Legislature(2011 - 2012)SENATE FINANCE 532

04/14/2012 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 56 INCLUDE ARSON IN CRIMES OF CONSPIRACY TELECONFERENCED
Heard & Held
+ HB 146 LAND TRANSFER FROM STATE AND ALASKA RR TELECONFERENCED
Heard & Held
+ HB 279 EXTENDING CERTAIN BOARDS & COMMISSIONS TELECONFERENCED
Heard & Held
+ HB 304 ALASKA FIRE STANDARDS COUNCIL TELECONFERENCED
Heard & Held
+ HB 337 BD OF ARCHITECTS, ENGINEERS, SURVEYORS TELECONFERENCED
Heard & Held
+ HB 365 AQUATIC INVASIVE SPECIES TELECONFERENCED
Heard & Held
+= HB 261 COMMERCIAL FISHING ENTRY PERMIT LOANS TELECONFERENCED
Moved CSHB 261(FIN) Out of Committee
+ HB 196 BULK FUEL LOANS/POWER PROJECT FUND TELECONFERENCED
<Pending Referral>
= HB 276 OIL/GAS PROD. TAX CREDITS/RATES/VALUE
Moved SCS CSHB 276(FIN) Out of Committee
= HCR 23 ALASKA ARCTIC POLICY COMMISSION
Moved SCS CSHCR 23(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 14, 2012                                                                                            
                         9:26 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:26:37 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:26 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                                                                                                                  
                                                                                                                                
Darwin Peterson, Staff, Senator  Bert Stedman; Jane Pierson,                                                                    
Staff, Representative Steve  Thomson; Gerald Kepes, Partner,                                                                    
Head  of  Upstream  and Gas,  PFC  Energy;  Christine  Hess,                                                                    
Staff,  Representative  Reggie   Joule;  Representative  Max                                                                    
Gruenberg;   Dan   Jager,   Fire  Marshall,   Capital   City                                                                    
Fire/Rescue; Representative  Tammy Wilson;  Bonne                                                                               
Self;  Representative   Mike  Hawker;  Erin   Shine,  Staff,                                                                    
Representative   Craig   Johnson;   Lynette   Berg,   Staff,                                                                    
Representative  Steve Thomson;  Representative Paul  Seaton;                                                                    
Tim Clark, Staff, Representative Bryce Edgmon.                                                                                  
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Elizabeth  Hensley,   NANA  Regional   Corporation,  Juneau;                                                                    
Harley Hightower, Chair, Alaska  State Board of Registration                                                                    
for  Architects, Engineers,  and Land  Surveyors, Anchorage;                                                                    
Boyd Brownfield, Self, Anchorage.                                                                                               
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSHCR 23(FIN)                                                                                                                   
          ALASKA ARCTIC POLICY COMMISSION                                                                                       
                                                                                                                                
          SCS CSHCR 23(FIN) was REPORTED out of                                                                                 
          committee with a "do pass" recommendation                                                                             
          and with a new fiscal impact note from the                                                                            
          Legislature.                                                                                                          
                                                                                                                                
HB 56     INCLUDE ARSON IN CRIMES OF CONSPIRACY                                                                                 
                                                                                                                                
          HB 56 was HEARD and HELD in committee for                                                                             
          further consideration.                                                                                                
                                                                                                                                
CSHB 146(RES)                                                                                                                   
          LAND TRANSFER FROM STATE AND ALASKA RR                                                                                
                                                                                                                                
          CSHB 146(RES) was HEARD and HELD in                                                                                   
          committee for further consideration.                                                                                  
                                                                                                                                
CSHB 261(FIN)                                                                                                                   
          COMMERCIAL FISHING ENTRY PERMIT LOANS                                                                                 
                                                                                                                                
          CSHB 261(FIN) was REPORTED out of committee                                                                           
          with a "do pass" recommendation and with a                                                                            
          previously published zero fiscal note:                                                                                
          FN1(DFG) and a previously published zero                                                                              
          fiscal note: FN3(CED).                                                                                                
                                                                                                                                
CSHB 276(FIN)                                                                                                                   
          OIL/GAS PROD. TAX CREDITS/RATES/VALUE                                                                                 
                                                                                                                                
          SCS CSHB 276(FIN) was REPORTED out of                                                                                 
          committee with a "do pass" recommendation                                                                             
          and with a previously published                                                                                       
          indeterminate fiscal note: FN3(REV) and                                                                               
          a previously published fiscal impact note:                                                                            
          FN4(DNR).                                                                                                             
                                                                                                                                
CSHB 279(FIN)                                                                                                                   
          EXTENDING CERTAIN BOARDS & COMMISSIONS                                                                                
                                                                                                                                
          CSHB 279(FIN) was HEARD and HELD in                                                                                   
          committee for further consideration.                                                                                  
                                                                                                                                
HB 304    ALASKA FIRE STANDARDS COUNCIL                                                                                         
                                                                                                                                
          HB 304 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 337    BD OF ARCHITECTS, ENGINEERS, SURVEYORS                                                                                
                                                                                                                                
          HB 337 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
CSHB 365(FIN)                                                                                                                   
          AQUATIC INVASIVE SPECIES                                                                                              
                                                                                                                                
          CSHB 365(FIN) was HEARD and HELD in                                                                                   
          committee for further consideration.                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 276(FIN)                                                                                                
                                                                                                                                
     "An Act providing for a  credit against the oil and gas                                                                    
     production  tax  for   costs  incurred  for  conducting                                                                    
     seismic  exploration   and  drilling  certain   oil  or                                                                    
     natural  gas  exploration   wells  in  certain  basins;                                                                    
     relating  to the  determination of  the production  tax                                                                    
     value  of oil  and gas  production; and  relating to  a                                                                    
     special tax  rate for new  oil or gas  production south                                                                    
     of 68 degrees North latitude."                                                                                             
                                                                                                                                
9:28:12 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  proposed  committee                                                                    
substitute  for  HB  276, Work  Draft  27-LS1193\W  (Nauman,                                                                    
4/13/12) as a working document.                                                                                                 
                                                                                                                                
9:28:28 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
DARWIN PETERSON, STAFF, SENATOR  BERT STEDMAN, discussed the                                                                    
changes  in  the new  committee  substitute,  version W.  He                                                                    
shared that  the following sectional analysis  described how                                                                    
the legislation  arrived at  a 30  percent allowance  on new                                                                    
production  from  new fields,  which  were  not in  existing                                                                    
units.                                                                                                                          
                                                                                                                                
     Section  1: AS  43.55.011(e) is  the 25%  base tax.  In                                                                    
     order  to calculate  the base  tax for  a new  lease or                                                                    
     property,  you  take  the   production  tax  value  and                                                                    
     subtract  30% gross  value at  the point  of production                                                                    
     for  new fields  and multiply  by 25%  to get  the base                                                                    
     tax.                                                                                                                       
                                                                                                                                
     Section  2:   As  43.55.011(g)  is   the  progressivity                                                                    
     calculation. You calculate the  production tax value as                                                                    
     you normally  would and  use that to  come up  with the                                                                    
     progressivity   percentage.      Then  you   take   the                                                                    
     production  tax   value  and  subtract   the  incentive                                                                    
     allowance which is 30% of  the gross value at the point                                                                    
     of  production  for new  fields.  That  gives you  your                                                                    
     adjusted production tax value you will pay.                                                                                
                                                                                                                                
