Legislature(2017 - 2018)BARNES 124

03/28/2018 01:00 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 5:55 pm --
*+ HB 399 CORP. TAX: REMOVE EXEMPTIONS/CREDITS TELECONFERENCED
Heard & Held
-- Testimony <Invited/Public> --
+ HB 173 CLIMATE CHANGE COMMISSION TELECONFERENCED
Heard & Held
-- Testimony <Invited/Public> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                                +                                                                                             
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 28, 2018                                                                                         
                           1:03 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Andy Josephson, Co-Chair                                                                                         
Representative Geran Tarr, Co-Chair                                                                                             
Representative John Lincoln, Vice Chair                                                                                         
Representative Harriet Drummond                                                                                                 
Representative Justin Parish                                                                                                    
Representative Chris Birch                                                                                                      
Representative DeLena Johnson                                                                                                   
Representative David Talerico                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Chris Tuck (alternate)                                                                                           
Representative George Rauscher                                                                                                  
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 399                                                                                                              
"An Act disallowing a federal tax  credit as a credit against the                                                               
corporate  net income  tax; repealing  a  provision allowing  the                                                               
exclusion of  certain royalties accrued or  received from foreign                                                               
corporations  for  purposes  of  the corporate  net  income  tax;                                                               
repealing the  reduced rate  for the  alternative tax  on capital                                                               
gains  for corporations;  repealing  an exemption  from filing  a                                                               
return  under the  corporate  net income  tax  for a  corporation                                                               
engaged in a  contract under the Alaska  Stranded Gas Development                                                               
Act; and providing for an effective date."                                                                                      
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 173                                                                                                              
"An  Act   establishing  the   Alaska  Climate   Change  Response                                                               
Commission;  relating to  the  powers and  duties  of the  Alaska                                                               
Climate  Change  Response  Commission; establishing  the  climate                                                               
change  response  fund; and  relating  to  the surcharge  on  oil                                                               
produced in the state."                                                                                                         
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 399                                                                                                                  
SHORT TITLE: CORP. TAX: REMOVE EXEMPTIONS/CREDITS                                                                               
SPONSOR(s): FINANCE                                                                                                             
                                                                                                                                
02/23/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/23/18       (H)       RES, FIN                                                                                               
03/28/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 173                                                                                                                  
SHORT TITLE: CLIMATE CHANGE COMMISSION                                                                                          
SPONSOR(s): JOSEPHSON                                                                                                           
                                                                                                                                
03/10/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/10/17       (H)       STA, RES, FIN                                                                                          
04/11/17       (H)       STA AT 5:30 PM BARNES 124                                                                              
04/11/17       (H)       Heard & Held                                                                                           
04/11/17       (H)       MINUTE(STA)                                                                                            
05/04/17       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
05/04/17       (H)       Heard & Held                                                                                           
05/04/17       (H)       MINUTE(STA)                                                                                            
05/09/17       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
05/09/17       (H)       Moved CSHB 173(STA) Out of Committee                                                                   
05/09/17       (H)       MINUTE(STA)                                                                                            
05/10/17       (H)       STA RPT CS(STA) NT 2DP 3DNP 2NR                                                                        
05/10/17       (H)       DP: WOOL, KREISS-TOMKINS                                                                               
05/10/17       (H)       DNP: BIRCH, KNOPP, JOHNSON                                                                             
05/10/17       (H)       NR: TUCK, LEDOUX                                                                                       
05/15/17       (H)       RES AT 1:00 PM BARNES 124                                                                              
05/15/17       (H)       -- MEETING CANCELED --                                                                                 
05/17/17       (H)       RES AT 1:00 PM BARNES 124                                                                              
05/17/17       (H)       -- MEETING CANCELED --                                                                                 
05/31/17       (H)       RES AT 1:00 PM BARNES 124                                                                              
05/31/17       (H)       -- MEETING CANCELED --                                                                                 
03/19/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/19/18       (H)       <Bill Hearing Canceled>                                                                                
03/28/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
BRODIE ANDERSON, Staff                                                                                                          
Representative Neal Foster                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:     Introduced   HB   399   on  behalf   of                                                             
Representative Foster,  co-chair of the House  Finance Committee,                                                               
sponsor.                                                                                                                        
                                                                                                                                
BRANDON SPANOS, Deputy Director                                                                                                 
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Answered questions relevant to HB 399.                                                                  
                                                                                                                                
MICHAEL WILLIAMS, Revenue Audit Supervisor                                                                                      
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered a question relevant to HB 399.                                                                  
                                                                                                                                
JEREMY LITTELL, Research Ecologist                                                                                              
US Geological Survey (USGS)                                                                                                     
Department of Interior Alaska Climate Science Center                                                                            
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   During  the hearing of  HB 173,  provided a                                                             
PowerPoint presentation entitled, "Climate 101 for Alaska."                                                                     
                                                                                                                                
MICHAEL BLACK, Director                                                                                                         
Department of Community Infrastructure Development                                                                              
Division of Environmental Health and Engineering                                                                                
Alaska Native Tribal Health Consortium (ANTHC)                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   During  the hearing of  HB 173,  provided a                                                             
PowerPoint  presentation  entitled,  "Effects and  Adaptation  To                                                               
Climate Changes in Alaska."                                                                                                     
                                                                                                                                
JOEL NEIMEYER, P.E., Federal Co-Chair                                                                                           
Denali Commission                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   During  the hearing of  HB 173,  provided a                                                             
PowerPoint presentation entitled, "Denali Commission."                                                                          
                                                                                                                                
JAY FARMWALD, Director of Programs                                                                                              
Denali Commission                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Addressed a question during  the hearing of                                                             
HB 173.                                                                                                                         
                                                                                                                                
CHRIS ROSE, Executive Director                                                                                                  
Renewable Energy Alaska Project (REAP)                                                                                          
Member, Climate Action for Alaska Leadership Team                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing of HB 173.                                                                  
                                                                                                                                
DAVIN HOLEN, PhD, Coastal Community Resilience Specialist                                                                       
Alaska Sea Grant Marine Advisory Program                                                                                        
Assistant Professor, College of Fisheries and Ocean Sciences                                                                    
University of Alaska Fairbanks (UAF)                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   During  the hearing of  HB 173,  provided a                                                             
PowerPoint   presentation    entitled,   "Climate    Impacts   to                                                               
Subsistence  Economies   &  Community  and   Regional  Adaptation                                                               
Planning."                                                                                                                      
                                                                                                                                
NIKOOSH CARLO, Senior Advisor                                                                                                   
Climate and Arctic Policy                                                                                                       
Office of the Governor                                                                                                          
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:     Provided   a  PowerPoint   presentation                                                             
entitled, "Alaska  Climate Change  Strategy," during  the hearing                                                               
of HB 173.                                                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:03:23 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  ANDY  JOSEPHSON  called the  House  Resources  Standing                                                             
Committee  meeting  to  order  at   1:03  p.m.    Representatives                                                               
Josephson, Tarr,  Birch, Parish,  Talerico, Johnson,  and Lincoln                                                               
were  present at  the  call to  order.   Representative  Drummond                                                               
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
          HB 399-CORP. TAX: REMOVE EXEMPTIONS/CREDITS                                                                       
                                                                                                                                
1:04:59 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON announced  that the  first order  of business                                                               
would be  HOUSE BILL NO. 399,  "An Act disallowing a  federal tax                                                               
credit  as  a  credit  against  the  corporate  net  income  tax;                                                               
repealing  a   provision  allowing   the  exclusion   of  certain                                                               
royalties  accrued  or  received from  foreign  corporations  for                                                               
purposes of the  corporate net income tax;  repealing the reduced                                                               
rate for the  alternative tax on capital  gains for corporations;                                                               
repealing an exemption  from filing a return  under the corporate                                                               
net income tax for a corporation  engaged in a contract under the                                                               
Alaska  Stranded  Gas  Development  Act;  and  providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
1:05:02 PM                                                                                                                    
                                                                                                                                
BRODIE ANDERSON, Staff, Representative  Neal Foster, Alaska State                                                               
Legislature,  introduced  HB  399  on  behalf  of  Representative                                                               
Foster, co-chair  of the  House Finance  Committee, sponsor.   He                                                               
said  HB 399  is  the  culmination of  work  to address  foregone                                                               
revenue and  to provide the State  of Alaska with the  ability to                                                               
potentially capture new  revenue.  To provide a  brief history on                                                               
how  the bill  came  to  be introduced,  he  noted  that in  2014                                                               
legislation  was  passed that  required  both  the Department  of                                                               
Revenue (DOR)  and the Legislative Finance  Division, Legislative                                                               
Agencies   and  Offices,   to  create   a   report  on   indirect                                                               
expenditures and the  amount of foregone revenue  not captured by                                                               
the State of  Alaska.  The first indirect  expenditure report was                                                               
submitted in  2015 [entitled, "2015 Legislative  Finance Indirect                                                               
Expenditure Report"].  This report  identified a list of indirect                                                               
expenditures  within the  Department  of Revenue  that should  be                                                               
terminated.  Last year during  the fiscal year 2018 (FY18) budget                                                               
process  the House  Finance Subcommittee  for  the Department  of                                                               
Revenue reviewed these indirect  expenditures and recommended the                                                               
House Finance  Committee offer legislation that  eliminates these                                                               
indirect expenditures.                                                                                                          
                                                                                                                                
MR. ANDERSON  explained HB 399  would repeal certain  credits and                                                               
exemptions that are recommended for  termination in both the 2015                                                               
indirect  expenditure   report  and   last  year's   FY18  budget                                                               
subcommittee.   He said the  indirect expenditures that  would be                                                               
repealed in [HB]  399 were selected for repeal  for the following                                                               
reasons:   the  indirect  expenditures did  not meet  legislative                                                               
intent, had limited or no  usage, or their conforming purpose has                                                               
changed.   The following indirect expenditures  would be repealed                                                               
by HB  399:  federal  tax credits, foreign royalty  exclusions, a                                                               
reduced rate  for capital gains,  and credit associated  with the                                                               
Alaska Stranded  Gas Development  Act.   According to  the fiscal                                                               
note before  the committee, he  continued, the combined  total of                                                               
the potential new revenue is up to an estimated $6.9 million.                                                                   
                                                                                                                                
1:07:43 PM                                                                                                                    
                                                                                                                                
MR. ANDERSON  provided a sectional analysis  of HB 399.   He said                                                               
Section  1  would  amend  Alaska  Statute  (AS)  43.20.021(a)  by                                                               
amending  the  current  section  with  conforming  language  that                                                               
removes the  list of  federal credits  as eligible  items against                                                               
Alaska corporate income tax liability.                                                                                          
                                                                                                                                
MR. ANDERSON stated Sections 2  and 3 would amend AS 43.20.145(c)                                                               
and (d),  respectively, by amending  those current  sections with                                                               
conforming language  in the  Affiliated Groups  section, removing                                                               
the reference  to the subsection  on foreign royalty  payments as                                                               
eligible for Alaska corporate income tax liability.                                                                             
                                                                                                                                
MR. ANDERSON explained  Section 4 is the repealer  section of the                                                               
bill.  He said this  section would repeal the following statutes:                                                               
AS 43.20.021(c), which  is the reduced rate in  capital gains; AS                                                               
43.20.21(d), which is the eligibility  of federal tax credits for                                                               
Alaska corporate income tax liability;  AS 43.20.036(a), which is                                                               
the  eligibility  of  federal  foreign   tax  credit  for  Alaska                                                               
corporate  income tax  liability; AS  43.20.036(b), which  is the                                                               
eligibility  of federal  investment credit  for Alaska  corporate                                                               
income tax liability;  AS 43.20.042, which is  the eligibility of                                                               
federal  special  industrial   incentive  investment  credit  for                                                               
Alaska corporate income tax  liability; AS.43.20.144(g), which is                                                               
the  exemption for  Alaska corporate  tax liability  for entities                                                               
participating  in contracts  related to  the Alaska  Stranded Gas                                                               
Development Act; AS  43.20.145(g), which is the  Stranded Gas Act                                                               
exclusion; and  AS 43.20.145(b)(3), which is  the foreign royalty                                                               
exclusion.                                                                                                                      
                                                                                                                                
MR. ANDERSON said Section 5  is uncodified law, the applicability                                                               
clauses.   Sections 1, 2, 3,  and portions of 4  would be subject                                                               
to the effective date, which is  Section 6, and which would add a                                                               
new section  making the  effective date  for this  legislation as                                                               
January 1, 2019.                                                                                                                
                                                                                                                                
1:11:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  offered his understanding that  the genesis                                                               
of  HB 399  is the  indirect expenditure  report assessment.   He                                                               
asked what the  net result is of this in  addition to getting rid                                                               
of some  tax credits.  He  further asked why [these  tax credits]                                                               
were had  in the  first place  - for  example, whether  they were                                                               
incentives or inducements for certain  behavior   and whether the                                                               
State of Alaska will lose something by eliminating them.                                                                        
                                                                                                                                
MR. ANDERSON replied that many  of the indirect expenditures were                                                               
created at the time the tax code  was created.  Many of them were                                                               
legislative intent  to create a  specific behavior.   Since their                                                               
creation  they  maybe haven't  lived  up  to the  expectation  of                                                               
inciting that behavior for corporations within Alaska.                                                                          
                                                                                                                                
1:12:49 PM                                                                                                                    
                                                                                                                                
BRANDON SPANOS,  Deputy Director,  Tax Division, DOR,  stated the                                                               
2015 indirect  expenditure report  tried to answer  that specific                                                               
question on  each individual  expenditure.   The report  tried to                                                               
detail  whether the  indirect expenditure  was  meeting what  its                                                               
intent was,  if DOR knew what  the intent was.   He explained the                                                               
federal  tax credits  were  adopted by  reference  and they  were                                                               
given a specific  rate that was similar to the  tax rate prior to                                                               
adopting [the  state's] new  structure in  1970.   So, basically,                                                               
corporations  were already  getting that  and [DOR]  continued to                                                               
adopt it.   He added  he hasn't gone  back and listened  to those                                                               
hearings  and therefore  doesn't  know if  there  were any  other                                                               
specific reasons.                                                                                                               
                                                                                                                                
REPRESENTATIVE  BIRCH   inquired  whether  there  has   been  any                                                               
consultation  with  those  who  would be  impacted  by  this  and                                                               
whether the feedback has been adverse.                                                                                          
                                                                                                                                
MR. ANDERSON  answered that at  this time the only  true outreach                                                               
would be  the creation of  the 2015 Legislative  Finance Indirect                                                               
Expenditure Report  and discussions throughout  policy committees                                                               
and committees  to discuss  whether indirect  expenditures should                                                               
be removed.  Regarding who is  impacted, he said DOR did submit a                                                               
letter.   Particularly in 2016,  he continued,  273 beneficiaries                                                               
for a total of $1.4  million participated in claiming federal tax                                                               
credits against their Alaska corporate income tax liability.                                                                    
                                                                                                                                
1:15:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH observed the  change in revenue anticipated                                                               
for the Alaska Stranded Gas Development  Act is $0.  He requested                                                               
this be spoken to.                                                                                                              
                                                                                                                                
MR.  SPANOS responded  the credits  were sunset  through statute.                                                               
He said  1994 was the  last date  that [companies] could  have an                                                               
expenditure  that would  create  a credit  and [companies]  could                                                               
carry  it forward  no  later  than 1999.    This  is really  just                                                               
cleanup language, he  continued, in that it  would remove credits                                                               
that no longer exist.                                                                                                           
                                                                                                                                
REPRESENTATIVE  PARISH surmised  this part  of the  bill is  what                                                               
falls  under the  House Resources  Standing Committee's  purview.                                                               
Since this  part is just  conforming language, he said,  he would                                                               
just as soon pass the bill on to the House Finance Committee.                                                                   
                                                                                                                                
MR.  ANDERSON replied  that because  of the  Alaska Stranded  Gas                                                               
Development  Act component  in HB  399 he  was not  surprised the                                                               
bill received  a House Resources  Standing Committee  referral to                                                               
answer that portion of the question.                                                                                            
                                                                                                                                
REPRESENTATIVE PARISH noted the  intended purpose of [the foreign                                                               
royalty  exclusion]  was  to   encourage  foreign  investment  in                                                               
Alaska.  However, he said,  this exclusion has had the unintended                                                               
consequence  of  corporations  transferring certain  assets  like                                                               
patents  to overseas  subsidiaries,  paying  royalties for  their                                                               
use,  and  then  excluding  80 percent  of  those  expenses  from                                                               
income.   He asked how  much of the  total fiscal impact  of this                                                               
portion would be captured by closing this troubling loophole.                                                                   
                                                                                                                                
