Legislature(2015 - 2016)BUTROVICH 205
03/28/2016 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| HB137 | |
| Confirmation Hearing | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 137 | TELECONFERENCED | |
| + | HB 216 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 28, 2016
3:30 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Mia Costello, Vice Chair
Senator John Coghill
Senator Peter Micciche
Senator Bert Stedman
Senator Bill Stoltze
Senator Bill Wielechowski
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 137(FIN) AM
"An Act raising certain fees related to sport fishing, hunting,
and trapping; relating to the fish and game fund; providing for
the repeal of the sport fishing surcharge and sport fishing
facility revenue bonds; replacing the permanent sport fishing,
hunting, or trapping identification card for certain residents
with an identification card valid for three years; relating to
hunting and fishing by proxy; relating to fish and game
conservation decals; raising the age of eligibility for a sport
fishing, hunting, or trapping license exemption for state
residents; raising the age at which a state resident is required
to obtain a license for sport fishing, hunting, or trapping; and
providing for an effective date."
- MOVED SCS CSHB 137(RES) OUT OF COMMITTEE
CONFIRMATION HEARING
Alaska Gasline Development Corporation
Luke Hopkins
- CONFIRMATION ADVANCED
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 216(RES)
"An Act relating to obstruction or interference with a person's
free passage on or use of navigable water; and amending the
definition of 'navigable water' under the Alaska Land Act."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 137
SHORT TITLE: HUNT/FISH/TRAP: FEES;LICENSES;EXEMPTIONS
SPONSOR(s): REPRESENTATIVE(s) TALERICO
03/06/15 (H) READ THE FIRST TIME - REFERRALS
03/06/15 (H) RES, FIN
03/20/15 (H) RES AT 1:00 PM BARNES 124
03/20/15 (H) Heard & Held
03/20/15 (H) MINUTE(RES)
03/25/15 (H) RES AT 6:00 PM BARNES 124
03/25/15 (H) Moved CSHB 137(RES) Out of Committee
03/25/15 (H) MINUTE(RES)
03/27/15 (H) RES RPT CS(RES) NT 2DP 3NR 2AM
03/27/15 (H) DP: OLSON, TALERICO
03/27/15 (H) NR: HERRON, JOSEPHSON, JOHNSON
03/27/15 (H) AM: SEATON, TARR
04/07/15 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/07/15 (H) Heard & Held
04/07/15 (H) MINUTE(FIN)
04/10/15 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/10/15 (H) Heard & Held
04/10/15 (H) MINUTE(FIN)
04/13/15 (H) FIN RPT CS(FIN) NT 5DP 5NR
04/13/15 (H) DP: PRUITT, WILSON, GATTIS, MUNOZ,
THOMPSON
04/13/15 (H) NR: SADDLER, GARA, GUTTENBERG, EDGMON,
NEUMAN
04/13/15 (H) FIN AT 9:00 AM HOUSE FINANCE 519
04/13/15 (H) Moved CSHB 137(FIN) Out of Committee
04/13/15 (H) MINUTE(FIN)
04/15/15 (H) TRANSMITTED TO (S)
04/15/15 (H) VERSION: CSHB 137(FIN) AM
04/15/15 (S) RES AT 3:30 PM BUTROVICH 205
04/15/15 (S) Scheduled but Not Heard
04/16/15 (S) READ THE FIRST TIME - REFERRALS
04/16/15 (S) RES, FIN
04/16/15 (S) RES AT 3:30 PM BUTROVICH 205
04/16/15 (S) Heard & Held
04/16/15 (S) MINUTE(RES)
04/17/15 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/17/15 (S) Scheduled but Not Heard
02/29/16 (S) RES AT 3:30 PM BUTROVICH 205
02/29/16 (S) Heard & Held
02/29/16 (S) MINUTE(RES)
03/23/16 (S) RES AT 3:30 PM BUTROVICH 205
03/23/16 (S) Heard & Held
03/23/16 (S) MINUTE(RES)
03/28/16 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
AKIS GIALOPSOS, Staff to Senator Giessel and the Senate
Resources Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained the changes from HB 137, version
V, to version SCS CSHB137 (RES), 29-LS0625\U.
REPRESENTATIVE TALERICO
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As sponsor of HB 137 supported version U.
KEVIN BROOKS, Deputy Commissioner
Alaska Department of Fish and Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Commented on HB 137.
BRUCE DALE, Director
Division of Wildlife Conservation
Alaska Department of Fish and Game (ADF&G)
Palmer, Alaska
POSITION STATEMENT: Commented on HB 137.
TOM BROOKOVER, Director
Division of Sportfish
Alaska Department of Fish and Game (ADF&G)
Anchorage, Alaska
POSITION STATEMENT: Commented on HB 137.
LUKE HOPKINS, representing himself
Fairbanks, Alaska
POSITION STATEMENT: Alaska Gasline Development Corporation
Board (AGDC) nominee.
ACTION NARRATIVE
3:30:19 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:30 p.m. Present at the call to
order were Senators Costello, Micciche, Coghill, and Chair
Giessel. Senator Stedman joined the committee.
