03/01/2012 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB148 | |
| SB204 | |
| SB152 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 204 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| = | SB 148 | ||
| = | SB 152 | ||
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 1, 2012
3:35 p.m.
MEMBERS PRESENT
Senator Donald Olson, Chair
Senator Albert Kookesh
Senator Linda Menard
Senator Johnny Ellis
MEMBERS ABSENT
Senator Thomas Wagoner
COMMITTEE CALENDAR
SENATE BILL NO. 148
"An Act exempting a gas pipeline with a design capacity of
500,000,000 or more cubic feet of gas a day from the state's oil
and gas exploration, production, and pipeline transportation
property taxes until the pipeline generates revenue for its
owners; and relating to the determination of full and true value
for the purpose of determining the amount of required local
contribution for public school funding."
- MOVED CSSB 148(CRA) OUT OF COMMITTEE
SENATE BILL NO. 204
"An Act relating to loans for the purchase of fishing quota
shares by certain community quota entities; and providing for an
effective date."
- HEARD & HELD
SENATE BILL NO. 152
"An Act requiring legislative approval before the issuance of an
authorization, license, permit, or approval of a plan of
operation for a large-scale metallic sulfide mining operation
that could affect water in or flowing into or over the Bristol
Bay Fisheries Reserve."
- HEARD & HELD
OVERVIEW: TOXINS RELEASE INVENTORY
- REMOVED FROM AGENDA
PREVIOUS COMMITTEE ACTION
BILL: SB 148
SHORT TITLE: GAS PIPELINE PROPERTY TAX EXEMPTION
SPONSOR(s): SENATOR(s) WIELECHOWSKI, EGAN, ELLIS, FRENCH, DAVIS,
KOOKESH
01/17/12 (S) PREFILE RELEASED 1/13/12
01/17/12 (S) READ THE FIRST TIME - REFERRALS
01/17/12 (S) CRA, RES, FIN
02/09/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
02/09/12 (S) Heard & Held
02/09/12 (S) MINUTE(CRA)
02/28/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
02/28/12 (S) Scheduled But Not Heard
03/01/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
BILL: SB 204
SHORT TITLE: LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS
02/21/12 (S) READ THE FIRST TIME - REFERRALS
02/21/12 (S) CRA, FIN
03/01/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
BILL: SB 152
SHORT TITLE: LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE
SPONSOR(s): FRENCH
01/17/12 (S) PREFILE RELEASED 1/13/12
01/17/12 (S) READ THE FIRST TIME - REFERRALS
01/17/12 (S) CRA, RES
02/28/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
02/28/12 (S) Heard & Held
02/28/12 (S) MINUTE(CRA)
03/01/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
DAVID SCOTT, Staff
Senator Donald Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained the committee substitute for SB
148 and introduced SB 204.
MICHELLE SYDEMAN, Staff
Senator Bill Wielechowski
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified that the sponsor supported the
committee substitute for SB 148.
DUNCAN FIELDS, Council Member
North Pacific Fishery Management Council
Kodiak, Alaska
POSITION STATEMENT: Testified in support of SB 204.
WANETTA AYERS, Director
Division of Economic Development
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Testified that DCCED did not have a position
on SB 204, but was prepared to implement the loans should the
bill pass.
MICHAEL O'CONNOR, President
Ouzinkie Native Corporation
Ouzinkie, Alaska
POSITION STATEMENT: Testified in support of SB 204.
KRISTEN PETERSON, Staff
Senator Hollis French
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 152 on behalf of the sponsor.
RICK ROGERS, Executive Director
Resource Development Council for Alaska, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 152.
ANDERS GUSTAFSON, Executive Director
Renewable Resources Coalition
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 152.
JIMMY HURLEY, representing himself
Ekwok, Alaska
POSITION STATEMENT: Testified in opposition to SB 152.
SUE ANELON, Member
Iliamna Village Council
Iliamna Natives LTD.
Iliamna, Alaska
POSITION STATEMENT: Testified in opposition to SB 152.
VERNER WILSON III, Member
Curyung Tribal Council and
Shareholder, Bristol Bay Native Corporation (BBNC
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 152.
