Legislature(1997 - 1998)

04/29/1998 03:50 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
              SENATE RESOURCES COMMITTEE                                       
                    April 29, 1998                                             
                      3:50 p.m.                                                
                                                                               
MEMBERS PRESENT                                                                
                                                                               
Senator Rick Halford, Chairman                                                 
Senator Lyda Green, Vice Chairman                                              
Senator Loren Leman                                                            
Senator Robin Taylor                                                           
Senator John Torgerson                                                         
Senator Georgianna Lincoln                                                     
                                                                               
MEMBERS ABSENT                                                                 
                                                                               
Senator Bert Sharp                                                             
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
SENATE BILL NO. 252                                                            
"An Act relating to paternity establishment and child support;                 
relating to the crimes of criminal nonsupport and aiding the                   
nonpayment of child support; and amending Rule 37(b)(2)(D), Alaska             
Rules of Civil Procedure; and providing for an effective date."                
                                                                               
     - MOVED CSSB 252(RES) OUT OF COMMITTEE                                    
                                                                               
CS FOR HOUSE BILL NO. 144(FIN)                                                 
"An Act relating to the authority of the Department of                         
Environmental Conservation to charge fees; and providing for an                
effective date."                                                               
                                                                               
     - MOVED SCS CSHB 144(RES) OUT OF COMMITTEE                                
                                                                               
SENATE BILL NO. 340                                                            
"An Act relating to the University of Alaska and university land,              
and authorizing the University of Alaska to select additional state            
land."                                                                         
                                                                               
     - MOVED CSSB 340(RES) OUT OF COMMITTEE                                    
                                                                               
SENATE BILL NO. 342                                                            
"An Act approving the sale of Prudhoe Bay Unit royalty oil by the              
State of Alaska to Mapco Alaska Petroleum, Inc.; and providing for             
an effective date."                                                            
                                                                               
     - SCHEDULED BUT NOT HEARD                                                 
                                                                               
HOUSE BILL NO. 73                                                              
"An Act extending the termination dates of the salmon marketing                
programs of the Alaska Seafood Marketing Institute and the salmon              
marketing assessment; and providing for an effective date."                    
                                                                               
     - SCHEDULED BUT NOT HEARD                                                 
                                                                               
PREVIOUS SENATE COMMITTEE ACTION                                               
                                                                               
SB 252 - See HESS minutes dated 3/2/98, 3/4/98 & 3/20/98 and                   
         Resources Committee minutes dated 4/22/98 & 4/27/98.                  
                                                                               
HB 144 - No previous action to record.                                         
                                                                               
SB 340 - No previous action to record.                                         
                                                                               
SB 342 - No previous action to record.                                         
                                                                               
HB  73 - See Labor and Commerce minutes dated 2/24/98 and 3/3/98.              
                                                                               
WITNESS REGISTER                                                               
                                                                               
Ms. Juli Lucky, Staff to Senator Halford                                       
State Capitol                                                                  
Juneau, AK 99801-1182                                                          
  POSITION STATEMENT:  Outlined changes in CSSB 252(RES)                       
                                                                               
Ms. Barbara Miklos, Director                                                   
Child Support Enforcement Division                                             
Department of Revenue                                                          
550 W. 7th Ave., Suite 310                                                     
Anchorage, AK 99501                                                            
  POSITION STATEMENT:  Offered information on CSSB 252(RES)                    
                                                                               
Dan Branch, Assistant Attorney General                                         
Human Services Section                                                         
Department of Law                                                              
P.O. Box 110300                                                                
Juneau, AK 99811-0300                                                          
  POSITION STATEMENT:  Offered information on CSSB 252(RES)                    
                                                                               
Ms. Barbara Cotting, Committee Aide                                            
House State Affairs Committee                                                  
State Capitol                                                                  
Juneau, AK 99801-1182                                                          
  POSITION STATEMENT:  Commented on CSHB 144(FIN)                              
                                                                               
Mike Tibbles, Staff to Representative Gene Therriault                          
State Capitol                                                                  
Juneau, AK 99801-1182                                                          
  POSITION STATEMENT:  Presented overview on CSHB 144(FIN)                     
                                                                               
