Legislature(2009 - 2010)SENATE FINANCE 532

04/15/2010 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 309 GAS EXPLORATION\DEVELOPMENT TAX CREDIT TELECONFERENCED
Heard & Held
+= HB 365 FISH PROCESSOR FEES, LICENSES, RECORDS TELECONFERENCED
Heard & Held
+= HB 424 G.O. BONDS:EDUC./LIBRARY/RESEARCH FACIL. TELECONFERENCED
Scheduled But Not Heard
+ HB 357 AK RAILROAD CORP. LAND SALES TELECONFERENCED
Heard & Held
+ HB 369 IN-STATE PIPELINE/ MANAGER/TEAM TELECONFERENCED
Scheduled But Not Heard
+ HB 90 AIDEA: BONDING/TAXATION/RECORDS TELECONFERENCED
Heard & Held
+ HB 314 WORKERS' COMPENSATION TELECONFERENCED
Heard & Held
+ HCR 22 ALASKA NORTHERN WATERS TASK FORCE TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 15, 2010                                                                                            
                         9:08 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:08:17 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:08 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator  Lesil  McGuire,  Sponsor;  Mike  Pawlowski,  Staff,                                                                    
Senator Lesil McGuire; Senator  Thomas Wagoner, Sponsor; Pat                                                                    
Galvin,   Commissioner,  Department   of  Revenue;   Senator                                                                    
Charisse Millett, Sponsor;  Ted Leonard, Executive Director,                                                                    
Alaska Industrial Development  and Export Authority (AIDEA);                                                                    
Conrad Jackson,  Staff, Representative Kurt  Olson, Sponsor;                                                                    
Sue McLean, Director, Criminal  Division, Department of Law;                                                                    
Linda Hall,  Director, Division of Insurance,  Department of                                                                    
Commerce,   Community   and    Economic   Development;   Don                                                                    
Etheridge,  Alaska  State  AFL/CIO;  Fred  Brown,  Executive                                                                    
Director,  Health   Care  Cost  Management   Corporation  of                                                                    
Alaska; Representative  Bill Stoltz, Sponsor;  John Binkley,                                                                    
Chairman, Alaska Railroad Corporation                                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Carri  Lockhart, Marathon  Oil;  Mark  Stearns, Alaska  Wood                                                                    
Molding,  Anchorage;  Peter  MacSey, Steel  Fab,  Anchorage;                                                                    
Mead Treadwell, Anchorage; Tom Favero, Fairbanks; John                                                                          
Reeves, Fairbanks                                                                                                               
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 309    GAS EXPLORATION\DEVELOPMENT TAX CREDIT                                                                                
                                                                                                                                
          SB 309 was heard and HELD in Committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 365    FISH PROCESSOR FEES, LICENSES, RECORDS                                                                                
                                                                                                                                
          HB 365 was heard and HELD in Committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 90     AIDEA: BONDING/TAXATION/RECORDS                                                                                       
                                                                                                                                
          HB 90 was heard and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 314    WORKERS' COMPENSATION                                                                                                 
                                                                                                                                
          HB 314 was heard and HELD in Committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 357    AK RAILROAD CORP. LAND SALES                                                                                          
                                                                                                                                
          HB 357 was heard and HELD in Committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 424    G.O. BONDS:EDUC./LIBRARY/RESEARCH FACIL.                                                                              
                                                                                                                                
          HB 424 was scheduled but not heard.                                                                                   
                                                                                                                                
HB 369    IN-STATE PIPELINE/ MANAGER/TEAM                                                                                       
                                                                                                                                
          HB 369 scheduled but not heard.                                                                                       
                                                                                                                                
HCR 22    ALASKA NORTHERN WATERS TASK FORCE                                                                                     
                                                                                                                                
          HCR 22 was scheduled but not heard.                                                                                   
                                                                                                                                
9:09:33 AM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 309                                                                                                           
                                                                                                                                
     "An Act amending and extending the exploration and                                                                         
     development incentive tax credit under the Alaska Net                                                                      
     Income Tax Act for operators and working interest                                                                          
     owners directly engaged in the exploration for and                                                                         
     development of gas from a lease or property in the                                                                         
     state; providing for an effective date by amending the                                                                     
     effective date for sec. 2, ch. 61, SLA 2003; and                                                                           
     providing for an effective date."                                                                                          
                                                                                                                                
Co-Chair Stedman  noted this  was the  first hearing  of the                                                                    
bill. He said that amendments would be allowed today.                                                                           
                                                                                                                                
9:12:12 AM                                                                                                                    
                                                                                                                                
SENATOR LESIL  MCGUIRE, SPONSOR,  explained that SB  309 has                                                                    
become an  amalgamation of  a variety  of bills  designed to                                                                    
incentivize oil  and gas exploration  efforts, both  in Cook                                                                    
Inlet and in  Prudhoe Bay. The first part of  the bill deals                                                                    
with Southcentral  Alaska which is suffering  from a decline                                                                    
in  drilling and  exploration activities  in the  Cook Inlet                                                                    
area.  Research  indicates  that  by 2013,  at  the  current                                                                    
drilling rate, there is a  very real possibility that Liquid                                                                    
Natural Gas  would need to  be imported from  Indonesia. The                                                                    
goal is to increase drilling  activity in the area, which is                                                                    
unique and has many challenges.                                                                                                 
                                                                                                                                
Senator  McGuire  addressed  the  first part  of  the  bill.                                                                    
During the interim,  time was spent talking  with Cook Inlet                                                                    
explorers  in an  attempt to  develop  incentives. The  bill                                                                    
amends   and  extends   the   exploration  and   development                                                                    
incentive tax  credits that were originally  enacted in 2003                                                                    
under the  Alaska Net Income  Tax Act. The current  bill, SB
309 changes the 10 percent amount  to 25 percent of a credit                                                                    
against  state   income  tax   liability.  The   50  percent                                                                    
limitation on the  amount of credits allowed to  be taken in                                                                    
a single year was eliminated in  SB 309. Now, 100 percent of                                                                    
all qualified  credits for  exploration and  development can                                                                    
be taken in a single year.                                                                                                      
                                                                                                                                
9:14:35 AM                                                                                                                    
                                                                                                                                
Senator McGuire explained  that the second part  of the bill                                                                    
would extend  the sunset date  of the investment  tax credit                                                                    
from  January 1,  2013,  to January  1,  2020, allowing  the                                                                    
companies to make longer-term business decisions.                                                                               
                                                                                                                                
