Legislature(2023 - 2024)
2024-05-13 House Journal
Full Journal pdf2024-05-13 House Journal Page 3079 HB 307 The following, which was held in second reading from the May 12 calendar (page 3070), was before the House: HOUSE BILL NO. 307 "An Act relating to the taxation of independent power producers; and increasing the efficiency of integrated transmission system charges and use for the benefit of ratepayers." Representative Saddler moved and asked unanimous consent that the following committee substitute be adopted in lieu of the original bill: CS FOR HOUSE BILL NO. 307(FIN) "An Act relating to the Regulatory Commission of Alaska; relating to regulation of public utilities and pipeline carriers; relating to approval of wholesale power agreements; relating to preapproval for construction of energy facilities; relating to electric reliability organizations; relating to the taxation of new electricity generation facilities; relating to the Alaska Energy 2024-05-13 House Journal Page 3080 Authority; relating to the Railbelt Transmission Organization; and providing for an effective date." Representative Carpenter objected. The question being: "Shall CSHB 307(FIN) be adopted?" The roll was taken with the following result: HB 307 Second Reading Adopt Finance CS YEAS: 32 NAYS: 4 EXCUSED: 1 ABSENT: 3 Yeas: Armstrong, Baker, Carrick, Coulombe, Cronk, Dibert, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, Josephson, McCabe, McCormick, McKay, Mears, Mina, Prax, Rauscher, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Wright Nays: Carpenter, Eastman, Ruffridge, Vance Excused: Allard Absent: Edgmon, D.Johnson, Ortiz And so, CSHB 307(FIN) was adopted. Amendment No. 1 was offered by Representative Rauscher: Page 3, line 21: Delete "reflect a" Insert "disclose a state or local" Delete "or government subsidy" Page 3, line 28: Delete "person" Insert "legal entity" Page 4, following line 9: Insert a new bill section to read: "* Sec. 8. AS 42.05.711(b) is amended to read: (b) Except as otherwise provided in this subsection, [AND 2024-05-13 House Journal Page 3081 IN] (o) of this section, and AS 44.83.700(d), public utilities owned and operated by a political subdivision of the state, or electric operating entities established as the instrumentality of two or more public utilities owned and operated by political subdivisions of the state, are exempt from this chapter, other than AS 42.05.221 - 42.05.281 and 42.05.385. However, (1) the governing body of a political subdivision may elect to be subject to this chapter; and (2) a utility or electric operating entity that is owned and operated by a political subdivision and that directly competes with another utility or electric operating entity is subject to this chapter and any other utility or electric operating entity owned and operated by the political subdivision is also subject to this chapter; this paragraph does not apply to a utility or electric operating entity owned and operated by a political subdivision that competes with a telecommunications utility." Renumber the following bill sections accordingly. Page 10, lines 23 - 31: Delete all material and insert: "Sec. 44.83.700. Railbelt Transmission Organization. (a) The Railbelt Transmission Organization is created for the purpose of establishing an open access transmission tariff that (1) provides for recovery of transmission costs and related ancillary services; and (2) replaces wholesale charges assessed by unit by each utility in the Railbelt with a new mechanism that fairly recovers and equitably allocates the costs of operating the backbone transmission system" Page 11, line 1: Delete "in" Insert "a division of" Page 11, lines 3 - 5: Delete all material and insert: "(c) To assist in administering the open access transmission tariff, the governance structure for the transmission organization must be made up of representatives from the authority, each of the Railbelt 2024-05-13 House Journal Page 3082 utilities, and, as an ex officio nonvoting representative, the chief executive officer of the applicable electric reliability organization." Page 11, line 6, following "Notwithstanding": Insert "AS 42.05.711(b) and" Page 12, lines 8 - 10: Delete "transfer of large-scale electrical power between or across separate geographical areas; "backbone transmission system" does not include assets that would be considered distribution facilities or radial facilities" Insert "transmission of electrical power" Page 12, line 16, following "Railbelt": Insert "that operates backbone transmission system assets" Page 12, line 22: Delete "sec. 14" Insert "sec. 15" Page 12, line 28: Delete "sec. 19" Insert "sec. 20" Page 12, line 29: Delete "sec. 19" Insert "sec. 20" Page 12, line 30, following "2025": Insert ", modeled after the governance structure of the Bradley Lake Hydroelectric Project, as outlined in the Bradley Lake Power Sales Agreement, including the creation, duties, and methods of the Bradley Lake Project Management Committee, with any adjustments the parties to the agreement determine are necessary. On or before January 1, 2025, the Railbelt Transmission Organization shall file with the Regulatory Commission of Alaska a certificate under AS 42.05.221 to achieve the purposes of AS 44.83.700 - 44.83.720, added by sec. 20 of this Act" 2024-05-13 House Journal Page 3083 Page 12, line 31: Delete "Section 4 of this Act takes" Insert "Sections 4 and 5 of this Act take" Page 13, line 1: Delete "sec. 22" Insert "sec. 23" Representative Rauscher moved and asked unanimous consent that Amendment No. 1 be adopted. There was objection. The question being: "Shall Amendment No. 1 be adopted?" The roll was taken with the following result: CSHB 307(FIN) Second Reading Amendment No. 1 YEAS: 32 NAYS: 5 EXCUSED: 1 ABSENT: 2 Yeas: Armstrong, Baker, Carrick, Coulombe, Cronk, Dibert, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, McCabe, McCormick, McKay, Mears, Mina, Ortiz, Prax, Rauscher, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Wright Nays: Carpenter, Eastman, Josephson, Ruffridge, Vance Excused: Allard Absent: Edgmon, D.Johnson And so, Amendment No. 1 was adopted. Amendment No. 2 was offered by Representative Mears: Page 5, lines 19 - 20: Delete "while considering" Insert "as well as" 2024-05-13 House Journal Page 3084 Representative Mears moved and asked unanimous consent that Amendment No. 2 be adopted. There was objection. Amendment No. 1 to Amendment No. 2 was offered by Representative Mears: Page 1, lines 1 - 3 of the amendment: Delete all material and insert: "Page 5, line 18: Delete "and stability" Insert ", stability, and cost to consumers"" Representative Mears moved and asked unanimous consent that Amendment No. 1 to Amendment No. 2 be adopted. Objection was heard and withdrawn. There being no further objection, Amendment No. 1 to Amendment No. 2 was adopted. Objection to Amendment No. 2 as amended was withdrawn. There being no further