     Section  4: AS  43.55.020(a)  is the  calculation of  a                                                                    
     producer's  installment  payments.  It just  says  that                                                                    
     once you figure out what the  tax will be, you pay 1/12                                                                    
     of that amount monthly.                                                                                                    
                                                                                                                                
     Section  8:  AS  43.55.160(a)  is  the  calculation  of                                                                    
     production  tax  value.  It simply  says  you  have  to                                                                    
     adjust  the  production  tax value  based  on  the  new                                                                    
     allowance in AS 43.55.162.                                                                                                 
                                                                                                                                
     Section 10: This section sets  up the new 30% allowance                                                                    
     for the first  10 years of sustained  production or the                                                                    
     first  ten years  after January  1, 2013,  whichever is                                                                    
     later.  In  order to qualify, a development  must be in                                                                    
     a new  lease or  property that is  north of  68 degrees                                                                    
     north latitude  and was not part  of a unit or  did not                                                                    
     have commercial production prior to January 1, 2008.                                                                       
                                                                                                                                
9:31:13 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
FURTHER OBJECTION, Work Draft 27-LS1193\W was ADOPTED.                                                                          
                                                                                                                                
Co-Chair  Stedman discussed  a fiscal  impact note  from the                                                                    
Department of  Natural Resources  in the amount  of $211,400                                                                    
in  general funds  for two  new full-time  positions and  an                                                                    
indeterminate  fiscal note  from the  Department of  Revenue                                                                    
(DOR). He added that an  updated fiscal note was forthcoming                                                                    
from DOR.                                                                                                                       
                                                                                                                                
JANE PIERSON, STAFF,  REPRESENTATIVE STEVE THOMSON, provided                                                                    
some background for the bill.                                                                                                   
                                                                                                                                
          BACKGROUND:                                                                                                           
                                                                                                                              
          This bill was originally conceived to provide tax                                                                     
          credits meaningful enough to attract exploration                                                                      
          in the Nenana Basin.  Fairbanks is suffering from                                                                     
          staggering energy costs.                                                                                              
                                                                                                                                
               1. $660 million last year for space heating                                                                      
                                                                                                                                
               2. Average KwH is 23 cents                                                                                       
                                                                                                                                
               3. Heating oil is over $4.00 per gallon and                                                                      
                                                                                                                                
               4. And Natural Gas is at $23 Mcf and only                                                                        
                  available to 1100 customers due to                                                                            
                  shortages of supplies.                                                                                        
                                                                                                                                
          Because of the high costs of energy, many people                                                                      
          are burning wood or coal which is not helping                                                                         
          Fairbanks meet PM 2.5, EPA standards.                                                                                 
                                                                                                                                
          Some residents have had to choose between paying                                                                      
          for necessities or keeping warm, especially                                                                           
          during this long, cold winter.                                                                                        
                                                                                                                                
          The lack of adequate gas supplies has also                                                                            
          created a stumbling block for economic                                                                                
          development, businesses are struggling and                                                                            
          development has been curtailed.                                                                                       
                                                                                                                                
          Yet, just 50 miles north of Fairbanks lays the                                                                        
          Nenana Basin:                                                                                                         
                                                                                                                                
          1. Where there is an exciting potential for gas                                                                       
             and possibly oil                                                                                                   
                                                                                                                                
          2. Situated adjacent to roads, the rail road and                                                                      
                                                                                                                                
          3. Power transmission systems                                                                                         
                                                                                                                                
          After working with the House Resources committee,                                                                     
          DNR, DOR, DOL, and other communities interested                                                                       
          in this concept the bill was developed.  The bill                                                                     
         was expanded to include drilling in other                                                                              
          unexplored/underexplored basins or areas, and                                                                         
         expanded to additionally include seismic                                                                               
          exploration.                                                                                                          
                                                                                                                                
         Yet the original concept of the bill was                                                                               
          preserved, which is to serve Alaskans, not only                                                                       
          by providing incentives that could lead to                                                                            
          commercialization of hydrocarbons for export, but                                                                     
          also to promote exploration for oil and gas                                                                           
          resources in frontier basins where there is a                                                                         
          possibility for local regional use.                                                                                   
                                                                                                                                
          Ever present in these discussions was how to                                                                          
          balance the elements of this bill as a public                                                                         
          policy:                                                                                                               
                                                                                                                                
          1.  The State's Priority to inspire exploration                                                                       
             and development                                                                                                    
                                                                                                                                
          2. The level of Risk that is reasonable for the                                                                       
             state to carry                                                                                                     
                                                                                                                                
          3. The total financial contribution the state is                                                                      
             willing to make                                                                                                    
                                                                                                                                
          4. And the potential for a return on the state's                                                                      
             investment                                                                                                         
                                                                                                                                
          THE SPECIFICS OF THE BILL:                                                                                            
                                                                                                                              
          P.7, [Section 6 AS 43.55.025(p)] In the bill                                                                          
          before you includes six geologic areas for                                                                            
          exploration.  (See map provided).  All these                                                                          
          areas were identified by DNR as having potential                                                                      
          for discovery of hydrocarbons and all with some                                                                       
          proximity to existing communities struggling with                                                                     
          high energy costs.                                                                                                    
                                                                                                                                
             1. Kotzebue and Selawick Basins                                                                                    
                                                                                                                                
             2. Nenana and Yukon Flats                                                                                          
                                                                                                                                
             3. Emmonak                                                                                                         
                                                                                                                                
            4. Glannallen and Cooper River area                                                                                 
                                                                                                                                
             5. Egegik - Northern Alaska Peninsula                                                                              
                                                                                                                                
             6. Port Moller - Southern Alaska Peninsula                                                                         
                                                                                                                                
          (DNR can address questions on how we got to these                                                                     
          6 areas and Representatives from Nana and Doyon                                                                       
          can address the importance of the Nenana and                                                                          
          Kotzebue areas)                                                                                                       
                                                                                                                                
             P. 4, [Section 4] With addition of these other                                                                     
             5 areas, the potential cost and risk to the                                                                        
             state rose.  To address this HB 276 limits the                                                                     
             number of exploration wells and seismic                                                                            
             exploration eligible for credits and limits the                                                                    
             credits.                                                                                                           
                                                                                                                                
             1. Exploration well credits - limits the number                                                                    
               of wells to 4 wells in one of the areas                                                                          
               identified on the map with no more than 2                                                                        
               wells in any one area.  The tax credit for                                                                       
               drilling is for 80% of the total exploration                                                                     
               expenditures for work performed or $25                                                                           
               million, .whichever is less.  (This is 15%                                                                       
               more than what would currently be available                                                                      
               in existing statute, unless the total cost                                                                       
               is 20% over 25 million - then 65% is                                                                             
               better).  The total credit exposure is $90                                                                       
               million or $30 mm more than what is                                                                              
               currently available..  However, only 15%                                                                         
               above credits that are currently, available.                                                                     
                                                                                                                                