HB 137-HUNT/FISH/TRAP: FEES;LICENSES;EXEMPTIONS
3:31:25 PM
CHAIR GIESSEL announced consideration of HB 137, last heard on
March 23.
SENATOR COSTELLO moved to bring SCS CSHB137 (RES), 29-LS0625\U,
before the committee as the working document.
CHAIR GIESSEL objected for discussion purposes.
SENATOR WIELECHOWSKI joined the committee.
3:32:00 PM
AKIS GIALOPSOS, Staff to Senator Giessel and the Senate
Resources Committee, explained the changes from version V to
version U version of CSHB 137 as follows:
1. Page 1, Lines 1, 3, and 12: Amends the title to remove the
language related to the powers and duties of the commissioner of
fish and game (an attempt to institute a Chitina dip netters
fee); replaces the word "rivers" with "watersheds"; and adds a
new semicolon related to the Chitina dip net fishery.
2. Page 2, Lines 2-7: Adds a new Section. 1, creating the
"Sustainable Wildlife Account" as a separate account in the Fish
and Game Fund. The account would receive moneys accruing from
the intensive management surcharge imposed by a later section of
the bill (Section. 23).
3:33:02 PM
3. Removes the former Sections. 1, 2, and 3 of the prior version
"V" of the bill. Those items were: intent language related to
the North American Wildlife Conservation model; a new paragraph
related to the powers and duties of the commissioner of fish and
game; and a section removing language related to the payment of
hatchery bonds (that conforms throughout this version).
4. Page 4, Line 10: Lowers the resident hunting license in
Section. 4 (Prior Version Section. 7) from "40" dollars to "35"
dollars.
5. Removes the former Sections. 6, 11, 13, 15, and 17 of version
"V". Those sections are related to maintaining the prior
hatchery surcharge on several licenses after the bonds had been
paid. The repeal language for those bonds will remain, but the
surcharge finding a way to remain has gone away as a consequence
of removing those sections. So there should not be a 9 dollar
surcharge from now on.
3:34:36 PM
SENATOR STOLTZE joined the committee.
6. Page 8, Line 19: Amends Section. 20 (Prior Version Section.
27) to reword "the age of 16" to "16 years of age."
7. Page 8, Lines 25-28: Amends Section. 21 (Prior Version
Section. 28) by adding the word "watersheds" after the words
"Kenai and Kasilof rivers" on lines 25 and 28, respectively.
8. Page 9, Lines 21-31: Adds a new Section. 22, repealing
certain hatchery surcharge provisions (effective date is further
in the bill with other effective dates related to the expiration
of the hatchery surcharge).
3:35:39 PM
9. Page 10, Line 13: Amends Section. 23 (Prior Version Section.
29) by increasing the intensive management surcharge on
nonresidents from "2010" dollars in the previous version of the
bill, to "30" dollars while keeping the resident surcharge at
"10" dollars.
10. Page 13, Lines 9-20: Adds a new Section. 31, amending the
existing AS 16.10.570 (Article 11: Chitina Dip Net Fishery), by
adding the duties of maintaining and improving state-owned land
used to access the Chitina dip net fishery, and maintaining and
operating sanitary facilities provided for the use of persons
participating in the Chitina dip net fishery, to the Department
of Fish & Game. He noted that existing language also requires
the ADF&G to work in concert with the Department of Natural
Resources (DNR) and Department of Transportation and Public
Facilities (DOTPF), respectively.
3:36:35 PM
11. Page 13, Line 21: Amends Section. 32 (Prior Version Section.
37) by adding a repeal provision for the Sustainable Wildlife
Account (new Section. 1).
12. Page 13, Line 22: Amends Section. 33 (Prior Version Section.
38) by adding a repeal provision to the Fish and Game Fund
statute for payment of revenue bonds related to hatcheries once
they have been paid.
13. Page 14, Lines 13-21: Amends Section. 35 (Prior Version
Sections. 40, 41) by making the effects of Sections. 22 and 33
conditional on the Commissioner of Fish & Game notifying the
revisor of statutes in writing that the bonds, interest and any
other applicable obligations have been met and fully discharged.
3:37:35 PM
14. Page 14, Line 24: Amends Section. 37 (Prior Version Section.
43) by extending the sunset date of the intensive management
surcharge from December 31 "2020" to December 31 "2022."
SENATOR WIELECHOWSKI, referring to Section 31 on page 13, said
he wanted some intent language on the record to understand
language in item 1 that says "maintain and improve state-owned
land used to access the Chitina dip net fishery." Does that
require DOTPF to clear the road past O'Brien Creek so people
have access into the canyon?
MR. GIALOPSOS said yes; that is the intent, but the only
obligatory language that he can see is for the ADF&G to work in
conjunction with those agencies.
SENATOR WIELECHOWSKI responded that his understanding is that
the department with the cooperation of DOTPF and DNR "shall"
maintain and improve state-owned land used to access the Chitina
dip net fishery. To him that requires all three organizations to
work together to make sure that the dip netters have drivable
access "in a car, not an ATV" past O'Brien Creek.
