Legislature(1995 - 1996)
04/10/1996 03:52 PM Senate RES
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SENATE RESOURCES COMMITTEE
April 10, 1996
3:52 P.M.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Drue Pearce, Vice Chairman
Senator Steve Frank
Senator Rick Halford
Senator Robin Taylor
Senator Georgianna Lincoln
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 59(RES)
"An Act relating to raffles and auctions of certain permits to take
big game; and providing for an effective date."
CS FOR HOUSE JOINT RESOLUTION NO. 54(RES) am
Encouraging the lessees of Alaska's vast North Slope natural gas
reserves to reach agreement to market gas, expressing the
legislature's support for an Alaska North Slope (ANS) gas
transmission pipeline, and requesting the President of the United
States and the Governor of the State of Alaska to publicly support
and take action that will help expedite the construction of that
system.
CS FOR HOUSE BILL NO. 357(RES)
"An Act relating to the issuance of hunting, trapping, and
noncommercial fishing licenses, tags, and permits and to residency
for fish and game purposes; and providing for an effective date."
SENATE BILL NO. 284
"An Act relating to the four dam pool transfer fund and the power
development fund."
HB 329 am (RESTITUTION FOR CERTAIN GAME VIOLATIONS) was scheduled,
but not taken up this date.
SB 180 (VALUE-ADDED TIMBER SALES; MARKETING) was scheduled, but not
taken up this date.
PREVIOUS SENATE COMMITTEE ACTION
HB 59 - No previous action to record.
HB 357 - See Resources minutes dated 4/3/96.
HJR 54 - No previous action to record.
SB 284 - See Resources minutes dated 3/6/96 and 4/3/96.
WITNESS REGISTER
Patti Swenson, Staff
Representative Con Bunde
State Capitol Bldg.
Juneau, Alaska 99801-1182
POSITION STATEMENT: Staff to sponsor of HB 59.
Mr. Wayne Regelin, Director
Division of Wildlife Conservation
Department of Fish and Game
P.O. Box 25526
Juneau, AK 99802-5526
POSITION STATEMENT: Commented on HB 59.
Duayne Buell, Chairman
Southeast Alaska Fish and Wildlife Safeguard
5700 Tudor Rd.
Anchorage, AK 5700
POSITION STATEMENT: Supported HB 59.
Captain Richard Graham
Division of Fish and Wildlife
Alaska Department of Fish and Game
4500 W 50th
Anchorage,AK 99502
POSITION STATEMENT: Supported HB 59 and HB 357.
Representative Gene Kubina
State Capitol Bldg.
Juneau, Alaska 99801-1182
POSITION STATEMENT: Sponsor of HJR 54.
Mr. Wayne Lewis, Manager
External Affairs
Yukon Pacific Corp.
1049 W. 5th Ave.
Anchorage, AK 99501
POSITION STATEMENT: Supported SCS CSHJR 54(RES) am.
Mr. Jeff Lowenfels, President and CEO
Yukon Pacific Corp.
1049 W. 5th Ave.
Anchorage, AK 99501
POSITION STATEMENT: Supported SCS CSHJR 54(RES) am.
Mayor Dennis Eagan
155 S. Seward St.
Juneau, AK 99801
POSITION STATEMENT: Supported SCS CSHJR 54(RES) am
Jerry Hood, Vice President
AFL/CIO
211 4th Street
Juneau, AK 99801
POSITION STATEMENT: Supported SCS CSHJR 54 (RES) am.
Representative Scott Ogan
State Capitol Bldg.
Juneau, Alaska 99801-1182
POSITION STATEMENT: Prime Sponsor of HB 357.
Lance Nelson
Department of Law
1039 W. 4th Ave., Suite 200
Anchorage, AK 99501-1994
POSITION STATEMENT: Available to comment on HB 357.
Randy Simmons
Alaska Energy Authority
480 W. Tudor Rd.
Anchorage, AK 99503-6690
POSITION STATEMENT: Commented on SB 284.
