Legislature(1995 - 1996)

03/27/1996 01:50 PM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SENATE FINANCE COMMITTEE                                   
                         March 27, 1996                                        
                            1:50 p.m.                                          
  SFC-96, #55, Side 1 and 2                                                    
  SFC-96, #56, Side 1                                                          
  SFC-96, #56, Side 2 (575-241)                                                
  CALL TO ORDER                                                                
  Senator Rick Halford,  Co-chairman, convened the meeting  at                 
  approximately 1:50 p.m.                                                      
  In  addition  to  Co-chairmen Halford  and  Frank,  Senators                 
  Phillips  and  Rieger  were  present.   Senators  Sharp  and                 
  Zharoff arrived shortly  after the  meeting began.   Senator                 
  Donley did not attend.                                                       
  ALSO  ATTENDING:    Senate President  Drue  Pearce;  Senator                 
  Leman;  Laurie  Otto,  Deputy  District  Attorney,  Criminal                 
  Division, Dept.  of Law;  Beth Kerttula,  Assistant Attorney                 
  General, Oil, Gas,  and Mining Section, Dept. of  Law; Annie                 
  Carpeneti,  Assistant  Attorney General,  Criminal Division,                 
  Dept.  of  Law; Rick  Cross,  Deputy Commissioner,  Dept. of                 
  Education;  Eddy Jeans,  School Foundation,  School Finance,                 
  Dept. of Education; Dwight Perkins, Special Assistant, Dept.                 
  of Labor; Doug Mertz, representing  the Prince William Sound                 
  Regional   Citizens   Advisory   Committee;   Pam   LaBolle,                 
  President,  Alaska State Chamber of Commerce; Wanda Cooksey,                 
  representing  Single  Site  Schools;  Eddy  Grasser,  Alaska                 
  Outdoor  Council; Charles  Campbell,  Juneau, Alaska;  Susie                 
  Gregg Fowler, Juneau, Alaska.                                                
  ALSO  PARTICIPATING VIA  TELECONFERENCE:   Ken  Donajkowski,                 
  Audit Consultant (E.H.& S. area) ARCO Alaska, Anchorage; Dan                 
  Elliot, representing  the  MatSu  Citizens  Advisory  Board,                 
  Wasilla, Alaska.                                                             
  SUMMARY INFORMATION                                                          
  SB  52 -  CAPITAL PUNISHMENT FOR MURDER                                      
            Testimony was presented by Charles Campbell, Susan                 
            Gregg Fowler, and Annie Carpeneti.   CSSB 52 (Jud)                 
            was  REPORTED OUT  of committee  with  zero fiscal                 
            notes from the  Court System  and Dept. of  Public                 
            Safety  and  a  $2.2   note  from  the  Governor's                 
  SB 199 -  ENVIRONMENTAL & HEALTH/SAFETY AUDITS                               
            Testimony  was presented  by  Senator Leman,  Doug                 
            Mertz, Laurie  Otto, Beth  Kerttula, Pam  LaBolle,                 
            Dwight Perkins,  and  via  teleconference  by  Ken                 
            Donajkowski.  Conceptual language, proposed by the                 
            Dept. of Law,  effecting an  exemption for  audits                 
            and  voluntary disclosures  relating  to the  TAPS                 
            tariff or enforcement of the state pipeline right-                 
            of-way   was   adopted   as   an   amendment   for                 
            incorporation within  a Senate Finance  version of                 
            the bill.  CSSB 199 (Fin) was then REPORTED OUT of                 
            committee  with  a $39.0  note  from the  Dept. of                 
            Environmental Conservation, a $40.0 note from  the                 
            Dept.  of  Natural  Resources, a  $66.5  note from                 
            Dept. of Fish  and Game, and  zero notes from  the                 
            Dept. of Transportation and Public Facilities  and                 
            the Dept. of Military & Veterans Affairs.                          
  SB 230 -  LEG APPROVE PERM'NT RECREAT'NL RESTRICT'N                          
            Discussion  was  had  with  Senator  Pearce,  Eddy                 
            Grasser, and  via teleconference with  Dan Elliot.                 
            A  draft committee  substitute  dated 3/26/96  was                 
            adopted.  CSSB 230 (Fin) was  then REPORTED OUT of                 
            committee with a $105.8 fiscal note from the Dept.                 
            of Natural Resources.                                              
  SB 244 -  CALCULATION OF STATE AID TO EDUCATION                              
            Discussion was  had with  Rick Cross,  Eddy Jeans,                 
            and Wanda Cooksey.  The bill was subsequently held                 
            in committee for further review.                                   
  SENATE BILL NO. 199                                                          
       An Act relating to environmental audits and health                      
       and  safety  audits to  determine  compliance with                      
       certain  laws,  permits,   and  regulations;   and                      
       amending Alaska Rules  of Appellate Procedure 202,                      
       402, 602, 603, 610, and 611.                                            
  Co-chairman Halford directed  that SB 199 be brought  on for                 
  discussion and  noted a  prior hearing  on the  bill.   DOUG                 
  MERTZ came before committee on  behalf of the Prince William                 
  Sound  Regional Citizens'  Advisory Committee,  a non-profit                 
  corporation formed to promote environmentally safe operation                 
  of the  Alyeska terminal and associated tanker traffic.  The                 
  group  consists  of  18  organizations  in  communities  and                 
  boroughs throughout the  area impacted  by the EXXON  VALDEZ                 
  spill as  well as commercial  fishing, aquaculture,  native,                 
  recreation,  tourism,  and   environmental  representatives.                 
  While the group  supports the fundamental goal  of fostering                 
  greater compliance  with  environmental  health  and  safety                 
  requirements through a  cooperative approach that encourages                 
  regulated entities to find and correct problems  themselves,                 
  SB 199 would not  accomplish that in its  current form.   It                 
  would  instead invite  abuse, generate more  public distrust                 
  and cynicism,  and widen  the chasm  between regulators  and                 
  regulated entities.                                                          
  The group thus recommends the following changes:                             
       1.   Eliminate the self-audit provision.   It creates a                 
  shield         that is too  broad and which  interferes with                 
                 the public's right  to know.   EPA has  found                 
                 that a self-audit  privilege is not necessary                 
                 to  encourage   self-auditing  by   industry.                 
                 Immunity from prosecution  for self-disclosed                 
                 violations is sufficient  to encourage  self-                 
       2.   That  regulatory  agencies   not  request  or  use                 
  environmental       audit  reports  to initiate  a  civil or                 
                      criminal prosecution of a self-disclosed                 
                      violation.      That   is   the   device                 
                      successfully used by EPA.                                
       3.   More  precision be added to standards language. As                 
  an        example,  Mr.  Mertz   noted  language   requiring                 
            disclosure  of a  violation  to occur  "promptly."                 
            EPA policy requires disclosure within 10 days.  He                 
            noted the use of vague generalities in other areas                 
            of  the  bill  and  correspondent  use  of precise                 
            numbers in federal policy.                                         
       4.   Immunity  be  narrowed so  that violators  are not                 
  allowed        to  retain  any   of  the  economic  benefits                 
                 derived  from  violations.   Immunity  should                 
                 extend   only   to   punitive   portions   of                 
                 enforcement actions.   That would provide for                 
                 fundamental fairness to competitors  who have                 
                 complied,   by   eliminating   the   economic                 
                 advantage of noncompliance.                                   