MR. ANDERSON  drew attention to  the fiscal note, page  2, change                                                               
in revenue estimates,  item 2 on foreign royalties,  and said DOR                                                               
states it could be a potential of $1.7 million.                                                                                 
                                                                                                                                
1:18:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH inquired  whether  it is  accurate to  say                                                               
that  that  suggests  the  vast  majority  of  these  monies  are                                                               
foregone  by  the  state   essentially  to  incentivize  domestic                                                               
companies  sending assets  overseas  or giving  them to  overseas                                                               
holding companies and then paying fees for their use.                                                                           
                                                                                                                                
MR. SPANOS responded  they could be legitimate  royalties and not                                                               
necessarily a  transfer of U.S.  assets to gain that  benefit; it                                                               
could be  some other  asset that  was already  overseas.   Is   a                                                               
multi-national  corporation,   he  said,  the   corporation  pays                                                               
royalties to a  foreign subsidiary or a foreign  parent and would                                                               
receive  a  benefit  of  an  exclusion of  80  percent  of  those                                                               
royalties.   It's unusual for a  state to take that  position, he                                                               
added.                                                                                                                          
                                                                                                                                
REPRESENTATIVE PARISH  asked whether it  would be correct  to say                                                               
that it does create a  positive incentive for sending such assets                                                               
overseas.                                                                                                                       
                                                                                                                                
MR. SPANOS answered yes DOR has seen that happen.                                                                               
                                                                                                                                
REPRESENTATIVE BIRCH  thanked Mr.  Spanos and  said he  found the                                                               
information that Mr. Spanos referenced.                                                                                         
                                                                                                                                
1:20:14 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON opened public testimony on HB 399.                                                                           
                                                                                                                                
1:20:25 PM                                                                                                                    
                                                                                                                                
MICHAEL  WILLIAMS,   Revenue  Audit  Supervisor,   Tax  Division,                                                               
Department  of   Revenue  (DOR),  at  the   request  of  Co-Chair                                                               
Josephson described his position at  DOR.  He said he specializes                                                               
in  corporate  income tax,  so  he  is  the principle  party  for                                                               
enforcement of these  statutes as they currently  exist and would                                                               
be the principle  party for enforcement of  these statutes should                                                               
they change.                                                                                                                    
                                                                                                                                
1:21:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON closed public  testimony after ascertaining no                                                               
one wished to testify.                                                                                                          
                                                                                                                                
CO-CHAIR JOSEPHSON held over HB 399.                                                                                            
                                                                                                                                
                HB 173-CLIMATE CHANGE COMMISSION                                                                            
                                                                                                                                
1:22:10 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON announced  that  the next  order of  business                                                               
would be  CS FOR  HOUSE BILL NO.  173(STA), "An  Act establishing                                                               
the Alaska  Climate Change Response  Commission; and  relating to                                                               
the  powers and  duties  of the  Alaska  Climate Change  Response                                                               
Commission."                                                                                                                    
                                                                                                                                
1:22:19 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
1:23:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON,  speaking as the prime  sponsor, explained it                                                               
is not his intent to advance HB  173, but he wants to talk to the                                                               
committee about the  legislation.  The bill  before the committee                                                               
is  a version  from the  House State  Affairs Standing  Committee                                                               
although he has prepared a  [proposed] committee substitute (CS),                                                               
Version M.   The reason he is disinclined to  advance the bill is                                                               
that in  October 2017, Governor  Walker created a  climate change                                                               
panel and he doesn't want to  compete with that panel or distract                                                               
from  that panel's  good work.   In  reviewing HB  173, including                                                               
Version M,  there are some  things he would  like to talk  to the                                                               
administration  about  that are  somewhat  different.   They  are                                                               
different  on  the  margins.    The  administration  had  several                                                               
hundred thousand dollars to operate its climate action team.                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON  explained Version  M,  would  add a  1  cent                                                               
conservation  surcharge   to  the   existing  surcharge   in  the                                                               
prevention account,  increasing that account  to a full  5 cents.                                                               
There  is  an  additional  1 cent  [surcharge]  in  the  response                                                               
account.  The thinking behind  the legislation was that a climate                                                               
change  commission  needed some  source  of  funding to  have  an                                                               
office,  and  to   establish  itself,  and  to   use  seed  money                                                               
effectively  to  then  try  to  obtain  other  grants  and  other                                                               
additional funding.                                                                                                             
                                                                                                                                
CO-CHAIR  JOSEPHSON  stated that  in  addition  to the  financing                                                               
difference  the other  principle difference  with the  governor's                                                               
team is the makeup.   Version M of HB 173  would include a number                                                               
of  the  governor's  cabinet  and  that can  be  true  under  the                                                               
governor's plan  as well.   So, there are  stylistic differences.                                                               
He said he  wants to use Version  M merely as a  talking point on                                                               
the  margins  to talk  about  how  this legislation  is  somewhat                                                               
different than  what the governor  has conceived.  He  would like                                                               
to  adopt Version  M  as the  working  document to  use  it as  a                                                               
talking point but not to move it forward.                                                                                       
                                                                                                                                
1:26:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR  moved to adopt  the proposed  committee substitute                                                               
(CS),  Version  30-LS0163\M,  Radford, 3/16/18,  as  the  working                                                               
document.                                                                                                                       
                                                                                                                                
1:26:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH objected.                                                                                                  
                                                                                                                                
CO-CHAIR JOSEPHSON  noted the State Affairs  version would create                                                               
a commission without  any funding source.  Version M  would add a                                                               
funding source.   Another significant  difference is that  at the                                                               
end of Version  M, pages 8-9, there is  transition language which                                                               
references  the wish  of  the bill  that in  the  event that  the                                                               
governor's team was dissolved, primarily,  for example, he didn't                                                               
wish  it to  continue or  he was  no longer  governor, this  bill                                                               
would come  into effect.   So, it is  designed to keep  a climate                                                               
change  panel  moving forward  in  the  absence of  a  governor's                                                               
climate change strategy or [Climate  Action for Alaska Leadership                                                               
Team].                                                                                                                          
                                                                                                                                
1:27:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON opened invited testimony related to HB 173.                                                                  
                                                                                                                                
REPRESENTATIVE BIRCH  stated this  is wrongheaded.   He  said the                                                               
billion-dollar issue on  oil tax credits keeps  being kicked down                                                               
the road.   This climate change bill would add  another penny per                                                               
barrel of oil,  which is basically another tax,  and the co-chair                                                               
has  said  he  doesn't  intend  to   act  on  this.    Given  the                                                               
committee's  time is  finite,  he urged  the  committee focus  on                                                               
something it intends to act on.                                                                                                 
                                                                                                                                
CO-CHAIR JOSEPHSON  responded that the bill  Representative Birch                                                               
wishes  to hear  is going  to be  heard in  48 hours.   While  he                                                               
doesn't intend to  advance his bill, he  continued, the committee                                                               
is  about to  hear experts  testify  on climate  change and  many                                                               
Alaskans do intend to act on the climate change problem.                                                                        
                                                                                                                                
REPRESENTATIVE JOHNSON  inquired whether  the committee  is going                                                               
to vote on the objection.                                                                                                       
                                                                                                                                
1:29:55 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
REPRESENTATIVE  DRUMMOND  reminded  committee  members  that  the                                                               
village  of Newtok  just  received $1  million  from the  federal                                                               
government  to move  the  village.   The  federal government  has                                                               
accepted that  climate change  is real  and is  impacting Alaskan                                                               
communities, she said.   It is important to  adopt the [proposed]                                                               
CS and get on with it.                                                                                                          
                                                                                                                                
1:30:51 PM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representatives  Drummond, Parish,                                                               
Lincoln,  Tarr, and  Josephson  voted in  favor  of adopting  the                                                               
proposed committee  substitute for  HB 173,  Version 30-LS0163\M,                                                               
Radford,  3/16/18,  as  the working  document.    Representatives                                                               
Birch,  Johnson,  and  Talerico  voted against  it.    Therefore,                                                               
Version M was before the committee by a vote of 5-3.                                                                            
                                                                                                                                
1:31:53 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON said committee members  would use Version M to                                                               
the extent that members wish as a talking point with testifiers.                                                                
                                                                                                                                
REPRESENTATIVE JOHNSON  noted she is  on the House  State Affairs                                                               
Standing Committee which heard the  bill's previous version.  She                                                               
asked  whether the  funding provision  of Version  M is  the only                                                               
difference between the two versions.                                                                                            
                                                                                                                                
CO-CHAIR JOSEPHSON confirmed that is  one difference and said the                                                               
other is the transitional language in Version M on pages 8-9.                                                                   
                                                                                                                                
REPRESENTATIVE TALERICO  offered his understanding that  what the                                                               
governor put together  was done via administrative  order (AO) in                                                               
October [2017].                                                                                                                 
                                                                                                                                
CO-CHAIR  JOSEPHSON answered  correct.   It is  AO 289  signed on                                                               
October 31, 2017.  He began the invited testimony.                                                                              
                                                                                                                                
1:33:15 PM                                                                                                                    
                                                                                                                                
JEREMY LITTELL, Research Ecologist,  US Geological Survey (USGS),                                                               
Department of Interior Alaska Climate  Science Center, provided a                                                               
PowerPoint presentation  entitled, "Climate 101 for  Alaska."  It                                                               
is   the  role   of  USGS   to  provide   scientific  information                                                               
underpinning  climate change  and make  climate information  more                                                               
available to  those who might  use it.  He  said he was  asked to                                                               
provide the  committee with a  brief overview of  current climate                                                               
                                     st                                                                                         
change and expected changes in the 21 Century.                                                                                  
                                                                                                                                
MR.  LITTELL moved  to  slide 2  and said  there  are three  main                                                               
messages  to take  away.   First, weather  observations/data over                                                               
the past 40-plus years show  that Alaska has already warmed about                                                               
two  and a  half  times faster  than the  average  for the  whole                                                               
planet   roughly 7.5 degrees  Fahrenheit (F) per century over the                                                               
last 45 years in contrast to about  3 degrees F for the planet as                                                               
a whole.   So, the rate of  warming in the high  latitudes and in                                                               
the far north  is greater than that  in the rest of  the U.S. and                                                               
the rest  of the planet.   Second, by  the late 2080s  the annual                                                               
average temperature  in the state  is projected to increase  by 7                                                               
degrees F  in Southeast Alaska and  by 14 degrees F  on the North                                                               
Slope.   Third,  precipitation  is likely  to  increase over  the                                                               
entire state  and in  all seasons, but  those increases  won't be                                                               
sufficient  to offset  the  temperature  increases, resulting  in                                                               
much increased  permafrost thaw, shorter snow  season, and longer                                                               
fire seasons.                                                                                                                   
                                                                                                                                
1:35:41 PM                                                                                                                    
                                                                                                                                
MR.  LITTELL,  responding  to Co-Chair  Josephson,  provided  his                                                               
background.   He said his  background and training is  in climate                                                               
science and  the way that climate  impacts terrestrial ecosystems                                                               
like forests  and other  vegetation.   He has  spent the  last 15                                                               
years working on problems of  climate impacts, usually those that                                                               
are relevant  to some  set of  stakeholders, for  example climate                                                               
effects  on forests  and  working with  the  U.S. Forest  Service                                                               
(USFS) to better understand what  that might look like or species                                                               
of concern  to the U.S.  Fish and  Wildlife Service (USFWS).   He                                                               
deals with a lot of climate  data and spends lots of time working                                                               
with climate projections and how to make them more robust.                                                                      
                                                                                                                                
MR. LITTELL  addressed slide 3  depicting a temperature  graph by                                                               
Rick Thoman of  the National Weather Service.  He  said the graph                                                               
includes the station  data over the entire state of  Alaska.  The                                                               
graph shows the  changes in temperature from  1925-2016, the most                                                               
recent  completed year  for  which the  data  has been  verified.                                                               
Each black  dot on the  graph, he explained, represents  a year                                                                 
average annual temperature  for the state as a whole.   From 1925                                                               
to the  mid-1970s there is  a considerable amount  of variability                                                               
year to  year, which is also  the case going forward  from there.                                                               
The red  line on the  graph, he further explained,  indicates the                                                               
trend that is statistically detectable  during that period.  From                                                               
1925-1976 there is no statistically  significant trend, but after                                                               
the  mid-1970s  the trend  becomes  increasingly  evident and  is                                                               
statistically significant  for any period  of time for  which the                                                               
data  justify that  analysis.    The rate  of  change is  roughly                                                               
seven-tenths of a degree F  per decade since the mid-1970s, which                                                               
is  twice  the  global  average.   He  noted  the  graph  depicts                                                               
observations,  not  modeled data.    It  is  an aggregate  or  an                                                               
average  over all  of the  stations in  the state  for which  the                                                               
quality control procedures have justified the work.                                                                             
                                                                                                                                
1:38:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO  pointed out  that today's  technology is                                                               
different than that  of 1925.  He therefore asked  whether all of                                                               
the measurements are  taken from consistent points  over the time                                                               
frame of 1925-2016.                                                                                                             
                                                                                                                                
MR. LITTELL replied the number  of stations increased in the late                                                               
1940s  to early  1950s and  there were  decreases later  as older                                                               
stations were decommissioned.  But,  for the most part, over this                                                               
period of record, this analysis  relies on the subset of stations                                                               
that have the best record.  There  are more of them in the latter                                                               
period and there are differences  in the instrumentation that has                                                               
been used over time, so the  technology used to measure these has                                                               
changed.  The  U.S. historic climate network from which  a lot of                                                               
these  stations  are  taken  goes   through  quite  a  controlled                                                               
process.  For  example, sometimes stations in the  past would get                                                               
moved and  that is only detected  if someone wrote down  that the                                                               
station  was moved  or increasingly  now it  is detected  more by                                                               
looking  at  comparisons  to  other   stations.    Most  of  this                                                               
information is consistent  to the time period,  but more stations                                                               
did come on line in the middle of the century.                                                                                  
                                                                                                                                
1:40:47 PM                                                                                                                    
                                                                                                                                
MR. LITTELL  turned to slide 4  and stated there are  other lines                                                               
of evidence in Alaska, we don't  have to rely just on temperature                                                               
to understand that things are changing  around us.  It is evident                                                               
that  glacier area  and volume  are  decreasing, particularly  in                                                               
Southeast and  Southcentral Alaska,  but also  in the  far north.                                                               
Sea ice extent seasonally is  decreasing, with this year being an                                                               
example of that in Western Alaska  in the Bering Sea.  Permafrost                                                               
is thawing, and  the seasonal active layer is deeper.   Fire area                                                               
burned  is also  increasing.   All of  these have  robust science                                                               
underpinning  them  and have  been  concluded  repeatedly in  the                                                               
published  literature.   He further  stated that  the global  and                                                               
                       th                                                                                                       
regional  historical 20   Century  temperature  record cannot  be                                                               
explained  without  considering  both human  drivers,  (primarily                                                               
increases  in greenhouse  gasses in  the atmosphere)  and natural                                                               
variability.    These  impacts   can  therefore  be  expected  to                                                               
continue as  greenhouse gas  concentration continues  to increase                                                               
in the atmosphere.                                                                                                              
                                                                                                                                
MR.  LITTELL  brought attention  to  slide  5,  a map  of  Alaska                                                               
showing the  rate of temperature  change for each of  the state's                                                               
climate divisions from 1970-1999  relative to the global average.                                                               
For example, the  North Slope rate of change is  2.6, which means                                                               
this area  is warming  at 2.6  times the  global average  for the                                                               
period 1970-2016.  In Southeast,  Southcentral, and the Aleutians                                                               
the rates of  change are slower.  The Interior  rate of change is                                                               
in between.  But  averaged over the state it is  over 2 degrees F                                                               
change relative  to the global  average.   The rate of  change is                                                               
much faster  in Northwestern  and Northern Alaska  than it  is in                                                               
Southcentral and Southeast.                                                                                                     
                                                                                                                                
1:43:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LINCOLN asked  why the  Arctic is  warming faster                                                               
than the rest of the globe.                                                                                                     
                                                                                                                                