Mr. Keith Laufer, Assistant Attorney General
Department of Law
P.O. Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Commented on SB 284.
ACTION NARRATIVE
TAPE 96-49, SIDE A
Number 001
CSHB 59(RES) RAFFLE OR AUCTION OF BIG GAME PERMITS
CHAIRMAN LEMAN called the Senate Resources Committee meeting to
order at 3:52 p.m. and announced CSHB 59(RES) to be up for
consideration.
Patti Swenson, Staff for Representative Con Bunde, explained that
under statute the only organization that is qualified to raffle a
permit for the Delta bison herd is Safeguard. HB 59 expands the
definition of "qualified organization" to allow the ADF&G to issue
through competitive auction or raffle up to two harvest permits
each year for each of the following species: dall sheep, bison,
musk ox, brown or grizzly bear, moose, caribou, and wolf.
At least 11 western states have the provision for auctioning or
raffling big game harvest permits. Every State with a similar
program has had a positive impact on their budget. This
legislation would provide another revenue source for ADF&G and
would enable the continuation of game management programs for the
common use of the people.
MS. SWENSON said there was a proposed amendment allowing for an
increased number of permits for Safeguard.
MR. WAYNE REGELIN, Director, Division of Wildlife Conservation,
explained that Safeguard would get all the proceeds from the raffle
rather than sharing them with the Division. He said if they share
the proceeds, they could only get 10% because of federal grant-in-
aid regulations.
He said there are two parts to the bill. One part reads that the
organization that does the raffle or auction can keep 10%. Ninety
percent comes back to the Department (to comply with federal grant-
in-aid requirements). The amendment that's suggested by
Representative Bunde donates one permit without sharing of receipts
so they can keep all of the funding.
SENATOR TAYLOR asked why they couldn't give that same opportunity
to other nonprofit organizations that promote hunting and fishing.
MR. REGELIN replied that they worked with hunting organizations
when writing this legislation. There is such a big demand for
hunting Delta Bison and they did not want to create a situation
that would limit the number of permits available by draw permit for
the regular hunter.
Number 180
SENATOR TAYLOR moved to amend the first section so that the
Department could donate one bison permit to Safeguard instead of
just 10% of the proceeds. There were no objections and it was so
ordered.
SENATOR LINCOLN asked if Delta supported this legislation. MR.
REGELIN replied that the Delta Fish and Game Advisory Committee had
been working with them through Safeguard for some time, but he
hadn't dealt with the city.
SENATOR LINCOLN asked if any other nonprofit group could qualify
for a permit. MR. REGELIN replied that the statute allows them to
donate one bison permit to a nonprofit supporting ADF&G. Because
of the federal grant-in-aid requirements of sharing those receipts
it's not profitable for Safeguard to continue that and this is a
way for Safeguard to have enough funding to continue their
operations which are very beneficial to ADF&G.
DUAYNE BUELL, Chairman, Southeast Board, Alaska Fish and Wildlife
Safeguard, said they had been in existence since 1984. He said
they have put hundreds and hundreds of hours into previous bison
permit raffles and the most they have gained from them is about
$3,000. This is mainly because of the Pitman - Roberts restriction
saying they can only have 10 percent if they are a licensing agent
for the State. As a nonprofit corporation with a donation of the
permit they are not a licensing agent and can retain the full
amount.
Number 304
SENATOR TAYLOR said he wanted to amend this bill to make it as user
friendly to other groups as possible. MR. REGELIN commented that
it is limited to two permits per species per year.
SENATOR TAYLOR said he would like to insert elk because he thought
there are enough of them now to do that and he wanted to remove the
10 percent so they could donate to different associations.
MR. REGELIN said they make money when there are a lot more people
who apply than receive the benefit. With elk there wasn't a lot of
interest and they didn't think they could make a lot of money on
those. He said this is targeted mostly at large groups from out-
of-state (because they bring in a lot of money).
SENATOR TAYLOR said he wanted an amendment saying that those local
organizations in Southeast Alaska that put in the time and money
have the right to, at least, an elk permit.