MR. GIALOPSOS answered that is his understanding, also.
CHAIR GIESSEL removed her objection and finding no further
objections stated that version U was adopted. She recapped that
public testimony was closed on March 23, and opened the
committee for discussion and questions.
3:39:44 PM
REPRESENTATIVE TALERICO, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 137, said he is happy with version U of HB
137. He appreciates all the effort put into this legislation.
However, he would like to see a $5 resident fee for intensive
management.
3:40:52 PM
KEVIN BROOKS, Deputy Commissioner, Alaska Department of Fish and
Game (ADF&G), Juneau, Alaska, said he would provide the answers
to the committee's questions from the last hearing.
1. How the department would use increased revenues? That
resulted in a document entitled "HB 137 Proposed Use for
Increased Revenue."
2. What is the impact of the changes in the age requirements for
licensing?
Raising the minimum age for purchasing a license from 16 to 18
results in an estimated loss of revenue of approximately $70,000
per year from approximately 2,400 fishing licenses and 1,000
hunting licenses. Raising the age for a Permanent ID (PID) card
from 60 to 62 results in an estimated increased revenue of
$105,800. An additional $158,700 would be generated by raising
it from 62 to 65. These estimates are based on 3,000 PIDs issued
to individuals aged 60-61, and 15,000 PIDs issued to individuals
aged 60-64.
3. Several questions came up related to a sockeye stamp: Are
fish wheels included? Does it apply to subsistence? How would it
be implemented with multiple households represented on a boat?
He clarified that the U version sockeye stamp applies to the
sport fishery only and not personal use or subsistence
fisheries.
4. What is the status of the hatchery bonds?
The Department of Revenue (DOR) debt manager, Devon Mitchel,
said he expected those bonds would be paid off by 2021/22. The
original debt schedule projected a payoff date in 2026, but
there have been several early redemptions due to available
revenue from the hatchery surcharge. Currently, that surcharge
generates about $6.3 million annually: $1.4 million of that is
generated from sales on licenses to residents and the majority
($4.9 million) is generated from sales on licenses to non-
residents.
5. How do Alaska's fees compare to other states, and in response
he had the attached document entitled "Western States Comp of
Hunting License and Tag Fees."
3:43:26 PM
MR. BROOKS said folks were working on the change in the fiscal
note, but some of the high points are on page and include:
-The $5 increase on hunting licenses generates $103,400 per year
for an additional $517,000 in revenue over five years.
-The additional intensive management surcharge of $10 on
residents and $30 on non-residents generates a total of
$1,535,000.
-Non-resident black bear at a $150 reduction results in a minus
$365,550 in revenue.
-Non-resident grizzly/brown bear $200 reduction results in a
minus $369,400 in revenue.
-Non-resident deer went up $25, generating a $37,800 increase.
-Non-resident elk generates $150 for six tags.
-Non-resident goat at $25 generates a $4,925 increase.
MR. BROOKS said the hunting changes total $1,359,925.
3:44:49 PM
On the fishing side:
-The Chitina dip net personal use fishery based on about 12,000
permits issued for $15 generates about $180,000. He said he had
reached out to DNR and DOT to let them know this is in the bill
and what the expectations are for providing services now that
there is ability to pay for them.
-They made some assumptions for sockeye stamp from state-wide
harvest data. About 140,000 anglers on the Kenai River generate
about $125,000 and about $15,000 on the Kasilof River.
He explained that since the department does not have a way of
determining what species are targeted, they assumed that half
would buy a sockeye stamp. A total of $71,500 comes from
residents and non-residents and about $68,000 from non-
residents. They used a seven-day $45 fee, a mid-number to get to
this estimate. Actual experience would dictate the correct
numbers; he just wanted to put it in a context and a ball park.
3:47:03 PM
SENATOR MICCICHE said those are watershed-related and asked if
that included the Russian River.
MR. BROOKS answered yes; however, the Division of Sportfish has
good numbers on the Russian River.
He said the total for fishing is $2,257,500 and that is expected
to go to things the department is not currently paying for. The
hatchery surcharge is not on the fiscal note, because the impact
occurs too far in the future (2022). However, it currently
generates about $6.3 million. The fiscal note would be $3.8
million, because a variety of surcharges are turned into a $9
fee. Similar to sockeye, they have 1, 3, 7, 14 and annual
licenses that have different costs and all of those are turned
into $9.
MR. BROOKS said the permanent ID cards generate $158,700 in
additional revenue for a grand total in the first full year of
$3.6 million on top of the $8.6 million that was already in the
bill - for a total of about $12.2 million.
CHAIR GIESSEL thanked him for being very informative.
CHAIR GIESSEL, referring to the white paper, noted that "Erosion
of State's Rights to Manage" (on page 1) talks about the
relentless erosion of Alaska's rights and that the increased
ADF&G revenue will provide support for the Department of Law
(DOL), ANILCA, and the access defense program.
