Legislature(2003 - 2004)

05/04/2004 03:55 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                          May 4, 2004                                                                                           
                           3:55 p.m.                                                                                            
TAPE(S) 04-48                                                                                                                 
MEMBERS PRESENT                                                                                                               
Senator Scott Ogan, Chair                                                                                                       
Senator Thomas Wagoner, Vice Chair                                                                                              
Senator Fred Dyson                                                                                                              
Senator Ralph Seekins                                                                                                           
Senator Ben Stevens                                                                                                             
Senator Kim Elton                                                                                                               
MEMBERS ABSENT                                                                                                                
Senator Georgianna Lincoln                                                                                                      
COMMITTEE CALENDAR                                                                                                            
SENATE RESOLUTION NO. 4                                                                                                         
Requesting  the  United  States Congress  to  amend  the  federal                                                               
Wilderness  Act to  authorize  fishery  enhancement programs  and                                                               
similar activities in wilderness areas.                                                                                         
     MOVED SR 4 OUT OF COMMITTEE                                                                                                
CS FOR HOUSE BILL NO. 319(FIN) am                                                                                               
"An  Act relating  to  the  disposal of  state  land by  lottery;                                                               
relating  to the  reservation  of  rights by  the  state in  land                                                               
contracts and deeds; relating to  the disposal, including sale or                                                               
lease, of remote  recreational cabin sites; and  providing for an                                                               
effective date."                                                                                                                
     HEARD AND HELD                                                                                                             
CS FOR HOUSE BILL NO. 531(FIN) am                                                                                               
"An Act relating  to natural gas exploration  and development and                                                               
to  nonconventional gas,  and amending  the  section under  which                                                               
shallow natural  gas leases may  be issued; and providing  for an                                                               
effective date."                                                                                                                
     MOVED SCS CSHB 531(RES) OUT OF COMMITTEE                                                                                   
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SR 4                                                                                                                    
SHORT TITLE: AMEND WILDERNESS ACT                                                                                               
SPONSOR(s): RESOURCES                                                                                                           
05/03/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/03/04       (S)       RES                                                                                                    
05/04/04       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
BILL: HB 531                                                                                                                  
SHORT TITLE: CONVENTIONAL & NONCONVENTIONAL GAS LEASES                                                                          
SPONSOR(s): RESOURCES                                                                                                           
03/04/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/04/04       (H)       O&G, RES, FIN                                                                                          
03/16/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
03/16/04       (H)       Heard & Held                                                                                           
03/16/04       (H)       MINUTE(O&G)                                                                                            
03/18/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
03/18/04       (H)       Heard & Held                                                                                           
03/18/04       (H)       MINUTE(O&G)                                                                                            
03/22/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
03/22/04       (H)       <Pending Referral>                                                                                     
04/01/04       (H)       O&G AT 3:15 PM CAPITOL 124                                                                             
04/01/04       (H)       Moved CSHB 531(O&G) Out of Committee                                                                   
04/01/04       (H)       MINUTE(O&G)                                                                                            
04/05/04       (H)       O&G RPT CS(O&G) 7AM                                                                                    
04/05/04       (H)       AM: HOLM, KERTTULA, MCGUIRE, ROKEBERG,                                                                 
04/05/04       (H)       CRAWFORD, HEINZE, KOHRING                                                                              
04/14/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
04/14/04       (H)       Heard & Held <Assigned to Subcmte>                                                                     
04/14/04       (H)       MINUTE(RES)                                                                                            
04/16/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
04/16/04       (H)       Moved CSHB 531(RES) Out of Committee                                                                   
04/16/04       (H)       MINUTE(RES)                                                                                            
04/19/04       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
04/19/04       (H)       Moved CSHB 531(RES) Out of Cmte. Again                                                                 
