Alaska Legislature: Senate Resources, 3/27/26, 3:30pm

I call Senate Resources Committee meeting to order. Today is Friday, March 27,

2026.

The time is 3:30 p.m. Please turn off your cell phones.

And committee members present today, Senator Rauscher, Senator Kawasaki,

Senator Meyer,

Senator Dunbar,

Vice Chair Senator Willikowski,

Senator Klayman is online and I am Senator Giesel, the chair.

We have a quorum to conduct business.

Thank you to Heather and Chloe who are keeping the minutes and helping us out with the audio.

We have two items on today's agenda.

First up will be Senate Bill 280,

oil and gas property tax municipal tax.

And the second bill will be Senate Bill 269,

Board of Fisheries. So on Senate Bill 280 we will stop at 4.40 p.m. to complete the meeting with Senate Bill 269.

So first up is Senate Bill 280.

This is the first hearing of the bill.

We're going to begin with

a presentation from the five mayors. We will have a detailed walkthrough of the bill on Monday,

but today we're going to have testimony from the five mayors and then we will hear a presentation from the Department of Revenue. So we have the five mayors online.

I'm going to start with Chris Noel with the Denali Borough.

Then we'll be going to Edna DeVries at the Mat-Su Borough, Josiah Pocatuck,

North Slope Borough, Mr. Hopkins,

the Fairbanks North Slope Borough, and lastly,

former Senator McChicky from the Kenai Peninsula. So, Mr. Noel,

thanks for calling in today.

If you would give us your thoughts about Senate Bill 280.

Oh, and pardon me, before you begin,

Mr.

Noel,

pause for one moment.

I want to welcome Senate President Gary Stevens to join us and Representative Donna Mears. Thanks for being here with us.

Mr.

Noel, welcome.

Okay. Thank you, Chair Gisle and Vice Chair Wilkowski,

members of the Senate Resources Committee.

Can you hear me okay?

Yes, very well. Thank you.

appreciate the opportunity to share some perspective on Senate Bill 280 in the Alaska National

Alaska Liquid Natural Natural Gas Project at large.

It would fundamentally alter the energy landscape in our state and be an economic gain for Alaska and could be for the Denali Borough. And all along we've worked to understand the financial arrangements proposed by the developer and advocate for our needs.

So as proposed,

phase one of the project would include 87 miles of pipe and related components in the Denali borough.

It would be a $1.5 billion investment based on current estimates.

This is four times the value of all taxable real and personal property for our full value determination in the borough based on last year's assessment.

Two primary concerns with SB 280.

The first, I believe,

shared with my fellow municipalities is the co-opting of municipal taxing authority.

Would tie the hands of our future residents and in Denali lead to $1.5 billion in untaxable private property.

We know that the project would lead to real benefits, but those would be limited in our borough with no existing gas distribution infrastructure and unclear plans for an off-take point during construction.

The second concern relates to the assumption that state and local subsidies are required for the viability of this global energy project.

I really believe we ought to take the time necessary to stress test this assumption.

The General Bureau,

for those who don't know, doesn't currently have a property tax. We are the only ones along the pipeline route without property tax,

and we have consistently supported the payment in lieu of taxes at a rate that is fair and reasonable.

As written,

actual production,

the value of the alternative volumetric tax for the borough would be approximately $4 million annually, and this is equivalent to about a three mil tax rate.

Ten miles of the pipeline are planned to directly cross borough land,

and we need clarity as to whether code-required land use fees are preempted by this bill.

There will be real impacts to all of our municipalities,

and I think you'll hear about this from my fellow mayors.

During construction,

so impacts to roads, waste management,

fire and EMS,

health care and housing, to name a few.

The Denali Borough has three code-required land planning processes relevant to the project that we must administer,

further increasing short-term demands on limited staff and resources.

So the bottom line is we cannot subsidize increased costs. We need certainty,

be an impact payment program during construction that actual costs will be covered by the project.

In addition,

as we...

Identified by the previous municipal advisor gas board would recommend some portion of the impact payments be available to non-pipeline communities for the indirect or currently unknown impacts that will arise in municipalities that don't receive a direct property tax or alternative volumetric tax benefit.

I just wanted to summarize we've participated in regular meetings with municipal leaders,

Glen Farm,

Alaska Gas Line Development Corporation and representative of Governor Dunleavy's office and look forward to ongoing discussions as we work together on a path forward.

This global gas export project is of national importance and it's too large for municipal taxpayers to subsidize and I appreciate the opportunity to speak with you today.

Thank you very much, Mayor Noel.

You had some really important suggestions,

so I appreciate that.

Are there questions from committee members?

Senator Myers.

Thank you, Madam Chair.

Mayor Noel,

I was curious,

you mentioned a little bit about costs to the borough during construction.

I'm wondering what kind of costs you're anticipating.

Yeah,

thank you, Senator Myers,

for the question.

You know, I anticipate some of those things that I talked about,

so increased solid waste acceptance,

potential for increased use of our EMS services.

We know those key land planning processes,

you know, we will need to work through those with the developer.

So those are, I don't know if I mentioned impacts to roads.

Most of the impacts are going to be concentrated along the Parks Highway Corridor.

There are local roads that Denali Borough does not have road service areas. We've just started to provide supplemental funding for road maintenance,

road improvement and foresee,

you know, based on maps that have been provided that there will be impacts from this large construction project.

Okay.

Thank you, Senator Kawasaki.

Yeah,

thank you. Just two things to clarify. You mentioned at the very beginning the number $1.5 billion,

and I'm just curious what that was.

And then the second was we've heard about potential for off-take there,

and I guess how far along is that process for you and for the borough?

Yeah, Senator Kawasaki, thank you for the question.

I think the first question related to the $1.5 billion estimate,

that's been provided through those meetings with Alaska Gas Line Development Corporation representatives from Glenn Farn.

So that's the most recent estimate I have seen,

and I do believe that's based on an estimate from State about 10 years ago.

The remind me if you made the next the next

question The next question was related to the offtake because we've heard potential offtakes at, I don't know, I mean definitely Fairbanks, but even near Clear Air Force Base and just as you approach the borough.

Yeah, I would say, you know, thanks for that question. And I'd say we would advocate for an offtake,

at least one offtake in the borough and understand that it's not without cost. And just I'd say there's not been clarity about where that location would be.

We have heard there might be a location in Cantwell.

Obviously,

it would probably need a market to go to. So near the park entrance would be another strong

possibility in Healy. And then yeah, near Clear Space Force Station would also be a natural fit.

Great.

Thank you, Mayor.

Senator Myers.

Thank you, Madam Chair.

So, Mayor Noel,

my office has had a little bit of correspondence with the State Assessor's Office,

and we were talking to them about the tax implications as far as the man camps for construction.

What they relate to us is that the pipe itself would not be taxable during construction,

but that the man camps would be. Is that something that is a potential offset for you?

do during the construction phase when you're going to see the most disruption?

Yeah, thanks Senator Myers.

Yes,

I do think that and based on maps that we have seen some of those camps, those construction camps would fall on.

I think the plan is to put those on borough lands and kind of to my comment earlier,

we want to understand if our existing land.

planning fees would be preempted by this bill.

