Legislature(2015 - 2016)BARNES 124

03/30/2016 01:00 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 3/31/16 at 1:00 p.m. --
+= HB 253 ELCTRNC TAX RETURN;MINING LIC. TAX & FEES TELECONFERENCED
Heard & Held
*+ HB 282 AGDC BOARD OF DIRECTORS TELECONFERENCED
Heard & Held
+ SB 125 LEGISLATIVE MEMBERS OF AGDC BOARD TELECONFERENCED
Heard & Held
+= HB 286 FISH & GAME: OFFENSES;LICENSES;PENALTIES TELECONFERENCED
Scheduled but Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 30, 2016                                                                                         
                           1:02 p.m.                                                                                            
                                                                                                                              
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Benjamin Nageak, Co-Chair                                                                                        
Representative David Talerico, Co-Chair                                                                                         
Representative Bob Herron                                                                                                       
Representative Kurt Olson                                                                                                       
Representative Paul Seaton                                                                                                      
Representative Andy Josephson                                                                                                   
Representative Geran Tarr                                                                                                       
Representative Mike Chenault (alternate)                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Hawker, Vice Chair                                                                                          
Representative Craig Johnson                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 125(RES)                                                                                                 
"An  Act adding  legislative nonvoting  members to  the board  of                                                               
directors of the Alaska Gasline Development Corporation."                                                                       
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 282                                                                                                              
"An Act relating to the board  of directors of the Alaska Gasline                                                               
Development Corporation; adding  legislators as nonvoting members                                                               
of  the board  of  directors of  the  Alaska Gasline  Development                                                               
Corporation; and providing for an effective date."                                                                              
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 253                                                                                                              
"An  Act requiring  the  electronic  filing of  a  tax return  or                                                               
report  with  the Department  of  Revenue;  establishing a  civil                                                               
penalty for  failure to electronically  file a return  or report;                                                               
relating to exemptions  from the mining license  tax; relating to                                                               
the  mining   license  tax  rate;  relating   to  mining  license                                                               
application, renewal,  and fees;  and providing for  an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 286                                                                                                              
"An  Act   relating  to  sport  fishing,   hunting,  or  trapping                                                               
licenses,  tags, or  permits; relating  to penalties  for certain                                                               
sport   fishing,  hunting,   and  trapping   license  violations;                                                               
relating  to  restrictions  on the  issuance  of  sport  fishing,                                                               
hunting, and trapping licenses;  creating violations and amending                                                               
fines  and  restitution  for  certain  fish  and  game  offenses;                                                               
relating to commercial fishing  violations; allowing lost federal                                                               
matching  funds   from  the  Pittman   -  Robertson,   Dingell  -                                                               
Johnson/Wallop -  Breaux programs to  be included in an  order of                                                               
restitution; adding  a definition of 'electronic  form'; amending                                                               
Rule  5(a)(4),  Alaska  Rules of  Minor  Offense  Procedure;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 125                                                                                                                  
SHORT TITLE: LEGISLATIVE MEMBERS OF AGDC BOARD                                                                                  
SPONSOR(s): SENATOR(s) COSTELLO                                                                                                 
                                                                                                                                
01/19/16       (S)       PREFILE RELEASED 1/15/16                                                                               
01/19/16       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/16       (S)       L&C, RES                                                                                               
02/02/16       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/02/16       (S)       Heard & Held                                                                                           
02/02/16       (S)       MINUTE(L&C)                                                                                            
02/04/16       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/04/16       (S)       Moved  CSSB 125(L&C) Out of Committee                                                                  
02/04/16       (S)       MINUTE(L&C)                                                                                            
02/08/16       (S)       L&C RPT CS  4DP  SAME TITLE                                                                            
02/08/16       (S)       DP: COSTELLO, GIESSEL, MEYER, STEVENS                                                                  
03/02/16       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/02/16       (S)       Moved  CSSB 125(RES) Out of Committee                                                                  
03/02/16       (S)       MINUTE(RES)                                                                                            
03/04/16       (S)       RES RPT CS  4DP 1DNP 1NR  SAME TITLE                                                                   
03/04/16       (S)       DP:    GIESSEL,    COGHILL,    MICCICHE,                                                               
                         COSTELLO                                                                                               
03/04/16       (S)       DNP: WIELECHOWSKI                                                                                      
03/04/16       (S)       NR: STOLTZE                                                                                            
03/23/16       (S)       TRANSMITTED TO (H)                                                                                     
03/23/16       (S)       VERSION: CSSB 125(RES)                                                                                 
03/25/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/25/16       (H)       RES, L&C                                                                                               
03/30/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 282                                                                                                                  
SHORT TITLE: AGDC BOARD OF DIRECTORS                                                                                            
SPONSOR(s): REPRESENTATIVE(s) CHENAULT                                                                                          
                                                                                                                                
01/29/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/29/16       (H)       RES, L&C                                                                                               
02/10/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/10/16       (H)       <Bill Hearing Canceled>                                                                                
03/30/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 253                                                                                                                  
SHORT TITLE: ELCTRNC TAX RETURN;MINING LIC. TAX & FEES                                                                          
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/19/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/16       (H)       RES, FIN                                                                                               
02/15/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/15/16       (H)       Heard & Held                                                                                           
02/15/16       (H)       MINUTE(RES)                                                                                            
02/17/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/17/16       (H)       Heard & Held                                                                                           
02/17/16       (H)       MINUTE(RES)                                                                                            
02/19/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/19/16       (H)       Heard & Held                                                                                           
02/19/16       (H)       MINUTE(RES)                                                                                            
02/23/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/23/16       (H)       Heard & Held                                                                                           
02/23/16       (H)       MINUTE(RES)                                                                                            
02/24/16       (H)       RES AT 8:30 AM BARNES 124                                                                              
02/24/16       (H)       Heard & Held                                                                                           
02/24/16       (H)       MINUTE(RES)                                                                                            
03/28/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/28/16       (H)       Heard & Held                                                                                           
03/28/16       (H)       MINUTE(RES)                                                                                            
03/30/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR MIA COSTELLO                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor, introduced CSSB 125(RES).                                                              
                                                                                                                                
WESTON EILER, Staff                                                                                                             
Senator Mia Costello                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Answered questions regarding  CSSB 125(RES)                                                             
on behalf of the prime sponsor, Senator Costello.                                                                               
                                                                                                                                
TOM WRIGHT, Staff                                                                                                               
Representative Mike Chenault                                                                                                    
Alaska State Legislature                                                                                                        
POSITION STATEMENT:  Assisted in  introducing HB 282 on behalf of                                                             
the prime sponsor, Representative Chenault.                                                                                     
                                                                                                                                
ED FOGELS, Deputy Commissioner                                                                                                  
Office of the Commissioner                                                                                                      
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   During  the hearing  of  HB 253,  answered                                                             
questions related to proposed amendments.                                                                                       
                                                                                                                                
BRANDON SPANOS, Deputy Director                                                                                                 
Tax Division                                                                                                                    
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   During  the hearing  of  HB 253,  answered                                                             
questions related to proposed amendments.                                                                                       
                                                                                                                                
JERRY BURNETT, Deputy Director                                                                                                  
Office of the Commissioner                                                                                                      
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   During  the hearing  of  HB 253,  answered                                                             
questions related to proposed amendments.                                                                                       
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:02:48 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  DAVID  TALERICO  called the  House  Resources  Standing                                                             
Committee meeting to order at  1:02 p.m.  Representatives Seaton,                                                               
Chenault  (alternate),   Olson,  Josephson,  Tarr,   Nageak,  and                                                               
Talerico  were present  at  the call  to  order.   Representative                                                               
Herron arrived as the meeting was in progress.                                                                                  
                                                                                                                                
            SB 125-LEGISLATIVE MEMBERS OF AGDC BOARD                                                                        
                                                                                                                                
1:03:31 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO announced  that the first order  of business is                                                               
CS  FOR SENATE  BILL  NO. 125(RES),  "An  Act adding  legislative                                                               
nonvoting  members  to  the  board of  directors  of  the  Alaska                                                               
Gasline Development Corporation."                                                                                               
                                                                                                                                
1:04:15 PM                                                                                                                    
                                                                                                                                
SENATOR MIA COSTELLO, Alaska  State Legislature, paraphrased from                                                               
her sponsor  statement, written as follows  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     Senate  Bill  125  amends  state   law  by  adding  two                                                                    
     legislators  as ex-officio  (nonvoting) members  to the                                                                    
     Board  of  Directors   of  Alaska  Gasline  Development                                                                    
     Corporation (AGDC).                                                                                                        
                                                                                                                                
     As  the  AKLNG  project  moves forward,  the  State  of                                                                    
     Alaska  will face  increasingly  complex financing  and                                                                    
     policy   decisions.  AGDC   is   the  state's   primary                                                                    
     representative  in  the project  and  will  be a  focal                                                                    
     point for these discussions in  the coming years. It is                                                                    
     essential the state have  a transparent, clear decision                                                                    
     making  process   in  place.  Senate  Bill   125  helps                                                                    
     accomplish this  by giving  all parties  a seat  at the                                                                    
     table.                                                                                                                     
                                                                                                                                
     The AGDC Board of  Directors currently consists of five                                                                    
     public  members  appointed  by  the  Governor  and  two                                                                    
     commissioners of  state departments.  The commissioners                                                                    
     for  the  Department  of   Revenue  and  Department  of                                                                    
     Natural Resources  are prohibited  from serving  on the                                                                    
     board. Having  legislators participate in  an advisory,                                                                    
     nonvoting  capacity adds  experience and  continuity to                                                                    
     the board.  Legislators understand  the type  of budget                                                                    
     decisions that will be needed  to meet the state's cash                                                                    
     calls for a  gasline project, and would  be helpful for                                                                    
     discussions on project financing.  Senate Bill 125 will                                                                    
     also  increase  collaboration  on the  project  as  any                                                                    
     contract over  two years in  duration must  be ratified                                                                    
     by the Legislature.                                                                                                        
                                                                                                                                
SENATOR  COSTELLO stressed  that  the importance  of the  gasline                                                               
cannot be understated.   Alaskans are following  this project and                                                               
during  the last  session the  legislature received  updates from                                                               
AGDC.   She described it  as a  generational project, one  of the                                                               
largest engineering  projects in  the world,  and said  this bill                                                               
will  help  facilitate  communication and  teamwork  between  the                                                               
legislature and  the AGDC Board  and move this  important project                                                               
forward.  Given the importance of  the project, she said there is                                                               
a need  for transparent  and clear decision  making and  the best                                                               
way to make these decisions is to  give all parties a seat at the                                                               
state's  table.   Having  legislators  will provide  perspective,                                                               
institutional knowledge, and continuity;  for example, six of the                                                               
seven AGDC  board seats turned  over during  the past year.   The                                                               
precedent   in  legislators   serving  on   the  board   is  that                                                               
legislators  currently serve  on over  a dozen  state boards  and                                                               
commissions,  including  the  Knick  Arm  Bridge  Authority,  the                                                               
Alaska Aerospace  Corporation, and  the Alaska  Seafood Marketing                                                               
Institute.    Each  of  those   boards  has  two  legislators  as                                                               
nonvoting  ex officio  members and  serving as  nonvoting members                                                               
alleviates any  constitutional concerns.  The  AGDC's mission and                                                               
authority has expanded greatly during  the past six years and has                                                               
evolved  to  be the  focal  point  of  state decision  making  on                                                               
developing liquefied natural  gas on behalf of the state.   It is                                                               
important that  the structure of  organizations such as  this are                                                               
able  to adapt  to  the types  of decision  making  needed for  a                                                               
project of  this magnitude.   Legislators understand the  type of                                                               
budgeting decisions necessary to meet  the state's cash calls and                                                               
it would be  helpful to have two legislators there  to listen and                                                               
participate in those discussions.   Legislators at the table also                                                               
lets policy  makers better  understand the  ADGC Board's  view of                                                               
the business  decisions facing  the state.   She  reiterated that                                                               
the  gasline   is  one  of   the  most  important   projects  the                                                               
legislature  has  before  it  and   this  bill  promotes  further                                                               
cooperation, teamwork,  and collaboration between the  members of                                                               
the ADGC Board and the legislature.                                                                                             
                                                                                                                                
1:08:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  asked  how   the  sponsor  addresses  the                                                               
prohibition  of  legislators  holding   dual  offices  under  the                                                               
constitution  and  legislative  members being  in  the  executive                                                               
branch.                                                                                                                         
                                                                                                                                
SENATOR COSTELLO responded  that the bill was  amended to require                                                               
that legislators would  not be paid per diem or  receive any sort                                                               
of financial benefit.   When looking at the  separation of powers                                                               
among the  branches, it is  the judicial branch that  would weigh                                                               
in as to whether or not  there is a constitutionality issue.  She                                                               
reminded  the members  of  the precedent  of  members sitting  on                                                               
boards  and corporations  and  if that  is an  issue,  it may  be                                                               
something that is taken up as a group.                                                                                          
                                                                                                                                
REPRESENTATIVE  SEATON put  forth that  many of  the topics  that                                                               
would  be  discussed would  require  confidentiality.   He  asked                                                               
whether   the    legislators   would   be   expected    to   sign                                                               
confidentiality statements  and how would they  share information                                                               
back to the legislature.                                                                                                        
                                                                                                                                
SENATOR COSTELLO responded  that she is aware of  only one member                                                               
of the AGDC  Board, currently, that has  signed a confidentiality                                                               
statement and, therefore,  if it is not an issue  for the current                                                               
members on the  board she does not  see why it would  be an issue                                                               
for ex officio members.                                                                                                         
                                                                                                                                
1:11:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether  members  of the  Alaska                                                               
Aerospace  Development Corporation  and Alaska  Seafood Marketing                                                               
Institute (ASMI) are appointed by the executive branch.                                                                         
                                                                                                                                
SENATOR  COSTELLO answered  that  she is  uncertain but  believes                                                               
they are appointed by the leadership in the House and Senate.                                                                   
                                                                                                                                
REPRESENTATIVE   JOSEPHSON  inquired   whether   there  are   any                                                               
competing legal opinions from any source.                                                                                       
                                                                                                                                
SENATOR COSTELLO  responded that under [South  Carolina v. Public                                                             
Interest  Foundation  and  Edward  D.  Sloan  v.  South  Carolina                                                             
Transportation  Infrastructure  Bank,  379  S.C.  160,  169,  666                                                             
S.E.2d  236,  241 (2008)],  the  court  decided  in favor  of  ex                                                               
officio members who serve in  the legislature also serving on the                                                               
board.  State courts are currently split on the issue, she said.                                                                
                                                                                                                                
