Legislature(2013 - 2014)

04/17/2014 09:06 PM FIN


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09:06:57 PM Start
09:07:03 PM SB138
09:08:04 PM Amendments
11:56:32 PM SB194
11:59:59 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 17, 2014                                                                                            
                         9:06 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:06:57 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 9:06 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Alan Austerman, Co-Chair                                                                                         
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Mia Costello                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Lindsey Holmes                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Steve Thompson                                                                                                   
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator   Peter   Micciche;    Michael   Pawlowski,   Deputy                                                                    
Commissioner, Strategic Finance,  Department of Revenue; Joe                                                                    
Balash, Commissioner,  the Department of  Natural Resources;                                                                    
Susan Pollard,  Oil, Gas, and Mining  Section, Department of                                                                    
Law;  Genevieve  Wojtusik,  Staff,  Senator  Lesil  McGuire;                                                                    
Roberta  Graham,   Assistant  Commissioner,   Department  of                                                                    
Commerce, Community and  Economic Development; Bill Peddler,                                                                    
Alaska Tourism Association.                                                                                                     
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Kathleen  Martin, Self,  Cooper  Landing;  Ed Martin,  self,                                                                    
Cooper Landing;  Ed Sniffen,  Department of  Law, Anchorage;                                                                    
Al  Nagel, Department  of Labor  and Workforce  Development,                                                                    
Anchorage.                                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 74     UNIVERSITY OF ALASKA BUILDING FUND                                                                                    
                                                                                                                                
          SB 74 was SCHEDULED but not HEARD.                                                                                    
                                                                                                                                
CSSB 138(FIN) am                                                                                                                
          GAS PIPELINE; AGDC; OIL & GAS PROD. TAX                                                                               
                                                                                                                                
          HCSCSSB  138(FIN) was  REPORTED  out of  committee                                                                    
          with a  "do pass" recommendation and  with one new                                                                    
          fiscal  note  from  the  Department  of  Commerce,                                                                    
          Community  and   Economic  Development,   one  new                                                                    
          fiscal note from  the Department of Transportation                                                                    
          and Public  Facilities, one  new fiscal  note from                                                                    
          the House Finance Committee,  two new fiscal notes                                                                    
          from  the Department  of Revenue,  one new  fiscal                                                                    
          note  from the  Department  of Natural  Resources,                                                                    
          and  one previously  published  fiscal note:  FN16                                                                    
          (CED).                                                                                                                
                                                                                                                                
SB 193    CONTRACTORS: BONDS; LICENSING                                                                                         
                                                                                                                                
          SB  193  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
CSSB 194 (FIN)                                                                                                                  
          TOURISM MARKETING BOARD                                                                                               
                                                                                                                                
          HCS CSSB  194(L&C) was  REPORTED out  of committee                                                                    
          with a  "do pass" recommendation and  with one new                                                                    
          zero fiscal note from  the Department of Commerce,                                                                    
          Community   and  Economic   Development  and   one                                                                    
          previously published fiscal note: FN2 (LEG).                                                                          
                                                                                                                                
CSSB 195(FIN)                                                                                                                   
          POSTSECONDARY EDUCATION LOANS/GRANTS                                                                                  
                                                                                                                                
          CSSB 195(FIN) was SCHEDULED but not HEARD.                                                                            
                                                                                                                                
SJR 23    CONST. AM: STUDENT LOAN DEBT                                                                                          
                                                                                                                                
          SJR 23 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
[Note: The following meeting was broken up into two                                                                             
separate documents. For the conclusion of the meeting see                                                                       
April 18, 2014 12:00 a.m. minutes.]                                                                                             
                                                                                                                                
CS FOR SENATE BILL NO. 138(FIN) am                                                                                            
                                                                                                                                
     "An Act  relating to the  purposes, powers,  and duties                                                                    
     of   the   Alaska  Gasline   Development   Corporation;                                                                    
     relating  to  an  in-state  natural  gas  pipeline,  an                                                                    
     Alaska  liquefied natural  gas project,  and associated                                                                    
     funds; requiring  state agencies and other  entities to                                                                    
     expedite  reviews and  actions related  to natural  gas                                                                    
     pipelines  and projects;  relating  to the  authorities                                                                    
     and  duties of  the commissioner  of natural  resources                                                                    
     relating to a North Slope  natural gas project, oil and                                                                    
     gas and gas only leases,  and royalty gas and other gas                                                                    
     received  by  the  state   including  gas  received  as                                                                    
     payment for the production tax  on gas; relating to the                                                                    
     tax on oil  and gas production, on  oil production, and                                                                    
     on  gas  production;  relating to  the  duties  of  the                                                                    
     commissioner  of  revenue  relating to  a  North  Slope                                                                    
     natural  gas project  and gas  received as  payment for                                                                    
     tax;  relating to  confidential information  and public                                                                    
     record  status of  information provided  to  or in  the                                                                    
     custody of the Department  of Natural Resources and the                                                                    
     Department  of   Revenue;  relating   to  apportionment                                                                    
     factors of the Alaska Net  Income Tax Act; amending the                                                                    
     definition of gross value at  the 'point of production'                                                                    
     for  gas for  purposes of  the oil  and gas  production                                                                    
     tax; clarifying that  the exploration incentive credit,                                                                    
     the oil or gas producer  education credit, and the film                                                                    
     production tax credit may not  be taken against the gas                                                                    
     production tax paid in gas;  relating to the oil or gas                                                                    
     producer education  credit; requesting the  governor to                                                                    
     establish  an  interim  advisory board  to  advise  the                                                                    
     governor  on municipal  involvement  in  a North  Slope                                                                    
     natural gas  project; relating to the  development of a                                                                    
     plan  by the  Alaska  Energy  Authority for  developing                                                                    
     infrastructure  to deliver  affordable energy  to areas                                                                    
     of  the state  that will  not have  direct access  to a                                                                    
     North Slope  natural gas pipeline and  a recommendation                                                                    
     of   a  funding   source   for  energy   infrastructure                                                                    
     development; establishing the  Alaska affordable energy                                                                    
     fund; requiring the commissioner  of revenue to develop                                                                    
     a  plan  and  suggest legislation  for  municipalities,                                                                    
     regional corporations,  and residents  of the  state to                                                                    
     acquire ownership interests in a North Slope natural                                                                       
     gas pipeline project; making conforming amendments;                                                                        
     and providing for an effective date."                                                                                      
                                                                                                                                
9:07:03 PM                                                                                                                    
                                                                                                                                
^AMENDMENTS                                                                                                                   
                                                                                                                                
9:08:04 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze MOVED to ADOPT Amendment 1, 28-                                                                                
GS2806\H.47, Bullock, 4/17/14 by Co-Chair Stoltze, Co-Chair                                                                     
Austerman, and Representative Gara by request of the                                                                            
governor (copy on file).                                                                                                        
                                                                                                                                
     Page 15, lines 20 - 21:                                                                                                    
     Delete "with any member of the legislature"                                                                                
                                                                                                                                
     Page 17, line 22:                                                                                                          
     Delete "with any member of the legislature"                                                                                
                                                                                                                                
     Page 18, line 5:                                                                                                           
     Delete "in"                                                                                                                
     Insert "to"                                                                                                                
     Delete "agent"                                                                                                             
     Insert "entity"                                                                                                            
                                                                                                                                
     Page 18, lines 7 - 8:                                                                                                      
     Delete ", if the commissioner determines that the                                                                          
     North Slope natural gas project is not making adequate                                                                     
     progress toward a final investment decision,"                                                                              
                                                                                                                                
     Page 18, line 8, following "state":                                                                                        
     Insert "or an entity of the state"                                                                                         
                                                                                                                                
     Page 18, line 9, following "state":                                                                                        
     Insert "or an entity of the state"                                                                                         
                                                                                                                                
     Page 18, line 10, following "state":                                                                                       
     Insert "or an entity of the state"                                                                                         
                                                                                                                                
     Page 18, lines 10 - 11:                                                                                                    
     Delete "may not be on terms that are more restrictive                                                                      
     than the terms that are applicable for access by"                                                                          
     Insert "must be on the same or substantially similar                                                                       
     terms applicable to"                                                                                                       
                                                                                                                                
     Page 34, line 18, following "by the":                                                                                      
     Insert "average"                                                                                                           
                                                                                                                                
     Page 34, line 19, following "the gas":                                                                                     
     Insert "produced by the producer  from the lease during                                                                    
     the month,"                                                                                                                
                                                                                                                                
     Page 34, line 23, following "If the":                                                                                      
     Insert "credit or"                                                                                                         
                                                                                                                                
     Page 34, line 27, following "by the":                                                                                      
     Insert "average"                                                                                                           
                                                                                                                                
     Page 34, line 28, following "the gas":                                                                                     
     Insert "produced by the producer  from the lease during                                                                    
     the month,"                                                                                                                
                                                                                                                                
     Page 35, line 12:                                                                                                          
     Delete  "(1) flared,  released,  or  allowed to  escape                                                                    
     and, under AS 43.55.020(e),"                                                                                               
     Insert "that, under AS 43.55.020(e), is"                                                                                   
                                                                                                                                
     Page 35, lines 14 - 17:                                                                                                    
     Delete "; or                                                                                                               
     (2) used  in the  operation of a  lease or  property in                                                                    
     the state in  drilling for or producing oil  or gas, or                                                                    
     for   repressuring   and,    under   AS   43.55.020(e),                                                                    
     considered  as gas  produced from  a lease  or property                                                                    
     for the purpose of AS 43.55.011 - 43.55.180"                                                                               
                                                                                                                                
     Page 36, line 15:                                                                                                          
     Delete "due under this chapter"                                                                                            
                                                                                                                                
     Page 57, line 8, following "of the":                                                                                       
     Insert "following locations: the"                                                                                          
                                                                                                                                
     Page 57, line 13, following "the":                                                                                         
     Insert "following locations: the"                                                                                          
                                                                                                                                
     Page 57, line 16, following "after":                                                                                       
     Insert "completion of"                                                                                                     
                                                                                                                                
     Page 57, line 19, following "the":                                                                                         
     Insert "following locations: the"                                                                                          
                                                                                                                                
     Page 60, line 23:                                                                                                          
     Delete "and"                                                                                                               
                                                                                                                                
     Page 60, following line 23:                                                                                                
     Insert a new paragraph to read:                                                                                            
     "(4)   the costs,  benefits, and risks  associated with                                                                    
     building  a pipeline  with a  mainline diameter  larger                                                                    
     than 42  inches, including the effect  of the increased                                                                    
     diameter  on compression,  fuel, and  other costs;  the                                                                    
     anticipated  allocation of  the  cost  of an  increased                                                                    
     diameter  among project  participants  and the  options                                                                    
     for and  effects of  the state  or participants  in the                                                                    
     project    funding    the   increased    diameter;    a                                                                    
     quantification  of  the  potential  benefits  from  the                                                                    
     increased   diameter   that   may   include   increased                                                                    
     exploration activity and  increased royalties and taxes                                                                    
     from   additional   production   transported   in   the                                                                    
     increased   capacity;    and   whether    natural   gas                                                                    
     transported in the additional capacity  is likely to be                                                                    
     produced from federal or state land; and"                                                                                  
                                                                                                                                
     Renumber the following paragraph accordingly                                                                               
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
9:08:21 PM                                                                                                                    
                                                                                                                                
MICHAEL PAWLOWSKI,  DEPUTY COMMISSIONER,  STRATEGIC FINANCE,                                                                    
DEPARTMENT OF  REVENUE, discussed  the amendment.  He stated                                                                    
that  the   amendment  clarified   language  in   the  House                                                                    
Resources  Committee.   He  began  with  page   one  of  the                                                                    
amendment. He noted the first two  changes on lines 2 and 5,                                                                    
which clarified the relationship  between the department and                                                                    
the  legislative branch.  The deletion  of the  words, "with                                                                    
any member  of the legislature" provided  clarification that                                                                    
the administration may  share individually with consultants,                                                                    
staff and agents of the  legislature as well as with members                                                                    
of  the legislature  individually.  He  noted the  effective                                                                    
dates, which were changed in  two places in the legislation.                                                                    
He pointed  to line 5,  page 18  of the legislation  and the                                                                    
deletion  of the  word "in"  and the  insertion of  the word                                                                    
"to" recognizing the contract to  which the state is a party                                                                    
or an  agent of  the state  is a party.  He pointed  out the                                                                    
deletion  of  the word  "agent"  on  the  same line,  to  be                                                                    
replaced with the word "entity."                                                                                                
                                                                                                                                