She said on February 18, the U.S. Fish and Wildlife Service
(USFWS) had a hearing in Anchorage talking about new rules for
refuges. What concerned her was that ADF&G was in the room and
was called upon, but they had no response. It is actually the
opposite of what he is saying here. Did they not have enough
money to speak?
MR. BROOKS responded, "Not at all." He actually asked the same
question. The program lead was in the room and hadn't been given
the clearance to speak and didn't on his own initiative. It was
the department's mistake, which he apologized for.
CHAIR GIESSEL asked Director Dale to comment on the February 18
incident.
3:51:00 PM
BRUCE DALE, Director, Division of Wildlife Conservation, Alaska
Department of Fish and Game (ADF&G), Palmer, Alaska, responded
that the failure to respond was on him. He was out of town and
the representative in attendance had talking points, which had
been reviewed and he was prepared to deliver, but he was waiting
for approval. Mr. Dale didn't realize he was waiting.
CHAIR GIESSEL asked if there is an opportunity for the
department to submit written comment.
MR. DALE answered that April 7 is the due date for written
comments and the department is in the process of finalizing
them. In addition, the Association of Fish and Wildlife Agencies
representing all 50 states, Canadian provinces, the Western
Association of Fish and Wildlife Agencies, numerous NGOs, and
the Board of Game are writing letters of objection to the Fish
and Wildlife Services proposed rule.
CHAIR GIESSEL asked to be copied on those letters so she could
pass them to the committee, since it has significant interest in
the defense of Alaska's right to manage its lands.
MR. DALE replied that he would be glad to do that.
SENATOR COSTELLO asked if the governor considers this a revenue
generating bill.
MR. BROOKS answered yes.
CHAIR GIESSEL said she appreciated that question and was
actually looking at another bill the committee had heard related
to increasing the mining license tax and noted that this bill
will generate $2 million more annually than the mining tax
license bill.
3:54:23 PM
SENATOR MICCICHE asked if the deputy commissioner had applied a
test on the $15 sockeye stamp to evaluate how it might
discourage folks who are in for a day or so that might be non-
residents, from fishing for sockeye on the Kasilof or Kenai
watersheds.
MR. BROOKS answered that the department's analysis factors in an
amount for a negative reaction to a price increase and used a 5-
10 percent drop in sales in this case that would build back up
over the course of five years or so.
3:55:27 PM
TOM BROOKOVER, Director, Division of Sportfish, Alaska
Department of Fish and Game (ADF&G), Anchorage, Alaska, added
that it is common for sales to drop after an increase in license
fees or a new fee is implemented. Beyond that, after the first
year or two, sales begin to rebound. They don't have a lot of
information specific to any case like this on the Kenai or the
Kasilof Rivers where they can actually predict how much sales
will drop or increase afterwards.
SENATOR MICCICHE said he didn't think raising the fee would
impact lodges and guides in his area, but it might impact the
self-service folks, such as people driving down from cities like
Anchorage. He asked how the department would analyze this after
the first year to determine if they have the right price point
on a stamp.
MR. BROOKS answered they would "absolutely be keeping track," as
they do with the king salmon stamp sales. They would survey
angler participation and try to match that up with the sale of
the stamps. However, one year would not be enough to make
meaningful comparisons.
SENATOR MICCICHE said he didn't think there would be an impact
on folks' dream trip to Alaska, but the potential impacts are on
the shorter term visitor.
3:57:56 PM
SENATOR STOLTZE asked if these are all unrestricted revenues and
which portion of them are tied to a measure.
MR. BROOKS answered that all of these funds would be deposited
into the Fish and Game Fund, and the intensive management
surcharge would be subaccount account within the fund, so it
could be tracked separately.
SENATOR STOLTZE asked if he could be provided a list of taxes
paid by the sportfishing industry, because he wanted to see
"what kind of parity there was in this whole process."
MR. BROOKS answered that currently the Fish and Game Fund
revenue consists of a fee for a license, not a true tax, as it
is for the privilege to fish. It generates about $25 million a
year. It could generate another $12 million if this measure
passes.
SENATOR MICCICHE remarked that the only thing that sort of
alludes to dedicated funds is the Chitina dip net fishery that
has a couple of suggestions. Two were added, but that still
doesn't dedicate funds. He likes people who pay for a tag to see
the direct benefit, and asked if he planned to account for what
is spent in the Chitina fishery so that folks paying that $15
can understand that they're getting direct value.
MR. BROOKS clarified that all license revenue is dedicated for
fish and wildlife purposes; the Fish and Game Fund is one of the
few dedicated funds. They will absolutely use that Chitina dip
net revenue ($150,000-$180,000) for the purposes stated: the
latrines, the trash, the road maintenance and those kinds of
things. And it will be accounted for separately.
4:01:22 PM
SENATOR STOLTZE said most people travelling to the Chitina dip
net fishery expect a road they could drive their off-road
vehicle on and not have a bank collapse on them. It might be a
mistake to assume the expectation of the committee is that these
funds will be used for creating a road that is drivable for a
traditional vehicle.