objection, Amendment No. 2 as amended was adopted. Amendment No. 3 was offered by Representative Groh: Page 1, line 1, following "Act" (title amendment): Insert "relating to feasibility licenses for and leases of state land for renewable energy projects;" Page 1, following line 7: Insert new bill sections to read: "* Section 1. AS 38.05.035(a) is amended to read: (a) The director shall (1) have general charge and supervision of the division and may exercise the powers specifically delegated to the director; the director may employ and fix the compensation of assistants and employees necessary for the operations of the division; the director is the certifying officer of the division, with the consent of the commissioner, and may approve vouchers for disbursements 2024-05-13 House Journal Page 3085 of money appropriated to the division; (2) manage, inspect, and control state land and improvements on it belonging to the state and under the jurisdiction of the division; (3) execute laws, rules, regulations, and orders adopted by the commissioner; (4) prescribe application procedures and practices for the sale, lease, or other disposition of available land, resources, property, or interest in them; (5) prescribe fees or service charges, with the consent of the commissioner, for any public service rendered; (6) under the conditions and limitations imposed by law and the commissioner, issue deeds, leases, or other conveyances disposing of available land, resources, property, or any interests in them; (7) have jurisdiction over state land, except that land acquired by the Alaska World War II Veterans Board and the Agricultural Loan Board or the departments or agencies succeeding to their respective functions through foreclosure or default; to this end, the director possesses the powers and, with the approval of the commissioner, shall perform the duties necessary to protect the state's rights and interest in state land, including the taking of all necessary action to protect and enforce the state's contractual or other property rights; (8) maintain the records the commissioner considers necessary, administer oaths, and do all things incidental to the authority imposed; the following records and files shall be kept confidential upon request of the person supplying the information: (A) the name of the person nominating or applying for the sale, lease, or other disposal of land by competitive bidding; (B) before the announced time of opening, the names of the bidders and the amounts of the bids; (C) all geological, geophysical, hydrological, meteorological, and engineering data supplied, whether or not concerned with the extraction or development of natural resources; (D) except as provided in AS 38.05.036, cost data and financial information submitted in support of applications, bonds, leases, and similar items; 2024-05-13 House Journal Page 3086 (E) applications for rights-of-way or easements; (F) requests for information or applications by public agencies for land that is being considered for use for a public purpose; (G) the name of the person submitting a proposal, and information in the proposal submitted under AS 38.05.093; (9) account for the fees, licenses, taxes, or other money received in the administration of this chapter, including the sale or leasing of land, identify their source, and promptly transmit them to the proper fiscal department after crediting them to the proper fund; receipts from land application filing fees and charges for copies of maps and records shall be deposited immediately in the general fund of the state by the director; (10) select and employ or obtain at reasonable compensation cadastral, appraisal, or other professional personnel the director considers necessary for the proper operation of the division; (11) be the certifying agent of the state to select, accept, and secure by whatever action is necessary in the name of the state, by deed, sale, gift, devise, judgment, operation of law, or other means, any land, of whatever nature or interest, available to the state; and be the certifying agent of the state [,] to select, accept, or secure by whatever action is necessary in the name of the state any land, or title or interest to land, available, granted, or subject to being transferred to the state for any purpose; (12) on request, furnish records, files, and other information related to the administration of AS 38.05.180 to the Department of Revenue for use in forecasting state revenue under or administering AS 43.55, whether or not those records, files, and other information are required to be kept confidential under (8) of this subsection; in the case of records, files, or other information required to be kept confidential under (8) of this subsection, the Department of Revenue shall maintain the confidentiality that the Department of Natural Resources is required to extend to records, files, and other information under (8) of this subsection; (13) when reasonably possible, give priority to and expedite the processing of an application for a lease or assignment of a lease of state land for development and operation of a gas storage facility, for a right-of-way to a gas storage facility, for a 2024-05-13 House Journal Page 3087 change to the allocation of production within a unit, and for a permit necessary for the operation of a gas storage facility; in this paragraph, "gas storage facility" has the meaning given in AS 31.05.032; (14) prepare and submit to the senate secretary and chief clerk of the house of representatives, on or before the first day of each regular session of the legislature, an annual report in electronic form concerning site lease applications submitted under AS 38.05.083; in preparing and submitting the report, the director shall (A) include in the report (i) a list of all applications pending with the department, including applications for a new lease and applications for renewal, amendment, and assignment of a lease, and the length of time each application has been pending with the department; (ii) for an application that has not been granted, the reason the application has not been granted; and (iii) the number of leases that the director elected not to renew under AS 38.05.070; (B) notify the legislature that the report is available. * Sec. 2. AS 38.05.070(e) is amended to read: (e) The director may renew a lease issued under this section, AS 38.05.075, 38.05.083, 38.05.094, or 38.05.810 upon its expiration if the lease is in good standing and the lease renewal is determined to be in the best interests of the state. A renewal issued under this subsection is not subject to AS 38.05.035(e). A lease under this section, AS 38.05.075, 38.05.083, or 38.05.810 may be renewed only once for a term not longer than the initial term of the lease. The director shall provide notice of the lease renewal decision. * Sec. 3. AS 38.05.075(a) is amended to read: (a) Except as provided in AS 38.05.035, 