Legislature(2005 - 2006)

2006-07-12 Senate Journal

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2006-07-12                     Senate Journal                      Page 3625
                                                                                                    
                                SENATE JOURNAL                                                   
                                                                                                    
                           ALASKA STATE LEGISLATURE                                              
                                                                                                    
                          TWENTY-FOURTH LEGISLATURE                                              
                                                                                                    
                            THIRD SPECIAL SESSION                                                
                                                                                                    
Juneau, Alaska                   Wednesday                     July 12, 2006                      
                                                                                                    
                                  First Day                                                      
                                                                                                    
                                                                                                    
Pursuant to the June 26Proclamation of the Governor calling for the                                 
convening of the Third Special Session of the Twenty-Fourth                                         
Legislature (page 3626), the Senate was called to order by President                                
Stevens at 6:07 p.m.                                                                                
                                                                                                    
The roll showed fifteen members present. Senators Bunde, French                                     
were excused from a call of the Senate. Senators Guess, Kookesh,                                    
Olson were absent.                                                                                  
                                                                                                    
The prayer was offered by the Chaplain, Amanda Green. Senator                                       
Hoffman moved and asked unanimous consent that the prayer be                                        
spread. Without objection, it was so ordered.                                                       
                                                                                                    
          Our Dear Father in Heaven,                                                                
                                                                                                    
          Thank You for allowing the legislators and their staff                                    
          to return safely to our Capitol. At this time, Father,                                    
          we would like to ask You to aid them in the decision-                                     
          making process as the decisions they make will affect                                     
          all Alaskans. Heavenly Father, we would also ask                                          
          You to assist the families of those present, in their                                     
          patience as this session continues.                                                       
                                                                                                    
          Father, we are grateful for the chance to once again                                      
          gather to decipher familiar issues before us; at this                                     
          time, Father, we again ask for Your wisdom to guide                                       
          us.                                                                                       
                                                                                                    
          We ask that You please give us all patience, unity to                                     
          stand strong, and respect for one another to facilitate                                   
          work as a team.                                                                           

2006-07-12                     Senate Journal                      Page 3626
          We ask these things in Your name,                   Amen.                                
                                                                                                    
Senator Seekins led the Senate in the Pledge of Allegiance.                                         
                                                                                                    
                                                                                                    
                                Certification                                                    
                                                                                                    
Senator Gary Stevens moved and asked unanimous consent that the                                     
journal for the thirtieth legislative day of the Second Special Session                             
and the First Journal Supplement of the Second Regular Session and                                  
the Second Special Session be approved as certified by the Secretary.                               
Without objection, it was so ordered.                                                               
                                                                                                    
The presence of Senator Kookesh was noted.                                                          
                                                                                                    
                                                                                                    
                          Messages from the Governor                                             
                                                                                                    
                            Executive Proclamation                                                 
                                      by                                                           
                         Frank H. Murkowski, Governor                                              
                                                                                                    
Under the authority of art. II, sec. 9, and art. III, sec. 17, of the Alaska                        
Constitution, and in the public interest, I call the Twenty-fourth                                  
Legislature of the State of Alaska into its third special session at                                
Juneau, Alaska in the legislative chambers on July 12, 2006, at 11:00                               
a.m. to consider the:                                                                               
                                                                                                    
     (1) repeal of the oil production tax and the gas production tax and                            
          providing for a production tax on oil and gas; and                                        
                                                                                                    
     (2) subject of statutory changes for the purpose of clarifying or                              
          providing additional authority for the development of contract                            
          terms under the Alaska Stranded Gas Development Act                                       
          (AS 43.82).                                                                               
                                                                                                    
               th                                                                                   
Dated this 26 day of June 2006.                                                                     
/s/                                                                                                 
Frank H. Murkowski, Governor                                                                        
                                                                                                    

2006-07-12                     Senate Journal                      Page 3627
Message dated July 10 was read stating:                                                             
                                                                                                    
Dear President Stevens:                                                                             
                                                                                                    