       5.   Certain provisions  that presently create  a safe-                 
  haven for           violators  be  tightened  or eliminated.                 
                      Specifically, the violator should not be                 
                      able to disclose a violation and  invoke                 
                      immunity  after  there has  already been                 
                      notice of a  citizen suit or a  whistle-                 
                      blower  complaint  concerning  the  same                 
                      violation.  The violator should also not                 
                      be  able  to  disclose  a violation  and                 
                      invoke  immunity  if  the violation  has                 
                      imminently and  substantially endangered                 
                      the  public  or  the  environment.   The                 
                      violator should not be able to  create a                 
                      permanent  safe-haven  by   repeated  or                 
                      continuous self-audits or  by announcing                 
                      an audit after it  already has reason to                 
                      believe a violation may have occurred.                   
       6.   Disclosure of  a violation  should not shield  the                 
  violator       from prosecutions for other  violations based                 
                 on disclosed  facts or  which are  discovered                 
                 because of disclosed facts.                                   
  As currently written, the bill would lead to more litigation                 
  and   effectively   shield   the   violator   from    future                 
  investigations  and prosecutions,  even for  violations that                 
  are not voluntarily disclosed.                                               
  KEN  DONAJKOWSKI,  Audit  Consultant  (E.H.&  S  area)  ARCO                 
  Alaska, next testified  via teleconference on behalf  of the                 
  Alaska Oil and Gas Association--a trade association whose 19                 
  members account for the majority of oil and gas exploration,                 
  production,  transportation,  refining   and  marketing   in                 
  Alaska.  The Association  supports the intent of SB 199.   A                 
  majority of members currently conduct self-audits as a means                 
  of ensuring compliance  and thus see  value in the  proposed                 
  Over the past  25 years,  health, safety, and  environmental                 
  regulations   have  become   increasingly   complex.     Not                 
  incidentally, interpretation of these regulations has become                 
  correspondingly difficult.   Self-auditing identifies  areas                 
  of inadvertent noncompliance and leads to corrective action.                 
  Self-audit is encouraged  not only to ensure  compliance but                 
  to  generally  improve  health,  safety,  and  environmental                 
  performance.   The proposed  legislation encourages  greater                 
  utilization  of   self-audits  by  providing   immunity  and                 
  Immunity should be offered as an incentive  for companies to                 
  identify,  disclose,  correct  and   prevent  recurrence  of                 
  noncompliance.   To be  effective,  self-auditing should  be                 
  undertaken  without  fear  of consequences  from  regulatory                 
  agencies and without  concern for final outcome.   Providing                 
  immunity for deficiencies that are discovered  through self-                 
  auditing recognizes  efforts by  companies to  comply rather                 
  than penalizing them  for those efforts.   Immunities should                 
  not, however, extend  to those  who knowingly and  willfully                 
  commit violations and subsequently audit  in order to shield                 
  themselves from the consequences.                                            
  Privilege further protects  companies from inappropriate and                 
  unnecessary  repercussions  of disclosing  audit  results to                 
  agencies.  It also ensures that  the auditing process is not                 
  compromised.  The issue is not one of secrecy but ability to                 
  conduct  candid   interviews  with  personnel.    To  remain                 
  effective, it is necessary to  preserve the integrity of the                 
  audit  process  and maintain  the  trust and  cooperation of                 
  employees.      Traditional  legal   privileges   limit  the                 
  flexibility important to the self-auditing process.  As with                 
  immunity,  there  are reasonable  limits  to application  of                 
  privilege.    It should  protect  the products  of  an audit                 
  (audit  report,  working papers,  and  action plan),  but it                 
  should not be a vehicle to hide underlying facts.                            
  In his concluding  remarks, Mr. Donajkowski advised  that SB
  199 moves health, safety, and  environmental compliance in a                 
  positive direction through  encouragement of  self-auditing.                 
  He urged  passage of legislation containing the intent of SB
  199.     He  reiterated   that  looking  for   deficiencies,                 
  identifying them, disclosing  them to appropriate  agencies,                 
  and correction is  the essence of  self-auditing.  It is  an                 
  important tool for voluntary compliance.  Without  privilege                 
  and  immunity, voluntary self-audits can  put a company at a                 
  competitive disadvantage relative  to companies that  do not                 
  Discussion  followed between Senator  Randy Phillips and Mr.                 
  Donajkowski  regarding  the  association's interaction  with                 
  various federal and state  agencies on problem areas  in the                 
  proposed bill.                                                               
  [Senator Sharp arrived at the meeting at this time.]                         
  LAURIE  OTTO, Deputy  Attorney  General, Criminal  Division,                 
  Dept. of Law,  came before committee.   She said that  while                 
  the intent  of the  bill is  good, she  would  speak to  the                 
  effect of the legislation on prosecutors.  Two things impact                 
  ability   of  the   state  to  prosecute   crimes  involving                 
  environmental or health and safety laws:                                     
       1.   Privileges as they apply to criminal prosecution.                  
       2.   Immunities.                                                        
  It  is the opinion  of the  Dept. of  Law that  the combined                 
  effect of the foregoing provisions "is to make it impossible                 
  to  prosecute  any  offense  where  an  environmental  audit                 
  privilege is claimed."  The bill makes an exception for "bad                 
  actors."  The  definition of  "environmental audit," at  the                 
  end  of  the bill,  is so  broad  that "anything  could fall                 
  within  it."    There are  no  standards,  certification, or                 
  licensing  requirements  for  auditors.     There  is  broad                 
  disagreement, within  the  field,  on  what  constitutes  an                 
  environmental audit.  Presumably, a bid proposal for cleanup                 
  would be considered privileged under the bill.                               
  The extent  of the  privilege is  not carefully  delineated.                 
  Every witness interview, document, scientific test, gathered                 
  pursuant  to  what  is  identified  as  an  audit  would  be                 
  privileged.    The  bill  provides  a  full,  complete,  and                 
  absolute shield against  provision of  "any document to  the                 
  state and against prosecution of  anybody."  It would  allow                 
  companies to "go  in and vacuum  up every piece of  evidence                 
  that might be incriminating,  . . . under  the shield of  an                 
  environmental audit."   Environmental crimes  are regulatory                 
  offenses.  Like  any other  white collar  offense, they  are                 
  proven with  documents generally obtained from the offender.                 
  If the  legislature  does not  want  environmental  offenses                 
  prosecuted  as  crimes,   it  would   be  easier  and   more                 
  straightforward to  eliminate  criminal  penalties  for  the                 
  crimes  covered  by  SB  199. Retention  of  such  crimes in                 
  statute and  passage of  the  proposed bill  would give  the                 
  appearance of ability to  prosecute.  The public would  then                 
  demand the filing  of charges in areas  where the department                 
  has no practical ability to prosecute.                                       
  Ms.  Otto  said she  asked staff  in  the office  of special                 
  prosecutions  and  appeals  to  review  the  legislation  to                 
  determine whether arguments  around cited problems  could be                 
  made.  She then advised that the view presented by staff was                 
  "even more negative than what I'm expressing to you  today."                 
  Ms. Otto said  that since  the proposed bill  is modeled  on                 
  Texas  law, she  contacted the  national district  attorneys                 
  association to  determine what the  national experience  has                 
  been.  The  response indicated  experience similar to  cited                 
  concerns.  The  association unanimously passed  a resolution                 
  against "this  kind of  legislation."   Ms. Otto  referenced                 
  both the resolution and correspondence from the association,                 
  outlining problems experienced with similar legislation.                     