We would not want that,

but that's, yeah,

a potential for another revenue source for the borough during construction.

Very good.

Thank you for that answer.

Thank you very much, Mayor Noel.

I don't see further questions for you.

Thank you very much for joining us today.

Senator Klayman, I do have a question.

Oh,

Oh, Senator Klayman?

Thank you, Madam Chair.

Mayor Noel,

can you give an estimate? How much is the Denali Borough collecting in taxes today on total tax revenue?

Senator Klayman, thanks for the question.

I would say total revenue is about $8 million.

$7 million of that is

tax revenue, primarily from a 7.5% tax on overnight accommodations,

and then we have a 5% tax on the sale of alcohol and marijuana. That makes up about 10% of our total tax revenue.

We also have a severance tax on the extraction of coal and gravel,

which brings in about $50,000 each year.

So in the current

Senator

tax structure,

Klayman.

assuming,

thank you, Madam Chair,

I apologize for not asking permission.

In the current tax structure, if the value of the gas pipeline is $1.5 billion,

under the current tax structure with the Denali Borough, what kind of revenue would the Denali Borough be giving up if this bill became law and you weren't allowed to collect any tax from the gas pipeline under current structure?

And assuming the $1.5 billion value.

Yes, Chair Giesel and Senator Klayman, thank you. As written,

you know, kind of under current law,

as I understand it,

the full 20 mills of state property tax would go to the state because the borough does not currently have a property tax on the books.

Thank you.

Thank you very much, Senator Klayman. And again,

thank you, Mayor Noel,

for spending time with us today.

I'm moving now to Mayor Edna DeVries in the Mat-Su Borough. Mayor DeVries, welcome.

Thank you very much, and hello everybody.

I'm sorry I'm not able to be there in person and see all of your faces, but my prepared remarks are that this bill replaces the traditional property tax with an alternate tax based on natural gas throughput and establishes a framework for payments in lieu of taxes or PIL.

The legislation generally aligns with our Borough Assembly resolution,

which deals with health,

payments in lieu of taxes.

The bill clearly supports the use of a PILT structure. This approach provides greater certainty for the project while ensuring the municipalities,

including ourselves,

receive revenue in place of property taxes.

This bill exempts the pipeline from the 2.65 mil calculation used for local education funding,

and that's a very important aspect to us.

Without this exemption,

local governments, and especially the Matsue Borough, could experience reduced education funding due to the increase in value due to this project.

The bill avoids that unintended consequence, and we're very thankful for that.

Number three,

full distribution to municipalities.

This bill allows the entire municipal portion of the PILT to municipalities rather than splitting it with the state.

Number four.

10-year backstop. The bill states that the PILT will commence after 10 years regardless of whether the true threshold has been met.

This is important provision as it prevents indefinite delay in local revenue.

There is one key issue with the bill regarding the threshold in which the PILT is triggered.

The bill establishes a pill trigger at $1 billion cubic feet per day, whereas our assembly resolution identified 250 million cubic feet per day as the preferred threshold.

We are open to discussion on this based on other municipalities'

input for the threshold, but believe the $1 billion threshold is far too high.

While we understand the desire to avoid burdening the project during the early operations and essentially taxing in state gas,

the difference in the thresholds are a real fiscal implementation for our local government.

We also recognize that the project construction will impact different communities differently.

The preferred approach is the ability to negotiate a construction phase tilt tailored to each municipality's expected impacts.

In closing, the MAP-2 Borough supports the overall structure of Senate Bill 280 and supports advancing the AK LNG project.

We especially ask the committee to recognize the importance of flexibility in the PILT negotiation,

consider a lower PILT threshold, and acknowledge the need for construction phase impact.

Thank you again for your time and thank you for inviting me to participate.

Are there questions,

ma'am?

Thank you, Mayor DeVries.

Senator Wielikowski.

Thank you, Madam Chair.

Thank you for your testimony.

Has the Matsu Borough done any estimates about how much it would receive if this bill did not pass and the pipeline were to proceed versus how much it would receive

if this bill were to pass?

I honestly,

I honestly, I'm sure that our administration has done that.

I don't have the figures here now. I can provide those to the committee.

Thank you, Mayor.

Senator Wielikowski.

Thank you. And I'm curious what,

I know Matsu Borough has other taxes in effect.

I believe

Mm

like

-hmm.

a bed tax,

business inventory tax,

other taxes like that.

And do you know if those taxes would be impacted by the passage of this bill?

We do have a bed tax,

we have a marijuana tax,

and we have some miscellaneous fees.

What was the last part of your question,

please?

I'm just curious if you were aware whether or not this bill would impact those taxes and if so, how much?

Not yet.

Not that we are aware of. Will the bill affect taxes?

Thank you. Senator Kawasaki.

Thank you, Madam Chair.

Mayor DeVries, I appreciate you being online and talking to us a little bit. What would a construction phase pill look like to you and how would it be sort of made fair, I guess, in your borough?

Well, our assembly has decided after looking at, you know, all of the possibilities and implementation,

I think they would have hoped we anticipate that we would get away from having the back and forth on trying to evaluate the pipeline and it would be more of a figure that we could depend upon.

more easily than every year have to evaluate and share also with the state for the property tax so that's the basis for going with the tilt rather than the property tax

Follow up, Senator Kosaki.

Just something of a statement, but I know that North Dakota was one of those places without a lot of amenities when.

And suddenly the Bakken shale happened and a lot of folks went there,

you know, so overwhelming schools, overwhelming roads,

overwhelming sort of the health care system that was in place. Do you anticipate something of that to happen in the Matsu borough since it's sort of it's pretty close to where the LNG will be?

Madam Chair, if I could again.

Okay, next question.

So the borough has 22% of the pipeline in its borough, but it only affects one road service area that we have because it's on the other side of the river. And so trying to get, so say like if they had some questions regarding EMS.

trying to get there to them would not be something that we could do so but we also I hopefully think are wise enough to realize that the borough still is a very desirable place to live and so we would anticipate that there would be more demand upon our houses and of course then upon the schools and upon our transportation but as far as

The pipeline and the camps, they're not going to be in the core area that I explained to you, sir.

Sure.

Sure.

Thank you.

All right. Other questions? Other questions for Mayor DeVries?

I don't see any. Thank you very much, Mayor DeVries, for joining us today.

With that, I'm going to go to Mayor Josiah Pocketuck, former representative from the North Slope Borough and now mayor.

Welcome,

Mayor Pocketuck.

Good afternoon,

Madam Chair. Good afternoon,

senators and members of the Resources Committee,

and thank you for taking the opportunity just to verify.

Can you hear me?

Yes, we can.

Thank you very much.

First, you know, I want to start with our long-standing and generous support of balanced resource development in the North Slope Borough. Actually, I was thinking as we're going through introductions over the last five minutes or so.

The last time I probably presented before this committee was probably in support of and carrying the resolutions for ANWR and NPRA during my time in the House. And that commitment to supporting balanced resource development doesn't waver. And it's actually something that we see as a responsibility here on the North Slope,

understanding that the state's needs and the nation's needs need to be met.

And there's no more interesting time in global happenings that underlines the importance of domestic production of oil and gas and a project like AKLNG and what we're supportive of generally of trying to make AKLNG happen. You know, I just, it's important for me to share as a spokesperson of the residents of the North Slope Borough.

