SB 190-KENAI RIVER SPECIAL MANAGEMENT AREA  CHAIR SCOTT OGAN called the Senate Resources Standing Committee meeting to order at 3:36 p.m. Present were Senators Thomas Wagoner, Fred Dyson, Kim Elton, Georgianna Lincoln and Chair Scott Ogan. Senator Ralph Seekins arrived at 3:37 and Senator Ben Stevens was excused. The first order of business to come before the committee was SB 190. MS. AMY SEITZ, Staff to Senator Thomas Wagoner, sponsor, explained that the two main purposes of SB 190 are to transfer lands to the Kenai River Special Management Area (KRSMA) and to change the makeup of the advisory board. The new lands would be put into KRSMA so they can be managed by people who focus on maintaining the Kenai River system, an important resource for the whole state. She related that the KRSMA was established in 1984 to protect the Kenai River system and covers about 105 million square miles. SB 190 adds 536 acres of land acquired from funds from the Exxon Valdez oil spill settlement and a few parcels that were left out of the original 1984 bill. MS. SEITZ said SB 190 would change the makeup of the advisory board to be more of a citizen's board by changing the state and federal agency members to ex-officio members. CHAIR OGAN asked her if anyone hates this bill. MS. SEITZ replied that she didn't think anyone hated it. SENATOR THOMAS WAGONER said that various quarters have resisted adding acreage, but these lands are important at this time. Other bills might add more acreage later if enough public support could be mustered. SENATOR RALPH SEEKINS asked which activities would not be allowed on this land under this bill. He thought that it removed the mineral estate, like gold mines and gravel pits. He wondered what would be protected. MS. SEITZ responded that those activities are not allowed currently under the Exxon Valdez Oil Settlement (EVOS). SENATOR WAGONER observed that putting lands into the state park is the ultimate protection next to proclaiming it a wilderness area. Some of the parcels are down-river where a boat ramp has been considered. Putting in a boat ramp would be tougher to do on park land. CHAIR OGAN asked if he is talking about a park, because the bill refers to the Kenai River Special Management Area. MS. SEITZ clarified that KRSMA is managed though the Division of Parks in the Department of Natural Resources (DNR). SENATOR SEEKINS said he wanted to make sure there were no unintended consequences. SENATOR WAGONER didn't see any unintended consequences at this time. CHAIR OGAN asked if the land that was purchased with EVOS money was mostly privately held. SENATOR WAGONER responded that these lands were proposed additions in the original bill from three years ago. MS. SEITZ affirmed that all the properties acquired through EVOS were state lands. SENATOR LINCOLN asked Senator Wagoner to expand on the reasoning behind going to a more public membership board. She noted an article in which a member disagreed with the proposed makeup due to his concern about special interest groups controlling the board. SENATOR WAGONER responded that, due to lack of participation through absentees or whatever on this board, the only special interests are the agency representatives. The agencies should continue to attend and have input, but that's their job; it's the citizens' job to have the final vote and the final say. He professed: That board will represent the three municipalities that are on the river - basically the Kenai Peninsula Borough, the City of Kenai and the City of Soldotna. Other members are members at large - members of the guide industry, members of the commercial fishing industry. I just feel more comfortable with that board and them having the say, not the agencies. I see too many times, the agencies tend to dominate meetings and dominate the outcome. SENATOR LINCOLN followed up saying that she had heard criticism that there are no municipal representatives currently on the board from Seward, Homer or Anchorage, but that membership would be confined to adjacent management areas. She asked if those people are precluded from serving on the board. SENATOR WAGONER responded that he didn't quite understand her question, but stated that Seward, Homer and Anchorage are not on the Kenai River; and the City of Soldotna, the City of Kenai and the Borough are the municipalities that are adjacent to the river and the properties. He claimed further: We didn't see any great need for them to have the voting representation. Seward would have representation through the borough-appointed representative - and so would, basically, Homer, but Homer is about 72 miles from the Kenai River and these properties. SENATOR LINCOLN had information indicating that adjacent to these waters are 15 state parks, subunits, lands owned by the cities, the borough and the federal government and private Native lands. She asked how many members are on the board and how would one go about becoming a member of it. SENATOR WAGONER answered that the board membership rotates every two years. He offered the name of current members and a brief comment about each. Joe Connors, who used to teach at Anchorage Community College, is now a guide and was a commercial fisherman in Cook Inlet for years. Ted Wellman is an attorney from Anchorage and a very active member on the board. Paul Shadura is a commercial fisherman and Native leader. Jim Golden is an outfitter using the Kenai River. David Westerman is from Cooper Landing. Roland Maw is the Executive Director of United Cook Inlet Drift Association. Ken Lancaster, the representative who started this bill four years ago, is a past mayor of the City of Soldotna. Jeff King is a life-long Alaskan sport fishing guide on the Kenai River. He didn't know Richard Hahn. SENATOR ELTON asked if there were restrictions now on the use of EVOS lands and were they open to oil and gas leasing, for instance. MR. PETE PANARESE, Division of Parks and Outdoor Recreation, DNR, answered that section 3 amends AS 41.21.502(c) referring to the Kenai River Special Management Area. The EVOS lands that are currently outside the management area are not available for oil and gas exploration. When they are included in