Legislature(2023 - 2024)ADAMS 519
04/23/2024 10:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB223 | |
| HB202 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 19 | TELECONFERENCED | |
| += | HB 223 | TELECONFERENCED | |
| + | HB 202 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 23, 2024
10:21 a.m.
10:21:25 AM
CALL TO ORDER
Co-Chair Edgmon called the House Finance Committee meeting
to order at 10:21 a.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
Representative Neal Foster, Co-Chair
ALSO PRESENT
Brodie Anderson, Staff, Representative Neal Foster; John
Crowther, Deputy Commissioner, Department of Natural
Resources; Emily Nauman, Director, Legislative Legal
Services; Savaya Bieber, Staff, Representative DeLena
Johnson; Lindsey Kato, Director, Division of Public Health,
Department of Health.
PRESENT VIA TELECONFERENCE
Mark Slaughter, Chief Commercial Officer, HEX/Furie,
Anchorage; Benjamin Johnson, President and CEO, BlueCrest
Energy, Inc., Dallas, Texas.
SUMMARY
HB 19 REGISTRATION OF BOATS: EXEMPTION
HB 19 was SCHEDULED but not HEARD.
HB 202 OPIOID OVERDOSE DRUGS IN SCHOOLS
HB 202 was HEARD and HELD in committee for
further consideration.
HB 223 TAX and ROYALTY FOR CERTAIN GAS
HB 223 was HEARD and HELD in committee for
further consideration.
Co-Chair Edgmon reviewed the meeting agenda. He noted that
Co-Chair Foster was out of town and HB 19 would be heard at
a later date. He noted there was a hard stop at about 11:25
a.m.
HOUSE BILL NO. 223
"An Act relating to the production tax and royalty
rates on certain gas; and providing for an effective
date."
10:23:49 AM
Co-Chair Johnson MOVED to ADOPT the proposed committee
substitute (CS) for HB 223, Work Draft 33-LS0886\D (Nauman,
4/22/24).
Co-Chair Edgmon OBJECTED for discussion. He asked Co-Chair
Foster's staff to explain the CS.
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER,
explained the changes in the CS.
10:28:50 AM
Co-Chair Edgmon asked if Mr. Crowther had any comments.
JOHN CROWTHER, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, shared that DNR viewed the changes as technical
in nature and appropriate.
Co-Chair Edgmon asked to hear from Emily Nauman with
Legislative Legal Services.
EMILY NAUMAN, DIRECTOR, LEGISLATIVE LEGAL SERVICES,
addressed a memo in members' packets (copy on file).
10:33:11 AM
Representative Josephson wondered whether it was known that
there were productive fields in the upper Cook Inlet at the
time of statehood.
Ms. Nauman agreed that the court specifically said that the
revenue generation from resource production would fund
state government. She stressed that there would be revenue
granted from mineral land granted to the state at the time
of statehood, but she did not have any information about
whether Cook Inlet was included in that.
Representative Josephson used the example of oil developed
at Kitchen Lights, which was immediately adjacent to other
gas development. He wondered if that location would be
considered "known at the time of statehood."
Ms. Nauman replied that she did not know. She stressed that
there was not a lot of other information provided in the
case.
Co-Chair Edgmon asked Ms. Nauman to continue the review.
Ms. Nauman continued her review of the memo.
10:37:23 AM
Representative Stapp asked about the best interest finding.
Ms. Nauman responded that the court in the case would lean
heavily on what the legislature believed to be in the best
interest of the people.
Representative Josephson asked if the amendment referred to
the CS.
Ms. Nauman corrected that the memo should refer to the
Resources CS.
Co-Chair Johnson asked about the correction she made.
Ms. Nauman replied that the word "amendment" in the memo
should be the Senate Resources CS. She noted the word
"amendment" also appeared in the final line of the memo and
should also be replaced to refer to the current version of
the bill.
10:40:17 AM
Representative Hannan asked about the maximum benefit of
the people, and how the benefit would be measured would be
defined in statute. She asked if it would be up to the
commissioner to define it.
Ms. Nauman answered that the memo discussed different ways
that the commissioner could make a written statement to
declare the legislation to be "in the best interest of the
state." She felt that an equally sufficient way would be to
develop a legislative record to demonstrate that the
royalty regime would benefit the people, even though it
would be outside of the typical royalty structure.