04/19/04       (H)       MINUTE(RES)                                                                                            
04/21/04       (H)       RES RPT CS(RES) 3DP 1DNP 3NR 2AM                                                                       
04/21/04       (H)       DP: GATTO, STEPOVICH, MASEK; DNP: LYNN;                                                                
04/21/04       (H)       NR: HEINZE, WOLF, DAHLSTROM;                                                                           
04/21/04       (H)       AM: KERTTULA, GUTTENBERG                                                                               
04/26/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/26/04       (H)       Continuation of Meeting Canceled 6:39                                                                  
04/27/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/27/04       (H)       Moved CSHB 531(FIN) Out of Committee                                                                   
04/27/04       (H)       MINUTE(FIN)                                                                                            
04/28/04       (H)       FIN RPT CS(FIN) 4DP 5NR                                                                                
04/28/04       (H)       DP: STOLTZE, CHENAULT, FATE, FOSTER;                                                                   
04/28/04       (H)       NR: MEYER, JOULE, CROFT, HARRIS,                                                                       
04/28/04       (H)       WILLIAMS                                                                                               
05/01/04       (H)       TRANSMITTED TO (S)                                                                                     
05/01/04       (H)       VERSION: CSHB 531(FIN) AM                                                                              
05/01/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/01/04       (S)       RES, FIN                                                                                               
05/04/04       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
WITNESS REGISTER                                                                                                              
Mr. Paul Shadura, President                                                                                                     
Kenai Peninsula Fishing Association                                                                                             
Soldotna AK                                                                                                                     
POSITION STATEMENT: Supports SR 4.                                                                                            
Mr. Jerry Fandrei, Executive Director                                                                                           
Cook Inlet Aquaculture Association                                                                                              
Kenai AK                                                                                                                        
POSITION STATEMENT: Supports SR 4.                                                                                            
Mr. Jerry McCutcheon                                                                                                            
Anchorage AK                                                                                                                    
POSITION STATEMENT: Commented on SR 4.                                                                                        
Representative Hugh Fate                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Sponsor of HB 319.                                                                                       
Mr. Bob Loeffler, Director                                                                                                      
Division of Mining, Land and Water                                                                                              
Department of Natural Resources                                                                                                 
400 Willoughby Ave.                                                                                                             
Juneau, AK  99801-1724                                                                                                          
POSITION STATEMENT: Commented on HB 319.                                                                                      
Mr. Mark Myers, Director                                                                                                        
Division of Oil and Gas                                                                                                         
Department of Natural Resources                                                                                                 
400 Willoughby Ave.                                                                                                             
Juneau, AK  99801-1724                                                                                                          
POSITION STATEMENT:  Commented on HB 353.                                                                                     
Mr. Matt Davidson                                                                                                               
Alaska Conservation Voters                                                                                                      
Juneau AK                                                                                                                       
POSITION STATEMENT:  Commented on HB 531.                                                                                     
ACTION NARRATIVE                                                                                                              
TAPE 04-48, SIDE A                                                                                                            
                   SR 4-AMEND WILDERNESS ACT                                                                                
CHAIR SCOTT  OGAN called the Senate  Resources Standing Committee                                                             
meeting  to order  at 3:55  p.m. Present  were Senators  Wagoner,                                                               
Seekins, Elton and  Chair Scott Ogan. Senator  Stevens arrived at                                                               
5:12  and Senator  Dyson  arrived  at 4:53.  The  first order  of                                                               
business  to come  before the  committee was  SR 4,  a follow  up                                                               
resolution to  the one  passed by  the committee  earlier, asking                                                               
the Department  of Interior to  allow the release of  sockeye fry                                                               
into Tustumena Lake  in Wilderness Society and  Alaska Center for                                                               
the Environment  versus the U.S.  Fish and Wildlife  Service. The                                                               
Department  of Interior  has  determined  that qualifications  to                                                               
assert in  the Supreme Court  aren't there and the  Ninth Circuit                                                               
has met  and balked. The  result of  the lawsuit is  that 100,000                                                               
