Legislature(2011 - 2012)SENATE FINANCE 532

03/30/2012 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 284 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
<Above Item Removed from Agenda>
+= HB 285 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
<Above Item Removed from Agenda>
+= SB 192 OIL AND GAS PRODUCTION TAX RATES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 91 SPORT FISHING GUIDING SERVICES TELECONFERENCED
Moved CSSB 91(FIN) Out of Committee
+= SB 119 ATHLETIC TRAINER LICENSING TELECONFERENCED
Moved CSSB 119(L&C) Out of Committee
+= SB 182 PUPIL TRANSPORTATION FUNDING TELECONFERENCED
Moved CSSB 182(EDC) Out of Committee
+= HB 65 SENIOR CITIZEN HOUSING DEV. FUND GRANTS TELECONFERENCED
Moved HB 65 Out of Committee
+= HB 104 ALASKA PERFORMANCE SCHOLARSHIPS TELECONFERENCED
Moved SCS CSHB 104(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 30, 2012                                                                                            
                         9:04 a.m.                                                                                              
                                                                                                                                
9:04:54 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:04 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lesil McGuire, Vice-Chair                                                                                               
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator  Linda  Menard;  Shyan Ely,  Intern,  Senator  Lesil                                                                    
McGuire;  Senator Kevin  Meyer; Christine  Marasigan, Staff,                                                                    
Senator  Kevin Meyer;  Senator Kevin  Meyer; Edra  Morledge,                                                                    
Staff, Senator  Meyer; Timothy Clark,  Staff, Representative                                                                    
Bryce  Edgmon;   Darwin  Peterson,  Staff,   Senate  Finance                                                                    
Committee; Diane Barrans,  Executive Director, Postsecondary                                                                    
Education Commission, Department  of Education; Janak Mayer,                                                                    
Manager,  Upstream  and  Gas,   PFC  Energy;  Senator  Cathy                                                                    
Giessel; Senator Joe Paskvan                                                                                                    
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 91     SPORT FISHING GUIDING SERVICES                                                                                        
                                                                                                                                
          SB 91 was REPORTED out of committee with a "do                                                                        
          pass" recommendation and with the accompanying                                                                        
          previously published fiscal note: FN2 (DFG).                                                                          
                                                                                                                                
SB 119    ATHLETIC TRAINER LICENSING                                                                                            
                                                                                                                                
          SB 119 was REPORTED out of committee with a "do                                                                       
          pass" recommendation and with accompanying new                                                                        
          fiscal impact note from the Department of                                                                             
          Commerce, Community and Economic Development; and                                                                     
          new zero fiscal note from the Department of                                                                           
          Administration.                                                                                                       
                                                                                                                                
SB 182    PUPIL TRANSPORTATION FUNDING                                                                                          
                                                                                                                                
          SB 182 was REPORTED out of committee with a "do                                                                       
          pass" recommendation, attached Letter of Intent                                                                       
          from the Department of Education and Early                                                                            
          Development and with a new fiscal impact     note                                                                     
     from the Department of Education and Early                                                                                 
     Development.                                                                                                               
                                                                                                                                
HB  65    SENIOR CITIZEN HOUSING DEV. FUND GRANTS                                                                               
                                                                                                                                
          HB 65 was REPORTED out of committee with a                                                                            
          "do pass" recommendation and with a new zero                                                                          
          fiscal note from the Department of Revenue.                                                                           
                                                                                                                                
CS HB 104(RLS)                                                                                                                  
          ALASKA PERFORMANCE SCHOLARSHIPS                                                                                       
                                                                                                                                
          CS HB 104(RLS) was REPORTED out of Committee                                                                          
          with individual recommendations and with a new                                                                        
          fiscal impact note from the Senate Finance                                                                            
          Committee for the Department of Education and                                                                         
          Early Development, a new fiscal impact note from                                                                      
          the Department of Education and Early                                                                                 
          Development, a new zero fiscal note from the                                                                          
          Department of Education and Early Development,                                                                        
          and an indeterminate fiscal note from the                                                                             
          Department of Revenue.                                                                                                
                                                                                                                                
SB 192    OIL AND GAS PRODUCTION TAX RATES                                                                                      
                                                                                                                                
          SB 192 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SENATE BILL NO. 91                                                                                                            
                                                                                                                                
     "An Act amending the termination date of the licensing                                                                     
     of sport fishing operators and sport fishing guides;                                                                       
     and providing for an effective date."                                                                                      
                                                                                                                                
9:06:51 AM                                                                                                                    
                                                                                                                                
SHYAN  ELY, INTERN,  SENATOR LESIL  MCGUIRE, highlighted  SB                                                                    
91. Senate Bill 91 will  ensure the continuation of Alaska's                                                                    
sport   fish   guide   licensing  and   reporting   program.                                                                    
Legislation authorizing  the program was passed  in 2004 and                                                                    
the program has proven beneficial  to both the sport fishing                                                                    
industry and  resource managers. With more  than 1.8 million                                                                    
clients, 88  percent of whom  are nonresidents,  taking more                                                                    
than  460,000  guided  fishing  trips  in  Alaska  annually;                                                                    
guided  sport  fishing  has  become   an  integral  part  of                                                                    
Alaska's tourism  economy. In fact, a  study commissioned by                                                                    
the  Alaska  Department  of Fish  and  Game  estimated  that                                                                    
nonresident  spending on  sport fishing  was more  than $650                                                                    
million in  2007. Since the program's  inception, an average                                                                    
of  1,670 sport  fishing business  licenses and  1,981 sport                                                                    
fishing guide  licenses have been sold  annually. She stated                                                                    
that 90 percent of license  holders are Alaska residents and                                                                    
the professionalization of the  sport fishing guide industry                                                                    
has benefitted both the industry  and the resource. The data                                                                    
collected  through  the  program  provides  the  information                                                                    
state and federal managers need  to sustainably manage sport                                                                    
fish populations. The program  also allows Alaska to receive                                                                    
an exemption from the National  Saltwater Angler Registry; a                                                                    
federal   program  that   would  begin   levying  fees   for                                                                    
registration  in 2011.  Recognizing  the  importance of  the                                                                    
program,  the  Alaska  legislature  extended  the  program's                                                                    
termination date  for one  year in 2010;  SB 91  proposes to                                                                    
amend  the  program's  associated  termination  language  in                                                                    
existing statutes  in order to  allow this  valuable program                                                                    
to  continue serving  Alaskans  and  their valuable  fishery                                                                    
resources.                                                                                                                      
                                                                                                                                
