Legislature(2011 - 2012)HOUSE FINANCE 519

03/16/2012 09:00 AM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ HB 182 ELECTRONIC DISTRIBUTION OF AGENCY REPORTS TELECONFERENCED
Moved CSHB 182(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 9 IN-STATE GASLINE DEVELOPMENT CORP TELECONFERENCED
Heard & Held
+= HB 78 INCENTIVES FOR CERTAIN MEDICAL PROVIDERS TELECONFERENCED
Moved CSHB 78(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 16, 2012                                                                                            
                         9:14 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:14:48 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 9:14 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Co-Chair                                                                                        
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Mia Costello                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Reggie Joule                                                                                                     
Representative Mark Neuman                                                                                                      
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Bob  Herron;  Jill Lewis,  Deputy  Director,                                                                    
Division of  Public Health, Department of  Health and Social                                                                    
Services;  Liz Clement,  Staff,  Representative Herron;  Tom                                                                    
Wright,   Staff,   Representative    Mike   Chenault;   Rena                                                                    
Delbridge,     Staff,     Representative    Mike     Hawker;                                                                    
Representative Kyle Johansen.                                                                                                   
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Joe  Dubler,  Vice  President,  Alaska  Gasline  Development                                                                    
Corporation;  Anne Brown,  Deputy  Director, State  Pipeline                                                                    
Coordinator's  Office,  Department   of  Natural  Resources;                                                                    
Martin  Schultz,  Senior  Assistant Attorney  General,  Oil,                                                                    
Gas,  & Mining  Section,  Department of  Law; Deitra  Ennis,                                                                    
Deputy  Municipal  Attorney,   Anchorage;  Mr.  Dan  Fauske,                                                                    
CEO/Executive Director,  Alaska Housing  Finance Corporation                                                                    
(AHFC)  and  President  of the  Alaska  Gasline  Development                                                                    
Corporation.                                                                                                                    
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 9      IN-STATE GASLINE DEVELOPMENT CORP                                                                                     
                                                                                                                                
          HB 9 was HEARD and HELD in committee for further                                                                      
          consideration.                                                                                                        
                                                                                                                                
HB 78     INCENTIVES FOR CERTAIN MEDICAL PROVIDERS                                                                              
                                                                                                                                
          CSHB 78(FIN) was REPORTED out  of committee with a                                                                    
          "do pass"  recommendation and with one  new fiscal                                                                    
          impact  note from  the  Department  of Health  and                                                                    
          Social  Services  and  one   new  zero  note  from                                                                    
          Department of Education and Early Development.                                                                        
                                                                                                                                
HB 182    ELECTRONIC DISTRIBUTION OF AGENCY REPORTS                                                                             
                                                                                                                                
          CSHB 182(FIN)  was REPORTED out of  committee with                                                                    
          a  "do  pass"  recommendation  and  with  one  new                                                                    
          indeterminate fiscal  note from the Office  of the                                                                    
          Governor.                                                                                                             
                                                                                                                                
HOUSE BILL NO. 78                                                                                                             
                                                                                                                                
     "An  Act  establishing  a loan  repayment  program  and                                                                    
     employment  incentive program  for certain  health care                                                                    
     professionals employed in the  state; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
9:15:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BOB HERRON  remarked  that  during the  last                                                                    
committee meeting  a concern  was addressed  regarding state                                                                    
residency.  He was  instructed to  craft a  letter with  the                                                                    
commissioner  to address  the issue.  The letter  is in  the                                                                    
committee packet (copy on file.)  The second issue concerned                                                                    
primary care  physicians brought up by  Representative Gara.                                                                    
The  legislation   creates  an  environment  with   all  the                                                                    
occupations   that   support   and  enhance   primary   care                                                                    
throughout  the  state.  The   legislation  would  have  the                                                                    
commissioner   establish  priorities   for  incentive   loan                                                                    
programs for  eligible sites to create  a better environment                                                                    
for attracting primary care physicians to Alaska.                                                                               
                                                                                                                                
Co-Chair Stoltze  requested the  department go on  record to                                                                    
address the concerns.                                                                                                           
                                                                                                                                
JILL  LEWIS, DEPUTY  DIRECTOR,  DIVISION  OF PUBLIC  HEALTH,                                                                    
DEPARTMENT  OF HEALTH  and SOCIAL  SERVICES, indicated  that                                                                    
the  administration  agrees   with  Representative  Herron's                                                                    
statement.  Co-Chair Stoltze  would like  the department  to                                                                    
say it for the record.  Ms. Lewis remarked that in reference                                                                    
to the residency question,  the current committee substitute                                                                    
gives  the   latitude  and  ability  necessary   to  address                                                                    
residency in the regulatory process.                                                                                            
                                                                                                                                
9:19:37 AM                                                                                                                    
                                                                                                                                
Representative Gara appreciated the  statement of intent. He                                                                    
asked if the department agrees  that the largest shortage is                                                                    
with primary care physicians. Ms. Lewis agreed.                                                                                 
                                                                                                                                
Vice-chair  Fairclough  pointed  out  in  the  fiscal  note,                                                                    
component  number 2765.  The difference,  on  page 3,  moves                                                                    
nurse practitioners  from Tier  2 to Tier  1. It  concerns a                                                                    
pending item  before the Board  of Nursing. The  fiscal note                                                                    
would  be  implemented if  the  Board  of Nursing  adopts  a                                                                    
regulation  requiring  Advanced Practice  Registered  Nurses                                                                    
(APRN)  to complete  a doctorate.  Co-Chair Stoltze  pointed                                                                    
out  that  the  tier  status  is  a  categorization,  not  a                                                                    
retirement  status. Vice-chair  Fairclough  agreed that  was                                                                    
correct.  The  fiscal notes  would  come  from payments  for                                                                    
nurse  practitioners  that will  be  paid  from the  service                                                                    
line.                                                                                                                           
                                                                                                                                