Um,

Currently, without this legislation, the only thing that the North Slope Borough stands to gain from this is property taxes. There's no contemplation for spur lines or gas being fed to any of our communities.

And that's something that is very apparent to the residents of the North Slope Borough,

but also to assembly members.

And when we talk about

proposing any kind of holidays or PILTs or abatements of property taxes,

I think it's important from a North Slope perspective at least considering that you have quite a bit of 456 tax of the property along with 2945 taxable property that you consider what's being asked, what value is being asked to be holidayed or abated and the value would be tied

on the investment of capital.

I think that's one of the things that we're struggling with is trying to assess the actual value of the project to know what value we're potentially trading away with something else. And so that's something else

from the North Slope perspective.

You know, we're so supportive of something.

I think we'd actually like to be co-owners of the project.

If there's a way that we could structure holiday on property taxes along with true capex being put up

to secure some kind of equity of the project,

that's something that we'd love to pursue,

but again it relies upon understanding the values of what we're asking to trade as far as giving up large percentage of 456 property taxes in lieu of getting some sort of equity and making sure those amounts match each other along with cash that could be contributed to the project.

I think there's a better conversation to be had probably in a follow-up with AGDC or the gas firm in regards to the differences in values of the gas treatment plant versus the pipeline and if any thought has been put into treating those things separately as far as holidays and abatements.

And considering that a majority of our North Slope communities power generating heat off of diesel, I understand the cost of utilities across the state and if there are other ways that we can maintain the low cost of utilities for in-state gas use,

I would love to explore those opportunities. Just a few days ago I was actually remembering my time in House resources when we spent some time learning about the royalty and.

kind deal that we make with the refineries that use BMT fuel in Fairbanks and is there a model like that that could be applied to in-state users or public utilities in the state those are the kind of things that I would love to contribute by way of waiving property taxes to maintain low gas rates for in-state users.

Well, aside from all those details, I think it's important to look at what's being asked in this bill from a government perspective, but also from a private sector investment perspective, specifically with 40 to 56 property tax assessments.

And the precedent that I'm concerned about with the North Slope Borough in the state of Alaska,

because we've spent a lot of time and money and many hours with lawyers defending assessments that the Department of Revenue has put together,

is what kind of precedent does it set for projects that want to proceed to FID?

But I guess I'm worried, does this become the normal process before getting to FID on a major oil and gas project on the North Slope is that, you know, we try to see if we can waive property taxes before we get to that FID.

I'm concerned about that. I'm concerned about

the sentiment that it sends to the rest of the 40 to 56 taxpayers in the North Slope. We have major investment that has occurred over the last few years and is on our horizon with our record-breaking lease sale of NPR

and maintaining that fair treatment of the oil and gas 40 to 56 properties across the board.

You know, I can't speak on behalf of the oil companies that are currently operating on the North Slope, but if I was a private sector oil company,

I definitely would be watching what's happening with this proposed legislation and getting my proposed legislation ready to reduce the mill rate for making my project more economical.

So I'm worried about that precedent. And is there a way we can craft this that reduces the CAPEX plus property tax cost on the building stages of this project? Delay it until another time?

I think there is. I think this is part of it,

but that requires transparency of the figures and transparency of the numbers between parties to make sure, again, going back to my first point, we understand what we're trading away.

The second point is the regime that this is approaching. The tax in general is on a full cost model.

For those

sitting on the committee,

I'm sure you're aware,

as we operate the trans-Alaska pipeline,

we've netted property taxes, and when I say we, I mean the Department of Revenue along with the State of Alaska

defendants near Fairbanks and Valdez have defended valuations based on replacement cost versus throughput.

And is then the expectation once we determine the AKLNG line to be based on throughput that we would then come right behind to

put the same tax regime on the trans-Alaska pipeline.

I wonder if that is something that folks are thinking of because we've seen over the years appeals to reduce the valuation of trans-Alaska pipeline based on declining throughput and I would think that those two things, those two commodities or those two pipelines

would be treated similarly so I wonder if there's any foresight to that and I think the Denali mayor spoke a little bit to it and said as far as you know as the mayor I am the representative of the day-to-day operations

but when it comes to matters like this,

I have an assembly that is a fiduciary to these things,

and I would ask that if any kind of broad authority is given to AGDC or the state without details of the concessions in place for the different mayors, that there's some type of

contingency on the assembly's final approvals of the different things that

understanding that this is under a big time crunch by the producer,

the force idea before the end of session.

And the last thing I would ask is has the committee committed to any type of schedule as far as moving this legislation through the process?

That'd be good for us to understand.

And with that I can plan to follow up with any other written testimony

and I want to make sure we leave time for the remaining colleagues that I have online. Thank you Madam Chair.

Thank you very much, Mayor Pakatak, for your comments.

Are there questions for Mayor Pakatak?

Senator Myers.

Thank you, Madam Chair.

So Mayor Pockett's out good to hear from you again.

Just a couple quick questions.

I'm wondering if you have a rough estimate of how much tax you would be getting from the project under the current regime,

you know, if this legislation doesn't pass. And then roughly what the North slope borough budget is these days.

Yeah, thank you, Senator Myers,

for the inquiry.

You know, I'd have to follow up with exact numbers on the proposed revenue for the North Slope Borough under the current tax regime,

but I do know that it is pretty substantial considering the gas treatment plant on the slope and that being the majority of the investment. I think that's part of the question that I have is

what is the tax revenue on a $40 billion project versus a $80 billion project or whatever the final number would be?

That's one of the things I'd like to learn more,

but as it stands now at a $44 billion CapEx,

that's roughly $12 billion over the course of 30 years.

Follow-up, Senator Myers.

Yeah,

Yeah, thank you,

Mayor.

And then just roughly what's the North Slope Borough budget these days?

Sure, so I...

Again, I'll have to follow up with exact details on it, but it is in a $400 million operating budget area,

considering that we run all water and sewer,

we build all of our schools,

we fund our education above the state funding amount,

we maintain the majority of our airports on slope,

we do our own search and rescue, we do our own fire and police.

And we actually subsidize the District Attorney's Office in the federal courts,

so it's quite the responsibility as far as providing social services, legal services that more than municipality in the state has a responsibility of.

Okay.

Okay, thank you.

Thank you.

Follow up, or excuse me, further questions for Mayor Pakatak.

Seeing none,

Mayor Pakatak, thank you very much for joining us.

Madam Chair, Senator Klayman, I've got a question.

All right, thank you, Senator Klayman.

Mayor Pakatak, in the information that you're getting in response to Senator Meyer's questions,

if you could not just give us the operating budget amount for the North slope borough, but actually the revenue figure, because my impression is that your revenue may exceed your budget.

And in addition,

if you could give the estimated,

if there's no change,

what the estimated tax would come if the project was built at least based on the estimates you have for the value of the project.

And then the third part, which you may know today,

is of the amount that some of which may go to the state and some which goes to the borough, how is that split today and the 2020 mills that can be assessed as property tax?

How much does the borough keep and how much goes to the state?

Thank you for the question.

Can you hear me? I've got a notification that I was muted.

I can hear you.