Co-Chair Stedman  noted the one previously  published fiscal                                                                    
impact note from the Department of Fish and Game.                                                                               
                                                                                                                                
Co-Chair  Hoffman MOVED  to report  CS  SB 91  (FIN) out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ORDERED.                                                                                                                     
                                                                                                                                
SB  91  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation   and   with  the   accompanying   previously                                                                    
published fiscal note: FN2 (DFG).                                                                                               
                                                                                                                                
SENATE BILL NO. 119                                                                                                           
                                                                                                                                
     "An Act relating to the licensing and regulation of                                                                        
     athletic trainers."                                                                                                        
                                                                                                                                
9:10:26 AM                                                                                                                    
                                                                                                                                
CHRISTINE MARASIGAN,  STAFF, SENATOR KEVIN  MEYER, explained                                                                    
that  SB  119  would  amend current  statutes  to  establish                                                                    
licensing and  regulation of athletic trainers  in the State                                                                    
of  Alaska. Athletic  Trainers  are  certified, health  care                                                                    
professionals who practice in  the field of sports medicine.                                                                    
This profession plays a significant  role in the management,                                                                    
prevention,  recognition   and  rehabilitation   of  injured                                                                    
athletes under  the supervision of a  licensed physician. As                                                                    
people  become increasingly  more active,  athletic trainers                                                                    
are a  vital resource  in administering  immediate emergency                                                                    
care as  well as  injury prevention and  treatment programs.                                                                    
The  National Athletic  Trainer's Association  (NATA), which                                                                    
was  founded   in  1950,  is  the   professional  membership                                                                    
association  for certified  athletic trainers.  According to                                                                    
NATA, Alaska is one of the  few states that do not currently                                                                    
license  athletic trainers.  Should  SB  119 pass,  athletic                                                                    
trainers would be required to  have a license to practice in                                                                    
the State of Alaska.                                                                                                            
                                                                                                                                
Co-Chair Stedman pointed  out one zero fiscal  note from the                                                                    
Department  of Administration  (DOA);  and  one fiscal  note                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
Development (DCCED)  for $26.5 million in  receipt supported                                                                    
services in FY 13, and $1.8 million in the out-years.                                                                           
                                                                                                                                
Co-Chair Hoffman  MOVED to report CS  SB 119 (L &  C) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ORDERED.                                                                                                                     
                                                                                                                                
SB  119 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation and with accompanying  new fiscal impact note                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
Development; and  new zero fiscal  note from  the Department                                                                    
of Administration.                                                                                                              
                                                                                                                                
SENATE BILL NO. 182                                                                                                           
                                                                                                                                
     "An Act amending the amount of state funding provided                                                                      
     to school districts for pupil transportation."                                                                             
                                                                                                                                
SENATOR KEVIN MEYER, explained that  school districts in the                                                                    
state of  Alaska are facing  shortfalls in  overall funding,                                                                    
in  part due  to  the rising  cost  of pupil  transportation                                                                    
programs.  It is  costing more  each year  to transport  our                                                                    
students safely to and from  school. Senate Bill 182 changes                                                                    
the  pupil  transportation   funding,  which  allows  school                                                                    
districts to  keep more of  their foundation funding  in the                                                                    
classroom. Currently most districts  have to subsidize their                                                                    
pupil  transportation   programs,  which   takes  foundation                                                                    
formula  dollars  out  of the  classroom.  This  legislation                                                                    
recalibrates the  funding for pupil transportation  based on                                                                    
the most  recent audits by  the Department of  Education and                                                                    
Early  Development. The  amounts will  be adjusted  annually                                                                    
according to  the Consumer Price Index  (CPI) for Anchorage.                                                                    
This change allows  the funding to match  the amounts agreed                                                                    
to in  their most recent contract  negotiations, providing a                                                                    
more  realistic   figure  for  the  actual   cost  of  pupil                                                                    
transportation.   Although   pupil  transportation   is   an                                                                    
indirect  cost of  education, it  is extremely  important in                                                                    
Alaska.  Road  conditions   are  often  dangerous,  daylight                                                                    
during  the  school  year  is  minimal,  and  sometimes  the                                                                    
distance of transporting students is immense.                                                                                   
                                                                                                                                
Co-Chair Stedman noted  the new fiscal impact  note from the                                                                    
Department of Education and Early Development.                                                                                  
                                                                                                                                
Senator Olson  wondered how many  school districts  would be                                                                    
impacted by  the bill. Senator  Meyer replied that  the bill                                                                    
would benefit  every school district that  currently offered                                                                    
school transportation.                                                                                                          
                                                                                                                                
EDRA  MORLEDGE, STAFF,  SENATOR  MEYER,  furthered that  the                                                                    
bill  represented  49 school  districts  out  of 53  in  the                                                                    
state.                                                                                                                          
                                                                                                                                
Senator Olson surmised  that the bill applied  to the school                                                                    
districts that  currently provided  transportation services.                                                                    
Ms.  Morledge agreed.  She  added that  if  the four  school                                                                    
districts  that  did  not currently  provide  transportation                                                                    
decided  to  provide  transportation in  the  future,  those                                                                    
districts would benefit from the proposal.                                                                                      
                                                                                                                                
Co-Chair  Hoffman MOVED  to report  CS SB  182 (EDC)  out of                                                                    
committee with  individual recommendations,  attached letter                                                                    
of intent, and the accompanying  fiscal note. There being NO                                                                    
OBJECTION, it was so ORDERED.                                                                                                   
                                                                                                                                
SB  182 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation,   attached  Letter   of   Intent  from   the                                                                    
Department of  Education and Early  Development, and  with a                                                                    
new  fiscal  impact from  the  Department  of Education  and                                                                    
Early Development.                                                                                                              
                                                                                                                                