Under the provisions of article III, section 18 of the Alaska                                       
Constitution, I am requesting the opportunity to address both the                                   
Senate and the House in a joint session of the Twenty-fourth Alaska                                 
State Legislature on Thursday, July 13, 2006 at 11 a.m.                                             
                                                                                                    
Thank you for your cooperation in this effort.                                                      
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
                                                                                                    
                           Messages from the House                                               
                                                                                                    
Message dated July 12 was read, stating:                                                            
                                                                                                    
The House of Representatives respectfully invites the Senate to a Joint                             
Session of the Twenty-fourth Alaska Legislature on Thursday, July 13                                
at 11:00 a.m. for a message from the Governor.                                                      
                                                                                                    
Senator Gary Stevens moved and asked unanimous consent that the                                     
Senate accept the House invitation to meet in Joint Session. Without                                
objection, it was so ordered.                                                                       
                                                                                                    
The Secretary was requested to notify the House.                                                    
                                                                                                    
                                                                                                    
                                Communications                                                   
                                                                                                    
The following report is on file in the Office of the Secretary of the                               
Senate:                                                                                             
                                                                                                    
Annual Report to the Legislature                                                                    
from Mary Anne Henry, Director                                                                      
Office of Victims' Rights, Alaska State Legislature                                                 
in accordance with AS 24.65.170                                                                     

2006-07-12                     Senate Journal                      Page 3628
                  Introduction and Reference of Senate Bills                                     
                                                                                                    
SB 3001                                                                                           
SENATE BILL NO. 3001 BY THE SENATE RULES COMMITTEE                                                  
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
          "An Act relating to the production tax on oil and gas                                     
          and to conservation surcharges on oil; relating to                                        
          criminal penalties for violating conditions governing                                     
          access to and use of confidential information relating                                    
          to the production tax; amending the definition of 'gas'                                   
          as that definition applies in the Alaska Stranded Gas                                     
          Development Act; making conforming amendments;                                            
          and providing for an effective date."                                                     
                                                                                                    
was read the first time and referred to the Special Committee on                                    
Natural Gas Development.                                                                            
                                                                                                    
The following fiscal information was published today:                                               
     Fiscal Note No. 1, zero, Department of Natural Resources                                       
     Fiscal Note No. 2, Department of Revenue                                                       
                                                                                                    
Governor's transmittal letter dated July 12:                                                        
                                                                                                    
Dear President Stevens:                                                                             
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a bill relating to the oil and gas                                  
production tax.                                                                                     
                                                                                                    
This bill is similar to previous versions of oil and gas production tax                             
legislation that the Legislature has considered during both the regular                             
and special sessions this year.  I appreciate that legislators have                                 
devoted sustained and serious attention and concern to this subject,                                
and there is therefore no need for me to repeat in detail here the                                  
reasons why this legislation is urgently needed or how the new tax                                  
system set out in this legislation would work.  Legislators well                                    
understand that the existing production tax law is not adequately                                   
serving the interests of Alaskans and that the approach taken by this                               
bill would provide the state with a fairer share of the value of oil and                            
gas production while encouraging vital investment in future                                         
production.                                                                                         

2006-07-12                     Senate Journal                      Page 3629
I also appreciate that the legislative process this year has led to                                 
numerous improvements in the bills that were originally submitted,                                  
resulting in increased clarity, predictability, and ease of                                         
administration.  The bill I am transmitting takes advantage of these                                
improvements by using as its model the most recent versions that were                               
passed by the House and Senate, HCS CSSB 2001(FIN) am H and                                         
CCS SB 2001.  The following two changes from those versions are                                     
reflected in the bill:                                                                              
                                                                                                    
          1. Because I still believe that a 20 percent tax rate on net                              
value represents a more appropriate balance than either of the higher                               
rates contained in HCS CSSB 2001(FIN) am H or CCS SB 2001, my                                       
bill returns to a 20 percent rate.                                                                  
                                                                                                    