Representative Wilson  asked what a nurse  practitioner with                                                                    
a doctorate  can do  that a  nurse practitioner  without one                                                                    
cannot. She also  inquired about the difference  in cost for                                                                    
education.                                                                                                                      
                                                                                                                                
LIZ CLEMENT,  STAFF, REPRESENTATIVE HERRON, replied  that by                                                                    
2015  many states  are requiring  their  advanced nurses  to                                                                    
hold a  Doctor of Nursing  Practice. In the state  of Alaska                                                                    
there  are  both  Master  and  Doctor  of  Nursing  Practice                                                                    
degrees. Currently the  Board of Nursing is  not planning on                                                                    
moving to the Doctor of  Nurse Practice requirement by 2015,                                                                    
however they  may in  the future. The  scope of  practice is                                                                    
not that  much different  just the  level of  education that                                                                    
may be required to advance in the future.                                                                                       
                                                                                                                                
Co-Chair  Stoltze questioned  if a  nurse practitioner  must                                                                    
work  under doctor.  Ms. Clement  referred  the question  to                                                                    
others available.                                                                                                               
                                                                                                                                
Co-Chair  Stoltze noted  that Nurse  Practitioners are  less                                                                    
expensive,  but can  perform many  of the  same services  of                                                                    
doctors.                                                                                                                        
                                                                                                                                
Vice-chair Fairclough  disclosed in FY 13  the $2,842,900 is                                                                    
reduced in  the commodities line  by $7600 for  future years                                                                    
which is  reflected in the  fiscal note. There will  only be                                                                    
one  full time  person  hired for  loan reimbursements.  She                                                                    
asked for a  confirmation from the Department  of Health and                                                                    
Social Services  that only  one person  would be  hired. Ms.                                                                    
Lewis confirmed that only one employee would be hired.                                                                          
                                                                                                                                
9:24:43 AM                                                                                                                    
                                                                                                                                
Representative Doogan referred to  the fiscal note and asked                                                                    
how  the  90  participant  number  in  the  first  year  was                                                                    
determined. Ms.  Lewis answered the bill  indicates that the                                                                    
maximum  would  be  90 participants.  Representative  Doogan                                                                    
remarked that  the actual number  could be lower.  Ms. Lewis                                                                    
agreed   the  number   of  participants   could  be   lower.                                                                    
Representative Doogan asked if there  were a lower number of                                                                    
participants would  the unspent money come  directly back to                                                                    
the state.  Ms. Lewis  responded that if  there were  not 90                                                                    
participants in  first year, then  the department  would not                                                                    
need to  spend all the  money in the fiscal  note, therefore                                                                    
the money would come back to the state.                                                                                         
                                                                                                                                
Vice-chair  Fairclough  followed  up that  when  grants  are                                                                    
issued from a  non-profit; a lot of the  spin-down occurs in                                                                    
the fourth quarter  because the group does not  want to lose                                                                    
the money for programs. She  asked Ms. Lewis for her opinion                                                                    
on the difference  in an operating budget item  and a grant.                                                                    
She pointed  out that  a certain amount  of money  was being                                                                    
set aside without actually knowing  how many people might be                                                                    
attracted. Ms.  Lewis avowed that  the department  would not                                                                    
try  to   expand  the   regulations  to   encourage  broader                                                                    
participation then the  intent of the bill.  The funds would                                                                    
be returned to the state if they are not used.                                                                                  
                                                                                                                                
9:28:46 AM                                                                                                                    
                                                                                                                                
Vice-chair Fairclough  MOVED to  report CSHB 78(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB 78(FIN) was REPORTED out  of committee with a "do pass"                                                                    
recommendation and with one new  fiscal impact note from the                                                                    
Department of  Health and Social  Services and one  new zero                                                                    
note from Department of Education and Early Development.                                                                        
                                                                                                                                
9:29:18 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:33:17 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 9                                                                                                              
                                                                                                                                
     "An   Act   requiring   the  Joint   In-State   Gasline                                                                    
     Development   Team  to   report   to  the   legislature                                                                    
     recommended changes  to state law that  are required to                                                                    
     enable  or   facilitate  the  design,   financing,  and                                                                    
     construction  of an  in-state natural  gas pipeline  so                                                                    
     that the in- state  natural gas pipeline is operational                                                                    
    before 2016; and providing for an effective date."                                                                          
                                                                                                                                
Representative Gara  asked if  a representative  from Alaska                                                                    
Housing  Finance Corporation  (AHFC) would  be available  to                                                                    
answer questions in future hearings.                                                                                            
                                                                                                                                
TOM WRIGHT,  STAFF, REPRESENTATIVE MIKE  CHENAULT, mentioned                                                                    
that there were various people online to answer questions.                                                                      
                                                                                                                                
Vice-chair  Fairclough  MOVED  to ADOPT  proposed  committee                                                                    
substitute HB  9, Work Draft 26-LS0075\K  (Bullock, 3/16/12)                                                                    
as a working document.                                                                                                          
                                                                                                                                
Co-Chair Stoltze OBJECTED for purpose of discussion.                                                                            
                                                                                                                                
Tom Wright spoke of changes  in the committee substitute. He                                                                    
noted the  summary of changes  available and a  title change                                                                    
due to  the adopted language in  the body of the  bill (copy                                                                    
on file).                                                                                                                       
                                                                                                                                
Mr. Wright pointed out the summary of changes in the bill.                                                                      
                                                                                                                                
He referred to the Title Change:                                                                                                
                                                                                                                                
     Page 1,  line 6, after  "lease or", adds "an  action or                                                                    
     decision related to"                                                                                                       
                                                                                                                                
     Page  1,  line  8,  after  "Corporation",  adds  "or  a                                                                    
     successor in interest"                                                                                                     
                                                                                                                                
     SECTION 1:                                                                                                                 
                                                                                                                                
     Page  2, line  8, through  Page 3  line 5:  Adds a  new                                                                    
     section of Legislative Findings and Intent.                                                                                
                                                                                                                                
