Legislature(2001 - 2002)
05/03/2001 06:25 PM Senate RES
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ALASKA STATE LEGISLATURE
SENATE RESOURCES COMMITTEE
May 3, 2001
6:25 pm
MEMBERS PRESENT
Senator John Torgerson, Chair
Senator Drue Pearce, Vice Chair
Senator Pete Kelly
Senator Robin Taylor
Senator Kim Elton
Senator Georgianna Lincoln
MEMBERS ABSENT
Senator Rick Halford
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 244(FIN)
"An Act relating to a grant of state land to the Denali Borough for
a railroad and utility corridor and a railroad development project;
repealing provisions relating to a grant of a right-of-way of land
for a railroad and utility corridor to the Alaska Industrial
Development and Export Authority; and providing for an effective
date."
MOVED SCSHB 244 (RES) OUT OF COMMITTEE
HOUSE BILL NO. 108
"An Act relating to the accounting for and appropriation of fees
for recording and related services by the Department of Natural
Resources; and providing for an effective date."
MOVED HB 108 OUT OF COMMITTEE
HOUSE BILL NO. 236
"An Act relating to the contracting and financing authority of the
Alaska Industrial Development and Export Authority; authorizing the
authority to issue bonds in a principal amount not to exceed
$76,000,000 to finance the acquisition, design, construction,
inventory, and operation of natural gas, propane air, or
manufactured gas public utility facilities; and providing for an
effective date."
MOVED SCSHB 236 (RES) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
HB 236 - See Resources minutes dated 4/30/01.
HB 108 - No previous action to consider.
HB 244 - See Resources minutes dated 4/30/01.
WITNESS REGISTER
Ms. Valerie Mundt
P.O. Box 149
McKinley AK 99785
POSITION STATEMENT: Opposed HB 244.
Mayor John Gonzalez
Denali Borough
POSITION STATEMENT: Supported HB 244.
Mr. Nico Bus, Director
Division of Administrative Services
Department of Natural Resources
400 Willoughby Ave.
Juneau, AK 99801-1724
POSITION STATEMENT: Supported HB 244.
Mr. Bob Poe, Executive Director
Alaska Industrial Development and Export Authority (AIDEA)
Department of Community and Economic Development
813 W. Northern Lights Ave.
Anchorage AK 99503
POSITION STATEMENT: Commented on HB 236.
Mr. Randy Ruaro
Staff to Representative Williams
State Capitol Bldg.
Juneau AK 99811
POSITION STATEMENT: Supported original version of HB 236.
ACTION NARRATIVE
TAPE 01-37, SIDE A
Number 001
HB 244-RIGHT-OF-WAY TO DENALI BOR. FOR RR/UTIL.
CHAIRMAN JOHN TORGERSON called the Senate Resources Committee
meeting to order at 6:25 pm and announced HB 244 to be up for
consideration.
SENATOR TAYLOR moved to adopt the Cook 5/1/01 committee substitute
to HB 244. There were no objections and it was so ordered.
Staff to Representative Dyson said the sponsor supported the
committee substitute.
MS. VALERIE MUNDT, Anchorage, said she has businesses in Kantishna
and Fairbanks. She opposed HB 244 because it eliminates the public
process by preselecting engineering and contracting firms to do the
work. There is no EIS and public hearings in Denali or anywhere
north of the park on whether there should be a railroad corridor or
a transportation corridor. She said:
Nenana has long been in favor of a northern one-way loop
road through the Park that has a regulated amount of
traffic for viewing. This bill eliminates all animal
viewing from the north side. The train doesn't stop to
see the bears, so it further reduces access of the public
and limits the experience. Last, but not least, the
Greater Fairbanks Chamber of Commerce has voted in favor
of a northern access corridor. On many occasions, they
were specifically asked to put forward a resolution on HB
244, but because of objections on the floor, it was
returned to the Government Affairs Committee, which has
not acted on it, which is a voice in itself. Finally, HB
244 strains the already existing businesses in Kantishna,
of which there are five. The Park Service has taken the
stand that inholders have one access to their inholdings
and the Park Service gets to decide what it is. All those
companies that have further limited access to a train
that they don't own and control. I thank you for
listening to my comments.
CHAIRMAN TORGERSON responded that there is $1.8 million for the
planning, EIS and public hearings for this issue that Senator
Murkowski put in the budget. There's $350,000 in the capital budget
to match that for the same thing.
MAYOR JOHN GONZALES, Denali Borough, said they have talked for a
long time about northern access to Kantishna. Whenever there's a
way to do something about it, it gets blocked. The Assembly has
supported a northern access by a railroad because it is the wise
thing to do. They wrote a resolution supporting the efforts of
Kantishna Holdings to try and build an access into Wonder Lake via
a railroad. "If we can build a project that will allow us to lease
land to a group that is willing to develop something, we believe
that as long as it's safely done and the borough agreed with that,
that we should go forth." He said they believe that the older
citizens who cannot backpack or kayak into the wilderness should
not be denied the beauty of the park.
SENATOR PEARCE asked why this was a railroad corridor and not a
transportation corridor.
MAYOR GONZALES answered that the railroad come to them and are
willing to put up their dollars to do the project. No one else has
done that.
SENATOR PEARCE asked him if the borough was going to make sure an
EIS or an EA was done on this project.
MAYOR GONZALES answered that the borough would make sure the EIS is
done.
SENATOR PEARCE asked what confidence they have that the National
Park Service won't close road access once there is another right-
of-way, even if it's not a usable right-of-way in place.
MAYOR GONZALES answered that they don't have any assurance.