Senator  McGuire  related  that  another part  of  the  bill                                                                    
addresses infield  drilling vs.  new pockets of  drilling in                                                                    
Prudhoe Bay. The bill would  allow infield drilling to occur                                                                    
and credits taken for that, as well.                                                                                            
                                                                                                                                
Co-Chair  Stedman  asked  for   an  explanation  of  infield                                                                    
drilling. Senator McGuire explained  that under the original                                                                    
legislation, drilling had to be  done outside of an existing                                                                    
well.  Infield drilling  is done  near  an existing,  proven                                                                    
well   reserve.    Previously,   high   risk    areas   were                                                                    
incentivized;   however,  this   bill  allows   for  infield                                                                    
drilling, as  well. The state is  willing to take a  risk to                                                                    
move into higher risk activities.                                                                                               
                                                                                                                                
9:17:03 AM                                                                                                                    
                                                                                                                                
Senator  McGuire highlighted  the  second part  of the  bill                                                                    
called  the  "Stampeder   Provision",  provisions  added  by                                                                    
Senator  Wagner. The  main idea  is to  bring a  jack-up rig                                                                    
(Section 11)  into Cook Inlet.  The provision  would provide                                                                    
credits  for  the first,  second,  and  third drillings.  It                                                                    
would mean a state investment  of between $24 million to $54                                                                    
million. She termed it high risk activity.                                                                                      
                                                                                                                                
Senator McGuire  informed the committee  about the  fixes to                                                                    
Alaska's  Clear and  Equitable Share  (ACES) production  tax                                                                    
included  in the  bill.  Small companies  are  asking for  a                                                                    
reduction  in  the  progressivity  rate,  the  allowance  of                                                                    
capital credits to be taken in  one year, and the ability to                                                                    
access  the oil  and gas  tax credit  fund. Senator  McGuire                                                                    
pointed  out that  there are  more companies  using the  tax                                                                    
credits than originally was envisioned.                                                                                         
                                                                                                                                
Senator  McGuire   stated  support  for  the   two  proposed                                                                    
amendments.                                                                                                                     
                                                                                                                                
9:20:13 AM                                                                                                                    
                                                                                                                                
MIKE PAWLOWSKI,  STAFF, SENATOR  LESIL MCGUIRE,  reported on                                                                    
the sectional analysis:                                                                                                         
                                                                                                                                
Section 1 amends  AS 43.20.043  (a)  by  increasing the  gas                                                                  
          exploration and  development tax credit to  25% on                                                                    
          qualifies  capital expenditures  and annual  costs                                                                    
          from 10%  for investments made after  December 31,                                                                    
          2009.                                                                                                                 
                                                                                                                                
Section 2 amends AS 43.20.043 (b) to  conform to the changes                                                                  
          made in section 1.                                                                                                    
9:21:14 AM                                                                                                                    
                                                                                                                                
Section 3 amends AS 43.20.043  (c) to repeal the  50% cap on                                                                  
          the  application   of  the  gas   exploration  and                                                                    
          development  tax  credit  against the  Alaska  Net                                                                    
          Income Tax.                                                                                                           
                                                                                                                                
Co-Chair  Stedman   asked  for  clarification  of   the  tax                                                                    
liability. Mr.  Pawlowski said it  was the  corporate income                                                                    
tax liability.                                                                                                                  
                                                                                                                                
Section 4 amends AS  43.20.043 (e) to ensure  that the value                                                                  
          of a  credit under AS 43.20.043  is passed through                                                                    
          to  consumers  in  a  rate  base  submitted  to  a                                                                    
          regulatory agency.                                                                                                    
                                                                                                                                
Section 5 amends  AS  43.20.043 (g)  to  clarify  that if  a                                                                  
          taxpayer  elects   to  take  a  credit   under  AS                                                                    
          43.20.043 the  taxpayer may not  also claim  a tax                                                                    
          credit   or  royalty   modification  under   other                                                                    
          identified sections of Alaska law.                                                                                    
                                                                                                                                
Section 6 amends AS 43.20.043 (i)(1) to  allow a taxpayer to                                                                  
          claim a credit under  AS 43.20.043 for development                                                                    
          in an  existing field and for  an expenditure that                                                                    
          does  not  lead  to  production.  Section  6  also                                                                    
          clarifies  that   topping  plants,   treatment  or                                                                    
          liquefied  natural  gas  and  other  manufacturing                                                                    
          plants are not qualified expenditures.                                                                                
                                                                                                                                
9:23:46 AM                                                                                                                    
                                                                                                                                
Section 7 amends  AS  43.20.043  to clarify  that  a  credit                                                                  
          under AS  43.20.043 may  be taken  in the  year in                                                                    
          which the expenditure is made  or cost is accrued,                                                                    
          or in the following tax year.                                                                                         
                                                                                                                                
Section 8 amends  AS 43.55.023  (a) to  allow  a tax  credit                                                                  
          taken against  a capital investment under  ACES to                                                                    
          be realized  in the  year in  which the  credit is                                                                    
          accrued.                                                                                                              
                                                                                                                                
Co-Chair Stedman  asked if the  credit applies  statewide or                                                                    
just to Cook Inlet. Mr.  Pawlowski said it applied statewide                                                                    
under ACES. All previous sections apply to Cook Inlet.                                                                          
                                                                                                                                
Section 9 amends AS  43.55.023 (d) to conform  to the change                                                                  
          in section 8.                                                                                                         
                                                                                                                                
Section  10 amends  AS  43.55.025 (a)  to  create a  special                                                                  
          tiered  exploration tax  credit of  80, 90  or 100                                                                    
          percent of total exploration expenditures.                                                                            
                                                                                                                                
Section 11  amends AS 43.55.025  by adding a  new subsection                                                                  
          (m)   to   clarify   that   the   special   credit                                                                    
          established in  section 10 is for  the first three                                                                    
          unaffiliated wells  drilled into  the pre-Tertiary                                                                    
          strata in  Cook Inlet  using a jack-up  drill rig.                                                                    
          Also caps  credits; lesser of  100% credit  or $25                                                                    
          million, lesser  of 90%  credit or  $22.5 million;                                                                    
          lesser of 80%  credit or $20.0 million.   Only one                                                                    
          credit  per  person,  may   not  include  cost  to                                                                    
          construct or  manufacture a  jack-up rig  and must                                                                    
          be for  work performed  after June  30, 2010.   If                                                                    
          exploration  results  in sustained  production  of                                                                    
          oil or  gas, 50  percent of credit  received shall                                                                    
          be  repaid.   Taxpayer  obtaining  credit in  this                                                                    
          section may  not claim  credit under  AS 43.55.023                                                                    
          or another provision in this  section for the same                                                                    
          exploration expenditure.  Provides definitions for                                                                    
          "jack-up   rig",    "reservoir"   and   "sustained                                                                    
          production".                                                                                                          
                                                                                                                                