9:10:22 PM                                                                                                                    
                                                                                                                                
Mr.  Pawlowski continued  with page  18 of  the legislation,                                                                    
lines 7 through  8 addressing the rights and  access to data                                                                    
under the  Alaska Liquefied Natural  Gas (AKLNG)  project by                                                                    
the  state or  by  an  entity of  the  state. The  amendment                                                                    
proposed  the deletion  of the  words  "if the  commissioner                                                                    
determines that the  North Slope Natural Gas  project is not                                                                    
making   adequate  progress   toward   a  final   investment                                                                    
decision." The  following changes  were consistent  with the                                                                    
addition of "or an entity of  the state" on page 18, lines 8                                                                    
and 9 following "the state."                                                                                                    
                                                                                                                                
Mr. Pawlowski continued with the  deletion of the words "may                                                                    
not" on page 10  to 11 and inserted "must be  on the same or                                                                    
substantially  similar terms  applicable to."  The amendment                                                                    
recognized  that  access  to  data  happened  early  in  the                                                                    
project. When the  state was an investor, access  was on the                                                                    
same and  substantially similar terms  to the  other parties                                                                    
in the agreement, immediately upon entering the project.                                                                        
                                                                                                                                
Mr. Pawlowski  addressed the next  change on page 34  of the                                                                    
"tax as  gas" section of  the legislation. He moved  to page                                                                    
34;  line  18,  following  the   words  "by  the"  the  word                                                                    
"average" was inserted. The insertion  of the word "average"                                                                    
recognized that taxes were paid  on a monthly basis, and the                                                                    
clarifying word helped the department  understand the use of                                                                    
the average gross value at  the point of production for each                                                                    
unit.                                                                                                                           
                                                                                                                                
Mr. Pawlowski mentioned the addition  on page 34, line 19 of                                                                    
the words  "produced by the  producer from the  lease during                                                                    
the  month."  The  intent  was   to  clarify  that  the  gas                                                                    
discussed was the producer's gas  rather than royalty or tax                                                                    
gas.  Page  34,  line  23 addressed  the  words  "credit  or                                                                    
refund"  eliminating  the  words "credit  or"  allowing  for                                                                    
consistency in the section. The  same clarification was seen                                                                    
on page 34,  line 27 with the use of  the word "average." He                                                                    
noted that  page 35 applied to  "where tax as gas  does not"                                                                    
option. The  change deleted the  words "flared,  released or                                                                    
allowed  to  escape"  and  inserting  the  direct  statutory                                                                    
reference. In  the event of  an accident, the tax  due would                                                                    
be paid  in value in the  regular form of money  because the                                                                    
gas  could not  be accounted  for in  a traditional  way. He                                                                    
stated  that  page  35;  lines 14  through  17  deleted  the                                                                    
ambiguous language regarding taxable gas.                                                                                       
                                                                                                                                
9:14:57 PM                                                                                                                    
                                                                                                                                
Mr.  Pawlowski   continued  with  page  36,   line  15.  The                                                                    
reference "due  under this chapter" in  the education credit                                                                    
was  deleted from  the language.  A credit  may not  be used                                                                    
against  the tax  as  gas. He  pointed to  page  57 and  the                                                                    
definition  of  the  point  of  production.  The  department                                                                    
viewed the  amendment as clarifying  on lines 6  through 24.                                                                    
The  section  created  three categories  for  the  point  of                                                                    
production for  gas. In each  of the three sections  on page                                                                    
3,  lines  5-15  of  the   amendment  the  words  "following                                                                    
locations"  were inserted.  Page 60,  line 23  eliminated an                                                                    
errant "and"  while inserting a  new section at  the request                                                                    
of the Department of Natural Resources.                                                                                         
                                                                                                                                
9:18:17 PM                                                                                                                    
                                                                                                                                
Mr. Pawlowski  stated that the  amendment's last  change was                                                                    
to renumber the following sections accordingly.                                                                                 
                                                                                                                                
Co-Chair  Stoltze stated  that the  additional bills  on the                                                                    
schedule would not be heard in the evening's meeting.                                                                           
                                                                                                                                
9:18:58 PM                                                                                                                    
                                                                                                                                
Representative  Gara   MOVED  to  AMEND  Amendment   1  with                                                                    
Amendment  2   to  Amendment  1,   28-GS2806\H.51,  Bullock,                                                                    
4/17/14 by Representative Gara (copy on file).                                                                                  
                                                                                                                                
     TO:  Amendment H.47 to HCS CSSB 138(RES)                                                                                   
                                                                                                                                
     Page 3, line 27, of the amendment, following                                                                               
     "activity":                                                                                                                
     Insert "by parties and nonparties to the project"                                                                          
                                                                                                                                
Representative Holmes OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative  Gara explained  that  the  amendment to  the                                                                    
amendment regarding the report  for future expansion on page                                                                    
3. He  wished to ensure  that the report  involved expansion                                                                    
that  was accessible  to  independent  companies. After  the                                                                    
word "activity" the words "by  parties and nonparties to the                                                                    
project" was added.                                                                                                             
                                                                                                                                
Mr.  Pawlowski   determined  that   the  amendment   to  the                                                                    
amendment was  consistent with the dialog  and supported the                                                                    
underlying amendment.                                                                                                           
                                                                                                                                
Representative  Holmes withdrew  her OBJECTION.  There being                                                                    
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
Amendment  2 to  amendment 1  was ADOPTED.  Amendment 1,  as                                                                    
amended was before the committee.                                                                                               
                                                                                                                                
9:21:41 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze MOVED to ADOPT  Amendment 3 to Amendment 1,                                                                    
28-GS2806\H.52, Bullock, 4/17/14 (copy on file).                                                                                
                                                                                                                                
     TO: Amendment H.47 to HCS CSSB 21(RES) CSSB 138(RES)                                                                       
                                                                                                                                
     Page 2, following line 6, of the amendment:                                                                                
     Insert new material to read:                                                                                               
     "Page 18, line 12:                                                                                                         
     Delete "the"                                                                                                               
     Insert "a""                                                                                                                
                                                                                                                                
Representative Costello OBJECTED for discussion.                                                                                
                                                                                                                                
Mr. Pawlowski discussed the amendment  to the amendment that                                                                    
was  specific to  the North  Slope natural  gas project  and                                                                    
changed the word  "the" to "a." The  amendment was supported                                                                    
by the department.                                                                                                              
                                                                                                                                
Representative Costello WITHDREW her OBJECTION.                                                                                 
                                                                                                                                
Amendment  3 to  amendment 1  was ADOPTED.  Amendment 1,  as                                                                    
amended was before the committee.                                                                                               
                                                                                                                                
Representative  Holmes  suggested   that  the  amendment  be                                                                    
considered conceptual  due to the  error in  quotation marks                                                                    
around "a."                                                                                                                     
                                                                                                                                
9:23:55 PM                                                                                                                    
                                                                                                                                
Representative Gara asked about  amendment 3 to amendment 1.                                                                    
He understood the  intention to apply the language  to a gas                                                                    
pipeline. He wondered if the  project discussed might not be                                                                    
the project implemented.                                                                                                        
                                                                                                                                
9:24:17 PM                                                                                                                    
                                                                                                                                
JOE   BALASH,  COMMISSIONER,   THE  DEPARTMENT   OF  NATURAL                                                                    
RESOURCES,  explained that  the law  of general  application                                                                    
allowed for  the use  of "a" because  more than  one project                                                                    
may be eligible for the provisions of law.                                                                                      
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO OBJECTION, it was so  ordered. Amendment 1 as amended was                                                                    
ADOPTED.                                                                                                                        
                                                                                                                                
9:25:19 PM                                                                                                                    
                                                                                                                                
Representative  Holmes  MOVED  to  ADOPT  Amendment  3,  28-                                                                    
GS2806\H.39, Bullock, 4/16/14  by Co-Chair Stoltze, Co-Chair                                                                    
Austerman,   Vice-Chair   Neuman,   Representative   Wilson,                                                                    
Representative     Edgmon,      Representative     Costello,                                                                    
Representative   Thompson,  Representative   Guttenberg  and                                                                    
Representative Gara (copy on file).                                                                                             
                                                                                                                                
     Page 60, following line 5:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "*  Sec. 66.  Section  1(b), ch.  11,  SLA 2013,  is                                                                    
     amended to read:                                                                                                           
     (b)  It is the intent of the legislature that                                                                              
     (1)   the  Alaska Gasline  Development Corporation,  in                                                                    
     its new placement as  an independent public corporation                                                                    
     of the state, shall be  treated for all purposes as the                                                                    
     transfer of a  corporation within the state  and not as                                                                    
     the creation of a new entity by the State of Alaska;                                                                       
     (2)   the  Board  of Directors  of  the Alaska  Gasline                                                                    
     Development Corporation commit  to governing the Alaska                                                                    
     Gasline  Development   Corporation  so  as   to  affect                                                                    
     positively  as  many  Alaskans as  possible,  including                                                                    
     those in  rural and coastal communities,  and to extend                                                                    
     opportunities  for all  Alaskans  to  benefit from  the                                                                    
     natural gas  resources of the state,  including propane                                                                    
     and  associated  gas-related  hydrocarbons  other  than                                                                    
     oil;                                                                                                                       
     (3)    to  the  maximum extent  permitted  by  law,  in                                                                    
     developing a  natural gas pipeline, the  Alaska Gasline                                                                    
     Development Corporation shall  procure services, labor,                                                                    
     products,   and   natural  resources   from   qualified                                                                    
     businesses    located   in    the   state,    including                                                                    
     organizations  owned by  Alaska  Natives and  municipal                                                                    
     organizations  directly  affected  by the  project,  if                                                                    
     those persons are competitive;                                                                                             
     (4)  the Alaska  Gasline Development Corporation and an                                                                    
     Alaska liquefied  natural gas project as  defined in AS                                                                    
     31.25.390  shall, to  the maximum  extent permitted  by                                                                    
     law,                                                                                                                       
     (A)    hire  qualified residents  from  throughout  the                                                                    
     state   for   management,  engineering,   construction,                                                                    
     operations,  maintenance,  and  other positions  for  a                                                                    
     natural gas pipeline project;                                                                                              
     (B)   establish hiring facilities  in the state  or use                                                                    
     existing hiring facilities in the state; and                                                                               
     (C)   use, as far  as practicable, the job  centers and                                                                    
     associated  services  operated  by  the  Department  of                                                                    
     Labor and  Workforce Development and  an Internet-based                                                                    
     labor exchange system operated by the state; and                                                                           
     (5)   the  Alaska Gasline  Development Corporation  and                                                                    
     its  subsidiaries shall  wind up  and dissolve  when no                                                                    
     bonds, notes, or other  obligations are outstanding and                                                                    
     the  Alaska   Gasline  Development  Corporation   or  a                                                                    
     subsidiary   of   the    Alaska   Gasline   Development                                                                    
     Corporation is  no longer  engaged in  the development,                                                                    
     financing,  construction, or  operation of  an in-state                                                                    
     natural gas pipeline."                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 65, line 23:                                                                                                          
     Delete "72"                                                                                                                
     Insert "73"                                                                                                                
                                                                                                                                
     Page 65, line 26:                                                                                                          
     Delete "secs. 73 and 74"                                                                                                   
     Insert "secs. 74 and 75"                                                                                                   
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Representative Holmes discussed the  intent language in last                                                                    
year's  HB  4 related  to  the  creation of  Alaska  Gasline                                                                    
Development   Corporation   (AGDC).  She   appreciated   the                                                                    
language related  to instate hire  and training.  She stated                                                                    
that instate  hire was important  for both  construction and                                                                    
operations. The  language also mentioned  hiring facilities,                                                                    
job centers and  the need for AGDC and the  state to take an                                                                    
active  role in  ensuring that  the incredible  job training                                                                    
was available to Alaskans. She  mentioned that the amendment                                                                    
was   clarifying  and   the  drafting   required  additional                                                                    
efforts.  She wished  to clarify  AGDC's role  in the  AKLNG                                                                    
project.                                                                                                                        
                                                                                                                                