SENATOR TAYLOR moved to pass SCSHB 244 (RES) from committee with
individual recommendations. There were no objections and it was so
ordered.
HB 108-DEPT NATURAL RESOURCES RECORDING FEES
CHAIRMAN TORGERSON announced HB 108 to be up for consideration.
MR. NICO BUS, Department of Natural Resources, supported HB 108.
He felt that the Recorder's Office would be a good program to be
funded by a receipt supported service because we have 14 offices
around the state and under the current funding law, they have been
reducing them and their staff, because they are competing with
other DNR programs. Annual revenues are about $4 million and they
have about $2.4 million for expenditure authorizations. There are
other expenditures for the recorders office that are tucked in
different state departments, such as leasing. Their annual capital
budget for archival and equipment is general funded and it would be
good to use the receipt system. He said their customers from
various industries support this proposal - the Credit Union League,
Miners Association, the Association of Realtors, Title Association
and the Bankers Association.
SENATOR TAYLOR moved to pass HB 108 from committee with individual
recommendations. There were no objections and it was so ordered.
HB 236-AIDEA BONDS FOR GAS PUBLIC UTILITIES
CHAIRMAN TORGERSON announced HB 236 to be up for consideration. He
said he wanted to see due diligence done on the report before he
could support this bill, but he won't block it, if the committee
wanted to move it forward.
COMMISSIONER BOB POE, Executive Director, Alaska Industrial
Development and Export Authority (AIDEA), said that they have done
development projects under both scenarios, where the legislature
has approved bonding authorization (not an appropriation) before
due diligence is done and after due diligence was done. In fact, we
have $328 million of bonding authorizations on the books today that
have not gone to projects."
He thought it was interesting that HB 244 repeals provisions
relating to a grant of right-of-way of land for a railroad utility
corridor to AIDEA. There was $28 million in bonding authority for
that project, but it didn't prove to be financially feasible, so
AIDEA did not move ahead with the project. He explained:
In this case, Alaska Interstate Gas came to us mid
session in a particularly busy time for us with a few
large projects we are trying to get wrapped up and said,
"We think we have equity investors. We think we have a
good project for gas to southeast Alaska. We have been
monitoring the project over the last several months or
maybe a year. They said our equity [indisc.] will be
ready to move in the short term in the summer or fall, if
you go forward with it. But the equity partner, from our
understanding, didn't want to dive into the project and
didn't know there was a good chance of getting the
bonding authority. So, we agreed that we would work with
Interstate Gas, but that they would try and move the
bonding authority through. We don't know if this project
makes financial sense. I'm sure you and I could sit down
and identify six or seven weaknesses right off the bat
that would need to be proven true. It doesn't mean they
can't. It doesn't mean that we don't see a good
opportunity here, but we can't attest to the financial
feasibility of this. What we can attest to is that AIDEA
does do its job and the faith that the legislature has
frequently given AIDEA, which is to say, "We trust you to
do your job," is proven out in those $328 million worth
of projects that we haven't done, because they didn't
prove to be financially feasible.
I'll wrap up by saying there are seven different
qualifications that a development project needs to have
before AIDEA goes to the step of making a development
project. I can swear to you that AIDEA will do all of
those and only when this project is financially feasible
and has the support of the communities involved would we
do the project.
CHAIRMAN TORGERSON asked, "Why don't you lend them $10 million to
get them started?"
MR. POE answered, "We don't do a project that way. Typically, the
way we do it…"
CHAIRMAN TORGERSON said, "I know about typically, but that doesn't
stop you from doing it."
MR. POE answered, "Fiscal prudence would. There is no reason to put
$10 million into a project that you don't know is fiscally
feasible. The way we tend to do it is to enter into a reimbursable
agreement with the sponsors of a project where they reimburse AIDEA
for the cost of doing the due diligence…"
Number 340
SENATOR TAYLOR asked how long it would take.
MR. POE answered that it could take several months. It depends on
the proponents of the project and how well they have done their
work.
SENATOR ELTON asked if it would take another act of the legislature
to approve the final issuance of the bonds.
MR. POE answered that's not correct. "Once you give us bonding
authority, you leave it up to the AIDEA Board to decide." He said
he would be happy to keep the legislature apprised of the
situation.
MR. RANDY RUARO, Staff to Representative Williams, said, "It's the
sponsor's position that the original version of the bill be
passed."
SENATOR TAYLOR moved to adopt the Cook 5/3/01 committee substitute
to HB 236.
SENATOR ELTON objected for an explanation of the changes.
CHAIRMAN TORGERSON explained that it says that the applicant bears
the cost.
SENATOR ELTON asked if there would be the additional step of coming
back to the legislature for the authority to issue bonds if the due
diligence got done.
CHAIRMAN TORGERSON said that was correct.
SENATOR ELTON said one of his concerns was that, "If we take this
out from under the wing of AIDEA, what we're going to do is
complicating passage this session…" The House would have to concur
and they voted unanimously for their version. He continued to
prefer the original version.
CHAIRMAN TORGERSON called for the roll. SENATORS TAYLOR, PEARCE,
TORGERSON voted yeah; SENATORS LINCOLN AND ELTON voted nay; and the
committee substitute was adopted by 3 to 2.
SENATOR TAYLOR moved to pass SCS HB 236 (RES) from committee with
individual recommendations. There were no objections and it was so
ordered.
SENATOR PEARCE moved to forward the nominations for the Board of
Fisheries, Dr. John White and Mr. Russell Nelson, and Commissioner
of the Department of Natural Resources, Pat Pourchot, to the joint
session. There were no objections and it was so ordered.
CHAIRMAN TORGERSON adjourned the meeting at 6:55 pm.
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