Jerry Reinwand                                                                 
2 Marine Way, #219                                                             
Juneau, AK 99801                                                               
  POSITION STATEMENT:  Outlined concerns with CSHB 144(FIN)                    
                                                                               
Ms. Janice Adair, Director                                                     
Division of Environmental Health                                               
Department of Environmental Conservation                                       
555 Cordova St.                                                                
Anchorage, AK 99501                                                            
  POSITION STATEMENT:  Offered information on CSHB 144(FIN)                    
                                                                               
Richard Harris, Senior Vice President                                          
Sealaska Corporation                                                           
One Sealaska Plaza                                                             
Juneau, AK 99801                                                               
  POSITION STATEMENT:  Testified in support of amendments to                   
                       CSHB 144(FIN)                                           
                                                                               
Ralph Bennett, Staff to Senator Taylor                                         
State Capitol                                                                  
Juneau, AK 99801-1182                                                          
  POSITION STATEMENT:  Presented overview on SB 340                            
                                                                               
Ms. Wendy Redman, Vice President                                               
Statewide Programs & Services                                                  
P.O. Box 755000                                                                
Fairbanks, AK 99775                                                            
  POSITION STATEMENT:  Suggested changes to SB 340                             
                                                                               
ACTION NARRATIVE                                                               
                                                                               
TAPE 98-36, SIDE A                                                             
Number 001                                                                     
                                                                               
        SB 252 - PATERNITY/CHILD SUPPORT/NONSUPPORT CRIMES                     
                                                                               
CHAIRMAN HALFORD called the Senate Resources Committee meeting to              
order at 3:50 p.m.  He brought SB 252 before the committee as the              
first order of business.                                                       
                                                                               
JULI LUCKY, staff to Senator Halford, directed attention to a new              
draft CSSB 252(RES), version "H," and two amendments to that work              
draft.  Ms. Lucky then outlined the following changes between the              
new draft and the work draft (version "F") adopted at a previous               
hearing on the bill:                                                           
                                                                               
  -  In Section 2 "recreational licensing" wording adopted at the              
     previous hearing has been incorporated.  This language                    
     differentiates between a recreational hunting or fishing                  
     license and a license required for subsistence or personal                
     use.                                                                      
                                                                               
  -  Sections 3 and 5, which were in the HESS version of SB 252 but            
     were not in the previous Resources CS, have been incorporated             
     into version "H."                                                         
                                                                               
  -  Section 4 will disallow sale of a list of social secuirty                 
     numbers collected by the state agency required by this bill.              
                                                                               
                                                                               
  -  Section 6 relates to confidentiality and would require the                
     Department of Fish and Game at the time that they allow a                 
     vendor to sell licenses to notify them of the consequences if             
     social security numbers are let out.                                      
                                                                               
  -  Sections 7 through 10 were in the HESS version of the bill and            
     require the Department of Fish and Game to provide social                 
     security numbers to CSED upon request.                                    
                                                                               
  -  Section 11 is a court amendment that requires the court to                
     provide copies of records for CSED for child support services.            
                                                                               
  -  Section 13 is the mediation amendment that was offered and                
     adopted at the previous hearing on the bill.                              
                                                                               
  -  In Section 22 the reference to first-class mail has been                  
     deleted and it now provides that service will be by certified             
     mail, return receipt requested, or served personally.                     
                                                                               
  -  In Section 24 the amounts the employer would have to pay as a             
     civil penalty have been changed.                                          
                                                                               
  -  In Section 25 the language relating to subpoenas has been                 
     reworded for clarity.                                                     
                                                                               
Number 145                                                                     
                                                                               
SENATOR LINCOLN inquired as to the status of an amendment to                   
Section 12 she had proposed at the previous hearing, which relates             
to withholding orders, an would delete the phrase "shall                       
immediately send" and replace it with "may enforce the order by                
sending."  She said she thought it was agreeable with the                      
department to change that language so that it is more permissive.              
                                                                               
                                                                               
SENATOR GREEN voiced her concern of a person being notified in a               
timely manner if an order has been issued but the language provides            
that it "may" be sent.  That means that person is left out of a                
loop and then could be held liable for nonpayment.                             
                                                                               