Okay, perfect. I'm doing the last one first,

and I might have to ask for a reminder of the first one centered to claim it. Thank you for the question.

Currently,

the North Shore Borough levies 17.99 mils of system and the 18 mil threshold that would produce the tax cap on the borough budget.

And so we need to...

0.01 mills on the table that the state realizes in property tax revenue and the difference between revenues versus operating budget. The delta for the most part is at $550 million. With the delta going to debt services. Again, as I mentioned, we build all of our infrastructure on the North Slope for municipal services and we do that with general obligation bonds

that we put out over a number of years have to pay the debt on. So that's where the remaining revenue goes for all the major infrastructure that you guys are familiar with through the CAPSA system. We handle all of that in slope under our own finances. And so there was a third question there that I lost there. Somebody kind of, if you could remind me,

I

No, I'm sure.

Madam Chair, I think I wanted

to see the last piece was how much you would expect to see in revenue should the pipeline get built and there's no changes proposed in Senate Bill 280.

revenue should the pipeline get built.

Thank you. The information that's been shared with us thus far

with the capex spend around $44 to $50 billion,

I know I saw a couple of spreadsheets that had two different cost of builds,

it's roughly $12 billion over the course of 30 years, and I guess that's the crux of

my questions

and learning more about the project and the capital stack of the project and the project financing,

is should we be negotiating mills and percentages based on $44 billion, based on $50 billion, based on a number greater?

And I think that's an important piece of information. We can talk about

the mills and percentages, but there are variables that are plugged into that that drastically change what we're being asked to abate or give holiday to.

So thank you.

Thank you, Senator Klayman.

I see no other questions,

Mayor Pakatak. Thank you again for joining us today.

Next up, we will invite Mayor Greyer Hopkins,

former representative from Fairbanks and now mayor of the Fairbanks North Star Borough.

Welcome,

Mayor Hopkins.

Thank you, Madam Chair.

Can you guys hear me okay?

Yes, thank you.

Thank you so much, Chair Keith. I appreciate it.

All right.

Thank you, members of the committee,

for bringing us in today.

We've been having decent conversations on,

well,

this throughput model, which has become Senate Bill 280,

since about the beginning or late January, the end of January,

with AGDC and some other members of the governor's team,

as well as one party attending sometimes and some consultants.

They bend these in conversations,

but at this point one thing you've heard from us consistently so far is we don't suppose to bill yet.

It's not where we as mayors feel it needs to be to support our communities,

to support the impacts that we're going to see,

or provide us with the benefits, either economically or tax-wise, that can set our communities up for a long time.

And we've been doing a fantastic job of working together and moving forward the unified voice.

One thing you've heard and something of a theme you'll learn more mayor to talk is we all have very different needs.

We all have very different impacts that we see from this project and from this bill as well.

But we're not there yet.

We have more meetings set up weekly, but of course now working with the legislature can move things along at a different pace so that we're looking forward to working with all of you as well as AGDC in this process.

You know, a wise man once said, and he's sitting in the room there,

that, you know, we will not be bullied and we will not be rushed.

I will go ahead and say we are not being bullied at this time. It does not feel like that yet in regards at all.

But it has been a rushed process.

You know, this is a big discussion,

and it's something that just started in January.

The governor came to us in October to say he'd like to bring us all together, and we managed to start doing that in January. But it's difficult when each of us have vastly different needs and limited time and certainly limited resources at our municipal levels.

The gas line, this line is about 12 years ago was routed outside almost completely of the Fairbanks North Star Borough. So today we only have two miles of line that goes through our boundaries and that line is about 30 miles away from our current natural gas infrastructure.

at nearly back-to-the-napkin math and some googles we found that the you're about ten million dollars line ten million dollars a mile for this line and that was an estimate from 10 12 years ago and so with that math that would at 20 mil that would be about four hundred thousand dollars worth of revenue but our borough only taxes at about ten mils worth of revenue so we'd be looking at

about $200,000 worth of revenue at our current tax rate if we're still running out of that $10 million line for looking at inflation based on that that looks a little bit more this time but we don't have those certain numbers so that's just my back of the napkin math and it's much easier math than many of the other municipalities because we only have two miles and far fewer looking parts than the beginning and the terminus of the line

So if you look at that $400,000 and reduce that by about 90%, we'd be getting less than $100,000, around $50,000 or so in the end of revenue under this legislation.

So the revenue for us is not what...

We're really impacted by.

It is the economics of the project and how it does not at this time support an economic boom to our community here in the interior.

Not one molecule of this gas line is set to go to this community and the interior gas utility rate payers or anybody who could be planning on switching to natural gas in our community,

whether it's an anchor tenant,

whether it's a new military base or our GBEA infrastructure.

We don't get any of this gas because...

We are currently talking with North Grove Gas down to our communities, and unless that price of gas comes to us at a certain break-even point that would allow our interior gas utility to get out of their contract with Hardison and Hill Corp because it would help both sides of that ledger,

we're not going to see any impacts without a spur line being built. So,

One of the things I've been talking about consistently in my community has for far longer than I've been mayor and far longer than I was even a representative is the need for that spur line here.

In order for this state to see the bone and economic boost from this project,

we have to make sure we're getting Alaskan gas to Alaskans.

And that spur line, 10 years ago, last time it was estimated out there, was about $180 million for those 30 miles.

and

Well, that's, you know, prices certainly going to have gone up since then.

And if you put that on the backs of the 30,500 or so ratepayers currently in today's dollars,

we're not expecting to see price come in any cheaper for an NCF of gas than we're dealing with today. And that's either $25,000, $26 per MCF range,

that we're seeing today.

And if we can't get that price down and not have the third line on the backs of those ratepayers.

It's going to be not going to deliver accessible gas to our community and so we're going to continue to have air quality issues,

we're going to continue to have our economy stagnated and so that's bottom line is what it comes down to us for needs and you heard Mayor Pockets talk about and accurately so his community his borough doesn't get gas through this project it gets revenue and our community doesn't get revenue and it doesn't get gas so you know that's why the

The needs are so diverse for all of our different communities.

I will say, in full clarity,

the conversations around that spur line need have,

I believe, started to sink in.

I had conversations this morning with a joint farm representative about the need for the spur line and their understanding for it. There's no concrete plans yet to see that built,

how it would be built, how it would be financed, or what timeline.

But the conversations are ongoing and I appreciate that understanding.

I also talked to the governor several days ago,

I believe it was Monday,

about the same need to express where our start and stop is for the support of this project.

And those are good and I'm happy to see it. You know, I'm not looking to try to make a ton of money for this community and every single one of us has said we're not looking at getting rich off of this line.

We're looking at getting what's fair,

maintaining our autonomy and our ability to negotiate or get a fair deal and make sure that the project benefits our community,

not just financially for many of us, but economically and the needs across the board.

We've been working together,

we've been standing together as municipal mayors and leaders for our communities.

We're looking to have our costs covered.

So what does that look like for construction tilt is also something that's important.