adult fish will not be returning to lower Cook Inlet.                                                                           
SR 4 asks Congress to amend  the Wilderness Act to deal with non-                                                               
commercial  activities such  as  the  sockeye salmon  enhancement                                                               
programs,  which have  been going  on  in Tustumena  Lake for  30                                                               
MR.   PAUL   SHADURA,    President,   Kenai   Peninsula   Fishing                                                               
Association,  supported the  resolution saying,  "The urgency  of                                                               
this  action  cannot  be overstated....  It  is  imperative  that                                                               
Alaska  encourages our  federal delegation  and our  president of                                                               
the need to take action...."                                                                                                    
MR.  JERRY FANDREI,  Executive Director,  Cook Inlet  Aquaculture                                                               
Association (CIAA), recognized the importance of this issue.                                                                    
     The Ninth Circuit Court of  Appeal's decision to enjoin                                                                    
     the  Tustumena Lake  project restricts  our ability  to                                                                    
     complete our goal of providing  protection for the Cook                                                                    
     Inlet  salmon resource.  The decision  also limits  the                                                                    
     ability of  the state to manage  its fishery resources,                                                                    
     particularly  those resources  providing the  basis for                                                                    
     the  state's  rural  economy.  On  behalf  of  CIAA,  I                                                                    
     support SR 4 and look forward to its submittal....                                                                         
MR. JERRY MCCUTCHEON, Anchorage resident, said:                                                                                 
     Put the  fish into Tustumena  Lake. Let the  state take                                                                    
     the  legal  responsibility  for having  it  happen  and                                                                    
     let's solve it  somewhere else. I think  by not putting                                                                    
     the fish  in the  lake we set  a bad  precedent.... The                                                                    
     waters of  the state of  Alaska belong to the  state of                                                                    
     Alaska. I don't  know whatever happened to  that, but I                                                                    
     think it's a good time to solve the problem.                                                                               
CHAIR OGAN said he agreed with him.                                                                                             
SENATOR  WAGONER  moved   to  pass  SR  4   from  committee  with                                                               
individual recommendations  and attached fiscal note.  There were                                                               
no objections and it was so ordered.                                                                                            
CHAIR OGAN  added that  Mr. McCutcheon's  comments relate  to the                                                               
submerged lands issue  and he thought the State  of Alaska should                                                               
have the ability  to regulate what happens on  them, whether they                                                               
are  an in-holding  in a  national wildlife  refuge or  not. "I'm                                                               
outraged   that   somehow   somebody  thinks   their   wilderness                                                               
experience  is  being  compromised because  there's  some  little                                                               
fishies  swimming in  a lake  somewhere and  maybe a  float plane                                                               
that landed."                                                                                                                   
4:08 - 4:09 - at ease                                                                                                           
   CSHB 319(FIN) am-REC.CABIN SITES/LOTTERY SALE/RTS. RESERV                                                                
CHAIR  SCOTT  OGAN  announced  CSHB   319(FIN)am  to  be  up  for                                                               
REPRESENTATIVE HUGH FATE,  sponsor of HB 319,  said he'd reviewed                                                               
only some of the amendments.                                                                                                    
4:10 - 4:12 - at ease                                                                                                           
MR.  BOB LOEFFLER,  Director, Division  Mining,  Land and  Water,                                                               
Department of Natural  Resources (DNR), said he is  very proud of                                                               
the division's  remote recreation  program, which  is continually                                                               
being  improved. The  technical amendments  are just  workability                                                               
sections so his goal can be accomplished.                                                                                       
He informed the  committee that surveys are  currently taking his                                                               
department roughly two years from  the time a lease is initiated.                                                               
Individual  parcels usually  take  longer than  the batches.  The                                                               
Mat-Su  Borough   has  a  10-month   backlog  and   the  proposed                                                               
legislation would  probably put  individuals to  the end  of that                                                               
line; Fairbanks  North Star Borough's situation  is similar. This                                                               
brings  about his  concern that  this program  might eliminate  a                                                               
portion of the department's current  program to do surveys in the                                                               
proposed  24   months.  Secondly,   he  was  concerned   that  an                                                               
individual would  go through the  process and not be  finished in                                                               
the  24-month  timeframe  and  the   department  would  lose  its                                                               