  Senator Randy Phillips expressed frustration over department                 
  criticism of  the legislation  in the  absence of  suggested                 
  alternatives or corrective  provisions.  Ms. Otto  said that                 
  EPA has a model that appears to work effectively.  There are                 
  also  other  things that  can  be  done  from a  prosecution                 
  standpoint.  She  cited ability of  a judge who sentences  a                 
  corporation for a crime  discovered as a result of  an audit                 
  to  take that into  account at  sentencing.   Language could                 
  lower  the  class  of  offense   if  discovered  via  audit.                 
  Further, provisions could  require that documents  be turned                 
  over  to the  state but  not utilized in  court.   The state                 
  would, at least, have  access to documents to  evaluate what                 
  is and is not admissible.  The current bill creates a bar to                 
  receipt  of documents  and provides  companies transactional                 
  immunity from prosecution.                                                   
  Ms. Otto explained that environmental  regulation is not her                 
  field.  She advised that she was merely telling members what                 
  effect the bill would  have on prosecutors who are  asked to                 
  enforce legislation.   She said she was  providing practical                 
  information  "about  what  this  bill  does."   She  further                 
  advised that  the legislation should  not be applied  to the                 
  "criminal arena."   The state should  not let those who  are                 
  knowingly  and intentionally  violating  the  law  "off  the                 
  hook."  That does not help anybody in the  industry since it                 
  provides a competitive advantage to wrong-doers.  Tightening                 
  the bill and providing definitions would help.                               
  PAM  LaBOLLE, President,  Alaska State Chamber  of Commerce,                 
  next came before  committee in  support of the  legislation.                 
  She  asked  that members  keep in  mind  the goal  of having                 
  regulations  that  protect   the  environment,  health,  and                 
  safety.   Having  "everyone comply  with those  regulations"                 
  makes the bill "very reasonable."   It allows those who have                 
  inadvertently been out of  compliance to voluntarily correct                 
  the  situation  without fear  of  prosection.   There  is no                 
  incentive for  self-audit if the end result is liability for                 
  fines,  jail,  and lawsuits.    The legislation  provides an                 
  opportunity  to  reach  the goal  of  a  partnership between                 
  business  and  government.   Similar  legislation  has  been                 
  successful in other states.                                                  
  [Senator Zharoff arrived at the meeting at this time.]                       
  In response to questions from Senator Phillips, Mrs. LaBolle                 
  noted  that self-audits discover  things "that  nobody knows                 
  about."   The  state  does not  have  enough regulators  and                 
  enforcers  to  find  them.    The proposed  bill  would  put                 
  business in the position of "helping to bring  these about."                 
  BETH  KERTTULA, Assistant  Attorney General;  Oil,  Gas, and                 
  Mining Section; Dept.  of Law;  next came before  committee.                 
  Co-chairman Halford  asked what  would need  to be  changed,                 
  within the bill, to  remove application to tariff cases  and                 
  associated fiscal implications.  Ms. Kerttula noted that, as                 
  presently  written,  privilege  sections  impact  self-audit                 
  information now received  from pipeline owners and  Alyeska.                 
  Those  provisions would  have to  be  rewritten so  that the                 
  privilege would  not apply.   The  state currently  receives                 
  both  safety and  environmental audits.   Further,  immunity                 
  provisions would impact  state ability to recover  under the                 
  existing tariff.  Exemption of  the tariff  and APUC-related                 
  filings could solve the problem.                                             
  Discussion  followed  between Ms.  Kerttula  and Co-chairman                 
  Halford  regarding placement  of  exemption language  within                 
  CSSB 199 (Res).  Ms. Kerttula expressed need for time within                 
  which to develop  appropriate language.   She also said  she                 
  could not guarantee that the "fix"  would work.  She advised                 
  she would attempt to craft an appropriate amendment.                         
  Senator  Leman, sponsor  of  the  legislation,  came  before                 
  committee referencing comments in support of the "intent" of                 
  the bill.  He then described past discussions with the Dept.                 
  of  Law  regarding provisions  within  the legislation.   He                 
  concurred that the bill "does the  good things," but he said                 
  he did  not agree  that it  would have  the negative  impact                 
  suggested by the department.   The sponsor stressed that the                 
  intent  is greater  compliance with  environmental laws  and                 
  increased worker safety.  He took exception to misstatements                 
  regarding the contents of the bill.                                          
  Referencing  comments  by Ms.  Kerttula  relating  to tariff                 
  problems,  Senator Leman  suggested that  she  was "probably                 
  reaching a  little far."   It  is  not the  intent that  the                 
  legislation prevent the state from  moving forward on tariff                 
  cases.   He agreed  that some  measure of  comfort could  be                 
  provided  if the  issue was  clarified under  "non-privilege                 
  The  sponsor  referenced comments  by  Ms. Otto,  and voiced                 
  reluctance  to define "exactly  what constitutes  an audit."                 
  He further  noted that 17  other states have  passed similar                 
  legislation  and  cited some  of  the provisions  adopted by                 
  those states.                                                                
  Senator Sharp attested  to slow-downs by representatives  of                 
  the  administration  who  offer   nothing  tangible  as   an                 
  alternative.  He then described a past situation in which an                 
  offer by  OSHA for  voluntary inspection  led to  successive                 
  OSHA monitoring.   He  expressed need  for legislation  that                 
  provides for voluntary audit and  compliance without fear of                 
  administrative repercussions.                                                
  Senator  Zharoff  asked  if  the  legislation  would  impact                 
  ongoing cases.    Would it  limit  state ability  to  obtain                 
  information  and  necessitate state  expenditures  to obtain                 
  reports  and   information  now   routinely  received   from                 
  companies?  Co-chairman Halford noted  that the bill applies                 
  to environmental and health and  safety audits conducted "on                 
  or after the effective date."  Senator Leman referenced page                 
  4, line 4, and explained that privilege does not apply if  a                 
  person or company is required to report specific information                 
  to the state.  Senator Zharoff noted correspondence from the                 
  Dept. of Law indicating that in  the case of the 1995 tariff                 
  case,  it  would  have  cost  approximately $25  million  to                 
  conduct needed audits.  If the proposed bill is enacted, the                 
  state will not have  access to that type of  information and                 
  would have to  bear the cost of obtaining it.  Senator Leman                 
  said he did not  want to compromise state ability  to pursue                 
  tariff  cases.  He  voiced his belief  that necessary tariff                 
  information,  which is  presently  being provided,  would be                 
  exempt under provisions  at page 4, lines 4  through 15.  He                 
  further  advised  that  he would  not  object  to clarifying                 
  language.   Information needed  for tariff  cases should  be                 
  part of the operating permit.                                                
  The sponsor again stressed lack of state resources to police                 
  operations and need for voluntary efforts toward compliance.                 
  Co-chairman  Halford   asked  that   Ms.  Kerttula   prepare                 
  conceptual language dealing with pipeline tariff cases under                 
  non-privileged material provisions.                                          
  Senator Rieger  referenced discussion concerning  the intent                 
  of the bill  versus the manner in  which it is drafted.   He                 
  voiced   his  recollection   that   Captain  Hazelwood   was                 
  ultimately  "let off" because  he voluntarily  disclosed the                 
  EXXON VALDEZ  oil spill.   He  cautioned that the  committee                 
  must "think through" how the bill is written.                                
