Legislature(2013 - 2014)

04/08/2014 09:03 AM RES


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09:03:54 AM Start
09:04:03 AM SB138
10:01:32 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 8, 2014                                                                                          
                           9:03 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Eric Feige, Co-Chair                                                                                             
Representative Dan Saddler, Co-Chair                                                                                            
Representative Peggy Wilson, Vice Chair                                                                                         
Representative Mike Hawker                                                                                                      
Representative Craig Johnson                                                                                                    
Representative Paul Seaton                                                                                                      
Representative Scott Kawasaki                                                                                                   
Representative Geran Tarr                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Kurt Olson                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
COMMITTEE SUBSTITUTE 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."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 138                                                                                                                  
SHORT TITLE: GAS PIPELINE; AGDC; OIL & GAS PROD. TAX                                                                            
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/24/14       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/24/14       (S)       RES, FIN                                                                                               
02/07/14       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/07/14       (S)       Heard & Held                                                                                           
02/07/14       (S)       MINUTE(RES)                                                                                            
02/10/14       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/10/14       (S)       Heard & Held                                                                                           
02/10/14       (S)       MINUTE(RES)                                                                                            
02/12/14       (S)       RES WAIVED PUBLIC HEARING NOTICE, RULE                                                                 
                         23                                                                                                     
02/12/14       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/12/14       (S)       Heard & Held                                                                                           
02/12/14       (S)       MINUTE(RES)                                                                                            
02/13/14       (S)       RES AT 8:00 AM BUTROVICH 205                                                                           
02/13/14       (S)       Heard & Held                                                                                           
02/13/14       (S)       MINUTE(RES)                                                                                            
02/14/14       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/14/14       (S)       Heard & Held                                                                                           
02/14/14       (S)       MINUTE(RES)                                                                                            
02/19/14       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/19/14       (S)       Heard & Held                                                                                           
02/19/14       (S)       MINUTE(RES)                                                                                            
02/20/14       (S)       RES AT 8:00 AM BUTROVICH 205                                                                           
02/20/14       (S)       Heard & Held                                                                                           
02/20/14       (S)       MINUTE(RES)                                                                                            
02/21/14       (S)       RES AT 8:00 AM BUTROVICH 205                                                                           
02/21/14       (S)       Heard & Held                                                                                           
02/21/14       (S)       MINUTE(RES)                                                                                            
02/21/14       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/21/14       (S)       Heard & Held                                                                                           
02/21/14       (S)       MINUTE(RES)                                                                                            
02/24/14       (S)       RES RPT CS  2DP 4NR 1AM   NEW TITLE                                                                    
02/24/14       (S)       DP: GIESSEL, MCGUIRE                                                                                   
02/24/14       (S)       NR:     FRENCH,    MICCICHE,     BISHOP,                                                               
                         FAIRCLOUGH                                                                                             
02/24/14       (S)       AM: DYSON                                                                                              
02/24/14       (S)       RES AT 8:00 AM BUTROVICH 205                                                                           
02/24/14       (S)       -- MEETING CANCELED --                                                                                 
02/24/14       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
02/24/14       (S)       Moved CSSB 138(RES) Out of Committee                                                                   
02/24/14       (S)       MINUTE(RES)                                                                                            
02/25/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/25/14       (S)       Heard & Held                                                                                           
02/25/14       (S)       MINUTE(FIN)                                                                                            
02/25/14       (S)       FIN AT 5:00 PM SENATE FINANCE 532                                                                      
02/25/14       (S)       Heard & Held                                                                                           
02/25/14       (S)       MINUTE(FIN)                                                                                            
02/26/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/26/14       (S)       Heard & Held                                                                                           
02/26/14       (S)       MINUTE(FIN)                                                                                            
02/27/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/27/14       (S)       Heard & Held                                                                                           
02/27/14       (S)       MINUTE(FIN)                                                                                            
02/28/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/28/14       (S)       Heard & Held                                                                                           
02/28/14       (S)       MINUTE(FIN)                                                                                            
03/03/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/03/14       (S)       Heard & Held                                                                                           
03/03/14       (S)       MINUTE(FIN)                                                                                            
03/04/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/04/14       (S)       Heard & Held                                                                                           
03/04/14       (S)       MINUTE(FIN)                                                                                            
03/05/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/05/14       (S)       Heard & Held                                                                                           
03/05/14       (S)       MINUTE(FIN)                                                                                            
03/05/14       (S)       FIN AT 5:00 PM SENATE FINANCE 532                                                                      
03/05/14       (S)       Scheduled But Not Heard                                                                                
03/06/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/06/14       (S)       Heard & Held                                                                                           
03/06/14       (S)       MINUTE(FIN)                                                                                            
03/07/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/07/14       (S)       -- MEETING CANCELED --                                                                                 
03/10/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/10/14       (S)       Heard & Held                                                                                           
03/10/14       (S)       MINUTE(FIN)                                                                                            
03/10/14       (S)       FIN AT 5:00 PM SENATE FINANCE 532                                                                      
03/10/14       (S)       Heard & Held                                                                                           
03/10/14       (S)       MINUTE(FIN)                                                                                            
03/11/14       (S)       FIN AT 5:00 PM SENATE FINANCE 532                                                                      
03/11/14       (S)       Heard & Held                                                                                           
03/11/14       (S)       MINUTE(FIN)                                                                                            
03/12/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/12/14       (H)       -- MEETING CANCELED --                                                                                 
03/14/14       (S)       FIN RPT CS  6DP 1AM  NEW TITLE                                                                         
03/14/14       (S)       LETTER OF INTENT WITH FINANCE REPORT                                                                   
03/14/14       (S)       DP: KELLY, MEYER, DUNLEAVY, FAIRCLOUGH,                                                                
                        BISHOP, HOFFMAN                                                                                         
03/14/14       (S)       AM: OLSON                                                                                              
03/14/14       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/14/14       (S)       Moved CSSB 138(FIN) Out of Committee                                                                   
03/14/14       (S)       MINUTE(FIN)                                                                                            
03/14/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/14/14       (H)       <Pending Referral>                                                                                     
03/17/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/17/14       (H)       <Pending Referral>                                                                                     
03/18/14       (S)       TRANSMITTED TO (H)                                                                                     
03/18/14       (S)       VERSION: CSSB 138(FIN) AM                                                                              
03/19/14       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/19/14       (H)       RES, L&C, FIN                                                                                          
03/19/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/19/14       (H)       Heard & Held                                                                                           
03/19/14       (H)       MINUTE(RES)                                                                                            
03/21/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/21/14       (H)       Heard & Held                                                                                           
03/21/14       (H)       MINUTE(RES)                                                                                            
03/24/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/24/14       (H)       Heard & Held                                                                                           
03/24/14       (H)       MINUTE(RES)                                                                                            
03/25/14       (H)       RES AT 4:30 PM BARNES 124                                                                              
03/25/14       (H)       Heard & Held                                                                                           
03/25/14       (H)       MINUTE(RES)                                                                                            
03/26/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/26/14       (H)       Heard & Held                                                                                           
03/26/14       (H)       MINUTE(RES)                                                                                            
03/27/14       (H)       RES AT 4:30 PM BARNES 124                                                                              
03/27/14       (H)       Heard & Held                                                                                           
03/27/14       (H)       MINUTE(RES)                                                                                            
03/28/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/28/14       (H)       Heard & Held                                                                                           
03/28/14       (H)       MINUTE(RES)                                                                                            
03/31/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/31/14       (H)       Heard & Held                                                                                           
03/31/14       (H)       MINUTE(RES)                                                                                            
04/01/14       (H)       RES AT 4:30 PM BARNES 124                                                                              
04/01/14       (H)       Heard & Held                                                                                           
04/01/14       (H)       MINUTE(RES)                                                                                            
04/02/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/02/14       (H)       Heard & Held                                                                                           
04/02/14       (H)       MINUTE(RES)                                                                                            
04/03/14       (H)       RES AT 4:30 PM BARNES 124                                                                              
04/03/14       (H)       Heard & Held                                                                                           
04/03/14       (H)       MINUTE(RES)                                                                                            
04/04/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/04/14       (H)       Heard & Held                                                                                           
04/04/14       (H)       MINUTE(RES)                                                                                            
04/05/14       (H)       RES AT 10:00 AM BARNES 124                                                                             
04/05/14       (H)       Heard & Held                                                                                           
04/05/14       (H)       MINUTE(RES)                                                                                            
04/06/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/06/14       (H)       Heard & Held                                                                                           
04/06/14       (H)       MINUTE(RES)                                                                                            
04/07/14       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/07/14       (H)       Heard & Held                                                                                           
04/07/14       (H)       MINUTE(RES)                                                                                            
04/08/14       (H)       RES AT 8:00 AM BARNES 124                                                                              
04/08/14       (H)       FIN AT 8:30 AM HOUSE FINANCE 519                                                                       
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
MICHAEL PAWLOWSKI, Deputy Commissioner                                                                                          
Office of the Commissioner                                                                                                      
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions on CSSB 138(FIN) am.                                                                  
                                                                                                                                