1:12:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  surmised that in the  event the appointees                                                               
are  challenged,  it  would  probably go  through  a  long  legal                                                               
process.  He  asked whether that would mean ADGC  would either be                                                               
at risk  at having any of  its decisions overturned or  would not                                                               
be able to make any decisions until the lawsuit was resolved.                                                                   
                                                                                                                                
SENATOR COSTELLO  reiterated that these ex-officio  members would                                                               
be nonvoting and if this bill  were to pass, any decision made by                                                               
the board  would be made by  the voting members of  the board and                                                               
not the two listening participating  members who are there simply                                                               
to have a  seat at the table.   The spirit in which  the bill has                                                               
been offered  is for cooperation  and communication, so  she does                                                               
not see why that would be an issue.                                                                                             
                                                                                                                                
1:13:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  referred to  how the AGDC  has evolved,                                                               
and asked whether the board  in its present iteration happened in                                                               
2013 as  part of Senate Bill  21.  He further  asked whether part                                                               
of the  argument is  that that  section of  Senate Bill  21 needs                                                               
reform.                                                                                                                         
                                                                                                                                
WESTON  EILER,   Staff,  Senator   Mia  Costello,   Alaska  State                                                               
Legislature, offered his belief  that Representative Josephson is                                                               
referring to  the changes  that were made  to the  Alaska Gasline                                                               
Development Corporation with passage of  Senate Bill 138 in 2014.                                                               
That bill outlined and structured  the Alaska Gasline Development                                                               
Corporation (AGDC) as it is currently arranged.                                                                                 
                                                                                                                                
1:14:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  inquired about  the catalyst and  need for                                                               
this legislation.                                                                                                               
                                                                                                                                
SENATOR  COSTELLO answered  that last  session it  became evident                                                               
that the  communication and  transparency amongst  the interested                                                               
parties could be improved.  The  impetus for this bill is to help                                                               
with communication  and certainly  if there were  two legislators                                                               
sitting on this  board as ex officio  listening and participating                                                               
members  it would  add to  the conversation.   She  said she  has                                                               
heard  from  members of  the  legislature,  currently sitting  on                                                               
other  boards  and  corporations,  that  their  participation  is                                                               
viewed as aiding the discussion and an asset to the corporation.                                                                
                                                                                                                                
1:15:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON recalled  that Representative  Tarr and                                                               
he attended an ADGC meeting with  a number of senators.  He asked                                                               
whether  there  is  any  reflection   in  attendance  by  the  60                                                               
legislators of interest in those meetings as they are happening.                                                                
                                                                                                                                
SENATOR COSTELLO  replied there  is extreme  interest in  what is                                                               
happening at AGDC  board meetings.  However, the  board goes into                                                               
executive session that cannot be  attended by anyone else, and as                                                               
the  people's  branch of  government  it  is incumbent  upon  the                                                               
legislature to be there.   She noted the concerns focusing mainly                                                               
on  the  role  of  the legislature  and  its  participation,  but                                                               
pointed out  that the role  and scope of  the project is  of such                                                               
magnitude it warrants a legislative view.                                                                                       
                                                                                                                                
1:18:06 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TALERICO  commented  it  would  appear  that  with  the                                                               
nonvoting,  uncompensated capacity  this  does not  appear to  be                                                               
advisory as much  as the legislature having  a communication line                                                               
open  for  better  transparency  and  communication  between  the                                                               
legislature  and  the board.    He  asked  whether that  was  the                                                               
sponsor's intent with this legislation.                                                                                         
                                                                                                                                
SENATOR COSTELLO responded yes.   She said it is common worldwide                                                               
for  corporations  to  have  what  would  be  considered  viewing                                                               
participating members  who do not vote  but are there as  part of                                                               
the discussion and listening.                                                                                                   
                                                                                                                                
1:19:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR said she does  not have a problem with adding                                                               
legislators  because   the  role  would  be   nonvoting  members.                                                               
However, she noted, if the  board goes into executive session and                                                               
the  legislative members  are able  to participate,  there is  no                                                               
mechanism  for   that  information   to  be  shared   with  other                                                               
legislators.     In  the  event  the   legislative  members  were                                                               
participating  and there  was  a  clear communication  breakdown,                                                               
whether or not there is a way to  make it a greater asset for the                                                               
legislature  in the  sense that  it could  then, perhaps  through                                                               
executive session of the legislature, learn the information.                                                                    
                                                                                                                                
SENATOR  COSTELLO   answered  that   the  ex   officio  nonvoting                                                               
legislative participants  would be  under the same  guidelines as                                                               
the rest of  the board so would not necessarily  be able to share                                                               
the  information.   She  described it  as  a confidence  building                                                               
effort to have the legislative branch in those meetings.                                                                        
                                                                                                                                
1:20:42 PM                                                                                                                    
                                                                                                                                
[CSSB 125(RES) was held over.]                                                                                                  
                                                                                                                                
1:20:52 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:20 p.m. to 1:21 p.m.                                                                       
                                                                                                                                
                 HB 282-AGDC BOARD OF DIRECTORS                                                                             
                                                                                                                                
1:21:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO  announced that the  next order of  business is                                                               
HOUSE BILL  NO. 282, "An Act  relating to the board  of directors                                                               
of   the   Alaska   Gasline   Development   Corporation;   adding                                                               
legislators as  nonvoting members  of the  board of  directors of                                                               
the Alaska Gasline Development Corporation;  and providing for an                                                               
effective date."                                                                                                                
                                                                                                                                
1:21:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT,  prime sponsor  of HB 282,  advised that                                                               
the  bill  has two  provisions,  one  of which  Senator  Costello                                                               
identified  when   speaking  about  CSSB  125(RES).   The  second                                                               
provision,  he advised,  would amend  AS  31.25.020(b) and  would                                                               
require the  governor to appoint  four of the five  board members                                                               
of  the Alaska  Gasline Development  Corporation (ADGC)  who have                                                               
experience and  expertise in  natural gas  pipeline construction,                                                               
operation,  marketing,  finance,  large  project  management,  or                                                               
other expertise and  experience that is relative  to the purpose,                                                               
powers, and duties of AGDC.   One board member is not required to                                                               
have the  expertise previously outlined.   He explained  that the                                                               
original  language established  under Senate  Bill 138  for board                                                               
member  appointment qualifications  was  permissive.   Currently,                                                               
the board  consists of five  public members and  two departmental                                                               
commissioners.    He  noted  that   the  commissioners  from  the                                                               
Department  of  Revenue  (DOR)  and  the  Department  of  Natural                                                               
Resources (DNR) are prohibited from serving on the board.                                                                       
                                                                                                                                
REPRESENTATIVE  CHENAULT  advised  that the  original  intent  of                                                               
House Bill 369,  House Bill 4, House Bill 9,  and Senate Bill 138                                                               
was  to  have  a  board  free  from  political  interference  and                                                               
influence, and to make decisions  based on the state's and AGDC's                                                               
best interests.  However, this has  changed in the last few years                                                               
as most  of the board members  do not have the  qualifications of                                                               
previous board  members, nor have  the expertise that  was sought                                                               
under  Senate Bill  138.   Once pre-front-end  engineering design                                                               
(Pre-FEED) is  completed and if  the decision is made  to advance                                                               
to  front-end engineering  design (FEED),  it is  imperative that                                                               
the  AGDC board  be comprised  of  members who  provide the  best                                                               
expertise available.  Governor Bill  Walker stated, in requesting                                                               
the  resignation of  the  original president  of  AGDC, that  the                                                               
executive of  the corporation  have the ability  to take  AGDC to                                                               
the next level, and the same should be true of the board.                                                                       
                                                                                                                                
1:24:34 PM                                                                                                                    
                                                                                                                                
TOM   WRIGHT,  Staff,   Representative  Mike   Chenault,  advised                                                               
Representative Josephson  that the court case  was South Carolina                                                             
v.  Public  Interest Foundation  and  Edward  D. Sloan  v.  South                                                             
Carolina Transportation Infrastructure Bank,  [379 S.C. 160, 169,                                                             
666 S.E.2d 236, 241  (2008)].  He said it is  the only court case                                                               
the sponsor has  been able to locate that discusses  the issue of                                                               
legislators serving  as nonvoting  members.  When  discussing the                                                               
nonvoting  members,  he opined  that  if  the administration  was                                                               
concerned  about that  it  would have  legislation  out there  to                                                               
discuss  the Alaska  Seafood Marketing  Institute (ASMI).   There                                                               
are  not   statutes  that  specifically  state   that  ASMI  have                                                               
legislators  serving on  that  board.   As far  as  the Knik  Arm                                                               
Bridge  and  Toll Authority  (KABATA)  and  the Alaska  Aerospace                                                               
Corporation,  if  this was  a  concern  he  would expect  to  see                                                               
legislation from the administration addressing this.                                                                            
                                                                                                                                
REPRESENTATIVE JOSEPHSON  noted that the existing  statute on the                                                               
governing body  for AGDC  is only  advisory, because  the statute                                                               
states, "when  appointing the governor shall  consider", and then                                                               
it goes on to discuss the  expertise that is wanted.  He inquired                                                               
whether  the sponsor's  amendment  would  basically require  that                                                               
that expertise be there for sure.                                                                                               
                                                                                                                                
MR. WRIGHT replied correct.                                                                                                     
                                                                                                                                
1:26:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  asked  whether  there  is  a  termination                                                               
clause  for   current  board   members  who   do  not   have  the                                                               
qualifications the bill requires.                                                                                               
                                                                                                                                
MR.  WRIGHT  responded  that  the sponsor's  intent  is  for  the                                                               
current board  members to remain  and when new  appointments come                                                               
up  that the  qualifications be  part of  the consideration  when                                                               
nominating someone.                                                                                                             
                                                                                                                                
1:27:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO  said he  will hold  over HB  282 and  that his                                                               
plan is  to generate  a committee  substitute (CS)  that utilizes                                                               
both CSSB 125(RES) and HB 282.                                                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON  pointed out  that the  opinions offered                                                               
are what are  called "persuasive opinions" as they  are from out-                                                               
of-state.  Persuasive  opinions can have some  authority but they                                                               
generally are not  persuasive relative to Alaska  decisions.  The                                                               
attorney general  cites two Alaska decisions  and three attorneys                                                               
general  opinions and  states  that even  nonvoting  status is  a                                                               
problem.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  TARR  commented  that  she will  work  with  both                                                               
sponsors as she is interested  in addressing the issue of whether                                                               
the  members can  be added,  and actually  having a  majority and                                                               
minority member added as nonvoting members.                                                                                     
                                                                                                                                
[HB 282 was held over.]                                                                                                         
                                                                                                                                
        HB 253-ELCTRNC TAX RETURN;MINING LIC. TAX & FEES                                                                    
                                                                                                                                
1:29:08 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO  announced that the  next order of  business is                                                               
HOUSE BILL NO. 253, "An Act  requiring the electronic filing of a                                                               
tax   return  or   report  with   the   Department  of   Revenue;                                                               
establishing a  civil penalty for failure  to electronically file                                                               
a  return  or report;  relating  to  exemptions from  the  mining                                                               
license tax;  relating to the  mining license tax  rate; relating                                                               
to mining  license application, renewal, and  fees; and providing                                                               
for an effective  date."  [Before the committee  was the proposed                                                               
committee  substitute  (CS)  for  HB  253,  Version  29-GH2924\N,                                                               
Nauman, 3/17/16, adopted as the working document on 3/28/16.]                                                                   
                                                                                                                                
[During  this hearing,  amendments to  Version N  of HB  253 were                                                               
discussed  or  adopted.   Because  of  their length,  the  longer                                                               
amendments are  found at the  end of  the minutes for  this bill.                                                               
The shorter amendments are included in the main text.]                                                                          
                                                                                                                                
1:30:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  the corrected  version of                                                               
Amendment 1, labeled 29-GH2924\N.15,  Nauman, 3/30/16.  [The text                                                               
of  Amendment  1 is  provided  at  the  end  of the  minutes  for                                                               
HB 253.]                                                                                                                        
                                                                                                                                
REPRESENTATIVE HERRON objected for discussion purposes.                                                                         
                                                                                                                                
REPRESENTATIVE  SEATON  explained  that Amendment  1  relates  to                                                               
production royalties  on mining.   On page  1, line  2, following                                                               
"fees"  the  amendment  would   insert  "relating  to  production                                                               
royalties on mining;" within the title.   He said the meat of the                                                               
amendment  goes to  Section 5.    Under Amendment  1 the  royalty                                                               
would be recalculated from 3 percent  of net profits to 3 percent                                                               
of either net  smelter return or the gross value  at the point of                                                               
production.  The reason for  two different definitions is because                                                               
the minerals  coming out  of mines are  handled in  two different                                                               
ways  and this  would  establish how  that is  done.   Section  6                                                               
establishes what  the net  smelter return is,  which is  when the                                                               
mineral goes into a smelter and  comes out as a finished product;                                                               
an amount  is subtracted for  the processing fees and  what comes                                                               
out is the value at that  point of production.  Section 7 defines                                                               
gross value  at the point  of reduction.  Those  calculations are                                                               
different because many times mines  shift concentrates; a product                                                               
that hasn't gone through a smelter  may be sold at that point, so                                                               
when it comes off  of the mine and is shipped  the gross value at                                                               
the point of production is established there.                                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON  further  explained  that  the  additional                                                               
verbiage in the  sections on net smelter returns  and gross value                                                               
at the  point of production  would require  that this must  be an                                                               
arm's  length transaction  similar to  a transaction  between two                                                               
different parties, people,  or companies.  In the  event a person                                                               
sells it to  themselves, the person could not declare  all of the                                                               
loss  in   an  inappropriate   place  or   declare  inappropriate                                                               
expenses.   Representative Seaton  pointed out that  Sections 1-4                                                               
are  also included  in  Amendment  1.   He  said  royalty is  the                                                               
state's ownership value in the minerals  that are there and it as                                                               
inappropriate to  have a tax  credit applied against  the state's                                                               
ownership  value.    Exploration  tax credits  could  be  applied                                                               
against taxes, whether  that's the mining license  tax or against                                                               
corporation income tax, but it  shouldn't reduce the value of the                                                               
state's portion of the minerals.                                                                                                
                                                                                                                                
1:34:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TALERICO asked  how the  gross  value at  the point  of                                                               
production  is determined,  given there  is a  lot of  processing                                                               
from pit to transportation system.                                                                                              
                                                                                                                                
ED  FOGELS,  Deputy  Commissioner, Office  of  the  Commissioner,                                                               
Department of  Natural Resources  (DNR), responded that  DNR does                                                               
not track these  costs and does not have the  expertise to figure                                                               
it out.   The  department does  not know  how it  would determine                                                               
these values  at this point, so  it is something that  would have                                                               
to be determined going forward.                                                                                                 
                                                                                                                                