             2. Seismic credits were created in this bill                                                                       
               to attract new geophysical analysis.  The                                                                        
               seismic credits are for 4 total projects,                                                                        
               with no more than one in any of the areas                                                                        
               identified on the map.  The credit amount is                                                                     
               75% of the total exploration expenditures,                                                                       
               or $7.5 million, whichever is less.  (i.e.                                                                       
               10% more than what is available in existing                                                                      
               statute, unless the total is 35% over 7.5                                                                        
               million).  The total maximum credit that                                                                         
               would be available is $30 million.  However,                                                                     
               this is 10% more than what might be                                                                              
               currently available.  Seismic projects are                                                                       
               subject to the same pre-qualification                                                                            
               criteria as drilling.                                                                                            
                                                                                                                                
        These credits apply to work performed after June 1,                                                                     
        2012 and like other production tax credits in AS                                                                        
        43.55.025, expires in 2016.  The credit is also not                                                                     
      stackable with other credits provided under AS                                                                            
        43.55.025 or AS 43.55.023.  It is the intent of this                                                                    
        bill that the quick window for these credits will                                                                       
        create a frontier basin stampede.                                                                                       
                                                                                                                                
        [Section 6] To ensure the state's investment is                                                                         
        warranted, and exploration projects are sound, with                                                                     
        DNR's input, prequalification criteria were created                                                                     
        that must be satisfied before any project commences.                                                                    
        DNR has broad discretion to weigh these factors                                                                         
        within 60 days or as soon as practicable before                                                                         
        approving or denying exploration well or seismic                                                                        
        exploration credits under this bill.  These pre-                                                                        
        qualification criteria can be found for drilling on                                                                     
      page 7, line 21 through page 8, line 2 and for                                                                            
        seismic on page 8, lines 24 through page 9 line 2.                                                                      
                                                                                                                                
        Also key in discussions on the bill, was how the                                                                        
       state gets a return on its investment.  More                                                                             
        geological data for state use and public release                                                                        
      helps to expand our knowledge of the potential                                                                            
        resources in these remote areas. It assists present                                                                     
        and future explorers, and seismic data could very                                                                       
        well attract new investment and development in the                                                                      
        state, bringing the potential for increased                                                                             
        production, tax revenues and royalties.                                                                                 
                                                                                                                                
        Added as qualification for the credits under HB276                                                                      
        is a requirement that all exploration drilling and                                                                      
        seismic data collected must be turned over to the                                                                       
        state and made available for public release within                                                                      
        two years of receiving the credit under this bill.                                                                      
                                                                                                                                
        [Section 2] The final consideration that arose was                                                                      
        what if an explorer in one of these remote areas of                                                                     
        Alaska is successful?                                                                                                   
                                                                                                                                
        These remote frontier areas are difficult to reach,                                                                     
        face logistical obstacles, and challenges getting                                                                       
        hydrocarbons to market.  Yet producers in these                                                                         
        areas would pay the same production tax as companies                                                                    
        on the North Slope that already has infrastructure                                                                      
        and access to markets.                                                                                                  
                                                                                                                                
        Therefore, another component was added:                                                                                 
                                                                                                                                
        For those explorers in these frontier basins who                                                                        
        reach commercial production, we gave a break on                                                                         
        production taxes.  New producers in "middle earth",                                                                     
        commencing production after January 1, 2013 and                                                                         
        prior to January 1, 2022, are eligible for a rate of                                                                    
        4% on the gross value at the point of production, or                                                                    
        taxes under 43.55.011(e), whichever is less, for                                                                        
       seven years following the start of commercial                                                                            
        production.                                                                                                             
                                                                                                                                
        After 7 years, the tax rate reverts back to what is                                                                     
        in existing statute.  This tax rate is crafted only                                                                     
      to apply to new production south of 68 degrees                                                                            
        latitude and not within the Cook Inlet. This bill                                                                       
        gives no breaks on Royalty, corporate income tax, or                                                                    
        property taxes.  What it does, is give explorers                                                                        
        willing to take the risk to explore in these remote                                                                     
        areas some predictability for the first seven years                                                                     
        of hydrocarbon commercialization.  This will assist                                                                     
        these companies in obtaining financing for                                                                              
      infrastructure and other costs associated with                                                                            
        remote areas.                                                                                                           
                                                                                                                                
        This completes my presentation and I would be happy                                                                     
        to answer any of the questions committee members may                                                                    
        ask.                                                                                                                    
                                                                                                                                
9:40:42 AM                                                                                                                    
                                                                                                                                
GERALD  KEPES,  PARTNER,  HEAD  OF  UPSTREAM  AND  GAS,  PFC                                                                    
ENERGY, began  a PowerPoint presentation (copy  on file). He                                                                    
explained that  the presentation examined the  changes to HB                                                                    
276 that impacted exploration  and production activities. He                                                                    
related  that  the  legislation  proposed  a  gross  revenue                                                                    
allowance  that  would impact  new  oil  development or  new                                                                    
development   as   stipulated.   He   concluded   that   the                                                                    
presentation was  intended to show the  impact or difference                                                                    
between  the  proposed  gross   revenue  allowance  and  the                                                                    
current policy for new oil under ACES.                                                                                          
                                                                                                                                
Mr. Kepes discussed slide 1  titled "ACES ($25/bbl Capex New                                                                    
Development)."  He  related  that the  slide  represented  a                                                                    
stylized new  development with capital  expenditures (CAPEX)                                                                    
of  approximately $17  per  barrel in  a  70 million  barrel                                                                    
field;  the field  would have  a peak  production of  10,000                                                                    
barrels per day  (bbl/d). He explained that at  an oil price                                                                    
of $100 per  barrel, the slide's scenario had  a net present                                                                    
value (NPV) of  $112 million and generated  an internal rate                                                                    
of return (IRR) of 16 percent.                                                                                                  
                                                                                                                                
Mr. Kepes  spoke to  slide 2  titled "ACES  with 30  % Gross                                                                    
Revenue  Allowance  ($17/bbl  Capex  New  Development)"  and                                                                    
stated that  it depicted  the result  of applying  the gross                                                                    
revenue allowance  to the same  new development as  slide 1.                                                                    
He  shared  that  slide  2's   NPV  had  nearly  doubled  in                                                                    
comparison to the  previous slide and that the  IRR had also                                                                    
increased to  20 percent. He  concluded that the  30 percent                                                                    
gross   revenue   allowance    represented   a   substantial                                                                    
difference for the low-cost  new developments and reiterated                                                                    
that  the slide  showed  the difference  between adding  the                                                                    
allowance versus the current treatment for new oil.                                                                             
                                                                                                                                
Mr. Kepes discussed slide 3  titled "ACES ($25/bbl Capex New                                                                    
Development)." He shared that the  slide stepped up the cost                                                                    
scale and  had a CAPEX  of $25  per barrel for  the stylized                                                                    
new development.  He stated that  a CAPEX of $25  per barrel                                                                    
was more  reflective of  the costs  for new  developments in                                                                    
Alaska,  which were  away from  existing infrastructure  and                                                                    
were higher  cost. He reiterated that  the slide represented                                                                    
a 70  million barrel field  with a peak production  level of                                                                    
about  10,000   bbl/d.  The  slide   generated  an   NPV  of                                                                    
approximately $24 million and an IRR of about 11 percent.                                                                       
                                                                                                                                