JOE BALASH, Commissioner                                                                                                        
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  In regard to CSSB 138(FIN) am, provided the                                                              
administration's position on proposed amendments.                                                                               
                                                                                                                                
CHRISTOPHER POAG, Assistant Attorney General                                                                                    
Labor and State Affairs Section                                                                                                 
Civil Division (Juneau)                                                                                                         
Department of Law (DOL)                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on CSSB 138(FIN) am.                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
9:03:54 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  ERIC   FEIGE  called   the  House   Resources  Standing                                                             
Committee meeting  back to  order at  9:03 a.m.   Representatives                                                               
Tarr, Seaton, P. Wilson, Kawasaki,  Hawker, Johnson, Saddler, and                                                               
Feige were present  at the call back to order.   [The meeting was                                                               
previously recessed at 3:05 p.m. on April 7, 2014.]                                                                             
                                                                                                                                
         SB 138-GAS PIPELINE; AGDC; OIL & GAS PROD. TAX                                                                     
                                                                                                                                
9:04:03 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  announced that the  only order of business  is 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."                                                                               
                                                                                                                                
CO-CHAIR  FEIGE said  the  committee would  continue  to work  on                                                               
amendments to CSSB 138(FIN) am.                                                                                                 
                                                                                                                                
9:04:25 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FEIGE   moved  to  adopt  Amendment   27,  labeled  28-                                                               
GS2806\I.A.91, [text provided at the end of this document].                                                                     
                                                                                                                                
REPRESENTATIVE HAWKER objected for discussion purposes.                                                                         
                                                                                                                                
CO-CHAIR  FEIGE explained  that  proposed  Amendment 27  combines                                                               
several  previous amendments.   It  requires the  commissioner of                                                               
the Department of  Revenue (DOR) to report to  the legislature on                                                               
the full  range of financing options  regarding state acquisition                                                               
of an  ownership interest  and participation  in the  North Slope                                                               
natural gas  project.   He deferred  to Representative  Hawker to                                                               
explain the additional portion of the combined amendment.                                                                       
                                                                                                                                
REPRESENTATIVE   HAWKER  explained   that  Amendment   27  amends                                                               
proposed Section  60 of CSSB  138(FIN) am to  include information                                                               
on development of the plan  for public participation in ownership                                                               
of  the pipeline  project.    He said  the  amendment merges  two                                                               
concerns  by inserting  "buyer beware"  provisions into  proposed                                                               
Section  60.   This would  ensure that  the public  will have  an                                                               
opportunity  to  review  full disclosure  of  all  the  financial                                                               
risks, obligations,  and burdens that the  proposed gasline might                                                               
entail.  He  wanted to ensure that all the  risks are highlighted                                                               
for any proposal brought forward since ownership entails risks.                                                                 
                                                                                                                                
CO-CHAIR FEIGE noted subsection (b)  is language suggested by DOR                                                               
to require  an interim  draft report to  the legislature  due the                                                               
first day of the regular session of the legislature.                                                                            
                                                                                                                                
9:07:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER removed his objection.                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  asked whether  the administration  wished to                                                               
comment.                                                                                                                        
                                                                                                                                
MICHAEL   PAWLOWSKI,   Deputy   Commissioner,   Office   of   the                                                               
Commissioner, Department  of Revenue, expressed  his appreciation                                                               
for  working  with the  committee  on  this  language.   He  said                                                               
[Amendment 27] "works" for the  department and includes important                                                               
clarification to  enhance consumer protection in  the second part                                                               
of the report.  He said [Amendment 27] is a "good amendment."                                                                   
                                                                                                                                
REPRESENTATIVE  TARR asked  if the  bill was  amended to  include                                                               
financial briefings and  reports, which will "synch  up" with the                                                               
[Municipal  Advisory  Gas Project  Review  Board]  to ensure  the                                                               
reports don't have overlapping or interfering timelines.                                                                        
                                                                                                                                
MR. PAWLOWSKI answered no and said  DOR has a good progression of                                                               
reports from  the [Municipal Advisory  Gas Project  Review Board]                                                               
ranging from  an interim draft to  a final plan as  the contracts                                                               
are  brought  back.    This  amendment  will  provide  a  regular                                                               
updating  of  information  from  members  as  the  contracts  and                                                               
briefing occur.                                                                                                                 
                                                                                                                                
9:08:41 AM                                                                                                                    
                                                                                                                                
There being no further objection, Amendment 27 was adopted.                                                                     
                                                                                                                                
9:09:08 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FEIGE   moved  to  adopt  Amendment   28,  labeled  28-                                                               
GS2806\I.A.97, Nauman/Bullock,  4/6/14 [text provided at  the end                                                               
of this document].                                                                                                              
                                                                                                                                
REPRESENTATIVE HAWKER objected for the purpose of discussion.                                                                   
                                                                                                                                
CO-CHAIR FEIGE  explained Amendment  28 combines  two amendments.                                                               
Beginning on page  1, line 7 [of proposed  Section 57], Amendment                                                               
28  would add  language  that lists  duties of  the  Oil and  Gas                                                               
Competitiveness Review Board, which was  an element of SB 21 from                                                               
the last  legislative session.   Amendment 28, beginning  on page                                                               
2, line  16, adds a requirement  for an additional report  due on                                                               
January 15, 2017,  regarding the state's tax  structure and rates                                                               
on oil  and gas produced  south of  68 degrees North  latitude or                                                               
everything excluding the  North Slope.  He stated  the purpose of                                                               
Amendment 28  is to address  potential concerns about  Cook Inlet                                                               
that will arise in about 2018.                                                                                                  
                                                                                                                                
9:10:57 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER  referred  to previous  testimony  on  two                                                               
amendments  [28-GS2806\I.A.18, Nauman/Bullock,  4/2/14] and  [28-                                                               
GS2806\I.A.54, Nauman/Bullock,  4/2/14], which were  merged [into                                                               
Amendment 28].   He said  this provides an effective  way forward                                                               
to ensure  that other  areas of  the state  are reviewed  with an                                                               
appropriate  lead time  and direction  by  the administration  to                                                               
provide necessary information.  Thus,  as [the state] reviews the                                                               
convergence  of  tax structures  that  will  occur in  2022,  the                                                               
[state] would have  sufficient lead time to  consider the effects                                                               
and  ensure the  [state]  doesn't  compromise the  revitalization                                                               
accomplishments  of Cook  Inlet and  the incentivizing  of Middle                                                               
Earth between now and then.                                                                                                     
                                                                                                                                
MR. PAWLOWSKI  said he appreciated Representative  Hawker linking                                                               
back  to  the  previous  record of  testimony  that  he  believes                                                               
provides guidance  to the department  as it supports the  Oil and                                                               
Gas  Competitiveness   Review  Board   in  bringing   back  these                                                               
recommendations.   He  offered his  belief the  committee held  a                                                               
healthy discussion and Amendment 28 reflects a good merger.                                                                     
                                                                                                                                
9:12:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON referred  to page 2, line  19 [of Amendment                                                               
28, sub-subparagraphs] (ii) and (iii)  and the tax structure that                                                               
takes into account  the gross value reduction (GVR)  at the point                                                               
of  production.   He  asked  for  clarification on  whether  this                                                               
analysis will include all options  not limited to the gross value                                                               
at the point of production scenarios.                                                                                           
                                                                                                                                