MR. LITTELL  replied there are  two main reasons and  many little                                                               
reasons, but to answer the question  he will address only the two                                                               
main reasons.   The  first main reason  is that  going northward,                                                               
the length of the snow cover season  is longer.  As snow cover is                                                               
decreased the rate  of heat transfer to the  ground is increased.                                                               
Snow  reflects light  in the  visible spectrum  so there  is less                                                               
surface warming.   Without  snow it  is darker  so there  is more                                                               
absorption of  heat and it  warms faster than would  otherwise be                                                               
expected.  The second main reason  is that with the mechanisms of                                                               
climate  change  and  how  they  influence  the  planet  and  the                                                               
atmosphere as a  whole, there is a greater rate  of heat transfer                                                               
from the  equator to the poles.   Energy is basically  moved more                                                               
efficiently from  the equator  to the poles,  which results  in a                                                               
faster rate  of change at the  high latitudes than at  low or mid                                                               
latitudes.                                                                                                                      
                                                                                                                                
1:44:52 PM                                                                                                                    
                                                                                                                                
MR.  LITTELL displayed  slide  6,  a map  of  Alaska showing  the                                                               
expected change  in annual average  temperature in F for  each of                                                               
the  state's  climate  divisions   for  the  years  2070-2099  as                                                               
compared to the years 1970-1999.   These numbers are lower in the                                                               
lower latitudes and higher in  the higher latitudes.  An increase                                                               
                                                                st                                                              
of 14 degrees F [in Northern Alaska] is expected  by the late 21                                                                
Century.  This is from  five different global climate models that                                                               
have  been shown  to perform  well  over the  Arctic and  Alaska.                                                               
This is  work on  projections has been  done in  conjunction with                                                               
partners  at  the University  of  Alaska  Fairbanks (UAF).    The                                                               
changes for  all of  Alaska's climate  divisions are  quite large                                                               
relative to the historical averages.                                                                                            
                                                                                                                                
MR. LITTELL moved  to slide 7 and discussed  the percent increase                                                               
in precipitation  that is expected  for the years 2070-2099.   He                                                               
noted  that the  darker  the  blue on  the  map,  the larger  the                                                               
expected percent increase in precipitation.   He pointed out that                                                               
there is a  larger percent increase in  precipitation is expected                                                               
in  Northern  and  Interior  Alaska  than  in  Southcentral,  the                                                               
Aleutians, or  Southeast.  With  a warming climate in  Alaska the                                                               
precipitation increases are projected  in all seasons on average.                                                               
The  increase in  summer is  not enough  to offset  the increased                                                               
evaporation that  is driven  by the  temperature increases.   So,                                                               
for  example, despite  the increase  in  precipitation the  fuels                                                               
available to  fires will  likely not be  any less  available than                                                               
they are  now, and  evidence indicates they  will likely  be more                                                               
available.                                                                                                                      
                                                                                                                                
MR.  LITTELL displayed  slide 8,  a map  of Alaska  depicting the                                                               
[expected] changes in  April 1 snowpack for  the years 2070-2099.                                                               
He explained the colors on  the map represent decreases (reds) or                                                               
increases (blues)  in the April 1  snowpack as a function  of the                                                               
temperature  and precipitation  that  occur  between October  and                                                               
March.   A  pronounced  decrease  in the  snow  cover season  [is                                                               
expected], he noted,  even as snow cover in the  middle of spring                                                               
is increasing.  In some of  the highest parts of the Arctic, [the                                                               
expectation is for]  a longer snow-free season and  more snow due                                                               
to  the increased  precipitation.   However,  he continued,  [the                                                               
expectation for]  Southeast, Southcentral, and Western  Alaska is                                                               
for substantial  decreases [in the  snowpack]   from as  small as                                                               
10-20  percent to  as great  as  60-80 percent  in Southeast  and                                                               
Southcentral coastal areas.                                                                                                     
                                                                                                                                
1:47:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND  inquired  about the  meaning  of  "PAS                                                                
above the color key on slide 8.                                                                                                 
                                                                                                                                
MR. LITTELL  responded "PAS" stands for  "precipitation as snow,                                                                
which is a percentage of the  fraction of water that comes out of                                                               
the sky as snow.  This depicts  [the change] in PAS as a percent,                                                               
he explained.  A 100 percent  decline in PAS means it all becomes                                                               
rain; a 60 percent increase in  PAS is assumed to be available in                                                               
snowpack in April.  No accounting  is made for melting, he noted,                                                               
it is just the maximum potential snowpack.                                                                                      
                                                                                                                                
REPRESENTATIVE  PARISH drew  attention to  slide 3  depicting the                                                               
increase  in Alaska  temperature and  asked what  the probability                                                               
value (p-value) is that this trend is chance.                                                                                   
                                                                                                                                
MR. LITTELL answered there are  two different probabilities - one                                                               
for the flat red line and the  other for the rising red line that                                                               
starts in  1976.  He  said the flat  line indicates a  very small                                                               
probability  that  it is  anything  other  than  a flat  line;  a                                                               
statistically significant  trend cannot  be fit through  that, so                                                               
it is flat.  For the  rising red line, he stated, the probability                                                               
is less than 5 percent that it is not a positive trend.                                                                         
                                                                                                                                
REPRESENTATIVE PARISH  noted villages in Alaska  are falling into                                                               
the ocean  and Alaska is losing  a great deal of  coastline every                                                               
year.  He inquired what the  likelihood is that will increase and                                                               
whether the trend will move north.                                                                                              
                                                                                                                                
MR. LITTELL replied that the rate  of thaw on the coastal margins                                                               
of  Alaska,  and  particularly Western  Alaska  and  Northwestern                                                               
Alaska,  would   very  likely  continue  under   these  projected                                                               
scenarios.   As  coastal areas  that previously  had very  little                                                               
thaw  experience  increased  temperatures and  increased  seasons                                                               
during which they  can thaw, that can be expected  to increase as                                                               
well so it would move up the coast.                                                                                             
                                                                                                                                
1:51:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH asked  how  far north  Mr. Littell  thinks                                                               
that that will extend by 2070.                                                                                                  
                                                                                                                                
MR.  LITTELL responded  he is  not  an expert  in permafrost  and                                                               
coastal erosion and would have to  get back to the committee with                                                               
an answer.                                                                                                                      
                                                                                                                                
REPRESENTATIVE PARISH [said that wasn't necessary.]                                                                             
                                                                                                                                
1:52:58 PM                                                                                                                    
                                                                                                                                
MICHAEL BLACK,  Director, Department of  Community Infrastructure                                                               
Development,  Division of  Environmental Health  and Engineering,                                                               
Alaska Native  Tribal Health Consortium  (ANTHC), said  ANTHC has                                                               
been  looking at  climate change  as it  relates to  communities,                                                               
community  health,  and  community infrastructure,  and  in  this                                                               
presentation,   he   will   discuss  the   highlights   of   that                                                               
involvement.                                                                                                                    
                                                                                                                                
MR. BLACK  turned to slide  4 and said  ANTHC is first  trying to                                                               
increase its  ability to  observe the changes  that are  going on                                                               
and the consortium has seen those  that have been mentioned.  The                                                               
consortium is attempting to respond  to those changes because its                                                               
interest is the health of  rural residents, in particular, and of                                                               
Alaska Natives, and the changing  of the environment is impacting                                                               
them.   He said the consortium  is also concerned because  it has                                                               
built  infrastructure  to  support communities,  such  as  health                                                               
clinics,  water  and  sewer  principally,   and  other  types  of                                                               
infrastructure to improve the public  health, and those are being                                                               
impacted as  well.   The consortium  hopes to  adapt some  of its                                                               
designs and construction techniques  to improve the resiliency of                                                               
that infrastructure.                                                                                                            
                                                                                                                                
MR. BLACK moved  to slide 5 and stated ANTHC  is aware things are                                                               
changing in Alaska.   As seen by [the pictures]  on the slide, he                                                               
continued, these  changes include  increased numbers of  fires in                                                               
the  Interior;  permafrost  melt,  which  is  impacting  lots  of                                                               
different infrastructure  and increasing erosion rates  along the                                                               
western coast; flooding;  and a general change  in vegetation and                                                               
in the nature of the natural world.                                                                                             
                                                                                                                                
MR. BLACK  displayed slide  6 and said  ANTHC's first  action was                                                               
taken  in 2009  when it  established the  Center for  Climate and                                                               
Health.   The  center's  purpose is  to  observe the  connections                                                               
between  climate  changes,  food  security,  disease,  behavioral                                                               
health,  injuries, and  water security  in rural  Alaska, all  of                                                               
which impact public health.                                                                                                     
                                                                                                                                
MR. BLACK  addressed slide 7, noting  that over just a  few years                                                               
the  Center for  Climate and  Health has  identified a  number of                                                               
changes and impacts on individual  Alaskans and households as the                                                               
climate warms,  especially in certain  regions of the state.   He                                                               
said the changes greatly involve  the subsistence foods that most                                                               
individual households within communities  depend on.  Changes and                                                               
impacts  also  include  contagious diseases,  respiratory  health                                                               
issues, food safety, infrastructure, and allergies.                                                                             
                                                                                                                                
1:58:05 PM                                                                                                                    
                                                                                                                                
MR. BLACK turned to slide 8  and related that ANTHC has created a                                                               
local  environmental observer  (LEO)  network  to better  observe                                                               
those changes.  A computer  network allows individuals at various                                                               
locations around  the state to  report observations of  what they                                                               
believe  to be  anomalies, something  out  of the  usual.   These                                                               
observations  are put  together to  try to  take a  comprehensive                                                               
look at how Alaska is changing.                                                                                                 
                                                                                                                                
MR. BLACK moved  to slide 9 and stated that  the photograph is of                                                               
a  massive  thermokarst  along the  Selawik  River  in  Northwest                                                               
Alaska and  is an example  of what is being  seen.  He  said this                                                               
thermokarst  resulted  when  the  ice failed  to  bind  the  soil                                                               
together and  when it warmed to  a critical point a  mass of soil                                                               
was released that ended up in  the river.  Thermokarsts are being                                                               
seen all  across Northwestern  Alaska, he  added, not  just along                                                               
the Selawik  River.   This impacts health  in large  part because                                                               
people depend upon surface waters  for a source of drinking water                                                               
as  well  as  for  navigation,  he explained.    It  is  becoming                                                               
increasingly difficult  to get barges up  rivers and consequently                                                               
trade costs are increasing because of  having to rely on more air                                                               
transport of freight material and food items.                                                                                   
                                                                                                                                
MR. BLACK  displayed slide  10 and pointed  out that  changes are                                                               
also being seen within the environment  of houses.  To save money                                                               
homeowners have tightened up their  houses [which keeps] airborne                                                               
particulates  and  other  pollutants   in  the  house,  which  is                                                               
exacerbated by  bad stoves.   He allowed  this cannot be  tied to                                                               
climate change  because a warming environment  would suggest that                                                               
not as much  heat is needed.  However, he  said, all these houses                                                               
are  being impacted  by melting  of the  permafrost.   Houses are                                                               
starting to tilt,  cock, and in some cases  lose their integrity.                                                               
Showing slide 11, he noted that  a typical connection for a water                                                               
and sewer  system is through  an arctic  box that is  attached to                                                               
the home.  Because of  differential settling from the permafrost,                                                               
the  pipes  are  pulling  away  from  the  buildings  themselves,                                                               
ripping open the insulation and allowing the pipes to freeze.                                                                   
                                                                                                                                
MR.  BLACK  turned to  slide  12  and  described the  impacts  to                                                               
structural health, such  as the tilting of water tanks.   In some                                                               
cases, he said,  thermosiphons have been installed  in an attempt                                                               
to keep  the ground  frozen, one  example being  the Trans-Alaska                                                               
Pipeline  System  (TAPS).   However,  the  thermosiphons are  not                                                               
performing as well  as they were originally  designed to perform,                                                               
and  failures  are  being  seen  in  foundations,  he  continued.                                                               
Displaying slide 13, he stated  that the broken [foundation] slab                                                               
is at the  Noorvik water plant and that the  pipes themselves are                                                               
being stressed because of the  tilting of the foundation.  Moving                                                               
to  slide 14,  he  said the  destruction is  in  Kotlik where  an                                                               
October  storm   washed  partially   formed  sea  ice   into  the                                                               
community,  which   devastated  the  water  and   sewer  systems.                                                               
Normally the sea ice would have been [fully] formed.                                                                            
                                                                                                                                
2:01:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND inquired whether  the picture on slide 14                                                               
of damage  in Kotlik  includes a broken  utilidor, which  has the                                                               
utility lines running through it.                                                                                               
                                                                                                                                
MR. BLACK  confirmed the [broken] metal  box in the picture  is a                                                               
utilidor that carries  water and sewer lines.   He explained that                                                               
when the  ice intercepted the  utilidor it bulldozed it  into the                                                               
community and tore apart all the piping.                                                                                        
                                                                                                                                
MR. BLACK  resumed his presentation.   He  moved to slide  15 and                                                               
said infrastructure  must be adapted to  the changing environment                                                               
or it will need to be  replaced more frequently, so adaptation is                                                               
ANTHC's  main concern.   Extending  the life  of water  and sewer                                                               
infrastructure will save  billions of dollars, he  continued.  He                                                               
displayed  slide   16  and  explained  the   drawing  depicts  an                                                               
adaptation engineered  and developed by  ANTHC - a  flexible pipe                                                               
that attaches  to the  home.   Turning to slide  17, he  said the                                                               
picture shows  this flexible  pipe as  it attaches  to a  home in                                                               
Savoonga.   The blue  portion of the  pipe is  flexible, allowing                                                               
the  pipe to  move, within  limits, independently  of the  house.                                                               
This is  one way to  avoid the damage  seen in the  Kotlik arctic                                                               
box picture, he added.  This  is being done increasingly in areas                                                               
where  it is  known that  permafrost is  going to  be an  issue -                                                               
Yukon-Kuskokwim (YK) Delta, Norton Sound, and Northwest Alaska.                                                                 
                                                                                                                                
2:03:24 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON asked where this flexible pipe was found.                                                                    
                                                                                                                                
MR. BLACK answered  that ANTHC itself engineered this  by using a                                                               
plastic form of pipe as opposed to  rigid metal.  It allows for a                                                               
limited amount of flexibility and  has performed much better than                                                               
ductile iron pipe, also known as  arctic pipe, which has no flex.                                                               
The plastic  pipe also  allows the  house to  be approached  in a                                                               
different  way as  opposed to  perpendicular into  the wall.   As                                                               
seen [on slide  17], he continued, the pipe runs  parallel to the                                                               
house, which increases its ability to move with the house.                                                                      
                                                                                                                                
MR. BLACK  returned to  his presentation.   He drew  attention to                                                               
slide  18 depicting  another adaptation  that ANTHC  is currently                                                               
engineering.   He  said solar  energy, the  enemy of  permafrost,                                                               
would be used as an electric source  to run a chiller to keep the                                                               
ground below  a water  plant frozen.   This  has never  been done                                                               
before but ANTHC  is hoping to build this within  the next couple                                                               
years.   If this can be  done, it would save  many buildings that                                                               
will  fail  because of  permafrost  warming  to the  point  where                                                               
foundations are lost.                                                                                                           
                                                                                                                                
2:05:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LINCOLN inquired  whether current structures could                                                               
be modified with this or whether  the structures would have to be                                                               
constructed new.                                                                                                                
                                                                                                                                
MR. BLACK replied it is  designed to use existing thermopiles and                                                               
modify them  simply by using  the refrigeration from  the chiller                                                               
to cool glycol  lines that are wrapped  around those thermopiles.                                                               
Adding more cold into the  glycol going below the building allows                                                               
for refreezing  of the ground as  opposed to letting it  warm up.                                                               
This modification, he  noted, will be much  cheaper than complete                                                               
re-building.                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  surmised the thermopiles are  labeled as                                                               
thermosiphons on slide 18.                                                                                                      
                                                                                                                                
MR. BLACK responded yes.                                                                                                        
                                                                                                                                
REPRESENTATIVE DRUMMOND further surmised they already exist.                                                                    
                                                                                                                                
MR. BLACK answered correct.                                                                                                     
                                                                                                                                
REPRESENTATIVE DRUMMOND offered her  understanding that Mr. Black                                                               
is  saying they  would be  powered by  the solar  energy that  is                                                               
available in a community.                                                                                                       
                                                                                                                                
MR. BLACK replied yes.  By  using active chilling and by wrapping                                                               
the  thermosiphons with  a refrigerant  tube, he  explained, more                                                               
cold can be induced into the ground.                                                                                            
                                                                                                                                