38.05.070, 38.05.073, 38.05.081, 38.05.082, 38.05.083, 38.05.087, 38.05.094, 38.05.102, 38.05.565, 38.05.600, 38.05.810, and this section, when competitive interest has been demonstrated or the commissioner determines that it is in the state's best interests, leasing shall be made at public auction or by sealed bid, at the discretion of the director, to the highest qualified bidder as determined by the commissioner. A bidder may be represented by 2024-05-13 House Journal Page 3088 an attorney or agent at a public auction. In the public notice of a lease to be offered at public auction or by sealed bid, the commissioner shall specify a minimum acceptable bid and the lease compensation method. The lease compensation method shall be designed to maximize the return on the lease to the state and shall be a form of compensation set out in AS 38.05.073(m). An aggrieved bidder may appeal to the commissioner within five days for a review of the determination. The leasing shall be conducted by the commissioner, and the successful bidder shall deposit at the public auction or with the sealed bid the first year's rental or other lease compensation as specified by the commissioner, or that portion of it that the commissioner requires in accordance with the bid. The commissioner shall require, under AS 38.05.860, qualified bidders to deposit a sum equal to any survey or appraisal costs reasonably incurred by another qualified bidder acting in accordance with the regulations of the commissioner or incurred by the department under AS 38.04.045 and AS 38.05.840. If a bidder making a deposit of survey or appraisal costs is determined by the commissioner to be the highest qualified bidder under this subsection, the deposit shall be paid to the unsuccessful bidder who incurred those costs or to the department if the department incurred the costs. All costs for survey and appraisal shall be approved in advance in writing by the commissioner. The commissioner shall immediately issue a receipt containing a description of the land or interest leased, the price bid, and the terms of the lease to the successful qualified bidder. If the receipt is not accepted in writing by the bidder under this subsection, the commissioner may offer the land for lease again under this subsection. A lease, on a form approved by the attorney general, shall be signed by the successful bidder and by the commissioner. * Sec. 4. AS 38.05 is amended by adding new sections to read: Sec. 38.05.091. Applicability; determination; regulations. (a) Unless specifically provided otherwise in AS 38.05.091 - 38.05.094, the provisions of AS 38.05.005 - 38.05.037 and 38.05.920 - 38.05.990 apply to the issuance of feasibility licenses for renewable energy projects under AS 38.05.091 - 38.05.094. (b) The commissioner shall make preliminary written determinations of the state land that may be subject to the provisions of AS 38.05.092. The determinations shall be given public notice using the methods described in AS 38.05.945(b). 2024-05-13 House Journal Page 3089 After completion of the comment period and evaluation of the comments received, the commissioner shall issue a written determination of the state land that is subject to the provisions of AS 38.05.092. (c) The commissioner may adopt regulations necessary to implement AS 38.05.091 - 38.05.094. (d) The commissioner may not issue feasibility licenses to a licensee so that, at any one time, the licensee holds feasibility licenses on more than 2,000,000 acres. Sec. 38.05.092. Feasibility licenses for renewable energy projects. (a) To encourage energy production on state land, the commissioner may issue feasibility licenses. (b) A feasibility license issued under this section gives the licensee (1) the exclusive right to explore, for a term not to exceed 10 years, the surface estate on state land described in the feasibility license to evaluate the land's potential for a renewable energy project, unless the feasibility license is terminated under (d)(1) of this section or the land is earlier relinquished, removed, or deleted under (d)(2) of this section; and (2) unless the feasibility license is terminated under (d)(1) of this section, the option to convert the feasibility license for all or part of the state land, except the land that is deleted or removed from the land described in the feasibility license under (d)(2) of this section, into a lease of state land for a renewable energy project, upon fulfillment of the work commitments contained in the feasibility license. (c) A feasibility license issued under this section (1) may cover, subject to the maximum acreage limitation on feasibility licenses by one licensee under AS 38.05.091(d), an area of not more than 500,000 acres that must be reasonably compact and contiguous; (2) must be conditioned on an obligation to perform a specified work commitment, in total for the term of the license, expressed in dollars of direct expenditures; the specified work commitment (A) may include a provision that adjusts the total amount of work commitment, expressed in dollars of direct expenditures, to account for inflation; (B) must include a requirement that the licensee 2024-05-13 House Journal Page 3090 complete at least 25 percent of the licensee's total specified work commitment by the fourth anniversary of the effective date of the issuance of the feasibility license; (3) must be conditioned on the posting of a bond or other security acceptable to the commissioner, in favor of the state and subject to the following requirements: (A) the bond or other security must be renewed annually; (B) the annual bond or other security shall be calculated as the estimated work commitment for the upcoming year, expressed in dollars, commencing the year the feasibility license is issued and recalculated each year for the duration of the feasibility license; (C) the bond or other security must provide sufficient financial assurances to cover costs for the demolition and removal of project infrastructure and restoration of land affected by the feasibility licensee, including, as applicable, the possible costs of remediating oil or other minerals, fiberglass, microplastics, or other contamination; (4) is subject to an annual review and revocation if the commissioner determines that the licensee has failed to provide or maintain in effect the bond or other security required by (3) of this subsection; and (5) must be conditioned on an agreement that direct expenditures are subject to audit by the commissioner. (d) If, on the fourth anniversary of the effective date of the issuance of the feasibility license issued under this section, (1) the licensee has not completed at least 25 percent of the licensee's total specified work commitment, as measured by the licensee's direct expenditures, the feasibility license terminates; (2) the licensee has completed at least 25 percent but has not completed at least 50 percent of the licensee's