9:27:25 PM                                                                                                                    
                                                                                                                                
Representative  Holmes   MOVED  to  ADOPT  Amendment   1  to                                                                    
Amendment 3, by Representative Holmes.                                                                                          
                                                                                                                                
     Page 1, Line20:                                                                                                            
          Delete:                                                                                                               
          "and"                                                                                                                 
          After "Corporation" add: "in its participation                                                                        
          in"                                                                                                                   
                                                                                                                                
     Page 1, Line 21:                                                                                                           
          After "AS 31.25.390" add "or a natural gas                                                                            
          pipeline"                                                                                                             
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Representative Holmes  discussed the amendment  to amendment                                                                    
3.  She  explained that  line  20  would read:  "the  Alaska                                                                    
Gasline Development  Corporation in its participation  in an                                                                    
Alaska  Liquefied  Natural  Gas  Project as  defined  in  AS                                                                    
31.25.390 or  a Natural  Gas Pipeline  shall to  the maximum                                                                    
extent permitted  by law"  continuing with  language related                                                                    
to   hiring   qualified    Alaskans,   establishing   hiring                                                                    
facilities in  the state  and using  job centers  located in                                                                    
Alaska.                                                                                                                         
                                                                                                                                
9:28:27 PM                                                                                                                    
                                                                                                                                
There being NO OBJECTION, it  was so ordered. Amendment 1 to                                                                    
Amendment 3 was adopted. Amendment  3, as amended was before                                                                    
the committee.                                                                                                                  
                                                                                                                                
Representative Gara asked  about the Alaska-hire provisions.                                                                    
He  wished to  ensure  that the  provisions  applied to  the                                                                    
project whether or not it was affiliated with AGDC.                                                                             
                                                                                                                                
Commissioner Balash  replied that the Alaska  LNG project as                                                                    
contemplated in the Heads of  Agreement (HOA) had applicable                                                                    
provisions. He pointed to Article 11 of the HOA.                                                                                
                                                                                                                                
Representative    Gara    appreciated    the    department's                                                                    
explanation.                                                                                                                    
                                                                                                                                
Commissioner Balash replied that  the provisions would apply                                                                    
to an Alaska LNG project.                                                                                                       
                                                                                                                                
Representative Gara asked whether or not AGDC was involved.                                                                     
                                                                                                                                
Commissioner Balash replied yes.                                                                                                
                                                                                                                                
9:30:34 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg noted  that some communities would                                                                    
be altered before the pipe  was ordered. He stated that 1000                                                                    
jobs related  to operation and maintenance  would be created                                                                    
by  the project.  He  wished to  ensure  that the  qualified                                                                    
employees  had   continued  opportunities  for   the  longer                                                                    
lasting jobs.                                                                                                                   
                                                                                                                                
Mr. Pawlowski  replied that other  amendments in  the packet                                                                    
built  the  foundation. He  stressed  that  many jobs  would                                                                    
become available  with the advent  of the LNG  facility. The                                                                    
manufacturing facility  was great  with harbor  and maritime                                                                    
related employment opportunities  that would further develop                                                                    
communities and support families.                                                                                               
                                                                                                                                
9:32:33 PM                                                                                                                    
                                                                                                                                
Representative Holmes  discussed line  23 stating  that AGDC                                                                    
shall  hire qualified  residents from  throughout the  state                                                                    
for   management,  engineering,   construction,  operations,                                                                    
maintenance  and   other  positions.  She   appreciated  the                                                                    
language.                                                                                                                       
                                                                                                                                
9:33:06 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze asked if the  amendment was consistent with                                                                    
the operations and desires of the administration.                                                                               
                                                                                                                                
Commissioner Balash replied yes.                                                                                                
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  Amendment 3                                                                    
as amended was ADOPTED.                                                                                                         
                                                                                                                                
9:33:42 PM                                                                                                                    
                                                                                                                                
Representative  Holmes  MOVED  to  ADOPT  Amendment  4,  the                                                                    
Alaska  State  Legislature  Letter  of  Intent  for  SB  138                                                                    
prepared by Representative  Holmes, Representative Munoz Co-                                                                    
Chair  Austerman,  Representative  Thompson,  Representative                                                                    
Edgmon, Representative Costello and Representative Gara.                                                                        
                                                                                                                                
                   Letter of Intent for SB 138                                                                                  
     It is the intent of the Alaska State Legislature that                                                                      
     the Alaska LNG project honor the commitments, as                                                                           
    copied below, made in "Article 11: Alaska Hire and                                                                          
     Content:, agreed to in the Heads of Intent Agreement                                                                       
     by and among the Administration of the State of                                                                            
     Alaska, Alaska Gas-line Development Corporation,                                                                           
     TransCanada Alaska Development Inc., ExxonMobil Alaska                                                                     
     Production Inc., ConocoPhillips Alaska, Inc., through                                                                      
     construction of the project.                                                                                               
                                                                                                                                
               ARTICLE 11: ALASKA HIRE and CONTENT                                                                              
                                                                                                                                
     11.1 For the Alaska LNG Project, the Alaska LNG                                                                            
     Parties will, within the constraints of law:                                                                               
        a. Employ Alaska residents and contract with Alaska                                                                     
          businesses to the extent they are qualified,                                                                          
          available, ready, willing and cost competitive;                                                                       
      b. Use, as far as practicable, job centers and                                                                            
         associated services operated by the State                                                                              
          Department of Labor and Workforce Development;                                                                        
        c. Participate with the State Department of Labor                                                                       
          and Workforce Development to update the training                                                                      
          plan for an LNG export project including main                                                                         
          operations;                                                                                                           
        d. Advertise for available positions locally and                                                                        
          use, as far as practicable, Alaska job service                                                                        
          organizations to notify the Alaska public; and                                                                        
      e. Work with the State Department of Labor and                                                                            
          Workforce Development and other organizations to                                                                      
          provide training.                                                                                                     
    11.2 Prior to construction, the Alaska LNG Parties                                                                          
     commit to negotiate in good faith project labor                                                                            
     agreements for the Alaska LNG Project.                                                                                     
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative Holmes  discussed the letter of  intent which                                                                    
removed  Article 11  (negotiated language  related to  local                                                                    
hire)  from the  HOA.  The language  was  identical to  that                                                                    
drafted by the Senate Finance  Committee. She wished for the                                                                    
legislature's   endorsement  of   the  intent.   The  letter                                                                    
pertained  to  the  employment   of  Alaskan  residents  and                                                                    
business. The  letter addressed job  centers and  the update                                                                    
of training plans  by the Department of  Labor and Workforce                                                                    
Development and negotiating in good  faith for project labor                                                                    
agreements.  The  letterhead used  was  that  of the  Alaska                                                                    
State Legislature.                                                                                                              
                                                                                                                                
Co-Chair Stoltze stated that the  amendment was sponsored by                                                                    
Representative Holmes,  Representative Munoz, Representative                                                                    
Thompson,   Co-Chair   Austerman,   Representative   Edgmon,                                                                    
Representative Costello and Representative Gara.                                                                                
                                                                                                                                
9:35:15 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman  clarified  that  the  letter  of  intent                                                                    
pertained  to  all  Alaskan   companies,  whether  union  or                                                                    
nonunion.                                                                                                                       
                                                                                                                                
Representative Holmes agreed.                                                                                                   
                                                                                                                                
Representative  Guttenberg  clarified  that  the  letter  of                                                                    
intent would be advanced to the legislature as a whole.                                                                         
                                                                                                                                
Co-Chair Stoltze  agreed that the letter  would be addressed                                                                    
on the House Floor.                                                                                                             
                                                                                                                                
9:36:23 PM                                                                                                                    
                                                                                                                                
There being  NO OBJECTION,  it was  so ordered.  Amendment 4                                                                    
was ADOPTED.                                                                                                                    
                                                                                                                                
9:36:45 PM                                                                                                                    
                                                                                                                                
Co-Chair  Austerman   MOVED  to   ADOPT  Amendment   5,  28-                                                                    
GS2806\H.27,  Bullock,  4/15/14  by  Representative  Wilson,                                                                    
Representative     Costello,      Representative     Holmes,                                                                    
Representative  Edgmon,  Vice-Chair  Neuman,  Representative                                                                    
Thompson,    Representative    Gara,   and    Representative                                                                    
Guttenberg (copy on file).                                                                                                      
                                                                                                                                
     Page 18, following line 15:                                                                                                
     Insert a new subsection to read:                                                                                           
     "(c) A  proposed agreement or contract  associated with                                                                    
     a  North Slope  natural  gas project  must provide  the                                                                    
     means for  allocating infrastructure costs  between the                                                                    
     state and other parties  in the project. The allocation                                                                    
     must  take  into  consideration  the  extent  to  which                                                                    
     infrastructure is used  by the project and  used by the                                                                    
     public and  the difference between the  normal expected                                                                    
     or actual  life-cycle costs  for the  infrastructure as                                                                    
     used by  the project and  the expected or  actual life-                                                                    
     cycle costs of the  same infrastructure if subject only                                                                    
     to  general  public  use.  The  proposed  agreement  or                                                                    
     contract   may   not   require   the   state   to   pay                                                                    
     infrastructure costs  that are directly related  to the                                                                    
     project and  not designed for  general public use  in a                                                                    
     proportionate amount  that is greater than  the state's                                                                    
     share of participation in the project."                                                                                    
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
9:36:59 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman discussed Amendment  5. He noted that the                                                                    
outcome  of  discussions  regarding   the  concerns  of  the                                                                    
infrastructure  development  and   improvements  that  would                                                                    
occur  around  the  North Slope  natural  gas  project.  The                                                                    
concern was related to  the responsibility for improvements.                                                                    
The  amendment  pointed to  various  costs  and whether  the                                                                    
state or the industry retained the responsibility for them.                                                                     
                                                                                                                                
9:38:30 PM                                                                                                                    
                                                                                                                                
Representative  Gara  distributed  answers provided  by  the                                                                    
consultants.  He explained  that the  amendment's importance                                                                    
was  highlighted  by the  varying  estimation  of costs  for                                                                    
infrastructure.   He  had asked  Enalytica  about the  state                                                                    
share  of  the pipeline;  the  net  present was  reduced  by                                                                    
greater payments of infrastructure  costs. He hoped that the                                                                    
administration  would consider  the  amendment seriously.  A                                                                    
loss of  5 to  10 percent  of the net  present value  of the                                                                    
pipeline   resulting  from   full  responsibility   for  the                                                                    
pipeline's construction was a serious consideration.                                                                            
                                                                                                                                
9:40:03 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.  Amendment 5 was ADOPTED.                                                                         
                                                                                                                                
9:40:34 PM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman MOVED to ADOPT Amendment 6, 28-                                                                               
GS2806\H.54 by  Vice-Chair Neuman,  Representative Thompson,                                                                    
Representative Wilson and Representative Guttenberg.                                                                            
                                                                                                                                
     Page 2, line 17, following "fund;":                                                                                        
     Insert "requiring the Department of Transportation and                                                                     
     Public Facilities to evaluate the design and                                                                               
     construction of a bridge across the Yukon River;"                                                                          
                                                                                                                                
     Page 60, following line 6:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "*  Sec. 67.  The  uncodified law  of  the State  of                                                                    
    Alaska is amended by adding a new section to read:                                                                          
     INFRASTRUCTURE.  The Department  of Transportation  and                                                                    
     Public  Facilities  shall,  in  consultation  with  the                                                                    
     Alaska  Gasline Development  Corporation, evaluate  the                                                                    
     design  and  construction  of a  new,  separate  bridge                                                                    
     across  the Yukon  River  that  would accommodate  both                                                                    
     vehicular traffic and a gas  pipeline resulting from an                                                                    
     Alaska liquefied natural gas project."                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 65, line 23:                                                                                                          
     Delete "72"                                                                                                                
     Insert "73"                                                                                                                
                                                                                                                                
