Legislature(2023 - 2024)SENATE FINANCE 532
05/08/2023 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB52 | |
| SB48 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 52 | TELECONFERENCED | |
| += | SB 48 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
May 8, 2023
2:12 p.m.
2:12:34 PM
CALL TO ORDER
Co-Chair Olson called the Senate Finance Committee meeting
to order at 2:12 p.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Ken Alper, Staff, Senator Donny Olson; Senator Loki Tobin,
Sponsor; Mike Mason, Staff to Senator Tobin, In Room; Rena
Miller, Special Assistant, Commissioners Office, Department
of Natural Resources; John Crowther, Deputy Commissioner,
Department of Natural Resources.
PRESENT VIA TELECONFERENCE
Josh Strauss, Senior Vice President, ANEW, California; Mike
Jones, Self, Homer; Dave Maxwell, Self, Palmer; Ken
Griffin, Self, Wasilla; Kassie Andrews, Self, Anchorage;
Todd Lindley, Self, Anchorage; Ken Huckeba, Self, Wasilla;
Ed Martin, Self, Kenai; Lydia Shumaker, Self, Wasilla.
SUMMARY
SB 48 CARBON OFFSET PROGRAM ON STATE LAND
SB 48 was HEARD and HELD in committee for further
consideration.
SB 52 INCREASE BASE STUDENT ALLOCATION
CSSB 52 was REPORTED out of committee with a four
do pass recommendations, one do not pass
recommendation, and two no recommendations; and
with two new zero fiscal notes and three new
fiscal impact notes from the Department of
Education and Early Development.
SENATE BILL NO. 52
"An Act relating to education; increasing the base
student allocation; and providing for an effective
date."
2:13:31 PM
Co-Chair Stedman MOVED to ADOPT the committee substitute
for SB 52, Work Draft 33-LS0369\R (Marx, 5/5/23).
Co-Chair Olson OBJECTED for discussion.
2:13:50 PM
KEN ALPER, STAFF, SENATOR DONNY OLSON, explained the
committee substitute:
Two main changes:
1) Page 8, line 7. Increases the Base Student
Allocation by $680, from $5,960 to $6,640, for FY2024
(effective July 1, 2023).
2) Removed subsequent year increases to the BSA that
were in the Education Committee version.
What the bill still does:
1) Retains the changes made in Senate Education that
add new reporting and "dashboard requirements to
better track academic performance and the progress of
each high school graduating class. These are amended
into the existing requirements created by the Alaska
Reads Act in 2022.
Co-Chair Olson WITHDREW the OBJECTION. There being NO
OBJECTION, it was so ordered.
2:15:04 PM
SENATOR LOKI TOBIN, SPONSOR, introduced herself.
MIKE MASON, STAFF, SENATOR LOKI TOBIN, introduced himself.
Senator Tobin explained that the proposed committee
substitute met the policy goal set forth by the Senate
Education Committee to significantly increase the Base
Student Allocation (BSA). She stated that there was a hope
to do what was needed to ensure the passage of the
legislation in the current year. She stated that it was
clear that the Alaska public education system was
struggling. She stressed that the bill would be a permanent
increase to the BSA to help children and young adults who
received a public education in the state.
Senator Bishop MOVED to ADOPT Amendment 1, 33-LS0369\R.3
(Marx, 5/6/23).
Co-Chair Olson OBJECTED for discussion.
Senator Bishop explained the amendment. He stated that the
amendment would raise the residential stipend for
residential schools. He stated that it was for $4.2
million.
Senator Wilson asked which boarding schools the amendment
would apply to.
Senator Bishop replied that the amendment was for the
Southeast Region, Southcentral Region, Nenana, Galena,
Southwest, Northern Remote, Nome, and Kotzebue. He stated
that it covered all residential schools.
Co-Chair Olson REMOVED the OBJECTION. There being NO
OBJECTION, it was so ordered.
Senator Tobin spoke in support of the amendment.
Senator Bishop MOVED to ADOPT Amendment 2, 33-LS0369\R.4
(Marx, 5/6/23).
Co-Chair Olson OBJECTED for discussion.
Mr. Alper explained Amendment 2. He stated that the
amendment would amend the statute that was the base number
for the people transportation formula. He stated that it
would be the input for calculating the line in the budget,
which would cover the cost of school transportation. He
stated that the current number was based on 2016. He stated
that it was a rewrite of the list of the transportation
costs. He stated that the 2016 number was increased by half
the amount of inflation, which was about $8 million of
increased funding for that need.
Senator Tobin spoke in support of the amendment.
Senator Wilson surmised that it was an increase of 50
percent based on the inflationary rate.