Mr.  Kepes addressed  slide 4  titled "ACES  with 30%  Gross                                                                    
Revenue  Allowance  ($25/bbl  Capex  New  Development)."  He                                                                    
stated  that slide  4  added the  30  percent gross  revenue                                                                    
allowance to the same development  as the previous slide. In                                                                    
comparison  to  the  previous  slide, the  IRR  rose  to  14                                                                    
percent and the NPV also  increased by about $100 million to                                                                    
$121 million.  He related that  the slide showed  the impact                                                                    
of adding  the new gross  revenue allowance at  higher costs                                                                    
versus the current treatment of oil in the ACES regime.                                                                         
                                                                                                                                
9:45:14 AM                                                                                                                    
                                                                                                                                
Mr. Kepes discussed slide 5  titled "ACES ($34/bbl Capex New                                                                    
Development)."  He  shared   that  the  slide's  development                                                                    
represented the highest cost range  examined and that it had                                                                    
a CAPEX of  $34 per barrel. He opined that  under ACES, this                                                                    
sort  of   investment  was  unattractive  and   generated  a                                                                    
negative NPV and a fairly low IRR.                                                                                              
                                                                                                                                
Mr.  Kepes explained  slide 6  titled "ACES  with 30%  Gross                                                                    
Revenue  Allowance  ($34/bbl  Capex  New  Development)"  and                                                                    
stated that  it applied the  gross revenue allowance  to the                                                                    
same  development as  the previous  slide. In  comparison to                                                                    
previous  slide, the  NPV  on  slide 6  had  moved into  the                                                                    
positive and the  IRR had increased to about  10 percent. He                                                                    
reiterated that the intent of  the slides was to demonstrate                                                                    
the specific  difference created by applying  the 30 percent                                                                    
gross  revenue allowance  to a  range  of low-cost,  medium-                                                                    
cost,  and  high-cost  new developments  of  oil  that  were                                                                    
outside   and   away   from  existing   infrastructure   and                                                                    
production.                                                                                                                     
                                                                                                                                
Co-Chair Stedman gave a brief  explanation of the 30 percent                                                                    
gross  revenue allowance  and pointed  out that  the concept                                                                    
had  arisen   from  previous  work  on   enhancing  new  oil                                                                    
production  with gross  progressivity  calculations. If  the                                                                    
committee  could   not  go  to   a  gross   calculation  and                                                                    
restructure  ACES, enhancements  for  new oil  needed to  be                                                                    
addressed within  the current  ACES structure.  He explained                                                                    
that the 30 percent gross  revenue allowance was designed to                                                                    
replicate  the   returns  of  prior  legislation   that  the                                                                    
committee had  spent a  month or so  working on.  He offered                                                                    
that  if ACES  was  restructured in  the  future, the  gross                                                                    
revenue allowance  would probably  also be  restructured. He                                                                    
explained that  he wanted  the public to  be informed  as to                                                                    
the background and numbers surrounding the concept.                                                                             
                                                                                                                                
ELIZABETH  HENSLEY, NANA  REGIONAL CORPORATION,  JUNEAU (via                                                                    
teleconference),  testified in  support  of the  legislation                                                                    
and expressed appreciation for the  aspects of the bill that                                                                    
incentivized  exploration  in   the  Kotzebue  and  Selawick                                                                    
Basins.                                                                                                                         
                                                                                                                                
9:48:52 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  MOVED to report  SCS CSHB 276(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
9:49:12 AM                                                                                                                    
                                                                                                                                
SCS CSHB 276(FIN)  was REPORTED out of committee  with a "do                                                                    
pass"  recommendation   and  with  a   previously  published                                                                    
indeterminate  fiscal   note:  FN3(REV)  and   a  previously                                                                    
published fiscal impact note: FN4(DNR).                                                                                         
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 23(FIN)                                                                                
                                                                                                                                
     Establishing and relating to the Alaska Arctic Policy                                                                      
     Commission.                                                                                                                
                                                                                                                                
9:49:43 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  proposed  committee                                                                    
substitute  for  HCR  23, Work  Draft  27-LS1212\T  (Nauman,                                                                    
4/13/12) as a working document.                                                                                                 
                                                                                                                                
9:50:02 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
Mr.  Peterson explained  the changes  in  the new  committee                                                                    
substitute for  HCR 23, version  T. He related that  on page                                                                    
2,  lines  15  through  17, language  had  been  added;  the                                                                    
language "and  each has  a significant  stake in  the nature                                                                    
and  course of  those activities  and development"  had been                                                                    
added to  the end of  the sentence  on lines 16  through 17.                                                                    
The second change,  on page 3, line 3,  increased the number                                                                    
of  members of  the commission  from 17  to 20.  On page  3,                                                                    
lines 21 and 22, the  language "with experience in a coastal                                                                    
management program" was added  after the wording "one member                                                                    
from a coastal community."  He related that the commission's                                                                    
new members  were on subsections  K, L, and M.  Subsection K                                                                    
added   a   new   member    who   represented   the   marine                                                                    
transportations   and  logistics   industry.  Subsection   L                                                                    
designated  a  new  member  to   the  commission  who  would                                                                    
represent  a  Native  corporation. Subsection  M  added  one                                                                    
member  to  the  commission  who would  represent  a  state-                                                                    
licensed marine pilot. He stated  that there were changes to                                                                    
page 4,  lines 6  and 7, which  dealt with  the commission's                                                                    
alternate  members.   He  explained  that   previously,  the                                                                    
commission had  four public alternate members,  but that the                                                                    
language had been reworded so  that there were two alternate                                                                    
members from the  public and two alternate  members from the                                                                    
legislature.  He  added  that   the  two  members  from  the                                                                    
legislature    would   include    one   Senator    and   one                                                                    
Representative.                                                                                                                 
                                                                                                                                
9:52:03 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
FURTHER OBJECTION, Work Draft 27-LS1212\T was ADOPTED.                                                                          
                                                                                                                                
CHRISTINE   HESS,   STAFF,  REPRESENTATIVE   REGGIE   JOULE,                                                                    
explained   that  the   legislation  was   a  result   of  a                                                                    
recommendation  by the  Northern Waters  Task Force  that an                                                                    
arctic policy commission be  established. She explained that                                                                    
all  arctic nations,  including  the United  States, had  an                                                                    
arctic  policy,  but  that  the  U.S.'s  policy  was  moving                                                                    
forward  slowly.  She concluded  that  it  was decided  that                                                                    
Alaska needed its own arctic policy.                                                                                            
                                                                                                                                
Co-Chair  Stedman  discussed  a   fiscal  impact  note  from                                                                    
Legislative  Council in  the amount  of $272,600  in general                                                                    
funds for  the cost of travel  and one range 19  position to                                                                    
staff the commission.                                                                                                           
                                                                                                                                
9:53:25 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  MOVED to report  SCS CSHCR 23(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
9:53:46 AM                                                                                                                    
                                                                                                                                
SCS CSHCR 23(FIN)  was REPORTED out of committee  with a "do                                                                    
pass" recommendation and with a  new fiscal impact note from                                                                    
the Legislature.                                                                                                                
                                                                                                                                