CO-CHAIR TALERICO  asked whether  DNR would  be reliant,  to some                                                               
degree, upon the producer.  He  said he can think of a particular                                                               
product that,  although it may  seem to be wildly  profitable, it                                                               
is  after  it is  crushed,  screened,  smelted, transported,  and                                                               
sold, so there are all of  those costs.  Potentially, there is an                                                               
argument that that  it is not the point of  production, the point                                                               
of  production  is  actually  pulling   it  out  of  the  ground.                                                               
Everything, beyond all of the  things he just mentioned are value                                                               
added to  the product.   He  asked whether  there is  an argument                                                               
that  could be  poised that  "this  is point  of production"  and                                                               
"this is processed product or value-added product."                                                                             
                                                                                                                                
MR. FOGELS replied  is not in a position to  answer the question,                                                               
but he does know  that if this were to go  forward DNR would have                                                               
to rely on  the operator to tell the department  what those costs                                                               
are on either side.  As  to how the department verifies the costs                                                               
or  audits the  operator somewhere  down  the road,  he does  not                                                               
know.   The  department would  be able  to give  the committee  a                                                               
clear  picture of  the fiscal  benefits to  the state  from these                                                               
changes, or the impact to the operator at this point.                                                                           
                                                                                                                                
1:36:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON directed attention  to Amendment 1, page 4,                                                               
lines 7-10, [subsection (b)], and  said they address exactly what                                                               
Co-Chair Talerico is talking about.  The language states:                                                                       
                                                                                                                                
               (b) Except as provided in (c) of this                                                                            
     section, the value of a  resource immediately after its                                                                    
     removal  from the  mine is  the price  received by  the                                                                    
     person engaged  in the mining of  the resource adjusted                                                                    
     for value added after the resource was produced.                                                                           
                                                                                                                                
REPRESENTATIVE  SEATON  then referred  to  page  4, lines  11-13,                                                               
subsection (c), of the amendment, which state:                                                                                  
                                                                                                                                
          (c) The price received by the person engaged in                                                                       
     the  mining of  the resources  may be  rejected by  the                                                                    
     department  as   the  gross  value  at   the  point  of                                                                    
     production when the                                                                                                        
               (1) price received is less than the fair                                                                         
     market value;                                                                                                              
               (2) price received does not reflect the                                                                          
     total value received by the seller in the transaction;                                                                     
               (3)   parties   to    the   transaction   are                                                                    
     affiliated; or                                                                                                             
               (4) price received was not negotiated in an                                                                      
     arm's length transaction between the buyer and seller.                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  said this language is  exactly as outlined                                                               
by  Co-Chair Talerico.   In  all these  tax cases,  including oil                                                               
taxes,  the producers  will tell  the state  what the  costs are.                                                               
Those are then  audited and would only be  rejected if considered                                                               
unreasonable or  unfair.   The state has  an audit  procedure and                                                               
not a  valuation determining feature  under the way this  bill is                                                               
crafted.   Subsection  (c)  provides the  parameters  of how  the                                                               
state could not accept a price that is given by the producer.                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON  next referred  to  page  4, lines  20-23,                                                               
subsection (d), of the amendment, which state:                                                                                  
                                                                                                                                
               (d) If the department rejects the price                                                                          
     reported by  the person  engaged in  the mining  of the                                                                    
     resource,  the  department  shall substitute  the  fair                                                                    
     market value  of the  resource on the  date and  at the                                                                    
     place  of production  for purposes  of determining  the                                                                    
     production royalty liability under this chapter.                                                                           
                                                                                                                                
REPRESENTATIVE  SEATON pointed  out that  under this  language if                                                               
the  department substitutes  fair market  value it  will have  to                                                               
have reasoning  for doing that,  such as substantiation  that the                                                               
value is  less than fair  market value  or any of  the conditions                                                               
[listed under  subsection (c)].   He explained that that  is what                                                               
is being considered in the bill  for determining the value of the                                                               
material in order to calculate the state's royalty.                                                                             
                                                                                                                                
1:39:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  surmised  that, while  the  accounting                                                               
called  for  under  Amendment  1   is  different  than  what  the                                                               
department is  doing now, the  department already has to  look at                                                               
varying  types  of information  in  documents  to inspect  a  net                                                               
profit value.   While, Amendment 1 would be  a different approach                                                               
for that sort  of analysis, he presumed it is  something that DNR                                                               
or the Department of Revenue (DOR) would have to do now.                                                                        
                                                                                                                                
MR. FOGELS  answered he has not  reviewed this with staff  as far                                                               
as  all  of  the things  that  would  have  to  be done  by  DNR.                                                               
Clearly, as he reads the bill,  there is a lot more involved here                                                               
that  DNR would  have  to be  looking at  in  order to  determine                                                               
whether the  amounts declared by  the operator were true  or not.                                                               
The department  is already collecting  some of  that information,                                                               
but probably not all of it.                                                                                                     
                                                                                                                                
BRANDON  SPANOS, Deputy  Director,  Tax  Division, Department  of                                                               
Revenue  (DOR),  added that  currently  DOR's  Tax Division  does                                                               
review those records  because it is just a percentage  of the net                                                               
tax  calculated  in  the  division.    Through  a  Memorandum  of                                                               
Understanding  (MOU) the  division shares  that information;  DNR                                                               
provides DOR with  a list of royalty recipients that  it wants to                                                               
have that information for, DOR gives  DNR the net income, and DNR                                                               
takes three  percent of  that.   Someone would have  to do  a lot                                                               
more  work under  the provisions  of Amendment  1, because  as he                                                               
reads the amendment it only  applies to the royalty and therefore                                                               
tax wouldn't.                                                                                                                   
                                                                                                                                
1:41:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON stated that  even if there is additional                                                               
work,  the testimony  on  2/19/16, was  that  royalty on  private                                                               
land, using  net smelter returns  in Alaska was 4.5  percent, and                                                               
that  royalty  on mental  health  trust  land using  net  smelter                                                               
return  was  5  percent.    Although,  this  bill  began  by  the                                                               
administration  as a  28 percent  increase, or  numerical percent                                                               
point  increase   of  2,   it  was   identified  and   echoed  by                                                               
Representative  Hawker on  2/15/16, "that  royalty was  this pure                                                               
thing and  we need  to get it  right."   Representative Josephson                                                               
noted he is paraphrasing and  not directly quoting Representative                                                               
Hawker's comment.   He asked  whether Amendment 1 would  help the                                                               
state do that.                                                                                                                  
                                                                                                                                
MR. SPANOS  replied he is  unsure he  is qualified to  answer the                                                               
question, but  certainly it  is a  different calculation  that on                                                               
its face would appear fair.                                                                                                     
                                                                                                                                
1:43:02 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO understood Mr. Spanos  to be saying that DOR is                                                               
currently structured to do exactly  what is being done with these                                                               
mines as  far as tax  collection in the  Tax Division, but  it is                                                               
the opinion  of Mr. Spanos  there more expense would  be involved                                                               
[under Amendment 1].                                                                                                            
                                                                                                                                
MR. SPANOS clarified that the Tax  Division would no longer be of                                                               
assistance to DNR  in order to provide information  to assist DNR                                                               
get to its  final number, whether there is  additional expense or                                                               
not, it is up  to DNR to determine.  Currently,  the way DNR gets                                                               
to  its 3  percent is  that the  Tax Division  does the  work and                                                               
provides DNR with those numbers.                                                                                                
                                                                                                                                
1:43:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  requested that an example  of real dollars                                                               
be  provided  to   show  what  the  state  would   get  from  the                                                               
amendment's provisions.                                                                                                         
                                                                                                                                
REPRESENTATIVE  SEATON  responded that  in  2014  the Pogo  Mine,                                                               
located on state land, produced  342,147 ounces of gold, which at                                                               
approximately  3   percent  of   net  smelter  return   would  be                                                               
$13,000,942.   Therefore,  this  tax would  generate  in a  range                                                               
somewhat  equal to  the  amount  that the  fish  tax increase  is                                                               
generating.   These two industries  are both large  and expansive                                                               
across the  state, with the  fishing industry employing  the most                                                               
amount  of people  and  the mining  industry  having the  highest                                                               
wages in the  state.  He reminded the committee  that the royalty                                                               
only applies to those mines on  state land, but it is the state's                                                               
ownership value  on that that that  would relate to.   One of the                                                               
problems is  that the state  has not been receiving  an ownership                                                               
share,  but rather  a  net profit  share.   The  question is,  if                                                               
someone is inefficient  or has high expenses  and doesn't control                                                               
their  expenses, should  the  state receive  less  value for  its                                                               
ownership of  the minerals extracted or  should it be on  a value                                                               
of the minerals?   That is a  policy call, and it  is generally a                                                               
policy call that the legislature has  made on oil and gas, and it                                                               
is  12.5  percent  minimum  royalty, that's  the  value  that  is                                                               
extracted.   It is not  dissimilar to  oil and gas  because there                                                               
are certain things  taken in production tax, there is  a point of                                                               
production,  and those  upstream costs  can be  subtracted.   For                                                               
corporate  income tax,  all of  the  expenses can  be taken  off.                                                               
This is done all the time with  well lease credits - there has to                                                               
be  a computation  of  well lease  expenditures,  those that  are                                                               
qualified, and  this is no different  than that.  There  has been                                                               
no reason  to collect the  numbers because  it has been  based on                                                               
total profit so only the  total profit number has been collected,                                                               
not the  intermediate number  and not allowing  all of  the other                                                               
extraneous  expenses to  be considered.   He  said Representative                                                               
Hawker's point was  that tax credits should not be  allowed to be                                                               
taken off  against the  state's oil royalty  because that  is the                                                               
state's ownership value  and the state shouldn't  be reducing it.                                                               
If the state's ownership value  is just a profit-based value then                                                               
that  is not  based  on ownership,  it is  based  on a  company's                                                               
efficiency of production.                                                                                                       
                                                                                                                                
1:48:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON   inquired  as  to   the  administration's                                                               
position on Amendment 1.                                                                                                        
                                                                                                                                
MR.  FOGELS  responded  that,  at this  point,  there  have  been                                                               
discussions on  this concept, but  since this amendment  was just                                                               
floated today  he is not  prepared to offer  the administration's                                                               
support or opposition to this.   The amendment needs to be looked                                                               
at in more detail.                                                                                                              
                                                                                                                                
REPRESENTATIVE  HERRON  asked  why  the state  hasn't  done  this                                                               
before.                                                                                                                         
                                                                                                                                
MR. FOGELS  answered that  the 3 percent  royalty was  enacted by                                                               
statute  in 1989,  and  DNR's  staff during  that  time did  some                                                               
economic  modeling to  determine that  royalty rate.   There  has                                                               
never been any cause to have  DNR, DOR, or other agency relook at                                                               
the royalty structure.   He said he cannot answer  as to why, but                                                               
added that DNR has  not been asked to take another  look at it in                                                               
those intervening years.                                                                                                        
                                                                                                                                
1:49:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  OLSON requested  that in  the event  DNR performs                                                               
modeling  in the  next  couple  of weeks  to  forward  it to  the                                                               
committee.                                                                                                                      
                                                                                                                                
MR. FOGELS agreed.                                                                                                              
                                                                                                                                
1:49:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  requested the  Tax  Division  be able  to                                                               
comment.                                                                                                                        
                                                                                                                                
JERRY  BURNETT,  Deputy  Director, Office  of  the  Commissioner,                                                               
Department  of Revenue  (DOR), commented  that this  is an  issue                                                               
that this commissioner and previous  commissioners have looked at                                                               
and talked to  Representative Seaton about.  It  is something the                                                               
department has  committed to looking  at in the future  and noted                                                               
that there  is a short period  of time between today  and the end                                                               
of the session.  The concept  is correct in terms of an ownership                                                               
percentage  similar to  other things,  so structurally  DOR would                                                               
think this is a rational way  to go, but there is information the                                                               
department does not have at  this point.  Representative Seaton's                                                               
estimate of  $13 million is not  an exact number and  it could be                                                               
more or less than  that.  This is not a  time when the department                                                               
has the resources to commit to doing that further analysis.                                                                     
                                                                                                                                
CO-CHAIR TALERICO noted  that time is not on the  bill's side and                                                               
Amendment 1 is substantially  different from the administration's                                                               
original bill.                                                                                                                  
                                                                                                                                
1:51:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  withdrew Amendment 1, but  noted that this                                                               
is a  very important concept to  be worked on and  that should be                                                               
addressed  at a  future time.   It  is an  important part  of the                                                               
conversation  because the  state's ownership  share is  not being                                                               
realized through a net profit.                                                                                                  
                                                                                                                                
1:52:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  Amendment 2,  labeled 29-                                                               
GH2924\N.7,  Nauman,  3/29/16.    [The text  of  Amendment  2  is                                                               
provided at the end of the minutes for HB 253.]                                                                                 
                                                                                                                                
1:53:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  withdrew  Amendment 2,  stating  that  it                                                               
involves the  same problem as  the royalty and would  replace the                                                               
royalty  with a  3  percent  severance tax,  which  is an  easier                                                               
calculation than either net smelter  return or gross value at the                                                               
point of  production.  He  opined it is a  valuable consideration                                                               
to have  and it would still  get the state to  basically the same                                                               
amount, except the  way the amendment is crafted it  is all mines                                                               
across the  state and so doesn't  really hit the royalty.   Thus,                                                               
for  the  technical  reasons  that  this  amendment  is  removing                                                               
royalty and the  state is required by law to  have royalty, he is                                                               
withdrawing Amendment  2.  He said  he would put it  on the table                                                               
for  future   conversations.    Structuring  a   royalty  upon  a                                                               
severance tax  is something  that could  be considered  if people                                                               
are  thinking that  a net  smelter return  or value  at point  of                                                               
production would be too difficult.                                                                                              
                                                                                                                                
1:54:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  Amendment 3,  labeled 29-                                                               
GH2924\N.8, Shutts/Nauman, 3/29/16, which read:                                                                                 
                                                                                                                                
     Page 1, line 2, following "fees;":                                                                                       
          Insert "establishing a legislative working group                                                                    
     to study the tax structure for mining;"                                                                                  
                                                                                                                                