9:26:37 AM                                                                                                                    
                                                                                                                                
Mr.  Pawlowski explained  that Section  12 is  language that                                                                    
          extends the sunset date.                                                                                              
                                                                                                                                
Section 13  amends the uncodified  law related to  the carry                                                                  
          forward  of  credits  accrued under  AS  43.20.043                                                                    
          beyond the sunset date of the credit.                                                                                 
                                                                                                                                
Section 14  repeals AS 43.55.028  (e) (2) and (e)  (3) which                                                                  
          requires a  small producer  accessing the  oil and                                                                    
          gas   tax   credit   fund   to   make   additional                                                                    
          expenditures  within  24  months of  claiming  the                                                                    
          credit.                                                                                                               
                                                                                                                                
Section 15  extends the  sunset of the  tax credit  under AS                                                                  
          43.20.043 to 2020 from 2013.                                                                                          
                                                                                                                                
Section 16 adds an immediate effective date.                                                                                  
                                                                                                                                
                                                                                                                                
9:28:18 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman asked  for a definition of  jack-up rig and                                                                    
the stampede concept.                                                                                                           
                                                                                                                                
SENATOR  THOMAS WAGONER,  SPONSOR,  related  the history  of                                                                    
units in  Cook Inlet  which have made  it more  appealing to                                                                    
use jack-up rigs. He stated  that almost every place drilled                                                                    
contains gas. He recalled that  during the Murkowski era the                                                                    
use of jack-up rigs was  proposed to incentivize Cook Inlet.                                                                    
This bill allows  for the drilling of three  wells off shore                                                                    
using jack-up rigs.                                                                                                             
                                                                                                                                
Senator Wagoner  explained that  a jack-up  rig is  used for                                                                    
drilling  in  shallow or  deep  water.  Of the  three  wells                                                                    
listed in the  bill, the first would be  incentivized at 100                                                                    
percent  of drilling  costs up  to $25  million, the  second                                                                    
well would  be at 90  percent up  to $22.5 million,  and the                                                                    
third well  would be at 80  percent up to $20  million. If a                                                                    
company  hits a  commercially  sized deposit,  then once  it                                                                    
goes  into production,  over the  next 10  years, the  state                                                                    
would receive 50  percent of the credits  back. He predicted                                                                    
that the state would make money from this provision.                                                                            
                                                                                                                                
9:33:01 AM                                                                                                                    
                                                                                                                                
Senator  Wagoner related  that  there are  currently two  or                                                                    
three small  independent companies set to  take advantage of                                                                    
the provision.                                                                                                                  
                                                                                                                                
Co-Chair Stedman asked  if one entity could  qualify for all                                                                    
three incentives.  Senator Wagoner said  it had to  be three                                                                    
different   companies  with   three   different  wells.   In                                                                    
addition,  going below  the pre-Tertiary  level should  give                                                                    
the state new, valuable geological information.                                                                                 
                                                                                                                                
9:34:40 AM                                                                                                                    
                                                                                                                                
Senator  Thomas  asked if  the  tax  credits are  consistent                                                                    
throughout the bill. Senator Wagoner  replied that under the                                                                    
stampede provision  information is  available to  the state.                                                                    
Senator McGuire clarified  that as the bill  sits now, there                                                                    
is  no requirement  of disclosure  of broader  provisions to                                                                    
DNR, such as income tax  relief. The companies reported that                                                                    
they  would not  take the  credit  if forced  to share  that                                                                    
data. If  the income tax  relief is taken, the  company does                                                                    
not qualify  for other  exploration and  development credits                                                                    
which  are much  more  valuable. Companies  are required  to                                                                    
provide data,  except for when  it is related to  income tax                                                                    
relief.                                                                                                                         
                                                                                                                                
Senator Wagoner  added that there are  "corner shooters". If                                                                    
drilling data  is made available, competing  companies would                                                                    
take  advantage of  the proximity  to wells  on land  leases                                                                    
with corners.                                                                                                                   
                                                                                                                                
Senator Thomas  thought that a data-collecting  aspect could                                                                    
be added later.                                                                                                                 
                                                                                                                                
9:38:38 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman requested  that Commissioner Galvin explain                                                                    
the bill's components.                                                                                                          
                                                                                                                                
PAT GALVIN,  COMMISSIONER, DEPARTMENT OF  REVENUE, suggested                                                                    
the  bill be  broken  down into  three  segments. The  first                                                                    
segment  would  be  targeted  credits  for  gas  exploration                                                                    
everywhere south  of the  North Slope.  This section  of the                                                                    
bill  provides  an  alternative   to  using  production  tax                                                                    
credits in  the form of a  corporate income tax credit  - 25                                                                    
percent  of  expenditures  for   gas  exploration.  It  also                                                                    
enhances  an  existing  program by  increasing  it  from  10                                                                    
percent to 25 percent.                                                                                                          
                                                                                                                                
Commissioner  Galvin explained  that the  second area  deals                                                                    
with jack-up  rigs, an  area DNR has  focused on  for years.                                                                    
There  is an  economic hurtle  to overcome  to get  these in                                                                    
place. He opined that they  would be used by many companies.                                                                    
The bill  provides for a  creative way to  attract companies                                                                    
to explore and drill new wells.                                                                                                 
                                                                                                                                
Commissioner   Galvin  related   that  the   third  category                                                                    
enhances the overall production  tax system; capital credits                                                                    
allowed  the   first  year  and   the  elimination   of  the                                                                    
requirement  to  make  additional investments  in  order  to                                                                    
qualify   for   a   state   purchase   of   capital   credit                                                                    
certificates.  Existing companies  take  advantage of  these                                                                    
companies;  however,  new  companies   don't  know  if  they                                                                    
qualify for  full value. The  bill eliminates a  barrier and                                                                    
allows companies to purchase certificates.                                                                                      
                                                                                                                                
