Legislature(2015 - 2016)BARNES 124

03/09/2015 01:00 PM RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 105 AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 14 BAN PLASTIC MICROBEADS IN COSMETICS TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 92 LABEL GENETICALLY MODIFIED FOOD TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
*+ HJR 8 FEDS ALLOW STATE TO MAKE ENERGY CHOICES TELECONFERENCED
Moved CSHJR 8(ENE) Out of Committee
-- Public Testimony --
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 9, 2015                                                                                          
                           1:02 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Benjamin Nageak, Co-Chair                                                                                        
Representative David Talerico, Co-Chair                                                                                         
Representative Mike Hawker, Vice Chair                                                                                          
Representative Bob Herron                                                                                                       
Representative Craig Johnson                                                                                                    
Representative Paul Seaton                                                                                                      
Representative Andy Josephson                                                                                                   
Representative Geran Tarr                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Kurt Olson                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 8                                                                                                    
Urging the  federal government  to empower  the state  to protect                                                               
the  state's   access  to  affordable  and   reliable  electrical                                                               
generation.                                                                                                                     
                                                                                                                                
     - MOVED CSHJR 8(ENE) OUT OF COMMITTEE                                                                                      
                                                                                                                                
HOUSE BILL NO. 105                                                                                                              
"An  Act  relating  to  the  programs and  bonds  of  the  Alaska                                                               
Industrial  Development  and  Export Authority;  related  to  the                                                               
financing   authorization    through   the    Alaska   Industrial                                                               
Development  and  Export Authority  of  a  liquefied natural  gas                                                               
production   plant   and   natural  gas   energy   projects   and                                                               
distribution systems  in the state;  amending and  repealing bond                                                               
authorizations granted  to the Alaska Industrial  Development and                                                               
Export Authority; and providing for an effective date."                                                                         
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 14                                                                                                               
"An Act banning the manufacture, sale,  or offering for sale of a                                                               
cosmetic that  contains plastic microbeads; and  providing for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 92                                                                                                               
"An Act relating to the labeling of food; relating to the                                                                       
misbranding of food; requiring labeling of food produced with                                                                   
genetic engineering; and providing for an effective date."                                                                      
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HJR  8                                                                                                                  
SHORT TITLE: FEDS ALLOW STATE TO MAKE ENERGY CHOICES                                                                            
SPONSOR(s): REPRESENTATIVE(s) TALERICO                                                                                          
                                                                                                                                
01/23/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/23/15       (H)       ENE, RES                                                                                               
02/03/15       (H)       ENE AT 10:15 AM CAPITOL 17                                                                             
02/03/15       (H)       Heard & Held                                                                                           
02/03/15       (H)       MINUTE(ENE)                                                                                            
02/17/15       (H)       ENE AT 10:15 AM BARNES 124                                                                             
02/17/15       (H)       Moved  CSHJR 8(ENE) Out of Committee                                                                   
02/17/15       (H)       MINUTE(ENE)                                                                                            
02/19/15       (H)       ENE AT 10:15 AM CAPITOL 17                                                                             
02/20/15       (H)       ENE RPT CS(ENE) NT 3DP 2NR                                                                             
02/20/15       (H)       DP: TALERICO, TILTON, COLVER                                                                           
02/20/15       (H)       NR: CLAMAN, WOOL                                                                                       
03/06/15       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/06/15       (H)       Scheduled but Not Heard                                                                                
03/09/15       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 105                                                                                                                  
SHORT TITLE: AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT                                                                            
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/11/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/11/15       (H)       ENE, RES, L&C, FIN                                                                                     
02/17/15       (H)       ENE AT 10:15 AM BARNES 124                                                                             
02/17/15       (H)       Heard & Held                                                                                           
02/17/15       (H)       MINUTE(ENE)                                                                                            
02/24/15       (H)       ENE AT 10:15 AM CAPITOL 17                                                                             
02/24/15       (H)       Moved  CSHB 105(ENE) Out of Committee                                                                  
02/24/15       (H)       MINUTE(ENE)                                                                                            
02/25/15       (H)       ENE RPT CS(ENE) 7DP                                                                                    
02/25/15       (H)       DP: NAGEAK, WOOL, TILTON, TALERICO,                                                                    
                         CLAMAN, COLVER, VAZQUEZ                                                                                
03/09/15       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB  14                                                                                                                  
SHORT TITLE: BAN PLASTIC MICROBEADS IN COSMETICS                                                                                
SPONSOR(s): JOSEPHSON                                                                                                           
                                                                                                                                
01/21/15       (H)       PREFILE RELEASED 1/9/15                                                                                
01/21/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/15       (H)       RES, FIN                                                                                               
03/09/15       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB  92                                                                                                                  
SHORT TITLE: LABEL GENETICALLY MODIFIED FOOD                                                                                    
SPONSOR(s): TARR                                                                                                                
                                                                                                                                
01/30/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/30/15       (H)       RES, FIN                                                                                               
03/09/15       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JOSHUA BANKS, Staff                                                                                                             
Representative David Talerico                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced HJR 8 on behalf of the sponsor,                                                               
Representative Talerico.                                                                                                        
                                                                                                                                
FRED PARADY, Acting Commissioner                                                                                                
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Assisted with introducing HB 105 on behalf                                                               
of the administration, sponsor.                                                                                                 
                                                                                                                                
GENE THERRIAULT, Energy Policy and Outreach Director                                                                            
Alaska Energy Authority (AEA)                                                                                                   
Alaska Industrial Development and Export Authority (AIDEA)                                                                      
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Assisted with introducing HB 105 on behalf                                                               
of the administration, sponsor.                                                                                                 
                                                                                                                                
TED LEONARD, Executive Director                                                                                                 
Alaska Industrial Development and Export Authority (AIDEA)                                                                      
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions related to HB 105 on                                                                  
behalf of the administration, sponsor.                                                                                          
                                                                                                                                
LISA HERBERT, Executive Director                                                                                                
Greater Fairbanks Chamber of Commerce                                                                                           
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 105.                                                                          
                                                                                                                                
LUKE HOPKINS, Mayor                                                                                                             
Fairbanks North Star Borough                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 105.                                                                          
                                                                                                                                
JOMO STEWART, Energy Project Manager                                                                                            
Fairbanks Economic Development Corporation                                                                                      
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 105.                                                                          
                                                                                                                                
BOB KING                                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of the proposed                                                                     
committee substitute for HB 14, Version W.                                                                                      
                                                                                                                                
SEAN MOORE, Associate Director                                                                                                  
State Government Affairs                                                                                                        
Consumer Healthcare Products Association (CHPA)                                                                                 
Washington, DC                                                                                                                  
POSITION STATEMENT:  Testified in opposition to HB 14.                                                                        
                                                                                                                                
PAMELA MILLER, Biologist, Executive Director                                                                                    
Alaska Community Action on Toxics (ACAT)                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 14.                                                                           
                                                                                                                                
STIV WILSON, Director of Campaigns                                                                                              
The Story of Stuff Project                                                                                                      
Berkley, California                                                                                                             
POSITION STATEMENT:  Testified in support of HB 14.                                                                           
                                                                                                                                
MICHAEL THOMPSON, Senior Vice President of Government Affairs                                                                   
Personal Care Products Council                                                                                                  
Washington, DC                                                                                                                  
POSITION STATEMENT:  Testified in opposition to HB 14.                                                                        
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:02:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  BENJAMIN NAGEAK  called  the  House Resources  Standing                                                             
Committee meeting to order at  1:02 p.m.  Representatives Seaton,                                                               
Johnson,  Josephson,  Tarr,  Herron, Talerico,  and  Nageak  were                                                               
present at the  call to order.  Representative  Hawker arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
         HJR  8-FEDS ALLOW STATE TO MAKE ENERGY CHOICES                                                                     
                                                                                                                                
1:03:50 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NAGEAK  announced that  the first  order of  business is                                                               
HOUSE JOINT  RESOLUTION NO. 8,  Urging the federal  government to                                                               
empower the  state to  protect the  state's access  to affordable                                                               
and reliable  electrical generation.   [Before the  committee was                                                               
CSHJR 8(ENE).]                                                                                                                  
                                                                                                                                
1:05:27 PM                                                                                                                    
                                                                                                                                
JOSHUA BANKS, Staff, Representative  David Talerico, Alaska State                                                               
Legislature,   introduced  HJR   on   behalf   of  the   sponsor,                                                               
Representative  Talerico.   He  said  HJR  8  is in  response  to                                                               
opposition to  the Environmental Protection Agency's  (EPA) Clean                                                               
Power Plan rule, which is  intended to reduce carbon emissions in                                                               
the U.S. by 30 percent, and  specifically in Alaska by 26 percent                                                               
by the year 2030.  This rule  will apply to all fossil fuel fired                                                               
plants greater than  25 megawatts, except for  plants on military                                                               
bases and  the university.   While well intentioned,  the sponsor                                                               
believes this plan  will likely lead to  higher electricity costs                                                               
without  meeting the  EPA's carbon  reduction goals.   The  Clean                                                               
Power  Plan is  based  on inaccurate  assumptions  that can  have                                                               
major effects  on the state of  Alaska.  The first  assumption is                                                               
that  the  largest  source  of carbon  emissions  is  from  power                                                               
plants.  While  this may be the  case in some areas  of the Lower                                                               
48, power plants  in Alaska only account for about  25 percent of                                                               
carbon  emissions  and the  remaining  75  percent of  stationary                                                               
sourced carbon  comes from  operations on the  North Slope.   The                                                               
sponsor  believes  that the  Clean  Power  Plan puts  unrealistic                                                               
expectations on Alaska's power plants.   The second assumption is                                                               
that low cost  natural gas and renewable energy is  ready for use                                                               
for major  energy consumption.   While this  may be  available in                                                               
most of Southcentral  Alaska and parts of  Southeast Alaska, this                                                               
would not be  feasible for Interior Alaska.  He  said EPA's claim                                                               
that Alaskans will  save on energy costs will not  be realized as                                                               
long  as natural  gas is  not available  at affordable  prices in                                                               
Interior Alaska.                                                                                                                
                                                                                                                                
1:07:18 PM                                                                                                                    
                                                                                                                                
MR. BANKS said  the fundamental reason for bringing  HJR 8 before                                                               
the  committee is  to protect  Alaska's sovereignty.   The  Tenth                                                               
Amendment of  the United States Constitution  clearly states that                                                               
the  powers   not  delegated   to  the   United  States   by  the                                                               
constitution, nor  prohibited by it  to the states,  are reserved                                                               
for the  states respectively or to  the people.  He  related that                                                               
in  reading the  constitution, he  fails to  find the  enumerated                                                               
power  with the  Executive Branch  to regulate  carbon emissions.                                                               
If  the  constitution  does  not clearly  say  that  the  federal                                                               
government  has the  ability to  regulate carbon  emissions, then                                                               
the  sponsor believes  that this  power resides  with the  state.                                                               
The sponsor  believes that the State  of Alaska has the  means to                                                               
make  effective decisions  through the  Regulatory Commission  of                                                               
Alaska (RCA),  as well as  various state agencies, that  not only                                                               
can deal with  any problems relating to climate  change, but also                                                               
do so in a way that does not  hurt Alaskans.  He said HJR 8 urges                                                               
the  federal government  to exempt  Alaska from  the Clean  Power                                                               
Plan and  to leave decisions  about regulating  energy production                                                               
to the State  of Alaska in order to protect  access to affordable                                                               
and reliable electrical generation.                                                                                             
                                                                                                                                
MR. BANKS offered to address the  changes made to HJR 8 that were                                                               
made by  the House Special  Committee on Energy if  the committee                                                               
desires.   He said  the changes  made in  CSHJR 8(ENE)  were made                                                               
based  on  feedback from  the  Alaska  Power Association,  Golden                                                               
Valley Electric Association, and the RCA.                                                                                       
                                                                                                                                
1:08:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  offered his understanding that  in July                                                               
2014 the  [Supreme Court  of the United  States] cleared  the way                                                               
for the EPA's  announcement in Section 111(d).   He asked whether                                                               
he is correct in this regard.                                                                                                   
                                                                                                                                
MR. BANKS  replied he is  not aware  of that court  decision, but                                                               
will look into it.                                                                                                              
                                                                                                                                
