Legislature(2019 - 2020)BUTROVICH 205

03/23/2020 03:30 PM RESOURCES

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
<Bill Hearing Canceled>
-- Public Testimony --
Moved SJR 15 Out of Committee
-- Public Testimony --
Moved SB 184 Out of Committee
-- Public Testimony --
**Streamed live on AKL.tv**
- Continue to Access Meeting Through akleg.gov
- All Off-Net Callers Must Hang Up Immediately
After Testifying to Keep Lines Open
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved CSHB 203(FSH) Out of Committee
-- Public Testimony --
           SJR 15-STATE FULL SHARE OF PROFITS IN ANWR                                                                       
3:58:24 PM                                                                                                                    
CHAIR MICCICHE announced  that the final order  of business would                                                               
be SENATE JOINT  RESOLUTION NO. 15, requesting  the United States                                                               
Congress to repeal sec. 20001(b)(5) of  the Tax Cuts and Jobs Act                                                               
to honor  the Alaska  Statehood Act with  respect to  the state's                                                               
share  of bonuses,  royalties, and  rentals from  exploration and                                                               
development in the coastal plain  of the Arctic National Wildlife                                                               
3:58:42 PM                                                                                                                    
SENATOR  BILL  WIELECHOWSKI,  Alaska State  Legislature,  Juneau,                                                               
Alaska, sponsor of SJR 15,  thanked the committee for hearing SJR
15 and noted that his intern would present the resolution.                                                                      
3:59:00 PM                                                                                                                    
ALEXANDER  SCHROEDER, Staff,  Senator Wielechowski,  Alaska State                                                               
Legislature,  Juneau,  Alaska,  said  SJR 15  urges  Congress  to                                                               
repeal section 20001(b)(5) of the Tax  Cuts and Jobs Act of 2017,                                                               
a bill  that opened federally  owned land in the  Arctic National                                                               
Wildlife  Refuge (ANWR)  for  oil, gas,  and  mining leasing  and                                                               
exploration. That  bill changed the revenue  sharing promise made                                                               
at  statehood  between  the  State  of  Alaska  and  the  federal                                                               
government from 90 percent to 50 percent.                                                                                       
MR.  SCHROEDER explained  that the  Alaska Statehood  Act adopted                                                               
part of  the Mineral Leasing  Act to protect the  State's mineral                                                               
rights. Section  28(b) in the  Alaska Statehood Act  asserts that                                                               
the State  would receive 90 percent  of oil and gas  revenue from                                                               
federal land.  Lawmakers appropriately  decided to  ensure Alaska                                                               
realized  its  economic  potential  via  passage  of  the  Alaska                                                               
Statehood Act.                                                                                                                  
He said  reducing Alaska's  share from 90  percent to  50 percent                                                               
already  has projected  consequences.  While  most revenues  from                                                               
ANWR  are unprojectable,  bonus lease  sale revenues  are already                                                               
determined  with certainty  by  the  Congressional Budget  Office                                                               
(CBO)  2017 analysis.  That analysis  estimated that  gross bonus                                                               
lease  sales from  800,000 acres  out  of the  total 1.5  million                                                               
acres would be approximately $2.2  billion over a 10-year period.                                                               
The difference between the State  receiving a 90 percent versus a                                                               
50 percent revenue share is $880 million.                                                                                       
MR.  SCHROEDER summarized  that SJR  15 asks  Congress to  repeal                                                               
section  20001(b)(5) of  the Tax  Cuts  and Jobs  Act and  return                                                               
revenue sharing  to the 90/10  agreement. SJR 15 would  show that                                                               
the federal government  recognizes the importance of  why it made                                                               
a promise  to the people  of Alaska  when the State  was admitted                                                               
into the union.                                                                                                                 
4:02:34 PM                                                                                                                    
SENATOR  KAWASAKI  said  he  does  not  understand  why  Congress                                                               
changed the  share percentage to 50  percent in the Tax  Cuts and                                                               
Jobs Act.  He asked  if there was  anything in  the congressional                                                               
record that  indicated whether the  change was necessary  or just                                                               
an oversight.                                                                                                                   
SENATOR   WIELECHOWSKI  said   he   presumes   that  the   Alaska                                                               
congressional delegation  did what they  needed to do to  get the                                                               
votes.  However, the  Alaska Statehood  Act  clearly states  that                                                               
Alaska  is to  get 90  percent.  The U.S.  Secretary of  Interior                                                               
during the statehood campaign said,  "The Statehood Act reaffirms                                                               
Alaska's preferential  treatment in  receiving 90 percent  of all                                                               
revenues from oil,  gas, and coal leasing on  the public domain."                                                               
The people of  Alaska voted on statehood based on  the promise by                                                               
the  federal  government  and  in  the  language  of  the  Alaska                                                               
Statehood  Act that  clearly gives  the state  90 percent.  It is                                                               
something  Congress should  have considered.  Congressional deals                                                               
should not trump  what was promised in the  Alaska Statehood Act,                                                               
he said.                                                                                                                        
4:04:14 PM                                                                                                                    
CHAIR MICCICHE said the  Alaska congressional delegation probably                                                               
decided that 50  percent of something was better  than 90 percent                                                               
of nothing. He  said he hates to second-guess  that decision, but                                                               
the resolution brings up a point that is worthy of discussion.                                                                  
SENATOR  WIELECHOWSKI   related  that  in  a   previous  year  he                                                               
introduced a floor amendment urging  Congress to honor what he is                                                               
proposing.  There was  wide spread  support,  but Senate  members                                                               
recommended  a  resolution instead  of  an  amendment and  that's                                                               
before the committee now.                                                                                                       