9:43:50 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  recalled  past dialogue  about  splitting                                                                    
credits or  postponing them. He requested  information about                                                                    
why the credits are allowed to be taken in one year.                                                                            
                                                                                                                                
Commissioner  Galvin  explained  the reasoning  behind  that                                                                    
provision. It  would enhance  the value  of the  credits. It                                                                    
would be an  economic driver for the companies  and not have                                                                    
a  large  impact  on  the   state.  From  an  administrative                                                                    
viewpoint, it is  less cumbersome to give the  credit at one                                                                    
time.                                                                                                                           
                                                                                                                                
Co-Chair Stedman  asked if that  reason overrides  the issue                                                                    
of   predictability  to   the  state.   Commissioner  Galvin                                                                    
appreciated  the question.  He  said that  during the  50/50                                                                    
discussion  there was  merit to  spreading the  credits over                                                                    
two years.  It was  discovered that  the information-sharing                                                                    
part has proven to be more valuable.                                                                                            
                                                                                                                                
Co-Chair Stedman  asked about  the timing  of the  change to                                                                    
one  year. Commissioner  Galvin explained  that the  bill is                                                                    
currently   written  so   that  the   changes  take   effect                                                                    
immediately, which  is problematic. He thought  an amendment                                                                    
would  clean  up  the  effective   date  and  make  the  two                                                                    
provisions retroactive to January 1, 2010.                                                                                      
                                                                                                                                
9:48:01 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman noted  two fiscal  notes, one  zero fiscal                                                                    
note  from  the Department  of  Natural  Resources, and  one                                                                    
indeterminate fiscal note from the Department of Revenue.                                                                       
                                                                                                                                
Senator Huggins MOVED to ADOPT New Amendment 1:                                                                                 
                                                                                                                                
     Page 1, line 4, following "in the state;":                                                                                 
     Insert "relating to interest on certain underpayments                                                                      
     or overpayments for the oil and gas production tax;"                                                                       
                                                                                                                                
     Page 1, line 7, following "basin;":                                                                                        
     Insert "relating to the use of the oil and gas tax                                                                         
     credit   fund   to    purchase   certain   tax   credit                                                                    
     certificates;"                                                                                                             
                                                                                                                                
     Page 5, following line 21, insert a new section that                                                                       
     reads: *Sec. 8.  AS 43.55.020 is amended by adding a                                                                       
     new subsection to read:                                                                                                    
          (i)  Notwithstanding any contrary provision of AS                                                                     
     43.05.225 or (g) or (h) of this section, if the amount                                                                     
     of  a tax  payment, including  an installment  payment,                                                                    
     due under (a)(1)  - (4) of this section  is affected by                                                                    
     the  retroactive application  of  a regulation  adopted                                                                    
     under  this  chapter,  the department  shall  determine                                                                    
     whether the  retroactive application of  the regulation                                                                    
     caused an underpayment or an  overpayment of the amount                                                                    
     due  and  adjust  the  interest  due  on  the  affected                                                                    
     payment as follows:                                                                                                        
          (1)if an underpayment of the amount due occurred,                                                                     
     the   department  shall   waive  interest   that  would                                                                    
     otherwise accrue for the  underpayment before the first                                                                    
     day of  the second month  following the month  in which                                                                    
     the regulation became effective, if                                                                                        
           (A) the    department    determines   that    the                                                                    
              producer's underpayment resulted because the                                                                      
              regulation was not in effect when the payment                                                                     
              was due; and                                                                                                      
           (B) the producer demonstrates that it made a                                                                         
              good faith estimate of its tax obligation in                                                                      
              light of the regulations then in effect when                                                                      
              the payment was due and paid the estimate tax;                                                                    
                (2)if  an  overpayment  of  the  amount  due                                                                    
     occurred  and   the  department  determines   that  the                                                                    
     producer's overpayment resulted  because the regulation                                                                    
     was  not  in  effect  when the  payment  was  due,  the                                                                    
     obligation for  a refund for  the overpayment  does not                                                                    
     begin to  accrue interest  earlier than  the following,                                                                    
     as applicable:                                                                                                             
               (A)except as otherwise  provided under (B) of                                                                    
               this paragraph,  the first day of  the second                                                                    
               month  following  the   month  in  which  the                                                                    
               regulation became effective;                                                                                     
               (B)90 days  after an amended  statement under                                                                    
               AS   43.55.030(a)  and   an  application   to                                                                    
               request a  refund of  production tax  paid is                                                                    
               filed, if  the overpayment  was for  a period                                                                    
               for  which  an  amended  statement  under  AS                                                                    
               43.55.030(a) was required  to be filed before                                                                    
               the regulation became effective.                                                                                 
                                                                                                                                
     Renumber accordingly.                                                                                                      
                                                                                                                                
     Page  9, following  line 11,  insert new  sections that                                                                    
     read:                                                                                                                      
     *Sec. 15. The uncodified law  of the State of Alaska is                                                                    
     amended by adding a new section to read:                                                                                   
          TRANSITION: APPLICABILITY OF SEC. 8 OF THIS ACT.                                                                      
     Section  8  of this  Act  applies  to taxes,  including                                                                    
     installment payments of estimated  tax, due on or after                                                                    
     January 1, 2006.                                                                                                           
     *Sec. 16. The uncodified law  of the State of Alaska is                                                                    
     amended by adding a new section to read:                                                                                   
          RETROACTIVITY OF SECS. 8-10 OF THIS ACT.  (a)                                                                         
     Section  8 of  this Act  is retroactive  to January  1,                                                                    
     2006.                                                                                                                      
          (b) Sections 9 and 10 of this Act are retroactive                                                                     
     to January 1, 2010.                                                                                                        
     *Sec. 17. The uncodified law  of the State of Alaska is                                                                    
     amended by adding a new section to read:                                                                                   
          RETROACTIVITY OF REGULATIONS.  Notwithstanding                                                                        
     any   contrary  provision   of  AS 44.62.240,   if  the                                                                    
     Department  of  Revenue  expressly  designates  in  the                                                                    
     regulation  that the  regulation applies  retroactively                                                                    
     to  a  specific  date,  a  regulation  adopted  by  the                                                                    
     Department  of Revenue  to  implement, interpret,  make                                                                    
     specific, or otherwise  carry out secs. 8, 9,  or 10 of                                                                    
     this Act applies retroactively to that date.                                                                               
     *Sec. 18.  Section 13 of  this Act takes effect July 1,                                                                    
     2010.                                                                                                                      
                                                                                                                                