SENATOR LINCOLN asked in section (a) why they are only talking
about bison. MR. BUELL said the statute giving them the bison
permit was passed in 1990 and at the time they thought it was
sufficient. They did not realize they would fall under the 10
percent provision. They still feel that one bison permit is all
they need, if they can get one. The return to the State on the
this over the last five or six years has been in excess of $20
million through fines, forfeitures, and civil penalties. He didn't
think they would have a return like that from management oriented
organizations.
CAPTAIN RICHARD GRAHAM, Division of Fish and Wildlife Protection,
said they support the concept in HB 59.
CSHJR 54(RES) am FAVOR TRANS-ALASKA GAS SYSTEM & LNG SALES
SENATOR LEMAN announced CSHJR 54(RES) to be up for discussion.
REPRESENTATIVE GENE KUBINA, sponsor, said a lot of people have had
input into the writing of this bill and do not oppose it. It
requests all the lessees to intensify their efforts to get a
contractual relationship to market our huge quantities of natural
gas to the Asian market. It asks the President of the United
States to demonstrate national support and to basically "plug it"
with our Asian trading partners. It asks the Governor to assure
the buyers that the State will provide continuity in regards to its
supply, tax structure, and regulatory policy. It encourages
private developers to use the State's labor force and have an
Alaskan hire agreement for any project that would market it.
REPRESENTATIVE KUBINA said there was a very good article from the
Ketchikan Daily News by Lew Williams which very accurately spells
out the issues that need to be addressed. It says the problem is
not necessarily the price and that there's not a market, but that
it is the internal structure we have and the way the North Slope
companies work with gas.
Number 456
SENATOR TAYLOR moved to adopt SCS CSHJR 54(RES) and asked
unanimous consent. There were no objections and it was so ordered.
MR. WAYNE LEWIS, Manager, External Affairs, Yukon Pacific Corp.
urged them to unanimously pass HJR 54. This resolution represents
a significant advancement in the evolution of the TAGS project
which is so important to Alaskans, he said. It also sends a clear
message to our Asian markets and competitors in the Middle East and
on the Pacific Rim that Alaska recognizes our gas resource
potential and we understand the need to forge a unified project
scheme.
MR. LEWIS said the problem isn't that Alaska isn't competitive, but
that it's not competing.
MR. JEFF LOWENFELS, President and CEO, stressed that the problem we
have is that we are not alone in this race. Last week they had a
visit from the Japanese National Oil Company who wanted our gas.
They brought an attorney who represented six utilities in Japan.
He said this is a project they are ready to build. They can do it
with producer help or they can do it simply with the gas the
producers have an obligation to produce. Either way, Yukon Pacific
and CSX are committed to move this project forward, he said. They
are committed to a project labor agreement.
MAYOR DENNIS EAGAN, City and Borough of Juneau, said even though we
the people of Juneau don't benefit directly, they would surely
benefit from the wealth to the State treasury to be brought in by
revenues from a trans Alaska gas line. He said the Assembly had
passed Resolution 1806 in support of HJR 54. The Municipal League
and the Alaska Congress of Mayors unanimously support this
legislation also.
JERRY HOOD, Vice-President, Alaska AFL/CIO, said they emphatically
support this legislation. He said one of the things that concerns
them most is Alaskan hire and they will discuss a project labor
agreement for the Yukon Pacific gas line project as soon as the
State has time to negotiate with them. They will discuss a plan of
action where residents in rural Alaska and Alaska natives will not
be excluded from job opportunities on the project.
SENATOR LEMAN asked if there was anyone opposed to this resolution
and there were no indications.
Number 575
SENATOR PEARCE moved to pass SCS CSHJR 54 (RES) out of committee
with individual recommendations and the appropriate fiscal note.
There were no objections and it was so ordered.
CSHB 357(RES) FISH & GAME:LICENSES & RESIDENCY
SENATOR LEMAN announced CSHB 357(RES) to be up for consideration.
SENATOR PEARCE moved to adopt SCS CSHB 357 (RES), version K.
