Legislature(2003 - 2004)

02/11/2003 09:50 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                        February 11, 2003                                                                                       
                            9:50 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bruce Weyhrauch, Chair                                                                                           
Representative Jim Holm, Vice Chair                                                                                             
Representative Nancy Dahlstrom                                                                                                  
Representative Bob Lynn                                                                                                         
Representative Paul Seaton                                                                                                      
Representative Ethan Berkowitz                                                                                                  
Representative Max Gruenberg                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
^OVERVIEW:  POSSIBLE  REVENUE  SOURCES   FROM  THE  DEPARTMENT  OF                                                              
NATURAL RESOURCES                                                                                                               
                                                                                                                                
TAPES                                                                                                                         
                                                                                                                                
03-08 SIDE A                                                                                                                    
                                                                                                                                
CHAIR  BRUCE WEYHRAUCH  convened the  meeting of  the House  State                                                            
Affairs Standing Committee at 9:50 a.m.                                                                                         
                                                                                                                                
SUMMARY OF INFORMATION                                                                                                        
                                                                                                                              
CHAIR WEYHRAUCH  informed the committee that today's  overview was                                                            
being  held for  the purpose  of hearing  information relative  to                                                              
possible  revenue  sources.    Departments   involved  in  today's                                                              
hearing  are the  Department of  Natural Resources  (DNR) and  the                                                              
Department  of   Revenue.    Chair  Weyhrauch  requested   that  a                                                              
breakdown  of  the  revenues  the   state  receives  from  natural                                                              
resource development.   One of the  proposals to close  the fiscal                                                              
gap  is  resource   development.    Streamlining   the  permitting                                                              
process,  opening up  areas  for development,  and  infrastructure                                                              
development are just  a few of the ideas to bring  more revenue to                                                              
Alaska.                                                                                                                         
                                                                                                                                
LARRY  PERSILY,   Deputy  Commissioner,  Department   of  Revenue,                                                            
brought copies of  the Fall Revenue Forecast.   Mr. Persily stated                                                              
that it  is hoped that  oil as  well as gas  will become  the main                                                              
sources of revenue  for the State of Alaska.   Revenue is received                                                              
from  the  fishing  industry through  the  fishery  business  tax,                                                              
fishery  resource landing  tax,  salmon enhancement  tax,  seafood                                                              
marketing taxes, and licensing and  permit fees.  While permit and                                                              
license  fees  are  fairly  stable,   the  fishery  resource  tax,                                                              
business tax, and  marketing assessments fluctuate  with the price                                                              
of salmon.  In addition to royalties  off of state lands, there is                                                              
a mining  license tax,  which is  based on the  value of  the ore.                                                              
The mining license tax is a production  tax similar to oil and gas                                                              
production  taxes  and  corporate  income taxes  paid  by  fishing                                                              
corporations, mining corporations,  and timber corporations [these                                                              
taxes] go into the state coffers.                                                                                               
                                                                                                                                
MR. PERSILY  turned to  timber revenues  and mentioned  that there                                                              
are some  state land sales and  the Mental Health  Trust Authority                                                              
also has land that it sells.  He  informed the committee that half                                                              
of  the fishery  business tax  is shared  with municipalities  and                                                              
boroughs and  a portion of  the money from  timbers sales  goes to                                                              
the Mental  Health Trust Authority.   Revenue from  fishery taxes,                                                              
licenses, permits,  mining, and timber totals almost  $100 million                                                              
a  year.   These revenue  sources  play a  different  role in  the                                                              
state's economy than  oil and gas.  The oil and  gas industry pays                                                              
for most services but the fishing,  mining, and timber industry in                                                              
total provide  a substantial  number of  jobs, perhaps  their main                                                              
purpose is  to provide jobs  not to provide  70-80 percent  of the                                                              
general fund budget as the oil and gas industry does.                                                                           
                                                                                                                              
CHAIR WEYHRAUCH referred to a handout  from DNR and requested that                                                              
Mr. Persily insert the fishing income  as it was excluded from the                                                              
handout.                                                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG  commented on the $5 million  figure from                                                              
recording fees.                                                                                                                 
                                                                                                                                
MR. PERSILY  noted that the  state has moved  toward user  fees to                                                              
pay the cost.                                                                                                                   
                                                                                                                                
There were no further questions of Mr. Persily.                                                                                 
                                                                                                                                
CHAIR WEYHRAUCH  asked if anyone from  DNR was in the  audience to                                                            
testify.  There was not.                                                                                                        
                                                                                                                                
BUCK   LINDEKUGEL,   Conservation   Director,   Southeast   Alaska                                                            
Conservation  Council  (SEACC),  read from  a  prepared  statement                                                              
entitled,  "Regarding Prospects  for  Revenue  Sources from  State                                                              
Lands."  Mr. Lindekugel offered to answer questions.                                                                            
                                                                                                                                
CHAIR  WEYHRAUCH  requested the  committee  be  provided with  Mr.                                                              
Lindekugel's written statement and  reminded the committee that if                                                              
there  was  any  further  information   the  members  required  to                                                              
understand the whole  state picture, they just need  to ask and it                                                              
will be made available to them.                                                                                                 
                                                                                                                                
ANNOUNCEMENTS                                                                                                                 
                                                                                                                                
There were no announcements.                                                                                                    
                                                                                                                                
COMMITTEE ACTION                                                                                                              
                                                                                                                                
No action was taken.                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                              
CHAIR  WEYHRAUCH  adjourned  the   House  State  Affairs  Standing                                                            
Committee at 10:02 a.m.                                                                                                         
                                                                                                                                
NOTE:   The meeting was  recorded.  A copy  of the tape(s)  may be                                                              
obtained  by  contacting   the  House  Records  Office   at  State                                                              
Capitol,  Room 3, Juneau,  Alaska 99801  (mailing address),  (907)                                                              
465-2214,  and after  adjournment  of the  second  session of  the                                                              
Twenty-Third  Alaska State  Legislature  this  information may  be                                                              
obtained  by  contacting  the  Legislative  Reference  Library  at                                                              
(907) 465-3808.                                                                                                                 

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