REPRESENTATIVE HAWKER  answered that the point  of the provisions                                                               
[of  Amendment 28  and  proposed  Section 57]  was  that as  [the                                                               
state]  moves  into  a  "SB   21  world"  structured  on  a  flat                                                               
production tax  of 35 percent  and considers  creating production                                                               
incentives  as appropriate  through GVRs,  that [sub-subparagraph                                                               
(ii)  would recognize  the unique  circumstances of  each of  the                                                               
areas  south of  68 degrees  North latitude.   [Sub-subparagraph]                                                               
(iii) specifies that  the GVRs are taken into  account and [under                                                               
sub-subparagraph]  (iv) considers  other incentives  for oil  and                                                               
gas.  This  language would give the  department complete latitude                                                               
to consider  other incentives, not  only the GVR, in  the written                                                               
findings and  recommendations to the Alaska  State Legislature on                                                               
January 15, 2017.                                                                                                               
                                                                                                                                
9:14:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  recalled the committee  previously discussed                                                               
unique    economic    circumstances   and    requested    further                                                               
clarification of unique economic circumstances.                                                                                 
                                                                                                                                
MR.  PAWLOWSKI  said  the   aforementioned  dialogue  was  multi-                                                               
faceted.   At  the primary  level,  DOR first  described how  the                                                               
department  and  the Oil  and  Gas  Competitiveness Review  Board                                                               
needs to  examine clearly  the in-state  energy role  that Middle                                                               
Earth and  the Cook Inlet Basin  play.  Secondly, there  are very                                                               
different circumstances within terms  of access to infrastructure                                                               
underlying each of those producing  regions.  For example, Middle                                                               
Earth has  numerous basins  that will need  to be  reviewed, with                                                               
each  one presenting  different challenges  and opportunities  to                                                               
support development in those regions.   However, as was discussed                                                               
the other day,  it is really those two combinations  that need to                                                               
be tailored for each specific place.                                                                                            
                                                                                                                                
9:16:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI referred  to [sub-subparagraph] (ii) that                                                               
highlights  the unique  economic circumstances  for each  oil and                                                               
gas  producing area  south  of  68 degrees  North  latitude.   He                                                               
related his  understanding that these  are not currently  oil and                                                               
gas producing areas.  He  asked for clarification on whether that                                                               
recognizes the potential oil and gas areas.                                                                                     
                                                                                                                                
CO-CHAIR FEIGE pointed to Cook Inlet.                                                                                           
                                                                                                                                
REPRESENTATIVE KAWASAKI  acknowledged work is being  performed in                                                               
the  Middle Earth  such as  in the  Doyon Basin  and near  Copper                                                               
River Basin.                                                                                                                    
                                                                                                                                
MR.  PAWLOWSKI responded  that  the  department hopes  production                                                               
will occur given all the work  by this committee and members.  He                                                               
offered his  belief the key  is that  those areas are  subject to                                                               
the  oil and  gas production  tax so  [Amendment 28]  is designed                                                               
around that  concept.  The  department interprets it to  apply to                                                               
all of them, he said.                                                                                                           
                                                                                                                                
9:17:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER removed  his  objection  to Amendment  28.                                                               
There being no further objection, Amendment 28 was adopted.                                                                     
                                                                                                                                
9:17:44 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR moved to adopt Amendment 29, labeled 28-                                                                    
GS2806\I.A.95, Bullock, 4/6/14, which read as follows:                                                                          
                                                                                                                                
     Page 18, following line 17:                                                                                                
     Insert a new bill section to read:                                                                                         
        "* Sec. 19. AS 38.05.182(a) is amended to read:                                                                     
          (a)  Any royalty provided for in AS 38.05.135 -                                                                       
     38.05.181 may be taken in  kind rather than in money if                                                                    
     the  commissioner determines  that the  taking in  kind                                                                    
     would be  in the best  interest of the  state. However,                                                                    
     royalties on oil and gas  shall be taken in kind unless                                                                    
     the commissioner  determines that  the taking  in money                                                                    
     would be in  the best interest of the state.  It is not                                                                
     in the  best interest of  the state to take  royalty on                                                                
     gas  in money  from a  lessee transporting  gas in  the                                                                
     North  Slope  natural gas  project  if  the lessee  has                                                                
     committed to  dispose of or market  the state's royalty                                                                
     gas taken in  kind on the same terms  and conditions as                                                                
     the lessee markets or disposes of the lessee's gas."                                                                   
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 21, line 16:                                                                                                          
          Delete "sec. 27"                                                                                                      
          Insert "sec. 28"                                                                                                      
                                                                                                                                
     Page 25, line 9:                                                                                                           
          Delete "sec. 30"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 31, line 18:                                                                                                          
          Delete "sec. 37"                                                                                                      
          Insert "sec. 38"                                                                                                      
                                                                                                                                
     Page 53, lines 24 - 25:                                                                                                    
          Delete "sec. 23"                                                                                                      
          Insert "sec. 24"                                                                                                      
                                                                                                                                
     Page 56, line 6:                                                                                                           
         Delete "23 - 27, 29, 30, 37, 39, and 55 - 61"                                                                          
         Insert "24 - 28, 30, 31, 38, 40, and 56 - 62"                                                                          
                                                                                                                                
     Page 56, line 8:                                                                                                           
          Delete "Section 38"                                                                                                   
          Insert "Section 39"                                                                                                   
                                                                                                                                
     Page 56, line 9:                                                                                                           
          Delete "secs. 62 and 63"                                                                                              
          Insert "secs. 63 and 64"                                                                                              
                                                                                                                                
CO-CHAIR SADDLER objected [for discussion purposes].                                                                            
                                                                                                                                
9:17:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR explained  one concept  brought up  by Roger                                                               
Marks,  [consultant  to the  Legislative  Budget  & Audit  (LB&A)                                                               
committee], was  characterized as  the most  favored nation.   In                                                               
the event  the state contracts  with one of the  project sponsors                                                               
to market  and sell  the state's  gas, the  state would  want the                                                               
producers to  sell its  gas at  the same  price as  the producers                                                               
sell  their gas.    She reported  that she  has  worked with  the                                                               
department  on  the language  in  Amendment  29 and  offered  her                                                               
belief  that the  department supports  it.   Amendment 29,  which                                                               
falls in the bill section for  royalty gas - proposed Section 19,                                                             
AS 38.05.182(a),  provides   a  trigger  on   the  commissioner's                                                               
finding  that  taking  royalty-in-kind  (RIK)  would  be  in  the                                                               
state's  best interest.   She  pointed out  that the  language is                                                               
written in  a double negative.   The amendment states that  it is                                                               
not in the best interest of the  state to take the royalty on gas                                                               
in value if  the producer has committed to dispose  or market the                                                               
gas  on  the  same  terms  and conditions  as  their  own.    She                                                               
acknowledged that the double negative  creates some difficulty in                                                               
understanding  the  amendment,  but  that  is  conceptually  what                                                               
Amendment 29  does and it  falls in the  section of the  bill the                                                               
administration supports.                                                                                                        
                                                                                                                                
9:19:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  concurred the  double negative  creates an                                                               
affirmative; however,  this affirmative also creates  one case in                                                               
which an affirmative  exists.  That affirmative  is that royalty-                                                               
in-kind can  be used  "if" the  lessee agrees  to dispose  of the                                                               
state's  royalty  gas  taken  in-kind   on  the  same  terms  and                                                               
conditions  as the  producer markets  its own  gas.   However, as                                                               
written, this  does not preclude  the administration  from making                                                               
other decisions.   This  would carve out  one specific  case that                                                               
makes an  absolute certainty  on the  same terms  and conditions;                                                               
however, this  would not necessarily  preclude reaching  the same                                                               
conclusion through other means.                                                                                                 
                                                                                                                                
REPRESENTATIVE TARR agreed that is her understanding.                                                                           
                                                                                                                                