authorization to  convey the  surveyed land  to them.  To protect                                                               
individual  Alaskans, he  proposed Amendment  1 that  says survey                                                               
and  appraisal  shall be  completed  within  24 months  of  lease                                                               
issuance  unless   an  extension  is  deemed   necessary  by  the                                                               
commissioner.  This directs  him very  clearly to  accomplish the                                                               
sponsor's intent, but doesn't penalize  an individual if it can't                                                               
be done.                                                                                                                        
MR. LOEFFLER said that Amendment  2 prohibits the department from                                                               
selling land with high mineral  potential by standards adopted by                                                               
the  department in  regulations (page  4, section  (g). Requiring                                                               
standards to  be put  into regulations  would eliminate  his FY05                                                               
sale.  However,  he  can  accomplish   the  sponsor's  intent  by                                                               
adopting standards, but not putting them into regulations.                                                                      
MR. POUND refined  the amendment saying he would  delete only "in                                                               
MR.  LOEFFLER  said  that  would be  fine.  The  third  technical                                                               
amendment deletes subsection (g). He  explained that at least two                                                               
boroughs require  either absolutely or approximately  10 acres as                                                               
the  minimum parcel  size,  but the  bill sets  10  acres as  the                                                               
maximum parcel size.  Given his experience with  people going out                                                               
on the  ground and  trying to  figure out  the area  along curved                                                               
streams  and  lakes, he  didn't  think  most  of them  would  get                                                               
particularly close.  It would be  odd to send people  out knowing                                                               
they would be unsuccessful in  the Mat-Su and Kodiak boroughs. He                                                               
thought  the  sponsor's  intent  could  be  accomplished  by  the                                                               
technical change.                                                                                                               
MR. POUND replied that it was acceptable.                                                                                       
SENATOR WAGONER said  he liked line 31 in section  (g) that deals                                                               
with lake  and river frontage  so one  person couldn't go  in and                                                               
develop one-acre lots clear around a lake.                                                                                      
MR.  LOEFFLER  agreed   with  him  in  general   and  said  those                                                               
requirements are  typically in all  his division's  remote sales.                                                               
He  said the  third  part of  (g) says  parcels  sold under  this                                                               
section are  subject to 16 USC  31, the famous no  more clause in                                                               
ANILCA. While he  is supportive of the clause,  it binds Congress                                                               
to not do certain things and it's  an odd thing to have to put in                                                               
everybody's patent.                                                                                                             
CHAIR OGAN summarized that there  was agreement by the sponsor on                                                               
all the technical  changes except for Amendment 1. He  went on to                                                               
the policy amendment that would revise (f).                                                                                     
MR.  LOEFFLER explained  that  the policy  problem  he wanted  to                                                               
solve  in  (f) is  that  Alaska  land needs  to  be  open to  all                                                               
Alaskans. Just  because one person nominates  a particularly good                                                               
parcel doesn't mean he is the  only one who should be entitled to                                                               
it  as he  is currently.  However, it  has been  the department's                                                               
experience that  people don't  bid when  someone has  nominated a                                                               
parcel and has the right of  first refusal. His solution has been                                                               
to offer enough land so that there are enough choices.                                                                          
SENATOR WAGONER  said he has been  involved in a couple  right of                                                               
first refusal purchases and that  people do bid competitively for                                                               
MR. LOEFFLER  responded that the  department offers  auctions for                                                               
surveyed  parcels  without  the   right  of  first  refusal,  but                                                               
auctions are  spirited nevertheless.  The publications  for those                                                               
parcels are much more elaborate  than mere classifieds. HB 319 is                                                               
an opportunity  to stake  land, but  the department  doesn't know                                                               
exactly what  is included in  the offers because the  land hasn't                                                               
been surveyed yet. The problems are operational.                                                                                
SENATOR WAGONER  said that a  lot of  people in Alaska  will know                                                               
better than  other people immediately  where the prime  pieces of                                                               
property are.                                                                                                                   
     I  believe what  the  chairman of  this committee  said                                                                    