He said he  believes that the State must  constantly reassert its                                                               
right  to the  promises that  the federal  government made  or it                                                               
could lose  those rights under  the theory in law  called "laches                                                               
or waiver."  That is  that rights  that are  not asserted  may be                                                               
lost. He said  it's important for the State to  assert its rights                                                               
forestalling potential future federal rollbacks.                                                                                
CHAIR  MICCICHE  said  he  appreciates  the  resolution  and  the                                                               
discussion.  He  agreed  that  Alaska needs  to  be  vigilant  to                                                               
prevent further erosion of the State's rights.                                                                                  
He  asked Senator  Coghill if  he had  any comments  or questions                                                               
since he  has expertise  in the  areas of  Alaska's constitution,                                                               
statehood, and ANILCA.                                                                                                          
4:07:00 PM                                                                                                                    
SENATOR  COGHILL thanked  Senator Wielechowski  for bringing  the                                                               
resolution  forward and  said he  is exactly  right. He  said the                                                               
resolution is  totally appropriate  as both  a statement  of fact                                                               
and a political pressure point.                                                                                                 
He recalled  that he  struggled with  the amendment  that Senator                                                               
Wielechowski  referenced  because  the  legislature  was  in  the                                                               
middle  of  asking the  congressional  delegation  for help  with                                                               
something  else.  However,   the  legislature  must  continuously                                                               
remind  the delegation  to bargain  more  for Alaska,  especially                                                               
when major banks  are now bailing on the  state's Arctic resource                                                               
base while the federal government does not help.                                                                                
SENATOR COGHILL  said he has  not studied  every word of  SJR 15,                                                               
but it  is appropriate. Without  the resolution, people  will say                                                               
Alaskans  did  not  say  anything  when  the  federal  government                                                               
reduced the revenue sharing to 50 percent.                                                                                      
4:09:19 PM                                                                                                                    
CHAIR MICCICHE said  he would like to have a  conversation with a                                                               
staff member  from the congressional delegation  to provide their                                                               
take on  the Tax Cuts and  Jobs Act. He noted  that the committee                                                               
will see  what time it  has during the legislative  session based                                                               
upon pending COVID-19 decisions.                                                                                                
He remarked that  he does not think  the congressional delegation                                                               
would relinquish the State's rights  easily. He said he thinks it                                                               
must have been their only  solution, much like the public knowing                                                               
why state legislators do the things they do.                                                                                    
SENATOR COGHILL  suggested that to  expedite the  resolution, the                                                               
sponsor  could further  explain  section 20001(b)(5)  in the  Tax                                                               
Cuts and Jobs Act that the resolution requests for repeal.                                                                      
CHAIR MICCICHE  replied that  he did not  know how  realistic the                                                               
request for  expediting the resolution  was due to the  intent of                                                               
legislators  to  leave Juneau  within  the  next couple  of  days                                                               
because of COVID-19.                                                                                                            
4:11:10 PM                                                                                                                    
SENATOR WIELECHOWSKI  explained that  section 20001(b)(5)  in the                                                               
Tax  Cuts Act  reduces  the payment  to the  State  of Alaska  on                                                               
rental  and  bonus receipts  derived  from  oil and  gas  program                                                               
operations on  federal land  from 90 percent  to 50  percent. The                                                               
section makes  the change  despite the  Mineral Leasing  Act that                                                               
authorized  the  90 percent  payment.  The  Alaska Statehood  Act                                                               
relied on the Mineral Leasing Act.                                                                                              
SENATOR COGHILL  said with Chair  Micciche's permission  that the                                                               
resolution could move up to  Senate Rules, a committee he chairs.                                                               
He noted that he addressed  specific questions to prepare certain                                                               
members before the resolution gets to the Senate floor.                                                                         
SENATOR COGHILL moved to report SJR 15 from committee.                                                                          
CHAIR  MICCICHE  stated that  he  did  not  mind the  motion  but                                                               
emphasized that he  wanted to be part of the  discussion. He said                                                               
he  had a  problem with  the committee  not involving  the people                                                               
that made the decision on the Tax Cuts and Jobs Act.                                                                            
SENATOR COGHILL  conceded that the  legislature should  have said                                                               
something last year,  but the timing was bad due  to a commitment                                                               
he made to a congressional delegation member on another front.                                                                  
CHAIR  MICCICHE  noted that  Senator  Coghill  previously made  a                                                               
motion on SJR 15.                                                                                                               
4:13:26 PM                                                                                                                    
SENATOR COGHILL restated his motion  to report SJR 15, work order                                                               
31-LS1378\K, from  committee with individual  recommendations and                                                               
attached fiscal note.                                                                                                           
CHAIR MICCICHE  asked if anyone in  the room or online  wished to                                                               
testify. Finding no one, he closed public testimony.                                                                            
4:14:09 PM                                                                                                                    
CHAIR MICCICHE  found no objection to  the motion and SJR  15 was                                                               
reported from the Senate Resources Standing Committee.                                                                          

Document Name Date/Time Subjects