HOUSE RESOURCES STANDING COMMITTEE April 30, 1998 1:30 p.m. MEMBERS PRESENT Representative Bill Hudson, Co-Chairman Representative Scott Ogan, Co-Chairman Representative Beverly Masek, Vice Chair Representative Ramona Barnes Representative Fred Dyson Representative Joe Green Representative William K. (Bill) Williams Representative Irene Nicholia MEMBERS ABSENT Representative Reggie Joule COMMITTEE CALENDAR HOUSE BILL NO. 274 "An Act relating to the qualifications of the members of the Alaska Oil and Gas Conservation Commission; and providing for an effective date." - MOVED CSHB 274(RES) OUT OF COMMITTEE HOUSE CONCURRENT RESOLUTION NO. 13 Relating to management of Alaska's wildlife resources. - MOVED CSHCR 13(RES) OUT OF COMMITTEE COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 262(RES) "An Act relating to regulation of hunting and trapping, to the definition of 'sustained yield,' and to controlled use areas." - MOVED HCS CSSB 262(RES) OUT OF COMMITTEE HOUSE BILL NO. 440 "An Act relating to certain audits regarding oil and gas royalty and net profits and to audits regarding costs relating to exploration incentive credits and oil and gas exploration licenses; and providing for an effective date." - SCHEDULED BUT NOT HEARD (* First public hearing) PREVIOUS ACTION BILL: HB 274 SHORT TITLE: OIL & GAS CONSERVATION COMMISSION SPONSOR(S): REPRESENTATIVES(S) GREEN Jrn-Date Jrn-Page Action 5/08/97 1656 (H) READ THE FIRST TIME - REFERRAL(S) 5/08/97 1656 (H) O&G, RES 1/15/98 (H) O&G AT 10:00 AM CAPITOL 124 1/15/98 (H) MINUTE(O&G) 1/22/98 (H) O&G AT 11:00 AM CAPITOL 124 1/22/98 (H) MINUTE(O&G) 2/05/98 (H) O&G AT 10:00 AM CAPITOL 124 2/05/98 (H) MINUTE(O&G) 2/12/98 (H) O&G AT 11:00 AM CAPITOL 124 2/12/98 (H) MINUTE(O&G) 2/20/98 2382 (H) O&G RPT CS(O&G) 3DP 4NR 2/20/98 2383 (H) DP: BUNDE, HODGINS, ROKEBERG; 2/20/98 2383 (H) NR: KEMPLEN, RYAN, OGAN, BRICE 2/20/98 2383 (H) ZERO FISCAL NOTE (H.O&G) 2/20/98 2383 (H) REFERRED TO RES 3/10/98 (H) RES AT 1:00 PM CAPITOL 124 3/10/98 (H) MINUTE(RES) 4/22/98 (H) RES AT 5:00 PM CAPITOL 408 4/22/98 (H) MINUTE(RES) BILL: HCR 13 SHORT TITLE: MANAGEMENT OF WILDLIFE RESOURCES SPONSOR(S): REPRESENTATIVES(S) VEZEY, Ryan, Ogan, Therriault, James, Bunde Jrn-Date Jrn-Page Action 2/24/97 441 (H) READ THE FIRST TIME - REFERRAL(S) 2/24/97 441 (H) RESOURCES 3/05/97 549 (H) COSPONSOR(S): JAMES 3/12/97 647 (H) COSPONSOR(S): BUNDE 4/30/98 (H) RES AT 1:00 PM CAPITOL 124 BILL: SB 262 SHORT TITLE: MANAGEMENT OF HUNTING SPONSOR(S): SENATOR(S) TAYLOR Jrn-Date Jrn-Page Action 1/27/98 2318 (S) READ THE FIRST TIME - REFERRAL(S) 1/27/98 2318 (S) RESOURCES 2/23/98 (S) RES AT 3:30 PM BUTROVICH ROOM 205 2/23/98 (S) MINUTE(RES) 3/23/98 (S) RES AT 3:30 PM BUTROVICH ROOM 205 3/23/98 (S) MINUTE(RES) 3/24/98 (S) RLS AT 11:45 AM FAHRENKAMP RM 203 3/24/98 (S) MINUTE(RLS) 3/24/98 2969 (S) RES RPT CS 5DP 1DNP NEW TITLE 3/24/98 2970 (S) DP: HALFORD, TAYLOR, SHARP, GREEN, 3/24/98 2970 (S) TORGERSON; DNP: LINCOLN 3/24/98 2970 (S) ZERO FISCAL NOTE TO SB & CS (F&G) 4/01/98 3092 (S) RULES TO CALENDAR 4/1/98 4/01/98 3092 (S) READ THE SECOND TIME 4/01/98 3093 (S) RES CS ADOPTED UNAN CONSENT 4/01/98 3093 (S) ADVANCED TO THIRD READING UNAN CONSENT 4/01/98 3093 (S) READ THE THIRD TIME CSSB 262(RES) 4/01/98 3093 (S) PASSED Y14 N6 4/01/98 3093 (S) ELLIS NOTICE OF RECONSIDERATION 4/02/98 3117 (S) RECONSIDERATION NOT TAKEN UP 4/02/98 3117 (S) TRANSMITTED TO (H) 4/03/98 2865 (H) READ THE FIRST TIME - REFERRAL(S) 4/03/98 2865 (H) RESOURCES, FINANCE 4/14/98 (H) RES AT 5:00 PM CAPITOL 124 4/14/98 (H) MINUTE(RES) 4/23/98 (H) RES AT 1:00 PM CAPITOL 124 4/23/98 (H) MINUTE(RES) 4/30/98 (H) RES AT 1:00 PM CAPITOL 124 WITNESS REGISTER No witness register ACTION NARRATIVE TAPE 98-53, SIDE A Number 001 CO-CHAIRMAN SCOTT OGAN called the House Resources Standing Committee meeting to order at 1:30 p.m. Members present at the call to order were Representatives Ogan, Dyson, Barnes, Green and Hudson. Representatives Williams and Masek arrived at 1:31 p.m. and 1:35 p.m., respectively. Representative Nicholia arrived sometime after the call to order. [MOST OF REPRESENTATIVE NICHOLIA'S TESTIMONY IS INAUDIBLE] HB 274 - OIL & GAS CONSERVATION COMMISSION CO-CHAIRMAN OGAN called on Representative Ramona Barnes to present the report on HB 274 from the subcommittee. Number 016 REPRESENTATIVE RAMONA BARNES stated the subcommittee has done extensive work on HB 274. She reported Howard Grey of Anchorage and past president of the Professional Geologist Association (PGA) was contacted at the suggestion of Leo Mark Anthony