HOUSE BILL NO. 65                                                                                                             
                                                                                                                                
     "An  Act  making  regional Native  housing  authorities                                                                    
     eligible to  receive grants through the  Alaska Housing                                                                    
     Finance  Corporation from  the senior  citizens housing                                                                    
     development fund."                                                                                                         
                                                                                                                                
9:16:10 AM                                                                                                                    
                                                                                                                                
TIMOTHY   CLARK,   STAFF,   REPRESENTATIVE   BRYCE   EDGMON,                                                                    
highlighted  the features  of HB  65. He  stated that  HB 65                                                                    
would benefit senior citizens across  the state by including                                                                    
regional  housing authorities  among  the entities  eligible                                                                    
for grants through the  Alaska Housing Finance Corporation's                                                                    
Senior Citizens Housing Development  Fund (SCHDF). The SCHDF                                                                    
contributed  funding to  organizations that  develop quality                                                                    
housing for older Alaskans, who  make up the fastest growing                                                                    
segment  of  our population.  While  SCHDF  grants had  been                                                                    
available to municipalities and  501 c(3) and (4) nonprofits                                                                    
since  the  fund's   inception,  Alaska's  regional  housing                                                                    
authorities had not been eligible.  House Bill 65, which had                                                                    
the  support  of  the  Alaska  Housing  Finance  Corporation                                                                    
(AHFC), will  correct that omission.  IN most  cases, grants                                                                    
through  the  SCHDF complement  funding  from  a variety  of                                                                    
other sources. Often and ACHDF  grant was the final piece of                                                                    
the puzzle that  allowed a project to go  forward. Funds can                                                                    
be put toward pre-development  expenses and new construction                                                                    
as   well  as   acquisition  of   properties,  accessibility                                                                    
modifications,  and  rehabilitations. Alaska's  14  regional                                                                    
housing authorities  span from Ketchikan to  Barrow and were                                                                    
among the  state's most experience developers  of affordable                                                                    
housing.  Making  housing  authorities eligible  for  grants                                                                    
would  not  increase spending  through  the  SCHDF. It  may,                                                                    
however,  widen  the  selection of  projects  competing  for                                                                    
grants  and  increase  AHFC's ability  to  more  effectively                                                                    
allocate funding.                                                                                                               
                                                                                                                                
Co-Chair Stedman pointed  out the one zero  fiscal note from                                                                    
the Department of Transportation and Public Facilities                                                                          
                                                                                                                                
Co-Chair  Hoffman MOVED  to report  HB 65  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION it was so ORDERED.                                                                               
                                                                                                                                
HB  65  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation  and with  a new  zero fiscal  note from  the                                                                    
Department of Revenue.                                                                                                          
                                                                                                                                
9:19:06 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:24:21 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 104(RLS)                                                                                                
                                                                                                                                
     "An  Act renaming  the  Alaska performance  scholarship                                                                    
     and  relating  to  the   scholarship  and  tax  credits                                                                    
     applicable   to  contributions   to  the   scholarship;                                                                    
     relating to AlaskAdvantage  education grant funding and                                                                    
     to    Alaska     performance    scholarship    funding;                                                                    
     establishing an  account and  fund for  those purposes;                                                                    
     making  conforming  amendments;  and providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  proposed  committee                                                                    
substitute  for  CS HB  104  (RLS),  Work Draft  27-GH1893\S                                                                    
(Mischel  3/28/12).   Co-Chair  Stedman  OBJECTED   for  the                                                                    
purpose of discussion.                                                                                                          
                                                                                                                                
9:25:31 AM                                                                                                                    
                                                                                                                                
DARWIN PETERSON, STAFF,  SENATE FINANCE COMMITTEE, explained                                                                    
the  changes in  the Work  Draft. He  explained the  changes                                                                    
between  committee substitute  versions R  and S.  He stated                                                                    
that page 2  of the work draft, lines 9  and 10 inserted the                                                                    
words, "an institutional accrediting  body recognized by the                                                                    
United States Secretary of Education."  He looked at page 2,                                                                    
lines 23 and 24 that  added the words, "Alaska residents who                                                                    
have attained  an Alaska high school  diploma by examination                                                                    
after January 1,  2011." He explained that  the phrase "high                                                                    
school diploma by  examination" was the proper  way to refer                                                                    
to  students  who  had   received  their  General  Education                                                                    
Development (GED).  Page 3, line  7 added the  exception for                                                                    
provisions of subsection  C, which were the  new high school                                                                    
diploma by  examination component.  Page 3,  line 9  made an                                                                    
exception  for subsection  D, which  was the  waiver of  the                                                                    
core academic requirements.  Page 4, lines 3  through 30 was                                                                    
the new grace period language.  He stated that the new grace                                                                    
period  language was  taken directly  from the  regulations,                                                                    
and was  only slightly modified.  The grace period  that was                                                                    
in regulation expired with the  graduating class of 2012, so                                                                    
the  new  language  continued  the   grace  period,  so  the                                                                    
Commissioner  can  waive  the requirements.  He  quoted  the                                                                    
grace period language:                                                                                                          
                                                                                                                                
     The   Commissioner  shall   waive  the   core  academic                                                                    
     requirements  for  a  high   school  graduate,  if  the                                                                    
     student  submits and  application  providing proof  the                                                                    
     student  was unable  the academic  requirements because                                                                    
     of illness or disability  or because those courses were                                                                    
     not  available in  the student's  school district.  The                                                                    
     Commissioner  has thirty  days  to approve  or deny  an                                                                    
     application  for  waiver.  High  school  graduates  who                                                                    
     receive  the waiver  will then  have  twelve months  to                                                                    
     finish  the  core  academic requirements  in  a  school                                                                    
     district that sponsors that student.                                                                                       
                                                                                                                                
Mr. Peterson stated that GED  graduates would have 24 months                                                                    
to complete the core academic requirements.                                                                                     
                                                                                                                                
Mr. Peterson  stated that page  5, lines  5, 11, and  17 had                                                                    
deleted  the  word,  "diploma", because  it  was  considered                                                                    
incorrect terminology. He  looked at page 7,  line 19, which                                                                    
changed  the date  from October  1  to September  1 of  each                                                                    
fiscal  year.  Page 7,  lines  21  through 25  inserted  new                                                                    
language:                                                                                                                       
                                                                                                                                