FRED ANGASAN, Chair
Land Committee
Alaska Peninsula Corporation
South Naknek, Alaska,
POSITION STATEMENT: Testified in opposition to SB 152.
MIKE SATRE, Executive Director
Council of Alaska Producers
Juneau, Alaska,
POSITION STATEMENT: Testified in opposition to SB 152.
ED FOGLES, Deputy Commissioner
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Testified on SB 152 and provided information
on the permit process for large-scale hard rock mining projects
ACTION NARRATIVE
3:35:59 PM
CHAIR DONALD OLSON called the Senate Community and Regional
Affairs Standing Committee meeting to order at 3:35 p.m. Present
at the call to order were Senators Wagoner, Kookesh, Menard,
Ellis and Chair Olson.
SB 148-GAS PIPELINE PROPERTY TAX EXEMPTION
3:36:18 PM
CHAIR OLSON announced the consideration of SB 148 and asked Mr.
Scott to explain the committee substitute (CS).
DAVID SCOTT, Staff, Senator Donald Olson, Alaska State
Legislature and Aide, CRA Committee, said version I committee
substitute (CS) makes three changes. First, the legislation
sunsets in 10 years. The idea was that this would spur a company
to act to take advantage of the tax exemption. Second, language
on page 4, lines 27-28, clarifies that the pipeline must
transport the gas to market for sale. Third, language on page 5,
lines 7-8, clarifies that the state will assess the 0.5 bcf/day
pipeline when it assesses the pipeline transportation systems.
CHAIR OLSON asked if the sponsor approved of the 10-year sunset.
MR. SCOTT answered that the sponsor did not object.
CHAIR OLSON asked if he or the sponsor had heard from any
boroughs or landowners that would be affected by the property
tax exemption.
MR. SCOTT said no.
CHAIR OLSON asked the reason for the third change.
MR. SCOTT answered that the state assessor brought that
suggestion forward. Current statute requires the state assessor
to find the full and true value of oil and gas pipeline systems
and the assessor wanted to clarify that the 0.5 bcf/day pipeline
also needed to be assessed.
3:40:42 PM
MICHELLE SYDEMAN, Staff, Senator Bill Wielechowski, Alaska State
Legislature, said the sponsor was comfortable with the changes
made in the CS for SB 148. The third change was an amendment the
sponsor brought to the committee to alleviate the problem that
had come up with TAPS, which was that local governments have
different ideas about the value of an asset. The state assessor
would provide a uniform valuation for the asset. The sponsor
also requested the requirement to transport the gas to market so
the state doesn't give a tax deferral to move gas from one
production facility to another. The intention was that the gas
would serve Alaskans. With regard to the sunset, she said the
sponsor appreciated that the committee wanted to create a sense
of urgency to act but she imagined that the Resources Committee
would take up that issue, because some people may think it
should be longer.
CHAIR OLSON found no further questions or discussion and asked
for a motion to adopt the CS.
3:42:20 PM
SENATOR KOOKESH moved to adopt the CS for SB 148, labeled 27-
LS0990\I.
CHAIR OLSON found no objection and announced that version I was
adopted. He asked the will of the committee.
3:42:42 PM
SENATOR KOOKESH moved to report [CS for] SB 148 from committee
with individual recommendations and attached fiscal note(s).
3:42:53 PM
CHAIR OLSON announced that without objection CSSB 148(CRA) moved
from the Senate Community and Regional Affairs Standing
Committee.
SB 204-LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS
3:43:12 PM
CHAIR OLSON announced the consideration of SB 204, which relates
to loans to community quota entities (CQE).
3:43:25 PM
DAVID SCOTT, Staff, Senator Donald Olson, Alaska State
Legislature and Aide, CRA Committee, said that SB 204 modifies
the Community Quota Entity (CQE) program by establishing an
independent revolving loan fund modeled within the existing
Alaska Commercial Fishing Revolving Loan Fund. It provides
better terms for the CQEs to purchase independent fishing quotas
(IFQ). He provided the following sectional analysis:
Section 1 amends AS 16.10.320(a) to conform to other
changes in the bill, specifically Section 3.
Section 2 provides that principal and interest
payments or any money chargeable to principal or
interest that is collected through liquidation by
foreclosure would go back into the revolving loan fund
created in the bill.
