HOUSE BILL NO. 76                                                            
                                                                               
       "An   Act  making   a  special  appropriation   to  the                 
       Department of Natural Resources for the purchase of the                 
       inholdings of the Seldovia  Native Association and  the                 
       Cook  Inlet Region, Inc., and  the timber rights of the                 
       Timber Trading  Company, within the Kachemak  Bay State                 
       Park; and providing for an effective date."                             
                                                                               
  REPRESENTATIVE GAIL PHILLIPS spoke in support of HB 76.  She                 
  emphasized that there  are no general funds  involved in the                 
  buy out.   She noted that $7.5  of the $20.5  million dollar                 
  Alyeska Settlement Fund is allocated  for Kachemak Bay State                 
  Park.    There   is  an   additional  $7.5  million   dollar                 
  appropriation for Kachemak Bay State Park from the Exxon Oil                 
  Spill Trust  Council.  The  remaining $7 million  dollars is                 
  appropriated from criminal fines levied against Exxon.                       
                                                                               
  Representative Martin  expressed concern that  the Katchemak                 
  Bay State Park purchases contain Spruce beetle infestations.                 
  Representative Phillips pointed  to a  letter by the  United                 
                                                                               
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  States  Department of  Agriculture  which  states  that  the                 
  infestation is only in the surrounding area (Attachment 2).                  
                                                                               
  Representative Hoffman asked  the Administration's plans  in                 
  regards to the  proposed Katchemak Bay State  Park buy-back.                 
  He noted  that the  Governor vetoed  appropriations for  the                 
  buy-back that were contained in legislation  passed in FY 93                 
  (HB  411).  Attorney General Cole  observed that funding for                 
  the  Katchemak  Bay  State  Park  buy-back  is  included  in                 
  legislation offered by the Governor in regards to allocation                 
  of Exxon criminal fines.                                                     
                                                                               
  Representative  Hoffman observed that a principle reason for                 
  the Governor's  veto of HB  411 was to  allow a trust  to be                 
  created in order that the State continue to use the interest                 
  on an ongoing basis.  Attorney  General Cole stressed that a                 
  principle  reason  for  the Governor's  veto  was  that many                 
  projects  included in HB 411 were not linked to restoration,                 
  replacement or enhancement of the damaged natural resources.                 
  He emphasized that  Katchemak Bay contains  critical habitat                 
  for species that were adversely affected by the oil spill.                   
                                                                               
  Co-Chair  Larson  asked if  the  subsurface rights  would be                 
  included in the  purchase.   Attorney General Cole  answered                 
  that subsurface rights are included in the purchase.                         
                                                                               
  Co-Chair Larson asked if $22  million dollars represents the                 
  fair value cost  of the inholdings.   Attorney General  Cole                 
  assured members that  $22 million dollars represents  a fair                 
  and reasonable price.                                                        
                                                                               
  Representative Foster MOVED to report HB 76 out of Committee                 
  with individual recommendations.   There being NO OBJECTION,                 
  it was so ordered.                                                           
                                                                               
  HB   76   was   reported   out   of   Committee   with   "no                 
  recommendation."                                                             
                                                                               
  Representative  Martin provided  members  with a  letter  of                 
  intent:    "It is  the intent  of  the Legislature  that the                 
  owner(s)  of the  timber of  Kachemak Bay Park  purge spruce                 
  infected  trees  and  reforest the  park  before  payment is                 
  advanced."                                                                   
                                                                               
  Representative  Grussendorf noted  that spruce  bark beetles                 
  are always in the timber.  He felt that the letter of intent                 
  would be too confining.                                                      
                                                                               
  Representative Martin MOVED to ADOPT the letter of intent.                   
                                                                               
  Co-Chair MacLean OBJECTED.                                                   
                                                                               
                                                                               
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  A roll call vote was taken on the motion.                                    
                                                                               
  IN FAVOR: Martin                                                             
  OPPOSED:  Foster, Hanley, Parnell,  Therriault, Grussendorf,                 
                 Hoffman, Navarre, MacLean, Larson                             
                                                                               
  Representative Brown was absent from the meeting.                            
                                                                               
  The MOTION FAILED (1-9).