HOUSE BILL NO. 56                                                                                                             
                                                                                                                                
     "An Act making arson in the first degree and arson in                                                                      
     the second degree serious felonies for purposes of                                                                         
     application of the crime of conspiracy."                                                                                   
                                                                                                                                
REPRESENTATIVE  MAX GRUENBERG,  stated that  the legislation                                                                    
added 1st and  2nd degree arson to the  crime of conspiracy.                                                                    
He  explained  that a  conspiracy  was  an illegal  criminal                                                                    
agreement to commit  a crime, and one act  in furtherance of                                                                    
the crime.  He stated  that conspiracy  was easier  to prove                                                                    
than the  completed crime or  an attempt, which  required "a                                                                    
substantial step  towards the  completed crime."  He related                                                                    
that  1st  degree  arson  was  the  intentional  burning  or                                                                    
explosion  of property  that  put a  human  life in  danger,                                                                    
while arson in  the 2nd degree was  the intentional starting                                                                    
of a fire  or an explosion of a building.  He explained that                                                                    
arson was a very difficult  crime to prove because often the                                                                    
evidence  was  destroyed  and  stated   that  a  very  small                                                                    
percentage  of arsons  were proven.  He  concluded that  the                                                                    
legislation  was necessary  because  in a  number of  cases,                                                                    
arsons were  conspiracies to destroy property  for insurance                                                                    
purposes.  He  furthered  that in  many  cases,  the  person                                                                    
behind  the  arson  was  nowhere  near  the  scene  and  the                                                                    
evidence  was long  gone. He  shared that  conspiracy worked                                                                    
similar  to  solicitation  in  that  completion  was  not  a                                                                    
prerequisite for prosecution and  conviction. He stated that                                                                    
conspiracy  was  one  degree below  the  actual  crime;  for                                                                    
example, arson  in the 1st degree  was a class A  felony, so                                                                    
conspiracy to commit the crime would be a class B felony.                                                                       
                                                                                                                                
Co-Chair  Stedman  discussed a  zero  fiscal  note from  the                                                                    
Department of  Law, a zero  fiscal note from  the Department                                                                    
of Public Safety, and an  indeterminate fiscal note from the                                                                    
Department of Corrections.                                                                                                      
                                                                                                                                
9:58:07 AM                                                                                                                    
                                                                                                                                
DAN JAGER,  FIRE MARSHALL,  CAPITAL CITY  FIRE/RESCUE, spoke                                                                    
in support  of the bill. He  stated that he was  a member of                                                                    
the Alaska  Association of Fire and  Arson Investigators and                                                                    
the  Alaska Fire  Chiefs Association  and  that both  groups                                                                    
strongly   supported   the   legislation.  He   shared   his                                                                    
experience as fire investigator in  Alaska over the last ten                                                                    
years.  He  related that  arson  was  a difficult  crime  to                                                                    
investigate  and  that   it  had  less  than   a  2  percent                                                                    
conviction  rate across  the country.  In  2011, there  were                                                                    
over 35  fires classified as  arson or suspicious  in nature                                                                    
in  Juneau  alone.  The  property  destroyed  by  the  fires                                                                    
included  vehicles,  structures,  open  fields,  and  school                                                                    
parks. He stated  that in Juneau, there were  three cases in                                                                    
which  suspects  were  identified  and  were  in  the  legal                                                                    
system. One  of the  cases in the  legal system  involved an                                                                    
adult male who  set fire to an aerial ladder  truck that had                                                                    
two  firemen  still  inside  of it.  He  furthered  that  in                                                                    
December, two  juveniles, ages 7  and 12 lit  separate fires                                                                    
in the  local Fred Meyer  and Wal-Mart stores and  that just                                                                    
the day prior,  a teenager had confessed to  setting fire to                                                                    
an outdoor restroom several times  over the past few months.                                                                    
He related  that arson  was a crime  that was  often planned                                                                    
and carried out  by more than one person.  He concluded that                                                                    
HB 56 was  an important bill to fire  investigators and that                                                                    
currently, arsonists  could only be charged  with that crime                                                                    
if  it was  completed or  attempted. He  explained that  the                                                                    
passage  of  the  bill  would  provide  stronger  punishment                                                                    
whether  or not  the  conspirators completed  the arson  and                                                                    
concluded  that  the  legislation  could  benefit  open  and                                                                    
active cases  in Juneau, as  well as other  areas throughout                                                                    
the state.                                                                                                                      
                                                                                                                                
10:00:41 AM                                                                                                                   
                                                                                                                                
HB  56  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 146(RES)                                                                                                
                                                                                                                                
     "An  Act  authorizing the  transfer  of  land from  the                                                                    
     State of Alaska and  the Alaska Railroad Corporation to                                                                    
     property  owners  along  the  Eielson  Spur  Line;  and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
REPRESENTATIVE TAMMY WILSON, explained  that HB 146 restored                                                                    
a  reversionary  property right  to  those  affected by  the                                                                    
repeal of Section  1209 of the Alaska  Railroad Transfer Act                                                                    
(ARTA).  In  2003, at  the  urging  of the  Alaska  Railroad                                                                    
Corporation,  Congress repealed  a few  sections of  ARTA in                                                                    
order to address  some title issues of  concern; however, in                                                                    
the process, the property  owners' reversionary right, which                                                                    
allowed  ownership of  the property  to be  transferred back                                                                    
once  the  right of  way  was  no  longer  in use  was  also                                                                    
repealed. She pointed  out that it was important  to keep in                                                                    
mind  that the  bill only  restored a  right that  was taken                                                                    
away  and did  not grant  anyone special  privileges, beyond                                                                    
what was  originally in  ARTA. She  furthered that  the bill                                                                    
only applied to the homesteads  along the Eielson Spur Line.                                                                    
She  pointed  out that  all  of  the affected  parties,  the                                                                    
railroad included, agreed on the bill as written.                                                                               
                                                                                                                                
Co-Chair  Stedman  discussed a  zero  fiscal  note from  the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
and  an indeterminate  fiscal note  from  the Department  of                                                                    
Labor and Workforce Development.                                                                                                
                                                                                                                                
BONNE                                                                                                                           
stated that  it would return  her family's right  to reclaim                                                                    
their property if the railroad ever moved.                                                                                      
                                                                                                                                
Co-Chair  Stedman observed  that Ms.  Woldstad had  traveled                                                                    
all  the  way  from  the   Fairbanks  area  to  testify  and                                                                    
indicated  that further  testimony  regarding her  situation                                                                    
would be welcomed.                                                                                                              
                                                                                                                                
Ms.  Woldstad  explained  that   her  family  owned  a  U.S.                                                                    
patented  homestead  that   pre-existed  the  railroad.  She                                                                    
related  that when  the  railroad was  laid  to Eielson  Air                                                                    
Force Base,  it had  crossed over  the property.  She stated                                                                    
that  under the  March 12,  1914 act,  the railroad  had the                                                                    
right to  cross the property  and that her family  had never                                                                    
argued  or  disputed that  right;  however,  in 2003,  while                                                                    
attempting to fix track problems  in Anchorage that involved                                                                    
land  swapping, the  railroad had  asked Congress  to repeal                                                                    
the reversionary  clause. She explained that  the unintended                                                                    
consequence of  repealing the  reversionary clause  was that                                                                    
her family had lost their  mechanism to reclaim ownership of                                                                    
the property if and when the railroad ever moved.                                                                               
                                                                                                                                