     Page 2,  lines 11-15:  Incorporates a Letter  of Intent                                                                    
     related to disclosure of  operating agreements into the                                                                    
     body  of  HB  9.  Clarifies  intent  language  so  that                                                                    
     executed   operating  agreements   will  be   disclosed                                                                    
     publically  to  the  extent  the  disclosure  will  not                                                                    
     divulge  trade secrets  or  other proprietary  business                                                                    
     information.                                                                                                               
                                                                                                                                
     Page 2, line 16, through  Page 3, line 5: Adds findings                                                                    
     and  intent related  to  AGDC's  mission; direction  to                                                                    
     provide gas and to  ship gas at commercially reasonable                                                                    
     rates;  makes a  determination  of an  AGDC project  as                                                                    
     being  within  the  public convenience  and  necessity,                                                                    
     declares development  of an instate gas  pipeline as in                                                                    
     the best  interests of  the state;  and finds  that the                                                                    
     state shall nave  a policy of making  state royalty gas                                                                    
     available for shipment in an AGDC pipeline.                                                                                
                                                                                                                                
     SECTION   2:  Renumbered from Section 1; no other                                                                          
                    changes.                                                                                                    
                                                                                                                                
     SECTION   3:  Renumbered from Section 2; no other                                                                          
                    changes.                                                                                                    
                                                                                                                                
     SECTION   4:  Renumbered from Section 3.                                                                                   
                                                                                                                                
     Page 6,  lines 20-28: Sets parameters  on the direction                                                                    
     for state  agencies to give AGDC  access to information                                                                    
     directly related  to an  instate natural  gas pipeline.                                                                    
     If an  agency finds that information  to be transferred                                                                    
     to  AGDC  is confidential,  the  agency  may require  a                                                                    
     confidentiality  agreement  and,  if  a  third  party's                                                                    
     rights are affected, AGDC may  have to secure the third                                                                    
     party's consent.                                                                                                           
                                                                                                                                
     This  change is  recommended by  the Department  of law                                                                    
     and   is  intended   to  set   parameters  around   the                                                                    
     information  that   is  to  be  shared   between  state                                                                    
     agencies  and  AGDC.  Some information  held  by  state                                                                    
     agencies is  confidential, and cannot  be automatically                                                                    
     shared with AGDC.                                                                                                          
                                                                                                                                
     SECTION   5:   Renumbered  from  Section  4;  no  other                                                                    
     changes.                                                                                                                   
                                                                                                                                
     SECTION  6:  Renumbered from Section 5.                                                                                    
                                                                                                                                
     Page 7, line 10: Changes "at  no cost or rental fee" to                                                                    
     "at no appraisal or rental cost.                                                                                           
                                                                                                                                
     This  change  was  recommended by  the  State  Pipeline                                                                    
     Coordinator's  Office/Department  of Natural  Resources                                                                    
     and better reflects existing terminology.                                                                                  
                                                                                                                                
     SECTION  7:  Renumbered from Section 6.                                                                                    
                                                                                                                                
     Page  8, lines  15-16: adds  after "rates,"  "except as                                                                    
     provided in (c) of this section".                                                                                          
                                                                                                                                
     Conforms to  the change in  Section 6,  clarifying that                                                                    
     while  nonhydrocarbon natural  resources  of the  state                                                                    
     are  to  be  made  available   to  AGDC  at  usual  and                                                                    
     customary  rates, a  state right-of-way  lease will  be                                                                    
     granted at no appraisal or rental cost.                                                                                    
                                                                                                                                
     Page 8, lines 25-28: Adds new subsection (I).                                                                              
                                                                                                                                
     Clarifies that a state  Right-of-Way lease entered into                                                                    
     by AGDC  may be  transferred to  a successor  under the                                                                    
     same terms the lease is granted to AGDC.                                                                                   
                                                                                                                                
    SECTION 8:     Renumbered from Section 7; no other                                                                          
                    changes.                                                                                                    
                                                                                                                                
    SECTION 9:     Renumbered from Section 8; no other                                                                          
                    changes.                                                                                                    
                                                                                                                                
    SECTION 10:    Renumbered from Section 9; no other                                                                          
                    changes.                                                                                                    
                                                                                                                                
    SECTION 11:    Renumbered from Section 10; no other                                                                         
                    changes.                                                                                                    
                                                                                                                                
     SECTION 12:    Renumbered from Section 11.                                                                                 
                                                                                                                                
     Page  13,   line  18,  after   "notwithstanding  (a},":                                                                    
     removed "and (b)."                                                                                                         
                                                                                                                                
     Page 13,  line 19:  Replaced "cost to  or reimbursement                                                                    
     by" with "appraisal or rental costs to."                                                                                   
                                                                                                                                
     Both  changes were  recommended by  the State  Pipeline                                                                    
     Coordinator's  Office/Department of  Natural Resources.                                                                    
     SPCO operates on receipt authority,  and AGDC will need                                                                    
     to  pay for  services.  The term  "appraisal or  rental                                                                    
     costs" conforms to existing SPCO/DNR terminology.                                                                          
                                                                                                                                
     SECTION 13:    Renumbered from Section 12.                                                                                 
                                                                                                                                
     Page 14, line 13: Added "or authorization" after                                                                           
          "decision."                                                                                                           
                                                                                                                                
     Page   14,   line   14-15,  after   "under":   Replaced                                                                    
          "authority delegated to" with "a program approved                                                                     
          or delegated by."                                                                                                     
                                                                                                                                
     Both changes  address technical concerns  by Department                                                                    
     of Environmental Conservation.                                                                                             
                                                                                                                                
    SECTION 14:    Renumbered from Section 13; no other                                                                         
                    changes.                                                                                                    
                                                                                                                                
    SECTION 15:    Renumbered from Section 14; no other                                                                         
                    changes.                                                                                                    
                                                                                                                                
    SECTION 16:    Renumbered from Section 15; no other                                                                         
                    changes.                                                                                                    
                                                                                                                                
     SECTION 17:                                                                                                                
                                                                                                                                