     that we're  going to  create a mini  land rush  and the                                                                    
     best parcels  in those areas  are going to be  taken up                                                                    
     by  the people  that know  those areas  best.... But  I                                                                    
     think it's  our responsibility  to make sure  the state                                                                    
     gets  the largest  amount of  profit out  of this  land                                                                    
     that we can....                                                                                                            
CHAIR OGAN  suggested adding "after  a best interest  finding" on                                                               
line 3 of the policy amendment.                                                                                                 
MR. LOEFFLER  said that a  best interest finding is  required for                                                               
the department  to sell all land,  but it's not required  on land                                                               
that isn't being sold.                                                                                                          
4:40 - 4:48 - at ease                                                                                                           
SENATOR DYSON arrived at 4:53.                                                                                                  
CHAIR OGAN said he would hold HB 319 for further work.                                                                          
   CSHB 531(FIN)am-CONVENTIONAL & NONCONVENTIONAL GAS LEASES                                                                
CHAIR OGAN  announced CSHB  531(FIN) am,  version 23-LS1818/KA.2,                                                               
to be up for consideration.                                                                                                     
CHAIR  OGAN announced  that he  has  no conflict  with this  bill                                                               
because he  is not employed  by anyone that it  affects. However,                                                               
some people  have a  perceived conflict and  he asked  Vice Chair                                                               
Wagoner to conduct the meeting.                                                                                                 
SENATOR SEEKINS  said in case  anyone perceives Chair Ogan  has a                                                               
conflict he objects so that he could vote.                                                                                      
CHAIR OGAN noted  that according to the Ethics  Committee, he has                                                               
no conflict to declare.                                                                                                         
SENATOR  WAGONER said  he was  instructed  that a  person had  to                                                               
declare financial  conflicts when a  bill was voted on,  not when                                                               
it was under discussion.                                                                                                        
5:00 - 5:03 - at ease                                                                                                           
TAPE 04-48, SIDE B                                                                                                            
MR. MARK MYERS, Director, Division  of Oil and Gas, Department of                                                               
Natural Resources (DNR), said the  current version of the bill is                                                               
23-LS1818/KA.2.  He  explained  that  Amendment  1  is  clean  up                                                               
language; the substantive part starts on line 13.                                                                               
                      A M E N D M E N T  1                                                                                  
OFFERED IN THE SENATE                                                                                                           
     TO:  CSHB 531(FIN) am                                                                                                      
Page 6, line 25:                                                                                                                
     Delete "finds"                                                                                                         
     Insert "determines"                                                                                                    
Page 7, line 4, following "or the":                                                                                         
     Insert "United States"                                                                                                 
Page 7, line 5:                                                                                                                 
     Delete "and"                                                                                                           
Page 7, line 11, following "required":                                                                                          
     Insert "; and                                                                                                          
                    (D)  as a condition of approval of a permit                                                             
          to drill  a well  for production or  production testing                                                           
          of  coal bed  methane, require  the operator  to design                                                           
          and implement  a water well testing  program to provide                                                           
          baseline  data  on  water  quality  and  quantity;  the                                                           
          commission  shall make  the results  of the  water well                                                           
          testing program available to the public"                                                                          
He  explained  that a  new  standard  requires the  applicant  to                                                               
develop  baseline water  data and  testing prior  to approval  by                                                               
AOGCC of a  permit to drill. This data would  be available to the                                                               
SENATOR DYSON moved to adopt Amendment 1. There were no                                                                         
objections and Amendment 1 was adopted.                                                                                         
VICE CHAIR WAGONER announced that Amendment 2 was up for                                                                        
                      A M E N D M E N T  2                                                                                  
OFFERED IN THE SENATE                                                                                                           