  END:      SFC-96, #59, Side 1                                                
  BEGIN:    SFC-96, #59, Side 2                                                
  Senator Leman countered the foregoing comment by voicing his                 
  belief that Captain Hazelwood got off because the  jury made                 
  a  bad  decision "about  his  state  of  intoxication."   He                 
  stressed  that  for  privilege and  immunity  to  apply, the                 
  agency  must be  notified in  advance that  a self-audit  is                 
  being performed.  It  would thus not apply in  the Hazelwood                 
  Co-chairman  Halford raised  a question  regarding potential                 
  loss  of  federal funds  should  the state  program  be less                 
  stringent  than  OSHA  requires.    Mr.  Leman  said he  was                 
  satisfied that would not occur under  the proposed bill.  It                 
  is not the intention that that occur.  He reiterated that 17                 
  other states  have adopted similar legislation and suggested                 
  that  they  would  not  knowingly  jeopardize their  federal                 
  Senator Zharoff sought clarification of  language at page 6,                 
  subsection  (g).   Senator  Leman  explained that  the state                 
  cannot initiate an  inspection solely upon receiving  notice                 
  of self-audit.                                                               
  DWIGHT  PERKINS, Special  Assistant,  Dept.  of Labor,  came                 
  before committee.  He explained that Alaska  presently has a                 
  state   plan  and   total  jurisdiction   over  safety   and                 
  environmental review through  federal funding.   The program                 
  consists of auditing and compliance.  If a company asks that                 
  the  department perform  an audit,  the  information becomes                 
  privileged.   Staff then works  with the company  to achieve                 
  compliance.     Audit   information  is   not  shared   with                 
  enforcement staff.  Alaska  has the only state plan  of that                 
  kind.  The federal government requires  that the state be as                 
  stringent as federal requirements.  If that is not the case,                 
  funding is jeopardized,  and OSHA  functions will revert  to                 
  the federal government.   Senator  Leman suggested that  EPA                 
  has made similar threats  to other states.  That  agency has                 
  not changed its policy to encourage self-audits.                             
  Mr. Perkins advised of initial  discussions with the sponsor                 
  to the effect that the department would have no problem with                 
  the bill if it does not change current operations and impede                 
  inspectors.   Following  introduction, the  department found                 
  areas of concern.  The Commissioner does not want to put the                 
  federal government to the  test with a program that  is less                 
  stringent.   Mr.  Perkins stressed major  concerns regarding                 
  worker safety.  He noted that the bill  would remove part of                 
  the department's enforcement  powers.   The state faces  the                 
  possibility  of  losing  its  plan.     He  then  referenced                 
  correspondence from Region 10, sharing those concerns.                       
  Senator Leman stressed that the issue  is not whether or not                 
  the state receives audits that are  already being done.  The                 
  balance is self-audit and subsequent  attempts at compliance                 
  versus no audits and "not  knowing what you're doing wrong."                 
  The intent is to encourage audits and corrective action.                     
  Discussion  of  compliance  plans followed  between  Senator                 
  Leman and Senator Zharoff.                                                   
  Co-chairman  Halford  referenced  the  following  conceptual                 
  amendment proposed by the Dept. of Law:                                      
       Page 1, line 8:                                                         
            Except for any audit reports relating to                           
            the  TAPS tariff  or enforcement  of the                           
            state pipeline right-of-way.                                       
       Page 4, line 17:                                                        
            Except  for  any  voluntary  disclosures                           
            relating   to   the   TAPS   tariff   or                           
            enforcement of the state pipeline right-                           
  Senator Phillips MOVED  for adoption.   No objection  having                 
  been raised, the amendment was ADOPTED.                                      
  Co-chairman   Halford   next   queried   members   regarding                 
  disposition of the bill.  Senator Sharp MOVED for passage of                 
  CSSB  199  (Fin) with  accompanying  fiscal notes.   Senator                 
  Zharoff OBJECTED.  Co-chairman Halford called  for a show of                 
  hands.   CSSB 199 (Fin) was  REPORTED OUT of committee  on a                 
  vote of 4 to 1, accompanied by the following fiscal notes:                   
       Dept. of Military and Veterans Affairs            0                     
       Dept. of Transportation and Public Facilities     0                     
       Dept. of Environmental Conservation              39.0                   
       Dept. of Natural Resources                       40.0                   
       Dept. of Fish and Game                           66.5                   
  Senator  Sharp signed the committee report  with a "do pass"                 
  recommendation.  Co-chairmen Halford  and Frank and Senators                 
  Phillips and  Zharoff signed  "no recommendation."   Senator                 
  Rieger indicated need for amendment.                                         
  SPONSOR SUBSTITUTE FOR SENATE BILL NO. 52                                    
       An  Act  authorizing  capital  punishment,  classifying                 
       murder in  the first  degree as a  capital felony,  and                 
       establishing   sentencing   procedures    for   capital                 
       felonies; authorizing  an advisory vote  on instituting                 
       capital  punishment;  and  providing for  an  effective                 
  Co-chairman Halford directed that SSSB  52 be brought on for                 
  discussion and  referenced CSSSSB  52 (Jud).   He  explained                 
  that the  judiciary version  provides only  for an  advisory                 
  vote on the issue of capital punishment.  The only reason it                 
  was referred to  Finance is  the $2.2 fiscal  note from  the                 
  Division of Elections.                                                       
  CHARLES CAMPBELL first  came forward to  speak to the  bill.                 
  He advised that  he came to  Alaska in  1979 as director  of                 
  corrections and would  be testifying based on  many years of                 
  experience in criminal justice.                                              
  He  voiced  his belief  that  an  advisory  vote on  capital                 
  punishment could initiate  a public  policy with  tremendous                 
  costs in  the future.   Further, an affirmative  majority on                 
  the  advisory  vote  will make  it  extremely  difficult for                 
  legislators to vote  against the death  penalty.  Since  the                 
  death penalty  would not be  good for Alaska,  the committee                 
  would  be  prudent to  set  the  bill aside  until  there is                 
  opportunity for additional research beyond that conducted in                 
  Senate Judiciary.                                                            
  If presented to  the public at this time, Alaska's residents                 
  will  be  voting   on  the  basis   of  "a  great  deal   of                 
  misinformation."   It would  be a disservice  to present the                 
  question to voters under those circumstances.                                
  Mr. Campbell  voiced his belief  that there are  no rational                 
  arguments in favor of the death penalty.  He then referenced                 
  evidence  which he said indicates that  the death penalty in                 
  America "has caused  murders that  might have otherwise  not                 
  been  committed."   Death  penalty states  consistently show                 
  higher murder rates than  states without capital punishment.                 
  Reinstitution of the death penalty has preceded increases in                 
  murder rates.   Canada abolished the death  penalty in 1976,                 
  and the murder rate decreased.   In the past year, the state                 
  of Texas executed three times  more prisoners than any other                 
  state, and the murder rate in Texas is 14 per 100,000--twice                 
  the national average.   Review of  the death penalty in  New                 
  York State  over a  60-year period  (1906-1966) evidences  a                 
  pattern  of  two  additional   murders  during  each   month                 
  following one or  more executions.   Findings indicate  that                 
  those  who  are  predisposed to  violent  behavior  are more                 
  likely  to be  incited  than  deterred  by the  prospect  of                 
  execution.    Mr.  Campbell  acknowledged  that   statistics                 
  provide indications rather than absolute conclusions.                        