You know that's fire and EMS service.

in our fire service areas ensuring that those costs are covered depending on where the bed down pipeyards are where the offload yards are getting off of the railroad here in the interior location of the railroad yards

how our municipal solid waste is impacted are all prices an issue that we need to make sure are covered and we're trying to get a handle on that but on this scenario we don't know yet what Glenn Farms impacts and plans are going to be on our community we're getting a feel for that they shared maps of where those camps will be where the roads are going to be but not numbers and not full scale so we're still working that out

They did share some other numbers of how many people,

how many trucks,

how many miles and pipes would go through our community on the backs of trucks to get some construction areas.

So those permutations are ongoing,

but we don't know that yet.

And that's why the timeline is important for all of you to take in consideration if you run into your end of session timeline and understanding that, you know, that's the timeline that Glenn Farms.

aren't put forward for needing to see what their costs are going to be but you have to do your due diligence and we do as well so what are going to be those impacts to the state as mayor pocket doctor talking about what are going to be the impacts of the municipalities and the people and the businesses of this state are the things that we have to take into account and so do you so we're standing strong together

We're having good conversations, but there's still a long way to go, in all honesty.

We are protecting our autonomy and our taxing authority and negotiating authority as our paramount needs.

You know, and the project phase one,

first phase two,

is something that's very important to take into consideration.

Phase one, you know, is a line that the length of the line changed recently,

actually, a few weeks ago.

And Mayor Machiki, you can go into it in further detail, but he knows in an email that the line now ends in Big Lake.

and so it's a shorter line than what was initially proposed even several weeks ago in that phase and so it doesn't go into the Kenai Peninsula, it's shorter into the Mat-Su,

still has the same distance in Denali, North Slope and Fairbanks,

but the state also still receives the largest portion of that line and revenue for this.

The 304 miles of this line that go through the unincorporated borough.

which is nearly 40% of the overall line,

all that revenue would be going to the state there.

So that's the largest chunk of the gas line itself is doing the infrastructure at the beginning of the pipes for within the North Slope's boundaries.

That's the biggest chunk of the revenue would be going there.

To that line.

So the change in projects, the ongoing conversations,

and working with the legislature are things we're looking forward to.

So I'm happy to answer any questions on that.

But like I said before,

I'd like to close and pass it back.

How we get the economic benefit to all the different Alaskans who get access to this gas is what's absolutely paramount and why we're advocating day in and day out for that spur line.

included in the tariff for the entire project because if we're going to get Alaskan gas to Alaskans we have to make sure it benefits everybody along that line in the way that they need.

Thank you.

Thank you very much, Mayor Hopkins,

for that testimony.

Questions,

Senator Myers.

Thank you, Madam Chair.

So, Mayor Hopkins,

as you mentioned, Fairbanks is a little bit left out in the cold when it comes to the property tax issue because we only got two miles anyway,

but obviously we're going to be a major hub for construction and transportation.

So the spur line aside,

that's a whole other issue of its own.

Absent the bill,

kind of what are the plans as far as revenue and dealing with offsetting expenditures,

and then does the bill right now alter any of those plans potentially?

Um.

As of right now, not the biggest impact that we want to see is one thing that changes,

well,

an important part of the bill that Mayor DeVries highlighted was making sure that the value of the line does not go to the value of our overall assessed value for school funding.

As many of you know, our overall assessed value of the municipality grows,

which it generally does every year.

then the state reduces its payments to the school districts.

So if we're not receiving revenue,

but the value of the line is included in our overall assessed value,

it's a double negative and a triple if you count the reduction in state costs to our state support for our school districts.

So that's something that's important to maintain and see.

You know, right now the bill does not have anything for construction tilt in here and making sure we're covering our fire and EMS is important.

We,

it depends the biggest impact on that construction and what the services are is going to be where they put the construction infrastructure.

I've had some preliminary conversations with Glen about where those lay down yards are, especially if they come off of the railroad because like you said, Senator, correct?

correctly it's we are going to be a hub for construction we're at the end of the railroad and that they're piping the rail piping so the railroading the pipe up to Fairbanks we're going to make sure it's done in the right place and right now their plan for the offload yard is stopping on the railroad on Murphy Dome Road

and then offloading 75 plus feet long pieces of pipes onto roads and then going down Fulton Street Road out to the Dalton Highway and Elliott and Seat Highways or going down Sheep Creek Road out to the parks to get it south.

Both of those roads are inundated with permafrost. They have tight turns.

They're blind turns.

They have no lights and streetlights on them because we love our dark skies here in the interior.

I've had preliminary conversations with the Glen farm but want to continue.

to continue then about where that type of road would be to move it still along the railroad out between the two ends of Badger Road along the Richardson Highway so that they would be on the highways,

they would mirror the route already being taken by the Manitou Trucking Project to ensure that there are much safer highways and much lower impact on the road maintenance and on the people and neighborhoods of those roads.

Okay, thank you.

Further questions? Yes, Senator Kawasaki.

Thank you. Thank you, Mayor,

for being online and talking to us about Fairbanks.

I think I agree with you. Fairbanks is sort of the center of the landscape.

You've got the terminus of the railroad,

you've got the Alcan moving from the east, and then you've got the Richardson Highway corridor.

So it's the right place to, I think, start the project.

And of course, it'll go north and south. But have you thought about, have you thought, because I think when we were talking about Aegea, which was two decades ago now, and between that time in AGDC,

the things that happen in North Dakota are sort of telling. How much have you thought about like the property taxes,

rentals would rise,

places just for regular people to live, I think?

would be really tough.

And then, of course, we've talked about the burden of workforce.

Have you worked on that as a sort of a Fairbanks area mayor?

Yeah, and hitting on the head there at the Fairbanks area,

Mayor,

you know, North Pole and the Badger area have access to natural gas.

This is going to be a community-wide project.

And so we have thought a fair bit about housing. When I met with the Glenfond representatives who came here to town,

I asked about housing. And that was something that was brought up earlier in terms of weeks and months ago in terms of maybe there's an equity plan we can have.

But unfortunately, that's sort of off the table as they're looking,

they're not going to be building permanent housing.

They're going to be using mobile man camps and moving them along the route as construction moves up and down the thousand miles.

So we're not going to be getting much from housing, but, you know, workforce development is going to be really important.

And something I forgot to write down on my initial stage is we have many of you have heard of our world famous Tiger Team meetings.

Those Tiger Teams are how we...

has incorporated conversations with the military community here.

We have pivoted that Tiger team to be talking about prepping our community for the gas line.

We had our first meeting the first Friday of March and we're having our second meeting on the first Friday of April.

And so we're talking about what those impacts are and bringing in our labor organizations and then a number of other stakeholders to talk about issues just like

the workforce development is something we're trying to get our hands around.

I don't honestly know how many new students are going to come to the Fairbanks North Star Borough with the man camps not being.

Palm 3 here and moving up and down the line hopefully we can be an attractive place and people want to stay here and move here and we'll bring more families but until that time we're not going to be getting a huge impact in our community from the on schools

Thank you.

Further questions?

Senator Dunbar.

Not a question,

Madam Chair,

just sort of a comment.

I understand what Mayor Hopkins is saying about the man camps and the short-term construction.