     Page 2, following line 14:                                                                                                 
     Insert a new bill section to read:                                                                                         
         "* Sec. 5. The uncodified law of the State of                                                                        
     Alaska is amended by adding a new section to read:                                                                         
          LEGISLATIVE WORKING GROUP. (a) A legislative                                                                          
     working group is established to                                                                                            
               (1)  review the state's fiscal regime for                                                                        
     mining taxation, including state mining license taxes,                                                                     
        royalties, rents, and corporate income tax with                                                                         
     consideration of federal and municipal taxation;                                                                           
               (2)  develop terms for a comprehensive                                                                           
     reform of the mining tax regime; and                                                                                       
               (3)  recommend changes to the legislature                                                                        
     for consideration  during the First Regular  Session of                                                                    
     the Thirtieth Alaska State Legislature.                                                                                    
          (b)  The working group consists of                                                                                    
               (1)  two co-chairs, one of whom is a member                                                                      
     of the house  appointed by the speaker of  the house of                                                                    
     representatives, and  one of  whom is  a member  of the                                                                    
     senate appointed by the president of the senate; and                                                                       
               (2)  members appointed by the co-chairs;                                                                         
     members must  be legislators  and must  include members                                                                    
     of the majority and minority caucuses.                                                                                     
          (c)  The co-chairs of the working group may form                                                                      
     an  advisory group  to the  working group,  composed of                                                                    
     members who are not  legislators and who have expertise                                                                    
     and skills to  assist in the review  and development of                                                                    
     a new  plan for the  tax structure and rates  on mining                                                                    
     licenses. The members of an  advisory group may include                                                                    
     commissioners  or   employees  of   state  departments,                                                                    
     members of  the mining industry or  trade associations,                                                                    
     and economists.                                                                                                            
          (d)  The working group is to be supported by                                                                          
     legislative  consultants  under  contract  through  the                                                                    
     Legislative Budget and Audit Committee."                                                                                   
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 28:                                                                                                           
          Delete "Section 6 of this Act takes"                                                                                  
          Insert "Sections 5 and 7 of this Act take"                                                                            
                                                                                                                                
     Page 2, line 29:                                                                                                           
          Delete "sec. 7"                                                                                                       
          Insert "sec. 8"                                                                                                       
                                                                                                                                
REPRESENTATIVE HERRON objected for discussion purposes.                                                                         
                                                                                                                                
1:54:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON explained that  Amendment 3 would establish                                                               
a legislative  working group.   The committee has found  that the                                                               
mining  taxes, whether  royalty, rents,  or mining  license fees,                                                               
are quite  confusing and a longer  dive needs to be  taken to get                                                               
it right.   In parallel  with the Cook Inlet  Legislative Working                                                               
Group  established under  consideration  of oil  taxes [HB  247],                                                               
Amendment 3 would establish a  legislative working group to study                                                               
the tax structure  of mining.  He posited that  this would be the                                                               
way to  come back and  have the industry  and both bodies  of the                                                               
legislature be involved to bring  the administration to the table                                                               
in other than  a quick reactive way, but to  craft something that                                                               
would be good for the legislature.                                                                                              
                                                                                                                                
1:56:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON withdrew  his objection.   There  being no                                                               
further objection, Amendment 3 was adopted.                                                                                     
                                                                                                                                
1:56:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  the corrected  version of                                                               
Amendment 4, labeled 29-GH2924\N.16,  Nauman, 3/30/16.  [The text                                                               
of  Amendment  4 is  provided  at  the  end  of the  minutes  for                                                               
HB 253.]                                                                                                                        
                                                                                                                                
REPRESENTATIVE SEATON explained Amendment  4 would not change the                                                               
royalty, it  would still be  the 3  percent net royalty,  but the                                                               
amendment provides that  the tax credits cannot  be taken against                                                               
the  royalty.   The royalty  is the  state's ownership  value and                                                               
therefore the  tax credit cannot  be taken to reduce  the state's                                                               
ownership value.  He said he  does not like the way the ownership                                                               
value  is  created,  but  once  it  is  created  the  legislature                                                               
shouldn't be reducing that ownership value through a tax credit.                                                                
                                                                                                                                
REPRESENTATIVE HERRON objected for discussion purposes.                                                                         
                                                                                                                                
REPRESENTATIVE  SEATON  further  stated  that Amendment  4  is  a                                                               
section  of  the  royalty bill  that  doesn't  change  royalties,                                                               
royalties are still  calculated exactly the same.   The amendment                                                               
would prohibit  applying an exploration  incentive tax  credit to                                                               
reduce  the state's  ownership  value in  the  minerals that  are                                                               
extracted.   He  reiterated that  he does  not like  the way  the                                                               
calculation of  ownership value is  made, but at least  the state                                                               
should not allow  that to be reduced by 50  percent by applying a                                                               
tax credit against it.  It is a  royalty and even though it is on                                                               
a net  royalty it is  a royalty and  the state should  not reduce                                                               
its ownership value.                                                                                                            
                                                                                                                                
1:58:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  recalled  that  at  the  bill's  first                                                               
hearing on 2/15/16, Fred  Parady, Deputy Commissioner, Department                                                               
of Commerce,  Community & Economic  Development, advised  that he                                                               
spent  approximately  30-plus  years  working for  and  with  the                                                               
mining industry.   Mr. Parady  noted that royalty is  uniquely an                                                               
ownership  share  and  should  not   be  considered  as  part  of                                                               
government take.   The point  made in that committee  hearing was                                                               
that  royalty  should be  unaffected  by  other things,  such  as                                                               
discounts and credits,  because the state does not  treat the oil                                                               
and gas industry  in that manner and it should  not be done here.                                                               
He said he therefore supports Amendment 4.                                                                                      
                                                                                                                                
1:59:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON withdrew  his objection.   There  being no                                                               
further objection, Amendment 4 was adopted.                                                                                     
                                                                                                                                
1:59:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT   returned  to  Amendment  3   and  drew                                                               
attention to page 2, lines 5-6, of the amendment, which read:                                                                   
                                                                                                                                
          (d) The working group is to be supported by                                                                           
       legislative consultants under contract through the                                                                       
     Legislative Budget and Audit Committee.                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT  pointed out that currently  there are no                                                               
consultants  on mining  taxes, which  is  an issue  if this  bill                                                               
passes and Amendment 3 stays in  the bill.  A discussion with the                                                               
Legislative  Budget and  Audit Committee  chair  is necessary  to                                                               
ascertain  that  if this  working  group  is formed  whether  the                                                               
legislature has those folks available to consult with.                                                                          
                                                                                                                                
CO-CHAIR TALERICO said the aforementioned is so noted.                                                                          
                                                                                                                                
2:00:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  Amendment 5,  labeled 29-                                                               
GH2924\N.14, Nauman, 3/30/16, which read:                                                                                       
                                                                                                                                
     Page 2, line 3, following "$100,000":                                                                                      
          Insert "and not over $1,000,000"                                                                                  
                                                                                                                                
     Page 2, line 4:                                                                                                            
          Delete "."                                                                                                            
                                                                                                                                
     Page 2, following line 4:                                                                                                  
     Insert new material to read:                                                                                               
          "over $1,000,000.......................$76,000 plus                                                               
     9 percent of the excess over 1,000,000."                                                                               
                                                                                                                                
REPRESENTATIVE HERRON objected.                                                                                                 
                                                                                                                                
2:00:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  explained  Amendment 5  by  first  noting                                                               
that, basically,  the purpose  of HB  253 is  to raise  money and                                                               
Version N  took that amount from  9 percent down to  8 percent at                                                               
the  lower tax  bracket.   Amendment 5  would look  at a  new tax                                                               
bracket  at $1  million,  significantly higher  than the  current                                                               
structure  of 8  percent  in  excess of  $100,000,  and at  these                                                               
higher  values  the  amendment  would  add  one  more  additional                                                               
percent.   That would  gain the  state back  some of  the revenue                                                               
that Version N  has lost, but would impact  fewer players because                                                               
there are  quite a few  players in  the over $100,000  range that                                                               
would not  be above the  $1 million  range.  The  amendment would                                                               
not return back  all of the money to the  original amount, but it                                                               
would be  somewhat more.   This amendment  would affect  just the                                                               
most profitable  taxpayers at an additional  one percent, wherein                                                               
it starts at $1  million which is 10 times the  value of where it                                                               
started at 8 percent.                                                                                                           
                                                                                                                                
2:03:04 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 2:03 p.m. to 2:07 p.m.                                                                       
                                                                                                                                
2:07:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HERRON  noted   that   Mr.  Burnett   previously                                                               
estimated  what the  governor's bill  would generate  in revenue.                                                               
He asked  Mr. Burnett to  ballpark an estimate of  the difference                                                               
between the governor's  bill, Version N, and  this amendment, and                                                               
the new revenues.  He  noted that this information would probably                                                               
be appropriate for Amendments 6 and 7.                                                                                          
                                                                                                                                
MR. BURNETT  replied that  for next  year the  difference between                                                               
the governor's original bill and  Version N is that the estimated                                                               
revenue would  be reduced  by about $3.2  million, from  about $6                                                               
million under  the original bill  down to about $3  million under                                                               
Version N.   The department does  not have a new  fiscal note for                                                               
it  because DOR  thought  there may  be  some amendments  offered                                                               
today.  Based on the last  year of tax filings there are fourteen                                                               
taxpayers over $100,000, nine of  which were between $100,000 and                                                               
$1 million, and  the others were over $1 million.   The taxpayers                                                               
between  $100,000  and  $1 million  are  primarily  large  placer                                                               
miners and  part landowners that  own part of the  property under                                                               
one  of the  larger mines.   The  total revenue  from those  nine                                                               
taxpayers  would  be  in  the  lower  hundreds  of  thousands  of                                                               
dollars,  so this  would restore  most  of the  revenue from  the                                                               
governor's bill  but would reduce  the tax rate for  those people                                                               
between $100,000  and $1 million to  8 percent rather than  the 9                                                               
percent  in  the  original  bill.    Those  nine  taxpayers  earn                                                               
significantly less  revenue than the five  largest taxpayers that                                                               
are over $1 million.                                                                                                            
                                                                                                                                
2:10:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  surmised that Amendment 5  would basically                                                               
restore the co-chair's committee substitute amount.                                                                             
                                                                                                                                
MR. BURNETT responded  that it would restore the  majority of the                                                               
money that  was taken  out because the  nine taxpayers  that earn                                                               
between $100,000 and $1 million  would have much less impact than                                                               
the five taxpayers over $1 million in revenue.                                                                                  
                                                                                                                                
2:11:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON noted  that the  purpose of  HB 253  is to                                                               
generate revenue, and  the structure of Amendment 5  is to remove                                                               
any additional  burden on  the majority  of smaller  players that                                                               
would have to pay  that tax.  The 9 percent  in the original bill                                                               
would  be moved  up to  those  taxpayers earning  $1 million  and                                                               
above, instead of  at $100,000.  Thus, more than  one-half of the                                                               
taxpayers would not be impacted by Amendment 5.                                                                                 
                                                                                                                                
REPRESENTATIVE  HERRON noted  the  five big  mines  would have  9                                                               
percent  and asked  what the  amount of  money is  that would  be                                                               
generated by the smaller miners between $100,000 and $1 million.                                                                
                                                                                                                                
MR. BURNETT  answered that he does  not have the exact  amount as                                                               
DOR  has  not  had  an  opportunity to  calculate  that,  but  he                                                               
estimated  it would  be in  the  lower hundreds  of thousands  of                                                               
dollars total between all of them.                                                                                              
                                                                                                                                
REPRESENTATIVE CHENAULT asked whether  Mr. Burnett's earlier said                                                               
that Amendment 5 would bring in an additional $3 million.                                                                       
                                                                                                                                
MR. BURNETT replied it would be approximately $3 million.                                                                       
                                                                                                                                
REPRESENTATIVE  CHENAULT  surmised it  would  be  from the  large                                                               
mines and not the small mines.                                                                                                  
                                                                                                                                
MR.  BURNETT agreed,  and said  DOR estimated  $3.2 million  from                                                               
each 1 percent at this level.                                                                                                   
                                                                                                                                
2:13:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO  understood that every percentage  point talked                                                               
about is a 14.25 percent tax increase.                                                                                          
                                                                                                                                
MR. BURNETT  responded that at 7  percent every [1 percent]  is a                                                               
little  over 14.2857  percent, but  next  time in  moving from  8                                                               
percent to 9 percent it is not so much, it is only 12.5 percent.                                                                
                                                                                                                                
CO-CHAIR TALERICO agreed.                                                                                                       
                                                                                                                                
2:14:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON maintained his objection to Amendment 5.                                                                  
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
and  Tarr  voted  in  favor  of  the  adoption  of  Amendment  5.                                                               
Representatives  Olson, Herron,  Chenault,  Talerico, and  Nageak                                                               
voted against  it.  Therefore,  Amendment 5 failed to  be adopted                                                               
by a vote of 3-5.                                                                                                               
                                                                                                                                
2:15:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 6, labeled 29-                                                                
GH2924\N.1, Nauman, 3/29/16, which read:                                                                                        
                                                                                                                                
     Page 1, line 10, through page 2, line 4:                                                                                   
          Delete all material and insert:                                                                                       
           "* Sec. 2. AS 43.65.010(c) is repealed and                                                                       
     reenacted to read:                                                                                                         
          (c)  The license tax on mining is imposed on the                                                                      
     net income  of the  taxpayer from  the property  in the                                                                    
     state, computed with  allowable depletion, plus royalty                                                                    
     received  in connection  with  mining  property in  the                                                                    
     state.  The tax  rates applicable  to the  amount of  a                                                                    
     taxpayer's net income are as follows:                                                                                      
     over $100,000 and not over $250,000 ........five percent                                                                   
     over $250,000 and not over $500,000 ..............$7,500                                                                   
     plus seven percent of the excess over $250,000                                                                             
     over $500,000 and not over $1,000,000 ...........$25,000                                                                   
     plus nine percent of the excess over $500,000                                                                              
     over $1,000,000 .................................$70,000                                                                   
     plus 11 percent of the excess over $1,000,000."                                                                            
                                                                                                                                
     Page 2, line 19:                                                                                                           
          Delete "amended"                                                                                                      
          Insert "repealed and reenacted"                                                                                       
                                                                                                                                
REPRESENTATIVE HERRON objected.                                                                                                 
                                                                                                                                