REPRESENTATIVE  DRUMMOND  returned to  slide  17  and asked  what                                                               
utilities are running inside that pipe.                                                                                         
                                                                                                                                
MR. BLACK  responded it is a  water line only.   He explained the                                                               
pipe size looks  big, but that this is because  of the insulation                                                               
and it is called an arctic pipe.                                                                                                
                                                                                                                                
REPRESENTATIVE DRUMMOND observed that  in addition to flexing the                                                               
blue section  of the pipe  looks like it  can expand.   She asked                                                               
whether it can also lengthen.                                                                                                   
                                                                                                                                
MR. BLACK confirmed the blue section  can expand as well as flex.                                                               
As to whether it can lengthen,  he said it will naturally [change                                                               
length] with warming and cooling and is designed to do that.                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND surmised the  inside pipe is much smaller                                                               
than the outside pipe so there  is space for it to flex, stretch,                                                               
and shrink as well.                                                                                                             
                                                                                                                                
MR. BLACK answered correct.                                                                                                     
                                                                                                                                
CO-CHAIR JOSEPHSON  inquired whether  this is  being done  by Mr.                                                               
Black or by a team of engineers.                                                                                                
                                                                                                                                
MR. BLACK  replied ANTHC has a  team of engineers.   The chief of                                                               
engineering is  responsible for research and  development so that                                                               
ANTHC  is  innovating  its   engineering  techniques  instead  of                                                               
remaining with  how things have been  done for the last  30 or 40                                                               
years.    He  said  ANTHC   realizes  that  under  this  changing                                                               
environment  it  has  to rethink,  redesign,  and  use  different                                                               
materials in order to keep these systems functioning.                                                                           
                                                                                                                                
2:08:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON  asked whether there are  patent opportunities                                                               
for ANTHC.                                                                                                                      
                                                                                                                                
MR. BLACK responded yes.                                                                                                        
                                                                                                                                
CO-CHAIR JOSEPHSON further asked  whether ANTHC is pursuing these                                                               
patent opportunities.                                                                                                           
                                                                                                                                
MR. BLACK  answered yes, in  various cases, with this  case being                                                               
one case in which ANTHC is pursuing patents on that technology.                                                                 
                                                                                                                                
CO-CHAIR JOSEPHSON surmised that is an industry of sorts.                                                                       
                                                                                                                                
MR.  BLACK replied  ANTHC has  used patents  in the  past, mainly                                                               
with  the  innovations  in  the   health  field,  while  this  is                                                               
innovations in the built infrastructure field.                                                                                  
                                                                                                                                
REPRESENTATIVE PARISH  brought attention  to the third  bullet on                                                               
slide  15 regarding  adapting infrastructure  to climate  change,                                                               
which  states:   "Compounding  this shortened  life over  decades                                                               
adds Billions  of dollars to  preserving the  sanitation utility.                                                               
Estimated  to  add  $3-6  B  (rebuilding)  by  2030  for  Alaskan                                                               
villages."   He  inquired  whether this  statement  is in  public                                                               
savings.                                                                                                                        
                                                                                                                                
MR.  BLACK  responded  correct.    He  noted  the  aforementioned                                                               
numbers come  from a 2007 report  by the Institute of  Social and                                                               
Economic Research (ISER) for the University of Alaska.                                                                          
                                                                                                                                
REPRESENTATIVE  PARISH presumed  that if  these same  innovations                                                               
were  to  be used  for  private  structures the  overall  savings                                                               
realized could be considerably higher.                                                                                          
                                                                                                                                
MR. BLACK answered correct.                                                                                                     
                                                                                                                                
REPRESENTATIVE PARISH  asked what the  capital costs would  be to                                                               
realize the $3-6 billion in savings.                                                                                            
                                                                                                                                
MR. BLACK replied  he cannot answer the question  although he can                                                               
answer it on  individual projects.  He said he  doesn't know that                                                               
there  is a  clear assessment  of how  much infrastructure  is at                                                               
risk.  While some examples  are in his presentation, there hasn't                                                               
been  a comprehensive  look at  the nature  of infrastructure  in                                                               
Alaska and how much of it is  in a threatened situation.  He said                                                               
he believes  the estimates provided  by [ISER] at that  time were                                                               
of the  total built  water and  sewer infrastructure  in villages                                                               
and communities around the state.                                                                                               
                                                                                                                                
2:11:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND pointed  out  that the  $3-6 billion  on                                                               
slide 15  is not a  savings but is  the cost of  rebuilding these                                                               
utilities.                                                                                                                      
                                                                                                                                
MR. BLACK responded correct.                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND further pointed  out that Anchorage has a                                                               
sewage treatment  plant that may  be in  danger of needing  to be                                                               
moved and will  cost Anchorage upwards of $1 billion.   She urged                                                               
people to  keep in mind the  cost of utilities in  Alaska because                                                               
they aren't cheap, and they aren't free.                                                                                        
                                                                                                                                
MR. BLACK returned to his  presentation.  Addressing slide 19, he                                                               
said modular  water treatment plants are  another adaptation that                                                               
ANTHC thinks has merit.  The  water treatment plant is built off-                                                               
site,  he explained,  and then  taken to  the community  where it                                                               
remains  moveable.   Unlike traditional  ways  of building  water                                                               
treatment plants  where concrete is  poured, and anchors  put in,                                                               
these modular  plants could  be moved and,  as such,  would avoid                                                               
erosion  and flooding  issues that  might otherwise  jeopardize a                                                               
static asset.  It also reduces  the cost of producing these types                                                               
of plants, he added.                                                                                                            
                                                                                                                                
MR. BLACK  turned to  slide 20  depicting a  portable alternative                                                               
sanitation  system (PASS)  being  used in  Kivalina.   He  stated                                                               
ANTHC has been  pioneering this system and believes  it has merit                                                               
for very  small communities and communities  threated by imminent                                                               
flooding and  erosion.   He said ANTHC  is attempting  to develop                                                               
this system as  a way of providing a  much-needed improvement for                                                               
un-served homes, those  homes that are relying  on honey buckets.                                                               
This would  allow treated  water to  be brought  to the  home and                                                               
sanitation taken care of in a  much healthier and easier way than                                                               
a honey bucket represents.   Also, from the standpoint of climate                                                               
change,  it allows  for  moving the  system  and doesn't  require                                                               
attaching  pipes to  the home.   He  related that  ANTHC believes                                                               
this  system can  be used  in coastal  communities threatened  by                                                               
erosion and  flooding.  He  further noted that last  winter ANTHC                                                               
put in a  few of these systems  in the Interior.   This system is                                                               
still being studied, he added, but it looks promising.                                                                          
                                                                                                                                
MR. BLACK  moved to  slide 21 and  concluded his  presentation by                                                               
noting  that  ANTHC is  working  with  the Denali  Commission  on                                                               
helping the  community of Newtok with  some of its issues  on how                                                               
to move to its new site.                                                                                                        
                                                                                                                                
2:14:51 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON inquired where ANTHC gets its resources.                                                                     
                                                                                                                                
MR.  BLACK answered  ANTHC gets  its funding  resources primarily                                                               
from  the   Indian  Health   Service  (IHS),   the  Environmental                                                               
Protection Agency  (EPA), and the U.S.  Department of Agriculture                                                               
(USDA).  Those are the  three primary funding federal agencies in                                                               
putting water, sewer, and other health facilities in to Alaska.                                                                 
                                                                                                                                
REPRESENTATIVE BIRCH  thanked Mr. Black for  his presentation and                                                               
said there  is a lot  to be proud of.   He offered  his agreement                                                               
with  the  principles  of  flexible,  light,  and  moveable  when                                                               
possible.  The innovations are tremendous, he added.                                                                            
                                                                                                                                
REPRESENTATIVE LINCOLN  brought attention  to slide  18 regarding                                                               
thermosiphons pulling heat.  He said  it sounds like a heat pump,                                                               
which can function  down to sub-freezing temperatures.   He asked                                                               
whether there  is any  opportunity to capture  some of  that heat                                                               
out of the ground and pump it into the building.                                                                                
                                                                                                                                
MR. BLACK  replied ANTHC uses  heat pumps  in some cases,  but in                                                               
this situation  not enough heat  would be derived to  justify it.                                                               
The beauty  of this system is  to pump as much  cold as possible,                                                               
he continued, and he is unsure  how much heat could be recovered.                                                               
In  Southeast  Alaska, ANTHC  is  using  heat recovery  from  the                                                               
ocean.   Further, ANTHC uses heat  recovery quite a bit  from the                                                               
power plants.   Capturing  heat from the  power plant  itself and                                                               
putting it into the water  system, saves the local residents lots                                                               
of money in their water and  sewer bills because 30-40 percent of                                                               
the cost  of water and sewer  has to do with  heat, especially in                                                               
very cold regions like Representative Lincoln's.                                                                                
                                                                                                                                
REPRESENTATIVE PARISH  asked how  useful HB 173  would be  to the                                                               
Alaska Native Tribal Health Consortium.                                                                                         
                                                                                                                                
MR. BLACK responded  that a dedicated revenue  source that allows                                                               
these types of  innovations would be quite useful  because to pay                                                               
for this ANTHC  must seek grants or use ANTHC  revenue.  There is                                                               
no  specific  place  that  can  be  gone  to  that  says,  "let's                                                               
innovate," so  ANTHC must apply  for each  project independently.                                                               
For example,  ANTHC is  attempting to  get community  block grant                                                               
funding for the soil chilling innovation  seen on slide 18.  Most                                                               
times it is  unknown whether ANTHC will be  successful in getting                                                               
that money, he noted.                                                                                                           
                                                                                                                                
2:19:22 PM                                                                                                                    
                                                                                                                                
JOEL NEIMEYER,  P.E., Federal Co-Chair, Denali  Commission, noted                                                               
he  worked for  the Indian  Health  Service (IHS)  for 25  years,                                                               
mostly in  rural Alaska, and for  the last 8 years  he has worked                                                               
as a civil servant with the  Denali Commission.  He applauded the                                                               
committee  for taking  up HB  173, and  said not  included in  [a                                                               
letter from  the Denali  Commission to  Representative Josephson,                                                               
dated 3/26/18, and  signed by Mr. Neimeyer  as Federal Co-Chair],                                                               
or  the  PowerPoint presentation,  is  that  the U.S.  Government                                                               
Accountability Office  (GAO), a  part of  the legislative  arm of                                                               
Congress and a federal agency  he thinks is outstanding, released                                                               
a report  on nation  states that  are addressing  climate change.                                                               
In this report  the GAO found that those nation  states doing the                                                               
best and  most good  in responding to  climate change  were those                                                               
that  had   alignment  between  the  executive   branch  and  the                                                               
legislative branch.   So, he said, he sees HB  173 in partnership                                                               
with  the governor's  office as  a  critical first  step for  the                                                               
State of Alaska to respond to climate change.                                                                                   
                                                                                                                                
MR. NEIMEYER began his  PowerPoint presentation entitled, "Denali                                                               
Commission."   Turning to  slide 2,  he said  the mission  of the                                                               
Denali Commission  is to identify  gaps where other  agencies are                                                               
not operating and  try to fill them, and the  commission tries to                                                               
complement, but not  duplicate, the work of other  agencies.  For                                                               
example, he  pointed out,  Mr. Black talked  about how  IHS, EPA,                                                               
and USDA  fund sanitation; therefore, the  Denali Commission does                                                               
not  work  there.    However, the  commission  found  that  other                                                               
agencies aren't  working on sanitation  energy efficiency  and so                                                               
the commission stepped in and has  been funding that.  He related                                                               
that  the late  U.S. Senator  Ted Stevens  envisioned the  Denali                                                               
Commission as being  nimble and able to respond to  issues of the                                                               
day.   The commission has  six commissioners who  are non-federal                                                               
employees  and Alaskans  and they  define where  the commission's                                                               
investments  will go.   To  date the  Denali Commission  has over                                                               
$1.2 billion  in investments in  rural Alaska matched  by another                                                               
$900  million  from  other  agencies  and  over  1,500  projects.                                                               
Virtually every  community in  rural Alaska  has been  touched in                                                               
one way or another by the Denali Commission.                                                                                    
                                                                                                                                
MR. NEIMEYER moved  to slide 3 and related that  on 9/2/15 former                                                               
President  Obama assigned  the  commission  as lead  coordinating                                                               
federal  agency  for village  relocations  and  protect in  place                                                               
solutions.   "Coordinating" is a  very important  distinction, he                                                               
noted.    The commission  wasn't  given  any extra  money,  other                                                               
federal agencies  were meant  to implement.   The  commission has                                                               
invested several million  dollars of its own  funds to coordinate                                                               
activities   such   as   plans  and   designs,   pre-construction                                                               
activities  that  take time  but  don't  cost  much money.    The                                                               
assignment  was specific  to the  built  infrastructure in  rural                                                               
Alaska,  he  continued, how  to  address  erosion, flooding,  and                                                               
permafrost degradation  that is  occurring.  The  assignment also                                                               
was that the  commission was supposed to follow  under the Arctic                                                               
Executive Steering Committee,  which was made up  of many cabinet                                                               
level  agencies and  that  was  supposed to  provide  a whole  of                                                               
government approach.                                                                                                            
                                                                                                                                
MR.  NEIMEYER  displayed  slide  4  and  provided  a  summary  of                                                               
environmental  threats.   Regarding [coastal]  flooding and  wave                                                               
run-up, he stated that according  to scientists the change is not                                                               
an increase in  the magnitude of storms but that  shore bound ice                                                               
is no  longer occurring in  the fall.   Shore bound  ice prevents                                                               
wave run-up and  doesn't now occur until much later,  and in some                                                               
communities not  until January.  Regarding  river flooding, which                                                               
has  been historic  in rural  Alaska, he  said the  difference is                                                               
permafrost  degradation  in  some   places  and  communities  are                                                               
settling,  so [during  ice  breakup] the  threat  of damming  the                                                               
river is more  imminent.  Regarding erosion  driven by permafrost                                                               
melting,  he related  that  the Denali  Commission  sees this  as                                                               
probably  the largest  risk in  the  western part  of the  state.                                                               
There  are  longer  periods  of  time in  which  no  freezing  is                                                               
occurring and that accelerates the erosion.                                                                                     
                                                                                                                                
2:26:05 PM                                                                                                                    
                                                                                                                                
MR. NEIMEYER addressed slide 5 depicting  a map of Alaska with 31                                                               
environmentally threatened  communities.  He noted  the map comes                                                               
from two sources   an  erosion analysis of threatened communities                                                               
completed in  2008 by  the U.S. Army  Corps of  Engineers (USACE)                                                               
followed by  a GAO  analysis that identified  these 31  as having                                                               
the largest  threat.   Of those 31,  four communities  are facing                                                               
relocation:   Shishmaref, Shaktoolik,  Kivalina, and Newtok.   Of                                                               
importance,  he pointed  out, is  the way  the Denali  Commission                                                               
carries out its  business.  The commissioners  from the beginning                                                               
gave  the  assignment  to  staff  to work  on  the  highest  need                                                               
projects.   If administrative capacity  issues were  preventing a                                                               
community from moving forward, staff's  job was to figure out how                                                               
to  remove  those  administrative  capacity  issues  and  address                                                               
highest need,  not just issue funding  to those who had  the best                                                               
grant writer.   In  September 2015  the commissioners  gave staff                                                               
very  clear instruction    to  focus attention  and resources  on                                                               
flooding,  erosion,  and  permafrost   degradation  in  these  31                                                               
communities.    Having said  that,  Mr.  Neimeyer continued,  the                                                               
commission is interested beyond that  and has provided funding to                                                               
the University of Alaska Fairbanks  (UAF) and USACE to do further                                                               
analysis  on  flooding  and  permafrost  degradation;  that  work                                                               
should be done in summer 2018.   He stated the commission sees it                                                               
as complementary  to the erosion work  done by the USACE  and the                                                               
commission  anticipates  that  after   those  three  threats  are                                                               
incorporated the number of communities will increase beyond 31.                                                                 
                                                                                                                                