I do think for all the mayors, I expect there will be impacts on housing from the project,

including people working at the different plants that will work two weeks on,

two weeks off.

slope and want to maybe not fly to oregon but instead live in alaska and because of that i'll just note we have a bill that passed the state house my bill that is currently in senate finance to allow ada to do low interest bonding and loans for housing construction projects for the workforce and i think aklon g is a massive massive project and it's very hard to anticipate you can hear all the mayors say it's very hard to anticipate exactly

exactly how those projects will those impacts will play out and where those housing needs will go but they will exist beyond just amend camps and so I hope that we are constructing housing concomitant with this project going forward thank you madam chair

Thank you, Senator Dunbar. Senator Klayman,

do you have any questions for Mayor Hopkins?

No.

No.

Thank you.

Thank you. Mayor Hopkins,

I don't see any further questions.

Thank you for your testimony. I appreciate your emphasis on the fact that discussions are still continuing and you are engaging with Glenn Farn,

giving them the reality of the situation in Fairbanks and the needs of that community.

Lastly, we will be speaking with former Senator Peter Machicki, who is now the mayor of the Kenai Peninsula.

Peninsula Borough.

Mayor Machicki,

welcome to the committee.

Thank you.

Thanks for having us on tonight.

We really appreciate your interest.

I came to the quietest place in the house and a boat just started behind me. We're grandmas, so I appreciate or I would like to know if the sound is okay at this point.

This sound is great.

Thank you.

Okay, very good.

Yes, thank you.

As you all know, I have a lot of history in the industry and been on every side of these tables.

Negotiated several large LNG projects,

three states,

two continents,

three continents including the U.S.

I've been very involved with AKL&G for a very long time. I've met with every delegation that came to the state.

We are very supportive of the project and we hope to see something go forward. I feel it is very important.

I put my hand on several Bibles,

one in municipal government before I came down to work with all of you.

One down there where we were.

Very focused on the people of Alaska.

And now I'm back home.

And my focus now is to make sure that retirees and working families on the Kenai Peninsula Borough are not subsidizing a very, very large project.

This bill held us there.

I'm very worried about that.

I am not rubbing my hands together as the borough mayor down here.

The fact is we have the lowest mill rate of any 4356 region.

This project is going to have a mill rate of around seven here.

Most of the facilities in our area are the Title 29 4550 properties.

We work with them very well.

So I'm very worried as costs have shifted from the state to municipalities.

We're kind of making it the way it is,

but we simply can't afford additional costs.

And running the worksheets that came from the project,

this is the home of the liquefaction facility. It's 43.5% of the value of the project.

This will be a busy place with thousands of people working here for three to four years.

It's tens of millions of dollars of impact a year for us.

And I can talk about where that impact lies.

But first,

I want to talk about the fact that this is a very compressed schedule.

And I'd rather be coming to you with support for a bill that we had negotiated over time.

Which would have been particularly easy for 43.5% of the value of this project because that's kind of what we do.

We have large industrial facilities and have since about 68.

When they're operating and doing well,

we have the full mill rate and under our ability to negotiate under Title 29,

29,

45, 50.

And now if you remember, we passed M, which is the economic development piece that gives us more flexibility.

I just wish the project would have come and said, hey, Peter,

for the last three renditions of this project,

we know we have a property tax issue and we'd like to sit down and talk to you about it.

I'm disappointed to see Title 29 in this bill.

We just recently have been leaning on the state for two and a half years to reduce the taxable value in a.

In a 4356 property,

because we're more interested in the gas than the taxes.

We really want to support lower

cost of field out,

people of South Central,

and that's where we are in this project. So the

ability to negotiate on this would bring a satisfactory, I'm convinced,

a satisfactory result to the project.

the project so I would

like to see similar options under 4356 and I would like to honor the local needs of each community they're all very different in my case well let's talk about the other cases for 800 miles of pipeline those of you with the natural gas pipeline experience know that once it becomes covered and subsurface

You'll see a truck with a logo patrolling the pipeline periodically and working on some instrumentation and doing their rounds.

This is going to change our community for 30 years.

Lots of impacts.

I'm one of those impacts.

I came for the summer as an intern for Marathon, which was Tesoro at the time, and I've built my life here.

I hope a lot of people do.

We've had 14 years of out-migration. That's painful.

We do need the commerce,

but this bill needs a lot of work.

And I can talk about a few of those things if you'd like.

We've got five boroughs and the unorganized borough, which is you,

the state.

I'm worried about the precedent going forward that if this project goes through and there's...

affordable natural gas that additional projects could come forward that the new floor is 10 percent of what the original mill rate is without the consideration for those local impacts I'm very worried about that doesn't mean I'm not willing to negotiate it and a little bit I'll tell you what the value would have been and the fact that we don't need that value to be satisfied here and have our cost covered

But that is something scary. That will be the new floor.

Make no mistake,

this is the two mil bill.

It's converted into six cents per million standard cubic feet,

but it is the two mil bill. It's a 90% reduction in revenue.

That's okay.

That's starting point.

I'd rather it wasn't and that we've been busy for the last six months delivering a bill that we can wrap our arms around.

But I have questions.

I would like to be convinced of the affordability in that exchange of a 90% reduction in property tax for affordable gas for Alaskans. That gets me pretty excited if that's the case.

So I have questions.

But my primary concern here is covering costs in my community.

My community is stretched,

as all of yours are.

Education funding,

shifting costs,

there are a lot of things that originally were designed to be reimbursed by the state that aren't any longer,

school bond reimbursement, yada, yada, yada. I'm not going to go on and on.

We're making it.

We're doing fine,

but we can't afford additional costs. So I want to make sure my community is protected as well as the communities of my other.

partner mayors in this discussion curious what the state's going to do with their share what does that look like so it's early in the process alaska needs commerce that's good for alaska right and that question we heard earlier that a little of something is better than nothing in my case below zero is not better than nothing

So I'm very concerned about that,

and that's a strange statement to make because we have to have, that proves that that discussion must take place. They must understand the impacts on our communities and work for this.

We're working together now.

We just started a couple weeks ago with some fruitful progress,

and I appreciate that. I've had a lot of calls with developers and AGDC and governor's office,

and I think we are talking now.

I think we might get there,

but it can take some time.

And I just can't stress more the communities should remain in control of those pieces to make sure that their costs are covered because 30 years, I'll go through a few things in the bill.

I just really want to stress that we take the time to get this right.

It is a 30-year, your children and grandchildren,

impact.

And it's imperative that we take the time to get it right.

I think this is a bottom offer.

few concerns the major components cannot cover import terminals until they become a part of the larger project why because we have three import terminals being proposed and as a legislature we try not to pick winners and losers right so that's something for you consider the

excluded taxes may include everything so anything possible

Including providers of materials and items for the projects may not be taxable. That needs to be clarified for me,

and it's a change we can suggest.

I don't know where a billion cubic feet comes from,

but it's five times the current usage in state.

I'm not sure why there's a floor.

I'm not sure why there's 1% escalation, I will tell you.

And again,

I respect the bottom offer thing.

That's kind of how things start,

right?

It's been an awkward process, but it's moving along better.

But I will tell you,

I manage a budget with a two and a half percent escalation.

That requires discipline every day,

every line of spend,

every category of spend,

every department to maintain two and a half percent.

So at one percent over 10 years,

you're underwater.

Right? Everyone,

all of you are used to dealing with these issues.