2:15:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   explained  that  Amendment   6  would                                                               
decrease some of the rates  for small mines making under $100,000                                                               
just on  the margins.  The  state is receiving just  $51,000 from                                                               
approximately 29 mines.  He said  he is okay with exempting those                                                               
folks  who he  assumes may  be hobbyists.   However,  Amendment 6                                                               
would  raise  the  rate  higher   than  was  recommended  by  the                                                               
governor.  He  outlined the applicable tax rates  proposed in the                                                               
amendment.  He  then reviewed the thinking  behind the amendment.                                                               
He recalled testimony  that South Dakota has a  net profit system                                                               
and taxes at 14 percent, and  he believed that Wisconsin taxes at                                                               
9 or 11 percent.   Amendment 6 would provide a  tax break for the                                                               
smaller  mining operations  and  encourage  development of  small                                                               
mines while increasing taxes on larger  mines.  In tax years 2013                                                               
and  2014, the  state generated  $51,000 and  $42,000 from  mines                                                               
with incomes  under $100,000, but  generated most of  its revenue                                                               
from  mines over  $100,000, respectively  $471  million and  $571                                                               
million.   The  effective  rate, according  to his  calculations,                                                               
works out  to 6.6-7 percent.   When all revenue from  all sources                                                               
is considered, such  as the mining license  tax, corporate income                                                               
tax,  and royalty  rent, the  industry contributes  approximately                                                               
3.24  percent of  total state  revenue.   Alternatively, the  oil                                                               
industry contributes approximately 54  percent at today's prices.                                                               
He said  his concern is that  [the state] does not  know the true                                                               
value of  the concentrate.   Documents reflect that the  value of                                                               
the concentrate  exceeds $2 billion,  but then there is  the cost                                                               
of processing the concentrate.   Relative to the other net profit                                                               
states,  he posited,  the amendment  is warranted  because he  is                                                               
concerned  that something  is being  left on  the table  that the                                                               
legislature  doesn't fully  appreciate or  understand.   He added                                                               
that this  industry provides fantastic  jobs, [with  wages] often                                                               
$90,000 and higher.                                                                                                             
                                                                                                                                
2:20:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON turned to Mr.  Burnett and asked the result                                                               
when comparing the columns in Version N and Amendment 6.                                                                        
                                                                                                                                
MR. BURNETT  explained that  the department  would have  to break                                                               
this out.   It  is based on  estimated next-year  numbers wherein                                                               
the 2  percent increase  in the original  bill was  roughly $6-$7                                                               
million based on  current prices, so this  would be approximately                                                               
$12-$13  million because  most of  the income  is at  the highest                                                               
level.    [The  amendment]  averages   out  the  lower  ones  and                                                               
eliminates some  taxpayers, but it  is another $9-$10  million at                                                               
current prices over Version N.                                                                                                  
                                                                                                                                
CO-CHAIR NAGEAK pointed out that  the costs of doing business are                                                               
higher in Alaska than they are  in the states used as examples by                                                               
Representative  Josephson.    Therefore that  comparison  is  not                                                               
useful in his opinion.                                                                                                          
                                                                                                                                
REPRESENTATIVE TARR  noted that these  taxes are net  profits and                                                               
even though it could be more  expensive, the mines are not paying                                                               
any taxes  until they have  a net profit and  this is on  the net                                                               
profit.                                                                                                                         
                                                                                                                                
REPRESENTATIVE SEATON  offered his  appreciation for  getting rid                                                               
of the  burden on  the smaller taxpayers  and said  the rationale                                                               
for a  graduated rate makes  more sense  than leaving off  all of                                                               
those  under $100,000.   He  surmised it  would take  away burden                                                               
from the department as well,  because the department is having to                                                               
do a  lot of taxpayer  information and  taxpayer forms for  not a                                                               
lot  of money.    But, he  continued, it  has  to be  compensated                                                               
somewhere and he is still looking  at where to get income for the                                                               
state  if the  legislature doesn't  raise  the rate  on the  most                                                               
profitable companies  to correspond with some  reasonable returns                                                               
and therefore he supports this amendment.                                                                                       
                                                                                                                                
REPRESENTATIVE HERRON  disclosed he  is a  small miner  and, like                                                               
other miners, he  would like this proposal.   But, unfortunately,                                                               
it goes  back to when  the legislature essentially  abolished the                                                               
income tax and  so he is averse to not  requiring the little guys                                                               
to pay taxes as  well.  It's always easy to undo  a tax, but more                                                               
difficult to create a tax and therefore he likes the status quo.                                                                
                                                                                                                                
2:24:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON  suggested that Amendments  5, 6, and  7 may                                                               
be appropriate for the proposed working group.                                                                                  
                                                                                                                                
REPRESENTATIVE  SEATON  commented  that  the  state  must  obtain                                                               
revenue from somewhere and if members  choose to not tax the most                                                               
profitable  companies   on  their   net  profits  it   means  the                                                               
legislature  will have  to take  more out  of the  permanent fund                                                               
dividend  allowances.   Therefore,  when  discussing the  state's                                                               
budget,  there must  be alternatives  to not  spending money  the                                                               
state does  not have.   He  pointed out  that the  committee does                                                               
have a process in considering  [alternatives] to determine how to                                                               
obtain significant  revenue, otherwise there will  not be headway                                                               
in reducing the state's $4 billion budget deficit.                                                                              
                                                                                                                                
CO-CHAIR  TALERICO  noted  his appreciation  for  the  ideas  and                                                               
concepts, but posited that a 56  percent tax increase in one fell                                                               
swoop is incredibly  steep for that highest  bracket when jumping                                                               
from 7 percent to 11 percent.                                                                                                   
                                                                                                                                
2:27:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  clarified  that  South  Dakota  is  10                                                               
percent on profits,  and Wisconsin is a  3-15 percent progressive                                                               
tax, which is what Amendment 6  is, on net mining proceeds, which                                                               
sounds like profits  to him.  Therefore he thinks  Amendment 6 is                                                               
reasonable.   He  cited a  2/3/2011  memorandum from  Legislative                                                               
Legal  and  Research  Services, and  paraphrased:  "The  resource                                                               
value is  just one indicator,  in 2009 of all  mineral extraction                                                               
is  approaching, it's  just under  $2.5  billion; the  government                                                               
revenue  was $67  million."   He reiterated  that he  understands                                                               
concentrate [and processed product] are very different things.                                                                  
                                                                                                                                
2:28:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON maintained his objection to Amendment 6.                                                                  
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
and  Tarr  voted  in  favor  of  Amendment  6.    Representatives                                                               
Chenault, Olson,  Herron, Talerico, and Nageak  voted against it.                                                               
Therefore, Amendment 6 failed to be adopted by a vote of 3-5.                                                                   
                                                                                                                                
2:29:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR  moved to  adopt  Amendment  7, labeled  29-                                                               
GH2924\N.12, Nauman, 3/30/16, which read:                                                                                       
                                                                                                                                
     Page 1, line 10, through page 2, line 4:                                                                                   
          Delete all material and insert:                                                                                       
           "* Sec. 2. AS 43.65.010(c) is repealed and                                                                       
     reenacted to read:                                                                                                         
          (c)  The license tax on mining is imposed on the                                                                      
     net income  of the  taxpayer from  the property  in the                                                                    
     state, computed with  allowable depletion, plus royalty                                                                    
     received  in connection  with  mining  property in  the                                                                    
     state.  The tax  rates applicable  to the  amount of  a                                                                    
     taxpayer's net income are as follows:                                                                                      
     over $40,000 and not over $100,000 ........three percent                                                                   
     over $100,000 and not over $250,000 ..............$1,800                                                                   
     plus five percent of the excess over $100,000                                                                              
     over $250,000 and not over $500,000 ..............$9,300                                                                   
     plus seven percent of the excess over $250,000                                                                             
     over $500,000 and not over $1,000,000 ...........$26,800                                                                   
     plus nine percent of the excess over $500,000                                                                              
     over $1,000,000 .................................$71,800                                                                   
     plus 11 percent of the excess over $1,000,000."                                                                            
                                                                                                                                
     Page 2, line 19:                                                                                                           
          Delete "amended"                                                                                                      
          Insert "repealed and reenacted"                                                                                       
                                                                                                                                
REPRESENTATIVE HERRON objected for discussion purposes.                                                                         
                                                                                                                                
2:29:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR explained  that Amendment  7 has  a slightly                                                               
different approach  than Amendments 5  and 6.  Amendment  7 would                                                               
keep  everything  under  $100,000   at  3  percent,  whereas  the                                                               
proposed legislation  is that folks at  $40,000-$50,000 would pay                                                               
3 percent and  folks at $50,000-$100,000 would pay  $1,500 plus 5                                                               
percent.  Thus,  the amendment shifts what might  be considered a                                                               
small operator  to $100,000  and under.   She  said she  wants to                                                               
keep  that  in  there  because those  individuals  are  currently                                                               
taxpayers and it  gives the department some  understanding of the                                                               
activity being done  to assist in planning and  ensuring there is                                                               
staff to  help get those  projects going.   Referring to  a chart                                                               
she  passed  out  that  compares current  statute  with  what  is                                                               
proposed in  Amendment 7, Representative  Tarr noted  there would                                                               
not be a tax increase for  anyone with annual net profit earnings                                                               
of under  $800,000; rather  those operators  would see  an annual                                                               
tax decrease ranging between $1,200  and $5,200.  For net profits                                                               
of  $800,000 there  would be  a tax  increase of  about $800  per                                                               
year.   For net  profits of  $900,000 the  tax increase  would be                                                               
about  $2,000 annually.   An  operator with  net profits  of $1.1                                                               
million would  see a  tax increase of  about $8,800  annually and                                                               
operators  with net  profits  of  $1.5 million  would  see a  tax                                                               
increase of about $24,000 annually.                                                                                             
                                                                                                                                
REPRESENTATIVE TARR  explained that Amendment 7  would spread out                                                               
the income brackets  relative to the legislation  and the current                                                               
statute,  which could  be helpful  in understanding  the relative                                                               
size of  different projects and who  is doing work.   It has been                                                               
six decades  since any  significant changes  have been  made, and                                                               
this would be  durable relative to the dollars that  are spent in                                                               
2016  and going  forward.   The Council  of Alaska  Producers and                                                               
others  have   explained  that  these  large-size   projects  are                                                               
expensive.    Version N  would  still  retain  a three  year  tax                                                               
holiday,  so  all  new mining  operations,  including  the  large                                                               
projects,  are exempt  from the  tax levied  by this  chapter for                                                               
three years after production begins.                                                                                            
                                                                                                                                
2:34:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON asked  Mr. Burnett  the net  difference in                                                               
the  amounts between  the current  statute, governor's  proposal,                                                               
and Version N.                                                                                                                  
                                                                                                                                
MR. BURNETT replied that his  "back of the napkin" calculation is                                                               
that the total on Amendment 7 would  be much the same as with the                                                               
previous amendment because most of  the revenue by far comes from                                                               
the  highest  tax bracket  in  any  proposal.   He  reminded  the                                                               
committee  of DOR's  previously distributed  chart depicting  the                                                               
various incomes  between small mines  and large mines  and nearly                                                               
all the income is at the million-plus range.                                                                                    
                                                                                                                                
2:35:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  concluded her explanation of  Amendment 7 by                                                               
noting  that even  when the  operations  are in  the $10  million                                                               
range of  net profit there  is an approximate  $90,000 difference                                                               
in taxes.  She said it  is difficult to believe that $90,000 more                                                               
would be overly burdensome for the $10 million companies.                                                                       
                                                                                                                                
2:37:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON maintained his objection.                                                                                 
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
and Tarr voted in favor  of Amendment 7.  Representatives Herron,                                                               
Chenault,  Olson,   Talerico,  and   Nageak  voted   against  it.                                                               
Therefore, Amendment failed to be adopted by a vote of 3-5.                                                                     
                                                                                                                                
2:38:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to  adopt Amendment 8, labeled 29-                                                               
GH2924\N.2,  Nauman,  3/29/16.    [The text  of  Amendment  8  is                                                               
provided at the end of the minutes for HB 253.]                                                                                 
                                                                                                                                
REPRESENTATIVE OLSON objected.                                                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON  explained Amendment  8 would  defer the                                                               
tax exemption  for a  mine in  its first  3 years  of production.                                                               
Testimony  heard in  February was  that these  mines enjoy  a tax                                                               
holiday for 3.5  years and he cannot think  of anything analogous                                                               
to that in  the oil and gas  industry.  There is  the gross value                                                               
reduction of 20 percent, and there  are the many credits that can                                                               
add up to 85  percent, and when prices went low  the state saw it                                                               
go higher  than that.  The  state had always enjoyed  15 percent,                                                               
and generally  35-40 percent  or more.   For  example, if  a mine                                                               
such as the Pebble Mine is  worth the tens of billions of dollars                                                               
that its owner  says it is, then it appears  the state is waiving                                                               
revenue.   He recalled  a gentleman  testifying in  February 2016                                                               
that the  state would enjoy $200  million per year just  from the                                                               
Pebble Mine.  Unless he  incorrectly understands the statute that                                                               
creates the tax exemption, that  is $6 million the state wouldn't                                                               
see for a  mine the size of  the Pebble Mine and at  3.5 years it                                                               
would  be $700  million.   Amendment  8 would  transform the  tax                                                               
exception  for   a  mining  operation's   first  3   years  after                                                               
production  into   a  tax  deferral   with  a  10   year  payoff.                                                               
Hypothetically, if an  operation owes $100 per year  in taxes for                                                               
each of  three years, that total  of $300 would be  divided by 10                                                               
for the decade  after production, so the company would  pay $30 a                                                               
year for those 10 years in  addition to things such as the mining                                                               
license fee.   Amendment 8  would work in conjunction  with other                                                               
amendments by  aiding a small  producer without revenue  and that                                                               
producer could defer its small  taxes spread out over many years.                                                               
The  amendment  would also  provide  the  same aid  to  companies                                                               
trying  to recover  their  startup costs  and  have quicker  cash                                                               
flow, and would generate revenue for  the state.  He recalled the                                                               
extensive  discussion regarding  the purpose  of the  tax credit.                                                               
The  tax credit  was useable  over  a 15  year span  but was  for                                                               
exploration and development.  There  is no revenue at exploration                                                               
and development and industry can  argue that on the backend there                                                               
is the  anticipatory benefit, but  in terms of the  frontend they                                                               
don't receive  any tangible credit  in the  first years.   So, he                                                               
posited, it is hard to argue  that it would deter new exploration                                                               
in that  it doesn't "pull the  rug out" because the  tax deferral                                                               
would be there and gradulize rather than a full exemption.                                                                      
                                                                                                                                
2:42:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON   recalled  that   in  2005  or   so,  the                                                               
Legislative  Ways and  Means  Committee worked  for  a couple  of                                                               
different sessions  on mining tax bills  and this was one  of the                                                               
provisions  from  that  committee.     The  committee  looked  at                                                               
deferral rather  than an  exemption in order  to assist  mines on                                                               
the frontend to recover their  costs earlier.  The state wouldn't                                                               
lose its tax money because  after the mine became more profitable                                                               
and recovered its costs, the mine  would still pay the tax but it                                                               
would be over time when the  mine was in a more profitable state.                                                               
He offered  his support for  Amendment 8, saying the  state needs                                                               
to move  from giving  away credits it  cannot afford  and instead                                                               
holding a  tax expense that the  mines will still need  to pay at                                                               
some point in the future.                                                                                                       
                                                                                                                                