BARBARA MIKLOS, Director, Child Support Enforcement Division,                  
Department of Revenue, clarified that this is not the section that             
requires the Child Support Enforcement Division (CSED) to  send out            
withholding orders.  This is a special court order that a person               
gets directly and they may send it, but it is separate of the                  
legislation, and it is not  used very often.                                   
                                                                               
DAN BRANCH, Assistant Attorney General, Department of Law, said he             
thought the word "shall" was put in by the drafters to make sure               
that if you wanted to enforce a withholding order that you                     
accompany it with all of the other documents that are listed.  He              
said if the amendment is adopted, he doesn't think it is going to              
diminish the ability of a non-custodial parent who is not using the            
agency to enforce an income withholding order.  He said the purpose            
of the amendment is to clarify and perhaps alleviate some of the               
concern that a newly divorced custodial parent might have that they            
are obligated by the statute to take a copy of the divorce order               
and send it off to anybody who might have money belonging to the               
child support debtor.                                                          
                                                                               
                                                                               
MS. LUCKY continued her overview of the changes made in CSSB
252(RES), version "H."                                                         
                                                                               
  -  Sections 26 and 27 relate to a person filing a response when              
     served with a notice of paternity and financial                           
     responsibility.  The deadline has been extended to 30 days for            
     financial information and for admitting or denying paternity,             
     and to 45 days to comply with genetic testing.                            
                                                                               
  -  Section 52 makes the Act nonseverable.                                    
                                                                               
Number 261                                                                     
                                                                               
CHAIRMAN HALFORD requested a motion to adopt the new Resources CS.             
                                                                               
SENATOR GREEN moved the adoption of CSSB 252(RES), version "H."                
Hearing no objection, the motion carried.                                      
                                                                               
SENATOR LINCOLN moved the following amendment to CSSB 252(RES):                
                                                                               
Page 9, line 10:  Delete the language "shall immediately send" and             
replace it with "may enforce the order by sending"                             
                                                                               
SENATOR TAYLOR objected to the adoption of Senator Lincoln's                   
amendment.   He said if the court was obligated every time to issue            
an income withholding order, why should someone be given the                   
opportunity to sit on it.  He added he couldn't see where the                  
amendment, in any way, benefits that person.                                   
                                                                               
MR. BRANCH stated that the department is neutral on the amendment.             
He added that the statutes provide that every child support order              
issued in the state shall contain a income withholding order.  The             
Court System has made provisions in the child support order form to            
allow the court to not make the income withholding order immediate             
in certain circumstances.  He added that the particular subsection             
that the amendment addresses is going to be used more by the                   
custodial parent that chooses not to go through CSED than by the               
agency.                                                                        
                                                                               
CHAIRMAN HALFORD called for a hand vote on the adoption of Senator             
Lincoln's amendment.  By a vote of 1-5, the amendment failed.                  
                                                                               
SENATOR LEMAN moved that CSSB 252(RES) be passed out of committee              
with individual recommendations.  Hearing no  objection, it was so             
ordered.                                                                       
                                                                               
        CSHB 144(FIN) - DEC FEES:PESTICIDES AND CHEMICALS                      
                                                                               
CHAIRMAN HALFORD brought HB 144 before the committee as the next               
order of business.                                                             
                                                                               
BARBARA COTTING, committee aide, House State Affairs Committee,                
stated the legislation resolves a lot of problems that have needed             
addressing for a long time.  She said the House Finance Committee              
has worked extensively on the legislation, and she deferred to                 
their staff to answer any questions committee members might have.              
                                                                               
MIKE TIBBLES, staff to Representative Gene Therriault, said there              
was a concern that industry was being charged for items that should            
come out of the general fund and are now being included in program             
receipts.  Initially, they looked at requiring a fixed fee,                    
however, in looking at the statute, there was confusion about how              
the language "and other services provided by the department" should            
be interpreted.  It was felt it was being interpreted too broadly              
and including items that shouldn't be included in the permittee's              
cost.  That language was removed, but then it started to open up               
into other items and excluded certain things they wanted to charge             
for.  They worked to get it to the point where fees could be                   
charged for the reasonable functions and have the safety built in              
so that there wouldn't be abuses, and, at the same time, have                  
industry pay for those actual direct costs of the services provided            
to them.                                                                       
                                                                               