REPRESENTATIVE  JOSEPHSON stated  the Tenth  Amendment debate  is                                                               
something he  has spent a  lot of  time looking at  and teaching.                                                               
While  he  hears  the  sponsor's  argument,  he  said  the  Tenth                                                               
Amendment also  doesn't say that "we  can have an air  force, but                                                               
we have an  air force."  He inquired whether  it is the sponsor's                                                               
position that if  it isn't written there  very specifically, that                                                               
there is  no breadth of  power under  the Commerce Clause  or the                                                               
Necessary  and Proper  Clause or  any  of the  other clauses  the                                                               
founders wrote.                                                                                                                 
                                                                                                                                
MR. BANKS  responded that while  perhaps the  Interstate Commerce                                                               
Clause could  be applied  for the Lower  48 because  the electric                                                               
grid  goes  through various  state  lines,  Alaska is  completely                                                               
isolated  and so  he  does not  believe  the Interstate  Commerce                                                               
Clause would be in effect here.                                                                                                 
                                                                                                                                
1:10:49 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO said  he appreciates Representative Josephson's                                                               
question  because he  thinks the  representative is  referring to                                                               
Title 42 of  the U.S. Code, Section 111(d).   He said his biggest                                                               
concern  is   that  five  power   plants  in  Alaska   have  been                                                               
tentatively put on the list  for carbon reductions of 26 percent:                                                               
Unit  1  in  Healy;  George   M.  Sullivan  Generation  Plant  in                                                               
Anchorage, an  Anchorage Municipal Light &  Power's plant; Beluga                                                               
Power  Plant,   a  Chugach  Electric  Association   power  plant;                                                               
Southcentral  Power  Plant, a  Chugach  Municipal  Light &  Power                                                               
combo-plant; and Nikiski Co-Generation Plant  in Nikiski.  To the                                                               
best of his knowledge, those plants  are very well run.  Hundreds                                                               
of thousands  of Alaskans rely on  those power plants.   As those                                                               
prices go up,  he is concerned because many of  the people in his                                                               
district  rely   on  overhead  costs  remaining   consistent  and                                                               
reasonably  low in  order  for  their goods  and  services to  be                                                               
delivered.    Even  people  not  connected to  the  grid  can  be                                                               
impacted by those costs.                                                                                                        
                                                                                                                                
REPRESENTATIVE JOSEPHSON inquired what  the timeline is for these                                                               
requirements  and what  costs  can be  anticipated  if the  state                                                               
complies with the requirements.                                                                                                 
                                                                                                                                
CO-CHAIR  TALERICO answered  he is  unsure there  is anything  in                                                               
concrete  as far  as  the  actual compliance  to  the  plan.   He                                                               
deferred to Mr. Banks in regard to the timeframe.                                                                               
                                                                                                                                
MR. BANKS offered his belief that  the EPA will finalize its plan                                                               
by the  end of summer 2016  and from there he  believes the state                                                               
will have a  year to create its  plan.  He said he  is unaware of                                                               
any anticipated costs for compliance.                                                                                           
                                                                                                                                
REPRESENTATIVE  JOSEPHSON surmised  there surely  are some  costs                                                               
and said he suspects they're likely in the millions.                                                                            
                                                                                                                                
1:14:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NAGEAK opened  public testimony,  then closed  it after                                                               
ascertaining no one wished to testify.                                                                                          
                                                                                                                                
1:15:32 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NAGEAK  inquired  whether  there is  any  objection  to                                                               
reporting CSHJR 8(ENE) from committee.                                                                                          
                                                                                                                                
REPRESENTATIVE JOSEPHSON  stated he will not  object to reporting                                                               
the  resolution  because  he  thinks  it will  be  moved  by  the                                                               
committee.    However, he  said,  he  comes  from the  school  of                                                               
thought, "Is an  Alaskan first, and I guess  an American second?"                                                               
Alaska joined  the union and  has its representation.   The state                                                               
has  a clean  air problem,  a carbon  footprint problem,  and the                                                               
state must  contribute to  finding a  solution.   He said  he has                                                               
respect for  the concern  and the uniqueness  of Alaska  and that                                                               
Alaska is obviously not the  greatest contributor, but he will be                                                               
marking the resolution as "do not pass."                                                                                        
                                                                                                                                
CO-CHAIR NAGEAK  again asked  whether there  is any  objection to                                                               
reporting  the  resolution  from   committee.    There  being  no                                                               
objection,  he  said he  will  entertain  a  motion to  move  the                                                               
resolution.                                                                                                                     
                                                                                                                                
1:18:13 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO moved  to report CSHJR 8(ENE)  out of committee                                                               
with  individual  recommendations  and  the  accompanying  [zero]                                                               
fiscal  notes].   There  being  no  objection, CSHJR  8(ENE)  was                                                               
reported from the House Resources Standing Committee.                                                                           
                                                                                                                                
The committee took an at-ease from 1:18 p.m. to 1:21 p.m.                                                                       
                                                                                                                                
         HB 105-AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT                                                                     
                                                                                                                                
1:21:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NAGEAK  announced that the  second order of  business is                                                               
HOUSE BILL  NO. 105, "An Act  relating to the programs  and bonds                                                               
of  the  Alaska  Industrial  Development  and  Export  Authority;                                                               
related  to  the  financing   authorization  through  the  Alaska                                                               
Industrial  Development  and  Export  Authority  of  a  liquefied                                                               
natural gas production plant and  natural gas energy projects and                                                               
distribution systems  in the state;  amending and  repealing bond                                                               
authorizations granted  to the Alaska Industrial  Development and                                                               
Export Authority; and providing for  an effective date."  [Before                                                               
the committee was CSHB 105(ENE).]                                                                                               
                                                                                                                                
1:21:54 PM                                                                                                                    
                                                                                                                                
FRED  PARADY,   Acting  Commissioner,  Department   of  Commerce,                                                               
Community & Economic Development  (DCCED), began the introduction                                                               
of HB 105  by noting that Administrative Order  272 from Governor                                                               
Walker directs  the commissioner  of the Department  of Commerce,                                                               
Community &  Economic Development to  work to collaborate  at the                                                               
highest  levels of  his administration  to  advance the  Interior                                                               
Energy  Project (IEP)  to  reduce  the cost  of  energy into  the                                                               
Fairbanks area.   He said HB 105 supports that  purpose in simply                                                               
giving  more  options  in  how  to source  gas  to  support  that                                                               
project,  as  well  as updating  bond  limitations  and  deleting                                                               
outdated bond projects.                                                                                                         
                                                                                                                                
1:22:39 PM                                                                                                                    
                                                                                                                                
GENE  THERRIAULT, Energy  Policy  and  Outreach Director,  Alaska                                                               
Energy Authority (AEA), Alaska  Industrial Development and Export                                                               
Authority (AIDEA),  Department of Commerce, Community  & Economic                                                               
Development  (DCCED), continued  the  introduction of  HB 105  by                                                               
explaining  the provisions  of CSHB  105(ENE),  the bill  version                                                               
before the  committee.  He said  Section 1 provides an  update to                                                               
an existing limitation on AIDEA's ability  to bond for funds.  If                                                               
AIDEA is going  to participate in bonding a project  that is over                                                               
$6 million, AIDEA must receive  a resolution of approval from the                                                               
local government  on the  siting of the  proposed project.   That                                                               
existing cap of  $6 million has been in place  since 1990 and the                                                               
proposal is to  adjust that amount to reflect the  erosion of the                                                               
purchasing power due to inflation over that time period.                                                                        
                                                                                                                                
1:24:18 PM                                                                                                                    
                                                                                                                                
MR. THERRIAULT  explained Section  2 is an  additional adjustment                                                               
in AIDEA's ability to bond.   The existing bond limitation of $10                                                               
million,  page 2,  line 16,  was established  in 1990.   He  said                                                               
[raising it to  $25 million] will cover the  erosion of inflation                                                               
and make  an adjustment due  to the cost  of the type  of project                                                               
that  AIDEA is  asked to  participate in.   Section  3 makes  two                                                               
adjustments in AIDEA's ability to  participate with local lenders                                                               
in  commercial loans.   The  first adjustment,  page 2,  line 28,                                                               
caps the participation at $25  million, the current cap being $20                                                               
million, which was  established in 2005.   The second adjustment,                                                               
page 2, line  30, raises the cap from $20  million to $25 million                                                               
[for qualified energy development].   This cap was established by                                                               
the  sustainable  energy   transmission  and  supply  development                                                               
(SETS) statute  that was  passed a  number of years  ago.   It is                                                               
desired by  AIDEA to have the  dollar amounts for those  two caps                                                               
be equal.   He  noted that  all of page  3 is  existing statutory                                                               
language.  Turning to page 4 of  the bill he noted that Section 4                                                               
is  a new  section inserted  by  the House  Special Committee  on                                                               
Energy and  that in the original  bill this provision was  in the                                                               
repealer section.   The  original bill repealed  a number  of old                                                               
unused AIDEA bond authorizations, many  of which have been on the                                                               
books since  the 1990s.   The AIDEA board of  directors generally                                                               
won't utilize  authorizations that  become a certain  age because                                                               
the board  feels it  has to  go back to  policymakers to  get the                                                               
language refreshed  or to get  new authorization.  This  could be                                                               
because the anticipated project  for which the bond authorization                                                               
was  given  did  not  go   forward,  the  project  may  not  have                                                               
materialized, or the project may  not have survived the AIDEA due                                                               
diligence   process.     Bond  counsel   has  advised   AIDEA  to                                                               
periodically clean its books of  those old authorizations because                                                               
when bond  counsel goes out  to do a  new rating for  AIDEA those                                                               
authorizations can still weigh down  the institution's books even                                                               
though  they  likely  would  not  be utilized  by  the  board  of                                                               
directors.   One of the repeals  in the original bill  was for an                                                               
old  authorization that  allowed  for a  bulk commodities  inland                                                               
facility  to be  built somewhere  in  Cook Inlet.   That  project                                                               
never went  forward, but  legislators from  the Matanuska-Susitna                                                               
Valley who sit  on the House Special Committee  on Energy plucked                                                               
that one  project from  the repealer  section, refreshed  it, and                                                               
made a slight modification to  it, but tied the potential project                                                               
that  would come  forward from  this  refreshed authorization  to                                                               
facilities that would be built at Point MacKenzie.                                                                              
                                                                                                                                
1:27:52 PM                                                                                                                    
                                                                                                                                
MR.  THERRIAULT said  Section 5  relates to  the Interior  Energy                                                               
Project  (IEP), authorized  in 2013  under Senate  Bill 23.   The                                                               
concept under  Senate Bill  23 was  to help  finance a  source of                                                               
natural gas  off the North  Slope, primarily by helping  with the                                                               
financing of  a liquefied natural  gas (LNG) plant that  would be                                                               
able to  produce the product.   The estimated cost of  that plant                                                               
came  in higher  than  expected, however,  and  now with  further                                                               
development of natural  gas resources in the Cook  Inlet area the                                                               
AIDEA  board of  directors,  with the  support  of the  governor,                                                               
would  like to  look at  possibly sourcing  the natural  gas from                                                               
Cook Inlet.   To have  the flexibility  to do that,  the modified                                                               
language  proposed [in  the original  bill] removed  the language                                                               
specifying  that the  LNG plant  had to  be on  the North  Slope.                                                               
However,  Interior  members of  the  House  Special Committee  on                                                               
Energy were concerned that the  focus on Interior Alaska would be                                                               
lost and  so the original bill  was modified to ensure  that that                                                               
focus on  Interior Alaska was  not lost.   That doesn't  mean the                                                               
resource  produced  can't be  available  for  other areas.    The                                                               
thought  behind the  Interior Energy  Project is  that while  the                                                               
core demand of  the Fairbanks North Star Borough  helps to anchor                                                               
the project,  the commodity can be  used up and down  the highway                                                               
system,  have  possible  delivery through  the  freshwater  river                                                               
system and  maybe even coastal  Alaska, to help with  the overall                                                               
economics of  a project  because, as  with most  energy projects,                                                               
the higher the volume the lower the per unit price.                                                                             
                                                                                                                                