     Page 65, line 26:                                                                                                          
     Delete "secs. 73 and 74"                                                                                                   
     Insert "secs. 74 and 75"                                                                                                   
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Vice-Chair Neuman  explained that the  amendment replacement                                                                    
addressed the order of language  regarding the Department of                                                                    
Transportation and  Public Facilities and AGDC.  He believed                                                                    
that the new order with  the department listed prior to AGDC                                                                    
invited the department  to the table in a  different way and                                                                    
placed them in the title.  He pointed out that the amendment                                                                    
was    co-sponsored   by    Representative   Thompson    and                                                                    
Representative  Wilson. He  noted  that  the department  and                                                                    
AGDC would  evaluate the  design and  construction of  a new                                                                    
separate bridge  across the Yukon  River. He  suspected that                                                                    
the language would prove important  in the upcoming process.                                                                    
He pointed  out the Department of  Transportation and Public                                                                    
Facilities' concern  with the issue. The  current bridge was                                                                    
37 years  old and suspended  the oil pipeline. A  new bridge                                                                    
was   necessary   to   support   both   transportation   and                                                                    
infrastructure.   He  mentioned   concerns  stated   by  the                                                                    
National  Security  Agency  related to  the  two  pipelines'                                                                    
proximity.                                                                                                                      
                                                                                                                                
9:44:27 PM                                                                                                                    
                                                                                                                                
Mr. Pawlowski appreciated the  amendment's sponsor, which he                                                                    
opined    built   upon    the   previous    amendment.   The                                                                    
administration supported the amendment.                                                                                         
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION. There being                                                                       
NO OBJECTION, it was so ordered. Amendment was 6 was                                                                            
ADOPTED.                                                                                                                        
                                                                                                                                
9:45:17 PM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman MOVED to ADOPT Amendment 7, 28-                                                                               
GS2806\H.55,  Nauman/Bullock, 4/17/14  by Vice-Chair  Neuman                                                                    
Representative     Thompson,      Representative     Wilson,                                                                    
Representative     Holmes,    Representative     Gara    and                                                                    
Representative Costello (copy on file).                                                                                         
                                                                                                                                
     Page 2, line 17, following "fund;":                                                                                        
     Insert "requiring the  Department of Transportation and                                                                    
     Public  Facilities  to  evaluate  certain  bridges  and                                                                    
     infrastructure related  to an Alaska  liquefied natural                                                                    
     gas project;"                                                                                                              
                                                                                                                                
     Page 60, following line 6:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "*  Sec. 67.  The  uncodified law  of  the State  of                                                                    
    Alaska is amended by adding a new section to read:                                                                          
     INFRASTRUCTURE.  The Department  of Transportation  and                                                                    
     Public  Facilities  shall,  in  consultation  with  the                                                                    
     Alaska   Gasline   Development  Corporation   and   the                                                                    
     Department  of  Natural  Resources,  evaluate  existing                                                                    
     bridges    and   infrastructure    and   bridges    and                                                                    
     infrastructure   constructed  to   accommodate  a   gas                                                                    
     pipeline  resulting from  an  Alaska liquefied  natural                                                                    
     gas  project  and  determine   whether  the  bridge  or                                                                    
     infrastructure   could   also    be   constructed   for                                                                    
    transportation uses, including vehicular traffic."                                                                          
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 65, line 23:                                                                                                          
     Delete "72"                                                                                                                
     Insert "73"                                                                                                                
                                                                                                                                
     Page 65, line 26:                                                                                                          
     Delete "secs. 73 and 74"                                                                                                   
     Insert "secs. 74 and 75"                                                                                                   
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
9:45:41 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman  stated  that the  replacement  amendment                                                                    
changed the  order of the  Department of  Transportation and                                                                    
Public  Facilities and  AGDC as  in amendment  6. He  stated                                                                    
that  the  amendment's co-sponsors  included  Representative                                                                    
Holmes,  Representative   Thompson,  Representative  Wilson,                                                                    
Representative   Costello   and  Representative   Gara.   He                                                                    
appreciated the  committee's support for the  amendment that                                                                    
addressed   other   bridges   and  infrastructure   in   the                                                                    
pipeline's transportation  route. He noted  multiple bridges                                                                    
existing  both large  and small  and the  pipeline producers                                                                    
must work  with the Department of  Transportation and Public                                                                    
Facilities in a coordinated effort.                                                                                             
                                                                                                                                
9:48:15 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  stated  that  the  co-sponsors  were  not                                                                    
listed on the replacement amendments.                                                                                           
                                                                                                                                
Representative  Wilson WITHDREW  his OBJECTION.  There being                                                                    
NO OBJECTION, it was so ordered.  Amendment 7 was ADOPTED.                                                                      
                                                                                                                                
9:50:07 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon  MOVED  to  ADOPT  Amendment  8,  28-                                                                    
GS2806\H.31,  Nauman/Bullock, 4/16/14  by Co-Chair  Stoltze,                                                                    
Co-Chair  Austerman,  Representative  Munoz,  Representative                                                                    
Costello,  Representative  Wilson, Representative  Thompson,                                                                    
Representative  Holmes,  Vice-Chair  Neuman,  Representative                                                                    
Gara and Representative Guttenberg (copy on file).                                                                              
                                                                                                                                
     Page 62, line 14, following "shall":                                                                                       
     Insert ", after considering the state energy policy                                                                        
     under AS 44.99.115 and sec. 1, ch. 82, SLA 2010,"                                                                          
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
9:50:20 PM                                                                                                                    
                                                                                                                                
Representative Edgmon  discussed amendment 8  that connected                                                                    
section 69  of the  bill related  to a  plan created  by the                                                                    
Alaska Energy  Authority to the  energy policy  currently in                                                                    
statute.  The  Alaska Energy  Policy  developed  in 2010  in                                                                    
uncodified  law  was far  more  expansive  in terms  of  the                                                                    
state's overall approach to providing  energy to all corners                                                                    
of Alaska.                                                                                                                      
                                                                                                                                
9:51:00 PM                                                                                                                    
                                                                                                                                
Representative  Gara clarified  that the  amendment included                                                                    
communities  located in  rural  areas and  off  of the  road                                                                    
system.                                                                                                                         
                                                                                                                                
Representative  Edgmon agreed.  He  stated  that the  Alaska                                                                    
Energy  Policy  took  great  pains   to  include  all  areas                                                                    
including residential, commercial and industrial.                                                                               
                                                                                                                                
Co-Chair   Stoltze   appreciated   the   clarification   and                                                                    
commitment to rural energy and statewide needs.                                                                                 
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered. Amendment 8 was ADOPTED.                                                                          
                                                                                                                                
9:52:58 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:55:16 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Thompson MOVED  to  ADOPT  Amendment 9,  28-                                                                    
GS2806\H.46,   Nauman/Bullock,  4/17/14   by  Representative                                                                    
Thompson  and Representative  Wilson  and Vice-Chair  Neuman                                                                    
(copy on file).                                                                                                                 
                                                                                                                                
     Page 18, line 14:                                                                                                          
     Delete "a payment in lieu of"                                                                                              
     Insert "the"                                                                                                               
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Representative  Thompson discussed  amendment  9 related  to                                                                    
page 18,  line 14 of the  bill. He noted the  elimination of                                                                    
"a payment in lieu of" and  the insertion of the word "the."                                                                    
The  language  would affect  the  North  Slope Borough,  the                                                                    
Fairbanks  North Star  Borough, the  Mat-Su Borough  and the                                                                    
municipality  of  Anchorage.   The  language  would  prevent                                                                    
changes to property taxes.                                                                                                      
                                                                                                                                
9:56:25 PM                                                                                                                    
                                                                                                                                
Representative   Wilson   echoed   the  comments   made   by                                                                    
Representative  Thompson. She  stated that  support for  the                                                                    
change was received by constituents.                                                                                            
                                                                                                                                
Vice-Chair Neuman  stated that the Mat-Su  region would also                                                                    
be in alignment with the amendment.                                                                                             
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.  Amendment 9 was ADOPTED.                                                                         
                                                                                                                                
9:57:33 PM                                                                                                                    
                                                                                                                                
Co-Chair   Stoltze  MOVED   to   ADOPT   Amendment  10   28-                                                                    
GS2806\H.36,  Bullock, 4/16/14  (copy on  file) by  Co-Chair                                                                    
Stoltze,   Co-Chair    Austerman,   Representative   Wilson,                                                                    
Representative      Costello,     Representative      Munoz,                                                                    
Representative Thompson, Representative Edgmon and Vice-                                                                        
Chair Neuman (copy on file).                                                                                                    
                                                                                                                                
     Page 36, line 23:                                                                                                          
     Delete "a state operated"                                                                                                  
     Insert "                                                                                                                   
     (A)  a [STATE OPERATED]"                                                                                                   
     Delete ","                                                                                                                 
     Insert "in the state that offers programs approved by                                                                      
     the United States Department of Veterans Affairs and                                                                       
     the Alaska Commission on Postsecondary Education;                                                                          
     (B)"                                                                                                                       
                                                                                                                                
     Page 36, line 25:                                                                                                          
     Delete ", and"                                                                                                             
     Insert "; or                                                                                                               
     (C)"                                                                                                                       
                                                                                                                                
Representative Costello OBJECTED for discussion.                                                                                
                                                                                                                                
Co-Chair Stoltze explained  that SB 193 and SB  194 would be                                                                    
heard tonight with time.                                                                                                        
                                                                                                                                
9:58:41 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze stated  that  amendment  10 deleted  state                                                                    
operated"  and  added "in  the  state  that offers  programs                                                                    
approved  by  the  United   States  Department  of  Veterans                                                                    
Affairs   and  the   Alaska   Commission  on   Postsecondary                                                                    
Education." He  stressed that the approval  by both entities                                                                    
allowed for a strong  standard of professional certification                                                                    
and requirements for accountability.                                                                                            
                                                                                                                                
9:59:52 PM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman  appreciated amendment 10. He  stated that                                                                    
the  Northern  Industrial  Training program  worked  in  the                                                                    
northern  region  to  provide additional  opportunities.  He                                                                    
noted  reports on  the lack  of workforce  and he  wished to                                                                    
allow for many opportunities for the training of Alaskans.                                                                      
                                                                                                                                
Co-Chair Stoltze stated that  private entities were adaptive                                                                    
and responsive to  employer's needs. He noted  that the area                                                                    
of education provided choice.                                                                                                   
                                                                                                                                
10:00:59 PM                                                                                                                   
                                                                                                                                
Representative Costello WITHDREW her OBJECTION.                                                                                 
                                                                                                                                
Representative Gara  asked if the amendment  was in addition                                                                    
to a credit eliminated earlier in the meeting.                                                                                  
                                                                                                                                
Co-Chair  Stoltze  responded  that the  amendment  addressed                                                                    
eligibility for training programs.                                                                                              
                                                                                                                                
Representative Gara noted the credit mentioned on line 15.                                                                      
                                                                                                                                
Representative  Thompson   stated  that  credits   were  not                                                                    
eliminated.                                                                                                                     
                                                                                                                                
Co-Chair Stoltze discussed the bicameral process.                                                                               
                                                                                                                                
Amendment 10 was ADOPTED.                                                                                                       
                                                                                                                                
10:02:30 PM                                                                                                                   
                                                                                                                                
Co-Chair   Stoltze  MOVED   to  ADOPT   Amendment  11,   28-                                                                    
GS2806\H.42,   Bullock,   4/16/14   by   Co-Chair   Stoltze,                                                                    
Representative    Thompson,   Representative    Edgmon   and                                                                    
Representative Holmes (copy on file).                                                                                           
                                                                                                                                
     Page 5, lines 1 - 5:                                                                                                       
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     Delete "Sections 1 - 19, 22, 23, 30 - 34, 36, 37, 45,                                                                      
     47, and 63 - 72"                                                                                                           
     Insert "Sections 1 - 18, 21, 22, 29 - 33, 35, 36, 44,                                                                      
     46, and 62 - 71"                                                                                                           
                                                                                                                                
     Page 65, line 25:                                                                                                          
     Delete "Section 46"                                                                                                        
     Insert "Section 45"                                                                                                        
                                                                                                                                
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     Delete "secs. 73 and 74"                                                                                                   
     Insert "secs. 72 and 73"                                                                                                   
                                                                                                                                
Representative Costello OBJECTED for discussion.                                                                                
                                                                                                                                
Co-Chair  Stoltze discussed  amendment 11  and the  language                                                                    
inserted  related to  eligibility  to serve  on the  gasline                                                                    
development board.                                                                                                              
                                                                                                                                
Representative Costello WITHDREW  her OBJECTION. There being                                                                    
NO OBJECTION, it was so ordered. Amendment 11 was ADOPTED.                                                                      
                                                                                                                                