Mr. Tibbles presented a section-by-section analysis of CSHB
144(FIN).                                                                      
                                                                               
Number 475                                                                     
                                                                               
SENATOR TAYLOR commented that other than for pesticides, it stills             
leaves the determination up to the department on what the hourly               
fee will be and what the fixed fee will be.  MR. TIBBLES                       
acknowledged that was correct, but he said they were trying to                 
approach it from the position of what can be charged, trying to                
eliminate all indirect costs, therefore forcing the fee down.                  
SENATOR TAYLOR said by eliminating the indirect costs, the                     
department will increase their hourly costs  in order to recover               
the same amount of money.  He voiced his position that there should            
be more "teeth" put into the bill.                                             
                                                                               
SENATOR TORGERSON asked if the department currently includes                   
overhead expenses in their hourly billing.  MR. TIBBLES replied                
that it was his understanding that they do, however, there is a                
statutory prohibition against including travel costs, but that is              
included in this legislation.                                                  
                                                                               
Number 541                                                                     
                                                                               
SENATOR LINCOLN asked if it is the department that is allowed to               
choose either the fixed fee or the actual direct costs.  MR.                   
TIBBLES replied that the fixed fee would have to based upon the                
actual direct cost.                                                            
                                                                               
Number 585                                                                     
                                                                               
JERRY REINWAND, representing the Chemical Specialty Manufacturers              
Association,  said his client has  concern with the uncertainty of             
what the charges are going to be and the uncertainty as to what the            
definition of the product is going to be.                                      
                                                                               
Mr. Reinwand said there is a dispute between the association and               
the department as to how many products would actually be                       
registered.  The department figures there would be about 2,000                 
products registered, however the association figures it would be up            
to 8,800 products registered.  He noted some states have as many as            
13,000 products registered.                                                    
                                                                               
He said there is also a dispute between the association and the                
department  on the definition of what constitutes a pesticide.                 
                                                                               
Mr. Reinwand said the association simply has a difference of                   
opinion with the department, and they have no problem with paying              
an appropriate fee.  They believe that the fee should be set in                
statute and the definitions contained in the proposed Resources SCS            
are appropriate.                                                               
                                                                               
TAPE 98-36, SIDE B                                                             
                                                                               
SENATOR GREEN inquired if this is handled in all states through                
the equivalent of a DEC.  MR. REINWAND responded that he believes              
there are states where the agriculture departments actually run                
these types of programs and not the environmental agency.                      
                                                                               
CHAIRMAN HALFORD questioned what the registration of household                 
products includes and what registration means.  MR. REINWAND                   
responded that even though his client's recommendation is to try to            
define these products, in general, by statute, the department still            
has a lot of elbow room to define this by regulation.  He wasn't               
familiar with the meaning of  registration.                                    
                                                                               
Number 550                                                                     
                                                                               
JANICE ADAIR, Director, Division of Environmental Health,                      
Department of Environmental Conservation, responding to Chairman               
Halford's question on the meaning of registration, said                        
registration, generally speaking, is when the department gets a                
copy of a label of a pesticide.  The label explains the cautions,              
how it can be used, how it shouldn't be used, etc., and this is                
kept on file so that they know how it can be used in the state.                
The manufacturer is responsible for providing this information to              
the department.                                                                
                                                                               
Ms. Adair said the department worked with the House Finance                    
Committee on the legislation, however, they still have problems                
with the pesticide section, and it primarily is a disagreement                 
about how many pesticides there are in use in the state.  The                  
department's registration program just took effect late last year,             
so it is just now getting the information on how many pesticides               
there are, but based on market surveys done by their pesticide                 
staff, there is somewhere between two to three thousand of them.               
She pointed out there is not much use of restricted use pesticides             
in Alaska, and the department does not have a problem with                     
differentiating between restricted-use pesticides and                          
nonrestricted-use pesticides.                                                  
                                                                               
Ms. Adair showed the committee a label from a product that is                  
authorized for agricultural and non-agricultural use.  However,                
with the way the language in the Resources SCS reads, she wasn't               
sure what they would call it when it comes to registering it, and              
if they would charge the higher fee for registering an                         
agricultural-use pesticide or lower fee for the household use.                 
                                                                               