2:43:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO  asked whether  the exemption clock  starts the                                                               
day a person receives his/her mining license.                                                                                   
                                                                                                                                
MR.  BURNETT  responded that  the  3.5  year exemption  from  tax                                                               
begins  on the  day  production starts,  when  the Department  of                                                               
Natural  Resources certifies  to the  Department of  Revenue that                                                               
production has started.                                                                                                         
                                                                                                                                
CO-CHAIR TALERICO  pointed out  that according  to the  bill, the                                                               
day  a  person  receives  a  license the  clock  starts,  but  it                                                               
actually begins on the day of production.                                                                                       
                                                                                                                                
MR.  BURNETT answered  correct,  because the  mining  tax is  the                                                               
mining license tax,  so the mining license really has  to do with                                                               
the payment of the first tax returns.                                                                                           
                                                                                                                                
CO-CHAIR  TALERICO asked  whether  most of  these  people are  in                                                               
their  wheelhouse  of  money  in   their  first  three  years  of                                                               
production or does it usually come later.                                                                                       
                                                                                                                                
MR. FOGELS  replied that typically  a new  mine will have  to pay                                                               
back  some  of  the  initial  capital  costs,  which  are  fairly                                                               
significant, and a lot  of that is done in the  early years.  The                                                               
profits come later in the mine life.                                                                                            
                                                                                                                                
2:45:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  referred to  Version N,  page 1,  lines 7-9,                                                               
which state:                                                                                                                    
                                                                                                                                
       (a) ... All new mining operations are exempt from                                                                        
       the tax levied by this chapter for three [AND ONE-                                                                       
     HALF] years after production begins.                                                                                       
                                                                                                                                
REPRESENTATIVE TARR asked whether that is the correct provision.                                                                
                                                                                                                                
CO-CHAIR TALERICO agreed,  and said he wants to be  certain it is                                                               
clear because it could be read a couple of different ways.                                                                      
                                                                                                                                
2:46:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON asked whether  the administration has taken                                                               
a position on Amendment 8.                                                                                                      
                                                                                                                                
MR. BURNETT  responded that  the administration  has not  taken a                                                               
position on  the amendment.   The 3.5  year deferral, which  is 3                                                               
years in  Version N, is  not likely to  impact any major  mine in                                                               
the next  several years.  The  money from this is  not within the                                                               
department's fiscal note or in the  time period it is looking at,                                                               
although it  is something that  will be  reviewed over time.   He                                                               
referred to  the discussion  about the Pebble  Mine and  the $200                                                               
million  a  year,  and  advised  that the  $200  million  a  year                                                               
estimate would  have included corporate income  tax and royalties                                                               
because the  mine is  on state  land.   The figure  wouldn't have                                                               
been a  $600 million  deferral or  exemption because  the company                                                               
still would have been paying corporate income tax.                                                                              
                                                                                                                                
REPRESENTATIVE HERRON asked whether  the structure, or mechanics,                                                               
of Amendment 8 would be valuable to have for the future.                                                                        
                                                                                                                                
MR. BURNETT  answered that the amendment  is conceptually similar                                                               
to  some  of the  proposals  the  department  has made  with  tax                                                               
credits  in the  area  of oil  and gas  where  the discussion  is                                                               
paying less than the full amount  and which was in the governor's                                                               
bill and  not necessarily in  the committee substitute  passed by                                                               
this committee.   There was a  cap on that and  then deferring it                                                               
to production at some  time in the future, so it  might well be a                                                               
valuable structure to review.                                                                                                   
                                                                                                                                
2:48:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   said  Mr.  Burnett  is   correct  and                                                               
referred to  page [17] of  the committee's 2/19/16  hearing where                                                               
Jason Brune  advised that  the Pebble Mine  might earn  the state                                                               
and local government $200 million.   He added he is hearing great                                                               
things about Donlin  Creek Gold Mine and that it  could be larger                                                               
than  anticipated.    Representative Josephson  noted  the  state                                                               
doesn't do anything  this generous for the oil  and gas industry.                                                               
He  urged there  be  a  mining license  tax  that  is spread  out                                                               
because it  is unknown whether an  ore body might be  at its best                                                               
in the first three years.  With  the exception of a few people in                                                               
the room, he does not  believe the committee understands that and                                                               
the state cannot afford  to just give a tax holiday  for 3 or 3.5                                                               
years.  Deferring the tax over a decade makes more sense.                                                                       
                                                                                                                                
2:49:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON maintained his  objection to Amendment 8 and                                                               
noted  that he  did not  receive the  amendments until  he walked                                                               
into the  committee room today.   Given they are  tax amendments,                                                               
he  prefers to  err on  the side  of caution  when he  hasn't had                                                               
adequate time to review the documents.                                                                                          
                                                                                                                                
A roll  call vote was  taken.  Representatives Tarr,  Seaton, and                                                               
Josephson  voted  in  favor  of  Amendment  8.    Representatives                                                               
Herron, Chenault,  Olson, Talerico, and Nageak  voted against it.                                                               
Therefore, Amendment 8 failed to be adopted by a vote of 3-5.                                                                   
                                                                                                                                
2:51:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to  adopt Amendment 9, labeled 29-                                                               
GH2924\N.3,  Nauman,  3/29/16.    [The text  of  Amendment  9  is                                                               
provided at the end of the minutes for HB 253.]                                                                                 
                                                                                                                                
REPRESENTATIVE OLSON objected.                                                                                                  
                                                                                                                                
REPRESENTATIVE  JOSEPHSON explained  Amendment  9 would  increase                                                               
the minimum rental rate, which  hasn't been modified in 16 years,                                                               
and would increase  the rate for mining rental  rates, other than                                                               
coal.   Currently, the statute requires  money in rent to  be not                                                               
less than 50 cents an acre for  the first five years and $2.50 an                                                               
acre  after  that; the  amount  must  be  in  that range  but  is                                                               
negotiable between the  parties.  Amendment 9  would increase the                                                               
rent to  be not  less than  $1.65 for the  first five  years, and                                                               
$3.30 after  that.   This amount  would establish  parity between                                                               
the state and private landowners  who charge higher rental rates.                                                               
He said  he would  like input from  the department  regarding the                                                               
amendment's fiscal  impact, but suspects  it is modest.   Even if                                                               
the  impact is  modest it  is  justified as  an opportunity  cost                                                               
because,  unlike with  other activities,  the  land is  occupied.                                                               
Therefore, he posited, Amendment 9 is reasonable.                                                                               
                                                                                                                                
2:53:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON inquired  about the  current rental  rates                                                               
that are being negotiated.                                                                                                      
                                                                                                                                
MR. FOGELS  replied that  page 2  of Amendment  9 is  the current                                                               
rental rate  that would be  deleted.   Pointing to the  far right                                                               
column for the  rental amount for each mining  claim or leasehold                                                               
location including  each quarter-quarter  section, he  noted that                                                               
the current  rental rate  is $20  for each  mining claim  for the                                                               
first 5 years, then  $40 for 6-10 years, and then  $100 for 11 or                                                               
more years.   Under Amendment 9 with the  new per-acreage amount,                                                               
the claim rentals for 0-5 years  and 6-10 years would jump to $66                                                               
a year, and after  11 years it would jump from $100  to $132.  He                                                               
qualified that  these are  rough calculations  given he  has just                                                               
seen this amendment.                                                                                                            
                                                                                                                                
REPRESENTATIVE   SEATON  surmised   that,   by  regulation,   the                                                               
department has  not adjusted these  rates for inflation  over the                                                               
years and so the acreage rental  rates are still the same as when                                                               
they were set.                                                                                                                  
                                                                                                                                
MR.  FOGELS believed  they have  not been  adjusted, but  said he                                                               
will get back to the committee on that.                                                                                         
                                                                                                                                
CO-CHAIR TALERICO,  regarding a "quarter-quarter  section," asked                                                               
whether it is a straight-across fee for 40 acres.                                                                               
                                                                                                                                
MR. FOGELS confirmed it is 40 acres.                                                                                            
                                                                                                                                
2:55:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON inquired whether  DNR is supposed to review                                                               
and follow inflation, or whether it is whenever.                                                                                
                                                                                                                                
MR.  FOGELS  replied he  has  been  thinking  about it,  and  the                                                               
department probably has  looked at this, but he  cannot offer any                                                               
details as to  whether the claim rentals have been  adjusted.  He                                                               
said he will get back to the committee.                                                                                         
                                                                                                                                
REPRESENTATIVE HERRON  commented that it appears  the state would                                                               
want to have a mechanism  to allow the department, by regulation,                                                               
to  at least  keep up  with inflation  rather than  going to  the                                                               
legislature in any  given year and creating a law,  and maybe the                                                               
legislature should be involved in the inflation amounts.                                                                        
                                                                                                                                
REPRESENTATIVE  TARR pointed  out  that  current statute  doesn't                                                               
allow that opportunity  and therefore asked how  [a review] could                                                               
have happened.                                                                                                                  
                                                                                                                                
MR. FOGELS reiterated  he will get back to the  committee with an                                                               
answer.                                                                                                                         
                                                                                                                                
CO-CHAIR  TALERICO asked  the  significance  behind the  increase                                                               
from 50 cents an acre to $1.65 an acre.                                                                                         
                                                                                                                                
REPRESENTATIVE   JOSEPHSON   advised  his   assistant   contacted                                                               
Legislative Legal and  Services about this, and he  does not know                                                               
the answer.  He offered that the increase from $2.50 to $3.30                                                                   
appears to be a reflection of inflation, but he does not know.                                                                  
                                                                                                                                
2:58:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON maintained his objection.                                                                                  
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted  in   favor  of  Amendment  9.     Representatives  Herron,                                                               
Chenault, Olson,  Seaton, Talerico, and Nageak  voted against it.                                                               
Therefore, Amendment 9 failed to be adopted by a vote of 2-6.                                                                   
                                                                                                                                
   Amendments to HB 253, Version 29-GH2924\N, Nauman, 3/17/16                                                               
                                                                                                                                
Amendment 1, labeled 29-GH292\N.15, Nauman, 3/30/16:                                                                          
                                                                                                                                
     Page 1, line 2, following "fees;":                                                                                       
          Insert "relating to production royalties on                                                                         
     mining;"                                                                                                                 
                                                                                                                                