total specified work commitment, as measured by the licensee's direct expenditures, the commissioner shall remove or delete, or shall require the licensee to relinquish, a portion of the area within the feasibility license; relinquishment, removal, or deletion of an area from the state land described in the feasibility license terminates the licensee's rights under AS 38.05.091 - 38.05.094 in the area 2024-05-13 House Journal Page 3091 that is relinquished, removed, or deleted; a relinquishment, removal, or deletion of a portion of the area described in the feasibility license must be in areas that are reasonably compact and contiguous; the areas relinquished from the state land described in the feasibility license must be areas identified by the licensee but, if the licensee fails to identify sufficient area, the commissioner may identify any additional acreage required to be removed or deleted from the area under license to meet the requirements of this subsection; within the area described in the feasibility license issued under (a) - (c) of this section, (A) 25 percent must be relinquished, removed, or deleted not later than the fourth anniversary of the effective date of the issuance of the feasibility license; (B) an additional 10 percent of the acreage remaining after relinquishment, removal, or deletion of acreage required by (A) of this paragraph and by previous relinquishments, removals, or deletions under this paragraph must be removed or deleted on each of the succeeding anniversaries of the effective date of the issuance of the feasibility license; (C) the cumulative total of the acreage relinquished, removed, or deleted under (A) and (B) of this paragraph may not be required to exceed 50 percent of the area described in the original feasibility license area. (e) If, immediately before the beginning of the period for annual renewal of the bond or other security under (c)(3)(A) of this section, the licensee fails to provide or maintain in effect the bond or other security required by (c) of this section for the period covered by the annual renewal and the commissioner revokes the feasibility license, the bond or other security then in effect for the licensee's obligations under the feasibility license is forfeited to the state. (f) Land and water included within an area subject to a feasibility license under this section must, to the extent practicable, remain open to (1) the public for access, hunting, fishing, and other generally allowed uses as determined by the department; and (2) other resource development, including mining. (g) Notwithstanding AS 38.05.300, state land subject to a feasibility license must remain open to mineral exploration and 2024-05-13 House Journal Page 3092 development, so long as the mineral exploration and development does not interfere with the licensee's feasibility evaluation. Issuance of a license under AS 38.05.091 - 38.05.094 does not constitute an exception to the requirements of AS 38.05.300(a). (h) In this section, (1) "direct expenditure" (A) means cash expenses undertaken in the performance of a specified work commitment under the provisions of AS 38.05.091 - 38.05.094 and necessarily incurred by the licensee in the permitting, mobilization, conducting, demobilization, and evaluation of geological, hydrological, meteorological, or other surveys, in determining the feasibility of a renewable energy project; (B) does not include noncash expenses, including depreciation and reserves, interest or other costs of borrowed funds, return on investment, overhead, insurance or bond premiums, or any other expense that is unreasonable or that the licensee has not incurred to satisfy the licensee's work commitment; (2) "work commitment" includes the gathering of data from activities described in (1) of this subsection. Sec. 38.05.093. License procedures. (a) The procedures in this section apply to the issuance of a feasibility license under AS 38.05.092. (b) The licensing process is initiated by a prospective licensee submitting a proposal to the commissioner that identifies a specific area to be subject to the feasibility license, proposes specific minimum work commitments, and states the minimum qualifications for a licensee as established by regulations adopted by the commissioner. The proposal must include (1) the specific location, description, and amount of land the prospective licensee wants included in a feasibility license; (2) a detailed summary of the proposed purpose the land will be used for; (3) all outputs, products, and byproducts likely to be generated or otherwise result from the proposed renewable energy project, whether beneficial or not; and (4) additional information and requirements established by the department in regulation, including any application fees. (c) Within 180 days after receiving a proposal from a 2024-05-13 House Journal Page 3093 prospective licensee under (b) of this section, the commissioner shall either reject the proposal in a written decision or give public notice of the intent to evaluate the acceptability of the proposal. The commissioner shall solicit comments on a proposal for which public notice is given under this subsection and shall request competing proposals. (d) The commissioner may make a written request to a prospective licensee for additional information on the prospective licensee's proposal. The commissioner shall keep confidential information described in AS 38.05.035(a)(8) that is voluntarily provided if the prospective licensee has made a written request that the information remain confidential. (e) After considering proposals not rejected under (c) of this section and public comment on those proposals, the commissioner shall issue a written finding addressing the qualifications of a prospective licensee, including whether the prospective licensee has previous experience with renewable energy projects, how the proposed project would accommodate concurrent use of the land, consistency with existing state area or management plans, and all matters set out in AS 38.05.035(e). If the finding concludes that the state's best interests would be served by issuing a feasibility license, the finding must describe the limitations, stipulations, conditions, or changes from the initiating proposal or competing proposals that are required to make the issuance of the feasibility license conform to the best interests of the state and, if only one proposal was submitted, identify the prospective licensee who the commissioner finds should be issued the feasibility license. The commissioner shall attach to the finding a copy of the feasibility license to be issued and the form of lease that will be used for any portion of the feasibility license area subsequently converted to a lease under AS 38.05.094. The commissioner may not issue a feasibility license under this section unless the written findings under AS 38.05.035(e) include (1) reasonably foreseeable