     If an  insufficient number of qualified  applicants are                                                                    
     awarded grants before  the end of the  fiscal year, the                                                                    
     commissioner shall  redeposit the remaining  funds into                                                                    
     the Alaska Higher Education Investment Fund.                                                                               
                                                                                                                                
Mr.  Peterson  explained  that, of  the  earnings  from  the                                                                    
principal  of the  $400 million  fund,  two-thirds would  go                                                                    
into  scholarships, and  one-third  would go  to grants.  If                                                                    
there were  not enough  students that could  use all  of the                                                                    
scholarship  funding  that   was  available,  the  remaining                                                                    
balance of  the funding  will go into  the grants.  If there                                                                    
were  not enough  students to  use all  the available  grant                                                                    
funding, whatever was  leftover at the end of  the year will                                                                    
be deposited  into the  overall Higher  Education Investment                                                                    
Fund to be used in the subsequent fiscal year.                                                                                  
                                                                                                                                
Mr. Peterson  looked at page 7,  line 26. He stated  that it                                                                    
was  not  a  change,  but was  the  small  school  carve-out                                                                    
provision that was staying in the  bill. Page 8, lines 6 and                                                                    
7 was a change that  stated, "the commission shall redeposit                                                                    
the  remaining  amount back  into  the  fund from  which  it                                                                    
originated."                                                                                                                    
                                                                                                                                
Mr. Peterson looked  at page 16, lines 24  through 26, which                                                                    
displayed transition language that  identified that the $400                                                                    
million  that  was appropriated  to  the  AHFC in  the  year                                                                    
prior,  and  would be  used  to  capitalize the  new  Alaska                                                                    
Higher Education  Investment Fund.  Page 17, at  the request                                                                    
of the  department, made changes  to the effective  dates in                                                                    
order to make the program easier to manage.                                                                                     
                                                                                                                                
Mr. Peterson looked at page 9,  lines 2 through 5, which was                                                                    
the payout mechanism in the legislation.                                                                                        
                                                                                                                                
Co-Chair Hoffman  wondered if there  was a  consideration to                                                                    
accommodate the  grant portion  by adding  additional funds,                                                                    
in  order for  the  fund  to be  more  stable. Mr.  Peterson                                                                    
replied that Legislative  Finance applied that consideration                                                                    
of a block for additional deposits.                                                                                             
                                                                                                                                
Co-Chair  Stedman  felt  that the  principle  would  not  be                                                                    
considered  until 20  years had  passed. He  felt that  over                                                                    
time, it may  be seen that performance  may be substantially                                                                    
different than what was anticipated.                                                                                            
                                                                                                                                
Co-Chair Hoffman commented  that he did not want  to work on                                                                    
the problem in 20 years.                                                                                                        
                                                                                                                                
Senator Thomas wondered if the  GED examination was the only                                                                    
acceptable  alternative  to  the high  school  diploma.  Mr.                                                                    
Peterson  deferred  that  question   to  the  Department  of                                                                    
Education and Early Development.                                                                                                
                                                                                                                                
Co-Chair Stedman  WITHDREW his OBJECTION. Seeing  NO further                                                                    
OBJECTION Work Draft 27-GH1893\S was ADOPTED.                                                                                   
                                                                                                                                
9:36:46 AM                                                                                                                    
                                                                                                                                
DIANE BARRANS,  EXECUTIVE DIRECTOR,  POSTSECONDARY EDUCATION                                                                    
COMMISSION,  DEPARTMENT  OF   EDUCATION,  expressed  concern                                                                    
regarding  some  additions  and  changes  to  the  committee                                                                    
substitute.   She  stressed   that  the   governor  remained                                                                    
committed to the program, and  that the program needed to be                                                                    
strong without a  dilution of the message  behind the Alaska                                                                    
Performance Scholarship.                                                                                                        
                                                                                                                                
Co-Chair  Stedman  pointed out  one  zero  fiscal note  from                                                                    
Department  of  Revenue (DOR),  one  zero  fiscal note  from                                                                    
Department of  Education and  Early Development  (DEED), one                                                                    
fiscal  impact  note from  the  Alaska  Commission on  Post-                                                                    
Secondary  Education  for  the  Alaska  Advantage  Education                                                                    
Grants, and one  fiscal impact note from  the Senate Finance                                                                    
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Hoffman MOVED  to  report CS  HB  104(RLS) out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  notes. There being NO  OBJECTION it was                                                                    
SO ORDERED.                                                                                                                     
                                                                                                                                
CS  HB 104(RLS)  was REPORTED  out of  Committee with  a "do                                                                    
pass" recommendation and with a  new fiscal impact note from                                                                    
the  Senate   Finance  Committee   for  the   Department  of                                                                    
Education and  Early Development,  a new fiscal  impact note                                                                    
from the  Department of Education  and Early  Development, a                                                                    
new zero  fiscal note from  the Department of  Education and                                                                    
Early  Development, and  an indeterminate  fiscal note  from                                                                    
the Department of Revenue.                                                                                                      
                                                                                                                                
9:38:42 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:49:18 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 192                                                                                                           
                                                                                                                                
     "An Act relating to the oil and gas production tax;                                                                        
     and providing for an effective date."                                                                                      
                                                                                                                                
JANAK  MAYER,   MANAGER,  UPSTREAM  AND  GAS,   PFC  ENERGY,                                                                    
displayed  a  PowerPoint  presentation  titled,  "Discussion                                                                    
Slides: Alaska Senate Finance Committee. March 30, 2012."                                                                       
                                                                                                                                
Mr. Mayer discussed slide 2, "Difficulties in Existing                                                                          
Fiscal Structure."                                                                                                              
                                                                                                                                
     The  incorporation of  progressivity  into the  Profit-                                                                    
     Based  Production   Tax  (Net)  in  ACES   creates  two                                                                    
     significant problems:                                                                                                      
                                                                                                                                