     Page  17, lines  16-18: Inserted  "A pledge  made under                                                                    
     this subsection shall  be treated as a  disposal of gas                                                                    
     other  than by  sale  or exchange  for  purposes of  AS                                                                    
     38.05.183."                                                                                                                
                                                                                                                                
     Department of Natural Resources recommended this                                                                           
     change to accommodate existing statutes related to                                                                         
     royalty gas.                                                                                                               
                                                                                                                                
     SECTIONS 18-33 are renumbered; no other changes.                                                                           
                                                                                                                                
9:42:05 AM                                                                                                                    
                                                                                                                                
Representative  Gara remarked  that the  state owns  roughly                                                                    
one out of  every eight units of natural  gas. He questioned                                                                    
how  one sells  just one  out of  every eight  units without                                                                    
producing the other seven eighths.                                                                                              
                                                                                                                                
RENA   DELBRIDGE,   STAFF,   REPRESENTATIVE   MIKE   HAWKER,                                                                    
responded  that  the  state's  royalty  gas  would  be  made                                                                    
available  for  shipment in  the  pipeline,  not that  there                                                                    
would be  no other  gas involved. Representative  Gara noted                                                                    
that the state  gets a royalty on roughly one  eighth of the                                                                    
value of  the hydrocarbon product when  it is commercialized                                                                    
and wondered if the other seven  eighths must be sold at the                                                                    
same  time  for  there  to be  royalty  gas.  Ms.  Delbridge                                                                    
replied that in  order to have royalty gas  taken as royalty                                                                    
gas "in  kind," that  there would  need to  be other  gas in                                                                    
production.                                                                                                                     
                                                                                                                                
Co-Chair Stoltze remarked that  shipping commitments were an                                                                    
essential ingredient.                                                                                                           
                                                                                                                                
Representative Costello  questioned the change in  Section 1                                                                    
relating  to the  policy changes.  She read  it to  say that                                                                    
Alaska is  taking its royalty "in-kind."  Mr. Wright agreed,                                                                    
but that was for gas not  already committed. For any gas not                                                                    
committed,  the  state would  be  like  it  to be  used  for                                                                    
consumers   and   commercial   enterprises.   Representative                                                                    
Costello questioned  the physics of natural  gas versus oil;                                                                    
she understood  that the size  of the pipe does  not matter.                                                                    
She asked that, under the  legislation, would it be possible                                                                    
for the  state to  invest in  making a  48 inch  pipeline to                                                                    
pursue   an   owner-interest   under  the   Alaska   Gasline                                                                    
Inducement Act (AGIA).                                                                                                          
                                                                                                                                
Mr.  Wright  requested  that  Joe  Dubler  respond  to  that                                                                    
question.                                                                                                                       
                                                                                                                                
JOE  DUBLER,  VICE  PRESIDENT,  ALASKA  GASLINE  DEVELOPMENT                                                                    
CORPORATION  (via teleconference)responded  that building  a                                                                    
48 inch pipeline  from the North Slope to  South Central was                                                                    
a   feasible  project,   but  uncertain   if  it   would  be                                                                    
commercially  feasible. At  present, it  would be  difficult                                                                    
due to being  so far along in the  permitting process. After                                                                    
a certain  point is  reached, modifications  can be  made to                                                                    
permits received. It  is an option open to the  state if the                                                                    
state wanted  to fund  it. If  the commercial  entities come                                                                    
into the  project to ship gas  to the extent that  a 48 inch                                                                    
pipeline  could  not  be  filled, the  costs  would  not  be                                                                    
recoverable.                                                                                                                    
                                                                                                                                
Representative Gara  thought the  bill left AGIA  intact and                                                                    
AGIA has the  provision of not being able to  ship more than                                                                    
a half of billion cubic feet (Bcf)  of gas a day. He did not                                                                    
believe that would allow for  a 48 inch pipeline. Mr. Dubler                                                                    
responded   that  would   be   correct,   but  he   believed                                                                    
Representative Costello's question addressed  making it a 48                                                                    
inch pipeline under AGIA law.                                                                                                   
                                                                                                                                
9:47:52 AM                                                                                                                    
                                                                                                                                
Representative Doogan  asked for  the meaning of  Section 12                                                                    
that adds a  new subsection "c." Ms. Delbridge  asked if the                                                                    
question was in reference to  the appraisal in rental costs.                                                                    
Representative  Doogan referred  to the  right-of-way lease.                                                                    
Ms.  Delbridge responded  that the  right-of-way lease  is a                                                                    
lease  agreement   entered  into   by  the   Alaska  Gasline                                                                    
Development  Corporation   (AGDC)  and  the   Department  of                                                                    
Natural  Resources. The  State Pipeline  Coordinators Office                                                                    
(SPCO)  is  charged  with administering  the  terms  of  the                                                                    
lease. The original intent was  that the state agency needed                                                                    
to provide permits and leases to  AGDC at no cost. The costs                                                                    
would be  rolled into the  tariff. The state  determined, in                                                                    
the interest of  the public, that the cost does  not need to                                                                    
be  in the  tariff and  that  would keep  tariffs lower  for                                                                    
people   getting  gas   in   Alaska.   The  State   Pipeline                                                                    
Coordinators Office (SPCO) operates  on receipt authority so                                                                    
they need  the entities  they administer  leases for  to pay                                                                    
for having  that administration done. The  sponsors believed                                                                    
it was  appropriate, in that  instance, for AGDC to  pay the                                                                    
costs required for administration of the leases.                                                                                
                                                                                                                                
9:50:12 AM                                                                                                                    
                                                                                                                                
ANNE  BROWN, DEPUTY  DIRECTOR, STATE  PIPELINE COORDINATOR'S                                                                    
OFFICE,    DEPARTMENT    OF     NATURAL    RESOURCES    (via                                                                    
teleconference),  responded that  the  question regards  the                                                                    
way  the  SPCO  tracks  funding  and  billing  for  pipeline                                                                    
projects. The  benefit of  the proposed  change would  be to                                                                    
give it flexibility and allow  them to change authority. All                                                                    
the state agencies  working on the project  would go through                                                                    
the  reimbursable agreement.  They  would like  to keep  the                                                                    
billing system to make it easier  to manage, but there is no                                                                    
objection  to adding  something  in the  legislation to  not                                                                    
have it  as part  of tariff. The  setup works  smoothly with                                                                    
less   effort  for   tracking  costs   and  flexibility   in                                                                    
responding to needs.                                                                                                            
                                                                                                                                