MR. BROOKS responded that he had not been to Chitina himself and
was not personally familiar with that road, but Mr. Derrick from
the Chitina Dip Net Association talked about four wheelers
having trouble, and that was his general understanding.
CHAIR GIESSEL said she had talked with DOTPF herself and found
that it is not an expectation that one would be able to drive
vehicles on it. That bank sloughs significantly every winter,
and every spring it can be cleared to some degree, but it's not
going to be a paved road or even a nice gravel road. The
legislature could follow up next year on how the road has been
maintained.
SENATOR WIELECHOWSKI commented that sport fishing fees going up
from $15 to $20 is a 33 percent increase and then the king fee
goes up $5, another 33 percent increase, and then you're adding
in the Kenai fees of $15, the Chitina dip netting fee which is
$15, and by the time that is all added up, an average sport
fisherman is looking at a couple hundred percent increase -
without the hunting fees. He thought maybe they were going "a
little bit overboard."
SENATOR MICCICHE clarified that the increase in the stamp is not
related to dip netting and looked to Mr. Brooks for
clarification.
MR. BROOKS answered that the increase to a king salmon stamp is
not. It's just tied to the general increase. The creation of the
sockeye stamp for sportfishing is not a personal use. The
Chitina dip net permit fee is new now, along with the other
general increases.
CHAIR GIESSEL clarified that at an earlier hearing, Mr. Ricky
Geese spoke to the committee and he meant to say he was speaking
on behalf of the Kenai River Special Management Area, not the
Kenai River Sportfishing Association (KRSA), which has not taken
a position on the sockeye stamp.
SENATOR COGHILL said he thought the [Chitina] association was
willing to pay for the fee, but bringing up personal use over
subsistence that same area is used to get into the subsistence
area, too, even though it's just yards away. He asked if there
had been discussion on some of the subsistence access provisions
under the same conditions with the Chitina dip net fishery.
MR. BROOKS deferred that answer to Mr. Brookover. He works most
closely with Tom Tobey, his deputy, on this topic.
MR. BROOKOVER responded that the dip net fee in statute would
apply strictly to the Chitina dip net personal use fishery,
which takes place from O'Brien Creek down to Haley Creek. The
Glennallen subdistrict would largely be unaffected except from
folks that might be launching from O'Brien Creek and driving
upstream. The Glennallen subdistrict subsistence fishery takes
place primarily upstream of the Chitina/McCarthy Bridge, which
is a ways away. He doesn't view that as being "predominantly
affected" by the legislation.
4:07:35 PM
SENATOR STOLTZE said the higher threshold of age to buy the
fishing license isn't clear and asked if an eight-year old needs
to buy a sockeye stamp?
MR. BROOKS answered the lack of a license requirement for
someone under 18 extends to stamps, as well.
SENATOR STOLTZE asked if that is a rigid department policy.
MR. BROOKS answered that it has been their policy since the king
salmon stamp was instituted.
4:08:51 PM
SENATOR MICCICHE found a correction to Section 21 on page 8,
lines 24-29, and page 9, line 1, about resident anadromous
sockeye stamp tag for the Kenai/Kasilof Rivers. It says, "A
resident may not engage unless that person is under 18 years old
(b)."
CHAIR GIESSEL thanked him for spotting that.
CHAIR GIESSEL asked for an updated fiscal note.
MR. BROOKS replied that they were waiting for the dust to
settle, but they would have one by tomorrow.
CHAIR GIESSEL mentioned that a letter of intent came with the
bill from the House and that needs some drafting work and she
intended to let the next committee, Senate Finance, do that.
4:10:21 PM
SENATOR STOLTZE said he thought the intentions in the letter
were good, but he was concerned about fleshing out the sheep and
livestock recommendations for the agriculture community.
4:11:03 PM
SENATOR COSTELLO moved to report SCS CSHB 137(RES), version 29-
LS0625\U, from committee with individual recommendations and
forthcoming fiscal note(s). There were no objections and it was
so ordered.
4:11:26 PM
At ease
^Confirmation Hearing
CONFIRMATION HEARING
Alaska Gasline Development Corporation
4:13:34 PM
CHAIR GIESSEL announced the confirmation hearing of Mr. Luke
Hopkins to the Alaska Gasline Development Corporation (AGDC)
Board. She invited Mr. Hopkins to tell the committee why he
wants to serve on the board.
4:14:04 PM
LUKE HOPKINS, representing himself, Fairbanks, Alaska, Alaska
Gasline Development Corporation (AGDC) nominee, said he came to
Alaska in 1966, straight out of high school to attend the
University of Alaska, Fairbanks, (UAF) and just stayed. He has
been involved with major projects at the UAF for his 35-year
career there and has held public office in appointed elected
positions for almost 19 years; six of those years as mayor of
the Fairbanks North Star Borough, where he brought forward a
number of economic development issues. More development will
happen in the very near future around Eielson Air Force Base.