10:03:25 PM                                                                                                                   
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  13,  28-                                                                    
GS2806\H.43, Bullock, 4/17/14 (copy on file).                                                                                   
                                                                                                                                
     Page 18, following line 15:                                                                                                
     Insert a new subsection to read:                                                                                           
     "(c)   An agreement or  contract in which the  state or                                                                    
     an agent  of the  state is a  party that  is negotiated                                                                    
     under  AS  38.05.020(b)(11)   must  include  principles                                                                    
     based on  commercially reasonable terms  for delivering                                                                    
     natural gas to  public utilities in the  state when the                                                                    
     demand  for natural  gas by  the utilities  exceeds the                                                                    
     amount of  the state's royalty natural  gas and natural                                                                    
     gas delivered  to the state  as payment of tax  that is                                                                    
     being  transported  in  the  North  Slope  natural  gas                                                                    
     project."                                                                                                                  
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
10:04:23 PM                                                                                                                   
                                                                                                                                
Representative Gara  discussed amendment 13. He  stated that                                                                    
Alaska would commit the natural  gas in the beginning of the                                                                    
pipeline for instate use and  export. The instate demand may                                                                    
grow, but the gas would be  committed to an Asian entity. If                                                                    
a  growth  occured in  instate  demand,  more gas  would  be                                                                    
necessary.  The  amendment  stated  that  with  commercially                                                                    
reasonable terms, the state  could obtain additional natural                                                                    
gas for  instate use. He  stated that Mr. Marks  viewed that                                                                    
the amount of gas used in  the state would be minimal and he                                                                    
could not envision a scenario  where the necessary gas would                                                                    
not  be   available  on  the  North   Slope.  If  difficulty                                                                    
obtaining gas occurred, Alaskans would pay more.                                                                                
                                                                                                                                
10:05:49 PM                                                                                                                   
                                                                                                                                
Representative  Holmes  MOVED   Conceptual  Amendment  1  to                                                                    
Amendment 13.                                                                                                                   
                                                                                                                                
     Page 18, following line 15:                                                                                                
     Insert a new subsection to read:                                                                                           
     "(c)   An agreement or  contract to which the  state or                                                                    
     an entity  of the state  is a party that  is negotiated                                                                    
     under  AS  38.05.020(b)(11)   must  include  principles                                                                    
     based on  commercially reasonable terms  for delivering                                                                    
     natural gas to  public utilities in the  state when the                                                                    
     demand  for natural  gas by  the utilities  exceeds the                                                                    
     amount of  the state's royalty natural  gas and natural                                                                    
     gas delivered  to the state  as payment of tax  that is                                                                    
     available in a North Slope natural gas project."                                                                           
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
She  discussed the  conceptual amendment  that would  delete                                                                    
the word "in"  and replace it with "to" and  delete the word                                                                    
"agent" and  replace it with  "entity that is  conforming to                                                                    
the changes  made earlier  in amendment  1." She  pointed to                                                                    
lines  7 and  8  of  the amendment  where  the words  "being                                                                    
transported"  were  deleted  and   replaced  with  the  word                                                                    
"available."  On line  8,  the word  "the"  was deleted  and                                                                    
replaced  with the  word "a."  She read  the amendment.  She                                                                    
suggested that  amendment 13  discussed natural  royalty gas                                                                    
of the state  when that gas may have  already been committed                                                                    
to  instate  or  out  of state  purchasers.  She  wished  to                                                                    
clarify the issue  related to the obligation  of royalty gas                                                                    
available.                                                                                                                      
                                                                                                                                
10:08:01 PM                                                                                                                   
                                                                                                                                
Mr. Pawlowski  opined the conceptual amendment  to amendment                                                                    
13 achieved the underlying intent  of the amendment in a way                                                                    
that  would protect  the administration  and allow  guidance                                                                    
for   negotiation.    He   appreciated   the    efforts   of                                                                    
Representative  Holmes  and  Representative Gara  for  their                                                                    
work  with  the administration  on  the  issue of  long-term                                                                    
delivery of gas to Alaskans.                                                                                                    
                                                                                                                                
10:08:56 PM                                                                                                                   
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO OBJECTION, it  was so ordered. Amendment  to amendment 13                                                                    
was  ADOPTED.  Amendment  13,  as  amended  was  before  the                                                                    
committee.                                                                                                                      
                                                                                                                                
Vice-Chair  Neuman stated  that the  amendment did  not make                                                                    
sense to him. He read the amendment.                                                                                            
                                                                                                                                
Mr. Pawlowski  replied that the  issue related  to long-term                                                                    
contracts providing  certainty for the state  to finance and                                                                    
enter  into the  project. He  noted the  question of  future                                                                    
principles governing  the use of  gas if  additional amounts                                                                    
were required for state use.  He stressed the amended end of                                                                    
the sentence that was important.                                                                                                
                                                                                                                                
10:10:49 PM                                                                                                                   
                                                                                                                                
Vice-Chair  Neuman  asked   Commissioner  Balash  about  the                                                                    
wholesale price  of gas  out of Cook  Inlet. He  wondered if                                                                    
less expensive gas  deliverable from the North  Slope to the                                                                    
pipeline would create different market conditions.                                                                              
                                                                                                                                
10:11:53 PM                                                                                                                   
                                                                                                                                
Commissioner Balash stated  that he did not  have the answer                                                                    
to the question yet. He stated  that the pricing of gas as a                                                                    
commodity  including  transport  was not  yet  possible.  He                                                                    
guessed that  North Slope gas  would be more  expensive than                                                                    
Cook Inlet  gas. Cook Inlet gas  would not have the  cost of                                                                    
transportation and treatment that  the North Slope gas would                                                                    
incur.  The success  of exploration  efforts  in Cook  Inlet                                                                    
would help answer  the question. He noted that  the price of                                                                    
gas would  continue to rise  with the consent  decree signed                                                                    
by  the  Attorney  General.  The  cost  of  exploration  and                                                                    
development would drive the market  price for natural gas in                                                                    
Cook  Inlet. He  found  it difficult  to  predict that  Cook                                                                    
Inlet gas would  remain at a lower price than  that found on                                                                    
and transported from the North Slope.                                                                                           
                                                                                                                                
10:14:01 PM                                                                                                                   
                                                                                                                                
Vice-Chair   Neuman  expressed   concern  about   the  final                                                                    
investment decision.  He suspected  that contracts  would be                                                                    
difficult to obtain until after  a completed open season for                                                                    
an AKLNG project. He thought  that exploration in Cook Inlet                                                                    
would prove difficult without the certainty of contracts.                                                                       
                                                                                                                                
Commissioner Balash replied that  Hilcorp Energy Company was                                                                    
seeking  a  rolling  four-year contract  with  their  public                                                                    
utility customers.  He expected  that the prospect  of long-                                                                    
term gas supply from AKLNG  would encourage Hilcorp to offer                                                                    
longer term contracts to their customers.                                                                                       
                                                                                                                                
Vice-Chair Neuman agreed with  the assessment offered by the                                                                    
commissioner. He  agreed that the arrangement  would benefit                                                                    
the consumers  and utility companies  in South  Central, but                                                                    
not for the producers.                                                                                                          
                                                                                                                                
Commissioner Balash  relayed that  those producers  would be                                                                    
forced to compete.                                                                                                              
                                                                                                                                
10:17:03 PM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze asked for further considerations.                                                                              
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO OBJECTION,  it was  so ordered.  Amendment 13  as amended                                                                    
was ADOPTED.                                                                                                                    
                                                                                                                                
10:18:01 PM                                                                                                                   
                                                                                                                                
Co-Chair   Stoltze  MOVED   to   ADOPT   Amendment  2,   28-                                                                    
GS2806\H.50, Bullock, 4/17/14  by Co-Chair Stoltze, Co-Chair                                                                    
Austerman  and   Representative  Gara  by  Request   of  the                                                                    
Governor (copy on file).                                                                                                        
                                                                                                                                
     Page 19, line 13, following "gas":                                                                                         
     Insert "or gas delivered to the state under AS                                                                             
     43.55.014"                                                                                                                 
                                                                                                                                
     Page 20, line 2:                                                                                                           
     Delete "the"                                                                                                               
     Insert "a"                                                                                                                 
                                                                                                                                
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     Delete "and"                                                                                                               
                                                                                                                                
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     Insert "a"                                                                                                                 
                                                                                                                                
     Page 20, line 8, following "term":                                                                                         
     Insert "; and                                                                                                              
     (4)  the  lessee or  an  affiliate  of the  lessee  has                                                                    
     committed  to  purchase,  dispose  of,  or  market  the                                                                    
     state's royalty gas taken in  kind and gas delivered to                                                                    
     the   state  under   AS  43.55.014   on  the   same  or                                                                    
     substantially similar terms as the lessee or an                                                                            
     affiliate of the lessee sells, disposes of, or markets                                                                     
     the lessee's gas"                                                                                                          
                                                                                                                                
     Page 20, line 9, through page 21, line 12:                                                                                 
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
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     Delete "sec. 34"                                                                                                           
     Insert "sec. 32"                                                                                                           
                                                                                                                                
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     Insert "sec. 28"                                                                                                           
                                                                                                                                
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     Page 65, line 23:                                                                                                          
     Delete "23, 30 - 34, 36, 37, 45, 47, and 63 - 72"                                                                          
     Insert "28 - 32, 34, 35, 43, 45, and 61 - 70"                                                                              
                                                                                                                                
     Page 65, line 25:                                                                                                          
     Delete "Section 46"                                                                                                        
     Insert "Section 44"                                                                                                        
                                                                                                                                
     Page 65, line 26:                                                                                                          
     Delete "secs. 73 and 74"                                                                                                   
     Insert "secs. 71 and 72"                                                                                                   
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
10:18:25 PM                                                                                                                   
                                                                                                                                
Commissioner  Balash  discussed  the  amendment  seeking  to                                                                    
reconcile sections  23, 24 and  25 found  on page 19  of the                                                                    
bill.  The amendment  sought to  combine the  three sections                                                                    
with one effective date.                                                                                                        
                                                                                                                                
Co-Chair Stoltze MOVED  to ADOPT amendment 1  to amendment 2                                                                    
by Co-Chair Stoltze and Co-Chair Austerman.                                                                                     
                                                                                                                                
     Page 1 line17, following "has"                                                                                             
          Delete: "committed"                                                                                                   
          Insert: "offered"                                                                                                     
                                                                                                                                
Representative Holmes OBJECTED for discussion.                                                                                  
                                                                                                                                
10:21:37 PM                                                                                                                   
                                                                                                                                
Commissioner   Balash  wished   for  consistency   regarding                                                                    
language  related  to terms  offered  by  the producers.  By                                                                    
switching  the language  to "offered"  an  acceptance of  an                                                                    
offer would precede any commitment.                                                                                             
                                                                                                                                
10:22:34 PM                                                                                                                   
                                                                                                                                
Mr. Pawlowski added that the  commissioner could propose the                                                                    
disposition of royalty, but the  legislation would bring the                                                                    
disposition back to the legislature for approval.                                                                               
                                                                                                                                
10:23:01 PM                                                                                                                   
                                                                                                                                
Representative  Holmes WITHDREW  her OBJECTION.  Amendment 1                                                                    
to  amendment 2  was adopted.  Amendment 2,  as amended  was                                                                    
before the committee.                                                                                                           
                                                                                                                                
Representative Gara discussed his support of the amendment.                                                                     
                                                                                                                                
Co-Chair Stoltze noted the three sponsors.                                                                                      
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO OBJECTION,  it was  so ordered.   Amendment 2  as amended                                                                    
was adopted.                                                                                                                    
                                                                                                                                
10:24:37 PM                                                                                                                   
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  12,  28-                                                                    
GS2806\H.40, Nauman\Bullock, 4/16/14  by Representative Gara                                                                    
(copy on file).                                                                                                                 
                                                                                                                                