CHAIRMAN HALFORD asked if the department prefers the categories                
restricted use and non-restricted use versus the three categories              
that are in the Resources SCS.  MS. ADAIR responded that was                   
correct, and that is how it came out of the House Finance                      
Committee.                                                                     
                                                                               
MS. ADAIR also related that the department was concerned that the              
House Finance Committee's fee amount was not sufficient to match               
their federal grant.  She said the amount of their grant isn't                 
driving what they are asking for because the cost is less than the             
cost that they put into it, but the whole idea behind this bill                
when it was originally introduced was to get rid of $55,000 in                 
general funds and to supplant that with program receipts that came             
from chemical manufacturers outside the state.                                 
                                                                               
Number 416                                                                     
                                                                               
RICHARD HARRIS, a Senior Vice President with Sealaska Corporation,             
said the corporation is involved in industrial resource development            
activities and, as such, receives a number of permits each year.               
He said they recognize that they are going to have to pay their                
share, but they do have a substantial problem with the fees that               
were passed in previous legislation.                                           
                                                                               
Sealaska has objected to the current structure, and their                      
experience is that it has created a gold rush mentality for fees               
for every possible regulatory action.  Sealaska agrees that it                 
should be the actual direct costs associated with those permits,               
but it should not be required to pay overhead costs associated with            
the administration of a department.                                            
                                                                               
Mr. Harris said Sealaska believes that the permittee has to have               
some protections.  He said we have to ensure that the permittee is             
not charged for services that have not been received, and that the             
permittee is burdened with the indirect costs, which they believe              
should remain a function of the state.                                         
                                                                               
Mr. Harris said HB 144 does help some of the deficiencies that                 
Sealaska has encountered, and they support the amendments before               
the committee.                                                                 
                                                                               
Number 350                                                                     
                                                                               
There being no further witnesses to testify on HB 144, CHAIRMAN                
HALFORD requested a motion on Amendment No. 1.                                 
                                                                               
SENATOR TORGERSON moved adoption of the following amendment:                   
                                                                               
Amendment No. 1                                                                
                                                                               
Page 3, line 15:  Following "for" add "the actual direct costs of"             
                                                                               
Hearing no objection to the motion, CHAIRMAN HALFORD stated                    
Amendment No. 1 was adopted.                                                   
                                                                               
Number 340                                                                     
                                                                               
SENATOR LEMAN moved the adoption of the following Amendment No. 2:             
                                                                               
Amendment No. 2                                                                
                                                                               
Page 1:  Following line 3 insert a new bill section to read:                   
                                                                               
     *Section 1.  AS 03.05.025 is amended by adding a new                      
subsection to read:                                                            
          (c)  Notwithstanding AS 44.46.025, the fee for a seafood             
processing permit for a direct-market fishing vessel may not exceed            
$100.  In this subsection, "direct-market fishing vessel" means a              
fishing vessel                                                                 
               (1)  that has an overall length of less than 65 feet            
and processes the vessel  operator's  own catch of seafood products            
on board the vessel for direct retail sale to consumers; or                    
               (2)  of any length if the seafood product that is               
harvested by the vessel operator and processed on board the vessel             
is tuna."                                                                      
                                                                               
Page 1, line 4:  Delete "Section 1" and insert "Sec. 2"                        
                                                                               
Renumber the following bill sections accordingly.                              
                                                                               
Number 320                                                                     
                                                                               
MS. ADAIR stated the department does not support the amendment.                
She said the $100 fee, even at the more limited hourly rate that               
the department would use to calculate the fixed fee, would not                 
cover the department's costs associated with these vessels.  She               
said on many occasions she has expressed the need to go back and               
look at the permit categories because industry has changed since               
the categories were first developed, and they are not reflective of            
the industry any more.  She is in the process of putting together              
a work group to look at the permit categories and the fees that go             
along with them.  The effect of the amendment is that it would take            
a group of processors that other processors complain about, lower              
their fee to a great amount, and then the state general fund would             
have to subsidize the activities involved with those types of                  
processors.                                                                    
                                                                               
