Legislature(2013 - 2014)BUTROVICH 205

02/24/2014 03:30 PM RESOURCES


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Audio Topic
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