Representative Wilson  asked about page 2,  line 18, "making                                                                    
natural  gas  available  to  Fairbanks…"  She  stressed  the                                                                    
community  needed  gas  at  a   more  affordable  rate,  but                                                                    
wondered  if there  was any  way it  could be  tighter as  a                                                                    
statewide project and not fall to the local residents.                                                                          
                                                                                                                                
Co-Chair  Stoltze questioned  the  definition of  Fairbanks.                                                                    
Ms. Delbridge replied that it  was Fairbanks as a population                                                                    
center.                                                                                                                         
                                                                                                                                
Mr. Wright responded to  Representative Wilson's question by                                                                    
referring to Mr. Dubler.                                                                                                        
                                                                                                                                
9:53:35 AM                                                                                                                    
                                                                                                                                
Mr. Dubler  responded that the tariff  proposed to Fairbanks                                                                    
included the  lateral line and  not an additional  charge on                                                                    
top of  the tariff. Regarding the  distribution lines within                                                                    
the community; the charge of  the gasline corporation was to                                                                    
deliver gas to Fairbanks, but  not pay the distribution line                                                                    
costs.                                                                                                                          
                                                                                                                                
Representative Wilson  realized distribution lines  would be                                                                    
Fairbanks  responsibility. She  indicated  that  as long  as                                                                    
Alaska Gasline and Development was  in charge, no one had an                                                                    
issue. But  if a private  corporation came in and  built the                                                                    
pipeline,  then  decided  it was  not  affordable  by  their                                                                    
numbers, Fairbanks  would get left  out because  the numbers                                                                    
did not work.                                                                                                                   
                                                                                                                                
Mr.  Dubler  responded  that the  cost  of  the  incremental                                                                    
pipeline  from  the main  line  into  Fairbanks would  be  a                                                                    
short,  small, inexpensive  line,  so even  if a  commercial                                                                    
entity  took over,  there  would be  sufficient  use in  the                                                                    
Fairbanks  area  to build  that  line.  A commercial  entity                                                                    
could make money with the incremental line.                                                                                     
                                                                                                                                
Ms. Delbridge clarified  that there is nothing in  HB 9 that                                                                    
would  preclude  commercial  interests from  coming  in  and                                                                    
doing it  themselves anyway.  The legislation,  by providing                                                                    
greater structure  to AGDC, allows  them to look  at someone                                                                    
else's project  and consider  lines into  population centers                                                                    
in the Interior and South Central.                                                                                              
                                                                                                                                
9:57:04 AM                                                                                                                    
                                                                                                                                
Representative  Neuman   asked  Ms.  Brown  that   with  the                                                                    
exclusive license  with TransCanada, would there  need to be                                                                    
changes  to the  exclusive license  to allow  AGDC or  other                                                                    
producers to come  under the fold of  the exclusive license.                                                                    
Ms.  Brown  responded that  was  a  better question  for  an                                                                    
attorney. The project  is designed not to  conflict with the                                                                    
AGIA project.  If they  were to  come together,  an attorney                                                                    
would  have  to  amend  the license  part.  She  added  that                                                                    
amendments can be made to a lease.                                                                                              
                                                                                                                                
Representative Neuman  noted there were  certain inducements                                                                    
to  companies that  participated  in the  first open  season                                                                    
with  the TransCanada  proposal. If  there was  an alignment                                                                    
with all the pipelines, he  wondered if the same inducements                                                                    
would follow through. Ms. Brown  suggested the Department of                                                                    
Revenue or Law  could better answer the  question. She added                                                                    
that if  they came  together, both project  applications and                                                                    
leases can be amended.                                                                                                          
                                                                                                                                
Co-Chair Stoltze asked the Department  of Revenue to come to                                                                    
the next meeting with those answers.                                                                                            
                                                                                                                                
Ms. Delbridge  indicated that someone would  be available to                                                                    
answer questions for next meeting.                                                                                              
                                                                                                                                
10:00:41 AM                                                                                                                   
                                                                                                                                
MR.  DAN FAUSKE,  CEO/EXECUTIVE DIRECTOR  OF ALASKA  HOUSING                                                                    
FINANCE  CORPORATION  (AHFC)  AND PRESIDENT  OF  THE  ALASKA                                                                    
GASLINE   DEVELOPMENT   CORPORATION  (via   teleconference),                                                                    
responded  to  Representative  Wilson's question  about  the                                                                    
tariff schedule and the assurance  of gas for Fairbanks. The                                                                    
tariffs  that  are  anticipated  for  the  entire  Fairbanks                                                                    
region are  essential to maintain  low tariffs  for everyone                                                                    
up and  down the line. There  would be no inducement  to not                                                                    
have the gas line going in,  as it would drive up prices for                                                                    
everyone. Fairbanks  is essential in the  overall production                                                                    
and  development of  an affordable  tariff schedule  for all                                                                    
the citizens using the pipeline.                                                                                                
                                                                                                                                
Representative  Edgmon  commented  on the  intent  language.                                                                    
There  is the  term "lowest  rate possible"  that refers  to                                                                    
Fairbanks,  South Central  and  communities  in Alaska  plus                                                                    
another  term  "commercially  reasonable"  that  applies  to                                                                    
public utilities  and industrial  customers. He  wondered if                                                                    
AGDC would be  the sole authority to insure  that the intent                                                                    
of the bill is met for the lowest rates possible.                                                                               
                                                                                                                                