  Mr.  Campbell  said he  recognized  the political  appeal of                 
  capital   punishment,   particularly   in  districts   where                 
  constituents  feel  strongly about  the  issue.   While most                 
  people believe in the  death penalty from time to  time, for                 
  particular crimes, when all facts  are considered, there are                 
  no  arguments  in  favor  of  it.   There  are  no  national                 
  organizations working for perpetuation of the death penalty.                 
  A better approach  would be for the  legislature to research                 
  what is happening  throughout the United States  and provide                 
  information to constituents.   In  his closing remarks,  Mr.                 
  Campbell stressed that capital punishment is not good public                 
  policy.  It will not control crime.                                          
  Senator Randy Phillips  referenced prior advisory votes  and                 
  noted that the  legislature took no  action based on any  of                 
  them.   Mr.  Campbell  suggested  that  on  this  issue  the                 
  legislature should advise the voters  rather than the voters                 
  advising the legislature.  Senator Phillips said that voters                 
  would  review  the facts  prior  to  a vote.    Mr. Campbell                 
  suggested that the right information  might not be provided.                 
  Surveys indicate that the majority  thinks the death penalty                 
  is inexpensive and would save money.                                         
  SUSIE GREGG  FOWLER next came before committee.   She voiced                 
  concern that the  intent of  the advisory vote  is to  limit                 
  discussion on merits and costs  of capital punishment.  That                 
  discussion should occur with statewide public participation.                 
  Presenting  Alaskans  with  an  advisory   vote  on  capital                 
  punishment  would  be  a  great   disservice  in  that  many                 
  residents are not well informed about current punishment for                 
  those convicted  of murder.   A  recent poll  shows that  78                 
  percent of Alaskans  believe that  those convicted of  first                 
  degree murder are  released after one  to twenty years.   In                 
  fact,  there  is  no release  after  twenty  years,  and the                 
  average  sentence is  eighty to  ninety years.   People  are                 
  frightened by stories of  those who get out and  kill again.                 
  Those stories have remained in the mind of the public rather                 
  than actual  facts about  what the  criminal justice  system                 
  A second  problem  with the  advisory  vote relates  to  the                 
  question being asked.  The  death penalty information center                 
  released a  report, three  years ago,  which indicated  that                 
  when the public is simply asked whether it is for or against                 
  the  death   penalty,  a  high  percentage   (77%)  responds                 
  affirmatively.  When asked if they support the death penalty                 
  or life without parole plus restitution, support for capital                 
  punishment dropped to  49 percent, and 44  percent preferred                 
  life imprisonment.  Opposition to the death penalty does not                 
  suggest that one  is soft on crime.   At issue is  the moral                 
  question  of life  or death and  the appropriateness  of the                 
  state taking a life.                                                         
  Mrs. Fowler voiced need for leadership which does not pander                 
  to public fears but seeks different opinions and  then makes                 
  courageous  and responsible decisions.   She  suggested that                 
  there is no compelling reason for the advisory vote.                         
  ANNIE  CARPENETI,  Assistant   Attorney  General,   Criminal                 
  Division, Dept. of  Law, next came before  committee voicing                 
  opposition to the bill.  She stressed that the death penalty                 
  is an  extremely difficult subject.   It is  associated with                 
  issues that need  debate within the  legislature.  Asking  a                 
  single question for or against capital punishment is unfair.                 
  Will voters know that it costs from three  to six times more                 
  to execute  a prisoner than to house  an inmate for the rest                 
  of his or her life?                                                          
  Ms.  Carpeneti  next  spoke to  problems  capital punishment                 
  would cause prosecutors because  it "skews the case law  for                 
  all cases."  Many decisions in a criminal case are committed                 
  to the discretion of a trial judge.   When the stakes are as                 
  high as the death  penalty, judges will want to  ensure that                 
  they  are correct.  They will bend  over backwards to do so.                 
  The criminal justice system is not perfect.  It has resulted                 
  in  execution of innocent  people in the past.   There is no                 
  reason  to expect  that will not  occur in  the future.   No                 
  information evidences that capital punishment deters murder.                 
  The  Dept. of  Law  is  getting  long  sentences  for  those                 
  convicted of first degree murder.                                            
  In territorial days, when capital  punishment was in effect,                 
  evidence indicates that  non-whites were executed at  a much                 
  higher rate than  whites, for similar  offenses.  This is  a                 
  problem  all  states  with   death  penalty  provisions  are                 
  attempting to address.                                                       
  In her concluding  remarks, Mrs. Carpeneti advised  that the                 
  death penalty  is wrong.   Violence  should not  be answered                 
  with violence. Research shows that if  a single question, as                 
  contemplated  by  the advisory  vote,  is placed  before the                 
  public, the response is affirmative.  A selection of options                 
  provides  a much different response.   There is concern that                 
  an advisory vote asking only  one question will be perceived                 
  as a public mandate.                                                         
  Comments followed  by  Senator  Randy  Phillips  reiterating                 
  earlier  statements  that the  legislature  has not,  in the                 
  past, acted on advisory votes.                                               
  Senator Sharp requested a brief at ease.                                     
                       RECESS -  3:15 P.M.                                     
                     RECONVENE - 3:30 P.M.                                     
  Senator  Sharp  MOVED   that  CSSSSB  52  (Jud)   pass  from                 
  committee.  Senator  Zharoff OBJECTED.   Co-chairman Halford                 
  called for a show of hands.  The motion carried on a vote of                 
  5 to 1,  and CSSSSB 52  (Jud) was REPORTED OUT  of committee                 
  with a  $2.2 fiscal  note from  the Office  of the  Governor                 
  (Division of  Elections) and  zero notes  from the Dept.  of                 
  Public  Safety  and the  Alaska  Court System.   Co-chairmen                 
  Halford and Frank and Senators Phillips and Sharp signed the                 
  committee report with a "do  pass" recommendation.  Senators                 
  Rieger and Zharoff signed "no recommendation."                               
  SENATE BILL NO. 244                                                          
       An   Act   relating  to   state   foundation  aid   and                 
       supplementary  state aid  for education;  and providing                 
       for an effective date.                                                  
  Co-chairman Halford directed  that SB 244 be  brought on for                 
  discussion.    RICK  CROSS,  Deputy  Commissioner,  Dept. of                 
  Education, came before committee  accompanied by EDDY JEANS,                 
  School Foundation, School Finance, Dept. of Education.                       
  END:      SFC-96, #55, Side 2                                                
  BEGIN:    SFC-96, #56, Side 1                                                
  Mr. Cross referenced the 20 percent test that must be met to                 
  include $35 million in federal funds  in the foundation.  He                 
  further advised that SB 244 deducts 95 percent from REAAs as                 
  opposed to 90  percent of  federal impact aid,  but it  also                 
  redistributes back a  $500.00 unit value to ensure  that the                 
  20 percent disparity test is met.                                            
  Senator  Sharp asked how  the bill would  impact the current                 
  per student rate  flowing to districts.   Mr. Jeans said  it                 
  would increase the per student  allocation in some instances                 
  and decrease it  in others.   He noted that the  legislature                 
  has traditionally provided supplemental  funding for single-                 
  site  school districts.    He pointed  to  the current  $1.2                 
  million supplemental request and said  that it is equivalent                 
  to a $500.00  allocation to  REAAs, per instructional  unit.                 
