03/12/2012 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB325 | |
| HB276 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 325 | TELECONFERENCED | |
| += | HB 276 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 12, 2012
1:04 p.m.
MEMBERS PRESENT
Representative Eric Feige, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Alan Dick
Representative Neal Foster
Representative Bob Herron
Representative Cathy Engstrom Munoz
Representative Berta Gardner
Representative Scott Kawasaki
MEMBERS ABSENT
Representative Peggy Wilson, Vice Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 325
"An Act establishing an Alaska coastal management program."
- HEARD & HELD
HOUSE BILL NO. 276
"An Act providing for a credit against the oil and gas
production tax for costs incurred in drilling certain oil or
natural gas exploration wells in the Nenana Basin."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 325
SHORT TITLE: COASTAL MANAGEMENT PROGRAM
SPONSOR(s): REPRESENTATIVE(s) AUSTERMAN
02/17/12 (H) READ THE FIRST TIME - REFERRALS
02/17/12 (H) RES, FIN
03/12/12 (H) RES AT 1:00 PM BARNES 124
BILL: HB 276
SHORT TITLE: OIL/GAS PROD. TAX CREDITS/RATES/VALUE
SPONSOR(s): REPRESENTATIVE(s) THOMPSON, DICK, MILLETT, TUCK,
MILLER
01/17/12 (H) PREFILE RELEASED 1/13/12
01/17/12 (H) READ THE FIRST TIME - REFERRALS
01/17/12 (H) RES, FIN
01/30/12 (H) RES AT 1:00 PM BARNES 124
01/30/12 (H) Heard & Held
01/30/12 (H) MINUTE(RES)
02/01/12 (H) RES AT 1:00 PM BARNES 124
02/01/12 (H) Heard & Held
02/01/12 (H) MINUTE(RES)
02/03/12 (H) RES AT 1:00 PM BARNES 124
02/03/12 (H) Heard & Held
02/03/12 (H) MINUTE(RES)
02/17/12 (H) RES AT 1:00 PM BARNES 124
02/17/12 (H) Heard & Held
02/17/12 (H) MINUTE(RES)
03/12/12 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE ALAN AUSTERMAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As the sponsor, introduced HB 325.
ERIN HARRINGTON, Staff
Representative Alan Austerman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Reviewed the provisions of HB 325 on behalf
of the sponsor, Representative Austerman.
ALPHEUS BULLARD, Attorney
Legislative Legal Counsel
Legislative Legal and Research Services
Legislative Affairs Agency
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a review of his 2/23/12 memorandum
regarding HB 325.
BRUCE BOTELHO, Chair
Alaska Sea Party
Juneau, Alaska
POSITION STATEMENT: As chair of the organization that sponsored
the Alaska Coastal Zone Management Program citizens' initiative,
answered questions regarding HB 325 and the initiative on which
the bill is based.
REPRESENTATIVE STEVE THOMPSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as the sponsor of HB 276.
JANE PIERSON, Staff
Representative Steve Thompson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a sectional analysis of HB 276,
Version D, on behalf of Representative Thompson, joint prime
sponsor.
ACTION NARRATIVE
1:04:15 PM
CO-CHAIR PAUL SEATON called the House Resources Standing
Committee meeting to order at 1:04 p.m. Representatives Dick,
Kawasaki, Gardner, Foster, Munoz, Feige, and Seaton were present
at the call to order. Representative Herron arrived as the
meeting was in progress.
HB 325-COASTAL MANAGEMENT PROGRAM
1:04:47 PM
CO-CHAIR SEATON announced that the first order of business would
be HOUSE BILL NO. 325, "An Act establishing an Alaska coastal
management program."
1:06:38 PM
REPRESENTATIVE ALAN AUSTERMAN, Alaska State Legislature,
introduced HB 325 as the sponsor, saying that the recent Alaska
Coastal Zone Management Program citizens' initiative signed by
about 30,000 voters indicated to him that the legislature should
have a conversation about what that meant. Noting there were
language problems in the initiative itself in terms of how
Alaska's statutes are done, he said he had the bill drafted to
comply with the state's statutes. While HB 325 does not look
like the initiative and some of it does not talk like the
initiative, he said it really is the initiative in complying
with the way statutes are written. His goal is to have a
conversation on the bill and that today his intent is to present
the bill and the initiative so there is an understanding of what
they are. He said he hopes to have conversations at some point
in time as to whether the legislature can draft a bill that is
acceptable to everyone and that is substantially the same.
1:09:32 PM
ERIN HARRINGTON, Staff, Representative Alan Austerman, Alaska
State Legislature, reviewed the provisions of HB 325 on behalf
of the sponsor, Representative Austerman. She explained that
the act would establish the Alaska Coastal Management Program
(ACMP), a program that was previously in place for approximately
four decades. The program was eliminated in 2011 through a
delayed repealer when legislation necessary to continue the
program failed to pass both bodies of the legislature during
regular session as well as two subsequent special sessions. A
citizens' ballot initiative process was kicked off in October
2011 and the initiative was certified [on 3/9/12] by Lieutenant
Governor Mead Treadwell. With 29,991 valid signatures and in
accordance with the Constitution of the State of Alaska, the
initiative will appear on the August 2012 primary ballot.
Representative Austerman introduced HB 325 on 2/17/12.
1:11:16 PM
MS. HARRINGTON noted that HB 325 is essentially the initiative
that has been substantially re-shaped to adhere to the
legislature's own drafting conventions. However, there are a
handful of tweaks from the initiative, three of which stick out.
The first is that the city of Dillingham has been added to the
list of geographic areas included in the first portion of the
bill; it was determined that this city was overlooked in the
initial drafting. The second is a clarification of the role and
appointment process for the public alternates and the third was
a change to the number of affirmative votes required for an
action by the Coastal Policy Board.
MS. HARRINGTON said there are a couple of additional areas where
the drafter has highlighted differences that may be more subtle
and difficult for the reader to pick out. The bill was drafted
by Mr. Alpheus Bullard who has prepared a memorandum outlining
the process he went through in changing the initiative language
to being the language in HB 325. Mr. Bullard also highlighted
areas where it might be confusing to the reader when looking at
the initiative and the bill side-by-side, and he further
highlighted areas to which he wanted to draw the legislature's
attention.
1:13:17 PM
MS. HARRINGTON outlined the three possible paths forward from
this point in regard to HB 325 and the initiative. She said the
first path could be the passing of legislation that the
legislature intends to be substantially similar to the citizens'
initiative. Determination of substantial similarity would rest
with the lieutenant governor, although that decision could be
litigated. If the legislature passed legislation that it
intended to be considered substantially similar, the governor
could veto that legislation, in which case the initiative would
appear on the [2012] August primary ballot. If the governor
signed the legislation and the lieutenant governor determined it
to be substantially similar, per Article XI, Section 4, of the
state constitution, the initiative would be removed from the
ballot and there would be no public vote on it.