     Page 18, following line 15:                                                                                                
     Insert a new subsection to read:                                                                                           
     "(c)   An  agreement  or contract  negotiated under  AS                                                                    
     38.05.020(b)(11)  or  other  agreement or  contract  in                                                                    
     which the state is a  party and that is associated with                                                                    
     a  North  Slope  natural  gas  project  may  allow  all                                                                    
     parties  the benefit  of equalized  capital costs  that                                                                    
     result from the expansion  of the project. However, the                                                                    
     agreement or contract must provide  for an expansion to                                                                    
     transport additional natural gas  produced from a lease                                                                    
     or  property  subject  to  the   tax  levied  under  AS                                                                    
     43.55.011(e)  that  may  increase the  average  capital                                                                    
     cost for  each 1,000  cubic feet  of natural  gas above                                                                    
     the level  before the expansion;  however, the  cost of                                                                    
     the expansion  may not  increase the  equalized capital                                                                    
     costs  for a  party that  does not  participate in  the                                                                    
     expansion  above  the  highest capital  cost  for  each                                                                    
     1,000 cubic feet of natural gas before the expansion."                                                                     
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative Gara  described amendment 12 as  a "rolled-in                                                                    
rates" amendment.  He stated that the  agreement between the                                                                    
state and the producers  allowed for an economical reduction                                                                    
of  shipping prices  for  all parties.  All  of the  parties                                                                    
shared  in the  reduction.  If the  pipeline  was not  large                                                                    
enough, then  expansion through the  prohibitively expensive                                                                    
process of  looping would be  required. The  amendment would                                                                    
allow all  parties to share  in a reduced shipping  cost. He                                                                    
believed  that   the  benefit  should  continue   if  prices                                                                    
increased.  Looping would  not allow  for extra  gas in  the                                                                    
pipeline if one  party was forced to bear the  full cost. He                                                                    
was  advised  by  Mr.  Meyer  about  the  proposal  and  was                                                                    
informed  that the  arrangement was  fair and  equitable. He                                                                    
opined that the  change was necessary if  the state expanded                                                                    
the  pipeline   in  a  way   that  would  allow   for  great                                                                    
exploration and employment opportunities in Alaska.                                                                             
                                                                                                                                
10:28:48 PM                                                                                                                   
                                                                                                                                
Commissioner  Balash  stated  that  the  administration  was                                                                    
opposed to  the amendment  as it  conflicted with  the terms                                                                    
stated in  the HOA.  He noted that  the North  America based                                                                    
project was fundamentally different  from an LNG project. He                                                                    
discussed a scenario with four  steps related to the cost to                                                                    
transport   and  expansion.   He  believed   that  a   party                                                                    
participating  in  one of  the  later  steps with  long-term                                                                    
contracts selling  gas as LNG,  would incur higher  rates in                                                                    
the  long  run.   He  agreed  with  the   sentiment  of  the                                                                    
amendment, but  argued that latecomers to  the project would                                                                    
suffer. He  sought a policy  that served both the  state and                                                                    
the public. He opined  that flexibility would be beneficial.                                                                    
Establishing the  best pipe  diameter initially  would solve                                                                    
the concerns addressed by a rolled-in rate policy.                                                                              
                                                                                                                                
10:32:34 PM                                                                                                                   
                                                                                                                                
Vice-Chair  Neuman  agreed  that  the  changing  rates  were                                                                    
unknown.  He  stated  that  the   debt  equity  ratio  would                                                                    
continue to change.                                                                                                             
                                                                                                                                
Commissioner Balash concurred.                                                                                                  
                                                                                                                                
10:33:46 PM                                                                                                                   
                                                                                                                                
Representative Costello asked how  the unregulated nature of                                                                    
the project impacted the amendment.  She understood that the                                                                    
amendment  was  attractive,  but the  project's  unregulated                                                                    
nature diminished the appeal.                                                                                                   
                                                                                                                                
Commissioner Balash  replied that the amendment  was crafted                                                                    
to match up with the HOA  due to its tie with capital costs.                                                                    
He  explained that  a large  portion of  the pipeline  rates                                                                    
were driven by the fuel  gas consumed by the infrastructure.                                                                    
Fuel  gas requirements  would  increase  as compression  was                                                                    
added to the pipeline system.                                                                                                   
                                                                                                                                
10:35:54 PM                                                                                                                   
                                                                                                                                
Representative  Gara stated  his attempts  to work  with the                                                                    
administration  on  the  issue   for  a  commitment  in  the                                                                    
contract allowing  for production  of additional gas  on the                                                                    
North  Slope.  He  discussed  the  potential  for  a  larger                                                                    
pipeline.  He  recalled  a  comment  by  Co-Chair  Austerman                                                                    
regarding  the value  in a  larger  pipeline to  accommodate                                                                    
expansions. He  disagreed with  the argument  that consumers                                                                    
would  be  negatively  affected by  the  amendment,  because                                                                    
extra  gas in  the pipeline  would allow  for greater  state                                                                    
revenue to subsidize the cost  of natural gas for consumers.                                                                    
If the  pipeline was expanded  through looping,  the expense                                                                    
would ultimately fall on the consumers.                                                                                         
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara                                                                                                                  
OPPOSED:   Neuman,  Thompson,   Wilson,  Costello,   Edgmon,                                                                    
Guttenberg, Holmes, Munoz, Austerman, Stoltze                                                                                   
                                                                                                                                
The MOTION FAILED (1/10).                                                                                                       
                                                                                                                                
10:40:39 PM                                                                                                                   
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  14,  28-                                                                    
GS2806\H.29, Nauman/Bullock, 4/16/14  by Representative Gara                                                                    
(copy on file).                                                                                                                 
                                                                                                                                
     Page 18, line 3:                                                                                                           
     Delete "a new section"                                                                                                     
     Insert "new sections"                                                                                                      
                                                                                                                                
     Page 18, following line 15:                                                                                                
     Insert a new section to read:                                                                                              
     "Sec. 38.05.024. Prohibited  agreement or contract term                                                                    
     relating to the tax on  oil production. An agreement or                                                                    
     contract negotiated under  AS 38.05.020(b)(11) or other                                                                    
     agreement or  contract in  which the  state is  a party                                                                    
     and that is  associated with a North  Slope natural gas                                                                    
     project may  not include a  provision that  reduces the                                                                    
     tax  levied on  oil  production under  AS 43.55.011  or                                                                    
     that  requires compensation  to a  producer for  future                                                                    
     changes in  the tax levied  on oil production  under AS                                                                    
     43.55.011."                                                                                                                
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
10:41:14 PM                                                                                                                   
                                                                                                                                
Representative  Gara  discussed  the  recent  proposals  for                                                                    
gaslines  in  Alaska where  the  three  major oil  producers                                                                    
demanded a provision to lock-in  oil tax rates for 25 years.                                                                    
The amendment ensured  that the parties did  not negotiate a                                                                    
lock-in of  oil tax rates  and removed the leverage  the oil                                                                    
companies might have as favorable  terms are negotiated. The                                                                    
state would  make compromises if  the industry  attempted to                                                                    
lock-in  rates.  The  amendment   would  allow  for  a  much                                                                    
stronger negotiating position over the next two years.                                                                          
                                                                                                                                
Commissioner  Balash opposed  amendment  14. He  appreciated                                                                    
the  sentiments  of the  sponsor  and  had no  intention  of                                                                    
locking-in  specific  oil  tax  rates. He  stated  that  the                                                                    
amendment's  language  was  written  in  a  way  that  would                                                                    
preclude the state from addressing  matters that might be an                                                                    
indirect  consequence  with  regard to  the  production  tax                                                                    
system.  The administration  expected  the  oil business  to                                                                    
remain healthy  and carry the costs  associated with natural                                                                    
gas production on the North  Slope and especially at Prudhoe                                                                    
Bay and Point Thompson. The  costs would be considered lease                                                                    
expenditures under the production tax system.                                                                                   
                                                                                                                                
10:45:34 PM                                                                                                                   
                                                                                                                                
Commissioner Balash continued with description of the Pt.                                                                       
Thompson agreement as it related to field costs. When the                                                                       
production tax system recognized upstream costs, the need                                                                       
for an upstream cost allowance would not be sought under                                                                        
the leases. If the legislature were to switch back to a                                                                         
gross tax system for oil, the door to resolve upstream gas                                                                      
costs would open.  The matter would require contemplation                                                                       
in the agreements, but the amendment's language would                                                                           
preclude that contemplation.                                                                                                    
                                                                                                                                
Vice-Chair  Neuman attempted  to envision  the future  where                                                                    
less and less oil was produced  in Alaska. He hoped that the                                                                    
state would  find new reserves.  He saw the potential  for a                                                                    
future  agreement with  the producers  for greater  pipeline                                                                    
capacity.  He  informed  the committee  that  he  would  not                                                                    
support the amendment.                                                                                                          
                                                                                                                                
10:49:34 PM                                                                                                                   
                                                                                                                                
Representative    Guttenberg     noted    the    significant                                                                    
relationship  between  oil and  gas.  He  believed that  the                                                                    
amendment allowed  a discussion  about the  important issue.                                                                    
If the  committee ignored  the option,  future commissioners                                                                    
and  legislators  might  be  challenged  with  the  decision                                                                    
making process.                                                                                                                 
                                                                                                                                
Representative   Gara  responded   to  Vice-Chair   Neuman's                                                                    
comments   regarding  changing   future  circumstances.   He                                                                    
stressed that  the amendment was unrelated  to the concerns.                                                                    
He advocated  for the  flexibility to  adjust to  real world                                                                    
circumstance.  The amendment  would  not  prevent the  state                                                                    
from  partnering  with  industry. The  legislature  and  the                                                                    
public  would   continue  to   make  those   decisions.  The                                                                    
provision  would prevent  the industry  from demanding  that                                                                    
the  state  lock  in  oil tax  rates.  The  amendment  would                                                                    
prevent  industry  from inserting  a  provision  in a  state                                                                    
negotiated contract  related to  penalties for  changing oil                                                                    
taxes. He believed  that the industry should  not be allowed                                                                    
to  lock in  oil  tax  rates as  part  of  the gas  pipeline                                                                    
agreement.                                                                                                                      
                                                                                                                                
Representative Wilson maintained her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg                                                                                                      
OPPOSED: Thompson, Wilson,  Costello, Edgmon, Holmes, Munoz,                                                                    
Neuman, Stoltze, Austerman                                                                                                      
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  15,  28-                                                                    
GS2806\H.22, Bullock,  4/15/14 by Representative  Gara (copy                                                                    
on file).                                                                                                                       
                                                                                                                                
     Page 18, following line 15:                                                                                                
     Insert a new subsection to read:                                                                                           
     "(c) An agreement or contract  in which the state or an                                                                    
     agent of  the state  is a party  that provides  for the                                                                    
     midstream transportation  by a  third party  of natural                                                                    
     gas received by the state  as royalty or payment of tax                                                                    
     may not require the state  to reimburse the third party                                                                    
     an amount  for funds  used during construction  that is                                                                    
     calculated using a  rate that is more  than one percent                                                                    
     higher  than the  five-year constant  maturity treasury                                                                    
     rate reported  by the  federal reserve  as of  the date                                                                    
     the  agreement  or  contract  is  terminated.  In  this                                                                    
     subsection,  "midstream" means  that  part  of a  North                                                                    
     Slope  natural  gas  project  that  is  upstream  of  a                                                                    
     natural gas liquefaction facility."                                                                                        
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
10:55:10 PM                                                                                                                   
                                                                                                                                
Representative Gara  explained the amendment. He  noted that                                                                    
the  contract  with  TransCanada allowed  for  a  beneficial                                                                    
term; the  state would  pay their costs  if the  project did                                                                    
not go forward as planned.  He stated that TransCanada had a                                                                    
free  ride because  they  would receive  money  back from  a                                                                    
failed  project with  an  additional  7.1 percent  interest.                                                                    
TransCanada  would receive  a guaranteed  profit. He  quoted                                                                    
Roger Marks, Legislative  Consultant, Legislative Budget and                                                                    
Audit Committee  "in my judgment,  the rate of  interest for                                                                    
repaying  TransCanada  in  the  event  the  project  is  not                                                                    
sanctioned  should  be  tied  to  the  yield  on  five  year                                                                    
treasury bills on the date  of the enabling legislation." He                                                                    
noted  that the  rate was  1.6 percent  at the  time of  the                                                                    
hearing.  He agreed  with  Mr. Marks  that  the 7.1  percent                                                                    
profit in addition  to repayment for the  investment was too                                                                    
great.                                                                                                                          
                                                                                                                                