     TO:  CSHB 531(FIN) page 19, line 10:                                                                                       
     Delete "(A)"                                                                                                           
Page 19, line 23:                                                                                                               
     Delete "and"                                                                                                           
Page 19, lines 24 - 29:                                                                                                         
     Delete all material.                                                                                                       
Page 23, line 7:                                                                                                                
     Delete "AS 38.05.180(n)(2)"                                                                                            
     Insert "AS 38.05.180(n)(2)(A)"                                                                                         
Page 26, lines 26 through 30:                                                                                                   
     Delete all material.                                                                                                       
Page 38, line 28, following "gas,":                                                                                         
     Insert "(A)"                                                                                                           
Page 38, line 30, following "lease":                                                                                        
     Insert "; and                                                                                                          
                    (B) if the nonconventional gas produced will                                                                
          not  be  in direct  competition  with  gas on  which  a                                                               
          royalty at a rate of  at least 12.5 percent is payable,                                                               
          then  the royalty  share payable  to the  state on  all                                                               
          production of  gas from the  pool attributable  to that                                                               
          lease  shall  be  6.25 percent  based  upon  production                                                               
          delivered  in pipeline  quality and  free of  all lease                                                               
          expenses, including  separation, cleaning, dehydration,                                                               
          gathering,  salt water  disposal,  and preparation  for                                                               
          transportation off the lease"                                                                                       
MR. MYERS explained  that Amendment 2 is  basically another clean                                                               
up amendment. The  Shallow Gas Program has a $1  per acre leasing                                                               
fee.  Currently, if  gas doesn't  compete with  other gas  in the                                                               
market, it  possibly can  get a 6.25  percent royalty.  This bill                                                               
contains that same right under  certain conditions. This language                                                               
is put  in the correct place  where it can deal  with the royalty                                                               
SENATOR  DYSON  moved  to  adopt   Amendment  2.  There  were  no                                                               
objections and it was so ordered.                                                                                               
VICE  CHAIR   WAGONER  announced  Amendment   3  to  be   up  for                                                               
                      A M E N D M E N T  3                                                                                  
OFFERED IN THE SENATE                                                                                                           
     TO:  CSHB 531(FIN) am                                                                                                      
Page 20, line 13, following "AS 38.05.180(ff)(4)":                                                                          
     Insert "or 38.05.180(gg)"                                                                                              
Page 20, line 26, following "AS 38.05.180(ff)":                                                                             
     Insert ", 38.05.180(gg),"                                                                                              
Page 39, line 18:                                                                                                               
     Delete "a new subsection"                                                                                                  
     Insert "new subsections"                                                                                                   
Page 40, following line 17:                                                                                                     
     Insert new subsections to read:                                                                                            
          "(gg)  Before approving operations for the development                                                                
     of coal  bed methane under AS 38.05.134,  38.05.177, or this                                                               
     section,  the director  shall ensure  that  the approval  is                                                               
     conditioned upon                                                                                                           
               (1) reasonable and appropriate setbacks governing                                                                
     the  placement  by  the  operator  of  compressor  stations;                                                               
     setbacks approved  under this  paragraph must  be determined                                                               
     with  reference  to  the   population  density  and  general                                                               
     character   of   the   parcels  surrounding   the   proposed                                                               
     compressor station site; and                                                                                               
               (2) reasonable and appropriate measures to                                                                       
     mitigate the noise of compressors,  engines, and other noise                                                               
     generating equipment operated  by  the operator on the lease                                                               
     or license;  measures approved under this  paragraph must be                                                               
     determined  with reference  to  the  population density  and                                                               
     general character  of the  parcels surrounding  the proposed                                                               