9:20:22 AM                                                                                                                    
                                                                                                                                
JOE BALASH, Commissioner, Department  of Natural Resources (DNR),                                                               
said Representative  Tarr has related the  concerns and positions                                                               
on Amendment  29 accurately.   He said the concept  is consistent                                                               
with  the agreement  in the  Heads  of Agreement  (HOA) with  the                                                               
other parties.   He acknowledged that it has been  a challenge to                                                               
engage each of  the other parties on this  particular topic since                                                               
everyone  "freaks out"  when pricing  and marketing  arrangements                                                               
are broached.   He predicted that if Amendment 29  was adopted by                                                               
the committee  he would  expect further  discussion with  all the                                                               
parties, which  might necessitate  further refining  the language                                                               
in the  next committee of referral.   He offered to  keep members                                                               
apprised.    He  amplified  Representative  Hawker's  remarks  by                                                               
emphasizing  the  importance of  maintaining  the  option.   This                                                               
needs to  be a decision  that the department makes  when deciding                                                               
whether or  not to rely on  the terms and conditions  provided by                                                               
the  lessees.    He  highlighted  that  there  may  be  important                                                               
circumstances  under  which  the  state may  wish  to  pursue  an                                                               
arrangement  independent  of the  producers  and  it would  be  a                                                               
disservice if the state does not have the necessary flexibility.                                                                
                                                                                                                                
CO-CHAIR FEIGE  asked whether Amendment  29 gives  the department                                                               
the necessary flexibility.                                                                                                      
                                                                                                                                
COMMISSIONER BALASH said the administration believes it does.                                                                   
                                                                                                                                
9:22:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON asked  whether the committee  needed to                                                               
do anything further.                                                                                                            
                                                                                                                                
COMMISSIONER BALASH said his attempt  to convey that conversation                                                               
outside of committee with each  producer in the HOA, specifically                                                               
ExxonMobil    Corporation,    BP    Exploration    Alaska,    and                                                               
ConocoPhillips, has been  a little bit of a "moving  target."  He                                                               
explained  the  committee  first discussed  [proposed  amendment]                                                               
"A.61" on  Friday and that  [proposed amendment] "A.95"  was just                                                               
distributed  yesterday.    He  acknowledged  that  based  on  his                                                               
conversations  with each  company, the  companies agree  with the                                                               
concept,  but the  review  process takes  time  to work  through.                                                               
Although the language may need  to be "wordsmithed" a little, the                                                               
concept  is sound.   It  is  consistent with  the agreement  that                                                               
everyone has  come to understand  with regard to  each individual                                                               
lessee working with the state - individually, with no collusion.                                                                
                                                                                                                                
9:23:55 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FEIGE   requested  that   the  commissioner   keep  the                                                               
committee informed  of new developments  since his  preference is                                                               
to address the language before it moves out of committee                                                                        
                                                                                                                                
COMMISSIONER BALASH agreed he would do so.                                                                                      
                                                                                                                                
REPRESENTATIVE  TARR  commented  on  the  review  process.    She                                                               
indicated that  originally she worked with  Legislative Legal and                                                               
Research Services, but the amendment  was redrafted after working                                                               
with the administration.  She  identified this as the "finessing"                                                               
process.   She agreed that  if the  language needs a  little more                                                               
work that it could also be accomplished.                                                                                        
                                                                                                                                
9:24:44 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER  removed his objection.  There being  no further                                                               
objection, Amendment 29 was adopted.                                                                                            
                                                                                                                                
9:25:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  moved to  adopt Amendment 30,  labeled 28-                                                               
GS2806\I.A.98, Bullock, 4/6/14 [text provided  at the end of this                                                               
document].                                                                                                                      
                                                                                                                                
CO-CHAIR SADDLER objected for discussion purposes.                                                                              
                                                                                                                                
REPRESENTATIVE HAWKER related that Amendment  30 goes back to the                                                               
early discussions  on CSSB 138(FIN)  am, in which  the department                                                               
acknowledged  the apportioning  of the  state's corporate  income                                                               
tax.  He  explained that Amendment 30 would make  certain the tax                                                               
related to sales factors would need  to be "tuned up."  Amendment                                                               
30 would  make certain that  the "tax  as gas" (TAG)  is excluded                                                               
from the  sales factor  when taken  in conjunction  - necessarily                                                               
included  in the  extraction factor  - but  it would  not include                                                               
[TAG]  in the  sales factor.   The  second part  of Amendment  30                                                               
would  clarify that  inter-company  sales and  transfers are  not                                                               
part of a tariff and thereby not part of a sale.                                                                                
                                                                                                                                
9:27:44 AM                                                                                                                    
                                                                                                                                
MR. PALOWSKI complimented  Representative Hawker's explanation of                                                               
the background,  saying this has  been worked on  through several                                                               
iterations  of the  bill.    Included in  the  original bill,  he                                                               
explained, was  the concept that "tax  as gas" (TAG) needs  to be                                                               
included  in  the  extraction factor  for  calculating  corporate                                                               
income  tax, which  includes the  business activity  conducted in                                                               
Alaska  and also  ensures that  it is  accurately reflected.   He                                                               
referred to page 1, line  15, sub-subparagraph (ii), of Amendment                                                               
30 which provides that the  department will not construct or deem                                                               
as sales the TAG delivered to  the state; this gas is being given                                                               
to the state.   Thus, Amendment 30 would clarify  that neither an                                                               
auditor  nor DOR  can later  consider  the TAG  a sale;  it is  a                                                               
payment of corporate  income tax.  This clarifies  how [TAG] will                                                               
be treated  in the sales  factor since it was  initially included                                                               
in the  extraction factor.  Sub-subparagraph  (iii) provides that                                                               
fees on  an intercompany basis are  not subject as a  sale, but a                                                               
regulated  tariff is;  however, there  are conforming  changes on                                                               
page 2,  lines [9]-15 of Amendment  30.  Sales factors  include a                                                               
numerator  and  denominator and  the  language  is consistent  in                                                               
both.   He said, "It's really  meant to clarify as  the result of                                                               
the  specific  designation  of  the tax  gas  in  the  extraction                                                               
factor, the  limited inclusion in  our apportionment  factors for                                                               
corporate income tax."                                                                                                          
                                                                                                                                
9:29:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  asked  whether this  affects  the  tariff                                                               
charged by the operator of  the state's 25 percent [ownership] of                                                               
the  pipeline or  applies strictly  to the  corporate tax  of the                                                               
parties producing gas.                                                                                                          
                                                                                                                                
MR. PAWLOWSKI replied this relates  specifically to the corporate                                                               
income  tax of  the  parties producing  gas  or their  affiliates                                                               
within the midstream.  It  would clarify, consistent with the way                                                               
it is  treated today.   Thus,  DOR would not  change the  way the                                                               
state  conducts   corporate  income  tax;  however,   it  becomes                                                               
necessary  since the  previous  section  specifically called  out                                                               
that the state  is including TAG in the  extraction factor, which                                                               
would increase corporate income tax  liability to the state.  The                                                               
state needs  to be careful  about "belts, suspenders,  boots, and                                                               
waders" for  the other  portions in  the apportionment  factor to                                                               
protect against changes in interpretation down the road.                                                                        
                                                                                                                                
9:31:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   KAWASAKI,  regarding   [sub-subparagraph]  (ii),                                                               
requested discussion of the  definitions of "constructive sales,"                                                               
"deemed sales," and "natural gas delivered to the state."                                                                       
                                                                                                                                
MR. PAWLOWSKI answered  the "natural gas delivered  to the state"                                                               
as payment of tax is the TAG or  the gas the producer pays to the                                                               
state.   "Constructive"  or  "deemed" is  a term  of  art in  the                                                               
corporate income tax  world in which the state would  look at the                                                               
transfer of that gas  to the state as a payment.   This means the                                                               
producer who paid  tax with that gas is not  actually selling the                                                               
gas  because the  value would  then  be included  in their  sales                                                               
factor.   However,  it is  not  a sale,  it  is a  transfer as  a                                                               
payment of tax to the state.   He characterized Amendment 30 as a                                                               
clarifying amendment.                                                                                                           
                                                                                                                                