Ms.  Delbridge agreed  that AGDC  is charged  with providing                                                                    
"commercially reasonable" service. They  are also charged to                                                                    
make sure  the rates that go  to the communities are  as low                                                                    
as can  be. They do not  want to roll more  into the tariffs                                                                    
then  there has  to be.  State support  in sand,  water, and                                                                    
gravel  really become  important.  The legislative  findings                                                                    
are  advisory, but  AGDC also  has  that obligation  written                                                                    
under HB 369  and now Section 2,  page 3 (a) and  (b) of the                                                                    
bill.                                                                                                                           
                                                                                                                                
Representative  Neuman  asked if  "commercially  reasonable"                                                                    
was  a  legal  term.  Ms. Delbridge  responded  it  was  not                                                                    
defined  anywhere.   Representative  Neuman   remarked  that                                                                    
"lowest rate possible" was also an open ended definition.                                                                       
                                                                                                                                
Mr. Wright  responded that a mission  in HB 369 was  "in the                                                                    
most economic manner." They are  still following the "lowest                                                                    
rates possible" with all considerations.                                                                                        
                                                                                                                                
10:05:24 AM                                                                                                                   
                                                                                                                                
Mr. Dubler  responded that  the important  thing to  keep in                                                                    
mind  with  the project  is  that  it  will not  go  forward                                                                    
without a successful open season.  The market will determine                                                                    
what "commercially  reasonable" rates  are and what  will be                                                                    
the tariffs.  If the tariffs  are too high, the  market will                                                                    
indicate it is  too high and will not proceed.   The project                                                                    
will  not continue  without firm  commitments  for the  full                                                                    
capacity of the pipeline.                                                                                                       
                                                                                                                                
Representative Guttenberg  noted that  the bill  grants AGDC                                                                    
considerable rights  and privileges  to build  the pipeline.                                                                    
Part of the  bill and process is the  eventuality if another                                                                    
commercial interest comes in,  referred to as the "successor                                                                    
of interests." He questioned if  someone else came in, would                                                                    
the state  given privileges  to AGDC  continue with  the new                                                                    
group.                                                                                                                          
                                                                                                                                
Mr.  Wright  remarked  that the  Department  of  Law  should                                                                    
answer  the question.  He added  that any  lease transferred                                                                    
still  has to  be  signed  off by  the  Commissioner of  the                                                                    
Department of Natural Resources.                                                                                                
                                                                                                                                
MARTIN SCHULTZ, SENIOR ASSISTANT  ATTORNEY GENERAL, OIL, GAS                                                                    
& MINING  SECTION, DEPARTMENT  OF LAW,  (via teleconference)                                                                    
indicated  that   his  understanding  of   the  right-of-way                                                                    
provision was that  it could be transferred  to a successor,                                                                    
but the way  the bill is written, the  Department of Natural                                                                    
Resources Commissioner  would need  to approve  the transfer                                                                    
of the right-of-way lease.                                                                                                      
                                                                                                                                
Co-Chair Stoltze  asked about the bonding  authority and the                                                                    
eminent domain question.                                                                                                        
                                                                                                                                
Mr.  Schultz   responded  that  those  are   powers  of  the                                                                    
Alaska Gasline  Development Corporation  under the  bill and                                                                    
those particular  powers would remain with  the corporation.                                                                    
Ms. Delbridge replied that the  question was answered by Mr.                                                                    
Schultz.                                                                                                                        
                                                                                                                                
Representative Doogan  wondered if  there are  any estimates                                                                    
for  the cost  of the  spurs  to rural  hubs. Ms.  Delbridge                                                                    
replied that  there are  no plans for  spurs to  rural hubs.                                                                    
The direction in the bill is  for AGDC to begin analyzing if                                                                    
commercially  reasonable  gas  could be  provided  to  other                                                                    
communities, but only after construction  begins on the main                                                                    
line.                                                                                                                           
                                                                                                                                
Mr. Dubler  responded that  on page  4, line  5-17, provides                                                                    
the  direction  to  AGDC to  begin  looking  for  additional                                                                    
natural    gas   pipelines    connecting   to    industrial,                                                                    
residential, or  utility customers  in other regions  in the                                                                    
state,  after the  beginning the  construction  of the  main                                                                    
line.  The idea  was to  get  the program  underway and  not                                                                    
presently look  at other areas.  There are a lot  of factors                                                                    
that  go into  the  costs  of connecting  to  a natural  gas                                                                    
pipeline.   The  first   and   largest   component  is   the                                                                    
composition  of  the gas  going  through  the line.  To  the                                                                    
extent  that it  is a  rich  stream, which  was the  initial                                                                    
plan,  the  cost  is  prohibitive  for  smaller  communities                                                                    
because an expensive  straddle plant would need  to be built                                                                    
at every location. The cost would  be much lower if it was a                                                                    
utility grade gas  stream from the main line.  The closer to                                                                    
the main line, the cheaper it would be.                                                                                         
                                                                                                                                
10:12:15 AM                                                                                                                   
                                                                                                                                
Representative   Doogan   understood   that  it   might   be                                                                    
difficult,  but   believed  there   must  be   some  initial                                                                    
estimates of  what the project  would cost. If  bringing gas                                                                    
to  a rural  area, then  there needs  to be  an idea  of the                                                                    
costs. He  indicated that was  a big  concern to him  and he                                                                    
needed a better idea of what he was voting on.                                                                                  
                                                                                                                                
Mr.  Wright  interjected  that the  main  charge  for  AGDC,                                                                    
established in  HB 369, was to  look at a main  line, not to                                                                    
spend a lot of money  or time engineering or providing costs                                                                    
estimates  to other  regions  of  the state.  Representative                                                                    
Doogan remarked that  HB 9 is the bill  being considered and                                                                    
if there is a provision for  hubs, then there needs to be an                                                                    
estimate to  the hubs.  He asked  if there was  a way  to do                                                                    
that   intelligently.  Mr.   Wright   agreed   it  was   the                                                                    
legislature's  prerogative  to  insert  and  consider  other                                                                    
language.                                                                                                                       
                                                                                                                                