10:57:59 PM                                                                                                                   
                                                                                                                                
Commissioner   Balash    opposed   the   amendment    as   a                                                                    
contradiction  of  a  material  term in  the  Memorandum  of                                                                    
Understanding  (MOU).  He wondered  if  the  purpose of  the                                                                    
amendment was to  undo the agreement with  TransCanada or to                                                                    
lead  to renegotiation.  He deemed  a renegotiation  process                                                                    
complex.                                                                                                                        
                                                                                                                                
10:59:17 PM                                                                                                                   
                                                                                                                                
Mr.  Pawlowski   reiterated  the   broad  spectrum   of  the                                                                    
relationship with  TransCanada in the terms  agreed upon. He                                                                    
noted that the Alaska  Gasline Inducement Act (AGIA) license                                                                    
required reimbursement of  TransCanada for expenditures made                                                                    
by TransCanada.  He noted  approximately $100  million worth                                                                    
of valuable work contributed by  TransCanada to the project.                                                                    
The  recovery  of costs  would  occur  through the  pre-feed                                                                    
period. During  the time  period, the  state would  have the                                                                    
right to  terminate the  relationship with  TransCanada with                                                                    
90 day notice  for any reason. The state had  the benefit of                                                                    
the work  and expertise, and  the focus on an  interest rate                                                                    
fundamentally    misunderstood    the   relationship    with                                                                    
TransCanada. He  argued that the terms  were consistent with                                                                    
those  drafted  with  other   pipeline  companies  in  other                                                                    
projects.   The   deal   with   TransCanada   involved   the                                                                    
contribution of  previous data, momentum, expertise  and the                                                                    
ability for  this or  the next  legislature to  evaluate the                                                                    
relationship  at  the end  of  2015.  The development  costs                                                                    
compensated TransCanada reasonably.                                                                                             
                                                                                                                                
11:01:34 PM                                                                                                                   
                                                                                                                                
Co-Chair Austerman  asked about negotiations related  to the                                                                    
7.1 percent.                                                                                                                    
                                                                                                                                
Commissioner  Balash  replied  that  the  return  on  equity                                                                    
received  by  TransCanada  was 12  percent  if  the  project                                                                    
proceeded  to construction.  He  stated  that the  corporate                                                                    
cost of capital  was higher than the 7.1  percent. He stated                                                                    
that the 7.1 percent was  derived through examination of the                                                                    
capital  structure  employed  on   the  project  during  the                                                                    
construction phase. The cost  of capital during construction                                                                    
was 7.1 percent.                                                                                                                
                                                                                                                                
11:03:08 PM                                                                                                                   
                                                                                                                                
Mr.  Pawlowski  added that  the  discussion  began with  the                                                                    
commercial  terms of  70/30 established  by TransCanada  and                                                                    
approved  by the  legislature. The  state  granted the  AGIA                                                                    
license further down in the negotiations.                                                                                       
                                                                                                                                
11:03:51 PM                                                                                                                   
                                                                                                                                
Representative  Gara  explained that  he  had  no motive  to                                                                    
disrupt  the arrangement  with TransCanada.  He stated  that                                                                    
TransCanada  had  a record  of  building  more pipelines  in                                                                    
North America than any other  company at fewer cost overruns                                                                    
than the  producers. As a  partner, TransCanada was  a great                                                                    
pipeline   builder.   He   had  no   motive   to   eliminate                                                                    
TransCanada. He  stated the  motive to  enable the  state to                                                                    
receive a  fair deal. He  stated that TransCanada  would not                                                                    
take a  loan out to  pay costs, but  would use cash  on hand                                                                    
instead.  He   opined  that  the  state   was  leveraged  by                                                                    
TransCanada  because they  had  the  potential AGIA  lawsuit                                                                    
against Alaska.                                                                                                                 
                                                                                                                                
11:06:16 PM                                                                                                                   
                                                                                                                                
Representative Wilson maintained her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg                                                                                                      
OPPOSED:  Wilson, Costello,  Edgmon, Holmes,  Munoz, Neuman,                                                                    
Thompson, Austerman, Stoltze                                                                                                    
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
11:07:28 PM                                                                                                                   
                                                                                                                                
Representative Gara  WITHDREW Amendment  16, 28-GS2806\H.21,                                                                    
Bullock, 4/15/14 by Representative Gara (copy on file).                                                                         
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  17,  28-                                                                    
GS2806\H.5,  Bullock, 4/12/14  by Representative  Gara (copy                                                                    
on file).                                                                                                                       
                                                                                                                                
     Page 18, following line 15:                                                                                                
     Insert a new subsection to read:                                                                                           
     "(c) An agreement or contract  in which the state or an                                                                    
     agent  of  the  state  is a  party  that  provides  for                                                                    
     transportation  by   a  third  party  of   natural  gas                                                                    
     received by the state as  royalty or payment of tax may                                                                    
     not require the state to  reimburse the third party for                                                                    
     more than 40 percent  of the development costs incurred                                                                    
     by  the  third party  plus  an  amount for  funds  used                                                                    
     during  construction if  the agreement  or contract  is                                                                    
     terminated.  The agreement  or  contract must  describe                                                                    
     the   development    costs   that   are    subject   to                                                                    
     reimbursement  and   the  rate  or  other   method  for                                                                    
     determining  the   allowance  for  funds   used  during                                                                    
     construction."                                                                                                             
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative  Gara  explained  the  amendment  related  to                                                                    
repayment  of  only 40  percent  of  TransCanada's costs  if                                                                    
necessary. The  goal of the  amendment was to create  a more                                                                    
equitable  relationship between  the state  and TransCanada.                                                                    
He  noted  that  TransCanada  was  the  only  party  in  the                                                                    
contract that  would get their  investment back.  He pointed                                                                    
out that  the state was allowed  to buy up to  40 percent of                                                                    
TransCanada's share  of the facilities.  He saw  the benefit                                                                    
to  TransCanada to  be reimbursed  for 40  percent of  their                                                                    
costs when  all other  investors would  bear 100  percent of                                                                    
their costs.                                                                                                                    
                                                                                                                                
Representative Gara WITHDREW Amendment 17.                                                                                      
                                                                                                                                
11:10:09 PM                                                                                                                   
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  18,  28-                                                                    
GS2806\H.28, Bullock,  4/16/14 by Representative  Gara (copy                                                                    
on file).                                                                                                                       
                                                                                                                                
     Page 18, following line 15:                                                                                                
     Insert a new subsection to read:                                                                                           
     "(c)  A  proposed agreement or contract  related to the                                                                    
     construction or operation of a  North Slope natural gas                                                                    
     project  must  include   a  severability  provision  to                                                                    
     require that  the remaining terms  of the  agreement or                                                                    
     contract will continue to apply  if a final decision by                                                                    
     a court of competent jurisdiction  finds that a part of                                                                    
     the agreement  or contract  that relates  to royalties,                                                                    
     production taxes,  payment of  tax or royalty  with gas                                                                    
     rather than payment in value,  property taxes, or other                                                                    
     fiscal terms is unconstitutional."                                                                                         
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
11:10:24 PM                                                                                                                   
                                                                                                                                
Representative Gara  discussed amendment  18. He  noted that                                                                    
if  a  term  was declared  unconstitutional,  the  amendment                                                                    
would ensure that the entity  could not remove them from the                                                                    
contract. He did not wish  to reward a party that negotiated                                                                    
an unconstitutional provision with  the ability to leverage.                                                                    
The  provision  would  provide   protection  with  a  common                                                                    
mechanism.  The  courts   would  not  enforce  uncontainable                                                                    
terms. The amendment sought to  protect the state from being                                                                    
leveraged  by  the  majors  if   a  provision  was  declared                                                                    
unconstitutional.                                                                                                               
                                                                                                                                
11:12:21 PM                                                                                                                   
                                                                                                                                
Commissioner  Balash  opposed  the amendment.  He  explained                                                                    
that  the complete  agreement was  not  yet established.  He                                                                    
agreed that close attention must  be paid to the agreements.                                                                    
Severability  provisions  would  likely  be  considered.  He                                                                    
noted  that  every  party  would   attempt  to  mitigate  an                                                                    
assortment of  risks. He  spoke to  the importance  of fall-                                                                    
back provisions in  the event of an  adverse court decision.                                                                    
He  stated  that  he  recognized   that  the  agreement  and                                                                    
statutory  language  would  be  difficult  to  contend  with                                                                    
because of the limit to  specific issues addressed. He noted                                                                    
that  some  solutions  would be  commercial  as  opposed  to                                                                    
fiscal.                                                                                                                         
                                                                                                                                
11:16:02 PM                                                                                                                   
                                                                                                                                
Representative Holmes  agreed that the  severability clauses                                                                    
existed  in  most  agreements.   She  anticipated  that  the                                                                    
agreements  would have  those clauses.  She took  issue with                                                                    
the  amendment  language  because  of  the  reference  to  a                                                                    
limiting provision  related to a  payment of tax  or royalty                                                                    
with gas rather  than a payment in value.  She supported the                                                                    
use  of severability  clauses in  the  contracts, but  would                                                                    
value greater nuance in their language.                                                                                         
                                                                                                                                
11:18:28 PM                                                                                                                   
                                                                                                                                
Mr.   Pawlowski  appreciated   the  insights   expressed  by                                                                    
Representative  Holmes.  He  stated  that  the  adoption  of                                                                    
amendment 1  allowed the  opportunity and  responsibility to                                                                    
engage  the  legislature over  the  next  two years  as  the                                                                    
agreements evolve.                                                                                                              
                                                                                                                                
11:19:56 PM                                                                                                                   
                                                                                                                                
Representative   Guttenberg  asked   about  the   difference                                                                    
between the  severability clause in  statute and the  one in                                                                    
the contract.                                                                                                                   
                                                                                                                                
Mr.   Pawlowski   replied   that  the   amendment   required                                                                    
severability clause  use for each  of the  scenarios listed.                                                                    
The  technicality  of  each  clause   was  deferred  to  the                                                                    
Department of Law.                                                                                                              
                                                                                                                                
Representative  Guttenberg  asked   if  different  types  of                                                                    
severability  clauses and  contracts might  be employed.  He                                                                    
asked  if  the  amendment  provided for  only  one  kind  of                                                                    
severability clause.                                                                                                            
                                                                                                                                
11:21:47 PM                                                                                                                   
                                                                                                                                
Commissioner  Balash interpreted  that  the  clause must  be                                                                    
included, but others could be employed as well.                                                                                 
                                                                                                                                
Mr.  Pawlowski requested  testimony from  the Department  of                                                                    
Law.                                                                                                                            
                                                                                                                                
11:22:52 PM                                                                                                                   
                                                                                                                                
SUSAN POLLARD,  OIL, GAS, AND MINING  SECTION, DEPARTMENT OF                                                                    
LAW, discussed  the statutory  provision on  severability as                                                                    
compared  to  contractual  provisions on  severability.  She                                                                    
agreed  that  contract  employed  a variety  of  methods  to                                                                    
address  particular provisions  in  a  contract. The  choice                                                                    
would  depend on  the party's  transactions and  intent. The                                                                    
statutory  provision   applied  to  a  statute   but  not  a                                                                    
contract. A court  must review a particular  statute and the                                                                    
severability  provision to  determine whether  the statutory                                                                    
provision could proceed.                                                                                                        
                                                                                                                                
11:24:48 PM                                                                                                                   
                                                                                                                                
Representative  Gara  wished  to  eliminate  worry  about  a                                                                    
contractual   provision   declared   unconstitutional.   The                                                                    
statute  was  unrelated  to a  contract  provision  declared                                                                    
unconstitutional by the courts.                                                                                                 
                                                                                                                                
Ms.  Pollard   stated  that  the  statute   would  apply  to                                                                    
legislation   as  opposed   to  contracts   between  private                                                                    
parties.                                                                                                                        
                                                                                                                                
11:25:30 PM                                                                                                                   
                                                                                                                                
Representative   Gara  recalled   that  contracts   normally                                                                    
included  a   severability  clause.   The  clause   was  not                                                                    
automatically  included in  the contract.  The point  of the                                                                    
amendment  was  to  eliminate  the need  to  fight  for  the                                                                    
severability  clause because  the statute  would remove  the                                                                    
option  as   a  negotiating  point.  He   pointed  out  that                                                                    
negotiation  with  the  major   oil  companies  could  prove                                                                    
difficult.  If a  term was  deemed unconstitutional  via the                                                                    
amendment,  the  parties   involved  would  proceed  through                                                                    
negotiation.                                                                                                                    
                                                                                                                                