          2. For the same reason, my bill eliminates the additional                                 
"progressivity" tax provisions that were in the other versions.                                     
                                                                                                    
          3. Similarly, because I believe that the four percent of gross                            
value tax floor on North Slope production that was added by HCS                                     
CSSB 2001(FIN) am H and the similar three percent floor that was                                    
contained in CCS SB 2001 are inconsistent with the concept of a                                     
progressive net value tax system, my bill eliminates that tax floor                                 
provision.                                                                                          
                                                                                                    
As explained more fully in my transmittal letter accompanying the                                   
original administration bills, this bill will greatly improve Alaska's oil                          
and gas tax system, encouraging investment in the state, making tax                                 
administration more predictable, and better reflecting the variable                                 
economics of oil and gas development.  This bill will provide                                       
Alaskans with a fairer share of the value of the oil and gas taken out of                           
the ground in our state and provide fiscal certainty for future                                     
generations of Alaskans.                                                                            
                                                                                                    
                                                                                                    
I urge your prompt and favorable action on the bill.                                                
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            

2006-07-12                     Senate Journal                      Page 3630
SB 3002                                                                                           
SENATE BILL NO. 3002 BY THE SENATE RULES COMMITTEE                                                  
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
          "An Act relating to the Alaska Stranded Gas                                               
          Development Act; relating to municipal impact                                             
          money received under the terms of a stranded gas                                          
          fiscal contract; relating to determination of full and                                    
          true value of property and required contributions for                                     
          education in municipalities affected by stranded gas                                      
           fiscal contracts; and providing for an effective date."                                 
                                                                                                    
was read the first time and referred to the Special Committee on                                    
Natural Gas Development.                                                                            
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, zero, Department of Revenue                                                     
 Fiscal Note No. 2, zero, Department of Natural Resources                                           
                                                                                                    
Governor's transmittal letter dated July 12:                                                        
                                                                                                    
Dear President Stevens:                                                                             
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a bill relating to the Alaska Stranded                              
Gas Development Act.  This bill is a shorter version of SB 2004,                                    
which was introduced at my request during the Second Special Session                                
of the Twenty-Fourth Alaska State Legislature.  The provisions of the                               
present bill are based largely on certain amendments to SB 2004 that                                
were reflected in CSSB 2004(NGD).  The bill I am transmitting would                                 
authorize the commissioner of revenue to negotiate fiscal terms                                     
relating to oil, and includes provisions relating to certain payments to                            
municipalities and nonprofit organizations.                                                         
                                                                                                    
I continue to believe that the proposed fiscal contract originally                                  
negotiated with the producers would be in the public interest.                                      
However, it is my intent to be responsive to the concerns expressed by                              
the Legislature and members of the public concerning the provisions                                 
in the fiscal contract that provide for fiscal certainty for certain taxes                          
levied on the production of oil.  I encourage the Legislature to                                    

2006-07-12                     Senate Journal                      Page 3631
continue review the fiscal contract and consider amendments to the                                  
Stranded Gas Development Act that will provide a sound foundation                                   
throughout the duration of the contract.  I pledge the full cooperation                             
of my administration to assist you in this effort, which is in the long-                            
term fiscal interest of the state.                                                                  
                                                                                                    
I urge your prompt and favorable consideration of this bill.                                        
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
                                                                                                    
                             Unfinished Business                                                 
                                                                                                    
Senators Dyson, Therriault, Wagoner moved and asked unanimous                                       
consent to be excused from a call of the Senate on July 14. Without                                 
objection, Senators Dyson, Therriault, Wagoner were excused.                                        
                                                                                                    
Senator Ellis moved and asked unanimous consent to be excused from                                  
a call of the Senate from July 24 through July 25. Without objection,                               
Senator Ellis was excused.                                                                          
                                                                                                    
                                                                                                    
                                Announcements                                                    
                                                                                                    
Announcements are at the end of the journal.                                                        
                                                                                                    