regarding the petroleum geologists in Alaska. He explained that there are between 130 and 140 American Institute of Professional Geologists (AIPG) members in Alaska who are registered with PGA. He further explained that the number could be doubled because there are between 130 and 140 geologists working in Alaska who have not registered with the association, but would otherwise probably qualify. He also estimated that of the 300 to 400 geologists in Alaska probably 100 are involved in some way with the oil industry and who may qualify under the bill to become a member of the Alaska Oil and Gas Conservation Commission. Mr. Grey upon receipt of the proposed committee substitute said that the changes to the existing law were fine and that it was a valid idea to replace the term "professional" with the term "petroleum" and cited arguments presented by Representative Joe Green that licensure is not mandatory to work within the industry in Alaska. When asked whether he thought the changes to the law would affect the size of the pool of applicants, he replied yes it was probable. However, he felt that the wording of the bill would likely ratchet up the quality of individuals making up the pool. The changes would give access to a greater number of individuals who would be more certain to qualify as members of the commission. In addition, defining the qualified geologist as a "petroleum geologist" would also help ensure well-qualified individuals for the commission. To use his words, he said it probably would result in ... "A pretty good field to draw from." REPRESENTATIVE BARNES further stated that Mr. Leo Mark Anthony of Anchorage did not recall specific numbers, but noted there are many registered geologists in Alaska. He also pointed out that AIPG is the primary qualifier. It provides qualified applicants with a certificate and the state provides registration upon the presentation of the AIPG certificate and the required money. Mr. Anthony suggested when seeking applicants for the commission one should probably look for qualified, registered geologists within the petroleum industry who have at least 10 years of experience. The experience would be necessary to assure a knowledgeable applicant. REPRESENTATIVE BARNES further stated that Catherine Reardon, Director of Occupational Licensing, Department of Commerce, explained the registration process under AS 08.02.011. She stated registration is voluntary in Alaska and there is no renewal process. The problem is that few other states do it like Alaska resulting in many geologists from other states applying and obtaining registration in Alaska. Of the about 400 geologists listed as registered, she estimates that only half live and work in Alaska. A similar problem exists when attempting to tabulate the number of petroleum engineers. Ms. Reardon noted that the records show a total of 89 petroleum engineers registered, and of that number, 40 have provided out-of-state addresses. That leaves just 49 instate petroleum engineers. REPRESENTATIVE BARNES further stated that in a letter from Assistant Attorney General Robert Mintz he indicated there were 579 petroleum engineers employed within the state of Alaska in 1996, the most recent year from which data are available. In both cases, it is unknown whether the individuals listed as petroleum engineers would actually qualify for the commission under the proposed bill. Mr. Mintz also pointed out that the number is not a reliable estimate for determining who would qualify under the proposal. REPRESENTATIVE BARNES further stated that Dave Johnston, the petroleum geologist on the commission now, explained that the term "petroleum engineer" is an imprecise definition. No one can statistically answer how many petroleum engineers there are or how many there are in each category or speciality, such as subsurface. Mr. Johnston felt that to obtain an accurate count most likely would require examining each individual and in whatever file is used. Yet, he does not think that it will change the numbers greatly. He also pointed out that the way to improve HB 274 is to change the word "or" to "and" under 2(A). Others, however, have indicated that such a change is unnecessary to redundant. He also suggested making licensure a goal rather than a requirement. There are many well-qualified engineers without licenses, although it is not difficult to obtain. Number 165 REPRESENTATIVE BARNES noted that there is a proposed committee substitute for HB 274, version 0-LS0998\Q, Glover, 4/28/98. REPRESENTATIVE BARNES