MS. HARRINGTON said the second path could be the passing of
legislation that the legislature does not intend to be
substantially similar to the citizens' initiative. Assuming
such legislation was not vetoed by the governor, the lieutenant
governor would still place the initiative on the ballot of the
[2012] August primary. Once on the ballot, the initiative could
either fail or pass. An unknown is whether the initiative
sponsors would actively campaign to see that initiative passed
despite the legislature passing a version of an ACMP program.
She deferred to Mr. Bullard to address the resulting gray area
for how to reconcile differences between the enacted legislation
and the initiative passed by a vote of the people.
MS. HARRINGTON said the third path could be that the legislature
declines to or fails to pass legislation substantially similar
or otherwise, in which case the citizens' initiative would go
before the public on the August [2012] primary ballot. Were the
initiative to pass, the legislature would have the ability to
amend that new law in a future legislative session.
1:17:36 PM
CO-CHAIR SEATON requested Mr. Bullard to review the differences
between HB 325 and the citizens' initiative as outlined in Mr.
Bullard's 2/23/12 memorandum to Representative Austerman.
ALPHEUS BULLARD, Attorney, Legislative Legal Counsel,
Legislative Legal and Research Services, Legislative Affairs
Agency, Alaska State Legislature, reiterated Representative
Austerman's statement that HB 325 really is the initiative. He
noted that under the substantially similar test there is a good
deal of latitude to craft legislation that is different, but HB
325 really is the initiative. Things have been reorganized,
clarified, and the state's [statute] language used. Some
substantive changes were made, the first of which is discussed
on page 2 of his 2/23/12 memorandum about how to deal with
alternate members on the Alaska Coastal Policy Board and how the
board can take action. The more significant of these two
changes is the bill's additional provision that this Alaska
Coastal Policy Board cannot take action without the affirmative
votes of at least six members. This was not specified in the
initiative which provided that a quorum would be five public
members and two designated members and which would mean that
only four would be needed for a majority. This really changes
the workings of the Alaska Coastal Policy Board and somewhat the
direction, neither positive nor negative, but is different.
Regarding alternates for the members of the board, he said he
did not know how essential these are, but the initiative was
silent to how the alternate process would work. He said he
filled in those details that he thought would be the way that
the bill would have been interpreted to have worked to avoid
questions for when an alternative might fill for a member of the
board. Those two changes are noted in terms of the composition
and the workings of the board scrolling forward through this
memorandum.
1:20:28 PM
CO-CHAIR SEATON noted that the aforementioned are included in
Section 46.40.310. He asked what the designation is for the
number 46.41.010 which appears in parentheses on the third line
of page 2 of the memorandum.
MR. BULLARD explained that the numbers in parentheses are where
those sections are located in the text of the initiative. The
first numbers that are not in parentheses are the numbers he
used [in the bill]. Real estate inside the state's statutes is
precious, so in drafting the bill he kept it within the same
chapter, 46.40, to conserve room in the statutes for future
legislative efforts. The different numerical designation is a
matter of housekeeping and has no real legal substantive effect.
MR. BULLARD continued his review of the memorandum, moving to
the change regarding Section 46.40.360 [page 3]. He said he
removed a fairly significant portion of the initiative text that
provided when an enforceable policy of an Alaska coastal
district or coastal resource area would be preempted; that
section of the initiative stated the legal doctrine of
preemption. However, whether this was stated in the initiative
or not, the doctrine would still exist and therefore that
language had no real substantive effect. Thus, that section of
the initiative, 46.41.060, is removed from the text of the bill.
1:22:34 PM
REPRESENTATIVE FOSTER observed that [page 2, paragraph 5, of the
memorandum] states 6 [affirmative] votes are needed to take
action. He understood the [Alaska Coastal Policy Board] would
be comprised of nine members.
MR. BULLARD confirmed the aforementioned is correct.
REPRESENTATIVE FOSTER asked why six votes would be required
since a majority would be five.
MR. BULLARD responded that different boards are differently
organized and a quorum may not necessarily be the same number of
votes that is required for affirmative action in different
situations. For different policy reasons, policymakers find one
preferable to another and in this case it would take that much
more.
1:23:19 PM
CO-CHAIR SEATON presumed this to mean that the five public
members would be unable to pass something without at least one
vote from one of the appointed members from a state agency.
MR. BULLARD replied it is a thirteen-member board: nine public
members and four [designated members] from the Department of
Environmental Conservation, Alaska Department of Fish & Game,
Department of Natural Resources, and Department of Commerce,
Community and Economic Development. If a quorum is five public
members and two designated members, the board could meet when it
has seven members present. It would still take six and for
action to have occurred there would have had to be at least two
designated members present. So, it would be possible that at a
meeting with six public members and two designated members, six
public members could make an affirmative choice without any of
the designated members voting in favor.
1:25:09 PM
REPRESENTATIVE KAWASAKI, regarding Section 46.40.310 dealing
with composition of the board, understood that the initiative
was silent on the role of alternate members and therefore Mr.
Bullard put in his own language. He inquired whether the
affirmative vote of six members would be considered
substantially different by the attorney general.
MR. BULLARD answered that this discrepancy would not be the sort
of discrepancy that would lead anyone to believe this is
something other than substantially the same. When that analysis
occurs, the lieutenant governor, or the courts if the lieutenant
governor's determination is challenged, will look at the scope
and subject matter of the initiative, the purpose of the
initiative, and the means used in the legislative bill and the
initiative to see if the means to effectuate that purpose is
substantially the same. This program is a combined regime of
federal, state, and local permitting that deals with Alaska's
coastal area and resource development. Inside a program of this
magnitude, this detail about the number of board members would
be nothing that would lead anyone to quibble about substantially
the same.
MR. BULLARD concluded his review by stating that the six
affirmative votes and the alternates [for the Alaska Coastal
Policy Board] are the only substantive changes that he made to
the initiative. He said he is happy to answer questions about
language, grammar, or why things were moved to a different
place, but he would like to leave the committee with the thought
that HB 325 is the initiative in bill form.
1:27:54 PM
REPRESENTATIVE MUNOZ recalled that one of the main concerns
heard during previous work on this issue was the Department of
Environmental Conservation (DEC) "carve-out". Given that the
initiative did not incorporate the DEC carve-out, she asked how
incorporating the carve-out into the bill would affect the
substantially similar test.