Mr. Alper replied that the accumulated inflation for the
years was approximately 22 percent, so the increase was 11
percent.
2:20:57 PM
Senator Wilson stated that it was an $8 million per year
increase.
Mr. Alper agreed.
Co-Chair Olson wondered whether $8 million was the cost of
the fiscal note.
Mr. Alper replied that the cost of the amendment would
bring the total cost of the transportation to $80 million.
Senator Bishop stated that even with the amendment, there
will still be districts that do not have enough money for
transportation.
2:22:36 PM
AT EASE
2:23:40 PM
RECONVENED
A roll call vote was taken on the motion.
IN FAVOR: Bishop, Kiehl, Merrick, Hoffman, Olson, Stedman
OPPOSED: Wilson
The motion PASSED (6/1).
2:24:16 PM
AT EASE
2:24:58 PM
RECONVENED
2:25:14 PM
AT EASE
2:25:21 PM
RECONVENED
2:25:31 PM
Senator Merrick wondered how the committee substitute would
affect the operating budget.
Co-Chair Stedman replied that the bill would have to be
signed and passed by the governor. He remarked that the
number would match the operating budget of the BSA, but it
would make it permanent.
Co-Chair Hoffman furthered that there would need to be
additional language in order to ensure that there were not
two appropriations for the same thing.
Co-Chair Stedman stated that it was already removed from
the budget.
Senator Merrick surmised that the passage and signing of
the bill would put the money into the formula, and not
passing the bill would put the money outside of the
formula.
Co-Chair Stedman agreed.
Co-Chair Stedman MOVED to REPORT CSSB 52(RIN) from
committee with individual recommendations and attached
fiscal notes. There being NO OBJECTION, it was so ordered.
2:27:41 PM
AT EASE
2:29:37 PM
RECONVENED
CSSB 52 was REPORTED out of committee with a four "do pass"
recommendations, one "do not pass" recommendation, and two
"no recommendations"; and with two new zero fiscal notes
and three new fiscal impact notes from the Department of
Education and Early Development.
SENATE BILL NO. 48
"An Act authorizing the Department of Natural
Resources to lease land for carbon management
purposes; establishing a carbon offset program for
state land; authorizing the sale of carbon offset
credits; and providing for an effective date."
2:30:09 PM
RENA MILLER, SPECIAL ASSISTANT, COMMISSIONERS OFFICE,
DEPARTMENT OF NATURAL RESOURCES, introduced herself.
2:30:29 PM
JOSH STRAUSS, SENIOR VICE PRESIDENT, ANEW, CALIFORNIA (via
teleconference), discussed the presentation, "Forest Carbon
In Alaska" (copy on file). He began with slide 7, which
addressed the credit buyers in the economy who were
participating in the program.
Mr. Strauss looked at slide 8, "Landowner Obligations":
• Harvesting should not exceed growth
• Must maintain certification (SFI, ATFS) or have
state approved Forest Management Plan
2:35:23 PM
Senator Bishop wondered whether there should be a reopener
in the contract in five years after the verification, and
if there was no increase in the intake of carbon would
there be a reopener on the contract; or whether it was
prorated.
Mr. Strauss replied that it was a rolling obligation. He
furthered that as there was an increase in stocking on the
property with verification on a five year basis, it was a
rolling commitment with the new minimum for the forty-year
period.
Senator Bishop wondered whether there was a chance to
renegotiate if there was an increase in carbon
sequestration from five years.
Mr. Strauss said that credit and revenue could be generated
on an ongoing basis.
Mr. Strauss addressed slide 9, "Key Components Of Offset
Quality." He noted the components of additionally,
permanence,verification/monitoring,registration/serializati
on(CAR, ACR, VCS, ARB), leakage, reversal
(intention/unintentional), and buffer. He elaborated on
each point.
2:42:05 PM
Mr. Strauss continued to discuss slide 9. He likened the
buffer account to homeowners insurance.
Senator Bishop asked about forest fires in the
unintentional loss column. He understood that forest
regrowth would still capture 80 percent of the carbon of a
mature forest.
Mr. Strauss replied that, in general, a significant fire
event could destroy the seed. Although, a forest that was
adept to fires could maintain the seed. He remarked that as
a whole there would be a significant carbon event.
2:45:20 PM
Senator Bishop wondered whether that should be included in
a formula for a risk pool.
Mr. Strauss replied that there was an explicit calculation
of risk numbers for various threats, including fire. He
stated that the 18 percent number was the appropriate
number at the time of the study.
Senator Kiehl wondered whether there was someone who was
monitoring the insurance credits, to ensure the tight
relationship between the carbon pledge and what was
actually leaked out.