KRSMA, they fall under its umbrella. SENATOR ELTON clarified that those lands are currently not open to oil and gas leasing, but if they were added to the special management area, they would be. MR. PANARESE affirmed that. SENATOR ELTON said it seemed to him that changing the makeup of the board is a rather substantive change, because it makes some government members ex-officio while municipal government members retain their ability to vote. Even more to the point, section 4, which says a majority of the voting members of the advisory group shall be residents of the Kenai Peninsula Borough, is creating a couple of classes of people. For instance, some fisheries guides that operate on the river live in Anchorage and it seems that a majority of the users of the river are probably from outside the borough. Also, when the majority of voting members have to be residents of the borough a second class of user is created. He asked what is envisioned by creating those different classes of people. SENATOR WAGONER answered that that language is already in statute. SENATOR ELTON granted that that language is already in statute, but pointed out that it is being perpetuated here. It just seems to me that you are disenfranchising river guides that live in Anchorage or that live elsewhere outside of the borough and you're disenfranchising many of the users of the Kenai River, those people who live outside the borough who come down to enjoy one of the natural wonders of your area. SENATOR WAGONER responded: We don't preclude them from serving. We just say a majority of them will be from the Kenai Peninsula. That doesn't exclude them from serving in one of the seats that's not on the Kenai Peninsula.... I do believe in local control - as much as you can get to local control. Those people that live on the Peninsula have a vested interest - a lot of them a lot longer than any other people around and especially the cities and municipalities have a vested interest in the business people in Soldotna and Kenai. That's the lifeblood of a lot of businesses. It's not the lifeblood of a lot of beds and breakfasts in Anchorage or the Mat Valley or any other place, but it is the lifeblood of a lot of bed and breakfasts and guide businesses in Kenai. I don't think you'll find that there are a lot of guides that guide in the Kenai River that live in Anchorage - not nearly as many as you might think. SENATOR SEEKINS said it looked like the attempt was to add acreage to the already existing management area. He asked, if those lands are open to oil and gas leasing, are there setbacks or other statutory requirements that would apply to those activities for reasonable protection of the river. CHAIR OGAN replied that state law already delineates 500 ft. setbacks from rivers and lakes; mitigation measures are in every plan of operation that is reviewed by the Department of Natural Resources (DNR), the Department of Conservation (DEC) and Alaska Department of Fish and Game (ADF&G). SENATOR ELTON said he wanted to make sure that when EVOS purchased the land there weren't stipulations in the contract that are being set aside by opening up that land to oil and gas leasing. MR. PANARESE answered that he wasn't clear on that and would have to get back to him on it. SENATOR ELTON said he wanted to know what the conditions of purchase were and what is really allowed in section 3. CHAIR OGAN said he also had a question about section 3 and interpreted it to mean the land would be open for oil and gas leasing, but not for mining. MR. PANARESE replied that was his understanding, also. He thought the Legislature had the use of directional drilling in mind, not actually putting facilities on park land. SENATOR LINCOLN asked if Senator Wagoner was anticipating having no travel costs for the citizen advisory boards. SENATOR WAGONER replied that had not been the case in the past and he didn't foresee that changing. SENATOR LINCOLN responded that the reason that hasn't been the case in the past is because the agencies have paid for it, but it's different when it's applied to a citizen group, which is why she questioned it. She asked if there were any letters of support. MS. SEITZ replied that they didn't really ask for letters of support, but they have one from the Kenai Peninsula Borough that supports the bill and opposes adding any other land to KRSMA. SENATOR ELTON asked how people were chosen for the current board. MS. SEITZ answered that the commissioner of DNR appoints them from names that are submitted. SENATOR ELTON asked if there are designated seats for guides and sport fishermen, etc. MS. SEITZ replied that there weren't designated seats. MR. PANARESE added that the by-laws of the board require the board to propose three names. The public member nominees submit a short resume' to the commissioner of DNR and perhaps indicate their preference. The commissioner then appoints one of them. The government members would be appointed by the commissioners of the departments they represent. The Fish and Wildlife Service and Forest Service would each appoint their representative, as would the other three branches of government local to the Kenai Peninsula. SENATOR ELTON said it would be helpful to get a copy of the by- laws. He wanted to be sure they would not end up with municipality people precluding the recreational users of the river from being fully represented. MR. ROBERT VALDATTA, member of the Municipal Advisory Panel on Stranded Gas in Soldotna, said that the bridge is the main concern. CHAIR OGAN asked him how that issue is relevant to the present bill. SENATOR WAGONER asked him if he was talking about the proposed bridge between Sterling and Funny River and the boat ramp that is a part of that project. MR. VALDATTA replied yes and added that it was being discussed 20 years ago. SENATOR WAGONER illuminated him saying that it is still being discussed. He thought a lawsuit was being filed by some people who live in a couple of subdivisions on the road that was chosen as the preferred site. However, he didn't think this bill was relevant to those lands. CHAIR OGAN thanked everyone for their comments and said SB 190 would be held for further work.