9:32:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER removed his objection.  There being no further                                                                 
objection, Amendment 30 was adopted.                                                                                            
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
9:35:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON moved to adopt Amendment 31, labeled 28-                                                                  
GS2806\I.A.50, Bullock, 4/2/14, which read as follows:                                                                          
                                                                                                                                
     Page 15, following line 30:                                                                                                
     Insert a new bill section to read:                                                                                         
        "* Sec. 16. AS 38.05 is amended by adding a new                                                                     
     section to read:                                                                                                           
          Sec. 38.05.023. Limitation on a provision related                                                                   
     to a payment in lieu of  property tax.  An agreement or                                                                  
     contract  associated with  a  North  Slope natural  gas                                                                    
     project  may  not authorize  a  payment  in lieu  of  a                                                                    
     property  tax   to  a   municipality  before   a  final                                                                    
     investment decision is made for the project."                                                                              
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 17, line 24:                                                                                                          
          Delete "sec. 17"                                                                                                      
          Insert "sec. 18"                                                                                                      
                                                                                                                                
     Page 21, line 16:                                                                                                          
          Delete "sec. 27"                                                                                                      
          Insert "sec. 28"                                                                                                      
                                                                                                                                
     Page 25, line 9:                                                                                                           
          Delete "sec. 30"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 31, line 18:                                                                                                          
          Delete "sec. 37"                                                                                                      
          Insert "sec. 38"                                                                                                      
                                                                                                                                
     Page 53, lines 24 - 25:                                                                                                    
          Delete "sec. 23"                                                                                                      
          Insert "sec. 24"                                                                                                      
                                                                                                                                
     Page 56, line 6:                                                                                                           
          Delete "16, 17, 23 - 27, 29, 30, 37, 39, and 55 -                                                                     
     61"                                                                                                                        
          Insert "16 - 18, 24 - 28, 30, 31, 38, 40, and 56                                                                      
     - 62"                                                                                                                      
                                                                                                                                
     Page 56, line 8:                                                                                                           
          Delete "Section 38"                                                                                                   
          Insert "Section 39"                                                                                                   
                                                                                                                                
     Page 56, line 9:                                                                                                           
          Delete "secs. 62 and 63"                                                                                              
          Insert "secs. 63 and 64"                                                                                              
                                                                                                                                
CO-CHAIR SADDLER objected [for discussion purposes].                                                                            
                                                                                                                                
9:35:57 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON explained  Amendment  31.   Municipalities                                                               
have indicated  that the  payment in  lieu of  tax (PILT)  or the                                                               
reclassification restructure  of property tax should  not go into                                                               
effect  unless  the  final investment  decision  (FID)  is  made.                                                               
Otherwise a  change in taxes  may impact  municipalities although                                                               
the project may not be finished.   Amendment 31 would ensure that                                                               
PILT  would be  in place  once the  FID is  made and  the project                                                               
moves forward.                                                                                                                  
                                                                                                                                
9:37:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  appreciated the intent [of  Amendment 31],                                                               
but  expressed concern  that it  would constrain  the negotiation                                                               
process  with an  artificial constraint  that may  or may  not be                                                               
appropriate for  the municipalities.   He  suggested that  a PILT                                                               
will  necessarily  be  the  result of  a  negotiation  among  the                                                               
affected communities  and the  state, noting  any PILT  must come                                                               
back to  the legislature  for approval as  part of  this process.                                                               
He  asked for  the reason  to constrain  the negotiating  process                                                               
when the [legislature] is holding  "the absolute hammer" over any                                                               
outcome.                                                                                                                        
                                                                                                                                
REPRESENTATIVE SEATON recalled this  process was also taken under                                                               
the Alaska  Stranded Gas Act  Development Act (ASGDA),  such that                                                               
if the contract was approved and  the project did not go forward,                                                               
it would have  changed the calculations and method  of payment on                                                               
municipal property taxes without the  project moving forward.  He                                                               
reiterated  that   this  ensures  that  what   is  negotiated  is                                                               
negotiated on  the basis of the  project and if the  project does                                                               
not  happen, the  municipal  property tax  is  not being  changed                                                               
based on something that does not occur.                                                                                         
                                                                                                                                
9:38:54 AM                                                                                                                    
                                                                                                                                
MR. PAWLOWSKI  viewed the  implication of  this amendment  - that                                                               
the  state would  have  a contract  that  would affect  municipal                                                               
taxes  - as  something  that  makes DOR  very  uncomfortable.   A                                                               
deeper concern, he said, is  that Amendment 31 could be construed                                                               
to mean the  administration has the power to authorize  a PILT in                                                               
a  contract.   As DOR  previously has  testified, the  department                                                               
does not  believe it  has that  power.   According to  the Alaska                                                               
Constitution changes  to municipal taxation are  provided by law.                                                               
Thus, it  is a  more fundamental  implication that  someone might                                                               
believe  that DOR  has  the power  to make  those  changes.   The                                                               
property  tax  changes  for  the  process  will  go  through  the                                                               
consensus   working    group   with   the    municipalities   and                                                               
municipalities will  come back to  the legislature  for statutory                                                               
changes  based on  the consensus  recommendation from  the group.                                                               
Only then would  there be the opportunity  to authorize something                                                               
related to  a municipality in  its property  tax.  The  idea that                                                               
the state,  through contractual  changes, could  change municipal                                                               
tax rates is counter to the Alaska Constitution.                                                                                
                                                                                                                                
9:40:24 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON argued that  Legislative Legal and Research                                                               
Services does not agree that  Amendment 31 would authorize DOR to                                                               
change taxes.  That is a  separate issue that is not raised here.                                                               
{Amendment  31]   is  a  prohibition   on  coming  back   to  the                                                               
legislature with  a contract  that would  do this;  however, [the                                                               
amendment] doesn't  say that [DOR]  can contract  property taxes.                                                               
The restriction  or "sideboard" does not  mean everything outside                                                               
the  "sideboard"  is  appropriate.   He  recalled  that  Mr.  Don                                                               
Bullock testified several days ago  to that effect on a different                                                               
amendment.   He  indicated it  seems clear  that the  legislature                                                               
wants  to receive  a contract  without the  flaw that  the Alaska                                                               
Stranded Gas  Development Act had  if the  [legislature] approves                                                               
the contract.   The [legislature] sets  taxes on oil and  gas and                                                               
the state  allows municipalities to  take a portion of  that tax;                                                               
however, it  is not directly  the municipalities that do  so, but                                                               
[the legislature] that does so.                                                                                                 
                                                                                                                                
9:42:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI  said Amendment 31 addresses  the concern                                                               
he had  that taxes  could be locked  in and  municipalities might                                                               
get shut  out.  He related  his understanding that it  is not the                                                               
administration's intent to  do so.  He referred  to AS 30.50.023,                                                               
which bumps the  discussions with the municipalities  to the top,                                                               
such that  the state agrees  with municipalities on  how taxation                                                               
should  occur well  before  the  contract is  set.    He said  he                                                               
prefers it  that way,  but is  unsure whether  it is  proper, but                                                               
believes it would protect municipalities.                                                                                       
                                                                                                                                
9:43:01 AM                                                                                                                    
                                                                                                                                
MR.  PAWLOWSKI  said  he  reads the  language  differently.    He                                                               
acknowledged he could confer with  the Department of Law on this.                                                               
He referred  to page 1, lines  5-7, of the amendment  which state                                                               
in part, "or  contract associated with a North  Slope natural gas                                                               
project may not authorize a payment  in lieu of a property tax to                                                               
a municipality  before a  final investment  decision is  made for                                                               
the project."   He viewed  the implication  as being that  if the                                                               
department waits until the FID  is made, then does the department                                                               
in  a  contract  have  the  authorization  to  do  a  PILT  to  a                                                               
municipality?    He  suggested   that  this  would  be  "bumping"                                                               
actually   later  in   the  process   the  engagement   with  the                                                               
municipality.   The department has  tried to "limit the  table up                                                               
front" through an administrative  order and recognize clearly and                                                               
consistently  on  the  record  that   authorizing  a  PILT  to  a                                                               
municipality  takes a  change in  law.   Thus, it  should not  be                                                               
implied that it can be done through a contract.                                                                                 
                                                                                                                                