     Renumber accordingly.                                                                                                      
                                                                                                                                
     Page 9, line 12, following "Sec. 15.":                                                                                     
          Delete "This"                                                                                                         
          Insert "Except as provided in sec. 18 of this                                                                         
     Act, this"                                                                                                                 
                                                                                                                                
     Renumber accordingly                                                                                                       
                                                                                                                                
Co-Chair Stedman OBJECTED.                                                                                                      
                                                                                                                                
Senator Huggins  stated that  the amendment  represents fair                                                                    
play   and  prevents   unintended  consequences   from  both                                                                    
overpayment and underpayment scenarios from the taxpayers.                                                                      
                                                                                                                                
Commissioner   Galvin  explained   that  the   amendment  is                                                                    
designed  to   clarify  that  when  there   are  regulations                                                                    
requiring retroactivity,  the tax penalty would  not acquire                                                                    
interest on  the underpayment. The department  currently has                                                                    
discretion to waive penalties, but not interest.                                                                                
                                                                                                                                
Co-Chair Stedman asked for a  synopsis of the interest rate.                                                                    
Commissioner Galvin  explained that  the interest rate  is a                                                                    
formula; the higher of either  11 percent or 5 percent above                                                                    
the treasury rate.                                                                                                              
                                                                                                                                
Co-Chair  Stedman   asked  how   often  it   is  compounded.                                                                    
Commissioner Galvin said quarterly.                                                                                             
                                                                                                                                
Co-Chair  Stedman informed  the public  about a  concern the                                                                    
amendment addresses.                                                                                                            
                                                                                                                                
9:51:58 AM                                                                                                                    
                                                                                                                                
Commissioner Galvin  referred to  the bottom  of page  2 and                                                                    
onto  page 3,  which clarifies  the effective  dates of  the                                                                    
various sections of the bill.                                                                                                   
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Senator Thomas WITHDREW Amendment 2.                                                                                            
                                                                                                                                
AT-EASE        9:52:53 AM                                                                                                     
RECONVENED     9:54:10 AM                                                                                                     
                                                                                                                                
Co-Chair Stedman  turned to the public  testimony portion of                                                                    
the hearing.                                                                                                                    
                                                                                                                                
9:54:41 AM                                                                                                                    
                                                                                                                                
CARRI   LOCKHART,   MARATHON  OIL,   (via   teleconference),                                                                    
testified  in  support  of the  legislation.  She  commented                                                                    
about the  need for on-going, long-term  exploration in Cook                                                                    
Inlet.  She spoke  about uncertainties  in  the market.  She                                                                    
stressed that  in order  to qualify  for the  investment tax                                                                    
credit, Marathon Oil has to  make capital investments, which                                                                    
will add some value back to the state.                                                                                          
                                                                                                                                
9:58:13 AM                                                                                                                    
                                                                                                                                
Senator Wagoner stated that the bill was good for Alaska.                                                                       
                                                                                                                                
SB  309  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
AT-EASE        9:59:18 AM                                                                                                     
RECONVENED     10:00:08 AM                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  brought the  meeting  back  to order.  He                                                                    
noted  it was  the first  hearing  of HB  365; however,  the                                                                    
companion bill, SB 255, was heard on April 9.                                                                                   
                                                                                                                                
HOUSE BILL NO. 365                                                                                                            
                                                                                                                                
     "An Act relating to sharing records regarding fish                                                                         
     purchased by fish processors with certain federal                                                                          
     agencies, to requirements to obtain and maintain a                                                                         
     fisheries business license, and to payment of industry                                                                     
     fees required of fish processors; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
SENATOR CHARISSE  MILLETT, SPONSOR, explained that  the bill                                                                    
enables processors  to provide fish tickets  to the National                                                                    
Marine  Fisheries so  the self-imposed  commercial fisheries                                                                    
tax  can  attain  a  $21   million  loan  from  the  federal                                                                    
government.   She    noted   that   the    processors   were                                                                    
uncomfortable with  the amount of $21  million. She referred                                                                    
to  a  Letter of  Intent  in  the  bill that  addresses  the                                                                    
understanding  that the  permit level  would not  fall below                                                                    
260  permits.  She  talked  positively  about  the  buy-back                                                                    
mechanism  and thought  it  would be  a  template for  other                                                                    
fisheries.                                                                                                                      
                                                                                                                                
10:02:52 AM                                                                                                                   
                                                                                                                                
Senator  Olson  asked how  many  total  permits there  were.                                                                    
Senator  Millett  thought  there  were  380.  Total  permits                                                                    
fished last year  were 212. The total bought  back last year                                                                    
was 35. She thought there  were 140 latent permits currently                                                                    
not being fished. Senator Olson  asked how many permits were                                                                    
from out of  state. Senator Millet said there  were 193 non-                                                                    
resident permits and 99 of those were fished last year.                                                                         
                                                                                                                                
Co-Chair Hoffman  asked if there  was a provision  to freeze                                                                    
the value of the permits so  that as more permits are bought                                                                    
the  remaining  do not  escalate  in  cost. Senator  Millett                                                                    
replied that  the bill did  not contain that  provision. The                                                                    
Letter of Intent addresses that potential problem.                                                                              
                                                                                                                                
Senator Thomas  asked if  there was a  requirement to  use a                                                                    
permit  with any  regularity,  or if  it  could sit  unused.                                                                    
Senator Millett  said that permits  were not required  to be                                                                    
used on  a regular  basis. Senator  Thomas pointed  out that                                                                    
there used  to be  consistently 415  permits; now  there are                                                                    
380. He inquired what happened  to those 35 permits. Senator                                                                    
Millett reported that the fisheries  bought back and retired                                                                    
35 permits.                                                                                                                     
                                                                                                                                
Co-Chair Hoffman noted  two zero fiscal notes,  one from the                                                                    
Department of  Revenue and one  from the Department  of Fish                                                                    
and Game, and a Letter of Intent.                                                                                               
                                                                                                                                
HB  365  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:07:32 AM                                                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 90(FIN)                                                                                                 
                                                                                                                                
     "An   Act   relating   to   bonding   limitations   and                                                                    
     confidentiality of records and information of the                                                                          
     Alaska Industrial Development and Export Authority;                                                                        
     relating to municipal taxation of interests in certain                                                                     
     property of the Alaska Industrial Development and                                                                          
     Export Authority; providing for an effective date by                                                                       
     amending the effective date of sec. 3, ch. 117, SLA                                                                        
     2000, as amended by sec. 2, ch. 74, SLA 2003, and by                                                                       
     sec. 3, ch. 67, SLA 2008; and providing for an                                                                             
     effective date."                                                                                                           
                                                                                                                                