MR. NEIMEYER turned  to slide 6, depicting  photographs of winter                                                               
storms  with no  shoreline ice  in the  villages of  Kivalina and                                                               
Shishmaref.   No shoreline ice  is an issue because  flooding can                                                               
occur,  he reiterated.   The  commission is  looking at  studying                                                               
Kivalina and Shishmaref similar to  a study done in Shaktoolik in                                                               
2008 or  2009 by the  USACE, he said.   In that study  [slide 7],                                                               
the  USACE  analyzed  a  100-year  storm  event  and  found  that                                                               
virtually  every  building would  be  inundated  by 2-3  feet  of                                                               
water.   Imagine if a  storm washed in  during the night  at high                                                               
tide in  November -  virtually every one  of the  community's 200                                                               
people would be  immersed in cold water.  It  is a very dangerous                                                               
situation, he continued,  and this is what the  signs are telling                                                               
will happen one day in Shaktoolik.   Perhaps one day it will also                                                               
happen in Shishmaref and Kivalina,  but unknown right now is what                                                               
the magnitude of run-up will be in those two communities.                                                                       
                                                                                                                                
2:29:31 PM                                                                                                                    
                                                                                                                                
R.  NEIMEYER moved  to  slide 8  which  portrayed photographs  of                                                               
river  flooding and  ice jams  in Galena  in May  2013.   He then                                                               
displayed  slide 9  with photographs  of permafrost  degradation.                                                               
He noted  the movement of  power poles, roads, and  boardwalks in                                                               
the pictures caused by  discontinuous permafrost or discontinuous                                                               
permafrost melting.   He also  reminded members of  the structure                                                               
movement discussed by Mr. Black.                                                                                                
                                                                                                                                
MR.  NEIMEYER  addressed an  earlier  question  from a  committee                                                               
member about  what the  savings would  be if  disaster mitigation                                                               
were done in advance.  He said  many studies done in the Lower 48                                                               
show a savings ratio  of about 1:4 or 1:6.   So, he continued, if                                                               
mitigation were done in advance  instead of allowing the disaster                                                               
to occur, there would be about a 1:4 savings ratio.                                                                             
                                                                                                                                
MR. NEIMEYER discussed  the table on slide 10  showing the Denali                                                               
Commission's investments  to date.   He stated  that in  2016 and                                                               
2017   the  commissioners   put  $7   million  and   $5  million,                                                               
respectively,  into the  Village Infrastructure  Protection (VIP)                                                               
Program, for  a total of  $12 million in  the two years  prior to                                                               
this  fiscal year.   The  Denali  Commission was  given no  extra                                                               
funds by  the previous  administration to  carry forward  the VIP                                                               
Program,  he  pointed  out,  these  funds  were  taken  from  the                                                               
commission's other programs, such  as the energy, transportation,                                                               
and clinic programs.  In  2018 the Alaska Delegation successfully                                                               
increased  the  commission's  budget  from  $15  million  to  $30                                                               
million,  he related,  with the  additional $15  million specific                                                               
for implementing  solutions in the highest-need  communities.  In                                                               
his  discussions  with commissioners  at  a  1/29/18 meeting,  he                                                               
continued, there  was agreement  that that  meant Newtok  and the                                                               
development of Mertarvik.  Between  9/2/15 and 3/22/18 the Denali                                                               
Commission was  acting as a  lead coordinating agency, but  as of                                                               
now the commission  is an implementing agency  with the community                                                               
of  Newtok  in the  development  of  Mertarvik.   The  commission                                                               
remains a  coordinating agency with  all the other villages.   In                                                               
2018, he added,  a total of $21.34 million  of federal investment                                                               
will be made into this issue.                                                                                                   
                                                                                                                                
2:32:37 PM                                                                                                                    
                                                                                                                                
MR. NEIMEYER  turned to slide  11 and provided  specific comments                                                               
about HB 173.   He said the slide depicts  a flowchart in essence                                                               
[from  climate change  science to  applied science  to engineered                                                               
solutions    and   prioritized    projects    to   funding    and                                                               
implementation].  Regarding climate change  science in Alaska, he                                                               
stated  that  the  three  threats   of  interest  to  the  Denali                                                               
Commission  are erosion,  flooding,  and permafrost  degradation.                                                               
He reminded committee members of  his earlier statements that the                                                               
USACE has  worked on erosion  and that the Denali  Commission has                                                               
been  working  on flooding  and  has  UAF working  on  permafrost                                                               
degradation,  all of  which provide  important information  about                                                               
trends  and what  is  happening  in the  local  community.   That                                                               
information is  then applied to  the local community  through two                                                               
or  more opportunities,  he explained.   One  opportunity is  the                                                               
Hazard Mitigation  Plan, which is a  Federal Emergency Management                                                               
Agency (FEMA)  document that the  [Alaska Department  of Military                                                               
and Veterans'  Affairs (DMVA)] uses  in working  with communities                                                               
to  identify  risks  to  each   community,  including  the  built                                                               
environment.   Another opportunity is  vulnerability assessments.                                                               
These  are  more  specific,  such as  assessment  of  a  specific                                                               
infrastructure  or  community  asset,   which  then  enables  the                                                               
identification  of  relative  risks to  that  built  environment.                                                               
From there it  goes into prioritized projects based  upon what is                                                               
more  risky  than others  and  then  engineered solutions.    For                                                               
example, he  continued, if in a  community it is unknown  what is                                                               
going  to happen  with wave  run-up, an  analysis of  wave run-up                                                               
will be  done to figure out  whether the lift station  is more at                                                               
risk than the airport and more  at risk than the school.  Through                                                               
that  analysis  the  highest  need can  be  identified  and  then                                                               
resources assigned to that highest  need.  From there things move                                                               
into funding and  implementation.  As talked about  by Mr. Black,                                                               
he added,  adaptation is  the key here  and adaptations  start at                                                               
the engineered solutions and prioritized projects.                                                                              
                                                                                                                                
2:35:07 PM                                                                                                                    
                                                                                                                                
EPRESENTATIVE  DRUMMOND  inquired  whether   she  is  correct  in                                                               
understanding that  Hazard Mitigation  Plans are a  FEMA document                                                               
that is used  by the Alaska Department of  Military and Veterans                                                                
Affairs (DMVA).                                                                                                                 
                                                                                                                                
MR. NEIMEYER  replied correct, part  of the DMVA is  the Division                                                               
of  Homeland  Security and  Emergency  Management  (DHSEM).   The                                                               
staffs at  FEMA and DHSEM  are dedicated professionals  who excel                                                               
at disaster  response after the  disaster comes in.   However, he                                                               
said, the  two agencies are  not given many funds  or authorities                                                               
on disaster mitigation, which is  the up-front issue.  The Denali                                                               
Commission sees that lots of effort  should be placed on that up-                                                               
front disaster  mitigation and strongly urges  that consideration                                                               
be given to  formally including the DHSEM in  the [Alaska Climate                                                               
Change Response Commission (ACCRC) proposed in HB 173].                                                                         
                                                                                                                                
2:40:06 PM                                                                                                                    
                                                                                                                                
MR. NEIMEYER returned to his  presentation.  He drew attention to                                                               
slide 12 and discussed the six  comments about HB 173.  Regarding                                                               
the first comment  to enhance the federal  to state relationship,                                                               
he  said the  federal  government  is late  to  this  issue.   He                                                               
applauded Governor  Palin for standing up  a climate sub-cabinet.                                                               
Many good  things were  accomplished by the  state and  there was                                                               
partnership with  many federal agencies  on that work.   From his                                                               
observations,  however,  local  federal  employees  stationed  in                                                               
Alaska who  understood the issues  in play  here did much  of the                                                               
federal  work.    Perhaps  there was  some  engagement  with  the                                                               
federal employees at  the regional level, he  continued, but from                                                               
his  conversations with  folks  who work  on  those matters,  the                                                               
policy makers and  funders in Washington DC were  not included in                                                               
the discussions.  Therefore, when  he says enhance the federal to                                                               
state  relationship, he  is  saying  there needs  to  be a  clear                                                               
policy statement  from the  State of Alaska  that says  the state                                                               
wants a clear  and intentional relationship with  all branches of                                                               
the federal government in Alaska  as well as regional offices and                                                               
headquarter offices in Washington, DC.                                                                                          
                                                                                                                                
MR.  NEIMEYER  addressed  the  second  comment  on  slide  12  to                                                               
articulate a village  relocation policy.  He said  nowhere on the                                                               
state or  federal level  is there an  express policy  that moving                                                               
villages  in  rural  Alaska  is  the  policy.    Many  times,  in                                                               
conversations  in Washington,  DC,  [the  Denali Commission]  has                                                               
found the  lack of this  express policy  to be a  problem because                                                               
agencies  that  have existing  authority  to  do work  oftentimes                                                               
expect  to be  working  in established  communities that  already                                                               
have   [infrastructure],  for   example,   a   water  and   sewer                                                               
department.  When  moving an entire village,  all these different                                                               
agencies  are  trying  to  work  together at  one  time  and  the                                                               
authorities often  do not match well.   It is key  in both Juneau                                                               
and  Washington,  DC,  to  articulate that  it  is  important  to                                                               
relocate  the  villages  and  if  done timely,  it  can  be  done                                                               
efficiently, effectively, and at reduced cost.                                                                                  
                                                                                                                                
MR. NEIMEYER moved  to the third comment on slide  12, which asks                                                               
why  FEMA and  DHSEM are  not  engaged.   He stated  that in  his                                                               
opinion  climate  change  response  is  centered  about  disaster                                                               
mitigation, disaster  response, and disaster recovery.   Not much                                                               
funding and authority is extended  to FEMA and therefore provided                                                               
downstream to the  State of Alaska through the  DHSEM on disaster                                                               
mitigation.   He  urged  that strong  consideration  be given  to                                                               
including  the  DHSEM  in the  [Alaska  Climate  Change  Response                                                               
Commission (ACCRC) proposed in HB 173].                                                                                         
                                                                                                                                
MR. NEIMEYER  discussed the fourth  comment on slide 12  to focus                                                               
on  responding to  climate change,  not stopping  climate change.                                                               
Often  seen, he  noted, are  well-intentioned efforts  to address                                                               
greenhouse gas emissions in rural  Alaska.  The Arctic is warming                                                               
at four  times the  rate as other  locations, but  the greenhouse                                                               
gas  causing  this  warming is  generated  from  high  population                                                               
areas, not the Arctic.   Stopping climate change is not something                                                               
Alaska can  have an  impact on,  he said.   It's a  federal issue                                                               
that must  be taken care of  in Washington, DC.   He advised that                                                               
including renewable  energy or greenhouse  gases in HB  173 would                                                               
be  a distraction  for the  staff working  on this.   It  invites                                                               
folks who are interested in those  sectors to come in and make an                                                               
appeal for  both time and resources  when the real issue  here is                                                               
disaster mitigation - how to respond in advance of a disaster.                                                                  
                                                                                                                                
MR. NEIMEYER  spoke to  the fifth  comment on  slide 12  that the                                                               
Denali Commission  stands ready  to collaborate  on complementary                                                               
work with the [Alaska Climate  Change Response Commission (ACCRC)                                                               
proposed in  HB 173].   He urged  consideration be given  to that                                                               
and  to specifically  naming that  in the  bill.   Prior to  this                                                               
federal  administration,  he   noted,  senators  and  congressmen                                                               
identified  the Denali  Commission to  be  zeroed out  and to  go                                                               
away, but the Alaska Delegation  has thwarted those proposals and                                                               
kept the  Denali Commission in place.   He said the  reason given                                                               
by this  administration for shutting  down the  Denali Commission                                                               
for  2018 and  2019 is  any state  that can  give its  citizens a                                                               
permanent  fund dividend  (PFD) doesn't  need additional  federal                                                               
resources.  He  offered his belief that the  Denali Commission is                                                               
needed for complementing  the work of the  other federal agencies                                                               
in communicating  back to the  Climate Change Commission  on what                                                               
the  federal  agencies   can  and  cannot  do.     Therefore,  he                                                               
continued,  he  encourages  consideration of  naming  the  Denali                                                               
Commission  as  part of  the  [ACCRC  proposed in  HB  173][sixth                                                               
comment on  slide 12].  The  commission doesn't have to  be named                                                               
as a  voting member, he  added, it  could be an  advisory member.                                                               
The  point is  that the  State  of Alaska  recognizes the  Denali                                                               
Commission's  work   and  wants  to  hear   one-on-one  what  the                                                               
commission is  doing and  how the  commission can  coordinate the                                                               
federal government to  State of Alaska activities.   Mr. Neimeyer                                                               
concluded his presentation by directing  committee members to the                                                               
aforementioned   3/26/18   letter,  which   provides   additional                                                               
information.                                                                                                                    
                                                                                                                                
2:44:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR   JOSEPHSON   asked   whether   Mr.   Neimeyer   is   in                                                               
communication with  the new Climate Action  for Alaska Leadership                                                               
Team and  other groups such as  ANTHC.  He further  asked whether                                                               
these  groups are  speaking to  each other  so that  the work  is                                                               
complementary.                                                                                                                  
                                                                                                                                
MR. NEIMEYER  replied a copy  of his  3/26/18 letter was  sent to                                                               
Nikoosh Carlo, [Office  of the Governor].   The Denali Commission                                                               
has been collaborating with that group  when invited.  He said he                                                               
sees  this  as an  opportunity  for  an intentional  relationship                                                               
between the federal and state  government.  The Denali Commission                                                               
is very  much coordinating with  ANTHC.   The work being  done in                                                               
Newtok by ANTHC  has been fully funded by  the Denali Commission.                                                               
There are other efforts that ANTHC  is working on as agent of the                                                               
Denali  Commission and  more  will be  forthcoming.   The  Denali                                                               
Commission   anticipates   that   they   will   have   a   larger                                                               
responsibility with  respect to  the $15 million  on implementing                                                               
solutions  in  Mertarvik  community   development.    The  Denali                                                               
Commission is aware of many of  the folks and is collaborating as                                                               
best it can.                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH recalled  an effort 35-40 years  to move the                                                               
larger part of Nulato up the  hillside to higher ground above the                                                               
Yukon River and inquired whether  that was successful.  In regard                                                               
to  how much  energy, effort,  and investment  is put  into areas                                                               
that  are frequently  subject to  flooding,  he further  inquired                                                               
whether the Denali  Commission has a policy for  not investing in                                                               
areas that are subject to  flooding and how the Denali Commission                                                               
looks at that from an investment standpoint.                                                                                    
                                                                                                                                
MR. NEIMEYER responded  that the cases of Nulato  and Koyukuk are                                                               
similar in that  it is known that during spring  break-up and the                                                               
formation of ice dams, flooding will  occur in the community.  In                                                               
Nulato's case, he  said, the Denali Commission was  aware of that                                                               
issue when  it funded a new  clinic about 11-12 years  ago - that                                                               
clinic had to be  built up on the hillside.   As the risk profile                                                               
is understood in communities, funders  like Denali Commission and                                                               
others start  making investments  out of  that floodplain  and up                                                               
higher.  That is where the  local Hazard Mitigation Plans and the                                                               
vulnerability assessments  are very important, he  continued, and                                                               
it is  also important to use  that applied science.   In the case                                                               
of Nulato, the Denali Commission has  not worked on moving any of                                                               
the housing structures up the  hillside.  He recommended that if,                                                               
in time,  the Denali  Commission and  the federal  agencies along                                                               
with the State  of Alaska decide there is a  need to start moving                                                               
existing homes out of the floodplain,  it be done by need.  Those                                                               
communities  with  the  greatest   need/risk  would  be  assigned                                                               
resources first, he explained, and  from there resources would be                                                               
assigned   sequentially  to   other  communities   by  level   of                                                               
need/risk.  The Denali Commission  hasn't gotten there yet in its                                                               
programming, he added, because most  of the commission's work has                                                               
been focused on the relocation villages.                                                                                        
                                                                                                                                
2:49:21 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON  recalled that  when he  lived in  Kalskag for                                                               
three  years   during  the  early  1990s   spring  breakup  would                                                               
typically flood  parts of the  village and would  sometimes flood                                                               
into the dump.  He noted  that climate change wasn't talked about                                                               
as much  back then  and asked how  to distinguish  between spring                                                               
breakups that are  not aggravated by climate change  and are just                                                               
how things happen and have happened in the past.                                                                                
                                                                                                                                