MR. THERRIAULT  noted Section 6  is one  of the repealers  but is                                                               
not  a complete  repealer.   The  language in  question was  last                                                               
modified by the legislature in  1992 and was a bond authorization                                                               
for the FedEx facilities at the  Anchorage airport.  Part of that                                                               
bond  authorization was  utilized  for the  construction of  that                                                               
facility and  the authorization dollar  amount that  was utilized                                                               
has been  repaid.  So, to  clean up the AIDEA  books the proposal                                                               
is  to move  the excess  bond authorization.   Section  7 is  the                                                               
complete  repeal  of  the remaining  old  authorizations  because                                                               
those  projects  never  advanced.   Section  8  is  an  immediate                                                               
effective date on the contents of the bill.                                                                                     
                                                                                                                                
1:31:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  observed that  title lines  3-4 on  page 1                                                               
talk  about production  plant, natural  gas energy  projects, and                                                               
distribution systems.   He further observed that  Section 4, page                                                               
4, lines 21-22,  talk about being located at  Point MacKenzie and                                                               
asked whether that should be reflected in the title.                                                                            
                                                                                                                                
MR.  THERRIAULT replied  he thinks  it is  included in  the title                                                               
because it deals with amending  and repealing bond authorizations                                                               
and that one amends an existing bond authorization.                                                                             
                                                                                                                                
1:32:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER commented he has  quite a few questions and                                                               
concerns about this  bill.  Regarding Section 4,  he recalled Mr.                                                               
Therriault's statement that this  pre-existing bond authority was                                                               
refreshed  with   a  slight  modification.     He   requested  an                                                               
explanation of what that "slight" modification did.                                                                             
                                                                                                                                
MR. THERRIAULT  responded that the  language was included  by the                                                               
House  Special Committee  on  Energy, and  AIDEA  didn't see  the                                                               
language until it  actually came out in  the committee substitute                                                               
(CS).   The modification removed  the language,  "related loading                                                               
and conveyor",  as well  as removed  the language  that specified                                                               
that  such a  facility could  be  built anywhere  in Cook  Inlet.                                                               
Language  was added  so  that  if it  were  to  move forward  the                                                               
facility or port would be located at Point MacKenzie.                                                                           
                                                                                                                                
REPRESENTATIVE HAWKER  noted this is  the authority for  AIDEA to                                                               
issue bonds  and said he  finds it interesting that  AIDEA didn't                                                               
know this amendment was coming  in the House Special Committee on                                                               
Energy.                                                                                                                         
                                                                                                                                
MR. THERRIAULT  answered that the  chairman of the  committee had                                                               
indicated he was considering that  and in a conversation with the                                                               
chairman's aide  it was stated  that it  may wait until  the bill                                                               
was  taken up  by  the  House Finance  Committee.   However,  the                                                               
language was included in the CS.                                                                                                
                                                                                                                                
1:34:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  observed that,  as modified,  the language                                                               
in CSHB  105(ENE) states that  AIDEA may issue bonds  to "finance                                                               
the acquisition, design, and construction  of a port facility and                                                               
equipment  related to  the development  and operation  of a  bulk                                                               
commodity  loading and  shipping terminal".   He  asked what  was                                                               
envisioned by the  original debt authority, what  was the project                                                               
going  to be,  and what  does AIDEA  envision the  project to  be                                                               
today  with the  "slight"  modification that  was  made to  those                                                               
words.                                                                                                                          
                                                                                                                                
MR.  THERRIAULT replied  his understanding  is that  initially it                                                               
was the possibility  of loading mineral elements and  that is why                                                               
the  word  "conveyor" was  included.    He  deferred to  Mr.  Ted                                                               
Leonard to further address what the original concept was.                                                                       
                                                                                                                                
TED  LEONARD, Executive  Director, Alaska  Industrial Development                                                               
and Export  Authority (AIDEA), Department of  Commerce, Community                                                               
& Economic  Development (DCCED),  responded the  original project                                                               
was to  be a mineral  bulk order or the  same type of  thing that                                                               
could be used for other bulk  commodities.  He offered his belief                                                               
that  the House  Special Committee  on Energy  is now  looking at                                                               
this as also being able to be  used as an LNG export facility and                                                               
that is  why the  committee took  out the wording.   He  said the                                                               
chair  of the  House Special  Committee on  Energy could  provide                                                               
more information on the intent.                                                                                                 
                                                                                                                                
REPRESENTATIVE  HAWKER   inquired  whether   he  is   correct  in                                                               
understanding  that Mr.  Leonard, a  representative of  AIDEA, is                                                               
saying he  is uncertain as  to the intent  in Section 4  and that                                                               
Mr. Leonard is not certain  what type of facility is contemplated                                                               
for which  the legislature would  be authorizing  state borrowing                                                               
of $50 million should this bill pass.                                                                                           
                                                                                                                                
MR.  LEONARD confirmed  Representative Hawker  is correct,  AIDEA                                                               
has not received a complete description of this.                                                                                
                                                                                                                                
REPRESENTATIVE HAWKER said this is a very important point.                                                                      
                                                                                                                                
1:37:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  said he  knows there is  discussion and                                                               
interest in a separate export project  from the west coast of the                                                               
Cook Inlet.   However,  he continued,  his focus  on this  is the                                                               
Interior  energy problem  and therefore  he will  need additional                                                               
follow-up.  He  offered his understanding that  the proposed line                                                               
for the  Alaska LNG  Project would  come to  or go  through Point                                                               
MacKenzie and commented  that that would be relevant  in terms of                                                               
infrastructure.                                                                                                                 
                                                                                                                                
CO-CHAIR NAGEAK asked  whether anyone on the committee  or in the                                                               
audience  can  respond  to  Representative  Josephson.    No  one                                                               
responded.                                                                                                                      
                                                                                                                                
1:38:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON said he would  feel more comfortable if the                                                               
title  of the  bill reflected  what the  intent is.   He  said he                                                               
still has the same concern as he has on Section 4.                                                                              
                                                                                                                                
MR. THERRIAULT replied that the  title in CSHB 105(ENE) came back                                                               
from the  drafters without that  change, which reflects  that the                                                               
drafters  considered the  title to  be adequate  as written.   He                                                               
said it is  in the committee's jurisdiction  to consider changing                                                               
the title.                                                                                                                      
                                                                                                                                
1:39:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON expressed his  concern that there have been                                                               
a number of  ideas for providing energy to the  Interior and some                                                               
have turned out  to be non-economic because  of the liquefaction.                                                               
Yet,  he  noted,  this  bill  is  targeting  strictly  energy  by                                                               
liquefaction; a  small diameter pipeline  from Cook Inlet  to the                                                               
Fairbanks  area  would  provide pipeline  gas  without  the  loss                                                               
through liquefaction  and transportation, and those  costs aren't                                                               
included in this.   He asked whether that  authority is somewhere                                                               
else within  AIDEA or whether there  is no authority in  AIDEA to                                                               
do a Cook Inlet pipeline with  gas of quality for burners without                                                               
the expense of  a gas treatment plant, giving  lower price energy                                                               
to Fairbanks.                                                                                                                   
                                                                                                                                
MR. THERRIAULT  responded that Mr. Bob  Shefchik, Project Manager                                                               
for  the Interior  Energy Project  and consultant  to AIDEA,  did                                                               
commit to Senator  Micciche that he would refresh  the members on                                                               
a possible pipeline  that would be able to  serve Interior needs.                                                               
He said Mr.  Shefchik also committed to work  with ENSTAR Natural                                                               
Gas  Company  because of  ENSTAR's  expertise  in pipeline.    He                                                               
further noted that  Mr. Shefchik will be in Juneau  on [March 10-                                                               
11]  and would  therefore be  available to  answer questions  and                                                               
meet  with Representative  Seaton.   Mr.  Therriault offered  his                                                               
understanding that the  cost of a pipeline is coming  in a little                                                               
higher  than  what  the  available  financing  is  and  said  Mr.                                                               
Shefchik could provide those numbers to Representative Seaton.                                                                  
                                                                                                                                
1:41:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  understood, then, that CSHB  105(ENE) does                                                               
not  include  any financing  authority  for  getting gas  to  the                                                               
Interior through  a pipeline from  Cook Inlet.  Rather,  the bill                                                               
is solely  that if Cook Inlet  gas is wanted, then  15 percent of                                                               
the  gas  would have  to  be  expended  to  liquefy it  and  then                                                               
transport it as LNG; that would  be the only way that AIDEA would                                                               
be able to finance Interior energy under this bill.                                                                             
                                                                                                                                
MR. THERRIAULT answered it is still  tied to LNG as a source when                                                               
looking at Section  5 of CSHB 105(ENE).  In  the last sentence of                                                               
Section 5, distribution "system"  is changed to "systems" because                                                               
the Regulatory  Commission of Alaska  (RCA) granted  the Interior                                                               
Gas  Utility (IGU)  the  service territory  outside  the core  of                                                               
Fairbanks,  so there  are currently  two distribution  systems in                                                               
Fairbanks.  Whether the  language "and affiliated infrastructure"                                                               
is   broad  enough   to  consider   pipeline   that  feeds   that                                                               
distribution  system  is   a  question  that  could   be  put  to                                                               
Legislative Legal and Research Services.   So, as was the case in                                                               
2013, the focus is on an LNG mechanism for the delivery.                                                                        
                                                                                                                                
MR. LEONARD added  that currently under the  SETS financing bill,                                                               
AIDEA cannot  finance a  pipeline from  Cook Inlet  to Fairbanks;                                                               
that is specifically  not included under what  a qualified energy                                                               
project is for AIDEA to finance under the SETS fund.                                                                            
                                                                                                                                
1:43:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON inquired about what fund and the source.                                                                  
                                                                                                                                
MR. LEONARD  replied it  is defined  under AS  44.88.900, Section                                                               
14,  which states  that "qualified  energy  development" means  a                                                               
project in the state  that involves liquefaction, regasification,                                                               
distribution, storage,  or use  of natural  gas except  a natural                                                               
gas pipeline project for transporting  natural gas from the North                                                               
Slope or Cook Inlet to market.                                                                                                  
                                                                                                                                
REPRESENTATIVE SEATON asked whether  the interpretation is that a                                                               
pipeline from the North Slope or  from Cook Inlet to market means                                                               
any sales.                                                                                                                      
                                                                                                                                
MR. LEONARD  responded yes, there  would have  to be a  change to                                                               
this section to utilize SETS funding for that type of project.                                                                  
                                                                                                                                
1:45:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  asked whether anything in  Section 4 makes                                                               
it clear  as to whether  the bulk commodity loading  and shipping                                                               
terminal  refers  to  loading and  shipping  things  overland  to                                                               
someplace within the state versus  loading and shipping something                                                               
away from the state as in exporting it via water.                                                                               
                                                                                                                                
MR. THERRIAULT answered he doesn't believe so.                                                                                  
                                                                                                                                
REPRESENTATIVE  HAWKER presumed  the language  in Section  4 that                                                               
the  "facility will  be owned  by the  authority" means  the port                                                               
facility.  He  inquired whether there is any  assurance that this                                                               
ownership through the proposed spending  authority of $50 million                                                               
will not be in competition with  any kind of a port facility that                                                               
is owned, operated, or invested in by the private sector.                                                                       
                                                                                                                                
ACTING COMMISSIONER  PARADY replied  he doesn't  believe so.   He                                                               
noted that  the original bill  simply repealed this  section with                                                               
the other  repealers and  said the  modification has  created the                                                               
questions that Representative Hawker is astutely asking.                                                                        
                                                                                                                                
1:47:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER argued  that  Section 5  is a  significant                                                               
restatement  of  the  uncodified  law that  was  passed  in  2013                                                               
following  a lengthy  public process  where the  legislature made                                                               
the policy  decision to authorize  an investment of  $275 million                                                               
in moving  gas from the  North Slope  and making it  available to                                                               
consumers in  Fairbanks.  Back  then it was called  gas trucking,                                                               
but now  it is being called  the Interior Energy Plan.   Of great                                                               
concern  at that  time was  the extremely  high cost  of consumer                                                               
energy in Fairbanks  and other Interior communities.   Under CSHB                                                               
105(ENE) the scope  of this policy call is being  changed to move                                                               
that appropriated money  to any project desired  that would bring                                                               
natural  gas  into   Interior  Alaska.    He   asked  whether  an                                                               
explanation can  be provided as  to what happened to  the project                                                               
that the legislature approved by  its policy decision in 2013 and                                                               
why AIDEA  is now  asking to be  able to take  the money  that is                                                               
left and spend it anywhere that AIDEA chooses to.                                                                               
                                                                                                                                