effects that a renewable energy project may have on the state or local economy, including potential effects on mining, timber, and other resource development sectors; (2) anticipated annual revenue that the renewable energy project may yield to the state; (3) an assessment and consideration of the known 2024-05-13 House Journal Page 3094 mineral potential, including current claim status, within the feasibility license area; (4) the renewable energy project's value, accounting for all outputs, products, and byproducts likely to be generated or otherwise result from the project, to the state and potential revenue to the state; and (5) a summary of public comments received in response to the solicitation under (c) of this section and the department's response to those comments. (f) If only one prospective licensee submits a proposal and the commissioner's finding under (e) of this section concludes that a feasibility license should be issued to that prospective licensee, the prospective licensee has 120 days after issuance of the finding within which to accept or reject the issuance of the feasibility license, as limited or conditioned by the terms contained in the finding. The feasibility license to be issued and the form of lease that will be used must be attached to that finding. The prospective licensee must accept or reject the issuance of the feasibility license in writing. (g) If competing proposals are submitted and the commissioner's finding under (e) of this section concludes that a feasibility license should be issued, the commissioner shall issue a request for competitive sealed bids, under procedures adopted by the commissioner by regulation, to determine which prospective licensee should be issued the feasibility license. The finding provided to the prospective licensees and to the public under (e) of this section must contain notice that (1) the commissioner intends to request competitive sealed bids; (2) a prospective licensee who intends to participate in the bidding must notify the commissioner in writing by the date specified in the notice; and (3) a prospective licensee's notice of intent to participate in the bidding constitutes acceptance of issuance of the feasibility license, as limited or conditioned by the terms contained in the finding and by the feasibility license to be issued and the form of lease to be used that have been attached to that finding, if the prospective licensee is the successful bidder. The successful bidder is the prospective licensee who submits the highest bid in terms of the minimum work commitment dollar amount. (h) In this section, "work commitment" has the meaning given in AS 38.05.092(h). 2024-05-13 House Journal Page 3095 Sec. 38.05.094. Conversion to lease. (a) If the licensee requests and the commissioner determines that the work commitment obligation set out in a feasibility license issued under AS 38.05.092 has been met, the commissioner shall convert to one or more leases all or part, as the licensee may indicate, of the area described in the feasibility license that remains after the relinquishments, removals, or deletions required by AS 38.05.092(d)(2). A lease agreement must include (1) land use restrictions and authorizations consistent with the requirements of AS 38.05.092(f) relating to multiple use and mineral exploration, the purpose of the lease, and other conditions and obligations that are specified in the lease; and (2) bonding requirements the commissioner determines are sufficient to cover the costs to the department of the demolition and removal of project infrastructure and restoration of land affected by the lessee, including, as applicable, the possible costs of remediating oil or other minerals, fiberglass, microplastics, or other contamination. (b) Compensation for a lease under this section (1) shall be designed to maximize the return to the state and be a form of compensation provided under AS 38.05.073(m); (2) shall account for the costs of, or value added by, all outputs, products, and byproducts likely to be generated or otherwise result from renewable energy projects for which the lease is issued; (3) shall be separately accounted for under AS 37.05.142; and (4) may be used by the legislature to make appropriations to the department to carry out the purposes of AS 38.05.091 - 38.05.094. (c) The provisions of AS 38.05.070 and 38.05.095 concerning subleasing, assignment, lease renewals, and lease extensions apply to leasing under this section. (d) By February 1 of each year, the commissioner shall prepare a report on the lease agreements entered into under this section, transmit the report to the senate secretary and the chief clerk of the house of representatives, and notify the legislature that the report is available. The report must contain the following information: (1) the number of total leases entered into each fiscal 2024-05-13 House Journal Page 3096 year; (2) a complete list of lease information for each ongoing lease that includes (A) a general description of the location of the lease; (B) the date the lease was executed; (C) the identity of each person on the lease; (D) a summary of the underlying renewable energy project; (E) the current status of the renewable energy project; (F) a summary of the compensation agreed on for the lease and an explanation of how the amount was determined; and (G) the identity of each individual having an ownership interest in an entity on the lease; (3) a complete list of leases that expired or were terminated during the preceding or current fiscal year and the reason the lease expired or was terminated; and (4) a description of the cumulative revenue received by the state from leases, the revenue received by the state from leases during the preceding fiscal year, and the anticipated revenue the state will receive from leases in the current fiscal year. (e) In this section, "work commitment" has the meaning given in AS 38.05.092(h). * Sec. 5. AS 38.05.102 is amended to read: Sec. 38.05.102. Lessee preference. Except for a lease under AS 38.05.081 or 38.05.094, if land within a leasehold created under AS 38.05.070 - 38.05.105 is offered for sale or long-term lease at the termination of the existing leasehold, the director may, upon a finding that it is in the best interest of the state, allow a holder in good standing of the existing leasehold to purchase or lease the land for its appraised fair market value at the time of the sale or long-term lease. * Sec. 6. AS 38.05.945(a) is amended to read: (a) This section establishes the requirements for notice given by the department for the following actions: (1) classification or reclassification of state land under AS 38.05.300 and the closing of land to mineral leasing or entry under AS 38.05.185; (2) zoning of land under applicable law; 2024-05-13 House Journal Page 3097 (3) issuance of a (A) preliminary written finding under AS 38.05.035(e)(5)(A) regarding the