support
had been included in the committee packet.
REPRESENTATIVE COWDERY wondered what kind of a diet the farmed
elk utilize.
Number 1368
MR. WARD replied that elk are both browsers and grazers. He
explained that they are a little bit seasonal in their diet. In
the spring they eat a lot of brush and boughs; in the summer they
graze on short grasses; in the fall they eat leaves; and in the
winter they are fed hay, which is supplemented with oats. He
pointed out that they do adapt well to captivity in that regard.
He also noted that three elk can be put in the same amount of
pasture as one beef cow.
REPRESENTATIVE JOULE wondered about the size of the farms.
MR. WARD indicated that elk farming lends itself to smaller
farms, because they don't need quite as much area as a beef
operation. He explained that elk do need enough space to go out
and roam, because they are still wild animals. He said that
people have started out with as little as 10 acres and have gone
up from there. He noted that [his farm] has about 150 to 160 elk
about 300 acres of fenced ground.
CO-CHAIR HUDSON wondered if they have to be concerned with
natural predators, such as wolves and bears.
MR. WARD said that they do have to be concerned, because those
are their natural predators, but [elk] are herd animals and work
in a tight social unit, so they band together to protect
themselves from predators.
Number 1630
EDNA ANDERSON, President, Kenai Peninsula Farm Bureau, testified
via teleconference from Homer. She stated that she and her
husband have been in Alaska for 42 years, and they started out
with cattle. She said her husband died in 1995, and she and her
sons decided to buy some elk, so they went to Ward Farms. They
started out with about 6 elk, and they have 25 elk now. She
explained that [elk] eat far less than the cattle did, and she
certainly supports HB 204.
GERON BRUCE, Legislative Liaison, Office of the Commissioner,
Alaska Department of Fish and Game, thanked Representative Harris
for working with them on HB 204 and stated that they have no
problem with the bill.
Number 1755
CO-CHAIR HUDSON made a motion to move CSHB 204 from committee
with individual recommendations and attached fiscal notes; he
asked for unanimous consent. There being no objection, CSHB
204(RES) was moved out of the House Resources Standing Committee.
HB 58 - OIL & GAS AUDITS
Number 1771
CO-CHAIR MASEK announced that the next order of business would be
HOUSE BILL NO. 58, "An Act relating to certain audits regarding
oil and gas royalty and net profits and to audits regarding costs
relating to exploration incentive credits and oil and gas
exploration licenses; and providing for an effective date."
KEVIN BANKS, Petroleum Marketing Analyst, Division of Oil & Gas,
Department of Natural Resources (DNR), testified via
teleconference from Anchorage. He said he had worked on the
interagency project team that recommended the transfer created by
HB 58, and had helped draft the language of the bill with the
Department of Revenue and the Department of Law. A technical
bill, HB 58 transfers the authority to audit royalties and
revenues from net profits that are created in the leases from the
Department of Revenue to the DNR; in transferring that authority,
the bill also imposes on DNR staff the same kind of
confidentiality requirements that now govern the information
gathered in audits conducted by the Department of Revenue. He
explained that they are recommending HB 58 for consideration
because of the efficiencies that it should achieve for DNR and
for the government.
Number 1961
CO-CHAIR MASEK agreed that HB 58 is a simple, straightforward
transfer of authority from the Department of Revenue to DNR. She
closed public testimony on HB 58.
REPRESENTATIVE COWDERY made a motion to move HB 58 from committee
with individual recommendations and the attached fiscal note; he
asked for unanimous consent. There being no objection, HB 58 was
moved out the House Resources Standing Committee.
HB 344 - DEPT NAT RES & AK HARD ROCK LAND EXCHANGE
Number 2045
CO-CHAIR MASEK announced that the next order of business would be
HOUSE BILL NO. 344, "An Act authorizing a land exchange between
the Department of Natural Resources and Alaska Hard Rock, Inc.;
and providing for an effective date."