MR. BULLARD responded that this question of substantially the
same has only been taken up twice by the state's courts - Warren
v. Boucher and State v. Trust the People - and neither of those
instances is readily analogous to the current situation of a
legislative bill and an initiative that would enact a massive
program. Because of the size and scope of the program, there is
significant latitude for the legislature to deviate from the
initiative's exact terms. He said that while he could not say
with certainty how the lieutenant governor or a court might
decide, the initiative contains a number of guidelines in terms
of what a coastal district or coastal resource area can include
in its enforceable policies under a plan. A DEC carve-out would
impose more conditions on what could be included in a coastal
district plan and he is unsure whether those added changes would
rise to the level of this being substantially different or
substantially not the same. He said his legal opinion is that
in the scope of a program of this size, if that were the only
change it would still be a program establishing a coastal
management program for the state that involves local residents
and the departments of the state, and that would likely be ruled
as substantially the same.
1:30:34 PM
REPRESENTATIVE MUNOZ noted that those are permitting issues for
water and air that DEC handles normally. She understood that
not incorporating the DEC carve-out would enable the board to
address policies that are under the purview of the DEC
permitting function.
MR. BULLARD replied there is one important caveat. The statutes
providing the previous DEC carve-out specified that various
chapters - DEC and so forth - were the sole source of permitting
authority having to do with those. But there was also the way
that that carve-out was interpreted and enforced by the
Department of Natural Resources under the prior program. He
therefore did not know whether including that statutory carve-
out in this same program beneath an Alaska Coastal Policy Board
would be exactly the same DEC carve-out that existed in practice
under the prior program. If the statutory provisions of the
historical DEC carve-out were included it might not be a change;
however, that might not be the same DEC carve-out in practice
underneath an Alaska Coastal Policy Board.
1:33:09 PM
CO-CHAIR SEATON pointed out that earlier references to the
substantially similar analysis were in regard to Mr. Doug
Gardner's March 5, 2012, memorandum [to Representative
Austerman]. He requested Ms. Harrington to provide a sectional
analysis of HB 325.
MS. HARRINGTON explained that the bill is structured on the
initiative; however, the initiative is all one large section
which makes it difficult to reference where the bill sections
are within the initiative. She said [Article 1 of] Section 1 of
the bill provides for development of the Alaska Coastal
Management Program. It would establish the Alaska Coastal
Policy Board, its responsibilities, and the method by which
board members would be appointed. The program would be
established within the Department of Commerce, Community and
Economic Development (DCCED), unlike the previous program which
was located within the Department of Natural Resources and
previous to that it was located within the Office of the
Governor. [Under Section 46.40.310], the board would have nine
public members, nine alternate public members, and four
[designated members] who would be the commissioners of the
Department of Environmental Conservation (DEC), Alaska
Department of Fish & Game (ADF&G), Department of Natural
Resources (DNR), and DCCED. The public nominees would be
submitted by the coastal districts of each region and they would
be appointed based on geographic diversity in the state.
1:35:19 PM
MS. HARRINGTON specified that Section 46.40.320 deals with the
powers and duties of the board. It would provide that the board
approve regulations to implement the Alaska Coastal Management
Program (ACMP) in conformity with the federal Coastal Zone
Management Act of 1972. The board would also initiate planning
work, approve coastal district management plans, establish
coordination among state agencies in the development and
implementation of the ACMP, evaluate the effectiveness of
district coastal management plans, and direct DCCED to apply for
grants and other funding that become available for coastal
planning and management. Thus, as envisioned in the initiative,
this board would have broad powers.
MS. HARRINGTON stated that Section 46.40.330 would establish the
Division of Ocean and Coastal Management within the Department
of Commerce, Community & Economic Development (DCCED). Division
responsibilities would include rendering federal consistency
determinations and state consistency determinations; developing
and adopting regulations that have been approved by the board;
ensuring that coastal districts have the data necessary for
executing their responsibilities; and developing and maintaining
a financial assistance program to assist the coastal districts
in their work.
MS. HARRINGTON related that Section 46.40.340 would direct DCCED
to develop regulations for the Alaska Coastal Management
Program. The regulations would include statewide standards for
the ACMP and district plans, as well as consistency review
procedures, including circumstances under which projects would
be excluded from the requirement of a consistency review.
1:37:18 PM
MS. HARRINGTON said Section 46.40.350 would establish the
objectives with which the ACMP must be consistent. Drawing
attention to page 5 of the bill, beginning on line 24, she said
a number of the listed objectives are from the previous program
along with some additional objectives. She understood that in
drafting the bill the Division of Legal and Research Services,
in places where the initiative closely resembled statute that
had been in place under the previous program or previous
iterations of the program, tried to use that language as close
as possible for consistency with what was previously approved by
the legislature.
MS. HARRINGTON explained that Section 46.40.370 describes the
process for implementation of the district coastal management
plans. Either the state or municipalities would implement the
plans depending on whether the municipalities have zoning
authority.
MS. HARRINGTON noted that Section 46.40.380 deals with
compliance and enforcement and would establish requirements that
the municipalities and state [agencies] administer regulations
and control in conformity of district coastal management plans.
It would also provide that the superior courts of the state have
jurisdiction to enforce lawful orders of the board and
department under this chapter, which is another carryover from
the previous body of statute.
1:38:57 PM
MS. HARRINGTON specified that Article 2 of Section 1 outlines
the procedure that allows areas of the coastal regions of the
state to organize into Coastal Resource Service Areas [for the
purposes of developing and implementing Coastal Management
Plans]. She offered her belief that the intention of the
initiative sponsors was to create a mechanism in law through
which the coastal districts that previously existed could be
reconstituted, but deferred to the initiative sponsor to answer
any questions about that intention.
MS. HARRINGTON said Article 3 of Section 1 is general provisions
and definitions, and includes the many small provisions that
were further forward in the initiative. She explained that this
was done to conform to drafting standards.
MS. HARRINGTON drew attention to the transition language in
Section 2, page 17, starting on line 8. She pointed out that
because this transition section is new to the legislation, there
may be some question as to whether the part of the bill dealing
with reconstituting the coastal districts the state previously
had [Article 2] is necessary should this transition language, or
a version of it, be passed. She deferred any questions in this
regard to Mr. Bullard.
1:42:14 PM
CO-CHAIR SEATON put forth several questions for answers by the
appropriate person. He requested an explanation for why the
program was put under the Department of Commerce, Community &
Economic Development rather than the Department of Natural
Resources or the Office of the Governor. Regarding the part of
Section 46.40.320 that would give the board the power to approve
regulations, he recalled that in a similar situation related to
fish groups in the state this type of power was determined to be
non-legal because it passed an authority for regulations to a
separate body. He requested that someone address this issue.
Regarding Section 46.40.370 and municipalities having zoning or
other controls, he requested an explanation of those
municipalities that have these Title 29 powers and whether this
would change their current authorities under that title, as well
as how it would affect those that have not selected those
powers. He further asked that someone address the question
about what would be needed if the transition language were
incorporated into the bill.
1:45:15 PM
REPRESENTATIVE MUNOZ added another question to those on the
table, asking how many enforceable policies there were prior to
the DEC carve-out. She further asked whether the number of
enforceable policies was affected when the DEC carve-out came
into play.