MR.  NEIMEYER answered  that whenever  the issue  of flooding  is                                                               
posed in  Washington, DC,  it just goes  by everyone;  they don't                                                               
catch the  nuance of  what Co-Chair  Josephson just  asked about.                                                               
He  explained that  the  Denali Commission  views  this issue  of                                                               
erosion,  flooding,  and  permafrost   degradation  as  more  the                                                               
question  of disaster  mitigation.   So, even  though the  spring                                                               
breakup and  ice damming has  been historical and  will continue,                                                               
and even though it is not  really driven by climate change, it is                                                               
a  climate  event.    And  when looking  at  climate  events,  he                                                               
continued,  the Denali  Commission believes  that that  should be                                                               
part of the portfolio of work that it does.                                                                                     
                                                                                                                                
REPRESENTATIVE DRUMMOND noted that  Mr. Neimeyer's 3/26/18 letter                                                               
is not in her committee packet  or on BASIS and requested that it                                                               
be provided to members.                                                                                                         
                                                                                                                                
CO-CHAIR JOSEPHSON agreed to do so.                                                                                             
                                                                                                                                
CO-CHAIR  JOSEPHSON   addressed  Mr.  Neimeyer's   comment  about                                                               
mitigation versus  reduction relative to the  carbon footprint in                                                               
Alaska.   He  agreed the  comment is  true given  there are  only                                                               
730,000  Alaska residents,  but stated  what strikes  him as  sad                                                               
about it  is that  there are  Alaskans who  want to  reduce their                                                               
carbon footprint.   He  said he takes  Mr. Neimeyer's  point that                                                               
the  7 billion  people outside  of Alaska  are more  impactful by                                                               
far.   He asked whether Mr.  Neimeyer would like to  add anything                                                               
about Alaskans' own behavior outside of the mitigation issue.                                                                   
                                                                                                                                
MR. NEIMEYER replied he stands by  his comment that the impact on                                                               
climate change by  Alaskans is miniscule.  He  said he encourages                                                               
Alaskans choosing to try to reduce  their use of fossil fuels and                                                               
other drivers of  climate change.  But, he continued,  that is an                                                               
individual commitment  and while  the state should  encourage it,                                                               
it is not  necessarily something that the State  of Alaska should                                                               
assign resources  and time to when  it is a miniscule  thing.  If                                                               
that  door  is  opened  to the  Alaska  Climate  Change  Response                                                               
Commission, there  will be a lot  of time and effort  and perhaps                                                               
even  resources assigned  to something  that  doesn't impact  the                                                               
increasing temperatures in Alaska.                                                                                              
                                                                                                                                
2:53:57 PM                                                                                                                    
                                                                                                                                
JAY  FARMWALD, Director  of Programs,  Denali Commission,  stated                                                               
his belief that  decreasing the carbon footprint  in rural Alaska                                                               
in  particular is  certainly related  to the  cost of  energy and                                                               
that is the  key for rural Alaska.   However, he said,  that is a                                                               
different subject than  climate change in his view.   Other state                                                               
and federal agencies are working on  trying to reduce the cost of                                                               
energy and  hence improve  the quality of  life in  rural Alaska.                                                               
These  include the  Alaska  Energy  Authority, Alaska  Industrial                                                               
Development and Export Authority  (AIDEA), and U.S. Department of                                                               
Energy.  He  offered his belief that Mr. Neimeyer  is saying that                                                               
the  issue of  carbon footprint,  also known  as cost  of energy,                                                               
should  be  addressed in  a  different  forum versus  the  Alaska                                                               
Climate Change  Response Commission at  the risk of  diluting the                                                               
true primary goals, mitigation primarily, of the new commission.                                                                
                                                                                                                                
2:55:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR   JOSEPHSON  recessed   the  House   Resources  Standing                                                               
Committee meeting to 5:55 p.m.                                                                                                  
                                                                                                                                
5:57:16 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON called the  House Resources Standing Committee                                                               
meeting back  to order at  5:57 p.m.   Representatives Josephson,                                                               
Tarr, Talerico,  Johnson, and  Lincoln were  present at  the call                                                               
back to  order.   Representatives Birch  and Rauscher  arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON resumed invited testimony related to HB 173.                                                                 
                                                                                                                                
5:58:05 PM                                                                                                                    
                                                                                                                                
CHRIS ROSE,  Executive Director, Renewable Energy  Alaska Project                                                               
(REAP), Member, Climate Action for  Alaska Leadership Team, noted                                                               
he  is  testifying  on  behalf of  REAP,  a  statewide  nonprofit                                                               
education  and advocacy  group for  renewable  energy and  energy                                                               
efficiency,  as  well as  on  behalf  of the  governor's  Climate                                                               
Action for Alaska  Leadership Team.  He stated  climate change is                                                               
an issue  that will be  around for centuries  and it is  just the                                                               
beginning.    Adaptation to  what  is  changing, mitigation,  and                                                               
research are all going to be a part of that.                                                                                    
                                                                                                                                
MR. ROSE  said REAP's role has  been on the mitigation  side.  He                                                               
related  that in  2007  REAP asked  the  legislature to  consider                                                               
financing renewable energy projects in  2008 and a unanimous vote                                                               
created  the Renewable  Energy Fund.   That  fund has  since used                                                               
about  $259 million  of state  money to  leverage more  than $250                                                               
million  of private  and  federal  money to  build  more than  70                                                               
projects around  the state, mostly  in rural Alaska.   The Alaska                                                               
Energy  Authority estimates  these projects  are saving  about 30                                                               
million gallons of diesel every year, he further related.                                                                       
                                                                                                                                
MR. ROSE  stated REAP  also worked  hard in  2010 for  passage of                                                               
House Bill 306  and Senate Bill 220.   House Bill 306  set a goal                                                               
of getting  50 percent  of the state's  electricity by  2025 from                                                               
renewable  resources.    House  Bill  306  also  set  a  goal  of                                                               
decreasing the per  capita energy use in the state  by 15 percent                                                               
by 2020.  He said Senate  Bill 220 included a provision to create                                                               
the  Emerging  Energy  Technology   Fund,  which  REAP  help  put                                                               
together  with  many  different  players,  including  the  Denali                                                               
Commission, Alaska Energy Authority,  the university, and others.                                                               
He  said  U.S.  Senator  Lisa  Murkowski  calls  Alaska's  remote                                                               
communities  a natural  laboratory  for energy  innovation.   The                                                               
technology and  adaptations to climate change  being developed in                                                               
rural  Alaska could  be important  to the  billion people  on the                                                               
planet with no electricity and 500 million who are on diesel.                                                                   
                                                                                                                                
MR. ROSE emphasized  there is no more financing;  the grant money                                                               
is over.   While the  governor has some  money in his  budget for                                                               
the  Renewable  Energy Fund,  he  said,  in general  the  forward                                                               
movement of  projects has to  be financed.   It has  already been                                                               
seen that energy  efficiency can be privately financed.   In 2008                                                               
REAP asked  the legislature to  consider putting more  money into                                                               
energy   efficiency.      That  resulted   in   the   legislature                                                               
appropriating over $600 million over  the course of several years                                                               
to  the  Alaska Housing  Finance  Corporation  (AHFC) to  support                                                               
weatherization and rebate programs.   More than 45,000 households                                                               
in the state took advantage of  those programs, he reported.  The                                                               
average savings  for those 45,000 households,  mostly on thermal,                                                               
has been 30  percent, a tremendous payback for  the state, except                                                               
the state used grant money to do that.                                                                                          
                                                                                                                                
6:02:02 PM                                                                                                                    
                                                                                                                                
MR. ROSE  stated REAP has  been investigating the  financing idea                                                               
for some  time.   Over the  last year  and a  half REAP  has been                                                               
particularly interested  in the  green bank  concept that  is now                                                               
being used by  other states and nations to  finance clean energy,                                                               
which is essentially energy efficiency  and renewable energy.  In                                                               
the  green bank  concept, he  explained,  a little  bit of  state                                                               
money is used to leverage  as much private money into investments                                                               
as possible.                                                                                                                    
                                                                                                                                
MR. ROSE outlined  why the green bank concept is  important.  For                                                               
example, he said, if someone went  to Wells Fargo today asking to                                                               
borrow $10,000 to do weatherization,  like what was done by those                                                               
45,000 households,  Wells Fargo  would say it  doesn't understand                                                               
how those work.   And, if Wells  Fargo did give a  loan, it would                                                               
probably say  10 percent interest to  be repaid in 5  years.  But                                                               
that doesn't work,  he advised.  Green banks  would educate those                                                               
other bankers in the private sector  that if they would just flip                                                               
these terms  and allow people to  pay back a 5  percent loan over                                                               
10 years the  bank would still make money and  would have a super                                                               
secure  loan because  people are  going to  be saving  more money                                                               
every month.                                                                                                                    
                                                                                                                                
MR. ROSE  pointed out that  other states have  developed programs                                                               
to  allow for  unsecured  loans for  energy  efficiency that  are                                                               
through  programs the  green bank  has  developed.   Most of  the                                                               
money is coming from private  banks, he said, because the private                                                               
banks now have been  educated about how to do this.   And, if the                                                               
private banker feels  there is any risk, the  state would de-risk                                                               
the  project for  the banker  by putting  a little  bit of  state                                                               
money into a loan loss reserve  fund or by guaranteeing a portion                                                               
of the loan.                                                                                                                    
                                                                                                                                
MR. ROSE specified  that Connecticut has been  very successful in                                                               
doing this.   Connecticut's average  leverage ratio in  the first                                                               
six years  has been 8:1, he  reported, meaning that for  every $1                                                               
Connecticut  loaned,  $8  was loaned  from  the  private  sector.                                                               
Within those  first six years  there was over a  billion dollar's                                                               
worth  of clean  energy financing,  mostly in  energy efficiency.                                                               
He said  REAP is hoping to  develop this model and  has flown the                                                               
vice president of  the Connecticut green bank to  Alaska a couple                                                               
times to  testify before  committees and meet  with the  mayor of                                                               
Anchorage and the governor.  Mr.  Rose added that he travelled to                                                               
Washington, DC, a  couple weeks ago to meet  with the Connecticut                                                               
green bank's vice president and that  he is also working with the                                                               
New York green bank and the  Coalition for Green Capital, both of                                                               
which are interested  in these kinds of things  and ensuring that                                                               
more green banks are developed.                                                                                                 
                                                                                                                                
MR. ROSE stated  he agrees that the financing part  must be done.                                                               
While  a  climate  action  team  can talk  about  this  and  make                                                               
recommendations to the governor by  September, this is an ongoing                                                               
problem, he  stressed.  Establishing  the [Alaska  Climate Change                                                               
Response Commission]  makes sense  because there  must be  a body                                                               
that   takes  this   on  and   actually  handles   these  issues.                                                               
Recommendations can  be made,  but there  must be  follow through                                                               
with action.  Ten years ago,  he said, he was on Governor Palin's                                                               
team  and  the  team  spent   two  years  coming  up  with  great                                                               
recommendations that  got put on the  shelf.  Now 10  years later                                                               
the  state is  still in  the position  of having  to act,  so the                                                               
[Alaska Climate  Change Response Commission] is  really important                                                               
for that.                                                                                                                       
                                                                                                                                
MR. ROSE  related that REAP  has over 80  organizational members,                                                               
including  utilities, Native  associations, Native  corporations,                                                               
independent power  producers, and businesses.   He explained that                                                               
before this wide  array of folks takes a stand  to support a bill                                                               
it typically goes through a  policy committee process and a board                                                               
vote.   But, he continued, REAP  hasn't done that on  the element                                                               
of  HB 173  that  he thinks  many of  the  committee members  are                                                               
concerned  with, which  is the  [proposed] per  barrel surcharge.                                                               
He said REAP would have to  discuss this provision of the bill as                                                               
an  organization   before  saying  it  supports   the  provision.                                                               
However, he continued, the state needs  to put money in this from                                                               
somewhere  because the  cost of  adaptation  is going  to be  far                                                               
greater than the cost of mitigation.                                                                                            
                                                                                                                                
MR. ROSE said  REAP sees a huge opportunity  in renewable energy.                                                               
For perspective, he  noted that in 1990 the average  cost of wind                                                               
power in the  U.S. was $.65 per kilowatt-hour, while  in 2017 the                                                               
average cost  of unsubsidized wind  power is  $.05.  The  cost of                                                               
solar is also  about $.05 per kilowatt-hour,  he continued, which                                                               
means both  wind and solar in  the Lower 48 are  now competitive,                                                               
without subsidy,  with coal and natural  gas.  The price  of wind                                                               
power and solar keeps going down,  he added, and is going to keep                                                               
going  down [with]  technology that  is already  happening.   For                                                               
instance,  electric vehicles  are something  to be  aware of  and                                                               
talking about.  Right  now, a Chevy Volt or Tesla  Model 3 can be                                                               
purchased  for  about  $35,000  before  the  $7,500  federal  tax                                                               
credit, making them about the same  price as any other car.  This                                                               
is because  the price  of lithium ion  batteries that  fuel these                                                               
cars has come down fast, he  explained, and the price is going to                                                               
keep coming  down, so the  price of those  cars is going  to keep                                                               
going down, which is a big deal.                                                                                                
                                                                                                                                
6:08:13 PM                                                                                                                    
                                                                                                                                
MR.  ROSE advised  the aforementioned  is significant  for Alaska                                                               
because there  are nations and  companies, such as  Volvo, saying                                                               
that after 2018 they are no  longer going to produce cars with an                                                               
internal combustion engine only; after  2018 they are going to be                                                               
making only  hybrids and  electric vehicles  (EVs).   Nations are                                                               
phasing  out internal  combustion engines  and so  are investors.                                                               
The reason  is economics, he  stated.  When  the same car  can be                                                               
purchased for $35,000  in electric versus gas,  it's a no-brainer                                                               
because even  with high electric  prices in the Railbelt  the gas                                                               
car costs twice as much to  operate.  Mr. Rose outlined the math:                                                               
To go  200 miles, the  range of an  electric car, takes  about 60                                                               
kilowatt-hours;  at $.20  per kilowatt-hour  the cost  is $12.00.                                                               
For a  gas car  at 25 miles  per gallon at  $3.00 per  gallon the                                                               
cost to go 200  miles is $24.00 or twice the  cost.  Many people,                                                               
he  related,   are  expecting  a   real  transformation   in  the                                                               
transportation  sector very,  very quickly.   That  will decrease                                                               
the demand  for oil  on the  planet by about  30 percent,  as oil                                                               
will still  be used for ships  and airplanes.  A  collapse in the                                                               
market  for  gasoline-powered  cars  could be  seen  within  5-10                                                               
years, he  said.   That will  impact the State  of Alaska  and is                                                               
something to think about.                                                                                                       
                                                                                                                                
MR. ROSE spoke  to mitigation, noting that he  will be testifying                                                               
tomorrow before the House Special  Committee on Energy on HB 382.                                                               
He said HB  382 is another attempt for the  Railbelt utilities to                                                               
start  working together  on a  consistent basis.   There  are six                                                               
independent utilities,  which made  sense when they  were formed.                                                               
But now, with transmission lines  and the Internet, there are six                                                               
utilities that  are not  planning together  on a  regional basis.                                                               
This is important for the  whole state to consider, he counseled,                                                               
because overbuilding  generation impacts  everyone in  the state.                                                               
Many experts believe  overbuilding has been done  in the Railbelt                                                               
due to the lack of planning.   It means consumers in the Railbelt                                                               
are  paying  more  for  unnecessary  generation  and  a  lack  of                                                               
transmission, he  said.  It  also means  that everyone who  is on                                                               
power  cost  equalization (PCE)  is  going  to get  less  support                                                               
because the  idea of PCE is  to equalize what it  costs people in                                                               
the  regions outside  of the  Railbelt for  electricity with  the                                                               
people who  live in Juneau,  Anchorage, and Fairbanks.   Mr. Rose                                                               
stated HB 382  would create a system of  regional planning, which                                                               
is  commonsense  for  generation  and  transmission,  [and  would                                                               
create]  region-wide  reliability standards  and  interconnection                                                               
standards.    That will  go  a  long  way  to mitigating  on  the                                                               
electric side some of the  greenhouse gas emissions in the state,                                                               
he continued, and,  more importantly, it would save  the State of                                                               
Alaska money.                                                                                                                   
                                                                                                                                
MR.  ROSE  concluded  by  saying  he is  glad  the  committee  is                                                               
bringing forth  the idea of  a commission  that can act  into the                                                               
future on all these things that are before the state.                                                                           
                                                                                                                                
6:12:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  asked where  the number of  45,000 homes                                                               
comes from.                                                                                                                     
                                                                                                                                