SENATOR LEMAN noted that was not the latest version. SENATOR
PEARCE moved to withdraw her motion and asked for unanimous
consent. There were no objections.
SENATOR PEARCE moved to adopt the SCS CSHB 357 (RES), Utermohle
4/9/96 version M as the workdraft. There were no objections and it
was so ordered.
REPRESENTATIVE SCOTT OGAN, sponsor, supported the changes in the
bill regarding people who move to the State.
SENATOR TAYLOR asked if this treated Coast Guard personnel
differently from other branches of the military. REPRESENTATIVE
OGAN replied that it put them on the same par as other military
members. In the past it was done out of courtesy, but it wasn't in
statute.
CAPTAIN RICHARD GRAHAM, Division of Fish and Wildlife, said they
support the bill.
Number 560
MR. LANCE NELSON, Department of Law, said he would answer
questions.
SENATOR TAYLOR said he was concerned that people working with our
congressional staff or young people on missions would not be
precluded by this change. MR. NELSON said it wasn't the intent of
the legislation to exclude those people and he suggested that they
put specific language in to address that.
SENATOR TAYLOR said he thought they were o.k. under current
regulations, but he wanted to make sure they weren't doing anything
here additionally that would preclude them.
SENATOR LINCOLN responded that she wanted to see specific language
put in regarding resident qualifications. She said she was mostly
concerned about students and families of military people.
REPRESENTATIVE OGAN said the military isn't a problem and students
were covered if they use their parent's address as their domicile.
Number 480
SENATOR LINCOLN asked why the fiscal note didn't reflect the
possible increase of thousands of dollars of revenue.
REPRESENTATIVE OGAN replied that the analysis was pretty
subjective.
SENATOR TAYLOR said he thought they had deleted the phrase "Alaska
State drivers license."
LINDA DAHL, Staff to Representative Ogan, explained that the
driver's license is not the only test. When they suspect someone
is not a resident, they will look for several things. One is has
the person applied for a resident hunting and fishing license in
another state, another is have they applied for unemployment
benefits or to vote.
Number 447
MR. NELSON said Ms. Dahl's comments regarding use of a driver's
license to help determine residency were accurate.
SENATOR PEARCE moved to pass SCS CSHB 357 (RES) out of committee
with individual recommendations and individual fiscal notes. There
were no objections and it was so ordered.
SB 284 FOUR DAM POOL: RELATED FUNDS & BONDS
SENATOR LEMAN announced SB 284 to be up for consideration. He said
there were two proposed committee substitutes.
SENATOR LINCOLN said she wanted some clarification on how the PCE
would be reduced and more information on the rural capitalization
fund.
RANDY SIMMONS, Alaska Energy Authority, responded that the Four Dam
Pool Utilities make approximately $11 million per year in payments
to the State for debt service for construction of the Four Dam Pool
projects. Right now that money is appropriated 40 percent to PCE,
40 percent to the Southeast Intertie, and 20 percent to DCRA's
power project fund for small grants.
He explained with the long term power sales agreement the State has
with the utilities the State is responsible for certain repairs and
improvements to those projects. In this case the repairs are for
the Tyee and Terror Lake Projects. Those repairs are around $20 -
$23 million. AEA has no funding to make those repairs, he
explained. Their option is to come to the legislature and try to
get a general fund appropriation or to try to do bonds or allow the
utilities to use their self help right. Under their self help
right they can withhold any or all of the monies that are paid in
on the debt service. If there is self help, therefore, there would
be a reduction of the amount of money that will go into PCE.
This bill would issue bonds and they would like to defer payments
for one year to try to get a long term solution to the Four Dam
Pool issues and PCE's. So there wouldn't be any effect for that
one year period. If they cannot float the bonds, the utilities
will exercise their self help right and no monies would be coming
into the State for the next two years.
SENATOR LEMAN asked him which committee substitute he preferred.