MR. LEONARD responded that AIDEA  moved forward with that project                                                               
and  the costs  came  in at  approximately  $13-$14 per  thousand                                                               
cubic  feet (MCF),  but  that didn't  meet  the community  target                                                               
goals.   A review  of the  community found  support for  AIDEA to                                                               
look at other alternatives to see  if the community goal could be                                                               
reached,  which  is  approximately  $15/MCF at  the  burner  tip.                                                               
Based on where AIDEA was at  on the trucking project with all the                                                               
different segments,  it was  looking like gas  to the  burner tip                                                               
was going to be over $19/MCF.                                                                                                   
                                                                                                                                
1:51:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  clarified that  there are two  numbers for                                                               
project anticipated costs of delivering  gas:  the estimated cost                                                               
of getting gas to the city  gate versus the estimated cost of gas                                                               
to the burner tip.  He requested the difference be explained.                                                                   
                                                                                                                                
MR. LEONARD  explained that cost  of gas  at city gate  means gas                                                               
into a plant in Fairbanks  prior to regasification and putting it                                                               
into  the system.   The  cost  of gas  to  burner tip  in a  home                                                               
includes [the cost to city  gate] plus cost of regasification and                                                               
distribution.  The  base estimate for cost to city  gate was $13-                                                               
$14 [per  MCF] and AIDEA  has not come to  a final cost  in that.                                                               
However, based on those costs  plus a distribution cost of $5-$6,                                                               
the estimated cost at burner tip would be approximately $19-$20.                                                                
                                                                                                                                
REPRESENTATIVE HAWKER  understood that the original  gas trucking                                                               
project,  as  envisioned and  authorized  by  the legislature  in                                                               
2013, was  determined unacceptable  to the  community due  to the                                                               
estimated  cost of  gas  to the  city gate  at  $13-$14/MCF.   He                                                               
further  understood that  according  to testimony  at a  previous                                                               
Legislative  Budget and  Audit  Committee  meeting the  community                                                               
goal was in the range of $11.                                                                                                   
                                                                                                                                
MR. LEONARD answered  the target goal mentioned  by the community                                                               
is $15/MCF,  but it doesn't  actually state  how much of  that is                                                               
for gas through  the different segments.   However, he continued,                                                               
it is  believed that to get  anywhere near the range  of $15/MCF,                                                               
gas to city gate would have to be in the range of $10-$11.                                                                      
                                                                                                                                
REPRESENTATIVE HAWKER understood that  Mr. Leonard's reference to                                                               
$15/MCF was  for the  cost to  burner tip,  and the  reference to                                                               
approximately $11/MCF was for the cost to city gate.                                                                            
                                                                                                                                
MR. LEONARD confirmed that to be correct.                                                                                       
                                                                                                                                
1:55:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER stated  that  the over-reaching  objective                                                               
here is  to get  cost relief  into Interior  Alaska, specifically                                                               
the community of Fairbanks.   He recalled an earlier announcement                                                               
that AIDEA intends  to purchase Fairbanks Natural Gas  (FNG).  He                                                               
noted that  that purchase  agreement includes  a contract  with a                                                               
subsidiary of Hilcorp  Energy Company (Hilcorp) to  move LNG from                                                               
the Cook Inlet to Fairbanks and  that this contract has a 10-year                                                               
committed delivery for  all gas required by  the current customer                                                               
base of  FNG at  $15 to  the city gate.   Yet,  the desire  is to                                                               
start over  and reconsider the  North Slope gas  trucking because                                                               
it came in at $13-$14 [to  city gate] while AIDEA invests another                                                               
$50 million  of public  funds in buying  FNG with  an inescapable                                                               
10-year  contract at  $15 [to  city gate]  while the  community's                                                               
acceptable  number  is $11  [to  city  gate].   He  requested  an                                                               
explanation  of this  paradox and  how that  integrates with  the                                                               
desire now  to continue to  look for  some other project  that is                                                               
unspecified  and for  which the  legislature would  be writing  a                                                               
blank check.                                                                                                                    
                                                                                                                                
MR.  LEONARD replied  AIDEA  does understand  that  paradox.   He                                                               
noted that  the RCA is looking  at that contract and  pointed out                                                               
that  the contract  will  be there  regardless  of whether  AIDEA                                                               
purchases the company.  He  said AIDEA is specifically looking at                                                               
this  purchase to  see how  it can  lower the  cost of  the total                                                               
system, which is  mainly the distribution system.   The belief is                                                               
that  AIDEA  can immediately  cut  that  by 8-15  percent,  which                                                               
lowers that total  cost to the burner tip.   Also, AIDEA realizes                                                               
it  will  have  to live  up  to  that  contract  as part  of  the                                                               
purchase, but AIDEA  believes it can lower the total  cost of gas                                                               
through the  blending of costs to  all of Fairbanks, and  that is                                                               
approximately 20 percent of the  total demand that AIDEA believes                                                               
is needed by  Fairbanks.  He said AIDEA is  still looking at what                                                               
is the best  source of gas to Fairbanks with  the lowest cost and                                                               
believes it needs to look at  the alternatives such as Cook Inlet                                                               
before moving forward.   It is not to say  that it couldn't still                                                               
be from  the North  Slope, but  AIDEA has been  asked to  look at                                                               
whether there  is an  alternative that  could provide  lower cost                                                               
gas and that  is the process that  AIDEA is asking to  be able to                                                               
move forward with.                                                                                                              
                                                                                                                                
2:00:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER   understood  AIDEA  is  asking   for  the                                                               
authority  to   finance  up  to  $275   million  of  development,                                                               
construction,  installation,   start-up  costs,   operation,  and                                                               
maintenance  for  an  LNG  plant  and  system.    Previously  the                                                               
legislature made the policy call  that it supported a system that                                                               
was very clearly North Slope gas  into Fairbanks.  He inquired as                                                               
to what is  AIDEA's current project plan that is  going to result                                                               
in potentially all of these savings.                                                                                            
                                                                                                                                
MR. LEONARD responded AIDEA does  not yet have the complete plan.                                                               
He  said AIDEA  is  going to  set  up  a system  to  look at  the                                                               
different alternatives and,  if there is a  better project coming                                                               
from the  south, AIDEA is  asking the legislature to  allow AIDEA                                                               
to move  forward with investing  in that project instead  of just                                                               
the North Slope.  He cannot  yet tell the committee which project                                                               
AIDEA would  invest in, but  AIDEA believes it needs  the ability                                                               
to  look at  investing in  a facility  that is  not on  the North                                                               
Slope if it could provide lower cost gas to Fairbanks.                                                                          
                                                                                                                                
ACTING  COMMISSIONER PARADY  pointed out  that the  authority for                                                               
the  investment  of  up  to  $275  million  is  in  the  original                                                               
legislation.   What's  at question  in  this bill  is simply  the                                                               
source of the gas - whether it  is the North Slope or Cook Inlet.                                                               
It is incumbent upon AIDEA that  the end price into the Fairbanks                                                               
community support the purposes of  the project, which is to lower                                                               
the cost  of energy  to those consumers  but also to  do so  at a                                                               
price  that   yields  a  conversion   rate  that   ultimately  is                                                               
successful.  That is why the tie  to the burner tip number of $15                                                               
and that  is why the drive  to consider alternatives.   But those                                                               
alternatives are  currently limited to  the North Slope,  and now                                                               
AIDEA is asking  for the authority to consider  Cook Inlet, which                                                               
does not foreclose the North Slope.                                                                                             
                                                                                                                                
2:02:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  noted   that  distribution  systems  have                                                               
consistently  been   the  total   responsibility  of   the  local                                                               
authority.   He said  he is concerned  with the  Hilcorp contract                                                               
being for  $15/MCF and the  statement that there will  be savings                                                               
on  the distribution  system.   He  inquired  whether that  means                                                               
AIDEA is  planning on  absorbing a  subsidy by  the state  of the                                                               
distribution system.  With a cost  to city gate of $15, the state                                                               
would have to build out the  distribution system for free to have                                                               
a burner tip cost of $15.                                                                                                       
                                                                                                                                
MR. THERRIAULT answered that the  original bill set in motion the                                                               
process of looking  at the cost of building  out the distribution                                                               
system  and using  the financing  tools available  to that.   The                                                               
SETS  funding has  an  ability to  delay  principle payments  and                                                               
adjust the  interest payments.   Specific  tools were  granted in                                                               
that original  financing package to  try to lower  that resulting                                                               
cost.   There  was  also  a capital  component  in  the blend  of                                                               
financing  tools,  which still  is  available  for the  board  to                                                               
figure out  where the consumer  gets the most advantage  from the                                                               
placement  of the  total tools  that  were granted  in that  2013                                                               
legislation.   Additionally,  the IGU  project is  a governmental                                                               
entity, so there  is not the profit  return/equity component that                                                               
a private  sector distribution system  has, which helps  to lower                                                               
the cost.  That is one of  the advantages of the Letter of Intent                                                               
that was signed  for AIDEA to purchase the  Pentex Alaska Natural                                                               
Gas Company,  LLC (Pentex) parent  company's assets, one  of them                                                               
being  the  existing  FNG  distribution  system.    Although  the                                                               
Fairbanks/North  Pole area  is  the  second largest  metropolitan                                                               
area, the overall demand is relatively  small for the cost of the                                                               
infrastructure  to serve  it.   Ensuring that  those two  systems                                                               
have the  lowest required return  on equity, integrating  the two                                                               
systems  for  the sharing  of  transmission  lines, storage,  and                                                               
regasification, and  linking them at  multiple points so  gas can                                                               
flow  back  and  forth  across  the  boundaries  of  the  service                                                               
territory  helps to  lower that  cost and  ultimately set  up the                                                               
possibility for combining the two systems into one.                                                                             
                                                                                                                                
2:06:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  pointed out that distribution  systems are                                                               
based on assessments of lots and  those are not subject to return                                                               
on equity because the equity comes  from the people who are being                                                               
serviced, not from  the service company - it is  a zero return on                                                               
equity  under the  current system.    For example,  if a  private                                                               
entity like  ENSTAR builds out a  system in a town  and $3,200 is                                                               
assessed  per lot  which is  then given  to ENSTAR,  there is  no                                                               
return on  equity because ENSTAR  had no equity input  into that.                                                               
He said he  is therefore unsure whether he is  hearing that state                                                               
equity is  going to  be substituted for  lot ownership  equity in                                                               
this system  and it will  be called a gift  from the state  for a                                                               
distribution  system.   If that  is done  as the  basis for  this                                                               
plan,  he  opined,  it  would  be totally  adverse  to  what  has                                                               
happened all across the state  and would be a tremendous inequity                                                               
of  gas  distribution,  and  he  is concerned  about  that.    He                                                               
requested that AIDEA provide a  definite outline of how the money                                                               
flows for  a distribution  system and  whether it  is a  loan and                                                               
what the  interest rate is.   Governments are doing that  now and                                                               
mostly there is  no return on equity because the  lot holders are                                                               
assessed and the assessments pay  that off over a 10-year period.                                                               
He said this is a question the committee needs to have answered.                                                                
                                                                                                                                
MR. THERRIAULT  replied that in Representative  Seaton's area the                                                               
municipality assessed  the lot  owners and  the state  provided a                                                               
grant of $10  million for the transmission system to  get the gas                                                               
to  the community,  thereby helping  to  lower [the  assessment].                                                               
When the Interior Energy Project  (IEP) was discussed in 2013, it                                                               
was looking at  the difference of sourcing gas off  of the ENSTAR                                                               
system  in Cook  Inlet.   The cost  of the  gas going  into those                                                               
pipes  is much  lower than  the cost  of the  gas going  into any                                                               
distribution  in Fairbanks  because  of  the geographic  distance                                                               
from the source, which is why  some extra tools were given to the                                                               
IEP.  They  give the AIDEA board some latitude  on where to apply                                                               
those  different  financing tools  to  help  the final  delivered                                                               
price to  the consumer.  The  community's target price of  $15 is                                                               
roughly  twice the  delivered price  in much  of the  Cook Inlet.                                                               
There are areas that have  this property tax assessment and there                                                               
were local improvement  districts (LIDs) on the  ENSTAR system in                                                               
the Matanuska-Susitna  area to help  push the pipes out  to areas                                                               
where  the  customer  density  was  lower.    The  price  of  the                                                               
commodity that  goes into the intake  of that pipe is  already so                                                               
much lower than anything that will  be able to be achieved in the                                                               
Interior, he reiterated.                                                                                                        
                                                                                                                                
