Legislature(2013 - 2014)BUTROVICH 205

02/24/2014 03:30 PM RESOURCES


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03:32:18 PM Start
03:32:57 PM SB138
03:41:59 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HJR 26 OFFSHORE OIL & GAS REVENUE SHARING TELECONFERENCED
Scheduled But Not Heard
<Pending Referral>
-- Public Testimony --
*+ SB 137 EXTEND SEISMIC HAZARDS SAFETY COMMISSION TELECONFERENCED
Scheduled But Not Heard
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 138 GAS PIPELINE; AGDC; OIL & GAS PROD. TAX
Moved CSSB 138(RES) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                       February 24, 2014                                                                                        
                           3:32 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Cathy Giessel, Chair                                                                                                    
Senator Fred Dyson, Vice Chair                                                                                                  
Senator Peter Micciche                                                                                                          
Senator Click Bishop                                                                                                            
Senator Lesil McGuire                                                                                                           
Senator Anna Fairclough                                                                                                         
Senator Hollis French                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 138                                                                                                             
"An  Act  relating   to  the  purposes  of   the  Alaska  Gasline                                                               
Development Corporation  to commissioner of natural  resources on                                                               
the custody  and disposition of  gas delivered to the  advance to                                                               
develop a large-diameter natural  gas pipeline project, including                                                               
treatment  state  in  kind;  relating to  the  authority  of  the                                                               
commissioner   of   natural   resources   to   and   liquefaction                                                               
facilities; establishing the  large-diameter natural gas pipeline                                                               
project  propose  modifications to  existing  state  oil and  gas                                                               
leases; making  certain information  fund; creating  a subsidiary                                                               
related  to  a  large-diameter   natural  gas  pipeline  project,                                                               
provided  to   the  Department  of  Natural   Resources  and  the                                                               
Department  of  Revenue   including  treatment  and  liquefaction                                                               
facilities;  relating  to  the   authority  of  the  exempt  from                                                               
inspection  as a  public record;  making certain  tax information                                                               
related  to an  commissioner  of natural  resources to  negotiate                                                               
contracts related to North Slope  natural election to pay the oil                                                               
and gas  production tax in  kind exempt from  tax confidentiality                                                               
gas  projects,  to  enter   into  confidentiality  agreements  in                                                               
support   of  contract   negotiations  provisions;   relating  to                                                               
establishing under  the oil  and gas production  tax a  gross tax                                                               
rate and implementation, and to  take custody of gas delivered to                                                               
the  state under  an  election  for gas  after  2021; making  the                                                               
alternate minimum  tax on oil  and gas  produced north of  to pay                                                               
the oil  and gas production  tax in  kind; relating to  the sale,                                                               
exchange, or disposal 68 degrees  North latitude after 2021 apply                                                               
only to oil;  relating to apportionment factors  of gas delivered                                                               
to the state under an election  to pay the oil and gas production                                                               
tax  in  of  the  Alaska   Net  Income  Tax  Act;  authorizing  a                                                               
producer's  election to  pay the  oil and  kind; relating  to the                                                               
duties of the  commissioner of revenue to  direct the disposition                                                               
of gas  production tax in  kind for  certain gas and  relating to                                                               
the  authorization;  relating  to   revenues  received  from  gas                                                               
delivered to  the state in kind  and to consult with  the monthly                                                               
installment payments of the oil  and gas production tax; relating                                                               
to interest payments  on monthly installment payments  of the oil                                                               
and  gas   production  tax;   relating  to   settlements  between                                                               
producers  and royalty  owners for  oil and  gas production  tax;                                                               
relating  to  annual  statements   by  producers  and  explorers;                                                               
relating  to  annual production  tax  values;  relating to  lease                                                               
expenditures;  amending  the definition  of  gross  value at  the                                                               
'point of  production' for gas  for purposes  of the oil  and gas                                                               
production tax; adding definitions  related to natural gas terms;                                                               
clarifying that credit may not  be taken against the in-kind levy                                                               
of the  oil and gas  production tax for  gas for purposes  of the                                                               
exploration incentive  credit, the oil or  gas producer education                                                               
credit,  and the  film production  tax credit;  making conforming                                                               
amendments; and providing for an effective date."                                                                               
                                                                                                                                
