ALASKA STATE LEGISLATURE
SENATE TRANSPORTATION STANDING COMMITTEE
March 1, 2005
1:33 p.m.
MEMBERS PRESENT
Senator Charlie Huggins, Chair
Senator John Cowdery, Vice Chair
Senator Gene Therriault
Senator Albert Kookesh
Senator Hollis French
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 40
"An Act relating to the establishment of the Kuskokwim Port
Authority; and providing for an effective date."
HEARD AND HELD
CS FOR HOUSE BILL NO. 115(TRA)
"An Act relating to charges paid or collected by users or
occupants of an airport facility owned or controlled by the
state; and providing for an effective date."
MOVED SCS CSHB 115(TRA) OUT OF COMMITTEE
SENATE BILL NO. 92
"An Act relating to charges paid or collected by users or
occupants of an airport facility owned or controlled by the
state."
SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 42
"An Act naming the Joe Williams, Sr., Coastal Trail."
SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 40
SHORT TITLE: KUSKOKWIM PORT AUTHORITY
SPONSOR(s): SENATOR(s) COWDERY, HOFFMAN
01/11/05 (S) PREFILE RELEASED 1/07/05
01/11/05 (S) READ THE FIRST TIME - REFERRALS
01/11/05 (S) TRA, FIN
02/03/05 (S) TRA AT 1:30 PM BUTROVICH 205
02/03/05 (S) <Bill Hearing Postponed to 02/08/05>
02/08/05 (H) TRA AT 1:30 PM CAPITOL 17
02/08/05 (S) Heard & Held
02/08/05 (S) MINUTE (TRA)
02/15/05 (S) TRA AT 1:30 PM BUTROVICH 205
02/15/05 (S) Scheduled But Not Heard
02/17/05 (S) TRA AT 1:30 PM BUTROVICH 205
02/17/05 (S) Heard & Held
02/17/05 (S) MINUTE (TRA)
03/01/05 (S) TRA AT 1:30 PM BUTROVICH 205
BILL: HB 115
SHORT TITLE: AIRPORT CUSTOMER FACILITY CHARGES
SPONSOR(s): LABOR & COMMERCE
01/26/05 (H) READ THE FIRST TIME - REFERRALS
01/26/05 (H) TRA, FIN
02/08/05 (H) TRA AT 1:30 PM CAPITOL 17
02/08/05 (H) Moved CSHB 115(TRA) Out of Committee
02/08/05 (H) MINUTE (TRA)
02/09/05 (H) TRA RPT CS (TRA) NT 4DP 1NR
02/09/05 (H) DP: THOMAS, NEUMAN, GATTO, ELKINS;
02/09/05 (H) NR: SALMON
02/14/05 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/14/05 (H) Moved CSHB 115(TRA) Out of Committee
02/14/05 (H) MINUTE (FIN)
02/16/05 (H) FIN RPT CS (TRA) NT 7DP 3NR
02/16/05 (H) DP: HAWKER, CROFT, KELLY, FOSTER,
WEYHRAUCH, MEYER, CHENAULT;
02/16/05 (H) NR: STOLTZE, JOULE, HOLM
02/24/05 (H) TRANSMITTED TO (S)
02/24/05 (H) VERSION: CSHB 115(TRA)
02/24/05 (S) TRA AT 1:30 PM BUTROVICH 205
02/24/05 (S) <Pending Referral>
02/28/05 (S) READ THE FIRST TIME - REFERRALS
02/28/05 (S) TRA, FIN
03/01/05 (S) TRA AT 1:30 PM BUTROVICH 205
WITNESS REGISTER
Mr. Paul Fuhs, Lobbyist
Kuskokwim Corporation
1635 Sitka St. STE 301
Anchorage, AK 99501
POSITION STATEMENT: Commented on SB 40
Ms. Kathleen Hoffman
Kuskokwim Corporation
1635 Sitka St. STE 301
Anchorage, AK 99501
POSITION STATEMENT: Commented on SB 40
Ms. Anna Hoffman, Chief Operating Officer
Bethel Native Corporation
Box 719
Bethel, Alaska 99559
POSITION STATEMENT: Testified in opposition of SB 40
Mr. Dario Notti
Georgetown, Alaska
POSITION STATEMENT: Testified in opposition of SB 40
Mr. Eric Middlebrook
POSITION STATEMENT: Testified in opposition of SB 40
Mr. Josh Applebee, Legislative Aide
Staff to Representative Tom Anderson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced HB 115