Section 3 adds a new subsection (l) to AS 16.10.320.
It establishes that CQEs may use the loan terms
spelled out in the bill to purchase 50,000 pounds of
quota share. The loan may not exceed 95 percent of the
appraised value of the collateral and the maximum term
is 25 years, except for extensions under AS
16.10.310(a)(1)(E). The loan may not exceed $1 million
and interest payments may be deferred for up to 10
years.
Section 4 amends the Commercial Fishing Revolving Loan
Fund statute, AS 16.10.340, to include the CQE
revolving loan fund.
Section 5 is a conforming language change.
Section 6 adds a new section to AS 16.10 that creates
the revolving loan fund.
Section 7 amends AS 16.10.350(a) to state that the
commissioner of commerce will be the administrator of
the fund.
Section 8 is the effective date, which is July 1,
2012.
3:46:54 PM
SENATOR ELLIS joined the committee.
CHAIR OLSON asked if the commissioner of commerce had the
authority to oversee this type of loan.
MR. SCOTT responded that the commissioner of commerce already
oversees the Commercial Fishing Revolving Loan Fund.
CHAIR OLSON asked how CQEs are related to IFQs.
MR. SCOTT said CQE stands for community quota entity and IFQ
stands for individual fishing quota. The North Pacific Fisheries
Management Council qualified 42 Gulf of Alaska communities to
form nonprofit CQE organizations in order to purchase 50,000
pounds of IFQ shares. He deferred further explanation to Mr.
Fields.
CHAIR OLSON asked if a CQE could exist without IFQs.
MR. SCOTT responded that there would be no point in forming a
CQE if the organization didn't move forward to buy quota shares.
3:49:38 PM
DUNCAN FIELDS, Fisheries Consultant, stated that he was speaking
on behalf of the rural communities for which he works,
particularly Old Harbor and Ouzinkie on Kodiak Island and the
Gulf of Alaska Coastal Community Coalition, which represents the
42 communities that have qualified as Community Quota Entity
(CQE) communities. He was not representing the views of the
North Pacific Fisheries Management Council (NPFMC), although he
was a member. He noted that the NPFMC had recognized three more
communities as CQE qualified so there would be 45 CQE
communities once the federal regulations were finalized.
MR. FIELDS said SB 204 is a loan bill to create economic
opportunities and jobs in rural CQE communities. About 15 years
ago, the NPFMC realized that fishing permits and IFQs were
leaving rural communities and fishing opportunities were lost
when these were sold. When community leaders looked at how to
reverse that downward spiral, they struck on the concept of a
community quota entity. Unlike the Bering Sea Community
Development Quota (CDQ) program, these entities would purchase
the quota in the marketplace. The community would hold the quota
in trust and lease it to individuals in the community.
The North Pacific Fisheries Management Council developed this
construct and imposed limitations as to the type of quota that
could be purchased, the amount of quota that could be purchased,
the way the quota could be fished. In 2004, the NPFMC authorized
forty-two Gulf Coast communities to purchase halibut and
sablefish IFQ shares. Only two communities have bought quota,
primarily because they lacked access to capital.
The state initially qualified the CQEs for the Commercial
Fisheries Revolving Loan Fund, but the terms of the loan,
particularly the 20 percent down payment, were a barrier.
Representative Austerman suggested modifications and introduced
HB 141, the companion bill to SB 204.
3:55:58 PM
MR. FIELDS explained that SB 204 establishes a separate loan
fund for CQE communities. The down payment is 5 percent as
opposed to the previous 20 percent. The loan term is extended
from 20 years to 25 years and interest payments may be suspended
[for up to 10 years]. The bill also provides that the
communities would pay interest at rates similar to those in the
revolving loan fund. He opined that this would provide some
communities an opportunity to access IFQs that they couldn't
otherwise access. As communities have success, other communities
will likely follow and access these loan funds.
The $45 million fiscal note would provide a maximum of $1
million to each of the approximately 45 qualified communities.
3:57:50 PM
CHAIR OLSON commented on the number of limited entry fishing
permits that are held by non-residents, and asked why anyone
would be interested in selling such a valuable asset to a CQE.