10:15:29 AM                                                                                                                   
                                                                                                                                
Representative  Gara  noted that  last  session  HB 369  was                                                                    
passed where  $200 million was  put into a fund  for studies                                                                    
and other  work. He  wanted a  detailed description  of what                                                                    
has  been passed  so  far and  an  answer to  why  HB 9  was                                                                    
needed. He noted that when  the previous bill was passed, he                                                                    
had not envisioned  having it followed the next  year with a                                                                    
bill like HB 9.                                                                                                                 
                                                                                                                                
Mr. Wright informed  that the $200 million  is still sitting                                                                    
in a  fund because  the in-state gasline  fund has  not been                                                                    
established.  Ms.  Delbridge  informed  Representative  Gara                                                                    
that they would be happy to provide the information.                                                                            
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his objection  to the  committee                                                                    
substitute.                                                                                                                     
                                                                                                                                
Committee  Substitute for  HB  9 was  ADOPTED  as a  working                                                                    
document.                                                                                                                       
                                                                                                                                
HB  9   was  HEARD  and   HELD  in  committee   for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:17:57 AM                                                                                                                   
                                                                                                                                
HOUSE BILL NO. 182                                                                                                            
                                                                                                                                
     "An Act relating to distribution of annual reports by                                                                      
     state agencies."                                                                                                           
                                                                                                                                
Vice-chair  Fairclough  MOVED  to ADOPT  proposed  committee                                                                    
substitute  for HB  182 (FIN)  Work Draft  27-LS0573\R as  a                                                                    
working  document.  There  being  NO  OBJECTION  it  was  so                                                                    
ordered.                                                                                                                        
                                                                                                                                
REPRESENTATIVE KYLE  JOHANSEN explained that the  bill takes                                                                    
all the  requirements in statute  that have been  written in                                                                    
the  past 40-50  years  that require  departments to  print,                                                                    
publish,   and  distribute   actual  pamphlets   and  annual                                                                    
reports. The  bill originally just involved  annual reports,                                                                    
but the State  Affairs Committee expanded it  to include all                                                                    
reports   required    by   statute,   to    be   distributed                                                                    
electronically.  There are  some exceptions.  The department                                                                    
commissioners would  make a  final determination  if reports                                                                    
needed to  be printed and  published. He gave an  example of                                                                    
why printed material has been needed  in the past. HB 9 came                                                                    
about when a person in  the Department of Commerce indicated                                                                    
the  need for  a  $250,000 increment.  When  asked why,  the                                                                    
person noted  rising printing costs  and the  requirement in                                                                    
statute for all  reports to be printed. In  2011, the Office                                                                    
of Management  and Budget (OMB)  predicted a  projected $1.6                                                                    
million savings. The fiscal note is indeterminate.                                                                              
                                                                                                                                
10:21:48 AM                                                                                                                   
                                                                                                                                
Representative  Costello  commented  that  when  the  Arctic                                                                    
Policy Council legislation passed  out, the fiscal notes did                                                                    
include  printing  report  costs.   When  fiscal  notes  are                                                                    
prepared, departments assume that  the reports are wanted in                                                                    
a printed  format. She  believed the bill  moves in  a great                                                                    
direction.  There could  be  considerable  cost savings  and                                                                    
thanked the sponsor.                                                                                                            
                                                                                                                                
Co-Chair Stoltze  noted that the  default position  would be                                                                    
electronic reports unless there  is a justifiable reason for                                                                    
the material to be printed.                                                                                                     
                                                                                                                                
Representative Johansen agreed that  was correct. Giving the                                                                    
department commissioners the authority  to make the decision                                                                    
would force the department to  justify their request to have                                                                    
the material printed.                                                                                                           
                                                                                                                                
10:24:01 AM                                                                                                                   
                                                                                                                                
DEITRA  ENNIS,  DEPUTY  MUNICIPAL ATTORNEY,  ANCHORAGE  (via                                                                    
teleconference) spoke in support  of the bill. The municipal                                                                    
language earlier referenced  speaks to noticing requirements                                                                    
to  tax  payers  for  closer  and  redemption  periods.  She                                                                    
stressed the importance in the  bill of not eliminating mail                                                                    
requirements. It  allows the municipality to  add electronic                                                                    
notice  to  the  newspaper  notice.  There  are  significant                                                                    
benefits of  the bill: costs, updating  and flexibility, and                                                                    
more  helpful information  available.  The  bill allows  the                                                                    
municipality to  decide the most  effective method  to reach                                                                    
taxpayers.  Estimated savings  was  $500,000  for the  first                                                                    
year on information brought online.                                                                                             
                                                                                                                                
10:27:10 AM                                                                                                                   
                                                                                                                                
Representative Edgmon asked if,  under law, the municipality                                                                    
was not  already able to  do it.  Ms. Ennis replied  that it                                                                    
would  not  apply  for  the   last  15  days,  because  some                                                                    
information must  be delivered  to the  newspaper so  far in                                                                    
advance.                                                                                                                        
                                                                                                                                
Representative  Gara MOVED  Amendment  1, 27-LS0573,  Kirsh,                                                                    
3/15/12. (Copy on file)                                                                                                         
                                                                                                                                
                        AMENDMENT 1                                                                                           
                                                                                                                                
     OFFERED IN THE HOUSE                                                                                                       
          TO: CSHB 182(), Draft Version "T"                                                                                     
                                                                                                                                
     Page 3, lines 29 - 30:                                                                                                     
          Delete "required by statute to produce and                                                                            
          distribute"                                                                                                           
                                                                                                                                
          Insert "that produces and distributes"                                                                                
                                                                                                                                
     Page 4, lines 1 - 2:                                                                                                       
                                                                                                                                
          Delete "The agency shall provide and post the                                                                         
          report for one year or until it is superseded,                                                                        
          whichever occurs first."                                                                                              
                                                                                                                                
     Page 4, line 3:                                                                                                            
                                                                                                                                
          Delete "those"                                                                                                        
                                                                                                                                
     Page 4, following line 14:                                                                                                 
                                                                                                                                
