Legislature(1993 - 1994)
03/14/1994 03:36 PM Senate RES
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SENATE RESOURCES COMMITTEE
March 14, 1994
3:36 P.M.
MEMBERS PRESENT
Senator Mike Miller, Chairman
Senator Loren Leman, Vice Chairman
Senator Steve Frank
Senator Drue Pearce
Senator Dave Donley
Senator Fred Zharoff
MEMBERS ABSENT
Senator Al Adams
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 280(STA)
"An Act establishing the Afognak Island State Park."
SENATE JOINT RESOLUTION NO. 38
Proposing amendments to the Constitution of the State of Alaska
relating to revenues from natural resources, the Alaska permanent
fund, the appropriation limit and the budget reserve fund; and
providing for an effective date for the amendments.
PREVIOUS ACTION
SB 280 - See State Affairs minutes dated 3/2/94.
SJR 38 - See State Affairs minutes dated 1/26/94, 1/28/94, and
2/4/94.
WITNESS REGISTER
Craig Tillery, Assistant Attorney General
Department of Law
1031 W. 4th, Ste. 200
Anchorage, Ak. 99501-1994
POSITION STATEMENT: Commented on SB 280.
Charles Meacham, Deputy Commissioner
Department of Fish and Game
P.O. Box 25526
Juneau, Ak. 99802-5526
POSITION STATEMENT: Supported SB 280.
Neil Johannsen, Director
Division of Parks
Department of Natural Resources
P.O. Box 107001
Anchorage, Ak. 99510-7001
POSITION STATEMENT: Supported SB 280
Representative Johnny Ellis
State Capitol
Juneau, Ak. 99801-1182
POSITION STATEMENT: Sponsor of SJR 38.
Roger Cremo
Anchorage, Ak.
POSITION STATEMENT: Commented on SJR 38.
ACTION NARRATIVE
TAPE 94-19, SIDE A
Number 001
CHAIRMAN MILLER called the Resources Committee meeting to order at
3:36 p.m. and announced SB 280 (ESTABLISH AFOGNAK ISLAND STATE
PARK) to be up for consideration.
CRAIG TILLERY, Department of Law, said SB 280 establishes Afognak
Island State Park from lands that were acquired by the Exxon Valdez
Trustee Council from the Seal Bay Timber Company. This area was
ranked as second in importance in habitat value. The United States
expressed a strong desire to acquire these lands. The state
trustees said no and indicted that if they were to be acquired it
was to be under state ownership. The United States agreed, but
added that the lands would have to go within a state park within
one year, by November 23, 1994.
MR. TILLERY said SB 280 is supported by the Kodiak Island Borough,
the City of Kodiak, the Kodiak Chamber of Commerce, fishing
organizations, tour operators, visitor associations, and many
Kodiak area citizens. It is supported by Koncor Forest Products,
the timber company that operates in the area and the Alaska Forest
Association.
Mayor Selby has written a letter to the Governor saying no jobs
were lost as a result of this acquisition, MR. TILLERY said.
Number 85
There is a new provision in this bill on page 1, line 5 adding to
existing rights, "including those rights created by the Afognak
Island Road Use Agreement executed on July 24, 1991 and as amended
from time to time."
There is a new section on page 2, line 7 relating to existing
rights, as well.
SENATOR LEMAN asked if subsurface estate becomes part of the park
with its purchase. MR. TILLERY said that is correct.
Number 175
SENATOR LEMAN moved to adopt the CS to SB 280 (RES) for discussion
purposes. There were no objections and it was so ordered.
SENATOR FRANK asked what kind of restrictions there were. MR.
TILLERY said there is a restriction against commercial timber
harvest and a restriction on the disposal, also. If there is an
attempt to convey the property to an entity other than the state,
it would revert to the Nature Conservancy which would be required
to deed it over to the federal government, he explained.
SENATOR LEMAN asked if the state could, at some time in the future,
change the classification of the land and then have to repay the
trustee council. MR. TILLERY guessed that it could be changed, but
it would have to be done before the trustee council was out of
business or done through a court action.
SENATOR MILLER asked if any new commercial hunting and fishing
lodges could be added. MR. TILLERY said there is no lodge in the
park, but the lodges use the park. They do not want to prohibit
that, because it is a restoration purpose.
Number 245
SENATOR FRANK asked if there were other examples of this type of
ownership. MR. TILLERY explained that this was not dissimilar to
other parks, but that the Exxon Valdez settlement was
unprecedented.
Number 266
SENATOR FRANK asked what was the purchase price. MR. TILLERY
answered $38.7 million, or about $900 per acre.
CHUCK MEACHAM, Deputy Commissioner, Department of Fish and Game,
said they strongly support this legislation.
NEIL JOHANNSEN, Director, Division of Parks, said the DNR supports
the legislation.
Number 340
SENATOR ZHAROFF moved to pass CSSB 280 (RES) from Committee with
individual recommendations. There were no objections and it was so
ordered.
SENATOR MILLER announced SJR 38 (RESTRUCTURE PERMANENT FUND) to be e
up for consideration.
REPRESENTATAIVE JOHNNY ELLIS, sponsor, said if this passed it would
significantly change they way the state conducts its finances. It
proposes that all the natural resource revenues of the state flow
into the Permanent Fund (PF) and that they adopt a system of
gradually reigning in our expenditures and front loading the PF.
The advantages to this are many. We could have a long range fiscal
plan for the state. We would be able to capture windfalls for
future use and not have the boom and bust cycle in state spending.
We would be able to have a bigger PF and spend just earnings, not
the principle.
Number 381
ROGER CREMO, author of the resolution, testified from Anchorage
that the resolution is self explanatory and he would answer their
questions.
SENATOR FRANK asked how the fluctuating value of the PF would be
reflected in the amount the legislature could appropriate? MR.
CREMO said there is a provision for averaging the value of the
fund. It is a 12 quarter average and is purposely done on a
calendar basis so that the last of the 12 quarters is the one
ending on December 31 just before the legislature convenes which
allows them to know to the penny how much money will be coming from
the fund.
SENATOR FRANK asked if they had considered writing the bill so that
people could see how it was changed rather than just repealing and
reenacting. MR. CREMO explained that the drafting attorney, Tamara
Cook, suggested this way would be by far the clearest approach
since the change was so radical.
SENATOR LEMAN asked if he had given any more thought to the
transition number. MR. CREMO said it could easily be less than 20.
He used 20, because it seemed to produce numbers that at least
started with the level of spending that the legislature is
currently using. He said the lower the start of the percentage,
the better the system will perform.
SENATOR FRANK asked what opportunities there would be to take
things off the budget. MR. CREMO said there isn't much room for
the legislature as far as how much can come out of the fund. The
percentage would be fixed in the constitution and the value of the
fund would be fixed by the market average. There is no restriction
on what the legislature could raise with non-resource revenues.
There is no spending limit, nor does it tell the legislature what
to do - anywhere. If the legislature would tax resources in the
future, that money would go into the PF rather than the general
fund.
SENATOR LEMAN moved to pass SJR 38 from Committee with individual
recommendations. There were no objections and it was so ordered.
SENATOR MILLER adjourned the meeting at 4:15 p.m.
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