Mr. Mark Pfeffer, Business owner
Venture Development Group
POSITION STATEMENT: Commented on HB 115
Mr. Kip Knudson
Department of Transportation & Public Facilities
3132 Channel Dr.
Juneau, AK 99801-7898
POSITION STATEMENT: Commented on HB 115
Mr. John Steiner
Attorney General's office
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Commented on HB 115
Ms. Sheryl Sutton, Legislative Aide
Staff to Senator Ben Stevens
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on HB 115
ACTION NARRATIVE
CHAIR CHARLIE HUGGINS called the Senate Transportation Standing
Committee meeting to order at 1:33:31 PM. Present were Senators
Hollis French, Gene Therriault, John Cowdery and Chair Charlie
Huggins. Chair Huggins advised the committee the first hour of
the meeting would be reserved for hearing testimony on SB 40.
SB 40-KUSKOKWIM PORT AUTHORITY
1:34:29 PM
CHARLIE HUGGINS announced SB 40 to be up for consideration.
MS. KATHLEEN HOFFMAN, board of directors, Kuskokwim Corporation,
testified the Corporation is in support of development of the
Donlin Creek Mine. Their number one goal is to see that their
shareholders get jobs and benefit from the mine. Although they
have made it clear that they are ready to meet the initiators of
SB 40, the sponsors have yet to meet with them.
She expressed concern regarding the make up of the proposed port
authority board. The Kuskokwim Corporation would prefer
development of a borough with elected representation of the
region. Kuskokwim Corporation will hold a borough formation
summit in the spring of 2005. Testimony from the Department of
Commerce and Community Development indicates preference for
borough formation also. According to the Department of
Transportation & Public Facilities (DOTPF), Placer Dome intends
to develop the port and the road privately.
1:37:04 PM
MS. HOFFMAN added the Alaska Industrial Development and Export
Authority (AIDEA) has advised they could provide financing for
the mine as they did with the Red Dog Mine if requested. While
Kuskokwim does not support SB 40 at this time, they would like
to suggest amendments. First would be an amendment which would
prohibit the authority from receiving land which has been
condemned by the State of Alaska. Secondly, if the legislation
moves forward it should include an amendment, which would turn
over operations of the authority to an organized borough in the
area when it is formed.
1:38:46 PM
SENATOR JOHN COWDERY commented board members would be the
Governor's choice.
1:39:09 PM
Senator Albert Kookesh joined the committee.
SENATOR COWDERY noted Placer Dome is neutral on SB 40.
CHAIR HUGGINS asked Ms. Hoffman to explain her comment regarding
condemned lands.
MR. PAUL FUHS, Kuskokwim Corporation, answered the question.
Condemned land is when the State of Alaska comes in to build a
road and seizes the land by imminent domain. Currently the
authority does not have the power of imminent domain but they
could ask the state to do it for them and then transfer the
land.
SENATOR GENE THERRIAULT stated borough formation would run up
against the same problem.
MR. FUHS agreed but it would be a locally elected body
representative of the people from the area.
1:41:21 PM
CHAIR HUGGINS asked Ms. Hoffman her interpretation of a timeline
for formation of the borough.
MS. HOFFMAN said it would be similar to that of the Red Dog
Mine. The Kuskokwim Board is concerned that the borough and the
mine come together at the same time for the best interest of the
shareholders.
MR. FUHS added around the state nearby boroughs are reaching out
to grab mining properties. That is an added concern worthy of
local borough formation.
CHAIR HUGGINS said the intent of the committee is to make SB 40
happen. He challenged everyone to work together to capitalize on
the value of the region.