2:10:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER recalled the  earlier testimony that it was                                                               
deemed necessary  for AIDEA to be  able to look at  sourcing gas,                                                               
including from  the Cook Inlet.   He also recalled  comments that                                                               
the savings that would immediately  be effectuated were basically                                                               
because  if the  state  goes into  competition  with someone  the                                                               
state doesn't have to make a  return on its investment or provide                                                               
for replacement costs like a business  does.  He said he is aware                                                               
of  at least  three private  sector entities  that are  currently                                                               
investigating  business plans  for delivering  gas from  the Cook                                                               
Inlet to  Fairbanks and he knows  that they have talked  to AIDEA                                                               
about this.   He asked  why the  committee would want  to approve                                                               
allowing AIDEA  to use  the state's taxing  authority to  go into                                                               
competition with those private sector entities.                                                                                 
                                                                                                                                
ACTING  COMMISSIONER  PARADY  responded  that  it  is  trying  to                                                               
achieve a  price that results  in conversion and, to  date, there                                                               
is no  evidence that  the private  sector is  able to  deliver at                                                               
that dollar.   He allowed he doesn't have  complete evidence that                                                               
AIDEA can either,  but fundamentally it is a matter  of trying to                                                               
solve  the pricing  issue  and the  conversion  in the  Fairbanks                                                               
Interior Energy Project.                                                                                                        
                                                                                                                                
REPRESENTATIVE  HAWKER  requested  an  explanation  of  the  term                                                               
"conversion factor."                                                                                                            
                                                                                                                                
ACTING COMMISSIONER  PARADY answered it is  getting homeowners to                                                               
convert to  natural gas  as a  source of  fuel for  home heating.                                                               
The term  conversion "rate" is  better than  conversion "factor."                                                               
The rate of conversion - enough  critical mass - must be achieved                                                               
to have a market.                                                                                                               
                                                                                                                                
2:12:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  said he doesn't  want anyone to  think him                                                               
unsympathetic to Fairbanks,  but he is all about trying  to do it                                                               
right.   He  said  he is  hearing a  price-driven  demand:   that                                                               
things will not  go forward until the number  being insisted upon                                                               
by  the community  is reached.    If the  very competent  private                                                               
sector folks in a very  competitive environment can't get it, the                                                               
only way  the state is going  to get it is  by essentially making                                                               
Fairbanks  a ward  of  the  state and  putting  it  on a  subsidy                                                               
forever,  and  he doesn't  think  anyone  wants that  to  happen.                                                               
Section  5 asks  the legislature  to write  a blank  check to  do                                                               
whatever  AIDEA decides  to do  without ever  coming back  to the                                                               
legislature for sanctioning or authority.   He inquired why AIDEA                                                               
doesn't come up with a  plan, numbers, contractors, and specifics                                                               
such as source  of gas and commitments to make  the gas available                                                               
that show AIDEA  can accomplish this at the  rate being requested                                                               
by the community, and then ask the legislature to pay for it.                                                                   
                                                                                                                                
ACTING  COMMISSIONER PARADY  replied  that  the description  just                                                               
offered by Representative Hawker is  the work that is underway by                                                               
the Interior Energy  Project team, which is to try  to find a gas                                                               
supply that works, utilize the  tools that are available to AIDEA                                                               
in terms of  liquefaction, transportation, storage, distribution,                                                               
and apply the state's leverage to  those activities in a way that                                                               
results  in a  price that  will  yield the  conversion rate  that                                                               
works.   He said AIDEA  is not asking  for a blank  check, rather                                                               
AIDEA is  asking for the  authority to take the  tools previously                                                               
offered  to it  by the  legislature and  consider an  alternative                                                               
source  to supply  that market.   He  said AIDEA  is open,  as it                                                               
should be, to any guidance  that the legislature cares to provide                                                               
in that direction.                                                                                                              
                                                                                                                                
2:15:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  offered his belief that  when legislators                                                               
approved that  original $275  million there  was a  trucking plan                                                               
and  a source  of gas.    There was  a  project in  front of  the                                                               
legislature and  that is what  he is  asking for before  making a                                                               
re-appropriation.  Without a plan it  is a blank check.  He asked                                                               
whether there  is any part of  the $275 million that  AIDEA needs                                                               
to continue the process on the road AIDEA is going down.                                                                        
                                                                                                                                
ACTING COMMISSIONER  PARADY recognized that this  discussion will                                                               
be continued and said the need  is for the ability to consider an                                                               
alternative source  of gas because AIDEA  was unable to get  to a                                                               
price that  worked.  The  full project detail that  the committee                                                               
is looking for is under development.                                                                                            
                                                                                                                                
REPRESENTATIVE JOHNSON said his question  is whether AIDEA can do                                                               
that study now without any additional money in this bill.                                                                       
                                                                                                                                
MR. THERRIAULT responded he thinks  there are some limitations in                                                               
using any of  the funds previously provided  from the legislature                                                               
to get  into any real  details of a  source other than  the North                                                               
Slope and whether AIDEA needs an authorization to do that.                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON stated he would  like to hear that because                                                               
he thinks the number the committee  needs to be looking at is the                                                               
number  that would  advance whatever  AIDEA needs,  not the  full                                                               
$275  million.   He requested  that the  committee hear  from Mr.                                                               
Leonard in this regard.                                                                                                         
                                                                                                                                
2:17:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  requested an  explanation of  the $750,000                                                               
that  was  approved  by  the  AIDEA  board  to  do  exactly  what                                                               
Representative Johnson is asking.                                                                                               
                                                                                                                                
MR.  THERRIAULT answered  that  a  lot of  that  effort was  also                                                               
looking at  changes to the  distribution system which  is covered                                                               
under the  existing language.   Savings were  looked at  and what                                                               
the price would  be if the price could be  lowered for the supply                                                               
for  that distribution  system.   He  said AIDEA  has held  focus                                                               
groups and  surveyed residents as  to their existing  price, what                                                               
AIDEA believed the target price  would bring their costs down to,                                                               
and  what  would be  the  rate  of  people  that would  make  the                                                               
expenditure to convert their home to  natural gas.  He said AIDEA                                                               
is not counting  on 100 percent conversion, but  rather has built                                                               
its numbers  around 75 percent, and  AIDEA is hoping a  price can                                                               
be achieved that would get a  higher conversion than that.  There                                                               
must be a certain volume in order to get the price.                                                                             
                                                                                                                                
2:18:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER said  when he asked what was  going on with                                                               
the money that had been appropriated,  he thinks he was told that                                                               
it was  really for something else  and not quite what  he took to                                                               
be  Representative  Johnson's  concern,  which is  to  bring  the                                                               
legislature  a project  and present  what works.   He  said AIDEA                                                               
Resolution  G15-02 authorizes  $500,000  from the  SETS fund  and                                                               
$200,000 from  AIDEA's economic development account  and that the                                                               
resolution  states  it  is for  a  process-driven  evaluation  of                                                               
alternative  means of  supplying energy  to Interior  Alaska that                                                               
meets the  needs of the  community.   He concluded that  AIDEA is                                                               
spending  $700,000  to   come  up  with  this   answer  that  the                                                               
legislature would like  to see before it makes  a policy decision                                                               
as to whether to invest hundreds  of millions of state dollars in                                                               
the project.                                                                                                                    
                                                                                                                                
MR. LEONARD replied the difference  is that under Resolution G15-                                                               
02 original SETS monies are  being used that were still available                                                               
to AIDEA  to look at  qualified energy  projects.  He  said AIDEA                                                               
cannot invest  funds under the new  SETS, Senate Bill 23,  of the                                                               
$125  million and  $150 million  of bonds  towards the  projects.                                                               
So, in  essence, AIDEA  has original  SETS funds  to look  at the                                                               
project; however, it  will take approximately three  months to go                                                               
through the  process and AIDEA  would then  have to wait  to come                                                               
back to the legislature next year  to get approval to invest in a                                                               
project  that doesn't  deal  with  North Slope  gas.   Putting  a                                                               
legislative session into  the mix before AIDEA is  able start the                                                               
process of investing in a  project would increase the time before                                                               
new gas would be going into Fairbanks.                                                                                          
                                                                                                                                
REPRESENTATIVE HAWKER clarified his  aforementioned cite was from                                                               
the memorandum  to the AIDEA board  members supporting Resolution                                                               
G15-02.  He  said he is uncomfortable with writing  a blank check                                                               
for [$275]  million when  he does  not know  more of  the project                                                               
details.                                                                                                                        
                                                                                                                                
2:22:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON requested  that  before the  bill is  next                                                               
brought up the co-chair solicit from  AIDEA a legal opinion as to                                                               
whether  the  interpretation  of "affiliated  infrastructure"  on                                                               
page 5 of the bill, lines  2-3, would expand to financing a small                                                               
diameter gasline from Cook Inlet to Fairbanks.                                                                                  
                                                                                                                                
REPRESENTATIVE HERRON  requested that the  title be looked  at by                                                               
the committee to ensure it is tight.                                                                                            
                                                                                                                                
2:24:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON understood  that for  the $275  million                                                               
AIDEA has not  exercised at this point the authority  given to it                                                               
by  the  legislature  to  obtain those  funds  and  develop  this                                                               
project.                                                                                                                        
                                                                                                                                
MR. THERRIAULT  replied a portion  of the capital  component that                                                               
was also included in 2013 has  been used and there have been some                                                               
loans from distribution work to FNG and IGU.                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  understood the  money AIDEA  is talking                                                               
about is  the grant  of about  $50 million that  was part  of the                                                               
2013 legislation.                                                                                                               
                                                                                                                                
MR. THERRIAULT responded that the grant was $57.5 million.                                                                      
                                                                                                                                
REPRESENTATIVE JOSEPHSON  understood the reason for  this bill is                                                               
because the North Slope plan  was uneconomical and AIDEA wants to                                                               
make an adjustment to something that might be more economical.                                                                  
                                                                                                                                
MR. THERRIAULT answered correct.                                                                                                
                                                                                                                                
REPRESENTATIVE   JOSEPHSON  further   understood   the  bill   is                                                               
repealing a number  of other authorizations as a  cleanup to make                                                               
AIDEA's bonding portfolio look more attractive.                                                                                 
                                                                                                                                
MR. THERRIAULT replied correct.                                                                                                 
                                                                                                                                
2:25:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NAGEAK opened public testimony.                                                                                        
                                                                                                                                
2:25:56 PM                                                                                                                    
                                                                                                                                
LISA HERBERT,  Executive Director,  Greater Fairbanks  Chamber of                                                               
Commerce, testified in  support of HB 105.  She  said the chamber                                                               
believes Interior  Alaska remains the  place to do  business, but                                                               
the  chamber's mission  is made  more difficult  every year  that                                                               
goes by  without action towards  achieving low cost energy.   She                                                               
informed the committee that just  moments ago the chamber's board                                                               
of  directors wrapped  up a  meeting  with AIDEA  representatives                                                               
Dana Pruhs and  Bob Shefchik and voted unanimously  to support HB                                                               
105  and  SB  50.    The chamber's  understanding  is  that  this                                                               
legislation  provides  the  necessary  flexibility  to  AIDEA  to                                                               
advance a natural gas energy project  to address the high cost of                                                               
energy  in Interior  and rural  Alaska.   It is  another tool  in                                                               
AIDEA's toolbox  to meet the  stated goal of  bringing affordable                                                               
natural  gas to  the greatest  number of  Interior residents  and                                                               
businesses as  quickly as  possible.  Reducing  the high  cost of                                                               
energy  remains the  chamber's number  one critical  priority for                                                               
chamber  members as  well as  economic development  organizations                                                               
and  local governments  in  the Interior.    The chamber  remains                                                               
committed to  engaging with the  legislature, AIDEA, and  all the                                                               
community stakeholders  as affordable energy for  the Interior is                                                               
pursued.                                                                                                                        
                                                                                                                                