MR.  ROSE  replied  it  comes from  the  Alaska  Housing  Finance                                                               
Corporation (AHFC),  which runs  both the weatherization  and the                                                               
rebate programs.                                                                                                                
                                                                                                                                
REPRESENTATIVE RAUSCHER asked if AHFC has published this number.                                                                
                                                                                                                                
MR.  Rose  responded  yes,  it  is in  AHFC's  reports  on  those                                                               
combined programs.                                                                                                              
                                                                                                                                
REPRESENTATIVE  RAUSCHER inquired  where  Mr.  Rose obtained  the                                                               
figures for  his statement that there  will be a collapse  in the                                                               
gas vehicle market in 5-10 years.                                                                                               
                                                                                                                                
MR. ROSE responded it is an  analysis many experts are looking at                                                               
and  he  would refer  members  to  a PowerPoint  presentation  by                                                               
analyst Tony  Seba.  In  this presentation, he related,  Mr. Seba                                                               
points  out that  the  cost  curve of  lithium  ion batteries  is                                                               
coming down  so fast that it  is driving along with  it the price                                                               
of electric cars.  Once [the price  of] an electric car is on par                                                               
with an internal  combustion engine car, and the  cost to operate                                                               
the electric  car is half  or less than half  that of a  gas car,                                                               
consumers  will  go that  direction.    It  will be  an  economic                                                               
decision   to  buy   electric  cars   because   it  is   cheaper.                                                               
Additionally, Mr. Rose noted, there  are 2,000 moving parts in an                                                               
internal combustion engine car compared  to 20 moving parts in an                                                               
electric car, which  means electric cars are going to  last a lot                                                               
longer and be easier and cheaper  to maintain.  Being said by Mr.                                                               
Seba and others, including the  car companies that have announced                                                               
they  are going  to stop  building combustion  vehicles, is  that                                                               
everything is pointing in this  direction.  If the business model                                                               
disruption of ridesharing  like Uber and Lift is added  on, it is                                                               
a  perfect confluence  because  these cars  with  only 20  moving                                                               
parts are  going to last 500,000  to 1,000,000 miles and  so will                                                               
be used on  a constant basis, unlike gas cars  that are parked an                                                               
average of 95 percent of the  time.  With electric cars that will                                                               
be constantly used it will  move toward a total transformation of                                                               
the transportation  infrastructure, he continued, and  it will be                                                               
so transformative that it will collapse the market.                                                                             
                                                                                                                                
6:15:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER asked why Mr. Rose used Connecticut.                                                                    
                                                                                                                                
MR. ROSE  answered Connecticut  is universally  seen as  the most                                                               
successful green bank  due to its program uptake.   For instance,                                                               
it is one thing to set up a  green bank and set up these esoteric                                                               
programs and it  is another to have lots and  lots of people take                                                               
advantage of  them and then  pay the loans  back.  So  [REAP] has                                                               
been very interested in how Connecticut  has done that.  They are                                                               
very  interested  in  helping  us.   Bert  Hunter,  who  is  vice                                                               
president of  the Connecticut  green bank and  who was  in Alaska                                                               
last year,  is willing  to come  back in  another month  at which                                                               
time conversations will  be continued with folks  in Alaska about                                                               
how something like that might be set up.                                                                                        
                                                                                                                                
REPRESENTATIVE RAUSCHER  inquired about  the prediction for  a 30                                                               
percent decline in  oil demand in 5-10 years and  whether this is                                                               
figurative or a guesstimate.                                                                                                    
                                                                                                                                
MR. ROSE replied  they are international energy  figures that are                                                               
based on  what percentage  of the  oil market  is used  for small                                                               
cars and individual transportation, which  is 30 percent.  So, if                                                               
30 percent of  the oil market goes to electric  vehicles, that is                                                               
what would happen.                                                                                                              
                                                                                                                                
6:16:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH asked how long the batteries last.                                                                         
                                                                                                                                
MR. ROSE said  that is a good question because  it determines the                                                               
economics.  He  provided some anecdotes.  He  related that Kodiak                                                               
Electric Association (KEA) is  100 percent renewable electricity,                                                               
80  percent hydro  and 20  percent  wind.   Darron Scott,  [KEA's                                                               
[President/CEO], recently  chose to replace the  wind farm's acid                                                               
batteries with  lithium ion  batteries.   In a  conversation, Mr.                                                               
Scott  said he  now  looks  at batteries  like  he  looks at  oil                                                               
filters    they filter the  electricity and  are a cost  of doing                                                               
business and  when they wear  out, he  recycles them.   Mr. Scott                                                               
said he saves  so much on the backend by  not burning diesel with                                                               
the wind  farm that it  makes total  [economic] sense.   Mr. Rose                                                               
further  related that  the lithium  ion battery  in his  personal                                                               
car, a  2002 Prius, was warranted  for 100,000 miles at  the time                                                               
of purchase  and that battery is  now at 250,000 miles.   For the                                                               
new Chevrolet Volts  and Tesla Model 3s coming out  this year, he                                                               
continued, the life  of the battery is  not yet known.   A lot of                                                               
smart people  are betting on  the technology lasting  long enough                                                               
for  it to  be worth  it.   In a  car where  the drive  train and                                                               
everything else lasts for 1 million  miles, he added, it might be                                                               
worth  replacing the  battery one  or two  times if  needed, just                                                               
like batteries are replaced in flashlights.                                                                                     
                                                                                                                                
6:18:58 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TARR noted  the issue  of emissions  from idling  cars.                                                               
She shared  her experience  of attending  a conference  where the                                                               
participants were  able to test  drive electric cars that  had no                                                               
emissions.  She remarked about the  big impact of no emissions on                                                               
climate issues.                                                                                                                 
                                                                                                                                
MR. ROSE agreed and noted his  Prius shuts down when stopped at a                                                               
red light.   He related that  Mr. Sepa talks in  his presentation                                                               
about how  much economically viable  space is taken up  in cities                                                               
by parking lots.  For example,  the amount of parking space taken                                                               
up in  Los Angeles  is the equivalent  of three  San Francisco's,                                                               
space  that  could  be  taken  up  with  economic  activity  from                                                               
businesses that could be located in  that space.  Mr. Sepa states                                                               
in his presentation that this  parking space won't be needed with                                                               
the  ride sharing  and constant  moving  of cars  that will  take                                                               
place with electric cars.                                                                                                       
                                                                                                                                
6:21:01 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON inquired  about  other  legislation that  Mr.                                                               
Rose is tracking.                                                                                                               
                                                                                                                                
MR. ROSE replied [HB 347]  for on-bill financing would be another                                                               
financing tool  that would allow  people to borrow  money through                                                               
their  utility to  do  [energy improvements]  and  then pay  back                                                               
through their  utility bill.   Another  way for  financing energy                                                               
efficiency,  but still  in  the implementing  phase,  is [HB  80,                                                               
Municipal Property Assessed Clean  Energy Act (PACE), signed into                                                               
law 10/6/17].  He said SB  190 and SB 191, both energy efficiency                                                               
bills, would keep the momentum  going particularly with the state                                                               
owning  5,000  buildings, because  the  state  should be  leading                                                               
here.   In 2012, AHFC  estimated the state's annual  utility bill                                                               
to be $642  million, which was during high oil  prices.  Assuming                                                               
the state's  annual utility bill  for heating and  electricity is                                                               
now $500 million, he continued,  that is a significant portion of                                                               
the operating  budget.  The state  taking the lead by  making all                                                               
its buildings  as energy efficient  as possible would  do several                                                               
things, he  advised.   It would  create a ton  of jobs  and would                                                               
attract people to  places that might not  otherwise be attractive                                                               
[due to  high energy costs].   It  is very difficult  to consider                                                               
doing any  kind of  business enterprise in  rural Alaska  when it                                                               
costs  $.40 cents  per kilowatt-hour  after PCE  and heating  oil                                                               
costs $8.00  a gallon.   He related that  a question he  likes to                                                               
ask  people rhetorically  to hear  what  they will  say is,   Why                                                               
wouldn't the  State of  Alaska have  as its goal  to be  the most                                                               
energy efficient place on the planet?                                                                                           
                                                                                                                                
6:23:37 PM                                                                                                                    
                                                                                                                                
DAVIN  HOLEN,  PhD,   Coastal  Community  Resilience  Specialist,                                                               
Alaska Sea  Grant Marine  Advisory Program,  Assistant Professor,                                                               
College  of Fisheries  and Ocean  Sciences, University  of Alaska                                                               
Fairbanks   (UAF),  began   with  slide   1  of   his  PowerPoint                                                               
presentation entitled, "Climate  Impacts to Subsistence Economies                                                               
& Community  and Regional Adaptation  Planning."  He noted  he is                                                               
an  anthropologist by  training  and  has researched  subsistence                                                               
economies in  Alaska for over 20  years.  In addition  to working                                                               
for  the College  of Fisheries  and  Ocean Sciences,  he said  he                                                               
works with  the Alaska Center  for Climate Assessment  and Policy                                                               
at the  International Arctic Research  Center, both of  which are                                                               
collaborations  between   UAF  and   the  National   Oceanic  and                                                               
Atmospheric  Administration (NOAA).   Dr.  Holen explained  he is                                                               
testifying  via teleconference  because he  is in  Nome attending                                                               
the  UAF-sponsored   Western  Alaska   Interdisciplinary  Science                                                               
Conference  where  scientists  and local  residents  are  talking                                                               
about  the  same  pressing  issues  that  the  committee  is  now                                                               
discussing.                                                                                                                     
                                                                                                                                
DR. HOLEN  turned to slide 2  and stated that wild  resources are                                                               
important  to  all Alaskans,  especially  those  living in  rural                                                               
communities.   He related that  he came  to the Alaska  Sea Grant                                                               
Marine Advisory  Program from the  Alaska Department of  Fish and                                                               
Game (ADF&G) where he was a  research and regional manager in the                                                               
Division of  Subsistence.   He has  worked with  communities from                                                               
the  Arctic to  Southeast Alaska  over his  career and  has found                                                               
there are  many subsistence  economies in  Alaska, not  just one.                                                               
Salmon are  important statewide, he  continued, as well  as other                                                               
marine  and riverine  fish.   The large  land mammals  and marine                                                               
mammals are also  very important and in some areas  of the state,                                                               
especially  Western   Alaska  and  the  Arctic,   marine  mammals                                                               
constitute a high portion of  the subsistence economy and come in                                                               
big  packages.   Small packages  include birds  and wild  plants,                                                               
especially berries  which residents  spend considerable  time and                                                               
effort harvesting.                                                                                                              
                                                                                                                                
DR. HOLEN  moved to slide  3 and  said that for  his dissertation                                                               
work  on  the  importance  of  fisheries  to  rural  communities,                                                               
culture, and economies,  he asked residents why  they remained in                                                               
their communities.  This simple  question had complex answers, he                                                               
noted.    Reasons  to  remain  included  family  being  important                                                               
because it is home as well  as having access to subsistence foods                                                               
and the subsistence  way of life.  He pointed  out that the slide                                                               
shows a subset  of three of the thirteen communities  in which he                                                               
asked  the  questions,  but  the overall  the  responses  in  all                                                               
communities were similar.                                                                                                       
                                                                                                                                
DR.  HOLEN  stated  there are  significant  challenges  to  rural                                                               
lifestyles.  Addressing slide 4,  he explained that to understand                                                               
some of these challenges related  especially to climate change is                                                               
part of a  larger effort over the  course of 18 months or  so.  A                                                               
collaboration of federal, state,  university, and nonprofits held                                                               
coastal  resilience workshops  in communities  in Western  Alaska                                                               
and he  did a similar workshop  in Southeast Alaska.   In Western                                                               
Alaska the latest climate science  for the region was provided to                                                               
representatives of  area tribes  and communities,  he said.   The                                                               
conversation was  turned around to  get feedback on  the greatest                                                               
issues impacting communities in the region.                                                                                     
                                                                                                                                
6:27:29 PM                                                                                                                    
                                                                                                                                
DR.  HOLEN displayed  slide 5  and outlined  the key  issues that                                                               
were  identified  by  both  scientists   and  residents:    ocean                                                               
acidification,  changes  in  seasonality, changes  in  hydrology,                                                               
permafrost thaw, and  reduction of sea ice.   Ocean acidification                                                               
is a  looming threat, he said.   Alaskan waters are  cold and old                                                               
and  make  great carbon  sinks  affecting  ocean chemistry.    In                                                               
Alaska  all  the  potential impacts  of  ocean  acidification  on                                                               
individual  fish  species are  not  understood.   Residents  face                                                               
challenges of  seasonality for hunting  large animals as  well as                                                               
the  shift in  fisheries he  pointed out.   Weather  impacts fish                                                               
drying times and  if fish are harvested  during prolonged periods                                                               
of  rain the  fish may  spoil on  the racks.   Hydrology,  or the                                                               
change  of  the   water  in  terms  of   abundance,  timing,  and                                                               
temperature is a  major issue and can be  coupled with permafrost                                                               
thaw in the  region.  Permafrost thaw means that  pan lakes found                                                               
throughout Western  Alaska and  the Interior  are drying  out and                                                               
steams  are also  lower in  some  areas.   Residents worry  about                                                               
streams for salmon  migration and subsistence, he  related.  They                                                               
worry  about waterfowl  habitat from  loss of  marshlands.   They                                                               
worry that freezing  rain is creating ice cover  over the lichen-                                                               
rich tundra  that caribou may be  unable to break through  in the                                                               
winter.  Travel on the  landscape is difficult, he continued, too                                                               
little  snow for  snow  machines  and too  much  for all  terrain                                                               
vehicles (ATVs).   Further, he noted, lack of sea  ice is a major                                                               
factor  because it  means  lack of  a buffer  for  late fall  and                                                               
winter storms with wave action  inundating communities, making it                                                               
unsafe for travel, and the loss of ice to hunt seals and walrus.                                                                
                                                                                                                                
DR.  HOLEN moved  to slide  6 and  stated that  the International                                                               
Arctic Research Center in collaboration  with the Arctic Research                                                               
Consortium of  the U.S.,  and the  National Weather  Service have                                                               
been  working on  a  project  to observe  sea  ice changes  using                                                               
satellites  and local  observations.   He said  the image  on the                                                               
right  of  the  slide  shows  wave  action  along  the  shore  at                                                               
Shishmaref in  February 2018  and pointed out  that it  should be                                                               
sea ice.   The graph in the center, he  noted, shows the ice-over                                                               
date of the Chukchi Sea, an area important for hunting walrus.                                                                  
                                                                                                                                
DR. HOLEN addressed the poster depicted  on slide 7 and noted the                                                               
poster is  a product of  the Coastal Resilience Workshops  in the                                                               
Bering  Sea  region  to  which   200  authors  contributed.    He                                                               
explained walrus are an important  food source for the region and                                                               
residents are  greatly concerned  about accessing walrus.   [One]                                                               
walrus  equals around  800 meals,  providing nutritious  protein,                                                               
not to  mention the benefits  of passing on a  cultural knowledge                                                               
that occurs  during a walrus hunt.   The poster also  shows other                                                               
factors  affecting  food  security  in Western  Alaska,  such  as                                                               
changes in habitat  for large land mammals.  This  poster and two                                                               
others can be downloaded at adaptalaska.org, he pointed out.                                                                    
                                                                                                                                
DR.  HOLEN displayed  slide 8  and said  Southeast Alaska  issues                                                               
include  warming  air  temperatures,  snowfall  variation,  ocean                                                               
acidification, warming ocean  temperatures, harmful algae blooms,                                                               
and changes  in the  forest environment.   He noted  these issues                                                               
are not  as visible as they  are in Western Alaska.   Warming air                                                               
temperatures  mean  more  rain  and  less  snow  in  the  winter.                                                               
Projections at the  University of Alaska Southeast  (UAS) show an                                                               
increase in  precipitation in the  winter in the future  and this                                                               
impacts the  forest environment.   Already large areas  of yellow                                                               
cedar are  dying off,  a species that  is important  for cultural                                                               
elaboration.  Less snowpack also  means less cold water available                                                               
in the  spring and  summer for salmon,  he explained.   Southeast                                                               
Alaska  has rich  shellfish resources,  providing residents  with                                                               
both subsistence  and commercial  fishing opportunities  for crab                                                               
and other marine  invertebrates.  Warming water  leads to harmful                                                               
algae blooms that  spurt toxins that shellfish  like clams absorb                                                               
and then humans absorb them.                                                                                                    
                                                                                                                                