     Large-scale gas  production at low gas  prices could in                                                                    
     the future significantly  reduce production tax revenue                                                                    
     from existing oil production.                                                                                              
     -Resolving this  problem within  the framework  of ACES                                                                    
     requires significant complexity.                                                                                           
     -Approach to  decoupling in  CSSB 192  requires ability                                                                    
     to  split   costs  between  oil  and   gas  production,                                                                    
     creating  high  degree  of administrative  burden,  and                                                                    
     limiting capacity of state to effectively audit.                                                                           
                                                                                                                                
     Options for  incentivizing new production  are limited,                                                                    
     and relatively complex.                                                                                                    
     -Proposed  incentives within  existing framework  focus                                                                    
     on either  allowances to  reduce Production  Tax Value,                                                                    
     or revenue exclusions (tax holiday).                                                                                       
                                                                                                                                
Mr. Mayer spoke to slide 3, "Summary of Progressive                                                                             
Severance Tax (Gross) Structure."                                                                                               
                                                                                                                                
     A  Progressive  Severance   Tax  (Gross)  option  would                                                                    
     instead  remove  progressivity  from  the  Profit-Based                                                                    
     Production Tax  (Net), instead levying this  tax at the                                                                    
     flat, base rate of 25 percent.                                                                                             
                                                                                                                                
     To   retain  an   element  of   progressivity,  a   new                                                                    
     Progressive Severance  Tax (Gross) would then  be added                                                                    
     to the system. The tax would:                                                                                              
     -Be  non-deductible  for  Profit-Based  Production  Tax                                                                    
     purposes.                                                                                                                  
    -Be levied on gross production (net of royalties).                                                                          
     -Be levied solely on oil.                                                                                                  
     -The  tax  would  use  a  progressivity  structure  not                                                                    
     dissimilar  to  that  under the  current  system,  with                                                                    
     progressivity  coefficients  that  apply  at  different                                                                    
     thresholds.                                                                                                                
                                                                                                                                
Mr. Mayer discussed slide 4, "Summary of Progressive                                                                            
Severance Tax (Gross) Options."                                                                                                 
                                                                                                                                
     The  first option  for  the  Progressive Severance  Tax                                                                    
     would use the following parameters:                                                                                        
     1. No severance  tax below $65 Gross Value  at Point of                                                                    
     Production (GVPP).                                                                                                         
     2.  Progressivity  of  .25   percent  commencing  at  a                                                                    
     threshold of $65 GVPP.                                                                                                     
     3. At $125  GVPP, a tax rate of 15  percent is reached.                                                                    
     At  this  point,  progressivity   is  reduced  to  0.05                                                                    
     percent.                                                                                                                   
     4. Progressivity is capped 20 percent                                                                                      
                                                                                                                                
     A second option, which would  freeze government take at                                                                    
     70 percent at $100/bbl might look like this:                                                                               
     1. No severance  tax below $60 Gross Value  at Point of                                                                    
     Production (GVPP).                                                                                                         
     2.  Progressivity  of  .25   percent  commencing  at  a                                                                    
     threshold of $60 GVPP.                                                                                                     
     3. At $100  GVPP, a tax rate of 10  percent is reached.                                                                    
     At  this  point,  progressivity   is  reduced  to  0.03                                                                    
     percent.                                                                                                                   
     4. Progressivity is capped 20 percent.                                                                                     
                                                                                                                                
9:56:07 AM                                                                                                                    
                                                                                                                                
Mr. Mayer explained slide 5, "Benefits of Progressive                                                                           
Severance Tax (Gross) Structure."                                                                                               
                                                                                                                                
     By   removing  progressivity   from  the   Profit-Based                                                                    
     Production  Tax  (Net),   and  having  the  progressive                                                                    
     element  of the  structure be  a Progressive  Severance                                                                    
     Tax (Gross), two things become much easier to achieve.                                                                     
     -The issue  of gas  production reducing  production tax                                                                    
     revenue ceases  to be  a problem  without progressivity                                                                    
     in the Profit-Based  Production Tax. Complex provisions                                                                    
     to  split costs  between oil  and gas  production under                                                                    
     CSSB 192 are thus no longer required.                                                                                      
     -Significant   incentives  can   be  provided   to  new                                                                    
     production, by eliminating  or reducing the Progressive                                                                    
     Severance Tax (Gross) for new production.                                                                                  
                                                                                                                                
     A  wide  range of  levels  of  government take  can  be                                                                    
     achieved  using   this  structure,  depending   on  the                                                                    
     parameters applied.                                                                                                        
                                                                                                                                
Mr. Mayer discussed slide 6,  "WTI Light Sweet Crude-Forward                                                                    
Curve."  He   stated  that  the  WTI   marker,  because  was                                                                    
considered  the most  liquid. He  stated that  WTI currently                                                                    
traded at a discount. In terms  of spot prices, there may be                                                                    
a ten or  more dollar differential. The  important point was                                                                    
the  shape of  the curve,  and the  fact that  2020 delivery                                                                    
dates  could be  below  $90/bbl. He  stated  that the  curve                                                                    
represented  March 29,  2012  contract  prices for  delivery                                                                    
from everything from May 2012 to November 2020.                                                                                 
                                                                                                                                
Mr. Mayer  explained slide 7, "FY  2013 Revenue Comparison."                                                                    
He  stated  that  the  chart  had  been  extended  from  the                                                                    
$150/bbl level  to the  $200/bbl level,  and added  a second                                                                    
severance  tax  option.  Severance tax  option  1  displayed                                                                    
progressivity continuing  up to $125/bbl; and  severance tax                                                                    
option 2 stopped at $100, but  kicked in at a slightly lower                                                                    
level, and  would "freezes" take  at the 70/30 split  for FY                                                                    
13. He  stressed that the  displayed revenues  were slightly                                                                    
than  the first  option that  was presented  the day  prior,                                                                    
however  the revenues  were broadly  similar to  those under                                                                    
the Alaska Clear and Equitable Share Act (ACES).                                                                                
                                                                                                                                