Co-Chair  Hoffman noted  it  was the  first  hearing on  the                                                                    
bill.                                                                                                                           
                                                                                                                                
TED   LEONARD,   EXECUTIVE   DIRECTOR,   ALASKA   INDUSTRIAL                                                                    
DEVELOPMENT  AND EXPORT  AUTHORITY  (AIDEA), summarized  the                                                                    
bill.  He related  that the  first goal  of the  bill is  to                                                                    
remove  refunding bonds  from  AIDEA's  bond cap.  Refunding                                                                    
bonds retire  old debt  with new  debt, with  more favorable                                                                    
terms. He  used the  refunding of  mortgages as  an example.                                                                    
Refunding  bonds  does  not  affect  agency  liability.  The                                                                    
second part  of the  bill would reinstate  AIDEA's authority                                                                    
to issue bonds that existed  before the July 1, 2000 sunset.                                                                    
It would  require AIDEA to receive  legislative approval for                                                                    
any  bond over  $10  million  that is  issued  to finance  a                                                                    
development project. He pointed out  that AIDEA bonds do not                                                                    
incur a liability for the state.                                                                                                
                                                                                                                                
10:10:24 AM                                                                                                                   
                                                                                                                                
Mr. Leonard shared  how AIDEA is expanding its  role in loan                                                                    
participation programs  and in how development  projects are                                                                    
done. Having the same bond  debt process that was previously                                                                    
in place would  allow for more flexibility to  fund loans at                                                                    
the best rate.                                                                                                                  
                                                                                                                                
Mr. Leonard shared the importance  of the passage of SB 269,                                                                    
which allows  AIDEA to have  recovery zone  bond allocation.                                                                    
In order for small  businesses to participate, especially in                                                                    
rural areas,  AIDEA needs to  have a new program  that could                                                                    
pool small projects in order to issue one bond.                                                                                 
                                                                                                                                
10:11:43 AM                                                                                                                   
                                                                                                                                
Mr.  Leonard  addressed  another  provision in  HB  90  that                                                                    
clarifies  which records  and information  AIDEA would  keep                                                                    
confidential.  Section   7,  the  part  the   House  Finance                                                                    
Committee added  last year  that would  extend the  DMTS tax                                                                    
exemption, would have a gap  due to the bill crossing fiscal                                                                    
years.  He understood  that HB  10 would  take care  of that                                                                    
problem.  He  concluded  that  the  passage  of  HB  90,  in                                                                    
conjunction  with  SB  269  and   HB  10,  would  provide  a                                                                    
stronger,  more  effective  toolbox   for  AIDEA  to  assist                                                                    
businesses with  attaining access to long-term  capital, and                                                                    
to move forward with its strategic plan.                                                                                        
                                                                                                                                
Co-Chair  Hoffman   noted  a  zero  fiscal   note  from  the                                                                    
Department    of   Commerce,    Community,   and    Economic                                                                    
Development.                                                                                                                    
                                                                                                                                
HB  90  was   heard  and  HELD  in   Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:14:04 AM                                                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 314(FIN)                                                                                                
                                                                                                                                
     "An Act relating to fees and charges for medical                                                                           
     treatment or services, civil damages, and penalties as                                                                     
     they relate to workers' compensation; and providing                                                                        
     for an effective date."                                                                                                    
                                                                                                                                
CONRAD JACKSON,  STAFF, REPRESENTATIVE KURT  OLSON, SPONSOR,                                                                    
explained  that  the  bill  relates  to  medical  treatment,                                                                    
service  fees,  and penalties  as  they  relate to  Workers'                                                                    
Compensation.  Last   year,  the  bill  moved   through  the                                                                    
legislature to  extend the current fee  schedule cap another                                                                    
year and to add a CPI  modifier to the schedule. The current                                                                    
cap  will expire  on December  31, 2010.  The extension  was                                                                    
done to give the Medical  Services Review Committee a little                                                                    
more time  to meet and  plan a new schedule.  Currently, the                                                                    
fee  schedule   lacks  up-to-date  medical  codes.   At  the                                                                    
conclusion  of  the   Medical  Services  Review  Committee's                                                                    
meeting,  a recommendation  to revise  the fee  schedule was                                                                    
made.                                                                                                                           
                                                                                                                                
Mr. Jackson explained  that Section 1 outlines  the basis of                                                                    
the  new  schedule,  which will  include  services  such  as                                                                    
emergency transportation, medical  supplies, and injections.                                                                    
Sections 2 and 3 clarify  the criminal and civil prosecution                                                                    
and penalties for Workers' Compensation fraud.                                                                                  
                                                                                                                                
10:16:34 AM                                                                                                                   
                                                                                                                                
Senator   Thomas   voiced   concerns  about   the   Workers'                                                                    
Compensation system as it pertains  to fraud. He thought the                                                                    
focus was  on the  injured worker.  Mr. Jackson  deferred to                                                                    
others to address criminal law concerns.                                                                                        
                                                                                                                                
SUE MCLEAN, DIRECTOR, CRIMINAL  DIVISION, DEPARTMENT OF LAW,                                                                    
clarified  that HB  314 is  not an  expansion into  criminal                                                                    
law,  but  rather  a  clarification  of  criminal  law.  She                                                                    
referred to page  3, line 1, "is civilly liable  to a person                                                                    
adversely affected  by the  conduct, is  guilty of  theft by                                                                    
deception". She  stated that  the proposed  change separates                                                                    
the civil  liability, which  is now in  Section C,  from the                                                                    
criminal  liability. It  simply says  that a  person may  be                                                                    
prosecuted under  AS 11.  It specifically  addresses Senator                                                                    
Thomas's  question.  Broadening  the  statute  ensures  that                                                                    
fraudulent  conduct  by other  than  the  employee is  dealt                                                                    
with.                                                                                                                           
                                                                                                                                
10:21:15 AM                                                                                                                   
                                                                                                                                
Senator  Thomas was  still concerned  about prosecuting  for                                                                    
fraud under  Workers' Compensation. Ms. McLean  spoke of the                                                                    
difficulty   of  prosecuting   when  the   statute  provides                                                                    
otherwise.                                                                                                                      
                                                                                                                                