He answered the G version because, although it doesn't give them
the flexibility they wanted of 10 years, they thought they could
live with eight years. Under F they like the way the bonds are set
up better, but there are a number of provisions that concern them
if the State and the utilities do not reach agreement by June 30,
1997. Then there would be a new way the monies are allocated.
They are allocated first to the bond payments which is good. But
secondly they could go to the utilities for repairs, improvements,
or new capital projects that are related to the projects; and the
way the new capital projects are written now the State would have
no veto right at all. They also have other legal concerns, he
added.
SENATOR LEMAN said he would prefer that these mature within 10
years.
SENATOR TAYLOR clarified that the legislation that created his
entity specified the creation of the Southeast Intertie Fund, the
amount of money that would flow to it, and how those monies would
be returned. The legislature was never intended to have a veto
over the funds. They didn't have a veto over them right now.
MR. SIMMONS said he was not trying to specify that the
Administration is opposed to the Southeast Intertie. He was trying
to give an example of a project that the utilities could decide to
build. They could all use a different one. They could decide to
hook a new intertie up to the projects that no one has even
contemplated. AEA would have no say so as to whether they went
forward with that project.
SENATOR TAYLOR said the question is whether this administration is
going to meaningfully enter into discussions on divestiture. He
said he wanted to make sure there was good faith bargaining and
finality here.
Number 281
SENATOR TAYLOR moved to adopt CSSB 284(RES), version F. SENATOR
LEMAN objected for the reasons stated by the witnesses. SENATORS
LINCOLN, PEARCE, LEMAN, and FRANK voted "Nay"; SENATOR TAYLOR voted
"Yes"; and so, the motion failed.
SENATOR LEMAN asked if the committee wanted to consider the G
version.
SENATOR TAYLOR said he had a question on page 3, line 7 where it
talks about the 50 years mature date for the bonds.
MR. KEITH LAUFER, Assistant Attorney General, explained that was a
provision included in AEA's general bonding statutes. It pertains
to bonds that AEA otherwise issued.
SENATOR FRANK asked what kind of incentive the State has to settle
the divestiture issue. MR. SIMMONS replied that in 1993 the State
made it clear they wanted AEA to divest of all of its projects.
SENATOR FRANK asked for clarification about what money would come
back to the State. MR. SIMMONS replied that if they were to sell
the projects they would be getting a sales price and they would be
selling them that debt.
SENATOR FRANK asked if they were discounting that stream of cash.
MR. SIMMONS replied that they discount the stream of cash depending
on the interest rate at the time and then they would reduce that
discount by what they call the risk of the ownership of those
projects, such as known repairs for those projects that they don't
have funding for.
SENATOR FRANK asked what their value was. MR. SIMMONS replied
their value was somewhere between $87 - $108 million depending on
who does the repairs.
SENATOR FRANK asked if they did the repairs what it would cost.
MR. SIMMONS answered $108 million and roughly $25 million less if
someone else does the repairs.
Number 78
SENATOR PEARCE moved to CSSB 284(RES), version G. SENATOR TAYLOR
objected. SENATORS LINCOLN, LEMAN, PEARCE, FRANK, and HALFORD
voted "Yea"; SENATOR TAYLOR voted "Nay"; and so, the motion passed.
SENATOR TAYLOR commented that from talks with the utilities he
found they would rather pay the debt off earlier rather than later.
MR. LAUFER said he recommended putting a certain date in the bill
to make the statute easier to read.
SENATOR FRANK moved on page 3, lines 4 and 5 to delete the words
"the effective date of this bill" section and insert "May 1, 1996."
There were no objections and it was so ordered.
SENATOR LINCOLN moved to amend line 7 to delete "eight years" and
insert "10 years." SENATOR HALFORD objected. SENATORS LINCOLN and
LEMAN voted "Yea"; SENATORS PEARCE, FRANK, HALFORD, and TAYLOR
voted "Nay"; and so, the motion failed.
SENATOR FRANK moved to pass CSSB 284(RES), as amended, from
committee with individual recommendations. There were no
objections and it was so ordered.
SENATOR LEMAN recessed the meeting at 5:30 p.m.
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