10:05:03 AM                                                                                                                   
                                                                                                                                
HB  146  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 279(FIN)                                                                                                
                                                                                                                                
     "An Act  extending the termination  dates of  the Board                                                                    
     of Nursing,  the Board of  Dental Examiners,  the Board                                                                    
     of Barbers  and Hairdressers,  the Big  Game Commercial                                                                    
     Services Board,  the Alcoholic Beverage  Control Board,                                                                    
     and the  Alaska Seismic Hazards Safety  Commission; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
10:05:27 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  proposed  committee                                                                    
substitute  for  SB  279, Work  Draft  27-LS0944\E  (Martin,                                                                    
4/10/12) as a working document.                                                                                                 
                                                                                                                                
10:05:35 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
Mr.  Peterson explained  the changes  in  the new  committee                                                                    
substitute,  version E.  He  stated on  page  2, Section  5,                                                                    
language had been inserted that  specified that a person who                                                                    
was convicted of a felony  involving moral turpitude may not                                                                    
serve  on a  board or  commission of  the state,  unless the                                                                    
conviction had  been overturned on  appeal or  otherwise set                                                                    
aside. Section 9  of the bill specified that  Section 5 only                                                                    
applied to  appointments on or  after the effective  date of                                                                    
the  legislation.  He explained  that  the  definition of  a                                                                    
felony involving  moral turpitude was referenced  in Section                                                                    
5 as the  Alaska Statute 15.80.010. He pointed  out that the                                                                    
committee members'  packets contained  the statute  and that                                                                    
it listed  the specific felonies involving  moral turpitude.                                                                    
He  offered  that  crimes  involving  moral  turpitude  were                                                                    
crimes  that  were  immoral  or wrong  by  nature,  such  as                                                                    
murder, manslaughter, assault,  sexual assault, sexual abuse                                                                    
of a  minor, kidnapping, and the  distribution or possession                                                                    
of  child  pornography. He  related  that  if a  person  was                                                                    
convicted of  a crime involving moral  turpitude, they might                                                                    
be  ineligible  for  certain   state  licenses.  He  further                                                                    
explained that  in Alaska, morticians, hearing  aid dealers,                                                                    
pharmacists,  real estate  appraisers,  and  even pawn  shop                                                                    
employees  would  be  prohibited   from  obtaining  a  state                                                                    
license or gaining employment if  they had been convicted of                                                                    
such  a crime.  He concluded  that Alaska  should not  allow                                                                    
someone  who  was  convicted of  a  felony  involving  moral                                                                    
turpitude to serve on a state board or commission.                                                                              
                                                                                                                                
10:07:54 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
FURTHER OBJECTION, Work Draft 27-LS0944\E was ADOPTED.                                                                          
                                                                                                                                
REPRESENTATIVE MIKE HAWKER, explained  that he was currently                                                                    
serving  as Chairman  of the  Legislative  Budget and  Audit                                                                    
Committee  and  that  HB  279   was  the  annual  board  and                                                                    
commission  reauthorization legislation.  He added  that the                                                                    
bill extended  the dates of  the following state  boards and                                                                    
commissions: the  Board of Barbers and  Hairdressers to June                                                                    
30, 2019,  the Board of  Dental Examiners to June  30, 2019,                                                                    
the Big  Game Commercial  Services Board  to June  30, 2016,                                                                    
the  Board  of  Nursing  to June  30,  2019,  the  Alcoholic                                                                    
Beverage  Control Board  to June  30, 2015,  and the  Alaska                                                                    
Seismic Hazards  Safety Commission June 30,  2014. He shared                                                                    
that   all  of   the  legislation's   extended  boards   and                                                                    
commissions had  undergone the audits that  were required by                                                                    
the  Legislative Budget  and Audit  Committee  and had  been                                                                    
found meritorious of  continuing to exist. He  added that he                                                                    
had no  opinion on the  substance of the changes  offered in                                                                    
the  new  committee substitute,  but  pointed  out that  the                                                                    
Alaska  Legislature had  a  long-standing  precedent of  not                                                                    
including  policy  calls  in  reauthorization  bills  in  an                                                                    
attempt to  "keep them  clean." He  recalled that  the prior                                                                    
year, "similar  language" had resulted  in "the  bill" being                                                                    
vetoed by the governor. He  stated that governor's letter of                                                                    
veto was provided  to Co-Chair Stedman and  offered that the                                                                    
letter raised a  number of questions. He  requested that the                                                                    
committee consider that the  new committee substitute should                                                                    
be vetted  through the judiciary  committees prior  to being                                                                    
included in legislation at this stage in the process.                                                                           
                                                                                                                                
Co-Chair  Stedman discussed  a fiscal  impact note  from the                                                                    
Department  of Public  Safety in  the amount  $1,538,200 for                                                                    
the Alcoholic  Beverage Control Board, a  fiscal impact note                                                                    
from the  Department of Natural  Resources in the  amount of                                                                    
$10,000 for the Alaska  Seismic Hazards Safety Commission, a                                                                    
fiscal  impact   note  from  the  Department   of  Commerce,                                                                    
Community  and   Economic  Development  in  the   amount  of                                                                    
$160,200  for  the  Board of  Barbers  and  Hairdressers,  a                                                                    
fiscal  impact   note  from  the  Department   of  Commerce,                                                                    
Community  and   Economic  Development  in  the   amount  of                                                                    
$461,600  for  the  Big Game  Commercial  Service  Board,  a                                                                    
fiscal  impact   note  from  the  Department   of  Commerce,                                                                    
Community  and   Economic  Development  in  the   amount  of                                                                    
$200,900 for  the Board  of Dental  Examiners, and  a fiscal                                                                    
impact note  from the Department of  Commerce, Community and                                                                    
Economic  Development in  the amount  of $1,070,800  for the                                                                    
Board  of Nursing.  He concluded  that "all  of these"  were                                                                    
currently funded in the FY 13 operating budget.                                                                                 
                                                                                                                                
10:11:04 AM                                                                                                                   
                                                                                                                                
CSHB 279(FIN)  was HEARD and  HELD in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 304                                                                                                            
                                                                                                                                
     "An Act relating to the membership of the Alaska Fire                                                                      
     Standards Council."                                                                                                        
                                                                                                                                
ERIN SHINE,  STAFF, REPRESENTATIVE CRAIG  JOHNSON, explained                                                                    
that   the  legislation   made  three   simple  changes   to                                                                    
membership  of  the  Alaska   Fire  Standards  Council.  She                                                                    
explained that the first change  designated an existing seat                                                                    
to  a   member  of  the  Alaska   Professional  Firefighters                                                                    
Association, the second change added  a seat for a member of                                                                    
the  Alaska Fire  Chiefs Association,  and the  third change                                                                    
reclassified the  existing seat for  a member of  the Alaska                                                                    
State   Firefighters  Association.   She  stated   that  the                                                                    
governor  would   appoint  one  member  from   each  of  the                                                                    
associations  to the  Alaska Fire  Standards Council  from a                                                                    
list  of   at  least   three  nominees  submitted   by  each                                                                    
association. She  related that the  intent of HB 304  was to                                                                    
insure  that the  three  mentioned  associations would  have                                                                    
representation on the Alaska Fire Standards Council.                                                                            
                                                                                                                                