Number 2107
JIM STRATTON, Director, Division of Parks & Outdoor Recreation,
Department of Natural Resources, testified via teleconference
from Anchorage. He stated:
For those of you that are not familiar with
Independence Mine State Historical Park, it's located
about 90 minutes from Anchorage, up past Palmer in the
Hatcher Pass region. It's a historic mining operation
that was closed down during World War II, and it came
to "Parks" as a state historical park from the mining
interests in about 1980.
Independence Mine State Historical Park has about
52,000 visits a year; it's road-accessible, and it's
accessible year-round when the snow is plowed in the
winter, and it's near the new proposed ski area at
Hatcher Pass. So, we're talking about a park that is
already a well-identified and well-used visitor
destination. It is one of the most significant tourist
attractions for the [Matanuska-Susitna] Borough, as it
sits on one of the few roads off of the major highway
system, and provides Alaskans and visitors alike to
drive above treeline for hiking and historical tours in
the summer and skiing and snowmobiling in the winter.
The main attraction at the park are the historical
mining structures and the beginning of one of the
mining tunnels that goes into the side of the mountain.
But maintaining these historical buildings is very
expensive, and we are not able to do that, given our
current capital authorization. So, we held a public
meeting in March of '97 to discuss options with the
community for how we could adaptively reuse the
buildings at Independence Mine in a way that would
provide an income flow to ensure that the buildings
would remain standing.
Through that meeting we found that adaptive reuse of
the structures as a visitor destination was acceptable
by everybody who was there, and that visitor
destination could include things like overnight
lodging, food service, gift shop and tours. We found
that this was compatible with the purposes for which
the park was established, in a finding that I signed in
June of 1998, but during that process we learned from
prospective private partners - who were interested in
coming into Independence Mine and working with the
division to reuse the buildings in Independence Mine as
a visitor destination - that there's not enough cash
flow in the lodging and food service alone to support
the investment needed to adapt and protect the historic
buildings.
Three things needed to occur: there needed to be some
improvements to the roads, and we've been working with
the [Department of Transportation & Public Facilities]
and the Mat-Su Borough to make that occur; the state
needed to make as much investment as they could in the
area, and this summer we have a TRAAK [Trails and
Recreational Access for Alaska] project that is
rebuilding the elevated walkway to the mine tunnel,
rebuilding the tunnels through the historical building
and providing ADA [Americans with Disabilities Act]
access to visitors center; and there needed to be an
opportunity for underground mine tours.
Underground mine tours were seen as the cash flow
opportunity to make this whole public-private
partnership work. The problem is the state didn't own
beyond the first few hundred feet of the tunnel; Alaska
Hard Rock, Incorporated, owned the tunnel, but we knew
that they were interested in pursuing an exchange for
property that the state owns on the Willow Creek side
of Hatcher Pass that Alaska Hard Rock is currently
using for their mining operations.
So, we signed a preliminary exchange agreement last
June. We spent last summer doing the surveys and the
appraisals; the costs were split between the state and
Alaska Hard Rock, and in the end, the state is to
receive 118 acres of underground mine tunnel valued at
$87,000, and Alaska Hard Rock will receive 107 acres
valued at $66,500. And because of the unequal values
involved in this exchange, we need legislative
approval, and we would ask that today.
Number 2314
RUDY VETTER testified via teleconference from Fairbanks. He
stated that he supports HB 344. He said there needs to be a lot
more diversification, and more state land needs to be put into
operation.
Number 2387
SCOTT EUBANKS, President, Alaska Hard Rock, Incorporated,
testified via teleconference from Wasilla. He asked for the
committee's support on HB 344. He pointed out that if the bill
passes, it will allow [the company] to protect a large investment
that it already has in the area. He stated that he believes it
is good for both parties involved.
CO-CHAIR MASEK closed public testimony on HB 344.
REPRESENTATIVE COWDERY made a motion to move HB 344 from
committee with individual recommendations and the attached fiscal
note; he asked for unanimous consent. There being no objection,
HB 344 was moved out of the House Resources Standing Committee.
ADJOURNMENT
CO-CHAIR MASEK adjourned the House Resources Standing Committee
meeting at 2:45 p.m.
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