SB 171-NPR-A COMMUNITY GRANT PROGRAM    CHAIR GARY STEVENS announced SB 179 to be up for consideration. 1:33:06 PM SENATOR GARY WILKEN, Sponsor, distributed a map to indicate community proximity to oil & gas drilling and exploration activity in the National Petroleum Reserve - Alaska. With regard to Ms. Burke's earlier challenge questioning the authority and latitude of the Legislature to analyze, rank and fund grants to communities, he said the bill is on course and does just what Judge Carpeneti told the Legislature to do. [Susan Burke testimony, 4/22/05 SCRA hearing on SB 171] He acknowledged she had several good suggestions and they would be incorporated in the Finance Committee. He asked the committee to pass the bill on to the Finance Committee where it is already scheduled pending referral. CHAIR GARY STEVENS noted the bill has two fiscal notes. 1:36:23 PM SENATOR DONNY OLSON said his district includes the NPR-A and his perspective is different than the sponsor's. Because a number of legal questions were raised during the previous hearing, he asked the committee to take no action until it receives an opinion from the attorney general. It makes sense to wait and get detailed answers to some of the legal questions that were raised because the issue has a history of legal questions. Also, it's important to wait and hear about the impacts to the people that are living in the communities. That's difficult to do on short notice when the whaling/subsistence time is near. He pointed out that in the past, the people from the North Slope have partnered with the State of Alaska and the successful vote on ANWAR bears witness to that. He suggested that relationship would be strained if the Legislature were to meddle with the impact money that goes to these communities. He noted there was already one lawsuit challenging the impacts to the area that went in favor of the plaintiffs. Impact means different things to different people and it's shortsighted to simply look at well locations to determine the impact on the North Slope and in the NPR-A. He distributed several maps of the area showing that active, trial, and abandoned oil and gas wells are located throughout the NPR-A and seismic activity crisscross the entire region. Certainly these maps indicate impact to the land and to the animals that live on the land, he said. A map showing current and proposed oil and gas lease areas indicates that leases are reaching farther to the west, which makes it clear that the impact isn't in just the northeast corner. The impact is spread throughout the NPR-A area. Although rivers and streams aren't shown, he estimated that at least 100 fish and caribou camps operate in the area and seismic activity would definitely impact the people and animals in the area. Noting that the sponsor had already scheduled the bill in another committee, he asked members to recognize the people that are impacted and to wait to hear from them before taking action on the bill. 1:45:45 PM SENATOR THOMAS WAGONER said he would like to hear about the positive impacts. SENATOR OLSON said he didn't want to give the impression that all the impact is negative. As the sponsor pointed out, there are more positive impacts to the activity in the NPR-A than negative. People going up to the NPR-A do business when they go through Fairbanks and as a result, there are more jobs in Fairbanks. 1:47:08 PM SENATOR BERT STEDMAN asked if the residents in the area derive benefit from the activity in the NPR-A in terms of improved jobs and better lifestyles. SENATOR OLSON said he doesn't know if there are more jobs, but speaking as a physician, the lifestyle of Native and non-Natives in the area has improved. The sponsor questioned the merit of using funds for the small boat launch ramp in Wainwright, but it does make sense, he said. As seismic activity increases and the caribou are driven away, the area residents need to venture farther up river to subsistence hunt. That's why the launch ramp facility is reasonable even though it's a long way from the closest community. SENATOR WAGONER suggested the new type of seismic activity might not affect calving season as much as it has in the past. SENATOR OLSON reiterated it's a good idea to wait and hear from area residents. 1:52:03 PM KATHY ASHBY, City Administrator, City of Nuiqsut, reported that the council members were sending a letter. She applauded Senator Olson for taking such a strong and loyal stand for people from the North Slope Borough and for understanding many of the impacts. She remarked that it's ironic how very well informed Nuiqsut people are if they want to be. Industry has meetings in the community on a regular basis to explain what and how they are doing. Residents are very involved and frequently voice their opinions regarding how they will be impacted. Although some argue that the bill opens NPR-A funds so that people that don't live in the NPR-A can apply for them, that's already being done, she said. The North Slope Borough applies for funds on behalf of villages not all of which are in NPR-A. As a city administrator with a background in public administration, her personal contention is with the runaway engine that DCCED has in administering grant funds. Her interpretation of federal law and state statute is that the compact is for DCCED to administer funds to impacted communities on behalf of NPR-A. What has happened in Nuiqsut is anything but that. She likened the community to a stepchild to the North Slope Borough. She said "It would take me days to compile all of the grants that have been taken away from it and been given to the North Slope Borough." If Nuiqsut realized anything that was instructive or contributed to local self-sufficiency or strong local government, one might remain silent with the award process. However, that process seems to have been onerous and heavy handed. CHAIR GARY STEVENS asked her to make certain her comments were directed to the bill under consideration. MS. ASHBY said the bill would take the authority to grant the NPR-A awards from DCCED. Another review process would be established with a six member committee and the finance committees would make the final award. She lauds that idea because, in her opinion, DCCED isn't doing a credible job. The current grant process won't stand the light of day if a good audit were conducted. She applauded Senator Wilken for introducing the bill, but cautioned against going too far. 1:59:17 PM SENATOR WAGONER noted there was a transportation proposal last year to build a bridge and he was curious where that was located. SENATOR OLSON told him it would cross the Coleville River south of Nuiqsut. 2:00:22 PM CHAIR GARY STEVENS referenced page 3, lines 19-21 and asked Senator Wilken for clarification regarding whether the recommendations had gone through the full legislative process. SENATOR WILKEN acknowledged it might need further clarification. The intent and the way the system works is that the special committee recommendations will go to the full Finance Committees and be incorporated into the capital budget. SENATOR WAGONER asked what the procedure would be if the bill moves to finance. With regard to Senator Olson's suggestion he noted that during the interim, hearings pertaining to SB 85 would be held on the North Slope. Dealing with the two issues during the same timeframe might be advantageous. SENATOR WILKEN said his intention is to get the bill to finance where he will make a presentation and get input. Decisions are required regarding what the Legislature wants to do with the existing $24 million in grants, he said. He didn't intend to move the bill out of finance this year. 2:05:30 PM SENATOR WAGONER motioned to report SB 171 and attached fiscal notes from committee with individual recommendations. There being no objection, it was so ordered. CHAIR GARY STEVENS said he had been asked to do a roll call vote. The motion carried 3 to 0 with Senators Stedman, Wagoner and Chair Gary Stevens voting yea.