     Page 1, following line 4:                                                                                                  
          Insert new bill sections to read:                                                                                     
        "* Section 1. AS 27.30.030(a) is amended to read:                                                                   
          (a)  In a tax year [OR ROYALTY PAYMENT PERIOD],                                                                       
     subject  to  (c) of  this  section  and the  respective                                                                    
     limitations of  this subsection,  the person  may apply                                                                    
     the credit, the  taking of which was  approved under AS                                                                    
     27.30.020(2),  against  [(1)]   taxes  payable  by  the                                                                    
     person                                                                                                                     
               (1) [(A)]  under AS 43.65; application of                                                                    
     the credit under this  paragraph [SUBPARAGRAPH] may not                                                                
     exceed the lesser of                                                                                                       
               (A) [(i)]  50 percent of the person's tax                                                                    
     liability  under AS  43.65  for the  tax  year that  is                                                                    
     related  to production  from  the  mining operation  at                                                                    
     which  the exploration  activities  occurred, as  shown                                                                    
     under (b) of this section; or                                                                                              
               (B) [(ii)]  50 percent of the person's total                                                                 
     tax liability under AS 43.65 for the tax year;                                                                             
               (2) [(B)]  under AS 43.20; application of                                                                    
     the credit under this  paragraph [SUBPARAGRAPH] may not                                                                
     exceed the lesser of                                                                                                       
               (A) [(i)]  an amount equal to the amount                                                                     
     determined under  (1)(A) of this subsection  [(A)(i) OF                                                                
     THIS PARAGRAPH]; or                                                                                                        
               (B) [(ii)]  50 percent of the person's total                                                                 
     tax liability under AS 43.20 for the tax year [; AND                                                                       
               (2)  MINERAL PRODUCTION ROYALTY PAYMENTS                                                                         
     PAYABLE BY  THE PERSON  UNDER AS 38.05.135  - 38.05.160                                                                    
     AND 38.05.212 FOR PRODUCTION  FROM THE MINING OPERATION                                                                    
     AT   WHICH   THE   EXPLORATION   ACTIVITIES   OCCURRED;                                                                    
     APPLICATION OF THE CREDIT UNDER  THIS PARAGRAPH MAY NOT                                                                    
     EXCEED 50  PERCENT OF  THE PERSON'S  MINERAL PRODUCTION                                                                    
     ROYALTY PAYMENT LIABILITY FROM  THE MINING OPERATION AT                                                                    
     WHICH THE EXPLORATION ACTIVITIES OCCURRED].                                                                                
        * Sec. 2. AS 27.30.030(b) is amended to read:                                                                         
          (b)  If the person applies the credit against the                                                                     
     person's  tax liability  under  (a)(1)(A) or  (a)(2)(A)                                                                
     [(a)(1)(A)(i)  OR (a)(1)(B)(i)]  of  this section,  the                                                                    
     commissioner of  revenue shall disallow  application of                                                                    
     the  credit  under  that provision  unless  the  person                                                                    
     files  with the  person's tax  return an  accounting of                                                                    
     the  person's  mining  operation  activities  for  each                                                                    
     mining  operation that  is included  in the  tax return                                                                    
     and  as  to which  the  credit  is being  applied.  The                                                                    
     accounting of  mining operation activities  required by                                                                    
     this subsection shall be made                                                                                              
               (1)  on a form prescribed by the Department                                                                      
     of Revenue; on the form, the person shall                                                                                  
               (A)  identify the mining operations for                                                                          
     which the credit is claimed; and                                                                                           
               (B)  set out the gross income attributable                                                                       
     to the  mining operations  and other  information about                                                                    
     the mining  operations that  the Department  of Revenue                                                                    
     may require;                                                                                                               
               (2)  without regard to an exemption to which                                                                     
     the person may be entitled under AS 43.65.010(a).                                                                          
        * Sec. 3. AS 27.30.040 is amended to read:                                                                            
          Sec. 27.30.040. Credit may be carried forward.                                                                      
     Except as  its application  is limited by  AS 27.30.030                                                                    
     and  27.30.050,  a portion  of  a  credit that  is  not                                                                    
     applied  under  AS  27.30.030 during  a  tax  year  [OR                                                                    
     ROYALTY PAYMENT  PERIOD] may be carried  forward to and                                                                    
     applied  during  a  subsequent  tax  year  [OR  ROYALTY                                                                    
     PAYMENT PERIOD].                                                                                                           
        * Sec. 4. AS 27.30.050 is amended to read:                                                                            
          Sec. 27.30.050. Limit on application of credit.                                                                     
     An exploration incentive credit  for a mining operation                                                                    
     may not  exceed $20,000,000 and must  be applied within                                                                    
     15  tax years  [OR ROYALTY  PAYMENT PERIODS]  after the                                                                    
     taking   of   the   credit   is   approved   under   AS                                                                    
     27.30.020(2),  but the  tax years  [OR ROYALTY  PAYMENT                                                                    
     PERIODS] in which the credit is applied need not be                                                                        
               (1)    the  tax   year  [OR  ROYALTY  PAYMENT                                                                    
     PERIOD] in which the person  first incurs liability for                                                                    
     payment  of  tax [OR  ROYALTY]  based  on the  person's                                                                    
     activity  that  is  the  basis  of  the  claim  of  the                                                                    
     exploration incentive credit; or                                                                                           
               (2)  consecutive periods.                                                                                        
        * Sec. 5. AS  38.05.212(b) is repealed and reenacted                                                                  
     to read:                                                                                                                   
          (b)  The production royalty is three percent of                                                                       
               (1)    the  net  smelter  return  for  mining                                                                    
     production that  is further processed  by a  smelter or                                                                    
     refinery; or                                                                                                               
               (2)    the  gross   value  at  the  point  of                                                                    
     production as determined under  AS 38.05.213 for mining                                                                    
     production that  is not further processed  by a smelter                                                                    
     or refinery.                                                                                                               
        *  Sec. 6.  AS 38.05.212  is amended  by adding  new                                                                  
     subsections to read:                                                                                                       
          (d)  A new mining operation is exempt from the                                                                        
     royalties  under this  section  for  three years  after                                                                    
     production begins.                                                                                                         
          (e)  In this section,                                                                                                 
               (1)   "net  smelter return"  means the  value                                                                    
     the person engaged in mining  receives from the smelter                                                                    
     or refinery and may be based on                                                                                            
               (A)    the  spot  or  current  price  of  the                                                                    
     mineral minus deductions for  the costs associated with                                                                    
     the  processing   by  the   smelter  or   refinery  and                                                                    
     transportation between the smelter  or refinery and the                                                                    
     location of the mine; or                                                                                                   
               (B)      another   method  adopted   by   the                                                                    
     department by regulation;                                                                                                  
               (2)   "new mining operation" has  the meaning                                                                    
     given to "new mining operations" in AS 43.65.060.                                                                          
        *  Sec. 7.  AS  38.05  is amended  by  adding a  new                                                                  
     section to read:                                                                                                           
          Sec. 38.05.213. Gross value at the point of                                                                         
     production.  (a)  The  gross  value  at  the  point  of                                                                  
     production                                                                                                                 
               (1)   is the value of  a resource immediately                                                                    
     after its removal from the mine;                                                                                           
               (2)    does  not   include  income  from  the                                                                    
     extraction or  processing of resources from  mine waste                                                                    
     or   residue   of    previously   processed   resources                                                                    
     previously subject to tax under AS 43.65.                                                                                  
          (b)  Except as provided in (c) of this section,                                                                       
     the value  of a resource immediately  after its removal                                                                    
     from  the mine  is  the price  received  by the  person                                                                    
     engaged  in the  mining  of the  resource adjusted  for                                                                    
     value added after the resource was produced.                                                                               
          (c)  The price received by the person engaged in                                                                      
     the  mining of  the  resource may  be  rejected by  the                                                                    
     department  as   the  gross  value  at   the  point  of                                                                    
     production when the                                                                                                        
               (1)   price  received is  less than  the fair                                                                    
     market value;                                                                                                              
               (2)   price  received  does  not reflect  the                                                                    
     total value received by the seller in the transaction;                                                                     
               (3)     parties   to   the  transaction   are                                                                    
     affiliated; or                                                                                                             
               (4)  price received  was not negotiated in an                                                                    
     arm's length transaction between the buyer and seller.                                                                     
          (d)  If the department rejects the price reported                                                                     
     by the  person engaged in  the mining of  the resource,                                                                    
     the department  shall substitute the fair  market value                                                                    
     of  the  resource on  the  date  and  at the  place  of                                                                    
     production for  purposes of determining  the production                                                                    
     royalty liability under this chapter.                                                                                      
          (e)  The gross value at the point of production                                                                       
     shall  be  calculated  using the  reasonable  costs  of                                                                    
     transportation  if the  destination  value  is used  to                                                                    
     determine  the value  at the  point of  production. The                                                                    
     reasonable costs of transportation  shall be the actual                                                                    
     costs, except when the                                                                                                     
               (1)    parties   to  the  transportation  are                                                                    
     affiliated;                                                                                                                
               (2)   contract for the transportation  is not                                                                    
     an arm's  length transaction  or is  not representative                                                                    
     of the market value of that transportation;                                                                                
               (3)     method   of  transportation   is  not                                                                    
     reasonable in  view of existing alternative  methods of                                                                    
     transportation.                                                                                                            
          (f)  If the department finds that the conditions                                                                      
     in (e)(1),  (2), or  (3) of  this section  are present,                                                                    
     the department shall determine  the reasonable costs of                                                                    
     transportation,  using the  fair market  value of  like                                                                    
     transportation,  the  fair   market  value  of  equally                                                                    
     efficient   and   available    alternative   modes   of                                                                    
     transportation,    or   another    reasonable   method.                                                                    
     Transportation costs fixed by  tariff rates properly on                                                                    
     file  with  the  Regulatory  Commission  of  Alaska  or                                                                    
     another  regulatory agency  shall  be considered  prima                                                                    
     facie reasonable.                                                                                                          
          (g)  In this section,                                                                                                 
               (1)  "affiliated" means a person who                                                                             
     directly,   or   indirectly   through   one   or   more                                                                    
     intermediaries,  controls,  is  controlled  by,  or  is                                                                    
     under common control with the persons specified;                                                                           
               (2)  "destination value" means the value of                                                                      
     the resource  at the destination where  production from                                                                    
     the mine is delivered for treatment or processing."                                                                        
                                                                                                                                
     Page 1, line 5:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 8"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 1, line 10, through page 2, line 4:                                                                                   
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 17:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 8"                                                                                                       
                                                                                                                                
     Page 2, line 18:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 8"                                                                                                       
                                                                                                                                
     Page 2, lines 19 - 21:                                                                                                     
          Delete all material and insert:                                                                                       
          "(b)  AS 38.05.212(d), added by sec. 6 of this                                                                        
     Act,  applies   to  a  mining  operation   that  begins                                                                    
     production on or after the  effective date of sec. 6 of                                                                    
     this Act.                                                                                                                  
          (c) The changes to the applicability of the                                                                           
     exploration  incentive credit  made in  AS 27.30.030(a)                                                                    
     and (b),  as amended by secs.  1 and 2 of  this Act, AS                                                                    
     27.30.040, as  amended by  sec. 3 of  this Act,  and AS                                                                    
     27.30.050, as amended  by sec. 4 of this  Act, apply to                                                                    
     a  royalty payment  period beginning  on  or after  the                                                                    
     effective date of sec. 1 of this Act."                                                                                     
                                                                                                                                
     Page 3, line 28:                                                                                                           
          Delete "Section 6"                                                                                                    
          Insert "Section 12"                                                                                                   
                                                                                                                                
     Page 3, line 29:                                                                                                           
          Delete "sec. 7"                                                                                                       
          Insert "sec. 13"                                                                                                      
                                                                                                                                
Amendment 2, labeled 29-GH2924\N.7, Nauman, 3/29/16:                                                                          
                                                                                                                                
     Page 1, line 1, following "An Act":                                                                                      
          Insert "repealing the mineral production royalty;                                                                   
     enacting a mineral severance tax;"                                                                                       
                                                                                                                                
     Page 1, following line 4:                                                                                                  
     Insert new bill sections to read:                                                                                          
        "* Section 1. AS 27.30.030(a) is amended to read:                                                                   
          (a)  In a tax year or royalty payment period,                                                                         
     subject  to  (c) of  this  section  and the  respective                                                                    
     limitations of  this subsection,  the person  may apply                                                                    
     the credit, the  taking of which was  approved under AS                                                                    
     27.30.020(2), against                                                                                                      
               (1)  taxes payable by the person                                                                                 
               (A)    under  AS 43.65;  application  of  the                                                                    
     credit  under  this  subparagraph may  not  exceed  the                                                                    
     lesser of                                                                                                                  
               (i)     50  percent   of  the   person's  tax                                                                    
     liability  under AS  43.65  for the  tax  year that  is                                                                    
     related  to production  from  the  mining operation  at                                                                    
     which  the exploration  activities  occurred, as  shown                                                                    
     under (b) of this section; or                                                                                              
               (ii)   50 percent  of the person's  total tax                                                                    
     liability under AS 43.65 for the tax year;                                                                                 
               (B)    under  AS 43.20;  application  of  the                                                                    
     credit  under  this  subparagraph may  not  exceed  the                                                                    
     lesser of                                                                                                                  
               (i)     an   amount  equal   to  the   amount                                                                    
     determined under (A)(i) of this paragraph; or                                                                              
               (ii)   50 percent  of the person's  total tax                                                                    
     liability under AS 43.20 for the tax year; and                                                                             
               (2)    mineral  production  royalty  payments                                                                    
     payable by  the person  under AS 38.05.135  - 38.05.160                                                                    
     [AND   38.05.212]  for   production  from   the  mining                                                                    
     operation   at   which   the   exploration   activities                                                                    
     occurred;   application  of   the  credit   under  this                                                                    
     paragraph  may not  exceed 50  percent of  the person's                                                                    
     mineral production  royalty payment liability  from the                                                                    
     mining  operation at  which the  exploration activities                                                                    
     occurred.                                                                                                                  
        * Sec. 2. AS 38.05.205(c) is amended to read:                                                                         
          (c)  A mining lease shall be for any period up to                                                                     
     55  years, and  is  renewable if  requirements for  the                                                                    
     lease remain  satisfied. Annual rental  [AND PRODUCTION                                                                    
     ROYALTIES]  shall   be  paid   as  required   under  AS                                                                    
     38.05.211  [AND   38.05.212].  A  valid   mining  claim                                                                    
     located and  held under AS  38.05.195 may  be converted                                                                    
     to a lease  at any time upon application  by the owner,                                                                    
     and issuance  by the commissioner. Rights  granted by a                                                                    
     mining lease may  not be exercised until  the lease has                                                                    
     been filed  for record in the  recording district where                                                                    
     the land is located."                                                                                                      
                                                                                                                                
     Page 1, line 5:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 3"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, following line 14:                                                                                                 
     Insert new bill sections to read:                                                                                          
        "* Sec. 7. AS 43 is  amended by adding a new chapter                                                              
     to read:                                                                                                                   
     Chapter 68. Mining Severance Tax.                                                                                        
          Sec. 43.68.010. Mining severance tax. (a) A                                                                         
     person engaging in the business  of mining in the state                                                                    
     shall  pay a  mining  severance tax  in  the amount  of                                                                    
     three  percent   of  the  gross  production   value  of                                                                    
     minerals produced.                                                                                                         
          (b) The tax under this section is due April 1 of                                                                      
     each year.                                                                                                                 
          (c) The department shall adopt regulations to                                                                         
     implement this section.                                                                                                    
        *  Sec.  8.    AS  38.05.211(c)  and  38.05.212  are                                                                  
     repealed."                                                                                                                 
                                                                                                                                
     Page 2, line 17:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 3"                                                                                                       
                                                                                                                                
     Page 2, line 18:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 3"                                                                                                       
                                                                                                                                
     Page 2, line 19:                                                                                                           
          Delete "sec. 2"                                                                                                       
          Insert "sec. 4"                                                                                                       
                                                                                                                                
     Page 2, line 21:                                                                                                           
          Delete "sec. 2"                                                                                                       
          Insert "sec. 4"                                                                                                       
                                                                                                                                
     Page 2, following line 21:                                                                                                 
     Insert new subsections to read:                                                                                            
          "(c)  The repeal of AS 38.05.212 by sec 8 of this                                                                     
     Act  applies  to  minerals produced  on  or  after  the                                                                    
     effective date of sec. 8 of this Act.                                                                                      
          (d)  The mining severance tax under AS 43.68.010,                                                                     
     enacted  by sec.  7 of  this Act,  applies to  minerals                                                                    
     produced on  or after the  effective date of sec.  7 of                                                                    
     this Act."                                                                                                                 
                                                                                                                                
     Page 2, line 28:                                                                                                           
          Delete "Section 6"                                                                                                    
          Insert "Section 10"                                                                                                   
                                                                                                                                
     Page 2, line 29:                                                                                                           
          Delete "sec. 7"                                                                                                       
          Insert "sec. 11"                                                                                                      
                                                                                                                                
Amendment 4, labeled 29-GH2924\N.16, Nauman, 3/30/16:                                                                         
                                                                                                                                
     Page 1, line 2, following "fees;":                                                                                       
          Insert "relating to the exploration incentive                                                                       
     credit;"                                                                                                                 
                                                                                                                                