sale, lease, or disposal of an interest in state land or resources for oil and gas, or for gas only, subject to AS 38.05.180(b); (B) written finding for the sale, lease, or disposal of an interest in state land or resources under AS 38.05.035(e)(6), except a lease sale described in AS 38.05.035(e)(6)(F) for which the director must provide opportunity for public comment under the provisions of that subparagraph; (4) a competitive disposal of an interest in state land or resources after final decision under AS 38.05.035(e); (5) a preliminary finding under AS 38.05.035(e) concerning sites for aquatic farms and related hatcheries; (6) a decision under AS 38.05.091 - 38.05.094 or 38.05.131 - 38.05.134 [AS 38.05.132 - 38.05.134] regarding the sale, lease, or disposal of an interest in state land or resources; (7) an exchange of state land under AS 38.50; (8) solicitation of competitive interest under AS 38.05.081(c). * Sec. 7. AS 38.05.945(e) is amended to read: (e) Except for a feasibility license issued under AS 38.05.091 - 38.05.094, notice [NOTICE] is not required under this section for a permit or other authorization revocable by the department. * Sec. 8. AS 38.05.965 is amended by adding a new paragraph to read: (29) "renewable energy project" means an indoor or outdoor facility that (A) requires industrial infrastructure and maintenance; and (B) produces energy that (i) is from a resource that naturally replenishes within a 100-year period; (ii) is derived from solar, water, or wind power; and (iii) minimizes the output of toxic material in the conversion of the energy." 2024-05-13 House Journal Page 3098 Page 1, line 8: Delete "Section 1" Insert "Sec. 9" Renumber the following bill sections accordingly. Page 12, line 22: Delete "sec. 14" Insert "sec. 22" Page 12, line 28: Delete "sec. 19" Insert "sec. 27" Page 12, line 29: Delete "sec. 19" Insert "sec. 27" Page 12, line 31: Delete "Section 4" Insert "Section 12" Page 13, line 1: Delete "sec. 22" Insert "sec. 30" Representative Groh moved and asked unanimous consent that Amendment No. 3 be adopted. Representative Saddler objected. The question being: "Shall Amendment No. 3 be adopted?" The roll was taken with the following result: CSHB 307(FIN) am Second Reading Amendment No. 3 YEAS: 19 NAYS: 20 EXCUSED: 1 ABSENT: 0 2024-05-13 House Journal Page 3099 Yeas: Armstrong, Dibert, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, Josephson, McCormick, Mears, Mina, Ortiz, Rauscher, Schrage, Story, Stutes, Sumner Nays: Baker, Carpenter, Carrick, Coulombe, Cronk, Eastman, Edgmon, C.Johnson, D.Johnson, McCabe, McKay, Prax, Ruffridge, Saddler, Shaw, Stapp, Tilton, Tomaszewski, Vance, Wright Excused: Allard And so, Amendment No. 3 was not adopted. Amendment No. 4 was not offered. Amendment No. 5 was offered by Representative Carpenter: Page 3, line 21: Delete "or government subsidy provided to a" Insert "for all or part of the value of an electricity generation facility or a government subsidy used to construct a new electricity transmission facility if the tax exemption or government subsidy was provided to the" Page 3, line 22, following "producer": Insert "within the preceding 10 years" Page 3, line 27, following "subsection,": Insert "(1) "government subsidy" means a direct or indirect payment from a federal or state entity; "government subsidy" does not include a loan or other financing arrangement that requires repayment; (2)" Page 3, line 28: Delete "person" Insert "legal entity" Page 3, line 29, following "electricity": Insert "with a net power production of at least five megawatts" 2024-05-13 House Journal Page 3100 Page 3, line 30, following "AS 42.45.310": Insert "or a net metering customer" Page 11, line 4, following "up": Insert "solely" Page 11, line 18: Delete "July 1, 2025" Insert "December 31, 2026" Page 12, lines 8 - 10: Delete "transfer of large-scale electrical power between or across separate geographical areas; "backbone transmission system" does not include assets that would be considered distribution facilities or radial facilities under the standards" Insert "transmission of electrical power under the Mansfield test" Representative Carpenter moved and asked unanimous consent that Amendment No. 5 be adopted. Representative Stapp objected. The question being: "Shall Amendment No. 5 be adopted?" The roll was taken with the following result: CSHB 307(FIN) am Second Reading Amendment No. 5 YEAS: 12 NAYS: 25 EXCUSED: 1 ABSENT: 2 Yeas: Baker, Carpenter, Edgmon, Hannan, McCabe, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Vance Nays: Armstrong, Carrick, Coulombe, Cronk, Dibert, Eastman, Fields, Foster, Galvin, Gray, Groh, C.Johnson, D.Johnson, Josephson, McCormick, Mears, Mina, Schrage, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Wright Excused: Allard Absent: Himschoot, Ortiz 2024-05-13 House Journal Page 3101 And so, Amendment No. 5 was not adopted. Amendment No. 6 was offered by Representative Carpenter: Page 11, line 18: Delete "2025" Insert "2026" Representative Carpenter moved and asked unanimous consent that Amendment No. 6 be adopted. Representative Stapp objected. The question being: "Shall Amendment No. 6 be adopted?" The roll was taken with the following result: CSHB 307(FIN) am Second Reading Amendment No. 6 YEAS: 10 NAYS: 27 EXCUSED: 1 ABSENT: 2 Yeas: Carpenter, Cronk, Eastman, McCabe, McKay, Prax, Ruffridge, Shaw, Tilton, Vance Nays: Armstrong, Baker, Carrick, Coulombe, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, C.Johnson, D.Johnson, Josephson, McCormick, Mears, Mina, Rauscher, Saddler, Schrage, Stapp, Story, Stutes, Sumner, Tomaszewski, Wright Excused: Allard Absent: Himschoot, Ortiz And so, Amendment No. 6 was not adopted. Amendment No. 7 was offered by Representative Carpenter: Page 12, line 10: Delete "standards" Insert "test" 2024-05-13 House Journal Page 3102 Representative Carpenter moved and asked unanimous consent that Amendment No. 7 be adopted. Representative Stapp objected. The question being: "Shall Amendment No. 7 be adopted?" The roll was taken with the following result: CSHB 307(FIN) am Second Reading Amendment No. 7 YEAS: 7 NAYS: 32 EXCUSED: 1 ABSENT: 0 Yeas: Carpenter, Eastman, McCabe, McKay, Ruffridge, Shaw, Vance Nays: Armstrong, Baker, Carrick, Coulombe, Cronk, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, D.Johnson, Josephson, McCormick, Mears, Mina, Ortiz, Prax, Rauscher, Saddler, Schrage, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Wright Excused: Allard And so, Amendment No. 7 was not adopted. Amendment No. 8 was offered by Representative McCabe: Page 1, line 6, following "Organization;" (title amendment): Insert "requiring the Alaska Energy Authority to submit a report about issuing rate reduction bonds for financing transmission system upgrades;" Page 12, following line 18: Insert a new bill section to read: "* Sec. 20. The uncodified law of the State of Alaska is amended by adding a new section to read: REPORT TO THE LEGISLATURE. (a) The Alaska Energy Authority shall, by January 1, 2025, submit a report to the legislature that (1) evaluates the feasibility of establishing the Railbelt Transmission Organization created by AS 44.83.700, added by sec. 19 of this Act, as a special purpose entity to issue long-term rate reduction bonds to finance the costs of upgrading and repairing 2024-05-13 House Journal Page 3103 transmission infrastructure that supports the backbone transmission system, as defined in AS 44.83.720, added by sec. 19 of this Act; (2) recommends methods for using a competitive transition charge to retire long-term rate reduction bonds; and (3) identifies further aspects of a statutory framework needed for rate reduction bonds, including recommended statutory provisions. (b) The Alaska Energy Authority shall submit the report required under (a) of this section to the senate secretary and the chief clerk of the house of representatives and notify the legislature that the report is available." Renumber the following bill sections accordingly. Page 12, line 31: Delete "Section 4 of this Act takes" Insert "Sections 4 and 20 of this Act take" Page 13, line 1: Delete "sec. 22" Insert "sec. 23" Representative McCabe moved and asked unanimous consent that Amendment No. 8 be adopted. Representative Stapp objected. The question being: "Shall Amendment No. 8 be adopted?" The roll was taken with the following result: CSHB 307(FIN) am Second Reading Amendment No. 8 YEAS: 28 NAYS: 11 EXCUSED: 1 ABSENT: 0 Yeas: Baker, Carpenter, Carrick, Cronk, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Himschoot, C.Johnson, D.Johnson, McCabe, McCormick, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Story, Stutes, Sumner, Tilton, Tomaszewski, Vance, Wright Nays: Armstrong, Coulombe, Eastman, Groh, Hannan, Josephson, Mears, Mina, Ortiz, Schrage, Stapp Excused: Allard 2024-05-13 House Journal Page 3104 And so, Amendment No. 8 was adopted and the new title follows: CS FOR HOUSE BILL NO. 307(FIN) am "An Act relating to the Regulatory Commission of Alaska; relating to regulation of public utilities and pipeline carriers; relating to approval of wholesale power agreements; relating to preapproval for construction of energy facilities; relating to electric reliability organizations; relating to the taxation of new electricity generation facilities; relating to the Alaska Energy Authority; relating to the Railbelt Transmission Organization; requiring the Alaska Energy Authority to submit a report about issuing rate reduction bonds for financing transmission system upgrades; and providing for an effective date." Amendment No. 9 was offered by Representative Eastman: Page 1, following line 7: Insert a new bill section to read: "* Section 1. The uncodified law of the State of Alaska is amended by adding a new section to read: LEGISLATIVE FINDINGS. The legislature recognizes the inherent conflicts, and increasing cost to ratepayers over time, of maintaining a state-supported integrated transmission system in which nonprofit electric utilities cannot withdraw profits and independent power producers can withdraw profits. Accordingly, the legislature recognizes the likelihood that, by 2038, either all independent power producers that participate in the integrated transmission system will be nonprofit entities or all utilities that participate in the integrated transmission system will be for-profit entities." Page 1, line 8: Delete "Section 1" Insert "Sec. 2" Renumber the following bill sections accordingly. Page 12, line 22: Delete "sec. 14" Insert "sec. 15" 2024-05-13 House Journal Page 3105 Page 12, line 28: Delete "sec. 19" Insert "sec. 20" Page 12, line 29: Delete "sec. 19" Insert "sec. 20" Page 12, line 31: Delete "Section 4" Insert "Section 5" Page 13, line 1: Delete "sec. 22" Insert "sec. 23" Representative Eastman moved and asked unanimous consent that Amendment No. 9 be adopted. There was objection. The question being: "Shall Amendment No. 9 be adopted?" The roll was taken with the following result: CSHB 307(FIN) am Second Reading Amendment No. 9 YEAS: 2 NAYS: 34 EXCUSED: 1 ABSENT: 3 Yeas: Eastman, McKay Nays: Armstrong, Baker, Carpenter, Carrick, Coulombe, Cronk, Dibert, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, Josephson, McCabe, McCormick, Mears, Mina, Prax, Rauscher, Ruffridge, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Vance, Wright Excused: Allard Absent: Edgmon, D.Johnson, Ortiz And so, Amendment No. 9 was not adopted. 2024-05-13 House Journal Page 3106 Amendment Nos. 10 and 11 were not offered. Amendment No. 12 was offered by Representative Ruffridge: Page 6, lines 14 - 20: Delete all material. Renumber the following bill sections accordingly. Page 12, line 22: Delete "sec. 14" Insert "sec. 13" Page 12, line 28: Delete "sec. 19" Insert "sec. 18" Page 12, line 29: Delete "sec. 19" Insert "sec. 18" Page 13, line 1: Delete "sec. 22" Insert "sec. 21" Representative Ruffridge moved and asked unanimous consent that Amendment No. 12 be adopted. Representative Stapp objected. The question being: "Shall Amendment No. 12 be adopted?" The roll was taken with the following result: CSHB 307(FIN) am Second Reading Amendment No. 12 YEAS: 8 NAYS: 30 EXCUSED: 1 ABSENT: 1 Yeas: Carpenter, Coulombe, Cronk, Eastman, McKay, Ruffridge, Tomaszewski, Vance 2024-05-13 House Journal Page 3107 Nays: Armstrong, Baker, Carrick, Dibert, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, D.Johnson, Josephson, McCabe, McCormick, Mears, Mina, Ortiz, Prax, Rauscher, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Sumner, Tilton, Wright Excused: Allard Absent: Edgmon And so, Amendment No. 12 was not adopted. Amendment No. 13 was offered by Representative Ruffridge: Page 6, following line 4: Insert a new bill section to read: "* Sec. 11. AS 42.05 is amended by adding new sections to read: Article 11A. Railbelt Transmission Organization. Sec. 42.05.900. Railbelt Transmission Organization. (a) The commission shall require the Alaska Energy Authority and the Railbelt utilities to form a Railbelt Transmission Organization for the purpose of establishing a transmission cost recovery mechanism that ensures the actual, reasonable costs of owning and operating the backbone transmission system are recovered in a manner that (1) eliminates per-unit wholesale transmission charges to increase the efficiency by which electricity service is provided; (2) eliminates multiple pancaked rates; and (3) equitably allocates costs among the load-serving entities connected to the backbone transmission system. (b) The governance structure for the transmission organization must be made up of a representative from the Alaska Energy Authority and each of the Railbelt utilities to assist in administering the system of transmission cost recovery. (c) Notwithstanding AS 44.83.090(b), the transmission organization and the Alaska Energy Authority are subject to the jurisdiction