MR. FIELDS differentiated the halibut and sablefish IFQs from
the State of Alaska limited entry permits. The halibut and
sablefish IFQs are more fluid in terms of market exchange than
limited entry permits. The people who sell the IFQs tend to make
different economic decisions than folks that are selling a
limited entry permit. A limited entry permit gives an individual
a right to participate in the fishery, whereas an IFQ gives an
amount of product, pounds of fish. Sometimes people will sell a
portion of their IFQs to expand their business and others will
sell all their IFQs because they're getting out of the fishery.
He said that one reason for forming the community quota entities
was to address the problem of limited entry permits leaving
rural communities. Should there be a mechanism for rural
communities to hold limited entry permits, he opined that the
CQE would be the ideal entity to facilitate that mechanism. He
relayed that these CQEs have also received two other types of
fishery access opportunities from the National Marine Fisheries
Service through the NPFMC. One is halibut charter permits. The
21 CQE communities in Southeast Alaska have each received up to
five halibut charter permits. The community can lease those
permits to an individual who must either start or end the
fishing trip in the community. Gulf of Alaska CQE communities
have seven permits.
Gulf of Alaska communities have a third fisheries access
opportunity called a groundfish limited license permit (LLP).
These are essentially federal limited entry permits for use by
the CQE in that community.
CHAIR OLSON asked how it happened that two CQE communities were
financially successful.
MR. FIELDS said they were both unique circumstances. The
community of Ouzinkie was able to access IFQs through the
fortuitous sale of trees that were donated by the local Native
corporation. Old Harbor accessed quota share primarily through a
five-year loan. He said that CQE needed to locate another
funding source within 18 months or sell its IFQ shares.
4:03:09 PM
CHAIR OLSON asked if there were loan default plans.
MR. FIELDS cautioned that he was not a banking expert, but his
understanding was that the payments would be made annually and
the loans would be secured by the halibut quota. In the event of
a default, the community would sell the IFQ shares and the
proceeds would go to the State of Alaska.
CHAIR OLSON asked what the interest rate would be.
MR. FIELDS said the interest would be prime rate plus two
percentage points, but not more than 10.5 percent.
CHAIR OLSON asked what other lending institutions thought of
this program.
MR. FIELDS said the banks they work with recognize that loans of
this type would not be allowed in their portfolios; in this role
the state can promote rural economic development. Some bankers
have suggested that if this program is successful, it may help
individuals build their personal portfolios and increase the
likelihood of qualifying for personal loans.
CHAIR OLSON asked if more IFQs might be available in the future.
MR. FIELDS responded that there was a national effort to move
the federal fisheries towards rationalized fisheries or an
individual transferable quota (ITQ) program. He offered his
belief that in the near future all the federal fisheries in
Alaska would be encompassed by either ITQ or IFQ programs.
4:07:33 PM
CHAIR OLSON asked how many of the 42 IQE communities depended on
subsistence fishing to feed their families.
MR. FIELDS answered that a number of the smaller Gulf Coast
communities rely on subsistence for a substantial amount of
their diet. The same applies for Kodiak Island and he suspected
it was true for the Chignik area as well. Dependence on
subsistence is probably less in the larger communities, but it's
still a component of their diet.
CHAIR OLSON asked how commercial fishing entities view
subsistence users.
MR. FIELDS said there seems to be general cooperation between
the local residents who are fishing CQE halibut and those who
are subsistence users. He opined that sport charter operators
and non-resident fishermen would be more likely to compete with
subsistence users.
CHAIR OLSON asked Ms. Ayers to comment.
4:10:38 PM
WANETTA AYERS, Director, Division of Economic Development,
Department of Commerce, Community and Economic Development
(DCCED), said that DCCED followed HB 141 last session and
provided a fiscal note on SB 204 regarding operating costs. The
division would be able to manage this loan fund if it were to be
implemented; it appears to be very similar to the current
Fisheries Enhancement Revolving Loan Fund. She agreed with Mr.
Field's answer regarding loan payments and defaults.
CHAIR OLSON asked if selling the quota generally covers any
delinquency and default.
MS. AYERS answered yes; quota is considered very good collateral
and DCCED has liquidated it in the past when necessary.
CHAIR OLSON said he asked because it appeared that the number
and size of halibut was on a downward trend.