10:00:37 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  asked  for a  clarification  on  the  two                                                                    
different  severance  tax  options,  specifically  regarding                                                                    
severance tax  option 2.  Mr. Mayer looked  at slide  8, "FY                                                                    
2013  Revenue  Comparison."  He  looked  at  the  difference                                                                    
between the total  state revenue from production  tax on the                                                                    
left and  the cash to companies  on the right hand  side. He                                                                    
stated  that there  was a  main divergence  showed a  slight                                                                    
change  around  the  $120/bbl  level   that  came  from  the                                                                    
different  progressivity coefficient  that is  applied under                                                                    
CS  SB 192:  .35 percent  rather than  .4 percent.  When the                                                                    
level is taken $120/bbl to  $200/bbl, there is a small split                                                                    
displayed, as the  cap in CS SB 192 is  applied. He stressed                                                                    
that below  $200/bbl, there was  very little  difference. He                                                                    
stated that  the blue line represented  severance tax option                                                                    
1.  The   scenario  was  based   on  progressivity   on  the                                                                    
progressive  severance  tax  would  kick in  at  a  rate  of                                                                    
$65/bbl, and  be progressive at a  rate .25 percent up  to a                                                                    
level of $125/bbl. From that  point on, it would continue at                                                                    
a  rate  of .05  percent  until  a  cap  of 20  percent  was                                                                    
reached.                                                                                                                        
                                                                                                                                
Co-Chair Stedman  noted that the  chart did not  include the                                                                    
$400 million in 20 percent  capital as reflected on slide 7.                                                                    
Mr. Mayer  replied in  the affirmative and  that all  of the                                                                    
2013 numbers were prepared  consistent with DOR methodology,                                                                    
where  their production  tax forecasts  did not  reflect the                                                                    
credits.  The  credits  were calculated  separately  in  the                                                                    
state budget. The reason the  $400 million was not included,                                                                    
was  because those  credits were  entirely exogenous  to the                                                                    
economic model that produces the numbers.                                                                                       
                                                                                                                                
10:04:53 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  stated that the  $400 million was  used to                                                                    
calculate in the  2013. He wanted to be clear  in the future                                                                    
whether the  credits represented $400  or $800 million.   He                                                                    
wondered  why  the $400  million  was  not included  in  the                                                                    
chart. Mr. Mayer responded that  he did not include the $400                                                                    
million because it was attributed  to projects that were not                                                                    
necessarily  producing.  The   additional  $400  million  in                                                                    
credits were not subject to production tax.                                                                                     
                                                                                                                                
Co-Chair  Stedman  stated that  he  would  like to  see  the                                                                    
credits shown in  the chart. He observed  that the committee                                                                    
would like  to look at  the whole  gross value and  not just                                                                    
adjusted numbers.                                                                                                               
                                                                                                                                
Senator Thomas  observed that a  1 percent tax  at $120/bbl,                                                                    
could result  in about $170  million. He stressed  that $400                                                                    
million or $800 million was a "big swap in cash."                                                                               
                                                                                                                                
Co-Chair Stedman  looked at  the severance  tax option  2 on                                                                    
slide 7, and  surmised that the concept was to  hold the tax                                                                    
flow  constant at  $100/bbl and  below.  However, more  cash                                                                    
would be moved to industry  at $100/bbl and above. Mr. Mayer                                                                    
responded  that there  was  a 70/30  percent  split in  both                                                                    
state  and federal  governments.  He stated  that the  70/30                                                                    
split,  under this  proposal,  would  make every  additional                                                                    
dollar above $100/bbl be broken,  so 30 percent would to the                                                                    
company, and  70 percent  would go  to the  combined federal                                                                    
and state governments.                                                                                                          
                                                                                                                                
Co-Chair Stedman asked  if the price was  frozen at $100/bbl                                                                    
Mr. Mayer responded in the affirmative.                                                                                         
                                                                                                                                
Co-Chair  Stedman wondered  if  the price  could  be set  at                                                                    
$125/bbl. Mr. Mayer did not respond.                                                                                            
                                                                                                                                
10:12:11 AM                                                                                                                   
                                                                                                                                
Mr. Mayer  displayed slide 9, "FY  2013 Revenue Comparison",                                                                    
which  compared   the  total  state  take   with  the  total                                                                    
government take.                                                                                                                
                                                                                                                                
Mr. Mayer explained  slide 10, "ACES (FY 2013)."   He stated                                                                    
that  the slide  outlined the  dollars to  the treasury  for                                                                    
each  of the  components  of  the system,  for  each of  the                                                                    
regimes.                                                                                                                        
                                                                                                                                
Co-Chair  Stedman noted  that the  committee had  not had  a                                                                    
chance  to review  the slides.  He looked  at slide  10, and                                                                    
wondered if  the revenue  forecast was  with or  without the                                                                    
additional  $400 million  in  credits.  Mr. Mayer  responded                                                                    
that the slide  did not include the  additional $400 million                                                                    
in credits.                                                                                                                     
                                                                                                                                
Co-Chair Stedman felt that information  about whether or not                                                                    
the $400  million was represented  should be  "footnoted" in                                                                    
some  of  the  slides,  in order  to  reduce  confusion.  He                                                                    
remarked that the numbers were  homogenized, but without the                                                                    
$400 million  applied. He felt  that a  homogenized analysis                                                                    
should  include   all  credits,  especially   $400  million,                                                                    
specifically all  credits applied against the  treasury: net                                                                    
cash back on  the table. Mr. Mayer replied that  in order to                                                                    
produce the numbers  for a model, it was  imperative to look                                                                    
at credits that came from  existing production, so one could                                                                    
examine  the  estimate  of the  costs  associated  with  the                                                                    
production  would  be.  He  remarked  that  the  reason  the                                                                    
presentation was  in its current  form, was  for consistency                                                                    
with  the   DOR  figures  and   the  current   state  budget                                                                    
structure.                                                                                                                      
                                                                                                                                
10:17:19 AM                                                                                                                   
                                                                                                                                
Mr. Mayer  discussed slide  11, "CSSB  192 (FY  2013)." When                                                                    
looking at  the overall  government take figures,  there was                                                                    
not much  difference from the current  structure. The reason                                                                    
there was not  much change, the 60 percent cap  did not bind                                                                    
at a  price level  of $230/bbl. He  furthered that  if there                                                                    
was an examination  of a range of years,  across the project                                                                    
life  span,   the  impact  of  inflation   would  display  a                                                                    
difference. The  only difference that is  showcased, was the                                                                    
impact  of  the  .35  percent rather  than  the  .4  percent                                                                    
progressivity coefficient.                                                                                                      
                                                                                                                                