of the commission for the purposes of AS 42.05.900 - 42.05-920. The commission shall require the transmission organization to file tariffs to achieve the purposes of AS 42.05.900 - 42.05.920. Sec. 42.05.910. Revenue mechanism. (a) The transmission organization shall hold and administer a commission-approved 2024-05-13 House Journal Page 3108 open access transmission tariff that ensures nondiscriminatory access to the backbone transmission system. (b) The transmission organization shall file with the commission a transmission cost recovery methodology that ensures the reliability and sufficient capacity of the backbone transmission system to support and promote state and regional energy policies and a rigorous, dynamic economy. If the transmission organization does not file a transmission cost recovery methodology with the commission on or before July 1, 2025, the commission shall, after notice and opportunity for public comment, establish a transmission cost recovery methodology consistent with this section. (c) The cost recovery methodology for the transmission organization must, as approved by the commission, (1) pool backbone transmission system costs and allocate those costs through certificated load-serving entities on a coincident peak or load ratio share basis, or a combination of both; and (2) account for (A) required backbone transmission system ancillary services; (B) backbone transmission system congestion; (C) disruptions to the backbone transmission system that result in the isolation of one geographical area of the backbone transmission system from another for more than 24 hours; and (D) costs to own and operate the backbone transmission system, as established by the commission or by contract, including transmission costs associated with the Bradley Lake hydroelectric project. (d) A Railbelt utility shall pass the commission-approved transmission costs directly and transparently to the utility's customers. Sec. 42.05.920. Definitions. In AS 42.05.900 - 42.05.920, (1) "backbone transmission system" means the transmission assets in the Railbelt that facilitate the transfer of large-scale electrical power between or across separate geographical areas; "backbone transmission system" does not include assets that would be considered distribution facilities or radial facilities under the standards established by the Federal 2024-05-13 House Journal Page 3109 Energy Regulatory Commission; (2) "Railbelt" means the geographic region from the Kenai Peninsula to Interior Alaska that is connected to a common electric transmission backbone; (3) "Railbelt utility" means a public electric utility certificated to operate in the Railbelt; (4) "transmission organization" means the Railbelt Transmission Organization formed under AS 42.05.900." Renumber the following bill sections accordingly. Page 9, line 31: Delete "and AS 44.83.700 - 44.83.720" Page 10, line 14: Delete "AS 44.83.700(d)" Insert "AS 42.05.900(c)" Page 10, line 15: Delete ", except as provided in AS 44.83.700 - 44.83.720," Page 10, line 21, through page 12, line 18: Delete all material. Renumber the following bill sections accordingly. Page 12, line 22: Delete "sec. 14" Insert "sec. 15" Page 12, lines 27 - 28: Delete "The Railbelt utilities, as defined in AS 44.83.720, added by sec. 19 of this Act, shall" Insert "The Regulatory Commission of Alaska shall require the Railbelt utilities, as defined in AS 42.05.920, added by sec. 11 of this Act, to" Page 12, line 29: Delete "AS 44.83.700, added by sec. 19" Insert "AS 42.05.900, added by sec. 11" 2024-05-13 House Journal Page 3110 Page 13, line 1: Delete "sec. 22" Insert "sec. 21" Representative Ruffridge moved and asked unanimous consent that Amendment No. 13 be adopted. There was objection. The question being: "Shall Amendment No. 13 be adopted?" The roll was taken with the following result: CSHB 307(FIN) am Second Reading Amendment No. 13 YEAS: 6 NAYS: 33 EXCUSED: 1 ABSENT: 0 Yeas: Carpenter, Eastman, McKay, Ruffridge, Saddler, Vance Nays: Armstrong, Baker, Carrick, Coulombe, Cronk, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, D.Johnson, Josephson, McCabe, McCormick, Mears, Mina, Ortiz, Prax, Rauscher, Schrage, Shaw, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Wright Excused: Allard And so, Amendment No. 13 was not adopted. Amendment No. 14 was offered by Representative Sumner: Page 1, line 2 (title amendment): Delete "and" Insert "," Following "carriers": Insert ", and liquefied natural gas import facilities" Page 3, line 13: Delete "a new subsection" Insert "new subsections" 2024-05-13 House Journal Page 3111 Page 3, following line 16: Insert a new subsection to read: "(q) For rate-making purposes, the commission shall not consider the investment of a public utility in a liquefied natural gas import facility as utility property, even if the liquefied natural gas import facility is exempt from regulation by the commission. In this subsection, (1) "investment" includes an investment in land used to connect to a liquefied natural gas import facility used by the public utility to render service to the public; (2) "liquefied natural gas import facility" includes a facility used to receive or unload natural gas or to store, transport, gasify, liquefy, or process received or unloaded natural gas." Representative Sumner moved and asked unanimous consent that Amendment No. 14 be adopted. There was objection. The question being: "Shall Amendment No. 14 be adopted?" The roll was taken with the following result: CSHB 307(FIN) am Second Reading Amendment No. 14 YEAS: 38 NAYS: 1 EXCUSED: 1 ABSENT: 0 Yeas: Armstrong, Baker, Carpenter, Carrick, Coulombe, Cronk, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, D.Johnson, Josephson, McCabe, McCormick, McKay, Mears, Mina, Ortiz, Prax, Rauscher, Ruffridge, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Vance, Wright Nays: Eastman Excused: Allard And so, Amendment No. 14 was adopted and the new title follows: CS FOR HOUSE BILL NO. 307(FIN) am "An Act relating to the Regulatory Commission of Alaska; relating to regulation of public utilities, pipeline carriers, and 2024-05-13 House Journal Page 3112 liquified natural gas import facilities; relating to approval of wholesale power agreements; relating to preapproval for construction of energy facilities; relating to electric reliability organizations; relating to the taxation of new electricity generation facilities; relating to the Alaska Energy Authority; relating to the Railbelt Transmission Organization; requiring the Alaska Energy Authority to submit a report about issuing rate reduction bonds for financing transmission system upgrades; and providing for an effective date." Representative Saddler moved and asked unanimous consent that CSHB 307(FIN) am be considered engrossed, advanced to third reading, and placed on final passage. There was objection. CSHB 307(FIN) am will advance to third reading on tomorrow's calendar.