9:44:03 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  asked for clarification  regarding at  what point                                                               
in the process that a change in law would be required.                                                                          
                                                                                                                                
MR. PAWLOWSKI  replied [the administration's]  intent is  to work                                                               
with   the  [Municipal   Advisory  Gas   Project  Review   Board]                                                               
established by  administrative order.   He said, "[DOR]  would be                                                               
bringing changes  or recommendations  from that group  to changes                                                               
to the property tax back to  the next legislative session in 2015                                                               
prior to the finalization of contracts."                                                                                        
                                                                                                                                
9:44:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  maintained that what happened  in ASGDA is                                                               
totally and  completely irrelevant  to this conversation  and any                                                               
contract that would be negotiated for  a payment in lieu of taxes                                                               
(PILT)  proposal and  brought  forward to  the  legislature.   He                                                               
supposed  that  work is  done  with  the Municipal  Advisory  Gas                                                               
Project  Review Board.   He  acknowledged that  the [legislature]                                                               
views final investment decision (FID)  occurring in about 2019 in                                                               
the most  optimistic light.  As  this project reaches the  end of                                                               
Front-End Engineering and Design (FEED)  and is going to FID, the                                                               
municipalities  will want  the PILT  revenue  to help  them.   He                                                               
offered his  belief that if he  was negotiating on behalf  of the                                                               
municipalities, he would be asking  for PILT that anticipates the                                                               
amount  needed,  with  some PILT  payments  up-front  that  would                                                               
likely predate the  FEED event.  Thus, this  [amendment] would be                                                               
telling the  municipalities, "Sorry, guys.   You can't  do that."                                                               
He said,  "And I'm looking up  and down that pipeline  looking at                                                               
those small communities.   I'm looking at  the bigger communities                                                               
as  well.   You're telling  them  that you  don't get  a shot  at                                                               
anything  until the  boots are  on the  ground and  the project's                                                               
begun.  In fact, if I was  them I'd be really disappointed in the                                                               
legislature shutting out that option to me."                                                                                    
                                                                                                                                
9:46:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  offered his belief that  Amendment 31 does                                                               
not address  impact payments since those  are before construction                                                               
starts.  Amendment  31 would address PILT for  property taxes and                                                               
not impact payments.   The question is whether  the contract will                                                               
come back  to [the legislature]  with sideboards so  the property                                                               
taxes  do not  change  unless  the project  moves  forward or  if                                                               
something will come  back to the legislature since it  is the tax                                                               
setting body that will ensure  that the property tax structure is                                                               
not  being  changed  before  the  project is  built  and  gas  is                                                               
flowing, but until the project  is sanctioned and the legislature                                                               
knows the project is moving forward.   He offered his belief that                                                               
this is  the appropriate time for  the legislature to have  a new                                                               
tax structure sanctioned once the project is going forward.                                                                     
                                                                                                                                
9:47:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI requested the Department of Law testify.                                                                
                                                                                                                                
CHRISTOPHER  POAG, Assistant  Attorney General,  Labor and  State                                                               
Affairs Section, Civil Division,  Department of Law (DOL), agreed                                                               
with Mr. Pawlowski  that the Alaska Constitution  vests the power                                                               
to  tax and  the  legislature has  allowed the  power  to tax  be                                                               
shared with only one other  group of entities, which is municipal                                                               
entities.   He said Mr. Pawlowski  [DOR] does not have  the power                                                               
to set taxes  through contract.  The inference  from the statute,                                                               
however, is that after  a FID is made, [DOR] has  that power.  He                                                               
suggested that Mr. Bullock's testimony  was that the power to tax                                                               
may not be surrendered.  Thus,  the DOL would read the statute in                                                               
light of the Alaska Constitution to  say that it could not create                                                               
that power, but the inference drawn  from the language is that it                                                               
does.   He  said his  perspective, which  is consistent  with Mr.                                                               
Bullock's  testimony,  is  that  the   power  to  tax  cannot  be                                                               
contracted by  Mr. Pawlowski.   It  will need to  be set  by [the                                                               
legislature] with the municipal entities involved.                                                                              
                                                                                                                                
9:49:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  argued that  the [legislature] will  get a                                                               
contract back containing the tax terms  in it and will approve it                                                               
or not.   He  argued that  DOR should  not be  able to  bring the                                                               
[legislature]  a contract  if the  legislature  would follow  the                                                               
DOL's advice since something within  the contract will be related                                                               
to taxes.   Amendment 31 simply  says that DOR cannot  propose to                                                               
the legislature  tax terms that  indicate the property  taxes are                                                               
being changed on  the gas project prior to project  sanction.  In                                                               
any case, DOR  will come back to the legislature  with a proposed                                                               
contract that  is negotiated with  [the administration],  not yet                                                               
approved  by  the legislature,  containing  tax  provisions.   He                                                               
reiterated that Amendment  31 just indicates that one  of the tax                                                               
terms cannot  be that the  property tax is changing  now, whether                                                               
the state gets a project or not.                                                                                                
                                                                                                                                
9:50:15 AM                                                                                                                    
                                                                                                                                
MR.  PAWLOWSKI stated  he appreciates  the  intent [of  Amendment                                                               
31]; however, the  point is not that the contract  may or may not                                                               
include  tax terms.    Those tax  terms will  be  enacted by  the                                                               
legislature and  not be  authorized by  any administration.   The                                                               
DOR  would  bring the  terms  to  the  legislature, just  as  the                                                               
administration is doing  in the bill in terms of  setting "tax as                                                               
gas" terms.  The terms must  be voted on by the legislature prior                                                               
to integration into  a contract.  He offered his  belief that DOR                                                               
would be referencing  terms enacted by the legislature.   He said                                                               
he views  the implication that  any contract brought  back should                                                               
not be  effective unless  a project is  built as  being different                                                               
than the implication  in the way this language  is written, which                                                               
is  what makes  him uncomfortable  based on  the advice  from his                                                               
legal counsel.  "I think that's  a fair concept that makes a good                                                               
deal of  sense," he said.   "It's  just based on  my conversation                                                               
with my legal counsel; this implication makes us uncomfortable."                                                                
                                                                                                                                
REPRESENTATIVE  SEATON  responded   that  Legislative  Legal  and                                                               
Research Services draws  up the statutes and this is  the way the                                                               
legal counsel drew  up the statutes, such  that the [legislature]                                                               
was  restricting the  terms that  could be  proposed back  to the                                                               
legislature, that  the terms could  not go into effect  until the                                                               
project was  actually sanctioned.  The  legislative legal counsel                                                               
testified the other  day that authorizing or taxing  could not be                                                               
done; however,  that is not  what Amendment 31 does,  even though                                                               
DOR or  DOL might interpret  it that way.   Mr. Bullock  was very                                                               
specific  that  "may  not  authorize"   does  not  say  that  the                                                               
department  is authorized.   It  simply limits  what [DOR]  could                                                               
propose in a  contract to the [legislature].   He acknowledged it                                                               
is possible  that the attorneys  disagree, but this  amendment is                                                               
Legislative  Legal's  way of  saying  that  within the  statutory                                                               
framework, this is the language to accomplish the intent.                                                                       
                                                                                                                                
9:52:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KAWASAKI,  to  provide  an  amicable  resolution,                                                               
inquired  about  the  possibility  of  adding  some  severability                                                               
language  into the  corpus of  Amendment 31  that makes  it clear                                                               
that the legislature  is not giving away taxing  authority to the                                                               
administration.                                                                                                                 
                                                                                                                                
9:53:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  moved to  adopt Conceptual Amendment  1 to                                                               
Amendment 31,  to add on page  1, line 6, after  "not" and before                                                               
"authorize" to  insert, "propose  to".   The language  would then                                                               
read, "An  agreement or  contract associated  with a  North Slope                                                               
natural gas  project may  not propose to  authorize a  payment in                                                               
lieu  of  a  property  tax  to  a  municipality  before  a  final                                                               
investment  decision  is  made  for  the  project."    Thus,  the                                                               
contract may  not propose to  authorize would mean that  there is                                                               
not any  ability to authorize,  but the proposal would  come back                                                               
to the  legislature.  If  this is  acceptable, it could  give the                                                               
legislature comfort to go forward.                                                                                              
                                                                                                                                