MS. AYERS said that DCCED would take all regulatory, management,
and market factors into consideration when making a loan.
CHAIR OLSON asked if the administration was in favor of SB 204.
MS. AYERS answered that the administration does not have
specific position on the bill, but DCCED was prepared to
implement it should it be adopted.
4:14:42 PM
MICHAEL O'CONNOR, President, Ouzinkie Native Corporation, said
Ouzinkie was a nonprofit corporation that focused on economic
development. He relayed that Ouzinkie currently had 8,000 pounds
of halibut IFQs and Old Harbor had 16,000 pounds. These were the
only CQEs that own and actively fish halibut IFQs. In Ouzinkie,
the individual who leased the halibut IFQs received 55 percent
of the catch and the CQE nonprofit corporation received 45
percent. This brings substantial money to a small community.
Responding to a comment from the Chair, he elaborated on the
timber sale that made it possible for the Ouzinkie CQE to buy
8,000 pounds of halibut IFQ shares. He confirmed that
conventional lenders are not interested in loaning money for
community owned IFQs.
4:20:55 PM
CHAIR OLSON asked if it was because of the risk.
MR. O'CONNOR answered yes.
CHAIR OLSON questioned why the state should undertake that risk.
MR. O'CONNOR opined that it wasn't large risk because the market
for IFQs was fluid.
CHAIR OLSON asked if he agreed that the growing farmed fish
market might threaten Alaska wild fish.
MR. O'CONNOR answered that he believed that the public
perception of farmed fish was turning negative.
4:22:43 PM
CHAIR OLSON found no further public testimony and announced he
would hold SB 204 in committee.
SB 152-LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE
4:23:03 PM
CHAIR OLSON announced the consideration of SB 152 and asked Ms.
Peterson to remind the committee about the bill.
4:23:44 PM
KRISTEN PETERSON, Staff, Senator Hollis French, Alaska State
Legislature, read the first paragraph of the sponsor statement
for SB 152 as follows:
Senate Bill 152 is designed to engage the legislature
in development issues in the Bristol Bay Fisheries
Reserve. The bill would require the legislature to
enact a law that includes a finding that any proposed
large-scale metallic sulfide mine operation
constitutes no danger to the fishery within the
reserve. This would have to be completed before the
issuance of an authorization, license, permit, or
approval of a plan of operation that could affect
water in or flowing into or over the reserve.
CHAIR OLSON opened public testimony.
4:24:38 PM
RICK ROGERS, Executive Director, Resource Development Council
(RDC) for Alaska, Inc., said RDC was strongly opposed to SB 152.
He relayed that RDC was a nonprofit organization whose purpose
was to link its diverse membership interests to encourage a
strong, diversified, private sector in Alaska, and expand the
state's economic base through responsible resource development.
He said that one of RDC's top legislative priorities was to
encourage the state to promote and defend the integrity of
Alaska's permitting process and to advocate for predictable,
timely, and efficient permitting processes that are based on
sound science and economic feasibility. RDC's perspective was
that SB 152 did the opposite. The bill was not about just the
Pebble mine; it was a legislative referendum on the state's
permitting process for projects across all industries. It
effectively usurps the permitting authority of the executive
branch and creates uncertainty for companies that are investing
or contemplating investment in Alaska. He urged the committee to
hold the bill.
CHAIR OLSON asked how to protect the fisheries and maintain the
maximum sustainable yield.
MR. ROGERS answered that there are processes and systems in
place to do that. Any suggested improvements should be vetted,
but the legislature should not adjudicate whether a project
should get permits. Many people will review a project the
magnitude of Pebble before it gets a permit; that process has
worked for Alaska for years. It's been possible to develop
large-scale projects responsibly while maintaining a robust
fishery.
4:29:08 PM
CHAIR OLSON commented that what the Murkowski administration did
to the coastal zone management program was devastating to the
people of Alaska, particularly those on the coast who no longer
have a seat at the table to voice concerns. That's why there is
grave reservation about this particular mine, he said.
MR. ROGERS said he recognized the concern about the magnitude of
the project, its location, and the other resources in the
Bristol Bay region, but he did not believe that SB 152 was an
appropriate approach for dealing with those issues.