  The proposed  bill would increase  the impact aid  deduct to                 
  offset that cost.  Mr. Jeans next pointed to an accompanying                 
  fiscal  note  reflecting  a  net  general fund  increase  of                 
  Co-chairman Frank voiced  appreciation for the  department's                 
  attempt to develop an approach that is "somewhat  neutral in                 
  terms of costs and revenues."  He then asked how much of the                 
  cost is attributable to single sites and how much relates to                 
  the new allocation for  disparity.  Is that fully  offset by                 
  the increased  deduct,  except for  the $224.0?   Mr.  Jeans                 
  responded that the fiscal note does not address the  single-                 
  site  allocation  because  it is  currently  built  into the                 
  department K-12 operating  budget.   Increase of the  deduct                 
  from  90  to 95  percent saves  the  state slightly  over $1                 
  million. Single-site funding totals  $3,149.0.  In  response                 
  to  a  further question  from  Co-chairman Frank,  Mr. Jeans                 
  acknowledged disparity costs of $1.2 million in FY 96.                       
  Co-chairman  Frank   asked  if  the   department  considered                 
  increasing disparity to 97 or 98  percent to make it totally                 
  revenue neutral.  Mr. Jeans explained that the increase from                 
  90 to  95 percent was  the recommendation of  the foundation                 
  task force.  That recommendation was  forwarded to the state                 
  board  of   education,  approved,   and  forwarded   to  the                 
  Governor's Office.   Co-chairman Frank referenced resistance                 
  to supplemental funding and a movement  to make SB 244 apply                 
  to  the  FY  96  allocation to  produce  a  revenue  neutral                 
  situation for FY  96 and  the future.   Mr. Jeans  cautioned                 
  that the  situation would  not  be revenue  neutral for  all                 
  school  districts.    A  small  number  would  be  adversely                 
  impacted  by that  approach.   The  problem  relates to  the                 
  increase  in  the  5  percent   deduct  versus  the  $500.00                 
  allocation.  Mr. Jeans next directed attention to the three-                 
  column  spread  sheet  attached  to   the  fiscal  note  and                 
  explained the significance of each column.                                   
  Senator Sharp  noted  that Anchorage  receives $3,847.00  in                 
  state funds per  student while other districts  receive from                 
  $10,000.00 to $24,465.00.  It appears that the proposed bill                 
  would increase that spread rather  than provide a "true fix"                 
  for state aid.   Mr. Jeans acknowledged that  some districts                 
  would benefit from increased revenue per student.   If those                 
  numbers were divided  by the number of students  served, the                 
  increase would  "be very  minimal on  a per-student  basis."                 
  Senator Sharp commented  that all the increases  would go to                 
  districts  that  are "probably  a  little bit  above average                 
  already on ADM."  Mr. Jeans acknowledged that might be true.                 
  Senator  Sharp  next asked  about the  effort to  revamp the                 
  entire foundation  formula.  Mr.  Cross said that  the state                 
  board of education  had met three  times, as a committee  of                 
  the whole,  to work on  the issue.   Two  more meetings  are                 
  scheduled to work on  a new foundation formula that  will be                 
  significantly different from that before members today.                      
  Senator Rieger asked if disregard of 2 mills of local effort                 
  would achieve the  same disparity numbers as  those proposed                 
  in SB 244.  Mr. Jeans explained that the disparity is caused                 
  by excess local contributions that  districts are allowed to                 
  make over and above 4 mills.  Lowering that to 2 mills would                 
  increase disparity.  Local effort would have to be increased                 
  to  lower  disparity.   Senator  Rieger  suggested  that the                 
  excess  could  be taken  off the  top  rather than  from the                 
  required  minimum.   There  are a  variety  of ways  to come                 
  within federal guidelines.                                                   
  Senator Rieger next voiced his  understanding that the state                 
  of Kansas, which is at 25  percent disparity, is planning to                 
  "take it to Congress and get the law changed rather than try                 
  to meet the 20  percent disparity."  Mr. Jeans  concurred in                 
  that understanding.                                                          
  Co-chairman Frank  noted that  it is  difficult to  increase                 
  dollars to districts that appear to  be getting the most per                 
  student.  He then  asked if that results from  a requirement                 
  that disparity be calculated  in the same fashion  as moneys                 
  are distributed.   Mr. Jeans  explained that the  department                 
  could compute the disparity test on a per-pupil basis.  That                 
  standard was computed and,  excluding all exceptions allowed                 
  under federal  law, it came  out worse at  27 percent.   Co-                 
  chairman  Frank  asked  that  computations be  provided  for                 
  committee review.                                                            
  Discussion followed concerning the possibility of changes at                 
  the federal level.  Mr. Jeans  explained that the impact aid                 
  program was reauthorized through 1999.   The disparity drops                 
  to 20 percent for FY 98 and 99.  Mr. Cross stressed that the                 
  administration  believes  the  proposed  bill  is  the  best                 
  solution at this time, rather than for all  time.  Until the                 
  foundation is substantively changed, this is the best way to                 
  meet present rules.                                                          
  In response to a question from Co-chairman Halford regarding                 
  funding for pupil  transportation, Mr. Jeans  explained that                 
  transportation  moneys  are allocated  to a  special revenue                 
  fund  outside  of  the  disparity  standard.   Disparity  is                 
  measured on the  operating fund only.   Capital and  federal                 
  programs are also outside.                                                   
  Co-chairman Frank voiced his  understanding that the single-                 
  site issue is separate from the  disparity issue.  Mr. Jeans                 
  concurred.   He added,  however, that  the department  would                 
  encourage inclusion of the single-site allocation within the                 
  foundation program.   The federal government has  taken note                 
  of the  single-site appropriation outside of  the foundation                 
  formula and has put the department on notice that it appears                 
  Alaska is creating  an entitlement program, and  the state's                 
  determination could be in jeopardy.                                          
  WANDA  COOKSEY,  representing single-site  school districts,                 
  came  before  committee  and  directed  attention   to  file                 
  materials  (copies  on  file in  the  master  Senate Finance                 
  Committee file for SB 244).   She explained that the formula                 
  in Sec.  4 is  the formula the  single-site school  district                 
  consortium has requested for the last  several years.  It is                 
  also the formula used to determine the grant amount.                         
  Ms. Cooksey noted that  there is no fiscal note  relating to                 
  single-site funding because  it does not involve  new money.                 
  It is in the department budget.                                              
  Co-chairman  Halford  asked  for   a  list  of   single-site                 
  districts  and  the  funding  they  receive.    Ms.  Cooksey                 
  directed  attention to  the  attachment  to the  transmittal                 
  letter from the administration.                                              
  In response to a question from Senator Zharoff, Ms.  Cooksey                 
  said  that  the proposal  was agreed  to  by all  the single                 
  sites,  the  state  board  of  education, the  school  board                 
  association, the school administrators association, and NEA.                 
  Co-chairman Halford noted that  additional people who signed                 
  up  to  testify  on the  bill  were  no  longer present  and                 
  suggested that SB 244 be set aside pending their return.                     