CO-CHAIR SEATON inquired whether Representative Munoz is asking
about the enforceable policies prior to [the changes made by
Governor Frank Murkowski] that changed a lot more than just the
DEC carve-out.
REPRESENTATIVE MUNOZ replied that she would like to know the
approximate impact to the number of enforceable policies after
the DEC carve-out came into play.
CO-CHAIR SEATON pointed out that two questions are being asked
by Representative Munoz: the approximate number of enforceable
policies pre- and post-change by the Murkowski Administration;
and the difference in numbers identified to the DEC carve-out.
REPRESENTATIVE MUNOZ concurred.
1:46:57 PM
REPRESENTATIVE HERRON said he would like to talk with the bill
drafter about how the DEC carve-out "morphed" over the last
several years. He then asked whether HB 325 would allow coastal
districts to veto projects, and whether HB 325 would allow
coastal districts to establish enforceable policies that
conflict with state and federal law.
CO-CHAIR SEATON noted that a difference between pre- and post-
Murkowski Administration changes was third-party lawsuits. One
of the changes was disallowing nonparticipants from appealing or
filing lawsuits on stipulations or conditions required under the
consistency review. Offering his belief that the bill is silent
in this regard, he asked how this would be handled under HB 325
and whether that silence is intentional.
REPRESENTATIVE GARDNER understood that HB 325 would disallow
citizen petitions or appeals. She asked whether there is any
data on how the existence of a coastal zone plan reduces
lawsuits and delays due to appeals and lawsuits.
1:50:02 PM
MS. HARRINGTON deferred answers to the aforementioned questions
to either the bill drafter or the initiative sponsor. For any
questions not answered, she said she would bring back the
answers at a future hearing.
CO-CHAIR SEATON agreed to that approach, saying the committee
was just getting the issues on the table.
MR. BULLARD deferred to the initiative sponsor to answer the
question about why the program is proposed for placement under
the Department of Commerce, Community & Economic Development.
1:50:57 PM
MR. BULLARD, regarding the proposed grant of decision-making
power to the Alaska Coastal Policy Board and whether this would
be too great a grant of legislative authority, said he does not
see that the bill, or the initiative on which the bill is based,
would provide too much authority to the board. The board's
authority is prescribed in terms of what it is limited to and
what regulations and coastal management plans it can approve.
Everything has to do only with the projects in the coastal zone.
This is also an area where the rest of state law, as well as
federal law, have not disappeared. Since the board could
approve district management plans and procedures, he said he
does not think it too great a grant of legislative discretion.
1:52:11 PM
MR. BULLARD noted that the zoning provision under AS 46.40.370
existed under the prior coastal zone management program. Given
there is a synthesis of federal, state, and local permitting
under the Alaska Coastal Management Program, it would just
provide that those municipalities that exercise zoning authority
will include the provisions of the plan in their zoning
regulations. For those districts or Coastal Resource Service
Areas having plans but not exercising zoning control, the state
agencies would be responsible for implementing the provisions.
1:52:53 PM
MR. BULLARD, regarding whether enforceable policies could
interfere with state or federal law, explained that Section
46.40.360(b) of the bill provides what a district coastal
management plan must include or must not include whether it is
to be approved. Referencing Section 46.40.360(b) of the bill
[page 7], he said the enforceable policies of the plan: are not
allowed to duplicate, restate, or incorporate by reference state
or federal statutes or regulations; they cannot be preempted by
federal or state law; they cannot arbitrarily or unreasonably
restrict a use of state concern; they must be clear and concise
as to the activities and persons affected by the policies and
requirements of the policies; they must use prescriptive or
performance-based standards that are written in precise and
enforceable language; and they must address a coastal use or
resource of concern to the residents of the coastal district as
demonstrated by local knowledge or supported by scientific
evidence." Thus, there are already sideboards on what these
plans can or cannot include.
1:54:32 PM
MR. BULLARD, in regard to whether the Alaska Coastal Policy
Board or the local districts could effectively veto a project,
explained that a district plan could involve requirements that
would have to be approved by the coastal policy board. He said
he does not know if that would ever amount to a veto of a
project, it would depend on the project and the permitting
requirements that were included.
MR. BULLARD, regarding lawsuits and standings, offered his
belief that the bill and the initiative are silent on who can
bring suit to enforce provisions of the district coastal
management policy or plan.
1:55:39 PM
REPRESENTATIVE HERRON inquired whether HB 325 would specifically
supersede other authorities of state agencies.
MR. BULLARD answered no. If current law provides another state
agency or department some sort of authority, a district plan
that was adopted could not be adopted if it interfered with that
agency's authority under those restrictions of 46.40.360(b).
1:57:08 PM
BRUCE BOTELHO, Chair, Alaska Sea Party, noted he is mayor of the
City and Borough of Juneau, but is before the committee today in
his capacity as chair of the Alaska Sea Party, sponsor of the
Alaska Coastal Zone Management Program citizens' initiative. He
said that in the absence of action by the Alaska State
Legislature, the Alaska Sea Party will champion the initiative
on the ballot later this year.
MR. BOTELHO commended Ms. Harrington and Mr. Bullard for their
presentations, saying that Ms. Harrington correctly outlined the
three paths that the legislature has before it and that she
provided an accurate summation of HB 325 and its tracking of the
initiative. He said Mr. Bullard's representation that HB 325
is, in essence, the initiative is absolutely correct, even
though they are organized differently. The change put in by Mr.
Bullard for the minimum number of members needed to vote in the
affirmative to take action by the Alaska Coastal Policy Board is
a new feature, he continued, but one that makes eminent sense.
In regard to Mr. Bullard's removal of what constitutes
preemption, he said Mr. Bullard is correct that the provision in
the initiative [46.41.060(c)] is a restatement of the law with
regard to what constitutes preemption. The Alaska Sea Party
included it in the initiative because it has been a very
important issue of contention historically and the party wanted
to make explicit that coastal policies may not in any way
preempt federal or state law. However, its elimination does not
in any way change the substantial similarity requirement were HB
325 to move forward.
1:59:52 PM
MR. BOTELHO, addressing why the initiative sponsor placed the
program under the Department of Commerce, Community & Economic
Development (DCCED), pointed out that the grant administration
for coastal districts has resided in the DCCED. In a more
general sense it is the DCCED that has had long standing ties
and responsibilities for state/local government relations, so
that was the preeminent reason for the initiative placing the
program in DCCED. A secondary concern for some was that the
Department of Natural Resources really performed two functions
when all the responsibilities for coastal management were
consolidated in that department: one as a permitting agency and
the other as the administrating agency for coastal management.
Coastal management itself is not a permitting function, it is a
coordinating function. The agencies that have historically had
permitting responsibilities - DNR, ADF&G, and DEC - will
continue to do the job they have always done in terms of issuing
permits. The function of the program in broad strokes is to
call for coordination of those permitting processes that the
agencies are working on together and working with project
developers.