2:27:43 PM                                                                                                                    
                                                                                                                                
LUKE HOPKINS,  Mayor, Fairbanks North  Star Borough, said  he sat                                                               
in meetings  a couple of  years ago with former  Governor Parnell                                                               
and there was the  idea that this plan up north  would be the one                                                               
that   would  solve   the  energy   needs  of   Interior  Alaska,                                                               
specifically  within  the Fairbanks  North  Star  Borough.   [The                                                               
borough]  had already  set up  a municipal  utility to  cover the                                                               
area outside  of the existing  service area.   He said  that plan                                                               
for a North  Slope project wasn't anything that was  firmed up at                                                               
that point.  It  took months and months to even  get to the point                                                               
of what  is the right plan  to bring forward.   He requested that                                                               
his community  with its  air quality issues  and cost  of energy,                                                               
and the  second largest metropolitan  area in the state,  be able                                                               
to get  some flexibility through HB  [105] to be able  to proceed                                                               
with looking and penciling out.   The people in AIDEA will pencil                                                               
it out  and then  that will  become the  public process  that the                                                               
legislature  has heard  when it  was  said what  is happening  up                                                               
north.   He  urged  the  committee to  move  the  bill because  a                                                               
solution is  needed for his community  and the bill is  needed to                                                               
move forward and continue looking at other aspects.                                                                             
                                                                                                                                
2:30:38 PM                                                                                                                    
                                                                                                                                
JOMO   STEWART,  Energy   Project  Manager,   Fairbanks  Economic                                                               
Development Corporation,  offered his organization's  support for                                                               
HB 105.   He recalled that when this process  was started several                                                               
years ago the community goal was  to have affordable energy to as                                                               
many  people  as possible  as  quickly  as possible,  that  being                                                               
defined for natural gas as  $15 per million British thermal units                                                               
(MMBtu) to  80 percent  of community  structures within  three to                                                               
five years.   The reason  for choosing $15/MMBtu was  because the                                                               
cost of energy at the time  was $30/MMBtu, which is equivalent to                                                               
$30 per thousand cubic feet (MCF).   It was thought that to truly                                                               
have a favorable  impact upon the community  economy, natural gas                                                               
would need  to be cheap enough  to compete with wood  because the                                                               
community also  has an  air quality problem.   When  that process                                                               
was started the  community also had a broader  goal regarding the                                                               
Interior  Energy  Project.   When  the  community began  to  move                                                               
forward  with  how  to  design  a  system  it  was  shooting  for                                                               
replicable models,  recognizing that out of  over 200 communities                                                               
across the state,  only a handful actually  had affordable energy                                                               
on a  consistent basis, Anchorage being  one of them and  being a                                                               
community that  was directly  tied to the  Cook Inlet  gas fields                                                               
through the ENSTAR  system.  However, he continued,  for the vast                                                               
majority of other  communities energy does not  serve to underpin                                                               
diversified and growing economies,  but instead drains, cripples,                                                               
and  crushes   those  economies.     One  of  those   sources  of                                                               
replicability  was  when  the  Interior  Gas  Utility  (IGU)  was                                                               
created, a municipal utility that  could drive out those pipes to                                                               
those  lower and  medium density  areas  to ensure  that as  many                                                               
people as possible  in the community would be able  to tap in and                                                               
have  the benefit  of affordability.   The  other thing  that was                                                               
done was  to try to  come up with a  funding model that  would be                                                               
more  sustainable  and  replicable  than, say,  the  $10  million                                                               
direct grant  to get  pipes to  Homer, the $25  million to  get a                                                               
transmission  line to  the Fire  Island  wind farm,  and the  tax                                                               
credits  that go  into Cook  Inlet development.   He  pointed out                                                               
that  in 2014  the subsidy  for Cook  Inlet development  was $305                                                               
million, and $311 million in 2015,  and $282 million in 2016, and                                                               
by 2018 the subsidy  will be a total of $1.6  billion to keep gas                                                               
affordable  and available  to the  Cook  Inlet region.   For  the                                                               
Interior, the  right thing to do  seemed to be a  low-grant model                                                               
with loans  where the repayment  structure would make  more funds                                                               
available to bring  the benefits of natural  gas through creating                                                               
distribution systems  in other communities.   The belief  is that                                                               
it still  is the right  thing to do.   He urged the  committee to                                                               
look favorably  upon HB 105  and to move  it out of  committee as                                                               
rapidly as possible.                                                                                                            
                                                                                                                                
2:33:58 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NAGEAK closed public testimony and held over HB 105.                                                                   
                                                                                                                                
The committee took an at-ease from 2:34 p.m. to 2:41 p.m.                                                                       
                                                                                                                                
           HB  14-BAN PLASTIC MICROBEADS IN COSMETICS                                                                       
                                                                                                                                
2:41:10 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO announced  that the third order  of business is                                                               
HOUSE  BILL NO.  14, "An  Act banning  the manufacture,  sale, or                                                               
offering   for  sale   of  a   cosmetic  that   contains  plastic                                                               
microbeads; and providing for an effective date."                                                                               
                                                                                                                                
2:41:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER  moved  to adopt  the  proposed  committee                                                               
substitute  (CS), labeled  29-LS0098\W,  Nauman,  3/6/15, as  the                                                               
working document.                                                                                                               
                                                                                                                                
REPRESENTATIVE  SEATON objected  for purposes  of explanation  of                                                               
the changes.                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON,  sponsor, explained that the  change is                                                               
just one word.  The  proposed CS deletes the word "biodegradable"                                                               
from  Section 3,  page 3,  line  3, of  the original  bill.   The                                                               
reason for this deletion goes to  the essence of the bill itself.                                                               
He said  he believes that there  is very little that  is actually                                                               
biodegradable  and that  by leaving  that term  in the  bill, the                                                               
industry  finds  alternatives  for   microbeads  that  result  in                                                               
continual problem  for the  fisheries, for  birds, and  for other                                                               
marine life.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON removed  his  objection.   There being  no                                                               
further objection, Version W was before the committee.                                                                          
                                                                                                                                
2:43:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  said he  had never heard  of microbeads                                                               
until  the   August  2014  meeting   of  the  Council   of  State                                                               
Governments  where  it  was  discussed  by  the  Suggested  State                                                               
Legislation Committee.   The term  came before that  committee in                                                               
regard to efforts to rid the  cosmetics industry of what some see                                                               
as  a  scourge.   He  explained  that,  if  passed, HB  14  would                                                               
prohibit  the use  or sale  of microbeads  in Alaska.   It  would                                                               
modify Title  17.20, Alaska's Food,  Drug and Cosmetic  Act, with                                                               
just a handful of words.                                                                                                        
                                                                                                                                
REPRESENTATIVE  JOSEPHSON defined  microbeads  as being  plastic,                                                               
synthetic  microspheres that  are widely  used in  the cosmetics,                                                               
skin care, and the personal  care industries, measuring less than                                                               
five millimeters.  They are  principally made of polyethylene and                                                               
polypropylene, as well as two  other less common compounds.  They                                                               
are used by  the cosmetics industry in  toothpaste, facial creams                                                               
and  cleansers,  as  well  as shaving  creams,  shower  gels  and                                                               
exfoliating products.   Prior  to about 10  years ago,  they were                                                               
not as  commonly used  and yet, he  quipped, his  recollection is                                                               
that people back then had clean  skin and healthy teeth.  He said                                                               
that in his view microbeads are  not a requirement in the hygiene                                                               
and cosmetics trades.  They  were adopted by the industry because                                                               
they are cheap to produce and  give a gritty and abrasive quality                                                               
to cleansers,  washes, and  pastes.   To provide  a sense  of the                                                               
scope  of  the problem,  he  noted  that the  Neutrogena  product                                                               
called  "Deep  Clean" contains  350,000  microbeads  in a  single                                                               
tube.  The small sizes of  microbeads enable them to get past the                                                               
filtering systems  of waste water  treatment facilities  and they                                                               
end up in rivers, lakes, and oceans.                                                                                            
                                                                                                                                
REPRESENTATIVE  JOSEPHSON discussed  some  science  to provide  a                                                               
better sense  of what microbeads are.   He said he  has read hour                                                               
upon hour  of literature on the  subject of microbeads.   For all                                                               
practical  purposes he  has never  found an  industry claim  that                                                               
microbeads are not  getting into rivers, lakes, and  oceans, or a                                                               
claim that microbeads  are not being consumed by  marine life and                                                               
birds.  From marine life, there  is every reason to believe that,                                                               
in turn, humans  are consuming microbeads or  toxins connected to                                                               
microbeads.    This  happens  when fish  and  other  marine  life                                                               
consume   microbeads  that   have  absorbed   persistent  organic                                                               
pollutants  (POPS),  including polychlorinated  biphenyls  (PCBs)                                                               
and  dichlorodiphenyltrichloroethane  (DDT).     These  are  also                                                               
called persistent  bioaccumlative toxins (PBTs).   Primarily this                                                               
occurs because people  are consuming fish and  other marine life.                                                               
Pesticides  and  toxins  are  hydrophobic,   so  they  glom  onto                                                               
microbeads and  find a  home with them  in waterways  and oceans.                                                               
It  is  believed  that  they  move along  the  food  chain  as  a                                                               
consequence.   Mistaking them  for eggs or  other food,  they are                                                               
readily consumed by fish.  Fish  also feel full when they are not                                                               
really  full and  some  are unable  to  excrete plastic,  causing                                                               
internal damage.  Study after study supports this fact.                                                                         
                                                                                                                                
2:46:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON related  that the  industry, almost  to                                                               
the company, concedes it has a  problem and that it wishes to fix                                                               
that problem.  The important thing to  ask is what the fix is and                                                               
who  pays for  the fix.   First,  there is  no evidence,  and the                                                               
industry doesn't really suggest in  the literature that there is,                                                               
that microbeads can  biodegrade.  Industry says  that word should                                                               
be excised  from the  production line, industry  says get  rid of                                                               
microbeads.   The industry basically  admits that  microbeads, at                                                               
least as  currently designed, cannot biodegrade.   Similarly, the                                                               
industry,  while  it  is  striving   to  find  a  substitute  for                                                               
microbeads, seems to believe that  it can still produce a plastic                                                               
of some sort  that will biodegrade.  The more  likely reality may                                                               
be that  no such  substance exists.   The industry  might suggest                                                               
that  polylactic  acids  (PLAs)  and  also  polyhydroxyalkanoates                                                               
(PHAs) will break down in  the environment and can be substituted                                                               
for  microbeads.    However, these  plastics  only  breakdown  in                                                               
industrial composting  facilities at temperatures of  120 degrees                                                               
Fahrenheit.  Even if something  could biodegrade, many of what is                                                               
being recommended  would remain in  the environment for  at least                                                               
six months,  and perhaps three  years.   It would persist  in the                                                               
aquatic  environment  and  remain bioavailable  to  wildlife  who                                                               
mistake it for food during that period of time.                                                                                 
                                                                                                                                
REPRESENTATIVE  JOSEPHSON pointed  out that  there are  cosmetics                                                               
and  toiletries companies  that  use  plastics substitutes  right                                                               
now, just  as the large  industrial cosmetics makers used  to do.                                                               
Those  substitutes  include  things  like  rice,  apricot  seeds,                                                               
walnut shells,  powdered pecan  shells, and  even bamboo.   Other                                                               
identified alternatives  include sea  salt, oatmeal,  pumice, and                                                               
ground almonds.   Companies that use safe  materials include Lush                                                               
Cosmetics, Acure Organics, Burt's  Bees, St. Ives, Alba Botanica,                                                               
and Bulldog.   It is possible that these  substitutes will result                                                               
in greater cost,  although he allowed he hasn't read  that and he                                                               
cannot say  what exactly that cost  would be.  However,  he said,                                                               
that extra cost  should be weighed against the  cost to fisheries                                                               
and human health.                                                                                                               
                                                                                                                                