CHAIRMAN HALFORD asked the current cost charged for the                        
inspections.  MS. ADAIR related that the permit and inspection                 
together is $400 per year.                                                     
                                                                               
SENATOR LINCOLN pointed out that the idea of the amendment was to              
get the fees down for the permit and inspection, but the amendment             
just speaks to the permit so it is not accomplishing what Senator              
Leman had intended.                                                            
                                                                               
SENATOR LEMAN moved, as an amendment to Amendment No. 2, to add the            
words "and inspection" following the word "permit."  He said it was            
his intent that this would be the annual cost for these vessels                
that would include the permit and any inspections.                             
                                                                               
MS. ADAIR pointed out if they have an inspection that ends up                  
finding several deficiencies and necessitates going back and doing             
a reinspection, then that operator can just have as many                       
inspections as he needs.  She said that is not how they treat                  
anyone else, and she wondered why, as a policy, he would want to.              
                                                                               
SENATOR LEMAN clarified he wants this to pertain to scheduled                  
inspections, not for reinspection of violations, and he proposed               
doing this as a conceptual amendment to get the wording correctly              
crafted.                                                                       
                                                                               
CHAIRMAN HALFORD  stated the conceptual amendment applies to the               
$100 fee to the permit and inspection, and that that be the normal             
scheduled inspection.  There would some leeway for additional                  
inspections, if required.                                                      
                                                                               
CHAIRMAN HALFORD asked if there was objection to the conceptual                
amendment to Amendment No. 2.  SENATOR LINCOLN objected, stating               
she did not think the $100 amount was enough.  By a show of hands,             
the amendment to Amendment No. 2 was adopted.                                  
                                                                               
CHAIRMAN HALFORD stated Amendment No. 2, as amended, was before the            
committee.  He said he personally has a problem with exempting the             
tuna boats because they are a lot bigger, and the operators don't              
live here.                                                                     
                                                                               
SENATOR TORGERSON moved as an amendment to Amendment No. 2, as                 
amended, to delete subsection (2) in the amendment, which is the               
reference to tuna vessels.  CHAIRMAN HALFORD explained  that it is             
not intended that they fall under the requirements of having a                 
permit.  It deletes them from the $100  exemption, so it may take              
a drafting change other than just deleting it from the amendment.              
                                                                               
CHAIRMAN HALFORD asked there was any objection to deleting the                 
exemption for tuna boats.  Hearing no objection, he stated that                
amendment to Amendment No. 2, as amended, was adopted.                         
                                                                               
TAPE 98-37, SIDE A                                                             
                                                                               
CHAIRMAN HALFORD stated Amendment No 2, as amended, was before the             
committee.  He added that the conceptual amendment adopted by the              
committee would be brought back before the committee to make sure              
there was agreement on its wording.                                            
                                                                               
CHAIRMAN HALFORD asked if there was objection to the adoption of               
Amendment No. 2, as amended.  SENATORS GREEN and LINCOLN objected.             
By a show of hands, the amendment carried on a 3-2 vote.                       
                                                                               
SENATOR LEMAN moved to pass SCS HB 144(RES) out of committee with              
individual recommendations.  Hearing no objection, it was so                   
ordered.                                                                       
                                                                               
         SB 340 - INCREASE LAND GRANT TO UNIV. OF ALASKA                       
                                                                               
CHAIRMAN HALFORD brought SB 340 before the committee as the next               
order of business.                                                             
                                                                               
RALPH BENNETT, staff to the Senate Judiciary Committee read the                
following sponsor statement into the record:                                   
                                                                               
"The provisions of SB 340 allow the University of Alaska to select             
250,000 acres of state land subject to approval by the Legislature.            
Land approved for transfer would include interests in minerals and             
to oil and gas subject to certain limitations.  Also lands subject             
to a coal lease or where a lease application is pending are not                
available for selection.  The University would bear the costs of               
selection, platting, surveying and conveyance.  All land selections            
must be made by December 31, 2012.  Twenty percent of income                   
derived from selected lands must be used at the campus closest to              
the income generating parcel(s).  All lands conveyed under this                
program are exempted from municipal taxation.  SB 340 is compatible            
with Senator Murkowski's S.660, the legislation, pending in                    
Congress, that will convey additional public lands to the                      
University of Alaska.                                                          
                                                                               