explained the following language in Section 1 has been deleted: "Before making an appointment, the governor may solicit the recommendations of professional or industry representatives for appointment of a commissioner." REPRESENTATIVE BARNES stated it is unnecessary to include verbiage allowing a governor to seek council with professional or industry representatives when he already has that power. REPRESENTATIVE BARNES further explained that the previous Section 2 is now Section 1. On page 2, line 7, the language "and the person completes university or industry training" has been added. It was added with the intent of increasing the quality of the pools from which candidates are drawn for the commission. Number 196 CO-CHAIRMAN OGAN asked Representative Barnes which proposed committee substitute is the new one. REPRESENTATIVE BARNES replied version "Q." Number 0208 CO-CHAIRMAN BILL HUDSON asked Representative Barnes whether she has taken the proposed committee substitute and put it into the "Q" version. REPRESENTATIVE BARNES replied the "Q" version is the new proposed committee substitute from the subcommittee. Number 215 REPRESENTATIVE BARNES made a motion and asked unanimous consent to adopt the proposed committee substitute for HB 274, version 0- LS0998\Q, Glover, 4/28/98. There being no objection, it was so adopted. CO-CHAIRMAN OGAN asked Representative Barnes to explain the changes to the committee substitute again. REPRESENTATIVE BARNES explained the following language in Section 1 has been deleted: "Before making an appointment, the governor may solicit the recommendations of professional or industry representatives for appointment of a commissioner." REPRESENTATIVE BARNES further explained on page 2, line 12, of version "P", the language "including and completing course work" has been deleted and the language "and the person completes university or industry training" has been inserted. REPRESENTATIVE JOE GREEN noted his appreciation of the work that the subcommittee members have done. The bill is better. The only reason for the provision in Section 1, which has been removed, was to jab at the Governor. He has maintained steadfastly that there aren't qualified individuals causing him to go out of the realm of what is necessary for the job. For two years now he has nominated people who are obviously not qualified. Number 265 CO-CHAIRMAN HUDSON made a motion to move the proposed committee substitute for HB 274, version 0-LS0998/Q, Glover, 4/28/98, out of the committee with individual recommendations and the attached zero fiscal note. Number 273 REPRESENTATIVE IRENE NICHOLIA asked Representative Barnes whether the "Q" version would still restrict the pool to 25 persons. REPRESENTATIVE BARNES replied it would not restrict the pool to 25 persons, according to the research. There are a lot of individuals who do not show up on the registers, but who work for oil companies. There is probably a pool of over 500. CO-CHAIRMAN OGAN noted that there being no objection to the motion, CSHB 274(RES) was so moved from the House Resources Standing Committee. HCR 13 - MANAGEMENT OF WILDLIFE RESOURCES CO-CHAIRMAN OGAN announced the next order of business was HCR 13, Relating to management of Alaska's wildlife resources. CO-CHAIRMAN OGAN noted that there is a proposed committee substitute, version 0-LS1771\E, Utermohle, 4/22/98, and an amendment. He entertained a motion to adopt the proposed committee substitute. Number 299 REPRESENTATIVE BARNES made a motion and asked unanimous consent to adopt the proposed committee substitute for HCR 13, version 0- LS1771\E, Utermohle, 4/22/98. Number 300 REPRESENTATIVE NICHOLIA asked whether the Department of Law is available. CO-CHAIRMAN OGAN stated the department was invited. CO-CHAIRMAN HUDSON stated the department decided not to show up and reminded the committee members that a motion is on the table. Number 365 REPRESENTATIVE NICHOLIA objected to the motion. A roll call vote was taken. Representatives Barnes, Dyson, Masek, Williams, Hudson and Ogan voted in favor of the motion. Representative Nicholia voted against the motion. Representatives Green and Joule were absent. The motion carried. CO-CHAIRMAN OGAN explained when Alaska became a state it was given the right to navigable waters based on the equal footing doctrine specifically addressed in the Alaska Statehood Act. Navigable waters were transferred to the states in 1953 under the Submerged Lands Act. On page 2, line 25 of the resolution, the citation to the court case was not included because it has not been recorded yet. It is that recent of a case. It is interesting to note that Justice Sandra Day O'Connor in writing the opinion of the United States Supreme Court for United States v. Alaska (___U.S.