Mr. Strauss replied that the program would update over time
based on changing perceptions of risk. He stated that for
any specific single forest with a single catastrophic
event, resulting in an unintentional reversal, the forest
would not be able to produce the offset.
Senator Kiehl asked whether that was a rule, and who
enforces the rule.
Mr. Strauss replied that the American Carbon Registry
managed the entire program, with a programmatic system for
calculating the risk. He stated that there was a recent
update to the calculation systemwide.
Senator Kiehl surmised that there was no individual
enforcement.
2:49:54 PM
Co-Chair Stedman asked about how the carbon registry market
was regulated and controlled.
Mr. Strauss replied that there were two different markets:
compliance and voluntary. He stated that within the
compliance realm the Air Research Board was the ultimate
authority, but they utilized the services of the three most
well-known non-profit registries: the Climate Action
Reserve, the American Carbon Registry, and the Verified
Carbon Standard. He stated that in the voluntary space,
those three bodies individually operated separate
registries with carbon offset credits with their own
analyses and methodologies.
Co-Chair Stedman surmised that more nonprofits could be
created to contribute to the market.
Mr. Strauss replied that it operated on the integrity and
reputation of the various groups and the markets
appreciation of the organizations.
Co-Chair Stedman felt that there needed to be regulatory
oversight when dealing with "tying up property for hundreds
of years."
Co-Chair Olson agreed.
Mr. Strauss pointed to slide 10, "Alaska DNR Pilot
Projects":
Three areas were selected as pilot projects due to
their carbon stocking, accessibility, and timber
marketability
Three projects could collectively generate 10 million
offsets over 40-year life
>$80 million in revenue over 1st decade alone
2:55:40 PM
Co-Chair Stedman wondered whether there was potentially
harvestable timber included in the state forest areas.
Mr. Strauss replied that the map considered timber that
should be merchantable at some point during the forty-year
project life.
Co-Chair Stedman remarked that with such a small bit of
state-owned land in Southeast Alaska, he wondered why it
was a targeted area for the proposal.
Me. Strauss replied that it was the desire of the
Department of Natural Resources (DNR) to see how things
might perform in a variety of different locations. He noted
that there was an examination of potential in a given area.
Co-Chair Stedman noted that there was not much economic
opportunity in Southeast Alaska, and felt that it could
restrict the small amount of state forest.
2:58:16 PM
AT EASE
2:59:56 PM
RECONVENED
Co-Chair Olson HANDED the GAVEL to Senator Merrick.
Mr. Strauss looked at slide 12, "Development Components."
He stated that the developer would participate and enact
the entire project.
Mr. Strauss addressed slide 13, "Development Timeline." He
remarked that the chart showed a timeline associated with a
project. He stated that an efficient project would take
approximately 18 months from listing phase to sale.
3:05:36 PM
Senator Merrick asked about the source of funding for the
nonprofit organizations.
Mr. Strauss replied that they received a number of cents
for each issued credit.
3:06:09 PM
JOHN CROWTHER, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, introduced himself.
Senator Merrick OPENED public testimony.
3:06:40 PM
MIKE JONES, SELF, HOMER (via teleconference), spoke in
opposition to the bill.
3:07:41 PM
DAVE MAXWELL, SELF, PALMER (via teleconference), testified
against the bill.
3:10:18 PM
KEN GRIFFIN, SELF, WASILLA (via teleconference), spoke in
opposition to the legislation.
3:13:01 PM
KASSIE ANDREWS, SELF, ANCHORAGE (via teleconference),
testified in opposition to the bill.
3:15:48 PM
TODD LINDLEY, SELF, ANCHORAGE (via teleconference), spoke
against the bill.
3:17:54 PM
KEN HUCKEBA, SELF, WASILLA (via teleconference), testified
against the legislation.
3:20:38 PM
ED MARTIN, SELF, KENAI (via teleconference), spoke against
the bill.
3:23:24 PM
LYDIA SHUMAKER, SELF, WASILLA (via teleconference),
testified in opposition to the legislation.
Senator Merrick CLOSED public testimony.
SB 48 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
3:26:27 PM
The meeting was adjourned at 3:26 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 52 Amenemdents 1 and 2 Bishop.pdf |
SFIN 5/8/2023 1:30:00 PM |
SB 52 |
| SB 52 CS in SFin summary of changes 5-8-23.pdf |
SFIN 5/8/2023 1:30:00 PM |
SB 52 |
| SB 52 work draft version R.pdf |
SFIN 5/8/2023 1:30:00 PM |
SB 52 |
| SB 52 Public Testimony rec'd 050823.pdf |
SFIN 5/8/2023 1:30:00 PM |
SB 52 |