2:49:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  discussed the  bill, stating  he thinks                                                               
Version W is  generous toward the industry in one  major way:  it                                                               
has an  effective date of January  2018, which is as  late as any                                                               
that  will be  found  in the  state legislatures.    Some have  a                                                               
graduated scale, but it begins  before 2018.  Literally dozens of                                                               
state legislatures  are introducing bills  right now to  stop the                                                               
release of microbeads  into waters, streams, and oceans.   It has                                                               
become  a worldwide  movement  of  sorts.   Just  last month  the                                                               
Indiana House, where  there are 29 Democrats  and 71 Republicans,                                                               
voted  97-0 to  ban microbeads,  although that  bill allows  some                                                               
substitutes and  Version W is  a little tougher in  that respect.                                                               
Version W is less generous to  the industry in that it requires a                                                               
real ban,  not what  he would  call a ban  that doesn't  move the                                                               
needle.  He said he thinks  that any time a discussion is invited                                                               
about biodegradability, it invites  discussion of substitutes for                                                               
microbeads that may  be equally harmful.  He said  he has letters                                                               
in  his  file  from  Johnson &  Johnson,  L'Oreal,  Crest,  Avon,                                                               
Colgate,  Palmolive, The  Body Shop,  and others,  conceding that                                                               
something must be done about the microbeads.                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  allowed that  the fiscal note  may give                                                               
pause  to  committee  members.     He  said  Ms.  Busse  [of  the                                                               
Department  of Environmental  Conservation  (DEC)] might  suggest                                                               
that  the  permits  for 2,200  distributors  would  be  $100-$200                                                               
apiece.   Theoretically that  could create  some parody  and help                                                               
alleviate the cost associated  with enforcement, which presumably                                                               
wouldn't begin  until 2018.  He  added that the committee  may be                                                               
hearing  from witnesses  who will  testify about  gyres, and  how                                                               
microbeads  move  into the  North  Pacific  and into  the  Arctic                                                               
through circulation around the ocean.                                                                                           
                                                                                                                                
2:51:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER inquired  why, if this is  such a pervasive                                                               
national issue,  the U.S. Food  and Drug Administration  (FDA) or                                                               
the U.S.  Environmental Protection Agency (EPA)  have not stepped                                                               
in and  taken action.   He  said those  agencies could  make this                                                               
problem go away with the stroke of a pen.                                                                                       
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   offered  his  belief  that   the  FDA                                                               
wouldn't have jurisdiction  and said he doesn't  know whether the                                                               
EPA would.   According to what he has read,  the FDA has actually                                                               
approved microbeads.   He related  that he has  seen photographs,                                                               
which he does not believe  were doctored, of microbeads lodged in                                                               
human  gums even  though the  [American Dental  Association] says                                                               
that that  can't be.  He  said the products are  safe when humans                                                               
first  apply the  plastics to  their faces  or brush  their teeth                                                               
with them, but the concern is the food chain and marine health.                                                                 
                                                                                                                                
2:53:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON drew  attention  to the  letters from  the                                                               
American  Chemistry  Council  and   the  Personal  Care  Products                                                               
Council, noting they appear to  be supportive of this legislation                                                               
but want amendments that would align  it with the existing law in                                                               
Illinois.  He asked whether HB 14 is aligned with Illinois.                                                                     
                                                                                                                                
REPRESENTATIVE JOSEPHSON  replied that  the bill is  only aligned                                                               
in the  sense that both bills  are striving for better  human and                                                               
environmental health.   He said the Illinois bill  is an industry                                                               
bill  and  the  industry  is   comfortable  with  that  language.                                                               
Essentially the Illinois bill uses  an allowance for an exemption                                                               
for  a  replacement  kind  of  microbead and  this  goes  to  the                                                               
question  about the  change  made in  the CS.    The change  that                                                               
Illinois adopted is not, in  his opinion, nearly as protective as                                                               
what  he is  suggesting.   He  is suggesting  going  back to  the                                                               
laboratory and using  sea salt or oatmeal or  apricot shells like                                                               
what was  done when he  was growing up.   The Illinois bill  is a                                                               
compromise bill that uses different  kinds of synthetic plastics.                                                               
The Great  Lakes is one of  the worst places for  this phenomenon                                                               
and Illinois  is on Lake  Michigan.   Will the Illinois  bill see                                                               
some improvement?   It might.   He deferred to witnesses  on line                                                               
to answer the question further.                                                                                                 
                                                                                                                                
REPRESENTATIVE  SEATON   understood  microbeads   are  "synthetic                                                               
plastic microbeads"  not "microbeads".   Thus, he  concluded, the                                                               
almond shells, pecan  shells, and such are ground  and fit within                                                               
the use category  that would be allowed and none  of those things                                                               
would be prohibited under the term "microbeads".                                                                                
                                                                                                                                
REPRESENTATIVE JOSEPHSON responded correct.                                                                                     
                                                                                                                                
2:56:50 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO opened public testimony.                                                                                      
                                                                                                                                
2:57:10 PM                                                                                                                    
                                                                                                                                
BOB  KING stated  his  support for  Version  W of  HB  14 to  ban                                                               
microbeads from cosmetics.   For the sake of brevity,  he said he                                                               
associates  himself  with  the comments  made  by  Representative                                                               
Josephson.   He said he has  worked on a variety  of ocean issues                                                               
and  a  variety  of  different  areas  for  the  past  10  years,                                                               
including that  of marine debris,  specifically plastics,  in the                                                               
marine environment.   The potential impact to  marine mammals, to                                                               
fisheries, and  the like is a  very big problem.   Just trying to                                                               
remove  these plastics  from the  oceans is  extremely difficult.                                                               
Therefore, the  best solution is  a simple effective one  such as                                                               
this bill, which  would ban them from getting  into the ecosystem                                                               
to begin with.   He said he agrees with  Representative Hawker in                                                               
regard to potential  national legislation because it  is an issue                                                               
that begs a national fix.  In  one of his previous jobs he worked                                                               
along  those  lines on  draft  legislation,  but the  states  are                                                               
taking the lead  here and a number of states  have already passed                                                               
legislation  similar  to HB  14  that  would move  this  forward.                                                               
Industry has recognized that this  is a problem and is responding                                                               
as well.   It is  appropriate for Alaska  to join in  this, given                                                               
Alaska's leadership on  ocean issues.  He urged  the committee to                                                               
move the bill.                                                                                                                  
                                                                                                                                
2:59:48 PM                                                                                                                    
                                                                                                                                
SEAN  MOORE,   Associate  Director,  State   Government  Affairs,                                                               
Consumer Healthcare Products Association  (CHPA), noted his trade                                                               
association represents  manufacturers and marketers  of over-the-                                                               
counter  medicines  and  dietary   supplements.    He  said  CHPA                                                               
supports the  concept raised in  HB 14,  but opposes the  bill as                                                               
drafted and  would like to  see it  amended to match  similar law                                                               
that  was adopted  last  year  in Illinois.    The CHPA  in-state                                                               
[lobbyist], Mr.  Eldon Mulder,  has provided  proposed amendments                                                               
on the  association's behalf.   He  disagreed with  the sponsor's                                                               
characterization of the Illinois bill  as being an industry bill,                                                               
saying  it was  a compromise  bill negotiated  with environmental                                                               
groups in Illinois.   He related that at the  August 2014 Council                                                               
of  State Governments  meeting, the  Suggested State  Legislation                                                               
Committee  adopted  the  Illinois  law  as  the  suggested  state                                                               
legislation.     He  added  that   CHPA's  member   companies  do                                                               
understand  that  plastic  pollution  in  the  environment  is  a                                                               
serious concern.   Many  manufacturers began  practicably phasing                                                               
out  the  use  of  synthetic  plastic  microbeads  prior  to  the                                                               
introduction  of  any legislation.    There  has been  plenty  of                                                               
legislation  aimed at  microbeads.   Already in  2015, two  dozen                                                               
states  have considered  legislation on  this issue  and more  is                                                               
still  to come.   It  can  be difficult  for companies  marketing                                                               
products  on  a  national  level  to deal  with  a  patchwork  of                                                               
differing  state laws.    For this  reason,  CHPA supports  state                                                               
bills  modeled after  the  Illinois law  to  provide one  uniform                                                               
solution to this issue.   By mirroring the existing Illinois law,                                                               
Alaska  can mandate  microbeads be  phased out  of personal  care                                                               
products   and   over-the-counter    medicines   while   ensuring                                                               
reasonable  effective  dates  and  uniform  definitions  for  key                                                               
terms.   This would closely  align with proposals that  have been                                                               
approved by  the Indiana House  of Representatives,  the Colorado                                                               
House  of Representatives,  and  both houses  of  the New  Jersey                                                               
legislature, all of  which passed bills that  mirror the Illinois                                                               
law.  To this end, CHPA  proposes to amend HB 14 with definitions                                                               
to the  terms plastic and  synthetic plastic microbeads  that are                                                               
identical to the Illinois law,  as well as propose to incorporate                                                               
the  implementation of  timeframes from  Illinois beginning  with                                                               
the ban  on manufacturing personal care  products with microbeads                                                               
after January 1,  2018, and over-the-counter drugs  on January 1,                                                               
2019.   Sales bans  for each product  category would  take effect                                                               
one year  later in 2019  and 2020, respectively.   This timeframe                                                               
is  important   because  it   provides  manufacturers   the  time                                                               
necessary to identify viable  alternatives to plastic microbeads.                                                               
Mr.  Moore urged  the  committee to  amend the  bill  so that  it                                                               
mirrors  the existing  Illinois law  and to  subsequently support                                                               
this common sense approach.                                                                                                     
                                                                                                                                
3:03:05 PM                                                                                                                    
                                                                                                                                
PAMELA   MILLER,  Biologist   and   Executive  Director,   Alaska                                                               
Community  Action   on  Toxics   (ACAT),  supported  HB   14  and                                                               
specifically  Version W,  saying it  is an  important measure  to                                                               
protect Alaska fisheries that depend  on clean and healthy marine                                                               
and freshwater environments.  She  pointed out that her statewide                                                               
organization   is   comprised   of  scientists,   public   health                                                               
professionals, and  community advocates who conduct  research and                                                               
provide   educational   programs,   technical   assistance,   and                                                               
training.  She continued as follows:                                                                                            
                                                                                                                                
     As   noted   in  Representative   Josephson's   sponsor                                                                    
     statement, hundreds  of personal  care products  on the                                                                    
     market  here in  the  U.S.,  including toothpastes  and                                                                    
     scrubs,  contain  these  tiny plastic  microbeads  that                                                                    
     pass  from household  waste streams  through wastewater                                                                    
     systems  and into  rivers,  lakes,  and ultimately  the                                                                    
     marine environment.   These tiny plastic  particles are                                                                    
     now  ubiquitous and  increasing rapidly  in the  ocean.                                                                    
     They  are  extremely  persistent  in  the  cold  marine                                                                    
     environment.  Marine  organisms, including zooplankton,                                                                    
     shellfish,  and fish  cannot distinguish  these plastic                                                                    
     microbeads  from the  food  they  need. Therefore,  the                                                                    
     plastic particles  are taken  into the bodies  of these                                                                    
     animals where  they accumulate,  may prevent  them from                                                                    
     getting the nutrients required  for their survival, and                                                                    
     can lead to physical  internal damage from abrasion and                                                                    
     blockage,  as  well  as  toxicological  harm.    Recent                                                                    
     scientific   investigations   have   demonstrated   the                                                                    
     disturbing  prevalence  of  plastic microbeads  in  the                                                                    
     marine  environment,   including  the   North  Pacific,                                                                    
     Beaufort,  and Chukchi  seas.   A  recent study  showed                                                                    
     that concentrations  of microplastics in the  Arctic at                                                                    
     least  two  orders  of  magnitude  greater  than  those                                                                    
     reported  from  contaminated  waters  of  the  Atlantic                                                                    
     Ocean north  of Scotland and North  Pacific subtropical                                                                    
     gyre.   The  researchers conclude  that Arctic  sea ice                                                                    
     represents  a   major  global  sink   for  microplastic                                                                    
     particles, and  that these particles are  released into                                                                    
     the  marine  environment as  sea  ice  melts.   We  are                                                                    
     especially  concerned  that plastic  microbeads  absorb                                                                    
     and concentrate highly  toxic and persistent chemicals,                                                                    
     including legacy  chemicals that  have been  banned for                                                                    
     many years such as PCBs  and DDT, but as well currently                                                                    
     used chemicals  such as polybrominated  diphenyl ethers                                                                    
     (PBDEs) which are  toxic flame retardants, nonylphenols                                                                    
     which are used in  detergents, and bisphenol-A which is                                                                    
     used  in plastics.   These  accumulate  at much  higher                                                                    
     levels than in surrounding waters.   Due to their large                                                                    
     surface area  to volume ratio, these  microplastics can                                                                    
     become heavily  contaminated and can concentrate  up to                                                                    
     six orders  of magnitude greater than  ambient seawater                                                                    
     with   persistent  bioaccumulative   chemicals.     The                                                                    
     microplastics  that are  ingested  by marine  organisms                                                                    
     therefore pose  a hazard to  human health  because they                                                                    
     could be a significant  route of exposure to endocrine-                                                                    
     disrupting   and  carcinogenic,   or  cancer   causing,                                                                    
     chemicals.   This  is an  especially important  concern                                                                    
     here in Alaska obviously where  we depend on the health                                                                    
     and   safety   of   our  commercial   and   subsistence                                                                    
     fisheries.    I urge  you  to  please  enact HB  14  to                                                                    
     protect   our  fisheries   from   the  insidious   harm                                                                    
     associated with plastic microbeads.                                                                                        
                                                                                                                                