Want to make sure that the taxes are levied and paid to the municipalities not subject to appropriation.

I'm okay with an alternate allocation of alternate tax.

It was actually my idea.

So let's do a throughput thing.

But in the throughput calculation...

It shifted the allocation for the people that will be living with this plan for a generation and a half from 43.5% to 21.

Detail I don't need to get into.

We're talking about that.

But I'm just actually demonstrating how early in the process we are and that we have a lot of work to do.

My impacts will be significant.

I'd like for...

Things, there may be pieces that can move forward, but I really hope that you will work with us and make sure we get this right to make sure that these municipalities and your needs are met collectively before we call this ready for primetime piece of legislation.

And I can list some of the,

we're willing and have been.

Partners for years, again,

on the taxation under Title 29,

these plants are still here because we've reduced the taxable burden significantly.

Why?

We want them to come back to life,

right?

If the tax burden is too high,

those facilities are going to go away.

The Kenai LNG facility wouldn't be considered for a regas facility.

Agrium wouldn't be there for a possible ammonia plant and some hydrogen work.

So we want them to stay.

We understand this. We've been in this business for 70 years.

And we will continue working well with investors in our community.

Our impacts, our housing impacts are going to be significant.

We don't want manned camps.

We'd like to be partners. So when the earlier plans were constructed, the refinery and the LNG plant and the agrant plant,

the community built subdivisions in partnership with those developers.

So there was quality neighborhoods that is a much better experience for everyone.

It makes the road and traffic impacts easier to manage.

We have to build bypass roads and have our schools ready.

That's kind of what we do here.

We'll take care of it, but it costs something.

Nothing's free.

We want to make sure that our costs are covered.

So a little thumbnail sketch here.

Again,

we're the lowest mill rate of a $43.56.

seven mills in the area of the facility somewhere between 140 and 210 million dollars would have been the likely property tax we're okay to negotiate that down significantly but 10% of it doesn't cover our costs so we've got a lot of work to do this isn't

I don't mean to sound negative because I'm excited.

Pipe's going to come into sewage for the pipeline,

do some railroad traffic.

Definitely liquefaction is going to be a huge project which will transform this community for three to four years.

By working together, that could be a smooth transition into what we experienced in the past, as we've done in the past,

and we're ready to sit down and...

I've been in a deal that works for everyone,

the developers,

our community,

Alaskans,

and I hope to God that comes along with affordable gas,

and we'll be learning about that I'm sure in the very near future.

Thank you, Madam Chair.

Thank you, Mayor Machicki.

Questions for Mayor Machicki?

Yes, Senator

Well,

Wielechowski.

thank you. Thank you, Mayor Michiki. Appreciate your testimony. Good to see you.

You said one thing which really struck me, and from Anchorage's perspective,

We're not, we didn't have a mayor test to find. I've reached out to our mayor to see, to get their input and I know they're having their legal analyze it, but there's one section and it's in version N and it says a city may not levy or collect a sales or use tax on the purchase,

use,

consumption or ownership of property or services relating to qualified property.

And I don't know how you read that and I'm looking into it some more, but I'm curious.

If you have concerns about that impacting potentially bed taxes,

business personal property taxes, maybe gas taxes, rental vehicle taxes,

if you have any thoughts on that.

One of my most enjoyable.

experiences in the legislature was arguing with Senator Willikowski and I hate seeing you as well but that's how I read that how does the community survive on those impacts when it cuts that deep into the fabric of our society it's a it's a very different philosophy from what I'm used to

Um,

everywhere I've sat on this table and I'm, it's something else we need to discuss. It's, it's problematic.

Where does that end?

Contractors lunches, bed taxes. I mean, it,

we will be severely impacted and the reduction of 90%.

does not align with the impact on the community and that's what the discussion is about I have faith we can get there I think they were worried about timing not sure the timing issue

Um,

well,

I will say that we've been at the table whenever asked,

I've missed one meeting, had lots of side conversations with individuals associated with this. We'd sit down in one place and talk about this realistically, not on a, the format of the meetings we've had were not effective until a couple of weeks ago.

I think we're getting somewhere now,

but I have to understand.

Why is this a first that I've seen in any project structure?

I understand the negotiations for property tax because we do it today,

and we'll continue to do it with similar projects.

But this is cutting deep into the fabric of how our communities work,

and that worries me.

And I feel like I'm not negotiating online.

I'm not negotiating through the legislature. We will be negotiating on our own.

But those are the kinds of conversations that need to occur.

If you take this as a state and say we're going to figure this out for you,

here's the bill,

there's going to be a lot of pieces left that are going to be impossible for us to pick up.

Thank you.

Further questions for Mayor Michiki?

All right. Seeing none.

Thank you very much, Mayor Machicki. I appreciate your comments.

I appreciate your positive outlook that continued conversations are important and that we will get there.

So thank you for that.

All

Thank you

Thank you.

right, with that, it concludes the mayor's testimony, and I see no questions from Senator Klayman at this time.

It did extend longer than I anticipated.

Mr.

Stickle is here,

was going to begin going through the fiscal note.

I apologize,

Mr.

Stickle.

We're going to set that aside,

and we do have you and, going far enough,

up on Monday before this committee so I apologize you've sat here this whole time but thank you

We do have a committee substitute to put on the table. Now the committee substitute is a drafted version of the governor's bill by our legislative drafting. So we have a different drafting format than the Department of Law has. And so that's what this committee substitute is. Senator Wielachowski.

Madam Chair, I move the committee adopt the Senate Resources CS for Senate Bill

280,

Work Order 34-GS2038-N as our working document.

And I'll object for purposes of discussion. My staff Paige Brown will speak to the changes.

Thank you Madam Chair and members of the committee. For the record, Paige Brown, staff to Senator Giesel. There are no substantive changes in version N. Members also received a copy of the accompanying memo from Legislative Legal that includes other questions, but this was a rewrite to legislative drafting procedural answers.

Yes.

All right. So again,

just legislative drafting style,

the content is the same. There is a memo from the attorney who drafted it, uh with some questions. So committee members have that, it is posted or will be posted on basis, um so everyone can view it. So seeing uh no objections, I I will remove my objection.

Is there further objection to adopting the committee substitute? All right, seeing none, uh committee substitute for two eighty, version.

Section N is now before our committee,

we're gonna set the bill aside. We will revisit it on Monday and it will give Glenn Farn and of course our Department of Revenue opportunity to look at it as well as our legal memo. We do want to briefly put on the table Senate Bill 269. This relates to the Board of Fisheries. Uh this will be the first hearing of the bill and I'm gonna invite Tim Grussendorf to come forward.

and present the bill to us online related to this bill we ha no, actually not online, he's actually here in the room, is Commissioner uh Doug Vincent Lang of the Department of Fish and Game. So, welcome Mr Grussendorf. If you would present the bill.

Thank you Madam Chairman. For the record, my name is Tim Grussendorf. I am staff to Senator Hoffman.

Uh we appreciate the

Chairman, hearing the bill today,

I'll make it short because it sounds like we've all had a long week and a long day today.