     compressor, engine, or other noise generating equipment."                                                                  
MR. MYERS  explained that Amendment  3 adds new  protections that                                                               
aren't  in the  current bill  that apply  to all  coalbed methane                                                               
operations  on state  lands. It  allows for  the commissioner  to                                                               
require reasonable and appropriate  setbacks for the placement of                                                               
compressor stations with reference  to population density and the                                                               
general character  of the  parcel surrounding  the site.  It also                                                               
requires noise  mitigation. This amendment seeks  to address some                                                               
of the conflicts between surface and subsurface owners.                                                                         
Secondly, it  places shallow gas  leasing under the  same bonding                                                               
requirements that exist  on the conventional program  and adds an                                                               
additional protection for the surface owner.                                                                                    
SENATOR BEN STEVENS arrived at 5:12.                                                                                            
5:14 - 5:15 - at ease                                                                                                           
SENATOR  STEVENS  moved  to  adopt Amendment  3.  There  were  no                                                               
objections and it was so ordered.                                                                                               
VICE  CHAIR   WAGONER  announced  Amendment   4  to  be   up  for                                                               
                      A M E N D M E N T  4                                                                                  
OFFERED IN THE SENATE                                                                                                           
     TO:  CSHB 531(FIN) am                                                                                                      
Page 40, lines 6 - 12:                                                                                                          
     Delete all material and insert:                                                                                            
               "(3)  the provisions of AS 38.05.130 apply to the                                                                
     extraction of coal bed methane, except that the provisions                                                                 
     of that section shall be implemented as follows:                                                                           
                    (A) for an activity or operation for which                                                                  
          the department, by  regulation, requires submission and                                                               
          approval of  a plan of operations  before activities or                                                               
          operations may be undertaken, the  director shall, as a                                                               
          condition  for issuing  the bond,  after notice  and an                                                               
          opportunity to be heard, review  the plan of operations                                                               
          to  determine  if  use of  the  surface  is  reasonably                                                               
          necessary to extract coal bed methane; and                                                                            
                    (B) the director may not require a bond                                                                     
          posted under this  paragraph from a lessee  or agent of                                                               
          a lessee  if the lessee  or agent has already  posted a                                                               
          bond  covering  the  lessee's  statewide  oil  and  gas                                                               
          leasing activities;"                                                                                                  
MR.  MYERS explained  that Amendment  4 is  a duplication  of the                                                               
second part  of Amendment  3 on bonding  and he  recommended that                                                               
the  committee  not consider  it.  The  committee agreed  not  to                                                               
consider it.                                                                                                                    
VICE CHAIR WAGONER renumbered Amendment 5 to be Amendment 4.                                                                    
MR. MYERS explained  that [renamed] Amendment 4  is technical and                                                               
on page 41,  lines 27 and 28, it deletes  "shales containing gas"                                                               
and inserts "gas contained in shales".                                                                                          
SENATOR  STEVENS  moved  to  adopt Amendment  4.  There  were  no                                                               
objections and it was so ordered.                                                                                               
MR. MATT DAVIDSON, Alaska Conservation  Voters, said he hoped the                                                               
public would  have time to review  the amended version of  HB 531                                                               
before it came up in the Finance Committee.                                                                                     
VICE CHAIR WAGONER  explained that the committee  rolled the best                                                               
part of  what it thought  was HB 395 into  HB 531 and  the public                                                               
would get a chance to review it.                                                                                                
SENATOR SEEKINS  moved to pass  SCS CSHB 531(RES)  from committee                                                               
with  individual  recommendations   and  attached  fiscal  notes.                                                               
Senators Stevens, Dyson, Seekins and Vice Chair Wagoner voted                                                                   
yea; and SCS CSHB 531(RES) moved from committee.                                                                                
There being no further business to come before the committee,                                                                   
Vice Chair Wagoner adjourned the meeting at 5:23 p.m.                                                                           

Document Name Date/Time Subjects