Co-Chair  Stedman discussed  a fiscal  impact note  from the                                                                    
Department  of Public  Safety in  the amount  of $2,200  for                                                                    
increased travel costs.                                                                                                         
                                                                                                                                
10:12:53 AM                                                                                                                   
                                                                                                                                
HB  304  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 337                                                                                                            
                                                                                                                                
     "An  Act  relating to  the  Board  of Registration  for                                                                    
     Architects, Engineers,  and Land  Surveyors and  to the                                                                    
     Department   of  Commerce,   Community,  and   Economic                                                                    
     Development."                                                                                                              
                                                                                                                                
                                                                                                                                
LYNETTE   BERG,   STAFF,   REPRESENTATIVE   STEVE   THOMSON,                                                                    
introduced  HB  337 and  stated  that  it would  revise  the                                                                    
Alaska  Statutes  to  designate  a  full-time  investigator,                                                                    
rather than  part-time, to serve  the Alaska State  Board of                                                                    
Registration for  Architects, Engineers, and  Land Surveyors                                                                    
(AELS).  She explained  that  the  full-time position  would                                                                    
insure that  the AELS Board  could meet the  growing demands                                                                    
of oversight  in the  industries within  its responsibility.                                                                    
She related that currently, the  AELS Board shared one part-                                                                    
time    investigator   with    five   other    boards.   The                                                                    
investigator's oversight  included a total of  around 20,000                                                                    
licensees;  furthermore, out  of  the  20,000 licensees,  28                                                                    
percent were AELS registrants,  which represented over 5,600                                                                    
licensees for  the AELS Board  alone. She stated that  a new                                                                    
regulation  had  recently  taken  effect,  which  added  ten                                                                    
additional  engineering  professions  to  the  AELS  Board's                                                                    
oversight. She furthered that some  of new professions under                                                                    
the  AELS   Board's  regulation  included   the  structural,                                                                    
environmental, nuclear, and  industrial engineering branches                                                                    
and that the number of  licensees under the AELS Board would                                                                    
increase  drastically.  She  offered  that  adding  the  new                                                                    
branches  of engineering  was necessary  for  the safety  of                                                                    
Alaskans; however,  the additional branches would  add to an                                                                    
already heavy  workload for the part-time  investigator. She                                                                    
furthered that the lack of  a full-time investigator for the                                                                    
board  could  reduce  its   effectiveness  in  carrying  out                                                                    
charges  that   were  required  by  the   statutes  and  the                                                                    
regulations.  She concluded  that an  unintended consequence                                                                    
of overloading the investigator might  be a failure to fully                                                                    
fulfill state and regulatory charges  and stated that HB 337                                                                    
would help the AELS  Board properly oversee licensees, while                                                                    
still  remaining in  compliance with  all state  regulations                                                                    
and statutes. She  spoke to the fiscal note  and pointed out                                                                    
that the  AELS Board intended  to begin forward  funding the                                                                    
full-time  investigator position  by  December  of 2013,  at                                                                    
which  time  the  next scheduled  fee  increase  would  take                                                                    
place.  Currently,  licensees  must pay  $125  for  biennial                                                                    
licensure. The  fee increase  was expected  to be  a minimal                                                                    
increase  of  $20  or  less   per  licensee  per  year.  She                                                                    
concluded that  all the  testimony on the  bill had  been in                                                                    
favor of the fee increase.                                                                                                      
                                                                                                                                
10:16:37 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman discussed  a fiscal  impact note  from the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
in the amount of $114,900.                                                                                                      
                                                                                                                                
Senator  McGuire queried  what specific  boards, other  than                                                                    
the AELS  Board, the investigator was  currently assigned to                                                                    
and  pondered  if  the  five  remaining  boards  would  each                                                                    
request its  own investigator, should the  legislation pass.                                                                    
Ms.  Berg  replied that  the  other  boards represented  the                                                                    
construction   contractors,   home  inspectors,   electrical                                                                    
administrators, mechanical administrators,  and storage tank                                                                    
workers.                                                                                                                        
                                                                                                                                
Senator McGuire inquired if there  had been any testimony as                                                                    
to whether  or not the  remaining boards would  also require                                                                    
their  own individual  investigator. Ms.  Berg replied  that                                                                    
she had not heard any testimony to that effect.                                                                                 
                                                                                                                                
HARLEY HIGHTOWER, CHAIR, ALASKA  STATE BOARD OF REGISTRATION                                                                    
FOR  ARCHITECTS, ENGINEERS,  AND  LAND SURVEYORS,  ANCHORAGE                                                                    
(via  teleconference), testified  in support  of HB  337. He                                                                    
related that  he was  an architect  who had  been practicing                                                                    
statewide since  1964 and that  he was presently  serving as                                                                    
chair of the AELS Board.  He related that HB 337 represented                                                                    
a priority issue for AELS and  that it would allow the board                                                                    
to more effectively perform its  charge of the protection of                                                                    
the health,  safety, and  welfare of  the public.  He stated                                                                    
the current AELS investigator also  served five other boards                                                                    
and was forced to pick and  choose which cases to pursue. He                                                                    
warned that  the investigator's overloaded schedule  was not                                                                    
only a  health and  safety issue, but  that it  also exposed                                                                    
the state and the board  to liability. He furthered that the                                                                    
cost increases  created by the legislation  would be minimal                                                                    
and  would be  covered  by  a slight  increase  in fees.  He                                                                    
offered that  AELS's fees  were reasonable  and fell  in the                                                                    
lower range in comparison to  the other 54 jurisdictions. He                                                                    
concluded that  the professions that  were regulated  by the                                                                    
AELS Board all supported the legislation.                                                                                       
                                                                                                                                
BOYD  BROWNFIELD,  SELF,   ANCHORAGE  (via  teleconference),                                                                    
expressed his support of the  legislation. He shared that he                                                                    
had  been  a  registered  civil  engineer  in  Alaska  since                                                                    
August, 1975  and had  served on  the AELS  for 8  years. He                                                                    
stated that  during his tenure  on AELS Board, he  served as                                                                    
the chairman  for two  years and  vice-chair for  four years                                                                    
and expressed support of the  board having its own full-time                                                                    
investigator.  He  pointed  out  that  AELS  was  the  third                                                                    
largest professional board  out of 20 boards,  but that AELS                                                                    
was first in the category  of complexity because it had four                                                                    
separate and distinct professions  to serve. He related that                                                                    
the  engineering  profession  alone  had  six  separate  and                                                                    
distinct  braches,  each   representing  its  own  technical                                                                    
challenges  and  that  the number  of  branches  would  soon                                                                    
increase  15.  He  stated that  the  AELS  investigator  was                                                                    
assigned to  several different boards  and was  only serving                                                                    
AELS  17 percent  of the  time. He  shared that  the current                                                                    
investigator was performing his  duties in a "superb" manner                                                                    
and encouraged the committee to pass the legislation.                                                                           
                                                                                                                                
Co-Chair  Stedman discussed  a fiscal  impact note  from the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
in the amount of $114,900.                                                                                                      
                                                                                                                                