Mr.  Mayer explained  slide  12,  "Severance Tax-20  percent                                                                    
Maximum  (FY 2013)  .25 percent  progressivity  from $65  to                                                                    
$125, then.10 percent progressivity."  He explained that the                                                                    
two graphs  displayed the difference  between a  .25 percent                                                                    
progressivity and  a .10 percent progressivity  from $65/bbl                                                                    
to $125/bbl.                                                                                                                    
                                                                                                                                
Mr. Mayer discussed  slide 13, " Severance Tax  - 20 percent                                                                    
Maximum  (FY 2013)  .25 percent  progressivity  from $60  to                                                                    
$100,  then .03  percent progressivity."  He explained  that                                                                    
the  two  graphs  displayed the  difference  between  a  .25                                                                    
percent progressivity  and a .03 percent  progressivity from                                                                    
$60/bbl to $100/bbl.                                                                                                            
                                                                                                                                
Co-Chair Stedman  asked for a  clarification on slide  7 and                                                                    
asked if  option was a $100  million.  Mr. Mayer  replied in                                                                    
the  affirmative and  declared  that it  was  a function  of                                                                    
progressivity kicking  in at the $60/bbl  level, rather than                                                                    
the $65/bbl  level. He furthered  that, under  severance tax                                                                    
option 2, total  state take was almost identical  to what it                                                                    
would be under CS SB 192.                                                                                                       
                                                                                                                                
Co-Chair Stedman  noted that the sharing  relationship would                                                                    
increase,  if there  was an  increase to  $110 million.  Mr.                                                                    
Mayer agreed.                                                                                                                   
                                                                                                                                
Mr.   Mayer  discussed   slide  14,   "Incentives  for   New                                                                    
Production."                                                                                                                    
                                                                                                                                
     Significant   incentives  can   be   provided  to   new                                                                    
     production, by eliminating  or reducing the Progressive                                                                    
     Severance Tax (Gross) on any combination of:                                                                               
     -Production from new areas.                                                                                                
     -Production from  new plans of  development (determined                                                                    
     through  the   regulatory  process   to  be   for  "new                                                                    
     production").                                                                                                              
     -Production above a fixed decline rate.                                                                                    
                                                                                                                                
     Here, a  reduced rate of Progressive  Severance Tax has                                                                    
     been modeled,  using the  following parameters  for new                                                                    
     production:                                                                                                                
     -Base rate of 0 percent                                                                                                    
     -Progressivity   of  .05   percent   commencing  at   a                                                                    
     threshold of $65 (gross value at point of production).                                                                     
     -Progressivity is capped 5 percent.                                                                                        
                                                                                                                                
     Following  slides   show  a  new,  high-cost   10  mb/d                                                                    
     development under                                                                                                          
     -The regular rate.                                                                                                         
     -The reduced rate (with a time limit of 7 years).                                                                          
     -The reduced rate (with no time limit).                                                                                    
                                                                                                                                
10:23:11 AM                                                                                                                   
                                                                                                                                
Mr.  Mayer   explained  slide  15,   "Noted  on   Impact  of                                                                    
Inflation."                                                                                                                     
                                                                                                                                
     Under   ACES,    thresholds   and    coefficients   for                                                                    
     progressivity are  specified in nominal  terms, without                                                                    
     indexation.                                                                                                                
     -As a result, when  economics over the long-term rather                                                                    
     than  just 2013  are examined,  we see  the effects  of                                                                    
     'bracket creep' or 'stealth tax.'                                                                                          
     -In  real terms,  as  prices  increase, thresholds  for                                                                    
     progressivity decrease, and the  higher take that comes                                                                    
     with  progressivity occurs  at  lower  and lower  price                                                                    
     levels.                                                                                                                    
                                                                                                                                
     Severance   tax  options   are  also   currently  shown                                                                    
     assuming nominal thresholds.                                                                                               
     -As  a  result,  in  the  charts,  the  impact  of  the                                                                    
     severance tax  can be seen  below the $60/$65  level at                                                                    
     which it applies  - a result of  bracket-creep over the                                                                    
     lifetime of a project.                                                                                                     
                                                                                                                                
     It  is strongly  worth considering  the application  of                                                                    
     price indexation to thresholds for progressivity.                                                                          
                                                                                                                                
Mr. Mayer  discussed slide 16, "ACES  (New Development)." He                                                                    
remarked that  the new development  under ACES  had negative                                                                    
NPV  at  every  price  level,  with  a  rate  of  return  of                                                                    
approximately  10 percent  at the  $100/bbl level.  It faced                                                                    
government take, over  the project life cycle,  of around 78                                                                    
percent at the  $10 level, and rising to $85  percent at the                                                                    
high $200/bbl levels.                                                                                                           
                                                                                                                                
Mr. Mayer explained slide 17,  "CSSB 192 (New Development)."                                                                    
He  stated that  under CSSB  192, the  reduced progressivity                                                                    
coefficient had a  small impact. The rate of  return for the                                                                    
project did not shift, but  there was growth from a slightly                                                                    
negative number  to a slightly positive  number at $100/bbl.                                                                    
With  the   impact  of  inflation  at   the  higher  levels,                                                                    
government take  was brought down to  north of approximately                                                                    
$180/bbl.                                                                                                                       
                                                                                                                                
10:26:25 AM                                                                                                                   
                                                                                                                                
Mr.  Mayer discussed  slide  18,  "Severance Tax-20  percent                                                                    
Maximum (New  Producer) .25  percent progressivity  from $65                                                                    
to  $125, then  .10 percent  progressivity." He  pointed out                                                                    
the  leveling of  the  life-cycle,  including factoring  the                                                                    
impact of inflation  at the $100/bbl to  $110/bbl level with                                                                    
a 76 percent split moving up the price deck.                                                                                    
                                                                                                                                
Mr.  Mayer explained  slide  20,  "Severance Tax-20  percent                                                                    
maximum,  (New Development)."  He explained  that the  slide                                                                    
represented  what  a  project  would  look  like  under  the                                                                    
severance  tax option  2, where  progressivity kicked  in at                                                                    
$60/bbl and extends to $100/bbl.                                                                                                
                                                                                                                                