___(1997)) said, "Ownership of submerged lands -- which carries with it the power to control ... fishing, and other public uses of water -- is an essential attribute of sovereignty ..." He wants to establish via the resolution to the Secretary of Interior that the federal government does not have the right to manage fisheries in navigable waters. CO-CHAIRMAN OGAN made a motion to adopt Amendment 1. It reads as follows: TO: CSHCR 13(RES) Page 3, line 3 Insert "WHEREAS is it the position of the Alaska State Legislature that ANILCA did not specifically preempt state management nor grant specific authority to the Secretaries of Agriculture and Interior to preempt state management of navigable waters and submerged lands." Page 3, line 9 Insert "FURTHER RESOLVED the Alaska State Legislature respectfully requests the U.S. Congress to promptly clarify that ANILCA did not preempt nor diminish state sovereign authorities over its own lands, waters and resources." REPRESENTATIVE NICHOLIA objected. REPRESENTATIVE BILL WILLIAMS asked how would the Katie John case affect the resolution. Didn't it go all the way to the Supreme Court of the United States? he asked. CO-CHAIRMAN OGAN replied the Katie John case went all the way to the Ninth Circuit Court of Appeals. The appeal to the Supreme Court of the United States was denied. REPRESENTATIVE WILLIAMS asked: What is the resolution trying to do? Is it trying to show that the Supreme Court is wrong? The Supreme Court didn't want to hear the Katie John case because there wasn't enough justification. The attorneys indicated that if the Supreme Court didn't want to hear the Venetie case then it is the supreme law of the land. The Supreme Court has already indicated that it doesn't want to hear something similar to what the resolution is asking. What are we doing? he asked. CO-CHAIRMAN OGAN replied the resolution asks Congress to clarify that the Alaska National Interest Lands Conservation Act (ANILCA) did not preempt a state's sovereign authority over its lands and waters. Alaska was clearly given the right to manage its own navigable waters when it became a state. REPRESENTATIVE WILLIAMS replied Alaska was also given the right on the 90-10 split. What happened to that? he asked. It did the same thing that is being discussed now. The federal government can come in anytime it wants and do anything it wants. Just like the state government can go onto state property and do and say anything it wants. He doesn't see the rationale for the resolution. He would like to hear from the Department of Law or the legislature's attorneys. "We always go about saying that we're all not attorneys, but we try to act like it ... some of us," he declared. REPRESENTATIVE BARNES stated she doesn't believe a word that the attorney general says. Just because the Supreme Court did not hear the Katie John case and the 90-10 split doesn't mean that it would not hear them at another time under a different set of facts. In addition, Katie John would only be law under the Ninth Circuit Court of Appeals. It would not be law anywhere else in the country. REPRESENTATIVE WILLIAMS stated, according to what he has been told, if the Supreme Court didn't want to hear the Venetie case, it would be considered the law of the land. Therefore, is Katie John the law now? he asked. REPRESENTATIVE BARNES replied, "No it is not." REPRESENTATIVE WILLIAMS replied he thinks it is. "I don't think we can't just pick and choose anything that we want, Mr. Chairman." CO-CHAIRMAN OGAN stated he has heard Representative Williams say many times that he doesn't want the federal government to manage the state's resources. The resolution is asking Congress to clarify that ANILCA did not intend for a takeover of fish and game, especially navigable waters. He paraphrased the provisions in the resolution. REPRESENTATIVE WILLIAMS stated he could argue any of the cases mentioned in the resolution. Katie John was taken to the Supreme Court, but not heard, so it doesn't mean anything, according to Representative Barnes. Therefore, why wasn't Katie John put in the resolution to give it more credence? he asked. CO-CHAIRMAN OGAN stated Representative Williams can make a motion for an amendment at anytime. REPRESENTATIVE WILLIAMS replied he believes that Katie John is the law of the land because it went to