                                                                                                    
                                  Enrollment                                                     
                                                                                                    
SB 231                                                                                            
The following memorandum dated July 11 was received from the                                        
Division of Legal and Research Services, Legislative Affairs Agency:                                
                                                                                                    
I am reporting the following errors in HOUSE CS FOR CS FOR                                          
SENATE BILL NO. 231(FIN) am H(brf sup maj pfld H) "An Act                                           
making appropriations, including capital appropriations, supplemental                               
appropriations, reappropriations, and appropriations to capitalize                                  

2006-07-12                     Senate Journal                      Page 3632
funds; making appropriations under art. IX, sec. 17(c), Constitution of                             
the State of Alaska, from the constitutional budget reserve fund; and                               
providing for an effective date" which were discovered after                                        
enrollment and have not been corrected:                                                             
                                                                                                    
Section 46(d)                                                                                   
Page 158, line 6:                                                                                   
    Delete "FSSLA 2002"                                                                             
    Insert "SSSLA 2002"                                                                             
                                                                                                    
Explanation:  The appropriation being amended is in sec. 1, ch. 1,                                  
SSSLA 2002.                                                                                         
                                                                                                    
Section 55                                                                                      
Page 163, line 18:                                                                                  
    Delete "FSSLA 2001"                                                                             
    Insert "SLA 2001"                                                                               
                                                                                                    
Explanation:  The appropriation being amended is in sec. 1, ch. 61,                                 
SLA 2001.                                                                                           
                                                                                                    
Section 66(d)                                                                                   
Page 180, line 11:                                                                                  
    Delete "and 65 - 67"                                                                            
    Insert "66, and 67"                                                                             
                                                                                                    
Explanation:  The retroactivity of sec. 65 is covered by sec. 66(a).                                
                                                                                                    
                                                                                                    
                                 Adjournment                                                     
                                                                                                    
Senator Gary Stevens moved and asked unanimous consent that the                                     
Senate stand in adjournment until 10:45 a.m., July 13, 2006. Without                                
objection, the Senate adjourned at 6:28 p.m.                                                        
                                                                                                    
                                                                Kirsten Waid                        
                                                     Secretary of the Senate                        
                                                                                                    
                                                                                                    

2006-07-12                     Senate Journal                      Page 3633
                                Announcements                                                    
                                                                                                    
Americans with Disabilities Act Notice - Persons with disabilities who require                      
special accommodation or alternative communication formats to access                                
committee meetings may contact the appropriate committee office or the                              
Legislative Information Office in their community. Reasonable advance                               
notice is needed to accommodate the request. For further information, call the                      
ADA Coordinator at 465-3854 Voice/465-4980 TDD.                                                     
                                                                                                    
                                                                                                    
                   ----------------------------------------                                        
                                                                                                    
                              SPECIAL COMMITTEES                                                 
                                                                                                    
                     SPECIAL COMMITTEE ON NATURAL GAS DEV                                        
                                                                                                    
Jul 13        Thursday                  Senate Finance 532            9:00 AM                     
+             9:00 a.m. Introduction to Special                                                     
              Session Bills:                                                                        
+ SB3001 OIL/GAS PROD. TAX                                                                          
+ SB3002 STRANDED GAS AMENDMENTS                                                                    
+             1:30 p.m. Proposed Revisions to the                                                   
              Stranded Gas Act                                                                      
                   ----------------------------------------                                        
                                                                                                    
                               JOINT COMMITTEES                                                  
                                                                                                    
                          LEGISLATIVE BUDGET & AUDIT                                             
                                                                                                    
Jul 13        Thursday                         Location Tba           4:00 PM                     
              No Audits                                                                             
              No RPLs                                                                               
              No Audit Requests                                                                     
              Other Committee Business                                                              
                   ----------------------------------------                                        
                                                                                                    
                                OTHER MEETINGS                                                   
                                                                                                    
                                JOINT SESSION                                                    
                                                                                                    
Jul 13        Thursday                     House Chamber            11:00 AM                      
              Message from the Honorable Frank H.                                                   
              Murkowski, Governor