MR. HOPKINS said he had been involved with getting natural gas
to Alaskans since 2006, when he was appointed to the Alaska
Gasline Port Authority (AGPA), one of the state's multiple
chances to develop a gasline. He now sits on the AGDC Board,
which is the best project the state has have ever put forward,
because the partners and the state are 100 percent behind it.
This is the hat he pulls down on his head the strongest - so
that all Alaskans can benefit both from the natural gas and its
revenue stream, and possible alternative energy sources from
that revenue stream.
4:17:28 PM
SENATOR COGHILL commended him, as mayor, for the work he did
with Eielson Air Force Base. However, he struggles with the Port
Authority in many ways. Some of his criticisms have been the
fact that they frequently go into executive session and that
will be one of the criticisms he will probably face with this
board. He asked what he had done to make sure more information
gets out into the public in a better way.
MR. HOPKINS answered he resigned from the Port Authority Board
so he could bring actions forward as mayor of the Fairbanks
North Star Borough. Now SB 138 gave special opportunities to the
AGDC that are not strictly in the public venue. When the
Assembly went into an executive session it had long standing
guidelines that included five days of public notice so the
public has a clear understanding of what will be in that
executive session. He has talked to board members about this
issue, and they are talking about how the agenda is produced
even though they are exempt from many of the actions and have
different standards than the Assembly, which is a public body.
4:19:35 PM
CHAIR GIESSEL said in 2006 he was appointed to the Port
Authority and asked why he would describe the Port Authority and
other efforts as not going forward and that this is the best
effort yet.
MR. HOPKINS replied that a lot it has to do with the market for
the projects that have been brought forward so far. Obviously,
the TransAlaska Pipeline System (TAPS), separate from the gas
TAPS, had quite the push behind it. They had one of the briefest
construction periods ever and many of permitting requirements
were waived. The market just didn't develop enough to pay for
the other gas line projects.
He knows the AKLNG project has the same questions, but it isn't
getting built right now. It has opportunities to advance with
the stage gate structure in place. The traction he sees is
having all three major producers on the North Slope, the Alaska
Legislature and the Governor behind it.
4:21:46 PM
CHAIR GIESSEL said she thinks Alaskans need to be reminded that
ten years ago, even five years ago, that gas was even more
valuable in bringing oil out of the ground and, in fact, the
Alaska Oil and Gas Conservation Commission (AOGCC) had not even
given permission to remove gas. So, the state would have lost
significant value in oil, a higher priced commodity, if it had
pulled gas off the North Slope earlier.
She said AGDC also has jurisdiction over the smaller in-state
ASAP line and asked what his assessment is of that project.
MR. HOPKINS apologized that he forgot to say the Alaska Oil and
Gas Conservation Commission (AOGCC) did not allow gas to be
taken off North Slope. He is aware of that. The board's action
around the mid-2015 put the ASAP project to go to a non-binding
open season on hold, because AKLNG is the project everyone was
working towards. He said they are still working on certain
components of ASAP: bringing forward the supplemental
Environmental Impact Statement for certain parts of the ASAP
project. Putting that on hold could cause it to "get stale," and
then the information has to be brought current, which takes a
lot of work. He said that ASAP is a very robust class 3
estimate; it has "a huge amount of information."
4:24:59 PM
SENATOR STOLTZE said he asked Mr. Rigdon Boykin when he worked
for AGDC about AGPA and he said it had been dissolved. But he
was wondering if it had really just been reconstituted in the
Governor's Office. He asked him to describe the dissolution
process of AGPA since a lot of former AGPA members (including
their well-paid consultant, former-Senator Halford) crossed over
and describe their influence on the current board.
MR. HOPKINS asked if he was referring to the Port Authority
Board or the AGDC Board.
SENATOR STOLTZE replied whatever the lineage, values, hopes and
aspirations were and how they manifest themselves on the new
board that includes some of the past Port Authority
participants.
MR. HOPKINS replied that he is one of those participants and his
opinion is he didn't know what the Port Authority's projects
were now. He speculated that there could be a routing to Valdez,
but that is a very old project and would have to be started all
over again. He is not on the AGDC Board to concern himself with
AGPA; he is working on the AKLNG line. That is what has been
submitted to the Federal Energy Regulatory Commission (FERC) and
what is moving forward with the Environmental Impact Statement
(EIS). The easements are almost all 100 percent on state land.
SENATOR STOLTZE asked if he expected to chair the corporation.
MR. HOPKINS replied that he heard some discussion about it, but
his name wasn't moved forward.
SENATOR WIELECHOWSKI said his background is very impressive and
asked which attributes he thinks will help him get the state a
gasline.
4:33:37 PM
MR. HOPKINS answered that as mayor working with a team is the
best way to get things accomplished. The Eielson project
involved a "tiger team" with repetitive continual action staying
on point about what they were trying to accomplish. The AGDC
board members are strongly committed to a team
effortConfirmation Hearings.
SENATOR WIELECHOWSKI remarked that stopping the base closure was
"pretty amazing." He asked him if Fairbanks has a strong mayor
and if it has prepared him for the big decisions that have to be
made. He also asked him to talk his effort to get natural gas to
Fairbanks.