  SENATE BILL NO. 230                                                          
       An Act providing  that state land, water, and  land and                 
       water may  not  be  classified so  as  to  preclude  or                 
       restrict traditional  means of  access for  traditional                 
       recreational uses.                                                      
  Co-chairman Halford directed that  SB 230 be brought on  for                 
  discussion and directed attention to  a work draft committee                 
  substitute   (9-LS1538\R,   Luckhaupt,  3/26/96).     SENATE                 
  PRESIDENT  DRUE  PEARCE, sponsor  of  the  legislation, came                 
  before committee.   She  explained that  she introduced  the                 
  bill to protect the  right of Alaskans to access  state land                 
  and water for recreational use.                                              
  Several things, specific to Denali State Park, have occurred                 
  which led  to introduction.   The  state  division of  parks                 
  closed  Curry  Ridge  (a  traditional landing  area)  within                 
  Denali  State  Park  to  aircraft  use.   Further,  an  area                 
  adjacent to the park, containing Blair Lake, was transferred                 
  to the division  of parks by the  division of land under  an                 
  ILMA.  Since transfer,  the area has been managed  as though                 
  it was  part of the  park, and access  to the lake  has been                 
  closed as part of that management effort.                                    
  Sec. 1 of  the work draft adds a new section  to the list of                 
  department duties so  that the division will  be required to                 
  provide the legislature an annual  report on any designation                 
  of incompatible use that prohibits or restricts  traditional                 
  Sec. 2 adds a further section to the list of duties required                 
  under  AS 41.21.020.   Language within the  new section says                 
  that the department may not manage, as special purpose  park                 
  land,  areas  that   are  not  inside  park   boundaries  as                 
  designated by  the legislature.   The new provisions  do not                 
  prohibit the division  of parks from operating  recreational                 
  sites, under present authority.                                              
  Sec. 3 adds slightly under 11  acres of land to the  Chilkat                 
  State Park.  This  provision was included in the  work draft                 
  at  the  request  of  the  department.   The  three  parcels                 
  involved were purchased by the department in the late 1970s.                 
  They  were  transferred  to park  management  using  an ILMA                 
  arrangement, but they  were never designated as  part of the                 
  park.  Since the legislature mandates  that land acquired by                 
  the  department be managed under the  more open statute, the                 
  department asked that the land  be added to the park.   This                 
  area has been managed as a park since purchase.                              
  Sec. 4  is specific  to Denali  State Park.    The park  was                 
  designated by the  legislature in  the late 1960s.   It  was                 
  extremely  remote  at the  time  and lacked  today's access.                 
  There is  no special management requirement  for traditional                 
  access in statutes designating the park.  Sec. 4 thus adds a                 
  description of  incompatible uses.   Language  requires that                 
  management  regulations provide  ample access for  sport and                 
  subsistence hunting.  Regulations must:                                      
       1.      Recognize  that  traditional   subsistence  and                 
  recreational        activities  include  the  use  of  small                 
                      outboard motors and snow machines.                       
       2.   Permit   reasonable   access   by   aircraft   for                 
  recreational        purposes.                                                
       3.   Provide ample access for recreational mining.                      
  Sec.  5  specifies  that  past  regulations  and regulations                 
  currently being promulgated for Denali  State Park will take                 
  effect only if  consistent with  provisions in the  proposed                 
  bill.    Regulations  that  are   not  consistent  would  be                 
  Senator  Pearce  next addressed  a  new  fiscal  note.   She                 
  acknowledged there would be fiscal  impact stemming from the                 
  annual  report to  the legislature,  but she  said that  the                 
  entire Denali State Park master plan need  not be completely                 
  rewritten.   There  is thus no  need for  additional natural                 
  resource   officers  and   associated  costs.      The  four                 
  designations in  Sec. 4  are the  only things  that must  be                 
  changed within the master plan.                                              
  Co-chairman Halford referenced similar overreaching closures                 
  by the Dept.  of Fish and  Game and asked  if they had  also                 
  been  considered  when  the  proposed  bill  was  developed.                 
  Senator Pearce responded negatively.   She surmised that the                 
  situation  at  the  Dept.  of  Fish  and  Game  is  similar.                 
  Research relating to  the proposed  bill indicates that  the                 
  Dept.  of  Natural Resources  had  no specific  authority to                 
  effect closures.   The action was  taken because no one  has                 
  challenged it in the past.                                                   
  Brief discussion followed regarding  access by various types                 
  of aircraft (wheels, skiis, floats).                                         
  Senator Pearce attested  to department closure of  access to                 
  recreational areas to Alaskans in deference to an unfettered                 
  experience for visitors  to the  park.  Co-chairman  Halford                 
  voiced  his  understanding that  environmentalists testified                 
  that the situation was badly handled  in terms of the vested                 
  interest of the commercial operator versus other users.                      
  Co-chairman   Halford   further   voiced  frustration   over                 
  department closure  of lakes,  transferred to  the state  as                 
  navigable  waters,  to  float  plane   landings.    He  then                 
  suggested an  amendment  disallowing  that  practice  unless                 
  there is a  compelling public purpose.   Senator Pearce said                 
  she  would  have  no problem  with  the  amendment, but  she                 
  questioned whether it would fit  under Title 41--the subject                 
  of   the   proposed   bill.     Title   38   legislation  by                 
  Representative Masek was  noted as an alternative.   Senator                 
  Pearce said  she would also  be willing to  pursue questions                 
  raised by  Dept.  of Fish  and Game  closures.   Co-chairman                 
  Halford expressed a preference for movement of the bill,  at                 
  this time,  as long  as cited  areas could  be addressed  in                 
  Rules or on the Senate Floor.                                                
  Senator Rieger referenced  an amendment  which he  explained                 
  draws  a   distinction  between  park  service  action  that                 
  squeezes  out  traditional  access  at  historic  levels  as                 
  opposed  to  increasing  access  beyond  that  level.    The                 
  amendment would add "at the  level it has historically  been                 
  conducted"  to  language at  page 3,  line  15 and  line 21.                 
  Discussion  followed   regarding  definition  of   the  word                 
  "level."  Co-chairman Halford referenced allocation problems                 
  associated with limiting the number of users.  He noted that                 
  it is easier to limit activities that have not yet occurred.                 
  END:      SFC-96, #56, Side 1                                                
  BEGIN:    SFC-96, #56, Side 2                                                
  Senator Sharp voiced opposition to strengthening  department                 
  authority to  manage people.   Senator  Rieger withdrew  his                 
  amendment at this time.  Senator Sharp MOVED for adoption of                 
  CSSB  230 (Finance).  No objection  having been raised, CSSB
  230  (Finance) was ADOPTED.   Senator Rieger  then MOVED for                 
  adoption of his  amendment.   Senator Pearce voiced  concern                 
  that amendment  language would prohibit  commercial activity                 
  within park areas.  She clarified that the proposed bill was                 
  not intended to prohibit commercial operations.  It seeks to                 
  ensure that commercial activity is not given preference over                 
  access  for  Alaskans.   Senator  Rieger explained  that the                 
  amendment  applies  to language  dealing  with  actions that                 
  prohibit  or  restrict traditional  means.     He referenced                 
  competing motorized and  non-motorized activities in Chugach                 
  State Park and  explained that  the amendment would  provide                 
  direction  to  the  department to  maintain  the  status quo                 
  rather than  give preference  to one  over the  other.   Co-                 
  chairman Halford called  for a  show of hands.   The  motion                 
  failed on a vote of 2 to 4.                                                  
  Discussion followed regarding  regulations for Denali  State                 
  Park and Chugach State Park.  Senator Pearce  explained that                 
  when the  majority of  Alaska's parks  were designated,  the                 
  legislature did not specify uses  that would be incompatible                 
  because  recreational   areas  were  not   experiencing  the                 
  pressures  of  today.    She then  cited  AS  41.21.110 from                 
  statutes designating the Chilkat State Park:                                 
       The commissioner shall  designate, by  regulation,                      
       incompatible   uses   within  the   boundaries  in                      
       accordance with 41.21.110, and  those incompatible                      
       uses shall be prohibited or restricted as provided                      
       by regulation.   Nothing in  this section  affects                      
       the rights and uses of water and facilities in the                      
       city  of Haines located  within the  boundaries of                      
       this area.                                                              
  In designating this  more recent park, the  legislature made                 
  provisions  for  uses that  had to  be continued.   Language                 
  within 41.21.020 (the  general purposes  section for  parks)                 
  merely  says that  the "department  shall  adopt regulations                 
  governing  the use and  designating incompatible uses within                 
  the boundaries of state  parks."  There is no  definition of                 
  "incompatible  uses."  There  had been no  problem in Denali                 
  until recently.                                                              
  EDDY GRASSER, representing the Alaska  Outdoor Council, next                 
  came before committee in support of the bill.  He referenced                 
  a recent edition  of an Anchorage based  environmental group                 
  newsletter and noted  that it raises concern over  the "tiny                 
  amount of land in  Alaska that has been set aside  for . . .                 