MR. BOTELHO, regarding Representative Munoz's question about the
DEC carve-out and what the initiative sponsors were hoping to
achieve, said the idea was that all agencies that are issuers of
permits in the coastal zone work together in coordinating their
processes and working with project developers under one
umbrella. That includes state agencies, but once the program is
reestablished it is hoped that there will be the right to review
federal projects and thus there would also be federal agency
participation in this process.
2:02:49 PM
CO-CHAIR SEATON recalled that under the immediately previous
program the only people who could appeal were participants - the
coastal districts, agencies, or project sponsor. He asked what
is envisioned by the Alaska Sea Party since the initiative seems
to be silent in this regard.
MR. BOTELHO concurred the initiative is silent on this issue.
He explained that because the Alaska Sea Party was aware of
concerns about the earliest program that allowed virtually
unlimited ability for individuals to appeal actions of coastal
policy districts, language was not incorporated into the
initiative to authorize that. At the same time, the initiative
expressly grants what would likely be the case in any event,
which is the power of the superior court to take action
interpreting this act. In that respect, it probably would not
differ from the practices over the last decade.
2:04:42 PM
REPRESENTATIVE HERRON noted that the initiative sponsors could
have chosen any time in the timeline of the previous program for
use as a program structure. He asked why the Alaska Sea Party
chose a "pre-Murkowski" structure.
MR. BOTELHO allowed it is probably fair to view the program as
having a "pre-Murkowski" structure, though the Alaska Sea Party
was not consciously emulating it except to the extent of the
organization's concern about meaningful participation of local
communities in the development of statewide policies that were
to be applicable in the coastal zone. In the Alaska Sea Party's
view, the most effective way was some variant on what had been
the Alaska Coastal Policy Council, a structure which calls for
representatives coming from coastal regions. However, as in
previous iterations, the ultimate appointing authority remains
the governor, both for the commissioners and the actual board
members who are appointed by the governor from nominations made
from coastal policy districts. The Alaska Sea Party saw that as
an important feature of providing for local input and local
participation. Aside from coastal districts themselves, it is
the Alaska Sea Party's view that this is probably the most
important distinguishing element about the initiative in
comparison to those pieces of legislation considered by the
legislature last year in regular and special session.
2:07:09 PM
REPRESENTATIVE MUNOZ asked how many enforceable policies the
Juneau district plan had prior to and after the changes put out
by the Murkowski Administration.
MR. BOTELHO recollected that at one point there might have been
as many 51, most of which were struck. The Juneau district
appealed and ultimately at least 13 of them were reapproved by
the administration. In further response, he reiterated that
this is his recollection and his numbers may be a little off,
but he thought almost all of the Juneau district's enforceable
policies were disallowed. There was a process for appealing,
and his recollection is that, of those, 13 were reinstated.
2:08:16 PM
REPRESENTATIVE MUNOZ, regarding Mr. Botelho's earlier statement
that the ACMP process was a coordinating process, posited that
those enforceable policies are necessary for a project to move
forward, so in a sense it becomes part of the permitting
process. She inquired whether Mr. Botelho agrees with that.
MR. BOTELHO responded that to the extent there are approved
coastal district plans, developments that take place in those
districts must conform to those plans; it is a species of land
use planning. So, the answer is yes; there must be conformity
to the plans.
REPRESENTATIVE MUNOZ postulated that it is therefore more than
coordination; it is actually part of the permitting process. A
project must go through the ACMP process and comply with all of
the enforceable policies before it moves forward.
MR. BOTELHO replied correct.
2:09:32 PM
CO-CHAIR SEATON asked whether Juneau adopted those into its
local codes so that currently those enforceable policies must
have a separate permit under the municipality to go forward.
MR. BOTELHO confirmed that Juneau's coastal management plan is
part of its comprehensive plan.
2:09:54 PM
REPRESENTATIVE HERRON recalled that last year the conference
committee substitute for HB 106 failed the House [in the first
special session] and a House substitute for SB 46 failed in the
second special session. Surmising that Mr. Botelho's answer
would be different than Mr. Bullard's, he inquired whether those
bills could be considered substantially the same as the ballot
initiative.
MR. BOTELHO noted he is a lawyer, so his answer will likely be
similar to Mr. Bullard's. He said that Warren v. Boucher, the
seminal case for Alaska, basically makes clear that as long as
the subject matter is largely the same the manner of
effectuating it can differ in small respects and the court even
has language that says may differ in a major respect. As
indicated by Mr. Bullard, the second case, State v. Trust the
People, expanded on this slightly, but made clear that the
larger the scope of the legislation being considered, and in
this case it is a fairly complex statutory scheme, the greater
the latitude the legislature has to deviate from the initiative
language itself. The second test is the degree of which they
attempt to meet the same purpose. To the extent that
reestablishing a coastal zone management program is being looked
at, there is some degree of latitude about how a court, and
initially the lieutenant governor, might look at past
legislation quite apart from this piece of legislation. The
third [test] is looking at whether they are structurally
similar, and on this point those measures offered in the special
sessions will have a high barrier to overcome, probably more in
terms of the coastal policy board structure than perhaps the
issue of the DEC carve-out.
CO-CHAIR SEATON informed members that the committee packet
includes a full memorandum from Mr. Bullard regarding the
aforementioned.
2:13:44 PM
REPRESENTATIVE HERRON asked whether the Alaska Sea Party would
still pursue an active campaign on the ballot initiative if the
legislature were to pass a bill that overcomes all the high
barriers and is supported by the people who backed the
initiative.
MR. BOTELHO replied he is quite confident that the Alaska Sea
Party would not actively pursue the initiative if a good piece
of legislation moved forward that is not identical to the
initiative. The organization's goal is to see a good program
and the initiative is the organization's best effort to put
together what it thought would be a good program. He said he
thinks the challenge to the legislature is less to spend a lot
of time worrying about whether a proposed bill is substantially
the same and a lot more about what makes for a good coastal
management program.
2:15:13 PM
CO-CHAIR SEATON, regarding the transition in Article 2 of the
bill and the transition language in [Section 2] that
reestablishes the previous coastal districts, inquired whether
reestablishment of the previous coastal districts would satisfy
the coastal district concerns of the initiative sponsor.
MR. BOTELHO answered yes, provided his understanding of the
question is correct.
2:15:54 PM
CO-CHAIR SEATON said the previous coastal districts were
adequate, so if that transition language did reestablish those
districts then the rest of that large amount of paperwork in the
bill could go away.
MR. BOTELHO responded there is a reason for including this
language. It would create the opportunity for one or more of
the existing Coastal Resource Service Areas to break into
multiple districts, and that is the primary import of much of
the language which is there. So, it is anticipating a
development that, while not anticipated any time soon, would
provide flexibility for future generations.