1:44:32 PM
SENATOR THERRIAULT referred to a letter sent by Kuskokwim
Corporation last year indicating support of an interior rivers
port authority. He asked Mr. Fuhs the difference.
MR. FUHS advised SB 40 legislation is more expansive in terms of
the area. There is also the added concern over the make up of
the board. Much of the concern could be facilitated if the
initiators of the bill would sit down and meet with the
community.
SENATOR THERRIAULT asked whether last years bill covered Donlin
Creek.
MR. FUHS said yes but Placer Dome did not have development plans
in place and they determined they do not want to use public
financing for the project because of the effect it would have on
their EIS. The DOTPF completely pulled out of the project
because Placer Dome told them they wanted to do it all as one
EIS as a private development. They also said the cost of the
port and the road are not cost prohibitive to developing the
mine and that they would even pre-position equipment there in
advance of the EIS being granted. The speed of doing it meant
more to them than the two or three percent points of tax exempt
financing.
1:48:06 PM
SENATOR THERRIAULT asked whether the state providing conduit
financing triggers the heightened EIS.
MR. FUHS said yes and it also triggers the Davis-Bacon wages and
the issue of doing the entire project under one EIS - the mine
and the road and the port.
SENATOR THERRIAULT voiced uncertainty that the Legislature could
trust the community to move on formation of a borough.
MR. FUHS agreed and said that is why the community is holding
the summit. He asked the committee to consider the proposed
amendments.
1:50:41 PM
CHAIR HUGGINS promised a member of the committee would meet with
the community in the summer.
MS. HOFFMAN agreed they would be prepared. She advised the
community has tried many times to communicate with the bill
sponsor.
1:53:32 PM
MS. BEVERLY HOFFMAN, shareholder, Calista Corporation and owner
of Kuskokwim Wilderness Adventures, introduced herself. She
expressed concern regarding the power that SB 40 would give to
the port authority without local consideration. She added
concern for the environmental impact on the fish and wildlife.
1:56:53 PM
MS. HOFFMAN added she was offended by a comment by Senator
Cowdery last week regarding how community members in the area
don't speak English and live in their own world.
2:01:35 PM
MS. ANNA HOFFMAN, chief operating officer, Bethel Native
Corporation (BNC), expressed concern over SB 40. BNC prefers the
bill have language that recognizes current private land
ownership within the proposed operating area. BNC opposes
language regarding the make up of the board and would require
board members include those in the community. BNC does not
support the proposed operating area as presented. BNC opposes
the collection of rates, fees, rents and other charges for the
execution of duties since the proposed duties are not limited to
port related functions. The villages are under budgeted and
would not have the means to pay charges imposed by SB 40.
2:04:30 PM
SENATOR COWDERY asked Ms. Hoffman whether the BNC was supportive
of development of the Donlin Creek Mine.
MS. HOFFMAN said they have environmental concerns regarding
development.
CHAIR HUGGINS asked whether the BNC supports a borough
formation.
MS. HOFFMAN advised they oppose it at this time.
CHAIR HUGGINS asked whether they support a port authority.
MS. HOFFMAN said they would like to research other options, such
as the enterprise and advisory boards in Valdez.
SENATOR HOLLIS FRENCH asked Ms. Hoffman whether the BNC would be
more supportive if they knew meetings would take place within
the community.
MS. HOFFMAN said yes.
SENATOR FRENCH asked Senator Cowdery whether he could support
that.
SENATOR COWDERY agreed with Chair Huggins that would be a goal.
SENATOR FRENCH offered to draft an amendment to add that
language.
2:07:27 PM
CHAIR HUGGINS invited Ms. Hoffman to take part in a planning
group to carry the initiative forward.
MS. HOFFMAN advised they would participate in any meetings,
information gathering, and research. She would not commit to
helping move the bill forward. She noted the effective date of
SB 40 was July 1, 2005 and asked when the committee would meet
with the community.
2:09:48 PM
CHAIR HUGGINS advised her to disregard the effective date.