Senator  Thomas  asked  if  this was  the  simplest  way  to                                                                    
approach the  issue. Ms.  McLean did not  know of  any other                                                                    
statute that addressed the issue.                                                                                               
                                                                                                                                
10:24:14 AM                                                                                                                   
                                                                                                                                
Senator Olson inquired if medical  providers are affected by                                                                    
the expansion in  the bill. Mr. Jackson said  there had been                                                                    
a number  of contacts from  the medical community,  which is                                                                    
why subsection  (D) of Section  1 includes  suggestions from                                                                    
the medical community.  It is not the intention  of the bill                                                                    
to limit services to injured workers.                                                                                           
                                                                                                                                
Senator Olson  asked if the  medical community  is satisfied                                                                    
with the bill. Mr. Jackson said they were.                                                                                      
                                                                                                                                
Co-Chair  Hoffman  noted  a  fiscal   note  for  $75,000  in                                                                    
Workers'  Safety   Account  Funds  to  cover   the  cost  of                                                                    
producing a Workers' Compensation  medical fee schedule from                                                                    
the  Department of  Labor and  Workforce  Development and  a                                                                    
zero fiscal note from the Department of Law.                                                                                    
                                                                                                                                
LINDA HALL,  DIRECTOR, DIVISION OF INSURANCE,  DEPARTMENT OF                                                                    
COMMERCE,  COMMUNITY  AND  ECONOMIC  DEVELOPMENT,  spoke  in                                                                    
support of  the bill, but  voiced concern about  the medical                                                                    
fee  schedule  that  expires  on   December  31,  2010.  She                                                                    
referred  to  charts  in  the bill  packet  that  show  that                                                                    
medical expenses  and premiums  in Alaska  are significantly                                                                    
higher in  the Workers'  Compensation arena.  She maintained                                                                    
that the fee schedule will  not solve the problem, but would                                                                    
help. She  responded to Senator  Olson's question  about the                                                                    
involvement  of  the  medical  community,  who  now  are  in                                                                    
agreement with  the fee schedule.  She testified  in support                                                                    
of the bill.                                                                                                                    
                                                                                                                                
10:28:29 AM                                                                                                                   
                                                                                                                                
DON  ETHERIDGE, ALASKA  STATE AFL/CIO,  spoke in  support of                                                                    
the  legislation. He  stated that  his concerns  about fraud                                                                    
issues and medical coverage have been assuaged.                                                                                 
                                                                                                                                
FRED BROWN, EXECUTIVE DIRECTOR,  HEALTH CARE COST MANAGEMENT                                                                    
CORPORATION  OF  ALASKA, reported  that  he  was a  Workers'                                                                    
Compensation  hearing  officer for  25  years.  He voiced  a                                                                    
concern  similar  to  Senator   Thomas's,  when  a  case  is                                                                    
reaching a settlement and the  insurance company is put in a                                                                    
position  of using  the  criminal code  to  use leverage  to                                                                    
drive down the  value of the settlement.  The consequence is                                                                    
a reduction in the value of  the claim, but also a reduction                                                                    
to the health trust funds.  In the settlement phase there is                                                                    
often  a  desire by  the  parties  to waive  future  medical                                                                    
benefits, and in that case  the health benefit funds are put                                                                    
in a position of picking up costs.                                                                                              
                                                                                                                                
Mr.  Brown  concluded  with a  suggestion  to  simplify  the                                                                    
system by omitting Section 2 (b) in HB 314.                                                                                     
                                                                                                                                
HB  314  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:34:28 AM                                                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 357(FIN)                                                                                                
                                                                                                                                
     "An Act relating to the sale of land owned by the                                                                          
     Alaska Railroad that is not necessary for railroad                                                                         
     purposes."                                                                                                                 
                                                                                                                                
REPRESENTATIVE  BILL STOLTZ,  SPONSOR, explained  the reason                                                                    
behind  needing   the  legislation.  The  bill   allows  the                                                                    
railroad  to  sell  property  to  current  leaseholders.  He                                                                    
referred to  written testimony in  the members'  packets. He                                                                    
stressed that  since the  bill was  brought forth  there has                                                                    
been more openness on the  railroad's part toward selling of                                                                    
land. The railroad president has  indicated a willingness to                                                                    
do business.  The lease holding  proceeds would  be replaced                                                                    
the earnings of any land that may be sold.                                                                                      
                                                                                                                                
10:38:05 AM                                                                                                                   
                                                                                                                                
Representative Stoltz spoke of  respect for the railroad. He                                                                    
suggested that  the state needs  a better  relationship with                                                                    
the  railroad. He  concluded that  this  legislation is  one                                                                    
small piece of that effort.                                                                                                     
                                                                                                                                
10:40:01 AM                                                                                                                   
                                                                                                                                
Senator   Thomas  brought   up  the   definition  of   "non-                                                                    
essential", noting  that about 50 percent  of the railroad's                                                                    
income is  from leased property.  He spoke of issues  in his                                                                    
district regarding  the release  of property.  He questioned                                                                    
various examples  of what might be  considered non-essential                                                                    
applications.                                                                                                                   
                                                                                                                                
Representative  Stoltz   did  not   have  a   definition  of                                                                    
essential. He said  the relationship is based  on good faith                                                                    
and  trust. He  suggested that  the bill  opens the  door to                                                                    
economic development. He did not  want to imply that the 350                                                                    
lease  holders  should  expect   their  leases  turned  into                                                                    
available  property. Instead,  the legislation  should allow                                                                    
the business  communities and small  communities to  have an                                                                    
opportunity to engage in a discussion of lease sales.                                                                           
                                                                                                                                
10:43:10 AM                                                                                                                   
                                                                                                                                
Co-Chair Hoffman  asked if this  bill requires  the railroad                                                                    
to follow  the Executive  Budget Act.  Representative Stoltz                                                                    
thought that the issue was worthy of future discussion.                                                                         
                                                                                                                                
Senator  Olson  asked  if  the sponsor  was  opposed  to  an                                                                    
amendment  that  would  include the  Executive  Budget  Act.                                                                    
Representative Stoltz thought debate on issues was good.                                                                        
                                                                                                                                
Co-Chair Stedman  commented on the negative  process of high                                                                    
jacking  bills by  one committee  over  the other.  Co-Chair                                                                    
Stoltze added that he respects the committee process.                                                                           
                                                                                                                                