6:31:08 PM                                                                                                                    
                                                                                                                                
DR.  HOLEN discussed  slide 9.   He  said in  September 2016  the                                                               
Central  Council Tlingit  and Haida  Indian Tribes  of Alaska  in                                                               
cooperation with six tribes and  Alaska Sea Grant held a workshop                                                               
in Ketchikan  to discuss the  latest science, mainly  focusing on                                                               
the  key cultural  resources of  salmon, shellfish,  berries, and                                                               
yellow cedar.  In this  two-day workshop partnerships were formed                                                               
between state  and federal  agencies, nonprofits,  and university                                                               
to initiate  monitoring activities.   He said Central  Council is                                                               
now working  on a region-wide adaptation  plan that can act  as a                                                               
template for  communities in Southeast  to devise their  own plan                                                               
based on locally identified needs.                                                                                              
                                                                                                                                
DR. HOLEN  showed slide  10 and related  that workshops  like the                                                               
aforementioned  have  been  taking  place  statewide  leading  to                                                               
vulnerability studies and adaptation  planning efforts.  He noted                                                               
that  a recent  report  details the  efforts  that have  occurred                                                               
statewide   identifying   climate   data   needs   and   barriers                                                               
communities face to  facilitate their efforts and the  map on the                                                               
slide depicts where some of these activities are occurring.                                                                     
                                                                                                                                
DR.  HOLEN turned  to slide  11 and  reviewed efforts  to address                                                               
some of  the most pressing issues.   He said a  recent Alaska Sea                                                               
Grant funded project is covering  some of the needs identified in                                                               
the Southeast  workshop.  The  project will take  existing stream                                                               
monitoring  data collected  by  ADF&G and  others, establish  new                                                               
data collection sites in collaboration  with tribes, and create a                                                               
model  of  potential  climate impacts  to  salmon  lifecycles  in                                                               
Southeast   Alaska   streams.     Two   networks   are   building                                                               
collaborations  to monitor  and better  understand harmful  algae                                                               
blooms and ocean acidification, he added.                                                                                       
                                                                                                                                
DR.  HOLEN moved  to slide  12  and said  the coastal  resilience                                                               
workshops in  Western Alaska and the  adaptation planning efforts                                                               
in Southeast Alaska led to  Adapt Alaska collaborations.  This is                                                               
headlined  by  a  website  launched  in  November  [2017],  which                                                               
articulates  major challenges  occurring  in  coastal Alaska,  he                                                               
continued.   It  pairs  these issues  with innovative  adaptation                                                               
solutions  and provides  links to  resources specific  to Alaska,                                                               
such  as  databases  and  tools.   All  the  materials  from  the                                                               
workshops  are housed  here and  efforts  continue with  planning                                                               
additional workshops  in the Yukon-Kuskokwim  (YK) Delta  as well                                                               
as Kodiak.   Most importantly, he stated, the  website provides a                                                               
location  for  Alaskans  to  tell  their  stories  of  innovative                                                               
adaptation  solutions and  allowing Alaskans  working on  similar                                                               
issues  to  learn from  each  other.    This component  is  under                                                               
development right now, he noted, and should be out shortly.                                                                     
                                                                                                                                
DR.  HOLEN discussed  the recommendations  outlined on  slide 13.                                                               
He  related that  from his  experience working  at ADF&G  and the                                                               
university,  one  of  the  key  challenges  researchers  have  is                                                               
obtaining funding  for their projects  to match  federal funding.                                                               
Such  funding  could  lead to  more  research  and  collaborative                                                               
projects  that   involve  communities  and   researchers  working                                                               
together  to   tackle  the  challenges  related   to  subsistence                                                               
economies and  other climate topics.   More tools are  needed for                                                               
community  specific  climate  data,  he  advised.    Efforts  are                                                               
ongoing  at  the university  through  the  Scenarios Network  for                                                               
Alaska  +  Arctic Planning  (SNAP)  at  the International  Arctic                                                               
Research  Center, but  this only  covers a  few communities  as a                                                               
test case.   Having spent  many years involved in  the regulatory                                                               
process,  he continued,  he knows  the  challenges many  resource                                                               
managers face  in amending hunting  and fishing  opportunities to                                                               
allow  for residents  to  participate  in subsistence  activities                                                               
when  the  climate  and  weather are  not  cooperating  with  the                                                               
scheduled regulatory seasons.  Perhaps  there are some innovative                                                               
regulatory  tools that  could be  developed, he  suggested.   The                                                               
Sitka Tribe and  Alutiiq Pride Hatchery in Seward  are working on                                                               
monitoring ocean  acidification in the near-shore  environment in                                                               
Southeast  Alaska, lower  Cook Inlet,  and Prince  William Sound.                                                               
The  programs need  long-term funding  to  understand trends  and                                                               
should be  expanded to areas  such as  Kodiak and the  Arctic, he                                                               
stated.   For  salmon, more  research and  resources are  needed,                                                               
especially in  understanding stress  on Chinook and  other salmon                                                               
resources  in  the  marine   environment,  something  that  local                                                               
residents often bring up in  workshops.  Finally, Dr. Holen said,                                                               
communities   are  taking   great  strides   to  increase   their                                                               
resiliency  and  build food  security  for  an uncertain  future.                                                               
Everyone knows the cost of  bringing food into rural communities.                                                               
Promoting  local production,  whether it  is through  greenhouses                                                               
and  farms  or  habitat  amelioration  for  wild  resources  will                                                               
provide for food security in communities across Alaska.                                                                         
                                                                                                                                
DR. HOLEN turned to slide 14  and concluded his presentation.  He                                                               
said the Tyonek community garden project  is a real model in that                                                               
it produces  fresh produce  through the  summer for  elder meals.                                                               
Produce is  for sale  in the  community at  much lower  cost than                                                               
shipping it in  and it produces jobs for  students, he continued.                                                               
It involves  the school and makes  the kids proud of  their work.                                                               
So much  is produced  that it  is sent out  of the  community for                                                               
sale  in Anchorage  to help  support the  program, he  added, and                                                               
more can be learned by going to the adaptalaska.org website.                                                                    
                                                                                                                                
6:36:56 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR requested  Dr. Nolen to talk  further about general                                                               
funds for state agencies and  university faculty to match federal                                                               
funds.  She offered her understanding  that due to budget cuts at                                                               
the University  of Alaska  Anchorage (UAA),  folks are  no longer                                                               
seeking some of these grant  opportunities, faculty has left, and                                                               
climate change  research is being  done by universities  in North                                                               
Carolina, Iowa, and other states.                                                                                               
                                                                                                                                
DR. HOLEN replied  it is a real challenge  because the university                                                               
has  lost a  significant amount  of  faculty.   For example,  his                                                               
program, the Alaska  Sea Grant Marine Advisory  Program, has lost                                                               
half its faculty in the last  five years.  This is continuing and                                                               
is causing  a brain drain  in which these researchers  are moving                                                               
to other  institutions.  But, he  noted, they still want  to work                                                               
in Alaska  and in  many cases,  they continue  to work  in Alaska                                                               
from other locations.  To fill  some of these gaps the university                                                               
has hired  research faculty  that almost  entirely work  on grant                                                               
funding.   They are provided  one or  two months of  funding from                                                               
the university  and then they  must seek additional funding.   It                                                               
is quite the challenge to find  that match, he added, it is often                                                               
50  percent of  what the  researcher is  asking for.   Dr.  Holen                                                               
noted that he and his  colleagues have passed over grants because                                                               
of this.  Alaska is a big state,  but also a very small state, he                                                               
continued, and  many of the  people working on these  issues know                                                               
each other well and have  created unique collaborations.  He said                                                               
he has  learned that in  many places  if an agency  or university                                                               
couldn't get a grant, they would just  pass it up.  Often done in                                                               
Alaska to  address these issues,  he advised, is to  put together                                                               
collaborations  of  very large  teams  to  apply even  for  small                                                               
amounts of funding and everybody throws in a little bit.                                                                        
                                                                                                                                
6:40:46 PM                                                                                                                    
                                                                                                                                
NIKOOSH CARLO, Senior Advisor, Climate  and Arctic Policy, Office                                                               
of  the Governor,  informed the  committee her  role as  a senior                                                               
advisor in the governor's office is  to lead the development of a                                                               
climate  policy   that  incorporates   the  expertise   of  state                                                               
departments  and agencies,  and  to  serve as  a  liaison to  the                                                               
Climate  Action for  Alaska Leadership  Team.   Slide 1  pictured                                                               
climate  change impacts  such  as  increased wildfires,  erosion,                                                               
melting  glaciers,  and  ocean   acidification,  which  she  said                                                               
collectively threaten the social  and cultural fabric of Alaska's                                                               
communities and  the health, safety,  and economic future  of its                                                               
residents.      In   October  [2017]   Governor   Walker   signed                                                               
Administrative  Order  289  which  established  Alaska's  Climate                                                               
Change  Strategy and  the Climate  Action  for Alaska  Leadership                                                               
Team.   The leadership  team has 21  appointed members  who first                                                               
met   December   [2017],   and  who   are   tasked   to   develop                                                               
recommendations that are  due to the governor  by September 2018.                                                               
Dr. Carlo said  the team has formed two working  groups to review                                                               
the topics of mitigation and adaptation  (slide 2).  The topic of                                                               
mitigation  includes   the  use   of  renewable   energy,  energy                                                               
efficiency, and  other actions to  decrease the  carbon footprint                                                               
of  the  state and  other  entities  (slide  3).   The  topic  of                                                               
adaptation will  be studied to  determine how  Alaska communities                                                               
respond  to   climate  impacts  and   how  to   increase  social,                                                               
environmental, and  economic resilience (slide 4).   Further, the                                                               
leadership team  will form panels,  one on science  and research,                                                               
and one to evaluate oil and  gas technical data and the effect of                                                               
industry on climate (slide 5).                                                                                                  
                                                                                                                                
6:45:18 PM                                                                                                                    
                                                                                                                                
DR. CARLO  continued to  explain another  category the  team will                                                               
study is  response to the  present threats facing  31 communities                                                               
in  Alaska  by  gathering data,  planning,  adaptation  measures,                                                               
diversification, and obtaining  funding (slides 6 and  7).  Slide                                                               
8 listed visions that would  address threats facing Alaska in the                                                               
future such as a stable fiscal plan and improved food security.                                                                 
                                                                                                                                
6:48:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR   JOSEPHSON  inquired   as  to   Dr.  Carlo's   previous                                                               
experience in Arctic policy.                                                                                                    
                                                                                                                                
DR. CARLO  said she is from  Fairbanks and Tanana and  worked for                                                               
the U.S.  Department of  State on Arctic  policy during  the U.S.                                                               
chairmanship of the  Arctic Council; prior to that  she served as                                                               
executive director of the Alaska Arctic Policy Commission.                                                                      
                                                                                                                                
CO-CHAIR  JOSEPHSON  asked  whether  Dr. Carlo  agreed  that  the                                                               
Climate Action for Alaska Leadership  Team should involve federal                                                               
agencies such as FEMA and DHSEM.                                                                                                
                                                                                                                                
DR.  CARLO said  she has  been in  contact with  federal agencies                                                               
that are  working on  climate change in  order to  ensure federal                                                               
agencies  are  aware  that Alaskans  are  threatened  by  climate                                                               
change now  and will be  in the future.   In further  response to                                                               
Co-Chair Josephson,  she said she also  communicates closely with                                                               
the Denali Commission.                                                                                                          
                                                                                                                                
CO-CHAIR JOSEPHSON  asked for assurance  that all of  the related                                                               
organizations collaborate.                                                                                                      
                                                                                                                                
DR.  CARLO gave  an example  of the  leadership team  cohosting a                                                               
workshop  during which  information was  exchanged between  state                                                               
and federal agencies.                                                                                                           
                                                                                                                                
6:52:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR encouraged the leadership  team to include complete                                                               
cost estimates  with its  recommendations to  the governor.   For                                                               
example, in  addition to the  costs of moving a  community, there                                                               
are additional costs  to oil and gas development  projects in the                                                               
northern region  due to thawing  permafrost and  shorter building                                                               
seasons; also, ocean acidification will  be costly to the fishing                                                               
industry.                                                                                                                       
                                                                                                                                
DR. CARLO agreed.                                                                                                               
                                                                                                                                
6:54:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR   JOSEPHSON  read   from   an  article   found  in   the                                                               
[Alaska/Anchorage Daily  News] noting the cost  of climate change                                                               
on  Alaska's  public  infrastructure  is  estimated  to  be  $5.5                                                               
billion in  2099 [document not  provided].  He pointed  out costs                                                               
are  difficult to  determine  and urged  the  leadership team  to                                                               
produce  a credible  document that  reflects the  reality of  the                                                               
cost  of  climate change.    Co-Chair  Josephson then  questioned                                                               
whether the leadership team needs funding at this time.                                                                         
                                                                                                                                
DR. CARLO  said the team has  the funding needed to  complete its                                                               
mandate  within  the  administrative  order;  however,  long-term                                                               
funding would be  helpful.  She added, "Conceptually,  I like the                                                               
idea of having  a commission that is there for  the long term and                                                               
is something that ...  we can work on to develop  and ... see the                                                               
recommendations  that  come  through  the  leadership  team  into                                                               
reality."                                                                                                                       
                                                                                                                                
CO-CHAIR JOSEPHSON asked about the team's meeting schedule.                                                                     
                                                                                                                                
DR.   CARLO  advised   the  team   holds   monthly  meetings   by                                                               
teleconference and on April 12, [2018],  will meet for one day in                                                               
Fairbanks.    She described  her  other  responsibilities in  the                                                               
governor's office.                                                                                                              
                                                                                                                                
6:59:24 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON opened  public testimony  on HB  173.   After                                                               
ascertaining  no  one wished  to  testify,  public testimony  was                                                               
closed.                                                                                                                         
                                                                                                                                
HB 173 was held over.                                                                                                           
                                                                                                                                
7:00:24 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 7:00 p.m.                                                                 

Document Name Date/Time Subjects
HB173 Version M.pdf HRES 3/28/2018 1:00:00 PM
HB 173
HB 399 Sponsor Statement 3.26.18.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB 399 O 3.26.18.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB 399 Sectional Sectional Analysis ver O 3.26.18.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB 399 Fiscal Note-DOR-TAX 3.24.18.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB 399 Additional Documents DOR Letter 3.26.18.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB 399 Additional Documents CIT Sector Report FY 2017 3.26.18.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB 399 Additional Documents - Indirect Expenditure Report Reduced Rate Capital Gains.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB 399 Additional Documents - Indirect Expenditure Report Foreign Royalty.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB 399 Additional Documents - Indirect Expenditure Report Federal Credits.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB 399 Additional Documents - Indirect Expenditure Report Stranded Gas.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB173 Supporting Document - Davin Holen Presentation 3.28.18.pdf HRES 3/28/2018 1:00:00 PM
HB 173
HB173 Supporting Document - Jeremy Littell 3.28.18.pdf HRES 3/28/2018 1:00:00 PM
HB 173
HB173 Supporting Document - Joel Neimeyer - Denali Commission presentation 3.28.18.pdf HRES 3/28/2018 1:00:00 PM
HB 173
HB173 Supporting Document - Mike Black Presentation 3.28.18.pdf HRES 3/28/2018 1:00:00 PM
HB 173
HB173 Supporting Document - Nikoosh Carlo Presentation 3.28.18.pdf HRES 3/28/2018 1:00:00 PM
HB 173
SB173 Sponsor Statement.pdf HRES 3/28/2018 1:00:00 PM
SRES 2/12/2018 3:30:00 PM
SB 173
HB173 Fiscal Note GOV-CCC 4.10.17.PDF HRES 3/28/2018 1:00:00 PM
HB 173
HB173 Fiscal Note DOR-TAX 3.26.18.pdf HRES 3/28/2018 1:00:00 PM
HB 173
HB 399 Opposing Document - Letter in Opposition 3.28.18.pdf HRES 3/28/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/4/2018 1:00:00 PM
HB 399
HB173 Supporting Document - Letter in Support 3.28.18.pdf HRES 3/28/2018 1:00:00 PM
HB 173
HB173 WSJ_Climate_McAleer_Opinion 4.2.18.pdf HRES 3/28/2018 1:00:00 PM
HB 173
Denali Commish Neimeyer Ltrs to HRES re HB173.pdf HRES 3/28/2018 1:00:00 PM
HB 173