2:17:03 PM
REPRESENTATIVE MUNOZ inquired whether the remaining 13
enforceable policies from the previous program have been adopted
into Juneau's planning and zoning code, and if not, whether
there the intent is to do so.
MR. BOTELHO answered that Juneau's [coastal management] plan is
incorporated into its comprehensive plan, so it is part of
Juneau's overall approach. A question he cannot answer now, but
will follow up on, is how Juneau has been making use of that in
light of the July 2011 demise of the statewide program.
2:18:06 PM
CO-CHAIR FEIGE surmised from Mr. Botelho's earlier statements
that the Alaska Sea Party would not have had a significant
objection to HB 106, as passed out of the House last year,
because it would have reestablished the Alaska Coastal Zone
Management Program.
MR. BOTELHO replied he wants to make clear that he is not
endorsing any bill that moved last year, but indicating that if
a good bill passed, the reference point being the Alaska Sea
Party's initiative. He said he is not suggesting that the bill
must be identical to HB 325 or the initiative. If it is a good
bill and incorporates among other elements the local voice that
he has referred to, his guess is that the Alaska Sea Party would
not actively campaign for the initiative. He added that the
primary point in his comments was to say that he thinks the
focus of the legislature should be on passing the best bill it
can and to not be driven primarily by substantial similarity.
Good legislation should stand on its own.
2:19:40 PM
CO-CHAIR FEIGE stated that House members thought HB 106 was
pretty good, given it passed the House by a vote of 40-0. He
asked why the Alaska Sea Party did not take that bill as the
boiler plate for the initiative, but instead rolled the calendar
back 10 years or so.
MR. BOTELHO responded that in the Alaska Sea Party's view it was
rolling it forward in terms of looking at the source of this
initiative - largely local government, participants who wanted
to make sure that there was a viable role for local
participation in shaping statewide policies.
2:21:13 PM
REPRESENTATIVE HERRON reiterated his earlier question about the
two pieces of legislation, one in the first special session and
one in the second special session.
MR. BULLARD answered there are two cases interpreting the
substantially the same standard and neither of those two dealt
with a program as comprehensive and large as this one. Warren
v. Boucher dealt with some campaign finance regulations and
State v. Trust the People was a very simple and narrow matter of
how a U.S. senator would be either voted in, or briefly
appointed, or not appointed at all. Regarding the House and
Senate vehicles considered during the first half of this
legislature for renewing the Alaska Coastal Management Program,
it is entirely possible that both of them would be found or
either of them would be found to be substantially the same.
That said, there is an element in the initiative that deals with
the Alaska Coastal Policy Board, the removal of the DEC carve-
out, and various other places found in the added objectives of
the program that have to do with local participation and control
that are absent from those bills. He said he does not know how
significant a court would find those elements and whether they
are central. The Alaska Coastal Management Program does a lot -
it coordinates state/federal permitting and brings federal money
to the state for grants for these things. How important that
element of local control is to the larger program he is unsure
how a court would find. He offered his suspicion that had the
legislature passed a bill that did not have quite the same
extent of local participation and control as countenanced in the
initiative, it would be found the same. However, he added, it
is impossible to answer the question with any certainty.
CO-CHAIR SEATON held over HB 325.
HB 276-OIL/GAS PROD. TAX CREDITS/RATES/VALUE
2:23:38 PM
CO-CHAIR SEATON announced that the next order of business would
be HOUSE BILL NO. 276, "An Act providing for a credit against
the oil and gas production tax for costs incurred in drilling
certain oil or natural gas exploration wells in the Nenana
Basin." [Before the committee was Version M, the proposed
committee substitute labeled 27-LS1193\M, Bullock, 1/18/12,
adopted as the working document on 1/30/12.]
The committee took an at-ease from 2:23 p.m. to 2:28 p.m.
2:28:33 PM
CO-CHAIR FEIGE moved to adopt the proposed committee substitute,
version 27-LS1193\D, Nauman/Bullock, 3/2/12, as the working
document. There being no objection, Version D was before the
committee.
2:29:07 PM
REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, said he
is before the committee to present Version D of HB 276 and that
the bill is a policy call for the legislature. He said the bill
would provide incentives that will hopefully spur investments
leading to seismic and drilling exploration in unexplored
frontier basins located in close proximity to communities in
need of a local energy source. He noted that his staff has
worked closely with the Department of Natural Resources (DNR) to
identify six areas within the state that represent unexplored
basins located in close proximity to energy challenged
communities. The bill would incentivize exploration by offering
four tax credits for seismic exploration within the [six]
different basins. Explorers seeking the credit would agree to
the data becoming public within two years of receiving the
credit. The seismic credit would be 75 percent of the seismic
exploration cost or $7.5 million, whichever is less. The bill
would also provide a drilling credit for the first four
exploration wells drilled within the identified areas with no
more than two wells in any single area. The drilling credit
would be 80 percent of actual drilling cost or $22.5 million,
whichever is less. Both credits under the bill would be for
work performed between June 1, 2012, and July 1, 2016.
REPRESENTATIVE THOMPSON pointed out that economic growth and
development in Interior Alaska is crippled by high energy prices
and the lack of renewable energy supplies, and said HB 276 would
strongly encourage companies to invest in potential frontier
basins. During the committee's discussion of the bill it became
evident there were more communities across Alaska that were
experiencing similar energy challenges and were looking for
possible solutions in their own backyard. The bill originally
dealt with drilling incentives in the Nenana Basin only. The
Nenana Basin is located 50 miles from Fairbanks and has road,
rail, and power access nearby. As drafted, HB 276 has the
potential to benefit not only the Interior but all Alaskans on
the Railbelt and beyond.
2:31:45 PM
JANE PIERSON, Staff, Representative Steve Thompson, Alaska State
Legislature, provided a sectional analysis of Version D of the
bill on behalf of joint prime sponsor, Representative Thompson.
She explained that Section 1 would [amend AS 43.55.025(a) to]:
make a conforming amendment to new section (q); provide a new
frontier basin drilling credit at the lesser of 80 percent of
the total drilling expenditures or $22.5 million described in
(n) of this section and that qualify under (b), (c), and (p) of
this section; and provide a new frontier basin seismic credit at
the lesser of 75 percent of the total seismic exploration
expenditures described in (o) of this section and that qualify
under (b), (c), and (p) of this section. She offered her belief
that a friendly amendment will be forthcoming to remove (c) from
the qualifications for seismic credits because (c) deals
exclusively with drilling credits. Addressing Section 2, she
said it would make a conforming amendment to include new
subsections created in AS 43.55.025(a).
2:32:56 PM
MS. PIERSON outlined Section 3, which proposes to add four new
subsections - (n), (o), (p), and (q) - to AS 43.55.025.