MR. HOPKINS answered that Fairbanks has a strong mayor form of
government. He is basically CEO of the government with 400
employees and an annual budget of close to $155 million. So,
over the six years that amounts to $900 million of financial
activities that he didn't have to go back for a supplemental,
and he was very proud of having anywhere from 1-3 percent left
over at the end of the year. Trying to bring gas into Fairbanks
was a team effort and he has always thanked Senator Parnell and
the legislature for bringing SB 23 forward that allocated
authority and granted funds to be utilized through AIDEA by the
community for bringing much larger volumes of natural gas to the
Interior when there were incredibly high energy prices. That
project continues and he has been involved all the way up until
November. Developing natural gas for those in the state off of
the North Slope and out of Cook Inlet to some degree has been
the aim of how to get natural gas to Fairbanks and that is also
very possible with AKLNG actions.
4:37:19 PM
SENATOR COSTELLO asked if he was in Fairbanks for the flood.
MR. HOPKINS answered that he was there as a student when the
rivers were rising, and then he drove an old rickety car back to
Maine. So, he didn't stand in the water, but as soon as he came
back, days after the water went down, Fairbanks had the clean-
up, and "it was incredible."
SENATOR COSTELLO asked him to respond to an Alaska Journal of
Commerce article saying there is an appearance that the governor
is trying "to put the band back together" by loading the AGDC
Board with former associates from the Alaska Gasline Port
Authority and asked him to respond.
4:39:17 PM
MR. HOPKINS responded that he agreed that it looks like that,
but he had not been involved in any discussions about going in
the AGPA direction. When the Board was about to vote on the
TransCanada buyout that was his first board meeting. His
conversations with the governor is that the project is AKLNG. If
that project modifies to some extent, AGDC has the ASAP sitting
there. All evidence points to the efforts to monetize Alaska's
gas. He is very proud to have been involved in some of those
projects.
4:41:54 PM
SENATOR COSTELLO said one of his responses today was that his
prime interest was to see that a gasline benefits Alaskans and
asked if he thought an export line would benefit Alaskans.
MR. HOPKINS answered yes, because it has five offtakes. He said
the board was evaluating commercial available gas issues right
now and how to pay for it once the valve is hit on the AKLNG
line. AS 31.25 says they are to develop what is required for
that, but they don't have the funds as part of the project.
4:43:34 PM
SENATOR COSTELLO said he also mentioned that the board works as
a team and asked if he considered the legislature as part of
that team.
MR. HOPKINS answered yes. The AGDC must fulfill project updates
per SB 138 and get a budget approved annually. It requires
everyone working together to move the gasline all the way to
export. It will require the legislature continuing to fund the
project in order for it to continue.
4:45:00 PM
CHAIR GIESSEL said some would call her picky, but this is a very
important board. The statute provides a description of the
public members: expertise and experience in natural gas pipeline
construction, operation, marketing, finance, large project
management, and other expertise and experience that is relevant
to the purpose, powers and duties of the corporation.
She said Mr. Hopkins has talked about his political experience,
which is laudable, but three folks were removed two years ago
who had more than 100 years of hands-on technical experience in
integrated natural gas pipeline projects, not just a pipe: gas
treatment plants, and LNG plants. They were, in fact, just
beginning to dig into the technical aspects of the gas treatment
plant on the North Slope since there are two different qualities
of gas that would be going into it. She wanted to know which of
the descriptive roles he feels that he brings to the AGDC.
MR. HOPKINS answered primarily the financial aspect of it;
however, he has not built a pipeline. He has been involved in
different financing packages in getting natural gas to a market,
whether it's the Interior of Alaska or Anchorage, and when
Golden Valley, the Port Authority and Pentax continually refined
how to build a North Slope project and an LNG plant. He led a
team for the municipal utility that worked with Alaska
Industrial Development and Export Authority (AIDEA) to establish
pipe in the ground and coordinated major University of Alaska
projects for his 35 years there.
4:49:35 PM
CHAIR GIESSEL asked if he can be unbiased in decision making on
a statewide basis if it came down to making some choices that
might involve the community of Fairbanks.
MR. HOPKINS answered yes. Fairbanks is a vibrant community and
has many opinions, which they have expressed to him before he
took up this position with AGDC, and he waited until his mayoral
term had expired before taking up this position. All Alaskans
will benefit from this.
SENATOR MICCICHE some might say that AGPA took a direction more
than once that perhaps demonstrated missing certain segments of
applicable experience, and he agrees. One is the philosophy of a
customer-funded project, a direction in which SB 138 is not
going. While Mr. Hopkins has some financing and project
experience and many years of dedicated public service (which
Senator Micciche thanked him for), he was a little bit concerned
that the current AGDC board makeup doesn't have a diversified
skill set that has any background in the kind of project the
AKLNG is.
4:52:40 PM
SENATOR MICCICHE explained that he worries that at some point
someone has to be on the board that can call "hogwash" on
something when it comes to operational, marketing, and direct
natural gas and LNG experience. He didn't worry with the first
couple of new board members, but it looks like they are going
that way almost exclusively. What is his response to this fair
non-political concern?