4:30:23 PM
ANDERS GUSTAFSON, Executive Director, Renewable Resources
Coalition (RRC), said he was speaking on behalf of the more than
6,000 Alaskan members in support of SB 152. The membership
consists of individuals, businesses, and organizations that
historically have fought over allocation of the Bristol Bay
fishery resource, but have since joined forces to protect the
habitat and water that is the building block of this resource.
In the early 1970s when Alaska was first developing its oil and
gas resources, the legislature recognized the incredible,
renewable resource that is the Bristol Bay fishery and realized
it was appropriate to designate a boundary for this watershed.
The legislature also realized there should be a process for
Alaskans to have a say in whether massive industrial
developments should be allowed. By supporting SB 152, the
coalition is asking the legislature to give that same level of
oversight to a large-scale mining development in the same
region. The bill does not affect mining development across the
state; it is about protecting the Bristol Bay fishery. The
members of RRC also believe that SB 152 will create a level of
certainty in the marketplace that this fishery will continue to
be strong. This will create a friendlier environment for those
dependent on the fishery to reinvest in their businesses.
MR. GUSTAFSON reiterated that SB 152 does not prohibit mining.
It ensures a process by which the people of Alaska, through
their representatives, can protect the incredibly significant
Bristol Bay fisheries resource.
4:33:29 PM
JIMMY R. HURLEY, representing himself, said he had lived in
Ekwok for the past 50 years and he strongly opposed SB 152. He
said that the people who live in this area don't want to live on
food stamps; they want jobs.
4:35:52 PM
SUE ANELON, Member, Iliamna Village Council, Iliamna Natives
Limited (INL), stated that the council and corporation were
strongly opposed to SB 152, because a rigorous science-based
permitting system was already in place. The legislature should
instead be dealing with the more important issues of oil taxes,
helping companies create jobs, and economic development in rural
communities. She also stated that the bill could affect other
landowners and development projects within the state.
CHAIR OLSON said he should have pointed out earlier that Senator
French had visited Southwest Alaska a number of times to survey
the situation.
4:37:59 PM
VERNER WILSON III, Member, Curyung Tribal Council and
shareholder, Bristol Bay Native Corporation (BBNC), testified in
support of SB 152. He said he was a Bristol Bay commercial
fisherman who also did subsistence fishing. He stated that the
legislation gives a voice to Alaskans on the very important
issue of a large-scale mine in the Bristol Bay region.
Proponents say the development could create 2,000 jobs, but they
don't say how many jobs may be impacted. He said his father paid
thousands of dollars for a permit to fish in Bristol Bay and the
family depends on the fishery. This issue is important to this
and future generations. The Bristol Bay fishery has been there
for thousands of years and it can continue for thousands more if
it is managed sustainably and the habitat is protected. He
reiterated that the legislation gives voice to Alaskans on an
issue about which they really care.
CHAIR OLSON asked why he was interested in protecting a fishery
that he didn't depend on any longer.
MR. WILSON clarified that he did depend on the Bristol Bay
fishery; his parents still live in the area and he returns to
fish every summer. He imagined that he would move back
permanently after he finished graduate school. He began fishing
when he was about age four and looked forward eventually to
getting his own boat and permit. If fishing and mining are to
coexist, it's necessary to ask the tough questions, he said.
CHAIR OLSON asked if after he finished graduate school he can
imagine putting on boots and rain gear and working in the fish
slime.
MR. WILSON answered yes. He added that he looked forward to
being a part of further developing the seafood industry and a
sustainable economy.
4:44:23 PM
FRED T. ANGASAN, Chair, Land Committee, Alaska Peninsula
Corporation (APC), stated that as one of the largest private
landowners within the Bristol Bay Salmon Reserve, APC was
opposed to SB 152. Matters currently committed to the sound
discretion of executive agencies based on science and the
concept of due process would instead be considered in the
political arena. He said APC was convinced that the legislation
violated state law. APC's primary mission is to manage its land
for the benefit of the villages and Congress has charged the
corporation with economic development of those lands. SB 152
directly interferes with that by creating uncertainty about the
effect of a metallic sulfide deposit on their land, which has
tremendous potential for mineral development. It would place at
risk the surface exploration agreements that APC has entered
into. APC has confidence in the current process, he stated.