the Supreme Court. CO-CHAIRMAN OGAN replied it wasn't decided by the Supreme Court. The conversation is way off track. The amendment asks that ANILCA did not specifically preempt Alaska's sovereign authority over its lands. REPRESENTATIVE WILLIAMS replied he is not out of order. Katie John specifically talks about submerged lands. CO-CHAIRMAN OGAN replied he didn't say that he was out of order. REPRESENTATIVE BEVERLY MASEK noted Representative Barnes stated clearly that Katie John has not really been addressed or resolved by the courts. She supports the amendment. The language is important to add to the resolution. Number 503 CO-CHAIRMAN HUDSON wondered how the dialogue has moved away from the original resolution, by Representative Al Vezey, of the management of Alaska's wildlife resources to navigable waters. He doesn't feel comfortable with it and doesn't believe there are the votes to move it from the committee. He wants to hear from the original sponsor of the resolution. He also wants to know where the changes took place. Was this something that Co-Chairman Ogan did independently? he asked. CO-CHAIRMAN OGAN replied he asked the original sponsor and he did not object to changing the resolution into what it is now. In light of the shortness of the session, he took advantage of using it as the vehicle for a resolution. Number 526 REPRESENTATIVE NICHOLIA stated regardless of how it is put Katie John is the law, which is why the state is in its predicament. There is a deadline in front of the state. There is clear evidence that it is the law. Number 540 CO-CHAIRMAN OGAN replied the majority opinion of the court begged for a legislative solution. The resolution is simply asking Congress to clarify that ANILCA did not preempt a state's sovereign authority. There are reams of case law in the Supreme Court of the United States that back up the assertion. He believes, if the state can get its day in court, that the Supreme Court would rule in favor of it. Justice Sandra Day O'Connor isn't going to reverse her opinion that submerged lands carry the power to control fishing, he declared. CO-CHAIRMAN OGAN noted at this time there isn't a quorum to take further action on the bill. REPRESENTATIVE NICHOLIA stated she thinks that Congress has clarified its position on a number of times. According to Alaska's congressional delegation, the Katie John case is in front of the state and it needs to resolve the issue before the deadline. She does not see Congress coming forth and clarifying the issue. CO-CHAIRMAN OGAN replied he hears what Representative Nicholia is saying. CO-CHAIRMAN OGAN called for a brief at ease. CO-CHAIRMAN OGAN called the meeting back to order and adjourned the meeting to the call of the chair. TAPE 98-54, SIDE A Number 000 CO-CHAIRMAN OGAN called the House Resources Standing Committee meeting back to order at 5:01 p.m. Members present at the call to order were Representatives Ogan, Barnes, Dyson, Green and Masek. CO-CHAIRMAN OGAN noted that there is a motion to adopt Amendment 1 on the table. Number 010 CO-CHAIRMAN OGAN made a motion to amend Amendment 1 to include the language ", resources therein" after the word "waters" to the amended portion on Page 3, line 3. There being no objection, it was so adopted. CO-CHAIRMAN OGAN asked whether there is any objection to the motion to adopt Amendment 1, as amended. There being no objection, it was so adopted. Number 024 REPRESENTATIVE BARNES made a motion and asked unanimous consent to move the proposed committee substitute for HCR 13, version 0- LS177\E, Utermohle, 4/22/98, as amended, from the committee with individual recommendations and the attached zero fiscal note. There being no objection, CSHCR 13(RES) was so moved from the House Resources Standing Committee. CSSB 262(RES) - MANAGEMENT OF HUNTING CO-CHAIRMAN OGAN announced the next order of business was CS for SB 262(RES), "An Act relating to regulation of hunting and trapping, to the definition of 'sustained yield,' and to controlled use areas." CO-CHAIRMAN OGAN explained that the House proposed committee substitute for the CS for SB 262(RES) has been adopted. Number 042 REPRESENTATIVE BARNES made a motion to move the House proposed committee substitute for CS for SB 262(RES) from the committee with individual recommendations and the attached fiscal note(s). There being no objection, HCS CSSB 262(RES) was so moved from the House Resources Standing Committee. ADJOURNMENT Number 049 CO-CHAIRMAN OGAN adjourned the House Resources Standing Committee meeting at 5:06 p.m.