11:28:01 PM                                                                                                                   
                                                                                                                                
Representative Wilson maintained her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg                                                                                                      
OPPOSED:  Costello,    Edgmon,   Holmes,    Munoz,   Neuman,                                                                    
Thompson, Wilson, Austerman, Stoltze                                                                                            
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
11:29:19 PM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:37:14 PM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Neuman MOVED to ADOPT  Amendment 19 by Vice-Chair                                                                    
Neuman (copy on file).                                                                                                          
                                                                                                                                
     Page 23, line 1:                                                                                                           
                                                                                                                                
     Following the words: "means a project to produce"                                                                          
                                                                                                                                
     Insert the words: "or transport"                                                                                           
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Vice-Chair  Neuman discussed  the amendment.  He pointed  to                                                                    
page  23, line  1, paragraph,  27  of section  30. He  noted                                                                    
three  different  definitions  describing the  project.  One                                                                    
definition was "a project to  produce natural gas." He noted                                                                    
that amendment 19  would add the words  "or transport" after                                                                    
the  word  "produce" leading  to  "North  Slope natural  gas                                                                    
project means a project to  produce or transport natural gas                                                                    
from a state oil or gas." He  referred to page 5 in the HOA,                                                                    
and  the project  components including  the  LNG plant,  gas                                                                    
treatment pipelines,  the treatment  plant, Prudhoe  Bay gas                                                                    
transmission line  and Point Thompson unit  gas transmission                                                                    
line.  He  wished  to  better   describe  the  full  project                                                                    
including the pipelines through the clarifying amendment.                                                                       
                                                                                                                                
11:39:20 PM                                                                                                                   
                                                                                                                                
Mr. Pawlowski appreciated the amendment.  He stated that the                                                                    
underlying  problem  with  reference   to  the  North  Slope                                                                    
natural  gas project.  He agreed  that the  addition of  "or                                                                    
transport" to the definition would  allow the application of                                                                    
a non-production related project.  He stated that the detail                                                                    
had  been   missed  by   the  administration   and  multiple                                                                    
legislative committees.  He appreciated  Vice-Chair Neuman's                                                                    
attention to detail.                                                                                                            
                                                                                                                                
11:40:09 PM                                                                                                                   
                                                                                                                                
Representative  Wilson WITHDREW  his OBJECTION.  There being                                                                    
NO OBJECTION, it was so ordered. Amendment 19 was ADOPTED.                                                                      
                                                                                                                                
Co-Chair Stoltze MOVED to ADOPT Amendment 20 28-                                                                                
GS2806\H.53, Bullock,  4/17/14 by  Co-Chair Stoltze  and Co-                                                                    
Chair Austerman by request of the governor.                                                                                     
                                                                                                                                
     Page 1, before line 1, of the amendment:                                                                                   
     Insert new material to read:                                                                                               
     "Page 2, line 12:                                                                                                          
     Delete "interim advisory board"                                                                                            
     Insert "advisory planning group""                                                                                          
                                                                                                                                
     Page 4, following line 1, of the amendment:                                                                                
     Insert new material to read:                                                                                               
     "Page 61, lines 7 - 8:                                                                                                     
     Delete "INTERIM ADVISORY BOARD"                                                                                            
     Insert "ADVISORY PLANNING GROUP"                                                                                           
                                                                                                                                
     Page 61, line 8:                                                                                                           
     Delete "interim advisory board"                                                                                            
     Insert "advisory planning group"                                                                                           
                                                                                                                                
     Page 61, line 9:                                                                                                           
     Delete "AS 44.19.028"                                                                                                      
     Insert "AS 44.19.145"                                                                                                      
                                                                                                                                
     Page 61, line 10:                                                                                                          
     Delete " board"                                                                                                            
     Insert "planning group"                                                                                                    
                                                                                                                                
     Page 61, line 15:                                                                                                          
     Delete "board"                                                                                                             
     Insert "planning group"                                                                                                    
                                                                                                                                
Representative Gara OBJECTED for discussion.                                                                                    
                                                                                                                                
Mr. Pawlowski discussed amendment 20.  He pointed to page 61                                                                    
of the legislation related to  an interim advisory board. He                                                                    
discussed the property  tax issues and needs  related to the                                                                    
project.  He noted  that lines  18  and 19  of amendment  20                                                                    
matched   the   statutory   authority  in   the   governor's                                                                    
administrative  order,   which  necessitated  a   change  in                                                                    
terminology   from  interim   advisory  board   to  advisory                                                                    
planning group.                                                                                                                 
                                                                                                                                
11:42:02 PM                                                                                                                   
                                                                                                                                
Representative Thompson  asked about the  municipal advisory                                                                    
group listed  by the  governor. He  believed that  the group                                                                    
lacked important contributors such  as the City of Fairbanks                                                                    
and  the City  of  North Pole.  He  noted that  construction                                                                    
workers would inhabit both cities  during their time off. He                                                                    
wished to  have the  communities included in  the discussion                                                                    
so  that the  pre-construction impact  dollars could  obtain                                                                    
adequate consideration.                                                                                                         
                                                                                                                                
Mr.  Pawlowski  appreciated  the information.  He  mentioned                                                                    
that  the advisory  group's meetings  were public,  open and                                                                    
transparent. He agreed with the  concern about the attention                                                                    
needed to understand  the social impacts of  the project. He                                                                    
mentioned the  demands on all  of the communities  and noted                                                                    
the administration's  commitment to working with  all of the                                                                    
interested groups to bring the best information forward.                                                                        
                                                                                                                                
11:43:44 PM                                                                                                                   
                                                                                                                                
Representative  Thompson  discussed   public  safety  issues                                                                    
including the police, fire  department and emergency medical                                                                    
technicians (EMT).  He stressed the need  to consider public                                                                    
safety organizations prior to the construction process.                                                                         
                                                                                                                                
Vice-Chair   Neuman  appreciated   the   comments  made   by                                                                    
Representative Thompson.                                                                                                        
                                                                                                                                
11:44:36 PM                                                                                                                   
                                                                                                                                
Representative Gara asked about the  amendment on page 1. He                                                                    
did not understand the reference to "before line 1."                                                                            
                                                                                                                                
11:45:16 PM                                                                                                                   
                                                                                                                                
Mr. Pawlowski  stated that the  amendment was drafted  as an                                                                    
amendment to amendment  1, which was adopted  earlier in the                                                                    
meeting.                                                                                                                        
                                                                                                                                
Representative Gara  asked if page  2, line 12 and  page 61,                                                                    
lines 7 and 8 would be changed by the amendment.                                                                                
                                                                                                                                
Mr. Pawlowski concurred.                                                                                                        
                                                                                                                                
11:45:59 PM                                                                                                                   
                                                                                                                                
Representative  Gara  stated  that  the name  of  the  group                                                                    
changed  from interim  advisory board  to advisory  planning                                                                    
group. He  was unsure about  location of the  term "advisory                                                                    
planning group" in the statute.                                                                                                 
                                                                                                                                
Mr.  Pawlowski  replied  that  the   reference  was  to  the                                                                    
statutory  authority  used  by  the governor  to  issue  the                                                                    
administrative order.                                                                                                           
                                                                                                                                
Representative Gara clarified  that the administrative order                                                                    
initiated an advisory planning group.                                                                                           
                                                                                                                                
Mr. Pawlowski concurred.                                                                                                        
                                                                                                                                
11:47:09 PM                                                                                                                   
                                                                                                                                
Co-Chair  Stoltze  stated  that  amendment  20  would  amend                                                                    
amendment 1.                                                                                                                    
                                                                                                                                
Representative  Wilson withdrew  her OBJECTION.  There being                                                                    
NO OBJECTION, it was so ordered. Amendment 20 was ADOPTED.                                                                      
                                                                                                                                
Co-Chair  Stoltze explained  that  the  bill's fiscal  notes                                                                    
would be discussed in the next day's meeting.                                                                                   
                                                                                                                                
Representative  Gara noted  that  information regarding  the                                                                    
relative  state  share  of the  project  compared  to  other                                                                    
jurisdictions was  not provided to the  committee. He wished                                                                    
to see  the information  on the House  Floor before  a final                                                                    
decision was made on the bill.                                                                                                  
                                                                                                                                
Commissioner   Balash   replied   that  he   would   provide                                                                    
clarification in the morning.                                                                                                   
                                                                                                                                
11:49:26 PM                                                                                                                   
                                                                                                                                
Vice-Chair Neuman  MOVED to REPORT  HCSCSSB 138(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
HCSCSSB 138(FIN)  was REPORTED out  of committee with  a "do                                                                    
pass" recommendation and  with one new fiscal  note from the                                                                    
Department of Commerce,  Community and Economic Development,                                                                    
one new  fiscal note  from the Department  of Transportation                                                                    
and Public  Facilities, one new  fiscal note from  the House                                                                    
Finance Committee, two new fiscal  notes from the Department                                                                    
of  Revenue, one  new  fiscal note  from  the Department  of                                                                    
Natural  Resources,  and  one  previously  published  fiscal                                                                    
note: FN16 (CED).                                                                                                               
                                                                                                                                
11:53:05 PM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:56:26 PM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR SENATE BILL NO. 194(FIN)                                                                                               
                                                                                                                                
     "An Act creating the Alaska Tourism Marketing Board;                                                                       
     and relating to tourism marketing."                                                                                        
                                                                                                                                
11:56:32 PM                                                                                                                   
                                                                                                                                
GENEVIEVE WOJTUSIK, STAFF,  SENATOR LESIL MCGUIRE introduced                                                                    
herself.                                                                                                                        
                                                                                                                                
11:57:47 PM                                                                                                                   
                                                                                                                                
ROBERTA  GRAHAM,   ASSISTANT  COMMISSIONER,   DEPARTMENT  OF                                                                    
COMMERCE,  COMMUNITY  AND  ECONOMIC  DEVELOPMENT,  testified                                                                    
that  the  bill  formalized  the  relationship  between  the                                                                    
industry and the department. She  stated that the department                                                                    
supported  the   legislation  and  she  offered   to  answer                                                                    
questions. She noted  that 21 members would  be appointed by                                                                    
the governor  as proposed by the  leading trade association.                                                                    
She stated that the bill would  allow the board to work with                                                                    
the  department  on the  marketing  of  Alaska as  a  travel                                                                    
destination.  She   mentioned  a   fiscal  note   for  $3000                                                                    
representing the two meetings required in the bill.                                                                             
                                                                                                                                
11:59:30 PM                                                                                                                   
                                                                                                                                
BILL  PEDDLER, ALASKA  TOURISM  ASSOCIATION, testified  that                                                                    
the industry  supported the bill.  Since 1988,  a formalized                                                                    
statutory  relationship was  established between  the Alaska                                                                    
travel industry  and the state. The  relationship suffered a                                                                    
few years  ago, and the  need to formalize  the relationship                                                                    
was again deemed necessary.                                                                                                     
                                                                                                                                
Representative Wilson stated that  the board had 21 members.                                                                    
She wondered if quorums might be difficult to obtain.                                                                           
                                                                                                                                
Mr.  Peddler  replied  that  the   bill  required  a  quorum                                                                    
including one  member from  each region of  the state  and a                                                                    
minimum of nine  voting members attending. He  stated that a                                                                    
quorum was  never difficult to  obtain as the subject  was a                                                                    
passionate one amongst all the industry members.                                                                                
                                                                                                                                
Representative  Wilson stated  that  she  participated in  a                                                                    
similar  group as  an assembly  member. She  appreciated the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Representative Munoz asked about the benefit of the                                                                             
statute.                                                                                                                        
                                                                                                                                
Ms.  Graham  replied that  the  marketing  committee of  the                                                                    
Alaska  Travel Industry  Association  (ATIA) was  affiliated                                                                    
with the  trade association.  She stated that  the qualified                                                                    
trade association was in statute.                                                                                               
                                                                                                                                
[Note: Meeting continued in minutes dated 4/18/14 12:01                                                                         
a.m.]                                                                                                                           
                                                                                                                                
11:59:59 PM                                                                                                                   
                                                                                                                                
                                                                                                                                

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