2:11:12 PM
MR. ERIC MIDDLEBROOK, local resident, testified SB 40
legislation was going too fast. Area residents have not had time
to digest the bill and the magnitude of it. The bill has the
potential to keep community representation out and invites
outsiders to development the area. Other authorities in the
state have clear limitations of their power but SB 40 does not
address that. Imminent domain is a major concern. He feels the
mine should be solely responsible for its own waste. He does not
agree with borough formation because they have the power to levy
taxes that could be funneled to support the operation of the
mine. The proposed area the port authority would cover appears
to be unchecked development as a way to funnel public monies to
private enterprises.
2:15:03 PM
CHAIR HUGGINS challenged Mr. Middlebrook to work toward
solutions.
MR. MIDDLEBROOK said a borough costs too much money and SB 40
would railroad the community leaving them stuck with liability.
2:18:53 PM
MR. DARIO NOTTI, Calista shareholder, Kuskokwim Corporation
member and Georgetown member, asked questions on the bill. He
wanted to know who would be responsible for the waste disposal
and expressed concerns regarding toxic waste. Both Calista and
Placer Dome have a history of leaving others responsible with
large debt. He expressed concern over the board members of the
proposed port authority.
2:27:31 PM
SENATOR THERRIAULT asked Mr. Notti whether he saw no benefit
from a regional waste disposal or regional power generation.
MR. NOTTI admitted there was potential for a benefit but the
bill does not clarify who would be responsible for those things.
2:31:22 PM
CHAIR HUGGINS held SB 40 in committee.
2:34:37 PM < Recess > 2:42:15 PM
HB 115-AIRPORT CUSTOMER FACILITY CHARGES
2:42:15 PM
CHAIR HUGGINS announced HB 115 to be up for consideration. The
committee would consider Version \I.
MR. JOSH APPLEBEE, staff to Representative Tom Anderson, advised
the committee substitute for HB 115 is the same as SB 92, which
has already been through a full hearing in the Senate.
SENATOR COWDERY asked whether there were any differences in the
two bills.
MS. SHERYL SUTTON, staff to Senator Ben Stevens, testified there
is no difference between the bills.
2:45:01 PM
SENATOR THERRIAULT asked Ms. Sutton for clarification of changes
to Section 1.
MS. SUTTON stated there were no substantive changes other than
word housekeeping and an effective date.
SENATOR THERRIAULT noted "uniform customer facility charge" was
controversial wording initially but is now being deleted. He
asked whether it was moved to a different section.
MS. SUTTON said yes. The customer facility charge was already in
place in statute and there is a new charge added, which is a
maintenance charge.
2:46:46 PM
SENATOR THERRIAULT asked whether it was specifically for a car
rental space.
MS. SUTTON advised it deals with the car rental facility and the
maintenance aspects within.
2:48:56 PM
MR. APPLEBEE summarized in 2001 the Legislature passed Chapter
99 SLE 2001 authorizing the use of the customer facility charges
to fund improvements to airport facilities state owned land.
Language needed to be tightened up for security of bonding.
SENATOR THERRIAULT asked Mr. Applebee whether a person could
avoid the charge by going off site.
MR. APPLEBEE said yes.
2:51:44 PM
SENATOR THERRIAULT asked the reason for taking state action to
raise the revenue to pay for the bond.
MR. APPLEBEE said when selling bonds for construction there
needs to be security.
MR. MARK PFEFFER, Venture Development Group, said the companies
are prohibited from setting charges to do a project of this type
on their own because of anti trust laws.
MR. KIP KNUDSON, Department of Transportation and Public
Facilities (DOTPF), informed there have been a great deal of
investment in legal counsel and economic analysis and the DOTPF
is in support of the bill.
MR. JOHN STEINER, attorney general's office, clarified HB 115 is
not limited the rental car parking facility.
2:57:45 PM
CHAIR HUGGINS reiterated there is a process for new rental car
companies to become part of the vendor process.
2:59:28 PM
SENATOR COWDERY moved SCS CSHB 115(TRA) from committee with
individual recommendations and attached fiscal note(s). There
being no objection, the motion carried. #
There being no further business to come before the committee,
Chair Huggins adjourned the meeting at 3:00:28 PM.