MS.  MILLER,  responding  to  Representative  Seaton,  agreed  to                                                               
provide the committee with a written copy of her testimony.                                                                     
                                                                                                                                
3:07:18 PM                                                                                                                    
                                                                                                                                
STIV WILSON, Director  of Campaigns, The Story  of Stuff Project,                                                               
noted  he  began this  campaign  several  years  ago and  it  was                                                               
originally a market  facing campaign petitioning some  of the big                                                               
producers  like Proctor  & Gamble,  Johnson &  Johnson, The  Body                                                               
Shop, and L'Oreal.  Through a  variety of tactics his project was                                                               
able to get these companies  to agree publically to phase plastic                                                               
microbeads out.  However, they did  not say when they would do it                                                               
or with what.   After further investigation and  seeing about 200                                                               
different  products in  the United  States,  his project  decided                                                               
that a  legislative approach was going  to be the best  course of                                                               
action.  Legislation was introduced  last session in New York and                                                               
California  and  independently   legislation  was  introduced  in                                                               
Illinois.   As the bills in  New York and California  were worked                                                               
through and  some of  industry's definitions  of biodegradability                                                               
were considered,  his project  acknowledged that  large loopholes                                                               
were being  left for so-called biodegradable  plastics that would                                                               
not  biodegrade in  the environment,  as well  as for  other non-                                                               
thermal formed  plastics such  as the  type of  polyester plastic                                                               
used in a cigarette filters.   So, amendments were made to ensure                                                               
that this loophole would be closed.   This was not something that                                                               
the  environmental groups  that worked  on the  bill in  Illinois                                                               
understood as  a loophole and  when his project pointed  that out                                                               
the bill had  already passed.  So, if  those environmental groups                                                               
were to  be asked  now, they  would support  stronger legislation                                                               
like the legislation that Alaska is  considering right now.  On a                                                               
geological timescale,  he explained, everything  is biodegradable                                                               
technically.  His project wants to  ensure that this is done in a                                                               
timely manner.   Even if innovators  do come forward with  a type                                                               
of plastic that will degrade  in the marine environment, there is                                                               
no third party  certification that is applicable to  this.  There                                                               
was  an  American  Society  for   Testing  and  Materials  (ASTM)                                                               
standard in effect  for marine degradability, but  that has since                                                               
been  withdrawn.   His  project  is  therefore looking  for  some                                                               
qualification of what biodegradable is  going to mean and that it                                                               
be  included and,  if included,  then  some sort  of third  party                                                               
oversight  to  ensure  that  these  substitutes  are  safe.    He                                                               
affirmed the comments made in  the previous testimonies regarding                                                               
the  issues with  regard to  persistent organic  pollutant uptake                                                               
and bioavailability to marine organisms.                                                                                        
                                                                                                                                
3:10:56 PM                                                                                                                    
                                                                                                                                
MICHAEL THOMPSON,  Senior Vice  President of  Government Affairs,                                                               
Personal Care  Products Council,  stated he  and Karen  Ross were                                                               
the industry representatives that  really worked on Illinois, New                                                               
York, California,  and others.   He said the committee  has heard                                                               
both  facts and  fiction today.   He  related that  the council's                                                               
members  decided to  get ahead  of this  issue and  have taken  a                                                               
lead,  but there  seems to  be  a backfilling  of folks  creating                                                               
disagreement.   The  concept that  this  is an  industry bill  is                                                               
about  the furthest  thing from  the truth  if anything  is known                                                               
about the state of Illinois or  other states.  That bill was well                                                               
negotiated  over  a  period  of three  months  with  about  15-20                                                               
stakeholders, including  the Illinois attorney  general, Illinois                                                               
Environmental Protection  Agency, and  others.   Defining exactly                                                               
what was  being banned and ensuring  that that was done  was what                                                               
was wanted, and to stay away  from much bigger global issues such                                                               
as  biodegradability,  composting  plastics,  and so  forth.    A                                                               
specific bill was wanted that  banned specific ingredients in the                                                               
products.  This bill passed  unanimously in Illinois and in other                                                               
states, but  it did  not pass  in California or  New York  as was                                                               
earlier alleged  and the council  looks forward to  continuing to                                                               
work on it.   His organization was in Anchorage  last summer when                                                               
the Council  of State  Governments took this  up and  suggested a                                                               
model legislation.   The reason why his organization  was able to                                                               
do this  is because  there is  science, there  is no  evidence on                                                               
either side that supports the  allegations, but industry is doing                                                               
the right  thing.   The concept  brought up  by the  sponsor that                                                               
industry  is going  to  use an  ingredient  biodegradable at  120                                                               
degrees is not  appropriate because it needs  to be biodegradable                                                               
in the product.  This  legislation just simply levels the playing                                                               
field for both domestic and  international companies and what the                                                               
council is looking for is national consistency.                                                                                 
                                                                                                                                
3:13:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  requested  Mr.   Thompson  to  provide  a                                                               
follow-up letter outlining the fiction that was heard today.                                                                    
                                                                                                                                
MR. THOMPSON agreed to do so.                                                                                                   
                                                                                                                                
3:14:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON inquired whether  offering for sale is the                                                               
equivalent of advertising.                                                                                                      
                                                                                                                                
MR.  THOMPSON  replied  the  concept of  offering  for  sale  was                                                               
language put  in by the regulators  in Illinois who did  not want                                                               
the  added  burden of  having  to  conduct  shelf surveys.    The                                                               
regulators told the  council that they probably  could figure out                                                               
exactly who  would violate  the statute, the  type of  store, the                                                               
type of  product, and  where it  was coming  from, and  that they                                                               
would rather find a pallet load  than finding one bottle.  So, it                                                               
was the  regulators' recommendation to  have it offered  for sale                                                               
and it is offered for sale to a retailer.                                                                                       
                                                                                                                                
REPRESENTATIVE JOHNSON  stated that, in his  opinion, advertising                                                               
toothpaste is offering to sell it.                                                                                              
                                                                                                                                
MR. THOMPSON responded yes, it would also ban that.                                                                             
                                                                                                                                
REPRESENTATIVE  JOHNSON  posed a  scenario  in  which a  national                                                               
commercial for Crest,  which has microbeads in it, is  aired on a                                                               
local television station.  He  asked who is responsible given the                                                               
television station  has the license  and is offering to  sell the                                                               
toothpaste even though it is coming from a national advertiser.                                                                 
                                                                                                                                
MR. THOMPSON answered he cannot  speak for that company, but said                                                               
he understands that company has announced it is phasing it out.                                                                 
                                                                                                                                
REPRESENTATIVE  JOHNSON requested  Mr.  Thompson  to ignore  that                                                               
specific company and answer for any company.                                                                                    
                                                                                                                                
MR. THOMPSON  said he will  consult with the  council's attorneys                                                               
about advertising and get back to the committee with an answer.                                                                 
                                                                                                                                
REPRESENTATIVE JOHNSON  remarked he doesn't  want to put  a local                                                               
television or  radio station  or newspaper  in violation  of this                                                               
even though  someone else has  placed the  ad and the  station or                                                               
newspaper are  not responsible  for the  product in  any fashion.                                                               
Therefore, he said, he would like to receive a legal opinion.                                                                   
                                                                                                                                
3:16:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO  closed public testimony after  ascertaining no                                                               
one else wished to testify.                                                                                                     
                                                                                                                                
3:16:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON pointed  out that page 1,  lines 1-2, state                                                               
contains  "plastic   microbeads",  but  the  definition   is  for                                                               
"synthetic plastic microbeads".  He  said he is drawing attention                                                               
to this to ensure that all the same thing is being talked about.                                                                
                                                                                                                                
3:17:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO held over HB 14.                                                                                              
                                                                                                                                
             HB  92-LABEL GENETICALLY MODIFIED FOOD                                                                         
                                                                                                                                
3:17:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO announced  that the final order  of business is                                                               
HOUSE BILL  NO. 92,  "An Act  relating to  the labeling  of food;                                                               
relating to the  misbranding of food; requiring  labeling of food                                                               
produced  with   genetic  engineering;   and  providing   for  an                                                               
effective date."                                                                                                                
                                                                                                                                
REPRESENTATIVE TARR,  sponsor, related that over  the weekend she                                                               
received  105  emails  of  support  for  the  bill  from  Bethel,                                                               
Anchorage, Ketchikan,  Palmer, Fairbanks, Homer,  Kasilof, Sitka,                                                               
Hoonah, Juneau,  Talkeetna, Wasilla,  Nome, False  Pass, Douglas,                                                               
Wrangell, Soldotna,  Kodiak, Haines, Anchor Point,  Sterling, and                                                               
Pelican.   She provided  a brief introduction  of HB  92, stating                                                               
that it requires the labeling  of genetically modified foods sold                                                               
in Alaska.   It is located in  the same section of  statute as HB                                                               
14 and  is considered  a branding  issue.  She  said that  at the                                                               
next  hearing for  HB  92 she  will go  through  the reasons  why                                                               
people have  concerns about these  products, why they  are asking                                                               
for labeling, what is happening in other states and at the                                                                      
federal level, and how this could be accomplished in Alaska.                                                                    
                                                                                                                                
CO-CHAIR TALERICO held over HB 92.                                                                                              
                                                                                                                                
3:19:34 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 3:20 p.m.                                                                 

Document Name Date/Time Subjects
3.9.15 HRES HB 105 Transmittal Letter.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES CSHB 105(ENE), version H.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 CSHB 105(ENE) Explaination of changes version A to version H.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES CSHB 105(ENE) Ver H Sectional Analysis.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 105 Fiscal Note.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 105 Fact Sheet.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES CSHB 105(ENE) FBX North Star Borough R2015-08.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 105 News Story Hilcorp not worried about Pentex Purchase.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 105 Sectional Analysis.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 92 Sponsor Statement.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 92 Fiscal Note.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 92 Sectional Analysis.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 92 GMO Q & A.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 14 Sponsor Statement.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 work draft, version W.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14, version A.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 Fiscal Note.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 Sectional Analysis.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 Graphic Page.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 News Article.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 5 Gyres Institute Position Paper.pdf HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 - Oppose Letter.docx HRES 3/9/2015 1:00:00 PM
HB 14
3.9.15 HRES HB 14 CS Explanation of Changes.docx HRES 3/9/2015 1:00:00 PM
HB 14
HB 105 HRES Fairbanks Chamber LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105
HB 105 HRES - Furie, LLC LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105
HB 105 HRES Fbks Economic Development Corp. LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105
HB 105 HRES Fbks North Star Borough Resolution R2015-08 - LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105
3.9.15 HRES HB 92 D Stevens LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 92
3.9.15 HRES HB 105 - Interior Gas Utility LOS.pdf HRES 3/9/2015 1:00:00 PM
HB 105