     Page 1, following line 4:                                                                                                  
          Insert new bill sections to read:                                                                                     
        "* Section 1. AS 27.30.030(a) is amended to read:                                                                   
          (a)  In a tax year [OR ROYALTY PAYMENT PERIOD],                                                                       
     subject  to  (c) of  this  section  and the  respective                                                                    
     limitations of  this subsection,  the person  may apply                                                                    
     the  credit, the  taking of  which  was approved  under                                                                    
     AS 27.30.020(2),  against [(1)]  taxes  payable by  the                                                                    
     person                                                                                                                     
               (1) [(A)]  under AS 43.65; application of                                                                    
     the credit under this  paragraph [SUBPARAGRAPH] may not                                                                
     exceed the lesser of                                                                                                       
               (A) [(i)]  50 percent of the person's tax                                                                    
     liability  under  AS 43.65 for  the  tax  year that  is                                                                    
     related  to production  from  the  mining operation  at                                                                    
     which  the exploration  activities  occurred, as  shown                                                                    
     under (b) of this section; or                                                                                              
               (B) [(ii)]  50 percent of the person's total                                                                 
     tax liability under AS 43.65 for the tax year;                                                                             
               (2) [(B)]  under AS 43.20; application of                                                                    
     the credit  under this    paragraph  [SUBPARAGRAPH] may                                                                
     not exceed the lesser of                                                                                                   
               (A)  [(i)]   an  amount equal  to the  amount                                                                
     determined  under (1)(A)  [(A)(i)]  of this  subsection                                                            
     [PARAGRAPH]; or                                                                                                            
               (B) [(ii)]  50 percent  of the person's total                                                                
     tax liability under AS 43.20 for the tax year [; AND                                                                       
               (2)    MINERAL  PRODUCTION  ROYALTY  PAYMENTS                                                                    
     PAYABLE BY  THE PERSON  UNDER AS 38.05.135  - 38.05.160                                                                    
     AND 38.05.212 FOR PRODUCTION  FROM THE MINING OPERATION                                                                    
     AT   WHICH   THE   EXPLORATION   ACTIVITIES   OCCURRED;                                                                    
     APPLICATION OF THE CREDIT UNDER  THIS PARAGRAPH MAY NOT                                                                    
     EXCEED 50  PERCENT OF  THE PERSON'S  MINERAL PRODUCTION                                                                    
     ROYALTY PAYMENT LIABILITY FROM  THE MINING OPERATION AT                                                                    
     WHICH THE EXPLORATION ACTIVITIES OCCURRED].                                                                                
        * Sec. 2. AS 27.30.030(b) is amended to read:                                                                         
          (b)  If the person applies the credit against the                                                                     
     person's  tax liability  under  (a)(1)(A) or  (a)(2)(A)                                                                
     [(a)(1)(A)(i)  OR (a)(1)(B)(i)]  of  this section,  the                                                                    
     commissioner of  revenue shall disallow  application of                                                                    
     the  credit  under  that provision  unless  the  person                                                                    
     files  with the  person's tax  return an  accounting of                                                                    
     the  person's  mining  operation  activities  for  each                                                                    
     mining  operation that  is included  in the  tax return                                                                    
     and  as  to which  the  credit  is being  applied.  The                                                                    
     accounting of  mining operation activities  required by                                                                    
     this subsection shall be made                                                                                              
               (1)   on a form prescribed  by the Department                                                                    
     of Revenue; on the form, the person shall                                                                                  
               (A)    identify  the  mining  operations  for                                                                    
     which the credit is claimed; and                                                                                           
               (B)   set out  the gross  income attributable                                                                    
     to the  mining operations  and other  information about                                                                    
     the mining  operations that  the Department  of Revenue                                                                    
     may require;                                                                                                               
               (2)  without regard  to an exemption to which                                                                    
     the person may be entitled under AS 43.65.010(a).                                                                          
        * Sec. 3. AS 27.30.040 is amended to read:                                                                            
          Sec. 27.30.040. Credit may be carried forward.                                                                      
     Except as  its application  is limited  by AS 27.30.030                                                                    
     and  27.30.050,  a portion  of  a  credit that  is  not                                                                    
     applied  under  AS 27.30.030  during  a  tax  year  [OR                                                                    
     ROYALTY PAYMENT  PERIOD] may be carried  forward to and                                                                    
     applied  during  a  subsequent  tax  year  [OR  ROYALTY                                                                    
     PAYMENT PERIOD].                                                                                                           
        * Sec. 4. AS 27.30.050 is amended to read:                                                                            
          Sec. 27.30.050. Limit on application of credit.                                                                     
     An exploration incentive credit  for a mining operation                                                                    
     may not  exceed $20,000,000 and must  be applied within                                                                    
     15  tax years  [OR ROYALTY  PAYMENT PERIODS]  after the                                                                    
     taking    of    the    credit   is    approved    under                                                                    
     AS 27.30.020(2), but the tax  years [OR ROYALTY PAYMENT                                                                    
     PERIODS] in which the credit is applied need not be                                                                        
               (1)  the tax year [OR ROYALTY PAYMENT                                                                            
     PERIOD] in which the person  first incurs liability for                                                                    
     payment  of  tax [OR  ROYALTY]  based  on the  person's                                                                    
     activity  that  is  the  basis  of  the  claim  of  the                                                                    
     exploration incentive credit; or                                                                                           
               (2)  consecutive periods."                                                                                       
                                                                                                                              
     Page 1, line 5:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 5"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 17:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 5"                                                                                                       
                                                                                                                                
     Page 2, line 18:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 5"                                                                                                       
                                                                                                                                
     Page 2, line 19:                                                                                                           
          Delete "sec. 2"                                                                                                       
          Insert "sec. 6"                                                                                                       
                                                                                                                                
     Page 2, line 21:                                                                                                           
          Delete "sec. 2"                                                                                                       
          Insert "sec. 6"                                                                                                       
                                                                                                                                
     Page 2, following line 21:                                                                                                 
          Insert a new subsection to read:                                                                                      
          "(c) The changes to the applicability of the                                                                          
     exploration  incentive credit  made in  AS 27.30.030(a)                                                                    
     and  (b), as  amended by  secs. 1  and 2  of this  Act,                                                                    
     AS 27.30.040, as  amended by  sec. 3  of this  Act, and                                                                    
     AS 27.30.050, as amended  by sec. 4 of  this Act, apply                                                                    
     to a royalty  payment period beginning on  or after the                                                                    
     effective date of sec. 1 of this Act."                                                                                     
                                                                                                                                
     Page 3, line 28:                                                                                                           
          Delete "Section 6"                                                                                                    
          Insert "Section 10"                                                                                                   
                                                                                                                                
     Page 3, line 29:                                                                                                           
          Delete "sec. 7"                                                                                                       
          Insert "sec. 11"                                                                                                      
                                                                                                                                
Amendment 8, labeled 29-GH2924\N.2, Nauman, 3/29/16:                                                                          
                                                                                                                                
     Page 1, line 1:                                                                                                            
          Delete "an exemption from"                                                                                          
          Insert "a deferral of"                                                                                              
                                                                                                                                
     Page 1, lines 5 - 9:                                                                                                       
          Delete all material and insert:                                                                                       
        "* Section 1. AS 7.30.030(b) is amended to read:                                                                    
          (b)  If the person applies the credit against the                                                                     
     person's   tax   liability    under   (a)(1)(A)(i)   or                                                                    
     (a)(1)(B)(i)  of  this  section,  the  commissioner  of                                                                    
     revenue shall disallow application  of the credit under                                                                    
     that  provision  unless  the   person  files  with  the                                                                    
     person's  tax  return  an accounting  of  the  person's                                                                    
     mining operation  activities for each  mining operation                                                                    
     that is included in the tax  return and as to which the                                                                    
     credit  is  being  applied. The  accounting  of  mining                                                                    
     operation activities required  by this subsection shall                                                                    
     be made                                                                                                                    
               (1)  on a form prescribed by the Department                                                                      
     of Revenue; on the form, the person shall                                                                                  
               (A)  identify the mining operations for                                                                          
     which the credit is claimed; and                                                                                           
               (B)  set out the gross income attributable                                                                       
     to the  mining operations  and other  information about                                                                    
     the mining  operations that  the Department  of Revenue                                                                    
     may require;                                                                                                               
               (2)  without regard to a deferral [AN                                                                        
     EXEMPTION] to  which the person  may be  entitled under                                                                    
     AS 43.65.010(a).                                                                                                           
        * Sec. 2. AS 43.65.010(a) is amended to read:                                                                         
          (a)  A [PERSON PROSECUTING OR ATTEMPTING TO                                                                           
     PROSECUTE,  OR ENGAGING  IN THE  BUSINESS OF  MINING IN                                                                    
     THE STATE  SHALL OBTAIN A LICENSE  FROM THE DEPARTMENT.                                                                    
     ALL] new mining operation may  defer the payment of tax                                                                
     due under  [OPERATIONS ARE EXEMPT  FROM THE  TAX LEVIED                                                                
     BY] this chapter during the  first [FOR] three and one-                                                                
     half  years   after  the  date  production   begins.  A                                                            
     taxpayer  that defers  the payment  of  tax under  this                                                                
     subsection shall pay  the amount of tax  deferred in 10                                                                
     equal installments,  without interest, before  May 1 of                                                                
     each  year,  beginning  with the  first  calendar  year                                                                
     following the date the deferral period ends.                                                                           
        * Sec. 3. AS 43.65.010(b) is amended to read:                                                                         
          (b)  The Department of Natural Resources shall                                                                        
     certify  to   the  department   the  date   upon  which                                                                    
     production  begins, and  the department  shall issue  a                                                                    
     certificate  of deferral  [EXEMPTION]  to the  producer                                                                
     accordingly."                                                                                                              
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, following line 14:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 7. AS 43.65.060(4) is amended to read:                                                                      
               (4)  "new mining operation [OPERATIONS]"                                                                     
     means  the first  mining operation  on a  property that                                                            
     previously has  not been subject to  mining [OPERATIONS                                                                
     WHICH BEGAN PRODUCTION AFTER JANUARY  1, 1953, OR WHICH                                                                    
     HAVE NOT BEEN LIABLE TO  PAY A MINING LICENSE TAX UNDER                                                                    
     THIS CHAPTER ON NET INCOME SINCE JANUARY 1, 1948];"                                                                        
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 17:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 2"                                                                                                       
                                                                                                                                
     Page 2, line 18:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 2"                                                                                                       
                                                                                                                                
     Page 2, line 19:                                                                                                           
          Delete "sec. 2"                                                                                                       
          Insert "sec. 4"                                                                                                       
                                                                                                                                
     Page 2, line 21:                                                                                                           
          Delete "sec. 2"                                                                                                       
          Insert "sec. 4"                                                                                                       
                                                                                                                                
     Page 2, line 28:                                                                                                           
          Delete "Section 6"                                                                                                    
          Insert "Section 9"                                                                                                    
                                                                                                                                
     Page 2, line 29:                                                                                                           
          Delete "sec. 7"                                                                                                       
          Insert "sec. 10"                                                                                                      
                                                                                                                                
Amendment 9, labeled 29-GH2924\N.3, Nauman, 3/29/16:                                                                          
                                                                                                                                
     Page 1, line 1, following "An Act":                                                                                      
          Insert "relating to rents for property involving                                                                    
     mining;"                                                                                                                 
                                                                                                                                
     Page 1, following line 4:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Section 1. AS 38.05.211(a) is amended to read:                                                                   
          (a)  The holder of each mining claim, leasehold                                                                       
     location,   prospecting   site,   and   mining   lease,                                                                    
     including  a mining  lease  under  AS 38.05.250,  shall                                                                    
     pay, in  advance, rental for  the right to  continue to                                                                    
     hold the mining  claim, leasehold location, prospecting                                                                    
     site, and mining lease, including  a mining lease under                                                                    
     AS 38.05.250. Rental is due and payable as follows:                                                                        
               (1)  the rental amount for a prospecting                                                                         
     site  is fixed  at $200  for the  two-year term  of the                                                                    
     site;                                                                                                                      
               (2)  annual rental for a mining claim,                                                                           
     leasehold location,  prospecting site, or  mining lease                                                                
     may not [SHALL] be less than                                                                                       
               (A) $1.65 for each acre during the first                                                                     
     five years that the rental is due;                                                                                     
               (B) $3.30 for each acre after the first five                                                                 
     years that  the rental is  due [BASED ON THE  NUMBER OF                                                                
     YEARS SINCE A MINING CLAIM,  A LEASEHOLD LOCATION, OR A                                                                    
     MINING LEASE'S PREDECESSOR  CLAIM OR LEASEHOLD LOCATION                                                                    
     WAS  FIRST LOCATED;  THE ANNUAL  RENTAL  AMOUNTS FOR  A                                                                    
     MINING CLAIM,  LEASEHOLD LOCATION, OR MINING  LEASE ARE                                                                    
     AS FOLLOWS:                                                                                                                
                                             RENTAL AMOUNT                                                                      
                                            FOR EACH MINING                                                                     
                                          CLAIM OR LEASEHOLD                                                                    
                                          LOCATION INCLUDING                                                                    
         NUMBER OF      RENTAL AMOUNT  EACH QUARTER-QUARTER                                                                     
      YEARS SINCE        PER ACRE FOR        SECTION MTRSC                                                                      
      FIRST LOCATED     MINING LEASES           SYSTEM                                                                          
      0 - 5                $  .50                $ 20                                                                           
      6 - 10                $1.00                  40                                                                           
      11- OR MORE           $2.50                100;                                                                           
               (3)  THE ANNUAL RENTAL IN ANY YEAR FOR EACH                                                                      
     QUARTER  SECTION CLAIM,  LEASEHOLD  LOCATION, OR  LEASE                                                                    
     BASED  ON THE  MTRSC SYSTEM  IS FOUR  TIMES THE  RENTAL                                                                    
     AMOUNT  FOR  A  QUARTER-QUARTER SECTION  MINING  CLAIM,                                                                    
     LEASEHOLD LOCATION, OR LEASE IN THAT YEAR]."                                                                               
                                                                                                                                
     Page 1, line 5:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 2"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, following line 14:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 6. AS 38.05.211(b) is repealed."                                                                            
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 17:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 2"                                                                                                       
                                                                                                                                
     Page 2, line 18:                                                                                                           
          Delete "sec. 1"                                                                                                       
          Insert "sec. 2"                                                                                                       
                                                                                                                                
     Page 2, line 19:                                                                                                           
          Delete "sec. 2"                                                                                                       
          Insert "sec. 3"                                                                                                       
                                                                                                                                
     Page 2, line 21:                                                                                                           
          Delete "sec. 2"                                                                                                       
          Insert "sec. 3"                                                                                                       
                                                                                                                                
     Page 2, line 28:                                                                                                           
          Delete "Section 6"                                                                                                    
          Insert "Section 8"                                                                                                    
          ^                                                                                                                     
     Page 2, line 29:                                                                                                           
          Delete "sec. 7"                                                                                                       
          Insert "sec. 9"                                                                                                       
                                                                                                                                
[HB 253 was held over.]                                                                                                         
                                                                                                                                
2:59:42 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The House Resources Standing Committee was recessed at 3:00 p.m.                                                                
to be reconvened at 1:00 p.m. on March 31, 2016.                                                                                

Document Name Date/Time Subjects
CSHB 253 Version N.pdf HRES 3/30/2016 1:00:00 PM
HB 253
HB 282 Ver. P.PDF HRES 3/30/2016 1:00:00 PM
HB 282
HB 282 Sponsor Statement.pdf HRES 3/30/2016 1:00:00 PM
HB 282
HB 282 Sectional Analysis.pdf HRES 3/30/2016 1:00:00 PM
HB 282
HB282-LEG-OP-02-04-16.pdf HRES 3/30/2016 1:00:00 PM
HB 282
AGDC Board Members.pdf HRES 3/30/2016 1:00:00 PM
HB 282
2015 12 07 Legal Memo - Leg Members AGDC Board.pdf HRES 3/30/2016 1:00:00 PM
HB 282
SB 125 Sponsor Statement.pdf HRES 3/30/2016 1:00:00 PM
SB 125
SB 125 Fiscal Note.pdf HRES 3/30/2016 1:00:00 PM
SB 125
SB 125 (RES) Version P.pdf HRES 3/30/2016 1:00:00 PM
SB 125
CS HB 253 Amendments Ver. N Packet.PDF HRES 3/30/2016 1:00:00 PM
HB 253