MR. HOPKINS answered that some on the corporation management
team sit as board members. They have 40 years of experience in
working with LNG and 20 years working on pipelines. There is a
presidential search right now for a person that has the
requisite LNG and pipeline experience. It's true; he was not
aware of anyone on the board that has built a pipeline, but the
board's fiduciary responsibility is being represented.
4:55:52 PM
SENATOR MICCICHE agreed, but added that he worries about the
board becoming a victim of staff. He didn't mean this as a
negative - he respects the Interior energy projects early
efforts - but he worries that some may want a project so bad
that they may tend to want to put the cart before the horse.
Maybe a different approach would have been more successful. He
wants to know that this board is only willing to go forward if
this is a great deal for Alaskans, not just to get a natural gas
pipeline. He almost wishes Mr. Hopkins was an earlier applicant.
He was worried that the state could be a victim of very
significant poor decisions for a very long time due to lack of
expertise.
MR. HOPKINS responded that he wanted to have more conversations
with Senator Micciche to help him feel more secure about the
board. He takes the fiduciary responsibility very seriously.
5:00:58 PM
SENATOR MICCICHE said he was trying to be transparent about his
concerns and had received a letter from the governor fairly
recently that talked about this project possibly going in a
different direction. When he knew the state had a technical
partnership with people who have built many similar projects
around the world, he felt fairly comfortable, and perhaps had a
different view of what the AGDC board makeup should look like.
With that letter about the state possibly moving in a different
direction, he has become more concerned about the expertise on
the AGDC board.
5:02:23 PM
SENATOR WIELECHOWSKI remarked that the Alaska Gasline
Development Corporation board and commission fact sheet says:
The board manages the assets of and business of the
corporation and may adopt, amend and repeal by-laws
and regulations governing the manner in which the
business of the corporation is conducted and the
manner in which its powers are exercised.
It is a policy making board, he stated. The prior board was
stacked with oil company executives, some of whom didn't even
live in Alaska. For several years there has been the debate of
having a board stacked with oil company executives who are
making decisions, possibly that are going to favor their old
employers or having a board making decisions that are going to
favor Alaskans. Mr. Hopkins is a 49-year resident with a long
history of fighting for his city, which is one of the largest in
the state; he has a successful track record of fighting for his
community and his state; he has proven where his heart is. There
is no doubt that his decisions will be in the best interests of
the State of Alaska. He finds it very disturbing that people
would allude to him having some ulterior motives when they were
perfectly content with having the board stacked with oil company
executives. He thanked Mr. Hopkins for standing up for Alaska.
CHAIR GIESSEL asked about his experience on the Municipal
Advisory Board that he most recently served on and how that
might influence or inform his work on AGDC.
5:04:52 PM
MR. HOPKINS replied that he appeared before this committee with
the other mayors when SB 138 was moving through. It was a great
forum in which to grapple with municipal government issues as it
related to any gas project. They heard a great detail about the
projects, both ASAP and AKLNG, and the role of property taxes in
that viability. There may be different opinions now, but at the
time fiscal certainty and the payment in lieu of taxes issue had
to be resolved in order for this project to move forward. The
Fairbanks North Star Borough was in court many times and finally
reached a settlement to pause for five years on the issue of
taxation. The other issue was impact aid.
5:08:10 PM
SENATOR MICCICHE said Mr. Hopkins' public service has proven
what is in his heart, but his concern is that he has the
experience to know the difference. That is the only reason for
his concern.
CHAIR GIESSEL said she shared the same concern. She asked for
public comment on the appointment and finding none, closed it.
CHAIR GIESSEL stated that in accordance with AS 39.05.080, the
Resources Committee reviewed the following and recommends the
appointment be forwarded to a joint session for consideration:
Alaska Gasline Development Corporation, Board of Directors, Luke
Hopkins, Fairbanks: appointed 11/20/2015. Term expires
9/13/2018. This does not reflect an intent by any of the members
to vote for or against confirmation of the individual during
further sessions.
5:10:26 PM
CHAIR GIESSEL, finding no further business to come before the
committee, adjourned the Senate Resources Committee meeting at
5:10 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB137-Version U.pdf |
SRES 3/28/2016 3:30:00 PM |
HB 137 |
| HB137-Explanation of Changes-Version U.pdf |
SRES 3/28/2016 3:30:00 PM |
HB 137 |
| AGDC Board Factsheet.pdf |
SRES 3/28/2016 3:30:00 PM |
Board Appointments-AGDC |
| AGDC-Resume-Luke Hopkins.pdf |
SRES 3/28/2016 3:30:00 PM |
Board Appointments-AGDC |
| HB137 Responses to Questions for Senate Resources 3-28-16.pdf |
SRES 3/28/2016 3:30:00 PM |
HB 137 |
| HB137-Revenue Analysis-DFG-3-28-2016.pdf |
SRES 3/28/2016 3:30:00 PM |
HB 137 |