REPRESENTATIVE P.  WILSON objected  to Conceptual Amendment  1 to                                                               
Amendment 31.   She suggested  this change still states  that the                                                               
administration cannot propose  [the PILT] until the  FID, but the                                                               
[municipalities] want to [institute PILT] before then.                                                                          
                                                                                                                                
MR. PAWLOWSKI said  it is a bit of a  "chicken and egg" situation                                                               
since it  comes back to  the concern expressed  by Representative                                                               
Hawker that impact  payments are one side of  a PILT arrangement.                                                               
It   is   not  that   they   are   divorced  from   each   other.                                                               
Substantively,  the  committee may  have  that  concern, but  the                                                               
department and committee are having  a little "back and forth" on                                                               
some  of  the language  on  the  power  of the  executive  branch                                                               
concept that causes  DOR some concern.  He did  not disagree with                                                               
the substance of the intent  that Representative Seaton is trying                                                               
to  describe, outside  of the  issue that  Representatives Hawker                                                               
and  P. Wilson  have  just  raised, which  is  the  order of  the                                                               
"chicken and egg" agreements.                                                                                                   
                                                                                                                                
9:56:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P.   WILSON  asked  whether  the   agreements  or                                                               
discussion should happen prior to the 2015 legislative session.                                                                 
                                                                                                                                
CO-CHAIR SADDLER  said he  does not  think "proposed  to" carries                                                               
with it the implication that the department has the authority.                                                                  
                                                                                                                                
REPRESENTATIVE  TARR regarding  Conceptual Amendment  1, referred                                                               
to page  1, line 6, saying  what is being considered  is that the                                                               
"project may  not propose  to authorize  a payment  in lieu  of a                                                               
property tax to a municipality".   She asked whether the language                                                               
"take effect before  a final investment decision is  made for the                                                               
project," could accomplish  that no changes would be  made to the                                                               
method for property tax calculations  in the event a project does                                                               
not  happen to  avoid  recalculating and  calibrating the  taxes.                                                               
She  further  asked whether  inserting  "take  effect" would  not                                                               
delay when  negotiations can  take place,  but would  change when                                                               
the actual tax would take place.                                                                                                
                                                                                                                                
9:58:39 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE asked to first  consider Conceptual Amendment 1 to                                                               
Amendment 31.                                                                                                                   
                                                                                                                                
REPRESENTATIVE P. WILSON maintained her objection.                                                                              
                                                                                                                                
REPRESENTATIVE SEATON withdrew Conceptual Amendment 1.                                                                          
                                                                                                                                
9:59:16 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  drew attention to [previously  adopted] Amendment                                                               
15,  which takes  the  duties and  responsibilities  laid out  in                                                               
Administrative Order 269 and inserts  them into statute verbatim.                                                               
He referred  to line  12 of the  amendment.  He  said it  was the                                                               
second duty  assigned to the  interim advisory board.   It reads,                                                               
"Provide  recommendations   for  changes  to  the   oil  and  gas                                                               
exploration  production  and   pipeline  transportation  property                                                               
taxes."   He stated  that the committee  has asked  the Municipal                                                               
Advisory  Gas Project  Review  Board to  discuss  and report  its                                                               
recommendations to the  legislature.  He said  he understands the                                                               
intent  of Amendment  31.   The legislature  is still  the taxing                                                               
authority and  must write the  law, but  said he thinks  this has                                                               
been addressed.                                                                                                                 
                                                                                                                                
10:00:59 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON withdrew  Amendment  31.   He offered  his                                                               
belief that, given the discussion, this  is an issue that will be                                                               
well considered.                                                                                                                
                                                                                                                                
[End of discussion--bill was held over]                                                                                         
Following is the text for Amendments 27, 28, and 30:                                                                            
                                                                                                                                
 Amendment 27, labeled 28-GS2806\I.A.91, Nauman/Bullock, 4/6/14                                                             
                                                                                                                                
     Page 2, line 5, following "credit;":                                                                                     
          Insert "requiring the commissioner of revenue to                                                                    
     provide  a  report  to  the  legislature  on  financing                                                                  
     options  for state  ownership  and  participation in  a                                                                  
     North Slope natural gas project;"                                                                                        
                                                                                                                                
     Page 54, line 23:                                                                                                          
          Delete ". (a)"                                                                                                        
          Insert "; IDENTIFICATION OF AND REPORT ON                                                                             
     FINANCING    OPTIONS    FOR   STATE    OWNERSHIP    AND                                                                    
     PARTICIPATION  IN A  NORTH SLOPE  NATURAL GAS  PROJECT.                                                                    
     (a)  The commissioner  of  revenue  shall identify  and                                                                    
     report  to  the legislature  on  a  range of  financing                                                                    
     options for state acquisition  of an ownership interest                                                                    
     and  participation   in  a  North  Slope   natural  gas                                                                    
     project. The  report must include a  description of the                                                                    
     risk  associated with  each option  and  the effect  of                                                                    
     each option on the bonding  capacity and bond rating of                                                                    
     the  state. In  this subsection,  "North Slope  natural                                                                    
     gas project" has the meaning  given in AS 38.05.965, as                                                                    
     amended by sec. 23 of this Act.                                                                                            
          (b)  The commissioner shall make an interim draft                                                                     
     of  the  report  described  in   (a)  of  this  section                                                                    
     available to  the legislature on  the first day  of the                                                                    
     First Regular Session of  the Twenty-Ninth Alaska State                                                                    
     Legislature,  and  a  final  report  at  the  time  the                                                                    
     commissioner  of natural  resources  submits the  first                                                                    
     agreement or  contract to the legislature  for approval                                                                    
     under AS 38.05.020(b)(11),  enacted by sec. 14  of this                                                                    
     Act."                                                                                                                      
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 54, line 28:                                                                                                          
          Delete "of"                                                                                                           
          Insert "and analysis by"                                                                                              
                                                                                                                                
     Page 55, line 21:                                                                                                          
          Delete "and"                                                                                                          
                                                                                                                                
     Page 55, line 23, following "interest":                                                                                    
          Insert ";                                                                                                             
               (8)  whether the ownership interest held by                                                                      
     a  municipality,  regional   corporation,  or  resident                                                                    
     would be subject to project assessments;                                                                                   
               (9)  how cash calls for the project and the                                                                      
     expansion of the project would be managed;                                                                                 
               (10)  the income tax consequences to the                                                                         
     holder of  an ownership interest, including  the timing                                                                    
     and  recognition of  income  related  to the  ownership                                                                    
     interest, including  differentiating income  related to                                                                    
     the ownership  interest from  the receipt  of dividends                                                                    
     or other distributions;                                                                                                    
               (11)  the risk that the receipt of a benefit                                                                     
     from  the project  by  a person  other  than the  state                                                                    
     would  make income  received from  the  project by  the                                                                    
     state subject to federal income tax; and                                                                                   
               (12)  constitutional issues that may be                                                                          
     implicated  by  restricting ownership  interests  under                                                                    
     the plan to residents and municipalities in the state"                                                                     
                                                                                                                                
     Page 55, following line 24:                                                                                                
          Insert a new paragraph to read:                                                                                       
               "(1)  "municipality" has the meaning given                                                                       
     in AS 01.10.060;"                                                                                                          
                                                                                                                                
     Renumber the following paragraphs accordingly.                                                                             
                                                                                                                                
 Amendment 28, labeled 28-GS2806\I.A.97, Nauman/Bullock, 4/6/14                                                             
                                                                                                                                
                                                                                                                                
     Page 2, line 14, following "project;":                                                                                   
          Insert "relating to the duties of the Oil and Gas                                                                   
     Competitiveness Review Board;"                                                                                           
                                                                                                                                