10:45:13 AM                                                                                                                   
                                                                                                                                
Senator  Olson inquired  about lack  of good  faith in  past                                                                    
disagreements  with  the   railroad.  Representative  Stoltz                                                                    
replied that the bill does not address that concern.                                                                            
                                                                                                                                
Senator Olson asked  if the sales mentioned in  the bill are                                                                    
those that were in  previous disputes. Representative Stoltz                                                                    
stated  that the  bill is  advisory and  does not  intend to                                                                    
involve on-going disputes.                                                                                                      
                                                                                                                                
10:47:03 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman   noted  a  zero  fiscal   note  from  the                                                                    
Department of Commerce,  Community, and Economic Development                                                                    
and a Letter of Intent.                                                                                                         
                                                                                                                                
JOHN   BINKLEY,  CHAIRMAN,   ALASKA  RAILROAD   CORPORATION,                                                                    
explained  that  the lease  of  lands  carries the  railroad                                                                    
through the  low financial points.  He recalled  the history                                                                    
of when  the state purchased  the railroad from  the federal                                                                    
government in 1985,  the legislature chose to  keep the real                                                                    
estate holdings,  about 35,000 acres, to  provide income for                                                                    
the people  of Alaska. He  stressed that the  legislation is                                                                    
for the people who own  the railroad. He emphasized that the                                                                    
bill allows the railroad to  sell land to leaseholders after                                                                    
bringing it  before the legislature. He  thanked the sponsor                                                                    
for the legislation because it  has spotlighted an aspect of                                                                    
the railroad, the leaseholders.                                                                                                 
                                                                                                                                
10:51:00 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman asked  if Mr.  Binkley supports  the bill.                                                                    
Mr.  Binkley reported  being neutral  on the  bill. Co-Chair                                                                    
Stedman  requested that  Mr.  Binkley  submit any  suggested                                                                    
changes to his office.                                                                                                          
                                                                                                                                
MARK   STEARNS,   ALASKA   WOOD  MOLDING,   ANCHORAGE   (via                                                                    
teleconference), testified  in support of the  bill. He said                                                                    
he was a  leaseholder and he thought the  railroad should be                                                                    
able to  spend the  proceeds of the  land sales.  He thought                                                                    
the legislation would benefit both  the leaseholders and the                                                                    
railroad.                                                                                                                       
                                                                                                                                
10:53:31 AM                                                                                                                   
                                                                                                                                
PETER  MACSEY, STEEL  FAB,  ANCHORAGE (via  teleconference),                                                                    
related the tax  structure on his property,  lease held land                                                                    
for sixty  years. He pointed  out that he pays  property tax                                                                    
for  his leased  land, as  if he  owned it.  He listed  four                                                                    
bills, HB  171, HB 173,  SB 142,  and SB 165  that authorize                                                                    
transfer of  railroad land.  He observed  that when  it's in                                                                    
public  interest, it's  no big  deal; when  it's in  private                                                                    
interest, it's a big deal.                                                                                                      
                                                                                                                                
Co-Chair  Stedman  stated  that  a lot  of  the  communities                                                                    
around  the  state charge  property  tax  for land  that  is                                                                    
leased.                                                                                                                         
                                                                                                                                
MEAD  TREADWELL,   ANCHORAGE  (via  teleconference),   as  a                                                                    
leaseholder,  thanked the  sponsor for  the legislation.  He                                                                    
thought his  property was non-essential to  the railroad and                                                                    
he  expressed  appreciation for  a  process  to buy  it.  He                                                                    
agreed  with  Mr.  Binkley that  real  estate  revenues  are                                                                    
important to the railroad.                                                                                                      
                                                                                                                                
10:57:14 AM                                                                                                                   
                                                                                                                                
TOM  FAVERO,  FAIRBANKS  (via teleconference),  spoke  as  a                                                                    
leaseholder in support of the bill.                                                                                             
                                                                                                                                
JOHN REEVES, FAIRBANKS (via  teleconference), spoke in favor                                                                    
of  the   legislation  so  that   he  could  own   and  make                                                                    
improvements to his property.                                                                                                   
                                                                                                                                
HB  357  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 424(FIN) am                                                                                             
                                                                                                                                
     "An Act providing for and relating to the issuance of                                                                      
     general obligation bonds for the purpose of paying the                                                                     
     cost of design and construction of library, education,                                                                     
     and educational research facilities; and providing for                                                                     
     an effective date."                                                                                                        
                                                                                                                                
HB 424 was scheduled but not heard.                                                                                             
                                                                                                                                
CS FOR HOUSE BILL NO. 369(FIN) am                                                                                             
                                                                                                                                
     "An Act relating to an in-state natural gas pipeline,                                                                      
     the office of in-state gasline project manager, and                                                                        
     the Joint In-State Gasline Development Team; requiring                                                                     
     the development of an in-state natural gas pipeline                                                                        
     plan, to be delivered to the legislature by July 1,                                                                        
     2011, that provides for a gasline that is operational                                                                      
     by December 31, 2015; directing the Joint In-State                                                                         
     Gasline Development Team to assume responsibilities                                                                        
     under sec. 19, ch. 14, SLA 2009; requiring expedited                                                                       
     review and action by state agencies or entities                                                                            
     relating to the in-state natural gas pipeline project;                                                                     
     and providing for an effective date."                                                                                      
                                                                                                                                
HB 369 was scheduled but not heard.                                                                                             
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 22(FIN)                                                                                
                                                                                                                                
     Establishing and relating to the Alaska Northern                                                                           
     Waters Task Force                                                                                                          
                                                                                                                                
HCR 22 was scheduled but not heard.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 11:01 AM.                                                                                          

Document Name Date/Time Subjects
SB 309 Amendment 1 Huggins SFIN 041510.doc SFIN 4/15/2010 9:00:00 AM
SB 309
SB 309 Royalty Sheet 041510.pdf SFIN 4/15/2010 9:00:00 AM
SB 309
SB 309 041510 SFIN Memo from DOR.pdf SFIN 4/15/2010 9:00:00 AM
SB 309
SB 309 041510 Alaska Oil and Gas Tax and Royalty Incentives.pdf SFIN 4/15/2010 9:00:00 AM
SB 309
SB 309 041510 Alaska Oil and Gas Tax Legislation Comparison .pdf SFIN 4/15/2010 9:00:00 AM
SB 309
SB 309 041510 CIWellExample_ds_20100412.pdf SFIN 4/15/2010 9:00:00 AM
SB 309