          Insert a new section to read:                                                                                         
                                                                                                                                
               "Sec. 44.99.380. Graphic design for annual                                                                       
          reports. Notwithstanding AS 44.99.200, when                                                                           
          preparing annual reports, a state agency may not                                                                      
                                                                                                                                
               (1) print color copies unless color is                                                                           
          needed for the reader to understand the material;                                                                     
                                                                                                                                
               (2) hire contractors to provide photographs                                                                      
          or graphics unless                                                                                                    
                                                                                                                                
                    (A) no agency employee qualified to                                                                         
               perform the work is available; or                                                                                
                                                                                                                                
                    (B) the agency would use fewer state                                                                        
               resources by hiring a contractor."                                                                               
                                                                                                                                
Vice-chair Fairclough OBJECTED for purpose of discussion.                                                                       
                                                                                                                                
Representative  Gara   worked  with  the  sponsor   and  the                                                                    
Department  of   Law  to  make  the   changes  reflected  in                                                                    
Amendment  1.  He  noted  that a  lot  of  agencies  produce                                                                    
reports so  his amendment  allows all  agency reports  to be                                                                    
posted  electronically. On  page 4,  lines 1-2,  states that                                                                    
the  reports will  be done  electronically, but  also states                                                                    
the report  must be removed  after one  year. Representative                                                                    
Gara  noted that  there are  people  who would  like to  see                                                                    
information  for more  than one  year. The  position in  the                                                                    
amendment  gives   the  agency   the  discretion   to  leave                                                                    
information on  the website longer  if it serves  the public                                                                    
interest. The most important part  starts on page 4 with the                                                                    
desire  to save  money. In  annual reports  there may  be no                                                                    
need  for color  or the  necessity to  hire outside  graphic                                                                    
designers or  photographers. The change would  indicate that                                                                    
"unless it is needed" the report  should not be in color and                                                                    
the agency should do its own work.                                                                                              
                                                                                                                                
Vice-chair Fairclough  asked if the sponsor  approved of the                                                                    
amendment. Representative Johansen  agreed with the changes.                                                                    
He believed the suggestions improve the bill.                                                                                   
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION  to Amendment  1.                                                                    
There being NO Further OBJECTION, Amendment 1 was adopted.                                                                      
                                                                                                                                
Representative Neuman mentioned that  the lack of government                                                                    
information is not helpful when  people want to be involved.                                                                    
He asked  if someone  wanted the paper  documentation, would                                                                    
it be available.                                                                                                                
                                                                                                                                
Representative Johansen read from  page 4, line 13-14, where                                                                    
it states that a person can  obtain a print copy of a report                                                                    
from the  Alaska State Library Distribution  and Data Access                                                                    
Center.   The  bill   also   states   that  the   department                                                                    
commissioner  have   the  authority  to  decide   whether  a                                                                    
document should be distributed widely.                                                                                          
                                                                                                                                
Representative  Neuman   commented  that  a  lot   of  rural                                                                    
communities do not have accessible libraries.                                                                                   
                                                                                                                                
Co-Chair  Stoltze  reported  that  most  people  today  have                                                                    
computer access.                                                                                                                
                                                                                                                                
10:35:08 AM                                                                                                                   
                                                                                                                                
Representative Johansen mentioned that  access was a concern                                                                    
brought  up  by  a  librarian in  Ketchikan.  The  bill  was                                                                    
written  to   make  sure  that  the   Alaska  State  Library                                                                    
Distribution Center, which is  connected to every library in                                                                    
the  state, had  the  information. He  also  stated that  80                                                                    
percent of households in Alaska have internet access.                                                                           
                                                                                                                                
Co-Chair Stoltze CLOSED public testimony.                                                                                       
                                                                                                                                
10:36:54 AM                                                                                                                   
                                                                                                                                
Vice-chair Fairclough  MOVED to report CSHB  182(FIN) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB  182(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation  and with one new  indeterminate fiscal                                                                    
note from the Office of the Governor.                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:37 AM.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 78 DHSS response 3-12-12.pdf HFIN 3/16/2012 9:00:00 AM
HB 78
HB 182 - Sectionalpdf.pdf HFIN 3/16/2012 9:00:00 AM
SSTA 4/11/2012 9:00:00 AM
HB 182
HB 182 - Sectional.docx HFIN 3/16/2012 9:00:00 AM
HB 182
HB 182 - OMB Report Summary.pdf HFIN 3/16/2012 9:00:00 AM
SSTA 4/11/2012 9:00:00 AM
HB 182
HB 182 - Backup Leg Research 2011.pdf HFIN 3/16/2012 9:00:00 AM
HB 182
HB182CS(STA)-NEW FN-GOV-OMB-3-03-2012.pdf HFIN 3/16/2012 9:00:00 AM
HB 182
HB182 Amendment 1 Gara.pdf HFIN 3/16/2012 9:00:00 AM
HB 182
HB009CS(RES)-NEW CSDOR-AHFC-03-12-12 Attachment.pdf HFIN 3/16/2012 9:00:00 AM
HB 9
HB009CS(RES)NEW CS-DOR-AHFC-03-12-12.pdf HFIN 3/16/2012 9:00:00 AM
HB 9
HB 9 CS Workdraft K version Summary of Changes.pdf HFIN 3/16/2012 9:00:00 AM
HB 9
HB9 CS WORKDRAFT Kversion 3.16.12.pdf HFIN 3/16/2012 9:00:00 AM
HB 9
HB 182 R VERSION SECTIONAL.pdf HFIN 3/16/2012 9:00:00 AM
HB 182
HB 182 CS WORKDRAFT 27-LS1057-R.pdf HFIN 3/16/2012 9:00:00 AM
HB 182
HB078CS(FIN)-NEW CS-DHSS-HPSD-3-16-12.pdf HFIN 3/16/2012 9:00:00 AM
HB 78
HB9 Gara Handout 3.16.12.pdf HFIN 3/16/2012 9:00:00 AM
HB 9