10:23:54 AM                                                                                                                   
                                                                                                                                
HB  337  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 365(FIN)                                                                                                
                                                                                                                                
     "An Act relating to the rapid response to, and control                                                                     
     of, aquatic invasive species."                                                                                             
                                                                                                                                
REPRESENTATIVE  PAUL SEATON,  introduced HB  365 and  stated                                                                    
that the legislation addressed an  issue of invasive species                                                                    
coming into Alaska. He explained  that there were situations                                                                    
where  an  invasive species  would  come  into an  area  and                                                                    
instead  of a  rapid containment  and elimination  response,                                                                    
studies  were conducted.  He shared  that containment  of an                                                                    
invasive   species   could  be   done   at   the  point   of                                                                    
introduction,  but  that  after a  species  was  established                                                                    
throughout  a  range,  it  became  extremely  difficult  and                                                                    
expensive  to  remove.  He  discussed  an  invasive  species                                                                    
situation  in Sitka,  where Didemnum  Vexillum had  infested                                                                    
Whiting  Harbor   and  related   its  potential   impact  on                                                                    
fisheries in  the area.  He explained that  HB 365  gave the                                                                    
Department of  Fish and  Game and  other state  agencies the                                                                    
authority and  tools to rapidly respond  to invasive species                                                                    
outbreaks.  The legislation  also  directed  the "board  and                                                                    
staff" to prioritize the eradication  of an invasive species                                                                    
over the other management issues  in that area. He furthered                                                                    
that the  bill required the Department  of Natural Resources                                                                    
to include  a "hold  harmless" provision  in its  leases and                                                                    
permits in order  to enable the department to  respond on an                                                                    
emergency basis and not be held liable.                                                                                         
                                                                                                                                
Co-Chair Stedman discussed three  zero fiscal notes from the                                                                    
Department of Environmental  Conservation and the Department                                                                    
of Health and  Social Services, one fiscal  impact note from                                                                    
the  Department  of  Natural  Resources  in  the  amount  of                                                                    
$84,200, and  a fiscal  impact note  from the  Department of                                                                    
Fish and Game in the amount of $489,200.                                                                                        
                                                                                                                                
10:27:45 AM                                                                                                                   
                                                                                                                                
CSHB 365(FIN)  was HEARD and  HELD in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 261(FIN)                                                                                                
                                                                                                                                
     "An Act relating to loans for the purchase of                                                                              
     commercial fishing entry permits; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
TIM CLARK,  STAFF, REPRESENTATIVE BRYCE  EDGMON, highlighted                                                                    
the  bill  and stated  that  the  legislation increased  the                                                                    
maximum loan amount  for entry permit loans  under Section B                                                                    
of the Commercial Fishing Revolving  Loan Fund from $100,000                                                                    
to $200,000.  He explained that  the increase  reflected the                                                                    
reality of the  cost of entry permits and  expounded that in                                                                    
2011,  the  Prince William  Sound  salmon  drift net  permit                                                                    
averaged  $161,000  in  price.   The  loans  would  only  be                                                                    
available  to Alaska  residents  who were  not eligible  for                                                                    
financing through commercial banks  or the Alaska Commercial                                                                    
Fishing  and Agriculture  Bank. He  concluded that  the bill                                                                    
lowered  the  barrier  for Alaskans  to  take  ownership  of                                                                    
Alaskan fisheries and helped eliminate  the hindrance of the                                                                    
cost of entry permits.                                                                                                          
                                                                                                                                
Co-Chair  Stedman discussed  two  previously published  zero                                                                    
fiscal notes  from the Department  of Fish and Game  and the                                                                    
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
10:29:42 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:30:02 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:30:09 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman  MOVED  to report  CSHB  261(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
10:30:16 AM                                                                                                                   
                                                                                                                                
CSHB  261(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation  and with  a previously  published zero                                                                    
fiscal  note:  FN1(DFG)  and  a  previously  published  zero                                                                    
fiscal note: FN3(CED).                                                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:30:46 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:30 AM.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 56 - Support Letter AFCA.pdf SFIN 4/14/2012 9:00:00 AM
HB 56
HB 56 - Support Letter CCFR.pdf SFIN 4/14/2012 9:00:00 AM
HB 56
HB 146 Chronolgy Final.pdf SFIN 4/14/2012 9:00:00 AM
HB 146
HB_146_Corp_ARTA_2005_excerpt.pdf SFIN 4/14/2012 9:00:00 AM
HB 146
HB_146_Sectional.pdf SFIN 4/14/2012 9:00:00 AM
HB 146
HB 279 Sectional.pdf SFIN 4/14/2012 9:00:00 AM
HB 279
HB 279 Sponsor Statement.pdf SFIN 4/14/2012 9:00:00 AM
HB 279
HB 304 Sponsor Statement.pdf SFIN 4/14/2012 9:00:00 AM
HB 304
HB304 letter to Senator Stedman.pdf SFIN 4/14/2012 9:00:00 AM
HB 304
HB 337 Sponsor Statement- Revised.pdf SFIN 4/14/2012 9:00:00 AM
HB 337
HB 337 Supporting Document- Letter- Burdett Lent 03-01-2012.pdf SFIN 4/14/2012 9:00:00 AM
HB 337
HB337 Supporting Documents- Letter Harley Hightower- Public 02-24-2012.pdf SFIN 4/14/2012 9:00:00 AM
HB 337
HB 365 explanation of changes between versions.docx SFIN 4/14/2012 9:00:00 AM
HB 365
CSG Capitol Ideas feature article on Aquatic Invasive Species.pdf SFIN 4/14/2012 9:00:00 AM
HB 365
HB 365 Response Letter to HFIN.pdf SFIN 4/14/2012 9:00:00 AM
HB 365
HB 365 Support Letters.pdf SFIN 4/14/2012 9:00:00 AM
HB 365
HB 261 BBEDC Support Letter.pdf SFIN 4/14/2012 9:00:00 AM
HB 261
HB 261 CDFU Support Letter.pdf SFIN 4/14/2012 9:00:00 AM
HB 261
HB 261 CFRLF Summary with Section B Details.pdf SFIN 4/14/2012 9:00:00 AM
HB 261
HB 261 Explanation of Changes.PDF SFIN 4/14/2012 9:00:00 AM
HB 261
HB 261 Support--BBNA Resolution 2012-05.pdf SFIN 4/14/2012 9:00:00 AM
HB 261
HB 261 Support--United Fishermen of Alaska.pdf SFIN 4/14/2012 9:00:00 AM
HB 261
HB196 Sectional Analysis.pdf SFIN 4/14/2012 9:00:00 AM
HB 196
HB196 Sponsor Statement.pdf SFIN 4/14/2012 9:00:00 AM
HB 196
SCS for CSHB 276(FIN) v.W.pdf SFIN 4/14/2012 9:00:00 AM
HB 276
SB 276 PFC Energy Alaska Senate Finance - April 14.pdf SFIN 4/14/2012 9:00:00 AM
SB 276
HB 279 SCS for CSHB 279(FIN) V.E.pdf SFIN 4/14/2012 9:00:00 AM
HB 279
HCR 23 SCS for CSHCR 23(FIN) version T.pdf SFIN 4/14/2012 9:00:00 AM
HCR 23