"The University of Alaska system was created under federal                     
authority as a land grant institution to provide for the higher                
education requirements of Alaska's people in perpetuity.   Most                
colleges established under the land grant program were endowed with            
sizable land bases from which to generate income to be used for                
operating purposes.  Unlike most institutions in the Lower 48                  
states, the University of Alaska does not have the relatively                  
larger population base and proximity to other support services that            
are so beneficial.  The University of Alaska also suffers from a               
smaller pool of alumni and other normal sources of endowment income            
which many institutions rely on to help support operations,                    
especially subsidies for teaching positions.                                   
                                                                               
"In the past decade several legislators have introduced legislation            
allowing the University of Alaska to select additional lands from              
the State.  The purpose of all legislative attempts to provide more            
land for the University statewide system has been to provide more              
income producing assets where monetary resources are becoming                  
scarcer and unpredictable.  This bill continues the effort to give             
the University of Alaska a larger, more productive land base.  The             
bill also provides clear expectations that land conveyed is to be              
used for the development of value added industries where                       
appropriate."                                                                  
                                                                               
MR. BENNETT informed the committee that Senator Murkowski's                    
legislation has been reported out of the last committee of referral            
and is headed to the floor for a vote.                                         
                                                                               
MR. BENNETT also presented a section-by-section analysis of SB 340.            
He noted there was a proposed committee substitute, which makes a              
simple change to Section 5, the section that deals with the new                
land selections.  The coal industry pointed out that coal leases in            
lease applications for coal were not included in the draft, so the             
committee substitute would include coal leases and the land for                
which a coal lease application is pending that would not be                    
available to the University for selection.                                     
                                                                               
CHAIRMAN HALFORD asked what happens if the University gets the land            
and does nothing with it.                                                      
                                                                               
SENATOR TAYLOR said like him he wants to see somebody producing                
something on it.                                                               
                                                                               
Number 261                                                                     
                                                                               
SENATOR GREEN referenced page 9, line 22, which is basically the               
beginning of a reversionary clause, and she said questioned why                
get back into reversionary clauses after spending two years getting            
out of one.                                                                    
                                                                               
MR. BENNETT related that S.660 would grant the University 250,000              
acres of federal land, and in order to receive this land, the                  
University must relinquish 11,852 of valuable inholdings in Alaska.            
The University would be eligible to receive an additional 250,000              
acres of federal land on a matching basis with the state for a                 
total of 500,000 additional acres.                                             
                                                                               
CHAIRMAN HALFORD questioned what happens if we don't want them to              
give up the only state land owned in those federal enclaves.  MR.              
BENNETT  responded that was a legislative call.                                
                                                                               
SENATOR TORGERSON said in Section 6, it says the net income goes               
into the endowment trust fund, and he asked how the endowment                  
works.                                                                         
                                                                               
WENDY REDMAN, Vice President, University of Alaska, explained that,            
by statute, the money goes into a land grant trust fund, and the               
earnings of the trust fund are what is extended.                               
                                                                               
SENATOR GREEN referenced subsection (c) on page 10 and commented               
that you can't get to the money, that 20 percent of the income                 
derived from the management of land selections for use on the                  
closest campuses because, by law, all the proceeds go into the                 
University trust fund.                                                         
                                                                               
MS. REDMAN stated the University would not support that kind of                
amendment for a lot of reasons, primarily because the purpose of               
the natural resource fund is to support natural resource programs              
in Alaska.  She said they try to expend the money where the faculty            
and staff exist.                                                               
                                                                               
MS. REDMAN said this is the fourth version of this type of                     
legislation that has been introduced over the years, and it is                 
probably the cleanest version.  However, she said there were a                 
couple of things that were dropped in subsequent bills, and she had            
some amendments for the committee's consideration.  There are two              
issues that are very important to the University.  The first one is            
on proprietary information.  The University is not covered the same            
way that the state is for the protection of proprietary information            
for people who wish to do leasing, etc.,  with them, and they would            
like to have that protection written into the bill.  The second                
issue is tort immunity, and they feel it is important for them to              
have some sort of immunity while people are out doing their                    
customary and traditional things on their land.                                
                                                                               