Mr. Mayer  looked at slide  22, "Severance Tax -  20 percent                                                                    
Maximum with first  7 years at 5 percent  (New Producer) .25                                                                    
percent  progressivity from  $60/bbl to  $100/bbl, then  .03                                                                    
percent   progressivity."  He   explained  that   the  slide                                                                    
displayed the same  factors as slide 20, but  applied a time                                                                    
limit of seven years.                                                                                                           
                                                                                                                                
10:31:30 AM                                                                                                                   
                                                                                                                                
Mr. Mayer  discussed slide  23, "20  Year Revenue  Impact of                                                                    
Reduced Rate  of New Production (Using  Severance Tax Option                                                                    
1)." He  stated that he  redid the analysis of  the possible                                                                    
20-year revenue  of a  reduced rate  for new  production. He                                                                    
ran the numbers again, but  he realized he was attempting to                                                                    
pull together  a large amount of  data in a short  period of                                                                    
time.                                                                                                                           
                                                                                                                                
Co-Chair  Stedman wondered  if the  chart included  credits.                                                                    
Mr. Mayer replied  that the charts included  the credits for                                                                    
the existing production.                                                                                                        
                                                                                                                                
Co-Chair  Stedman furthered  that the  chart should  reflect                                                                    
the impact of the legacy  fields. Mr. Mayer responded in the                                                                    
affirmative.                                                                                                                    
                                                                                                                                
Mr.  Mayer  looked  at slide  24,  "Regime  Competitiveness:                                                                    
Relative  Government Take."  He stated  that the  number was                                                                    
not too bad for government take at $60/bbl.                                                                                     
                                                                                                                                
Co-Chair Stedman  felt that Alaska would  be more attractive                                                                    
than  North  Dakota  at  $60/bbl.   Mr.  Mayer  agreed,  but                                                                    
reiterated that  Alaska was not  more attractive  than North                                                                    
Dakota at current prices.                                                                                                       
                                                                                                                                
Mr.  Mayer  discussed  slide  25,  "Regime  Competitiveness:                                                                    
Relative Government  Take." He pointed out  that at $80/bbl,                                                                    
ACES for  existing producers was below  other regimes, other                                                                    
than Norway.                                                                                                                    
                                                                                                                                
Mr.  Mayer  looked  at slide  26,  "Regime  Competitiveness:                                                                    
Relative Government  Take." At $120/bbl, the  gap started to                                                                    
widen.                                                                                                                          
                                                                                                                                
10:37:39 AM                                                                                                                   
                                                                                                                                
Mr.  Mayer  looked  at slide  29,  "Regime  Competitiveness:                                                                    
Relative Government  Take." At  $140/bbl, ACES and  CSSB 192                                                                    
were basically the  same as Norway, while  the two severance                                                                    
tax   options  were   significantly  more   competitive.  At                                                                    
$160/bbl, ACES and CSSB 192 was  nowhere near the top of the                                                                    
regimes.                                                                                                                        
                                                                                                                                
Mr.  Mayer  discussed  slide  30,  "Regime  Competitiveness:                                                                    
Relative Government  Take." He stressed that  at $180/bbl, a                                                                    
split could be seen between ACES and CSSB 192.                                                                                  
                                                                                                                                
Mr.  Mayer  spoke  to  slide  31,  "Regime  Competitiveness:                                                                    
Relative Government Take." He  pointed out that at $200/bbl,                                                                    
ACES  was  matched  with  Algeria   and  other  high  taxing                                                                    
regimes.                                                                                                                        
                                                                                                                                
Co-Chair Stedman  looked at the remaining  slides, and noted                                                                    
that  they  displayed  a  7 year  time  horizon.  Mr.  Mayer                                                                    
responded  that   the  second  set  of   slides  represented                                                                    
economics  for  new  development, rather  than  an  existing                                                                    
producer.                                                                                                                       
                                                                                                                                
10:40:52 AM                                                                                                                   
                                                                                                                                
Mr. Mayer  highlighted slides 36-39. He  remarked that north                                                                    
of $180 to $200 for new  development, ACES was at the top of                                                                    
the very high price levels.                                                                                                     
                                                                                                                                
Co-Chair Stedman  remarked that Alaska was  more stable than                                                                    
Syria. Mr. Mayer agreed.                                                                                                        
                                                                                                                                
Co-Chair Stedman noticed calculations  and net present value                                                                    
in pricing displayed  in slides 41 through  43. He requested                                                                    
a  brief description  of those  slides. Mr.  Mayer responded                                                                    
that  the generic  view of  ACES was  useful in  the initial                                                                    
analysis. Now, that  there was a micro-level  of detail, the                                                                    
FY 13 numbers were more useful.                                                                                                 
                                                                                                                                
Mr.  Mayer  pointed  out  slide   41,  "CSSB  192  (Existing                                                                    
Producer)." The  slide displayed the 79  percent maximum for                                                                    
CSSB 192.                                                                                                                       
                                                                                                                                
Mr. Mayer  discussed slide 42,  "Severance Tax -  20 percent                                                                    
maximum (Existing  Producer) .25 percent  progressivity from                                                                    
$65  to $125,  then  .10 percent  progressivity." He  stated                                                                    
that severance  tax was  frozen at  current prices,  so from                                                                    
$120/bbl  and  up  would  allow  for  a  steady  72  percent                                                                    
government take.                                                                                                                
                                                                                                                                
Mr. Mayer highlighted slide 43,  "Severance Tax - 20 percent                                                                    
maximum (Existing  Producer) .25 percent  progressivity from                                                                    
$60  to $100,  then  .03 percent  progressivity." He  stated                                                                    
that the slide displayed the  freezing at $100/bbl with a 69                                                                    
to 70 percent from that point on.                                                                                               
                                                                                                                                
SB  192  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Stedman discussed housekeeping.                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:46:05 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:46 AM.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 192 Alaska Senate Finance - March 30.pdf SFIN 3/30/2012 9:00:00 AM
SB 192
HB 104 work draft version S.pdf SFIN 3/30/2012 9:00:00 AM
HB 104