Subsection (n) describes the new frontier basin exploration
drilling credits. A person drilling the first four exploration
wells in an area described in subsection (p) of the bill on
state or private lands would be eligible for credits described
in subsection (a)(6) of the bill. The proposed credit could not
be taken for more than two exploration wells in any single area
described in subsection (p) of the bill. Subsection (n) would
further require that written consent be obtained from the owner
of oil and gas interests on private land for full public release
of all well data within two years after receiving a credit.
Data submission requirements would need to be in compliance with
the requirements in (f)(2) of this statute. A person planning
to drill an exploration well would be required to get approval
from the Department of Natural Resources (DNR) commissioner
prior to spudding the well. The DNR commissioner would have to
make an affirmative finding that the exploration well is in the
best interest of the state based on the well location, the
proximity to a community in need of a local energy source, the
proximity to existing infrastructure, the experience and safety
record of the explorer in conducting operations in remote or
roadless areas, the projected cost schedule, whether seismic
data sufficiently identifies a particular tract for exploration,
whether targeted depth and range are designed to penetrate and
fully evaluate the hydrocarbon potential below which hydrocarbon
reservoirs are likely to be found, and whether the exploration
plan provides for full evaluation of the well. Credits under
this subsection would be for work performed after June 1, 2012.
The drilling and exploration would need to be in an area with a
basin described under (p) of this section. If this credit is
claimed, no other credits could be claimed under this section or
AS 43.55.023 for the same expenditures.
2:35:16 PM
MS. PIERSON said proposed new subsection (o) describes the new
frontier basin seismic credit. It would provide that a person
conducting the first four seismic exploration projects in the
areas described in proposed new subsection (p) for the purposes
of discovering oil or gas in a basin is eligible for the credit.
A credit could not be taken for more than one seismic
exploration project in an area described in subsection (p).
Exploration credits would be available for work performed after
June 1, 2012. The person conducting seismic exploration on
private land would have to obtain written consent from the owner
of the oil or gas interest for full release of geophysical data
in compliance with the submission requirements of (f)(2). The
commissioner of DNR would have to give approval before the
commencement of seismic exploration activities and would have to
make an affirmative finding that the seismic project is in the
best interest of the state based on location, project cost,
schedule, data acquisition and data processing plan, the reason
for choosing the area for exploration, and the experience and
safety record of the person doing the exploration in a remote or
roadless area. A taxpayer obtaining a credit under this
subsection could not claim a tax credit under AS 43.55.023 or
another provision of this section for the same exploration
expenditure. She added that these credits would go to the
person doing the drilling, not the individuals holding an
interest within a multiple party, so a partner still could get
the credit.
2:37:09 PM
MS. PIERSON said proposed new subsection (p) states that credits
under (a)(6), (n), (a)(7), and (o) must be for exploration of a
basin within the following areas whose criteria points are
determined by using the World Geographic System of 1984 datum.
These six locations - Fairbanks, Kotzebue, Emmonak, Glennallen,
Egegik, and Port Moller - were identified by DNR as potential
frontier basins and they were further defined by proximity to
communities that are suffering from high energy cost and supply
issues.
MS. PIERSON explained that subsection (q) was added to HB 276 in
response to a problem identified by [oil and gas consultant]
Pedro van Meurs, which was that if a current producer with a tax
liability at high prices would offset the full marginal rate,
plus the expanded exploration tax credit, the state could end up
paying more than the 65 percent that is intended for exploratory
work. This can be seen as an inequity in the design of the
current tax credit wording. The intent is to set the amount for
exploration credits at 65 percent and not dependent on
particular companies or other operators. The limitations are
not applied to the Cook Inlet or frontier basin credits since
they are credits geared for creating a stampede of exploration
in certain areas of the state that will produce benefits for the
state and its residents.
2:38:39 PM
CO-CHAIR SEATON understood that this, unlike the Cook Inlet
credit, was not for a single entity drilling three wells. This
is multiple persons could either do the multiple seismics, or
multiple persons, meaning multiple companies, could qualify for
the tax credit by drilling in one basin and someone else in
another basin. It is not restricted to the same person, it is
persons.
MS. PIERSON confirmed this understanding to be correct and
apologized for misspeaking earlier.
2:39:24 PM
REPRESENTATIVE KAWASAKI understood that Section 3 identifies the
way in which an explorer can apply for drilling credits.
Regarding the best interest finding on page 4, line 15, he
presumed that the DNR commissioner would have to have submitted
a best interest finding and agreed that the [exploration well]
was qualified for the credit prior to the drilling actually
being done.
MS. PIERSON confirmed this understanding to be correct.
REPRESENTATIVE KAWASAKI inquired whether a best interest finding
is something that can readily be done and asked how much time it
would take. He understood that a lot would go into a best
interest finding before a credit could be applied for.
MS. PIERSON offered her belief that (f)(2) of the statute, which
the committee does not have before it, provides 30 days after
the date of request, unless a longer period is provided.
REPRESENTATIVE KAWASAKI, regarding the condition under the best
interest finding about the explorer's experience and safety
record, inquired whether that record is for Alaska or other
states, or would be up to the commissioner to decide.
MS. PIERSON offered her belief that it would be left for the
commissioner to decide, but added that she believed it would
also be whether the explorer's agents who are actually
conducting the drilling or seismic have had some experience in
remote and roadless areas.
2:41:43 PM
REPRESENTATIVE HERRON offered his appreciation for how the bill
has changed and where the proposed committee substitute (CS) is
going. Noting the map shows six basins, he asked about the
criteria used [for their selection] such that there are not
seven or eight basins.
MS. PIERSON replied that DNR provided the initial basins and the
sponsor looked at them in regards to being close to communities
that could actually use the resources and that had a need for
the resources, which is how these six areas were chosen. The
other three areas provided by DNR were either not in close
proximity to a community that would need them or were in such
close proximity to the Cook Inlet that they were already being
taken care of.
REPRESENTATIVE HERRON surmised, then, that there is no need to
have a trigger built into the statutes to open up another basin
without going back to the legislature.
MS. PIERSON responded that extending this credit until 2022 was
talked about at one time, along with adding some other things
discussed in this committee. However, due to the lateness of
the session, she said she created what she hopes is a good
framework and offered her belief that if this works it will be
looked at again before 2016.
2:43:39 PM
REPRESENTATIVE GARDNER related she has an ongoing theme of
letting Alaskans and legislators know what the state is buying
and spending and who is getting and claiming credits. She asked
which elements of HB 276 are completely available to the public
and which are not. For example, if the commissioner made a best
interest finding, she presumed the public could read that and be
able to estimate what the credit would be. She said she would
like to see, in principle, that whenever a tax credit is given
to someone the information is available to all Alaskans so they
know who the beneficiaries are, along with the amount.
MS. PIERSON answered that the sponsor tried to do this by
requiring the data discovered be made public within two years.