Returning to Senator Green's reference to a reversionary clause on             
page nine, MS. REDMAN said that unless there was some strong reason            
for keeping that section in the bill, she would encourage that it              
be removed.  She said they believe the University can get those                
lands into a productive and appropriate development for the state              
of Alaska.                                                                     
                                                                               
Number 498                                                                     
                                                                               
SENATOR TAYLOR said he likes the provision in there to either "use             
it or lose it."  He said he wants the University motivated to                  
harvest the resources or else it might as well go back to the feds.            
MS. REDMAN said she thought the University's history of managing               
land is a lot better than DNR's history of managing land.                      
                                                                               
CHAIRMAN HALFORD commented the fact is that the University has a               
strong constituency for preservation, and, if they are given the               
land without some kind of a push, they are probably not going to               
generate much money.  Generating money takes active management, and            
it takes dealing with conflicts, it takes exploration, it takes                
access, numerous things that some people in the University's                   
constituency don't like.                                                       
                                                                               
MS. REDMAN said she didn't think he would see that if he would look            
at what the University has been doing in the last 10 years since               
they have had possession of their lands.                                       
                                                                               
Number 537                                                                     
                                                                               
SENATOR LEMAN said if the University had a plan in place for use of            
the land, he didn't think the reversionary clause would be as much             
of a burden as was suggested.                                                  
                                                                               
TAPE 98-37, SIDE B                                                             
                                                                               
SENATOR LINCOLN moved an amendment to page 2, line 20, to delete               
"to the maximum extent practicable" so that it just says that the              
University of Alaska shall manage the land in a manner that permits            
customary and traditional uses of the resources of that land.                  
                                                                               
SENATOR TORGERSON proposed as an amendment to the amendment to                 
delete "manage" and insert "grant the use of" in its place.                    
                                                                               
SENATOR TAYLOR proposed to delete after the word "shall" the phrase            
"manage the land in a manner that permits" and to insert the word              
"allow" in its place.                                                          
                                                                               
SENATOR GREEN, speaking against the amendment, said on the  one                
hand we're saying to take this land, develop it and make money, and            
on the other hand, we're saying they can't refuse letting anyone               
on the property for any reason.                                                
                                                                               
MS. REDMAN suggested that if that section was going to be left in              
the bill, she thought the way it was currently worded worked the               
best.                                                                          
                                                                               
CHAIRMAN HALFORD stated Senator Lincoln's motion to delete "to the             
maximum extent practicable" was before the committee.  SENATOR                 
GREEN objected.  A hand vote was taken and the amendment failed on             
a 1-5 vote.                                                                    
                                                                               
Number 514                                                                     
                                                                               
MS. REDMAN requested that the committee consider a conceptual                  
amendment to subsection (c) on page 10, which  provides that 20                
percent of the income derived goes to the campus that is located               
within the closest proximity.   She said it is a very troubling                
section to the University, however, she thinks they might be able              
to live with it if it were broadened to say "to support resource               
development within the region of the campus."  SENATOR TAYLOR                  
voiced his objection to the amendment.                                         
                                                                               
SENATOR LEMAN moved to adopt a confidentiality amendment in the                
bill.  Hearing no objection, the amendment was adopted.                        
                                                                               
SENATOR LEMAN moved to adopt an immunity amendment to include the              
language in AS 09.65.200.  Hearing no objection, the amendment was             
adopted.                                                                       
                                                                               
Number 432                                                                     
                                                                               
SENATOR GREEN stated she was still uncomfortable with the                      
reversionary clause language.  She moved as an amendment to page 9,            
beginning on line 22, to delete paragraph (1) in its entirety.                 
                                                                               
CHAIRMAN HALFORD called for a show of hands on Senator Green's                 
amendment, and by a 1-4 vote, the amendment failed.                            
                                                                               
CHAIRMAN HALFORD stated the amendments adopted by the committee                
would be incorporated into a Resources CS.                                     
                                                                               
SENATOR TAYLOR moved CSSB 340(RES) be passed out of committee with             
individual recommendations.  Hearing no objection, it was so                   
ordered.                                                                       
                                                                               
There being no further business to come before the committee, the              
meeting adjourned at 7:10 p.m.                                                 

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