  quiet recreation."  Mr. Grasser  stressed that two-thirds of                 
  Alaska has been set aside for  that type of recreation while                 
  other Alaskans have been restricted to "these types of areas                 
  along  the  road  system."   He  further  spoke  to lack  of                 
  vehicular access to many park areas.  Most  of Alaska is off                 
  limits to  "non-quiet" recreational purposes.   The proposed                 
  bill represents a balancing proposition.   Park lands belong                 
  to  all  Alaskans rather  than  to  a specific  group.   The                 
  proposed  bill  protects  traditional  activities  on  these                 
  DAN ELLIOT, representing the MatSu Citizens Advisory  Board,                 
  next testified via  teleconference from  Wasilla.  He  spoke                 
  against the  legislation, terming it  a "poor bill,  both in                 
  its  intent  and  also  in   its  imprecise  language,"  and                 
  suggested that it caters  to a lobbying effort.   Mr. Elliot                 
  explained   that  development  of   the  Denali  State  Park                 
  masterplan included the public, at all stages, over a number                 
  of  years.     The  plan  evolved  through   compromise  and                 
  consensus.  It protects the resource while accommodating all                 
  user  groups  and prepares  for  increased pressure  on park                 
  resources.  The proposed bill  negates the masterplan, takes                 
  management of the  park away from the  department, and vests                 
  control in the  legislature which  is reacting to  interests                 
  that seek to bypass the public process and masterplan.                       
  Mr. Elliot  noted that  the alpine  terrain of  Curry/Kesugi                 
  Ridge is recognized as a "unique, fragile, natural resource"                 
  recommended to be subject to restricted uses.  Vast areas of                 
  the  park  are  open to  snow  machines,  four-wheelers, and                 
  aircraft.    But  special  management  considerations   were                 
  recommended for Kesugi  Ridge to  provide both Alaskans  and                 
  visitors an areas free from motorized access.  The park plan                 
  attempts to accommodate all user groups.                                     
  Mr. Elliot cited the new Princess  Hotel, road access, and a                 
  number of other  activities as evidence of  increased use of                 
  the  area.     He  reiterated  that  lobbying   efforts  are                 
  attempting to bypass the exhaustive  public process that led                 
  to the masterplan.  The proposed  bill not only negates that                 
  process, it makes  no provisions for  a new masterplan.   It                 
  allows no provisions for  dealing with all user groups  in a                 
  compatible way.   It is  imprecise in defining  traditional,                 
  historical, popular use,  providing ample access, reasonable                 
  access, etc.  If  the legislature intends to take  over park                 
  management,  it  "better  get specific."    Most  activities                 
  listed  in  the  bill have  only  sporadically  occurred and                 
  increased demand has been fairly recent.  The proposed  bill                 
  ignores its  negative impact  on future  uses and  resulting                 
  incompatibilities.  Mr.  Elliot asked  that the  legislature                 
  not  supplant  the exhaustive  public  process and  place an                 
  unmanageable situation upon the Dept. of  Natural Resources.                 
  Senator Randy Phillips  noted that the bill  appears to have                 
  undergone major  transformations from the  original, dealing                 
  with Title 38, to  CSSB 230 (Res) which relates to Title 41.                 
  Senator  Pearce  acknowledged  that   it  changed  in   many                 
  respects.  Application changed from public lands statutes to                 
  public  resource statutes  when the  department pointed  out                 
  that attempting to place provisions within Title 38 would be                 
  "overkill" in terms of specific  park management.  Inclusion                 
  within  Title  38 would  have  led  to "a  number  of fairly                 
  unsurmountable problems in  . . . management  of other state                 
  lands."    Title  41  was  the  better  place  for  proposed                 
  language.   The drafter  made  the initial  decision to  use                 
  Title  38.    He  subsequently  agreed  that  Title  41  was                 
  Co-chairman Halford queried members regarding disposition of                 
  the  bill.    He said  he  would  research  the question  of                 
  aircraft access on navigable waters.   Senator Rieger voiced                 
  concern over impact   on Chugach  State Park because of  the                 
  way  traditional  access  and activities  are  defined.   He                 
  suggested that  failure  of  his  amendment  and  subsequent                 
  passage of  the bill  would upset  a balance  in that  park.                 
  Senator Zharoff  raised concern relating to traditional uses                 
  and advised that he would work with the sponsor.                             
  Senator Sharp raised  a question  regarding ILMAs.   Senator                 
  Pearce explained that they  are "interagency land management                 
  agreements"  authorized  under Title 38 and  administered by                 
  the division of  land.  They  provide for land transfers  to                 
  all  agencies for  purposes such as  material sites  for the                 
  Dept.    of    Transportation    and   Public    Facilities,                 
  telecommunications  repeater  sites   for  the  division  of                 
  communications,  fire bases  for  the division  of forestry,                 
  In  response  to  a  further  question from  Senator  Sharp,                 
  Senator Pearce advised that ILMAs are not always adjacent to                 
  parks.    She  noted  the Chilkoot  Trail,  the  Eagle Trail                 
  Recreational  Site,   and  the  Sitka  Historical   Site  as                 
  examples.   These areas  have been  designated through  ILMA                 
  transfers, and the  division of parks manages  them as state                 
  recreational sites,  state  historical  sites,  etc.    This                 
  arrangement has provided  more land  to division  management                 
  than  the   legislature  has   designated.    However,   the                 
  legislature  set  up the  process  so the  state  could take                 
  advantage of such areas.                                                     
  Senator Sharp  MOVED for passage of CSSB  230 (Finance) with                 
  individual  recommendations  and accompanying  fiscal notes.                 
  No  objection  having been  raised,  CSSB 230  (Finance) was                 
  REPORTED OUT of committee with a $105.8 fiscal note from the                 
  Dept. of Natural  Resources.  Co-chairmen Halford  and Frank                 
  and Senator  Sharp signed  the committee report  with a  "do                 
  pass"  recommendation.    Senators   Rieger,  Phillips,  and                 
  Zharoff signed "no recommendation."                                          
  Co-chairman  Halford  announced  that  the  committee  would                 
  continue discussion of  legislation listed on the  agenda at                 
  8:30 a.m. the  next morning.   The meeting was adjourned  at                 
  approximately 4:45 p.m.                                                      

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