     - MOVED CSSB 138(RES) OUT OF COMMITTEE -                                                                                   
                                                                                                                                
SENATE BILL NO. 137                                                                                                             
"An  Act extending  the termination  date of  the Alaska  Seismic                                                               
Hazards Safety Commission; and providing for an effective date."                                                                
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 26                                                                                                   
Urging  the  United  States  Congress  to  provide  a  means  for                                                               
consistently  and   equitably  sharing  with  all   oil  and  gas                                                               
producing  states adjacent  to  federal  outer continental  shelf                                                               
areas  a   portion  of  revenue   generated  from  oil   and  gas                                                               
development on the  outer continental shelf to  ensure that those                                                               
states   develop  necessary   infrastructure  to   support  outer                                                               
continental   shelf   development  and   preserve   environmental                                                               
integrity.                                                                                                                      
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 138                                                                                                                  
SHORT TITLE: GAS PIPELINE; AGDC; OIL & GAS PROD. TAX                                                                            
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/24/14       (S)       READ THE FIRST TIME - REFERRALS                                                                        

01/24/14 (S) RES, FIN 02/07/14 (S) RES AT 3:30 PM BUTROVICH 205 02/07/14 (S) Heard & Held 02/07/14 (S) MINUTE(RES) 02/10/14 (S) RES AT 3:30 PM BUTROVICH 205 02/10/14 (S) Heard & Held 02/10/14 (S) MINUTE(RES) 02/12/14 (S) RES WAIVED PUBLIC HEARING NOTICE, RULE 23 02/12/14 (S) RES AT 3:30 PM BUTROVICH 205 02/12/14 (S) Heard & Held 02/12/14 (S) MINUTE(RES) 02/13/14 (S) RES AT 8:00 AM BUTROVICH 205 02/13/14 (S) Heard & Held 02/13/14 (S) MINUTE(RES) 02/14/14 (S) RES AT 3:30 PM BUTROVICH 205 02/14/14 (S) Heard & Held 02/14/14 (S) MINUTE(RES) 02/19/14 (S) RES AT 3:30 PM BUTROVICH 205 02/19/14 (S) Heard & Held 02/19/14 (S) MINUTE(RES) 02/20/14 (S) RES AT 8:00 AM BUTROVICH 205 02/20/14 (S) Heard & Held 02/20/14 (S) MINUTE(RES) 02/21/14 (S) RES AT 8:00 AM BUTROVICH 205 02/21/14 (S) Heard & Held 02/21/14 (S) MINUTE(RES) 02/21/14 (S) RES AT 3:30 PM BUTROVICH 205 02/21/14 (S) Heard & Held 02/21/14 (S) MINUTE(RES) 02/24/14 (S) RES AT 8:00 AM BUTROVICH 205 WITNESS REGISTER No witnesses to record ACTION NARRATIVE 3:32:18 PM CHAIR CATHY GIESSEL called the Senate Resources Standing Committee meeting to order at 3:32 p.m. Present at the call to order were Senators French, Bishop, McGuire, Micciche, and Chair Giessel. Senator Fairclough joined the committee shortly after. 3:32:57 PM SB 138-GAS PIPELINE; AGDC; OIL & GAS PROD. TAX CHAIR GIESSEL announced CSSB 138(RES), version 28-GS2806\N, to be up for consideration. She said Amendment 6 was adopted last Friday and it corrects a drafting error on page 3 that had to do with numbering. She asked if there was further discussion. 3:33:24 PM SENATOR DYSON joined the committee. SENATOR MICCICHE reminded people that the members will keep an eye on this bill as it moves through the other committees, especially the Finance Committee. He thanked the chair for her leadership. 3:34:03 PM SENATOR DYSON said he made what some viewed as critical remarks last Friday about organized labor and was visited by a number of them afterwards. He was told that the unions that used to have an internal rule that said they couldn't hire qualified Alaskans as long as people were on the books in the Lower 48, but that provision had gone away. He was also assured that virtually all of the construction unions in this state are very enthusiastic about this pipeline going forward and they don't believe there will be any labor problems or anybody excluded from getting work. SENATOR BISHOP echoed Senator Micciche's comments and congratulated the chair on doing a good job of keeping the committee on task. 3:35:51 PM SENATOR FAIRCLOUGH said this is as close as they have ever been to a natural gas pipeline in terms of alignment and getting an equity share, but Alaskans need to be willing to take on the risks and those need to be understood as much as possible. She said this is just the first step should they agree with the conditions outlined in the project. What is before them and getting ready to exit from the Resources Committee is at least a partial understanding and she wanted it on the record that she would be a "no recommendation," because she will see SB 138 again in the Finance Committee and wants to really understand the taxing issue. She said they had had good conversations about some of the risks that are still out there and some base lines that she would like to see incorporated into this bill when it's pointing towards royalty leases and the floor and was wondering if other language should be considered for the "floor." She wanted to continue keeping an open mind about that percentage knowing that it's related to our equity share and that that will put more on the table for Alaskans as they choose to analyze whether the gross tax is equal to what our tolerance is for the risk on future capital cash calls from the state. 3:38:53 PM CHAIR GIESSEL said she looked at this project as a legacy that can be left for generations to come; it's a megaproject that will provide affordable energy for Alaskans and the opportunity to transmit natural gas all over the state. The jobs during construction will be tremendous for all Alaskans who are fit, willing, and ready to take them. They have talked about diversifying the economy, and affordable energy is what brings private sector diversification to an economy - like Iceland's aluminum processing industry that has transformed that country, because of their low cost energy. Alaska can do the same thing and this is an opportunity to do that. She said they had looked at a lot of details in this bill, but many other elements, like fiscal issues, need a further look. They heard a lot about payment in lieu of taxes for local municipalities and concerns expressed about the creation of a subsidiary, but she was fully confident that the Finance Committee would dig into those topics. 3:40:57 PM SENATOR DYSON moved to report CSSB 138, version 28-GS2806\N as amended, from committee with attached fiscal notes and individual recommendations. There were no objections and CSSB 138(RES) moved from the Senate Resources Standing Committee. 3:41:59 PM CHAIR GIESSEL, finding no other business to come before the Senate Resources Standing Committee adjourned the meeting at 3:41 p.m.