     Page 53, following line 13:                                                                                                
     Insert a new bill section to read:                                                                                         
        "* Sec. 57. AS 43.98.050 is amended to read:                                                                        
          Sec. 43.98.050. Duties. The duties of the board                                                                     
     include the following:                                                                                                     
               (1)     establish  and  maintain   a  salient                                                                    
     collection  of  information  related  to  oil  and  gas                                                                    
     exploration, development,  and production in  the state                                                                    
     and related  to tax  structures, rates, and  credits in                                                                    
     other regions with oil and gas resources;                                                                                  
               (2)      review  historical,   current,   and                                                                    
     potential levels  of investment in the  state's oil and                                                                    
     gas sector;                                                                                                                
               (3)  identify  factors that affect investment                                                                    
     in   oil   and   gas  exploration,   development,   and                                                                    
     production  in  the  state,  including  tax  structure,                                                                    
     rates,     and    credits;     royalty    requirements;                                                                    
     infrastructure; workforce  availability; and regulatory                                                                    
     requirements;                                                                                                              
               (4)   review the competitive position  of the                                                                    
     state  to attract  and maintain  investment in  the oil                                                                    
     and  gas  sector  in  the  state  as  compared  to  the                                                                    
     competitive position of other  regions with oil and gas                                                                    
     resources;                                                                                                                 
               (5)  in  order to facilitate the  work of the                                                                    
     board,   establish  procedures   to  accept   and  keep                                                                    
     confidential  information  that  is beneficial  to  the                                                                    
     work of the  board, including the creation  of a secure                                                                    
     data room  and confidentiality agreements to  be signed                                                                    
     by   individuals   having    access   to   confidential                                                                    
     information;                                                                                                               
               (6)        make    written    findings    and                                                                    
     recommendations to the Alaska State Legislature before                                                                     
               (A)  January 31, 2015,  or as soon thereafter                                                                    
     as practicable, regarding                                                                                                  
               (i)    changes   to  the  state's  regulatory                                                                    
     environment  and  permitting  structure that  would  be                                                                    
     conducive  to  encouraging increased  investment  while                                                                    
     protecting  the interests  of the  people of  the state                                                                    
     and the environment;                                                                                                       
               (ii)  the status of  the oil and gas industry                                                                    
     labor  pool  in  the  state and  the  effectiveness  of                                                                    
     workforce development efforts by the state;                                                                                
               (iii) the  status of  the oil-and-gas-related                                                                    
     infrastructure  of the  state, including  a description                                                                    
     of infrastructure deficiencies; and                                                                                        
               (iv)    the  competitiveness of  the  state's                                                                    
     fiscal oil  and gas tax  regime when compared  to other                                                                    
     regions of the world;                                                                                                      
               (B)  January 15, 2017, regarding                                                                             
               (i)   the state's tax structure  and rates on                                                                
     oil  and  gas  produced   south  of  68  degrees  North                                                                
     latitude;                                                                                                              
               (ii)    a  tax   structure  that  takes  into                                                                
     account the unique economic  circumstances for each oil                                                                
     and  gas  producing  area south  of  68  degrees  North                                                                
     latitude;                                                                                                              
               (iii)  a reduction in  the gross value at the                                                                
     point of production  for oil and gas  produced south of                                                                
     68  degrees  North  latitude that  is  similar  to  the                                                                
     reduction in gross value at  the point of production in                                                                
     AS 43.55.160(f) and (g);                                                                                               
               (iv)    other  incentives  for  oil  and  gas                                                                
     production south of 68 degrees North latitude;                                                                         
               (C)  January 31, 2021,  or as soon thereafter                                                                
     as practicable, regarding                                                                                                  
               (i)   changes  to the  state's fiscal  regime                                                                    
     that would be conducive  to increased and ongoing long-                                                                    
     term investment  in and development of  the state's oil                                                                    
     and gas resources;                                                                                                         
               (ii)   alternative  means for  increasing the                                                                    
     state's ability  to attract and maintain  investment in                                                                    
     and development  of the state's oil  and gas resources;                                                                    
     and                                                                                                                        
               (iii)  a review  of the current effectiveness                                                                    
     and future value  of any provisions of  the state's oil                                                                    
     and gas  tax laws  that are expiring  in the  next five                                                                    
     years."                                                                                                                    
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 56, line 6:                                                                                                           
          Delete "61"                                                                                                           
          Insert "62"                                                                                                           
                                                                                                                                
     Page 56, line 9:                                                                                                           
          Delete "secs. 62 and 63"                                                                                              
          Insert "secs. 63 and 64"                                                                                              
                                                                                                                                
 Amendment 30, labeled 28-GS2806\I.A.98, Nauman/Bullock, 4/6/14                                                             
                                                                                                                              
     Page 26, following line 24:                                                                                                
     Insert a new bill section to read:                                                                                         
        "* Sec. 33. AS 43.20.144(d) is amended to read:                                                                     
          (d)  The sales factor of a taxpayer subject to                                                                        
     this section is a fraction,                                                                                                
               (1)   the numerator  of which  is the  sum of                                                                    
     the following for the tax period:                                                                                          
               (A)   the tariffs allowed and  received by or                                                                    
     for  the  taxpayer  for  transporting  oil  or  gas  by                                                                    
     pipeline  in  this  state, regardless  of  whether  the                                                                    
     tariffs  are  paid  by third  parties  or  by  entities                                                                    
     within the taxpayer's consolidated business; and                                                                           
               (B)  the total sales  of the taxpayer in this                                                                    
     state,   determined   in   accordance   with   AS 43.19                                                                    
     (Multistate Tax Compact), but excluding                                                                                    
               (i)   those  sales  already  included in  the                                                                
     tariffs described in (A) of this paragraph;                                                                                
               (ii)   constructive sales or deemed  sales of                                                                
     natural gas  delivered to the  state as payment  of tax                                                                
     under   an  election   made  by   the  taxpayer   under                                                                
     AS 43.55.014;                                                                                                          
               (iii)   fees, allowed and received,  that are                                                                
     paid between entities  within the consolidated business                                                                
     of  the   taxpayer  for  transporting   the  taxpayer's                                                                
     natural gas; and                                                                                                       
               (2)  the  denominator of which is  the sum of                                                                    
     the following for the tax period:                                                                                          
               (A)   the tariffs allowed and  received by or                                                                    
     for   the   taxpayer's    consolidated   business   for                                                                    
     transporting  oil   or  gas  by   pipeline  everywhere,                                                                    
     regardless  of whether  the tariffs  are paid  by third                                                                    
     parties   or   by   entities  within   the   taxpayer's                                                                    
     consolidated business; and                                                                                                 
               (B)    the  total  sales  of  the  taxpayer's                                                                    
     consolidated   business   everywhere,   determined   in                                                                    
     accordance with AS 43.19  (Multistate Tax Compact), but                                                                    
     excluding                                                                                                                  
               (i)   those  sales  already  included in  the                                                                
     tariffs described in (A) of this paragraph;                                                                            
               (ii)   constructive sales or deemed  sales of                                                                
     natural gas  delivered to the  state as payment  of tax                                                                
     under   an  election   made  by   the  taxpayer   under                                                                
     AS 43.55.014 or  delivered in another  tax jurisdiction                                                                
     under a law comparable to AS 43.55.014;                                                                                
               (iii)   fees, allowed and received,  that are                                                                
     paid between entities  within the consolidated business                                                                
     of  the   taxpayer  for  transporting   the  taxpayer's                                                                
     natural gas."                                                                                                          
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 31, line 18:                                                                                                          
          Delete "sec. 37"                                                                                                      
          Insert "sec. 38"                                                                                                      
                                                                                                                                
     Page 56, line 6:                                                                                                           
          Delete "37, 39, and 55 - 61"                                                                                          
          Insert "38, 40, and 56 - 62"                                                                                          
                                                                                                                                
     Page 56, line 8:                                                                                                           
          Delete "Section 38"                                                                                                   
          Insert "Section 39"                                                                                                   
                                                                                                                                
     Page 56, line 9:                                                                                                           
          Delete "secs. 62 and 63"                                                                                              
          Insert "secs. 63 and 64"                                                                                              
                                                                                                                                
                                                                                                                                
[CSSB 138(FIN) am was held over.]                                                                                               
                                                                                                                                
10:01:32 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 10:02 p.m.                                                                
                                                                                                                                

Document Name Date/Time Subjects