Whether the explorer actually has a lease or has an exploration
area, it is almost like advertising. If there is something good
going on the explorer is protected by its exploration area or
its lease. If something is found it may bring investors into
these areas, something that has been problematic. Therefore, in
making any data discovered for this credit public and available,
the sponsor is trying to give the state more knowledge and
something it can sink its teeth into.
REPRESENTATIVE GARDNER offered her appreciation for the
aforementioned.
2:45:45 PM
CO-CHAIR SEATON pointed out that under existing programs any
explorer can qualify for the 65 percent credit without sharing
data. He therefore understood that someone wishing to take the
enhanced credits for exploration in the proposed areas under HB
276 would have to go through the best interest finding and would
have to agree to release the data.
MS. PIERSON confirmed that this is correct.
2:46:26 PM
CO-CHAIR FEIGE understood the DNR commissioner and his staff
would approve where the seismic projects or the exploratory
drilling occurs. He asked whether there is a time constraint
from when the credit is approved and when the work must start.
MS. PIERSON replied that to qualify for the [proposed] credit an
exploration expenditure would have to incurred for work
performed after [June 1, 2012] and before July 1, 2016.
2:47:20 PM
CO-CHAIR SEATON understood that under the bill's provisions the
person qualifying for and receiving the credit would be the one
actually turning the drill bit first.
MS. PIERSON responded "that is true and that is really belt and
suspenders," but as was seen with Cook Inlet that became very
important.
2:47:52 PM
REPRESENTATIVE FOSTER noted that the second paragraph of the
sponsor statement states that the drilling credit would be for
the "first four exploration wells in an area described in the
bill with no more than two wells in any single area." He
inquired whether that means a total of four wells or means six
areas times no more than two wells in each area, which would be
twelve.
MS. PIERSON, noting that this has been a hard one to nail down
in legal writing, said it would be four total.
2:48:31 PM
CO-CHAIR SEATON opened public testimony on HB 276. After
ascertaining that no one wished to testify, but that the
Resource Development Council had submitted written testimony in
favor of the bill, he announced that HB 276 would be held over
for public testimony on 3/14/12 and that people could submit
written testimony as well.
2:49:29 PM
CO-CHAIR SEATON moved to adopt Conceptual Amendment 1, written
as follows:
Page 2, Line 14: Delete (c)
CO-CHAIR SEATON pointed out that this is the amendment talked
about by the sponsor that would delete the reference to (c).
CO-CHAIR FEIGE objected for discussion purposes.
CO-CHAIR SEATON explained that lines 12-14 on page 2 talk about
seismic exploration activities. However, (c) specifically
references only exploration wells, so reference to (c) is
probably inappropriate.
CO-CHAIR FEIGE withdrew his objection. There being no further
objection, Conceptual Amendment 1 was adopted.
2:51:10 PM
REPRESENTATIVE KAWASAKI recalled Ms. Pierson's statement that
the proposed tax credits would not be stackable. He noted that
the research and development tax credit is not in Title 43, but
under a different title. He requested clarification on which
credits are stackable and which are not stackable.
MS. PIERSON said she will have to get back to the committee with
an answer.
CO-CHAIR SEATON pointed out that the two fiscal notes are for
the original bill and said new fiscal notes are anticipated for
Version D.
2:53:04 PM
REPRESENTATIVE KAWASAKI said he will submit written questions
through the co-chair about the dynamics of the best interest
findings, the proximity to a community in need, the definition
of proximity to existing infrastructure, and how those would be
objectively looked at by the commissioner in a best interest
finding.
CO-CHAIR SEATON offered his belief that the bill actually lays
out mileage around the points.
MS. PIERSON said this can be found in subsection (p) on page 6,
beginning on line 2.
CO-CHAIR SEATON added that the aforementioned language describes
the areas the basins would have to be in. He recalled that DNR
had previously said a best interest finding would be based on
the prospectivity because the state did not want to spend a lot
of money if there was not much prospectivity. He asked whether
this language is adequate for Representative Kawasaki.
2:55:47 PM
REPRESENTATIVE KAWASAKI commented that this was originally a
Nenana Basin bill and now a number of different communities have
been added. He recollected a discussion led by Co-Chair Feige
in which there was talk about whether a community would be able
to take advantage of a potential find. For example, Fairbanks
is close to the road system and has a need, but in rural areas
with a need it might not be cost effective to pay for the
credits; therefore, it is a policy call that must be made.
MS. PIERSON offered her belief that that is the reason for the
best interest finding. She said a problem of these being
frontier basins is that they have never been actually solidified
in their definitions, which is the reason for the circles [on
the map depicting the six areas]. She imagined that if somebody
wanted to drill in an area within the circle but not in the
basin, there would be a problem with that, and that is the best
interest finding. The Department of Natural Resources was
concerned that there be a development plan.
CO-CHAIR SEATON offered his appreciation for the colored map
depicting the proposed areas that are defined in the bill by
latitude and longitude.
2:57:45 PM
CO-CHAIR SEATON understood that the bill does not include outer
continental shelf (OCS) or federal land; thus the credits would
be available for either state or private land.
MS. PIERSON confirmed that this is correct.
CO-CHAIR SEATON said his previous statement was to clarify that
the state credit would not apply to any work occurring off the
Aleutian Islands in the OCS.
[HB 276 was held over.]
2:58:37 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:58 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB0325A.pdf |
HRES 3/12/2012 1:00:00 PM |
HB 325 |
| HB 325 Sponsor Statement.pdf |
HRES 3/12/2012 1:00:00 PM |
HB 325 |
| HB276 Sponsor Statement version D.pdf |
HRES 3/12/2012 1:00:00 PM HRES 3/14/2012 1:00:00 PM |
HB 276 |
| Sectional House Bill 276 version D.pdf |
HRES 3/12/2012 1:00:00 PM HRES 3/14/2012 1:00:00 PM |
HB 276 |
| Oil Basin Final re areas version D 3.8.12.pdf |
HRES 3/12/2012 1:00:00 PM HRES 3/14/2012 1:00:00 PM |
HB 276 |
| HB276 CS versiion D 3.7.12.pdf |
HRES 3/12/2012 1:00:00 PM HRES 3/14/2012 1:00:00 PM |
HB 276 |
| HB 325 Legal Opinion.pdf |
HRES 3/12/2012 1:00:00 PM |
HB 325 |
| 12-177ljw.pdf |
HRES 3/12/2012 1:00:00 PM |
HB 325 |
| Document1.docx |
HRES 3/12/2012 1:00:00 PM |
HB 276 |
| RDC CS HB276 Comments.pdf |
HRES 3/12/2012 1:00:00 PM |
HB 276 |
| HB 325 Sectional Analysis Version I.pdf |
HRES 3/12/2012 1:00:00 PM |
HB 325 |