4:51:29 PM
MIKE SATRE, Executive Director, Council of Alaska Producers
(CAP), said CAP was a nonprofit trade association representing
the producing large metal mines and large mine development
projects in the state. He said he was testifying to voice
opposition to SB 152. The bill uses existing statutory language
that places limitations on surface entry permits to develop oil
and gas leases or exploration licenses within the Bristol Bay
Fisheries Reserve, but it goes much farther. SB 152 attempts to
restrict mining throughout the region regardless of land status
or whether the activities are in the fisheries reserve. It could
strip the rights of individuals who already hold valid mineral
claims and exploration permits in the area. This could possibly
constitute a taking, which would violate both the Alaska and
U.S. constitutions. The existing statute for oil and gas does
not assume that the development will adversely affect water; it
only requires a finding that the development will not harm the
fishery. SB 152 assumes that mining activity will adversely
affect water quality and the proponents have stated their belief
that it will potentially stop one project. This, too, raises
constitutional issues, he said.
MR. SATRE said CAP strongly supports the existing large mine
permitting processes in the state and all efforts to fully fund,
strengthen, and improve the permitting functions of the resource
agencies. If SB 152 were to pass, state permitting agencies
would be forced to follow the directives of the legislature,
rather than basing decisions on the existing science-based,
transparent, and predictable permitting processes.
4:54:11 PM
ED FOGLES, Deputy Commissioner, Department Natural Resources,
said he was not taking a position on the bill. He wanted to
discuss the state's regulatory process and present issues for
the committee to consider. He opined that the state's mine
permitting process was solid. The seven operating mines in the
state were all operating within environmental compliance, with
no significant impact to the downstream fisheries.
He emphasized that the permitting process for a large mine was
complex. It involves a number of agencies and dozens of experts
with advanced degrees in addition to the federal environmental
impact statement (EIS). He cautioned that the legislature would
have to figure out how to parse through that in order to make a
decision, but it wouldn't be an easy task.
SENATOR MENARD asked how many people would be dedicated to a
project like the Pebble Mine.
MR. FOGLES said that approximately 20 agency experts would be
involved, although the number would vary throughout the life of
the mine.
SENATOR MENARD observed that a tremendous number of people were
already dedicated to the process, which was why she was
uncomfortable.
4:58:35 PM
MR. FOGLES said that DNR's reading of the bill is that it would
cover any hard rock metal mine on both state and private lands.
Thus, any significant hard rock mining project within the
Bristol Bay area would have to come before the legislature.
Because each mine project has dozens and dozens of state and
federal permits that come out at different times, DNR is not
clear on how that would work for the legislature. Time lags will
also be an issue to evaluate because the legislature isn't in
session all the time.
5:00:33 PM
CHAIR OLSON commented that he anticipates more bills like this
because there was no coastal zone program where people from the
local area have a seat at the table to voice their concerns.
MR. FOGLES said he had been involved in permitting a number of
mines, three of which were not in the coastal zone, and
community concerns were always taken into account. Regardless of
what is in place, DNR will always address community concerns, he
said.
CHAIR OLSON said public testimony would continue at the next
meeting. He asked the sponsor to provide closing comments.
5:02:13 PM
SENATOR HOLLIS FRENCH, sponsor of SB 152, said the bill was
based on the 1972 law that was passed to protect the Bristol Bay
Fisheries Reserve from oil and gas development. The legislature
at the time considered including mining but oil and gas was the
immediate threat to the fisheries and that became the topic of
the bill. SB 152 is designed to put large-scale mining on the
same footing as oil and gas. If it can be done safely and with
no threat to the fishery, then go ahead. If it can't be done
safely, then it should stop. The legislature deserves input
given the far-reaching nature of the impact on fishermen across
all of Alaska.
CHAIR OLSON asked the sponsor before the bill moved from
committee to address the constitutional questions that the bill
potentially raised.
CHAIR OLSON held SB 152 in committee.
5:03:58 PM
There being no further business to come before the committee,
Chair Olson adjourned the Senate Community and Regional Affairs
Standing Committee meeting at 5:03 p.m.
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