Document Name Date/Time Subjects
HJR 26 vs N.pdf SRES 2/24/2014 3:30:00 PM
HJR 26
HJR 26 Sponsor Statement.pdf SRES 2/24/2014 3:30:00 PM
HJR 26
HJR 26 Fiscal Note - LAA.pdf SRES 2/24/2014 3:30:00 PM
SRES 2/26/2014 3:30:00 PM
HJR 26
HJR 26 OCS States Letter.pdf SRES 2/24/2014 3:30:00 PM
HJR 26
HJR 26 BPC Revenue Sharing 101.pdf SRES 2/24/2014 3:30:00 PM
HJR 26
HJR 26 FAIR Act (S.1273).pdf SRES 2/24/2014 3:30:00 PM
HJR 26
HJR 26 FAIR Act Summary.pdf SRES 2/24/2014 3:30:00 PM
HJR 26
HJR 26 Mayor Brower Testimony.pdf SRES 2/24/2014 3:30:00 PM
HJR 26
HJR 26 Energy Council Policy Statement.pdf SRES 2/24/2014 3:30:00 PM
SRES 2/26/2014 3:30:00 PM
HJR 26
HJR 26 Supp Letter RDC 20140221.pdf SRES 2/24/2014 3:30:00 PM
SRES 2/26/2014 3:30:00 PM
HJR 26
SB 137 vs A.pdf SRES 2/24/2014 3:30:00 PM
SRES 2/26/2014 3:30:00 PM
SB 137
SB 137 Sponsor Statement.pdf SRES 2/24/2014 3:30:00 PM
SRES 2/26/2014 3:30:00 PM
SB 137
SB 137 Fiscal Note.pdf SRES 2/24/2014 3:30:00 PM
SRES 2/26/2014 3:30:00 PM
SB 137
SB 137 Annual Report 2013.pdf SRES 2/24/2014 3:30:00 PM
SRES 2/26/2014 3:30:00 PM
SB 137
SB 137 ASHSC Strategic Plan.pdf SRES 2/24/2014 3:30:00 PM
SRES 2/26/2014 3:30:00 PM
SB 137
SB 137 Supp Letter RobertScher 20140204.pdf SRES 2/24/2014 3:30:00 PM
SRES 2/26/2014 3:30:00 PM
SB 137
SB 138 Supp Letter DavidSpringgate 20140223.pdf SRES 2/24/2014 3:30:00 PM
SB 21