Senator Hoffman was has been watching the board of fish for quite a while now and we've just noticed that over time they have been getting they're they're solving more conflicts they're dealing with more different diverse user groups and they're having a tough time and it's turned their job into a full-time job it's it didn't I don't think it always used to be that way and now we have a seven member board that when they sign on to be a board member it pretty much

much takes every day and every hour of their life for for their time that they serve and I think board members get burned out I think we've got issues with how they

Their time. They burn a bunch of their time.

They can't keep up with all the different regions of the state that they have to go to.

And I think also some of the regional areas feel like they're getting left out of the process a little bit because the board doesn't travel to their region.

They're on a cycle and they get to every region,

you know, every couple years,

every three years.

And sometimes big issues sometimes sit for a while.

And in the fisheries business,

sometimes that's kind of tough on some of the fish.

the fishermen and some of the user groups there. So sent bill 269 is being offered to begin discussions to make the of ways to make the Board of Fish regionally focused to increase efficiency and to allow the board to better understand and interact with the diverse user groups.

The concept behind 269 is to restructure the board from a single seven-member board to a 15-member board compromised of three regional boards.

One would be the southeast Alaska and Yakutat region. The second would be the central Gulf,

Prince William Sound,

Kodiak and southern Alaska Peninsula.

And the third is the Arctic western Kuskokwim-Yukon. And these boards will can also meet when they have fisheries that cross.

They can also meet jointly as two of two regions, or there will be times when they have statewide

issues that the whole board will meet.

And they also are required to meet with the board of game at some point. So they will meet as a full board. Um the second thing this bill does is we've all heard about the conflicting out of uh

of members and it's kind of tough when you have the person that has the most knowledge in a region on a fishery they're not even allowed to just to be involved in discussions and then they don't get to vote.

This bill is going to propose the idea of much like the legislature does when you guys when you folks are on the floor you get up you state your conflict and if any member objects you're required you you get to participate and you're required to vote.

vote. I think if someone really had a serious conflict of interest, they could probably talk to their fellow board members and just say, you know, this is this is a big deal and I really would like not to participate or vote at least vote on the issue. I'll participate in the discussion but you know I'd like to abstain from voting and and so that's that's what that's the basics behind this bill.

I just for kind of a discussion purposes,

I haven't heard,

I know the board is overworked and we'd sort of like to see.

um input from not only industry the people that go to the board of fish all the time i i attend the ones in southeast i commercial fish and it's it's pretty tough the board just recently had a hatchery meeting and they had five days of hearings um i think a thousand documents put before them and 150 testifiers and so and that's just for the hatchery issue i mean there are so many other issues that they deal with i just

I just, I feel like these regional boards would be better for the users and for a better product coming from the board of fish to help our, help maintain the quality of our fisheries.

So that's the, that's the basics of the bill.

If you'd like me to go through the, take time to go through the section, well I will,

but it's up to you, Madame Chairman.

Committee members,

are there any questions?

Senator Myers.

Th thank you Madam Chair. So uh Mr. Christendorf I uh really appreciate the the introduction kind of given me the the rationale for the bill. Um I'm curious, you're talking about the the board members basically are over-worked, this becomes a full-time job, they're not really compensated for it, things like that. Um

Thank you, Madam Chair. Mr. Griesendorf, I really appreciate the introduction, kind of giving me the rationale for the bill.

I'm curious.

I can completely understand why that's a problem.

I'm curious if your office considered instead taking the Board of Fish and structuring it more like, say, the RCA,

where it is a full-time job, you're paid for it, paid well,

you'd be expected to remove yourself from any commercial interest that you have related to it. And so that would remove the conflict of interest

problems if that was something that was brought up in the discussion.

Through the chair, Senator Myers. No, we didn't discuss that. This is something that's been in the back of Senator Hoffman's head for quite a while. I started working on this probably 10, 15 years ago at one point when we had some issues with the board and we put it aside, put it aside. And this was just his idea on how to better structure the board. I know there's probably better ways to do it.

Possibly.

This is just an idea that we put out there because we know that something needs to be done because that board is really getting overworked.

Okay.

Thank you, Senator Myers.

Thank you. Just a follow-on comment.

Again,

I appreciate the problem that we're trying to solve here.

I'm just – if the problem is already that bad –

my the initial thing that goes through my head is splitting it up into regional boards. It kind of feels like a stop-gap. You know, maybe this is gonna work for five or ten years and then wait now you've got three boards with people bringing even more proposals because now you've got time for it. And we're gonna be back in the same situation at some point in the future. So just thought, moving forward, thank you.

Senator Kawasaki.

Yeah, thanks.

This is a technical question on the regional board.

So would the regional board set the fish allocation?

Would they be in charge of the allocation issue?

Through the chair,

Senator Kawasaki,

yes, they would be seen as the Board of Fish for their region. So they will set

allocations in their region. If there's cross fisheries, then the two regional boards will get together if they have issues like that.

So that was the intent.

Follow-up, Senator Kawasaki.

Sure.

And I don't know if there is a case where this would happen,

but what happens if like the central,

the fisheries that are located inside the interior would just seem like they have a veto power over the other five on the coastal side.

And I don't know if there's a fishery that does that actually.

Would there be a time where that could potentially happen and what happens in that case?

Through the chair, Senator Kawasaki,

I don't know of a case where that could potentially happen,

but I probably could.

I would imagine it probably could be.

And if it's just the two boards get together and there's a proposal,

and of course you have two five-member boards, so you wouldn't have an odd number.

It was our...

thought that if a proposal was offered and it turned out to be a tie the motion would fail whatever they were doing it would just would not pass so they and I think if it got to be of a super serious nature that's probably something the full board could take up with all three boards sitting because they're going to have to meet once or twice once or twice for sure so that might have to go to them as an outside arbitrator I guess looking in

So follow

And

up.

follow up.

Yeah, just it looks like so the southeast and Yakutat might be close to the Prince William Sound and so there might be impacts in one of those fisheries that would impact the other fisheries so they would they would both be involved is what you're saying both regions would be involved in that discussion.

through the chair, Senator Kawasaki, I would say yes,

but the fisheries that are involved there,

I,

you know, I'm involved in the Southeast quite a bit. And Yakutat's a troll.

I don't, they don't seine out of Yakutat. They don't gill net out of Yakutat. They all come down to the, down to, into Southeast properties.

So the only, you know, and there's some bottom fish out there probably off the coast, but I don't think they compete like that, like you would think.

Okay, and then

Okay.

And then just,

there are other questions,

OK,

but if you have another

one,

just

one other one

sure.

is like, so the Central Gulf Prince William Sound fishery, would those people, they have to live in that region?

Through the Chair,

Senator Kawasaki,

yes,

that would be the intent that everyone,

you would live or you would, you know, work or reside in that area.

Okay.

And these areas aren't necessarily set in stone.

They're just kind of common lines that we've seen before in the past.

I've had comments from folks from out of Homer that said they didn't really think that Kodiak.

That area should be tied in with Prince William Sound because they have different types of fisheries.

And so that would be something that I think when they do their regulations with Department of Fish and Game,

that's something they would figure out.

And we're also not sold on the makeup of the individuals on the board. Right now we have a commercial fisherman,

you know, sport fish.

and subsistence users and then we also and then we have two other board members and those board members I mean I think it would probably be smart to put someone that has a science background because right now that's not a requirement but

So,

Someone