MARK SLAUGHTER, CHIEF COMMERCIAL OFFICER, HEX/FURIE,
ANCHORAGE (via teleconference), shared details of the
natural gas development produced by Hex and Furie within
Cook Inlet. He detailed that the Kitchen Lights unit was
the most burdened unit in Cook Inlet. The combined royalty
was 25 percent, which was almost twice as much as any other
unit in Cook Inlet. He shared that HB 223 would allow it to
become more economic, and become more competitive with
other investment opportunities.
10:45:14 AM
Mr. Slaughter continued his testimony, and stressed that
the legislature would make the Kitchen Lights unit more
attractive for investment.
Representative Stapp asked what the limiting factor was for
the company.
Mr. Slaughter could not answer how many wells the other
company was not drilling.
Representative Stapp asked how the company would gain more
access to the rig if the legislation passed.
Mr. Slaughter responded that currently Hilcorp had the rig
under contract. Hilcorp had communicated it would make the
rig available to Furie.
10:48:26 AM
Representative Josephson stated that the state could forego
some of the royalty, overriding royalty that was not the
state's.
Mr. Slaughter confirmed that the company had an additional
12.5 percent royalty.
Representative Josephson asked if the company would still
be paying a royalty to another party.
Mr. Slaughter answered in the affirmative. It would still
pay the 12.5 percent royalty but, testified in a Senate
committee asking for the needle to be moved to get the
company into the competitive range.
Representative Josephson asked what capacity could be
produced that met South Central's need. He asked if the
bill was part of the answer to the coming deficits or the
entire answer. He asked how the company would produce and
store any excess gas.
Mr. Slaughter responded that they were just part of the
solution. There was 300 bcf of gas that could also
alleviate the pressure.
10:51:37 AM
Representative Hannan wondered whether a five-year state
royalty relief would be acceptable.
Mr. Slaughter responded that the 10-year timeline was
important for the bill, because it gave time for investment
decisions and the company could not have alternatives in
place within the five year window.
Representative Hannan did not know who the other royalty
was for 12.5 percent. She asked if they were seeking
royalty relief from that amount.
Mr. Slaughter answered they were individuals and investment
companies, and stated that two individuals said they would
match what the state did. He was not optimistic they would
relinquish the royalty.
Representative Hannan stated it concerned her that outside
or alternate investors would not make a reduction, while
the state was being asked to reduce its royalty to zero.
10:55:17 AM
Representative Galvin queried the process for estimating
the well production, and asked for the size of the range
with or without the bill.
Mr. Slaughter replied that there was an estimate of an
added 5000 cubic feet of gas per day, so it would increase
to 16,000 cubic feet. The bill would allow for more active
drilling.
Representative Galvin observed that the company had plans
to grow. She asked where the investment would come from.
Mr. Slaughter responded that the company was looking at
self-funding the wells. The company was looking to secure
additional financing, which would free up funds and
accelerate development. He did not know the rate of return
the investors would be looking at.
Representative Josephson queried the firm contracts.
Mr. Slaughter replied there was currently a firm commitment
through March 31, 2025 with Enstar.
10:59:16 AM
BENJAMIN JOHNSON, PRESIDENT AND CEO, BLUECREST ENERGY,
INC., DALLAS, TEXAS (via teleconference), shared that he
grew up in Kenai, Alaska and worked for Arco for many
years. He had joined others in creating BlueCrest Energy,
and bought out Pioneer's interest in 2012. The company had
drilled and resulted in a well that was the most prolific
in decades.
11:03:00 AM
Representative Stapp asked if the company had received a
loan from Alaska Industrial Development and Export
Authority (AIDEA).
Mr. Johnson replied affirmatively.
Representative Stapp asked why the company did not think to
approach AIDEA for another loan of $100 million.
Mr. Johnson replied that the company had talked to AIDEA
and at present they did not know how it would work.
Representative Stapp asked what "talk to them" meant.
Mr. Johnson answered that so far AIDEA had stated they
could not make the loan.
Representative Stapp stated his understanding that AIDEA
had not shown enough interest in the Cook Inlet.
Mr. Johnson answered not exactly, but they had not been
aggressive about wanting to loan money.
Representative Stapp stated his trouble with the whole
scheme was that he did not know why AIDEA would not be more
interested in investing, if investors wanted less state
take they were arguing for better return. He asked why the
state should take less money.
11:06:29 AM
Mr. Johnson responded that the gas projects were not highly
economic like oil fields.
Representative Josephson asked for a comparison of the
royalty reduction program and the reserve/asset-based loan
concept.
Mr. Johnson replied that one of the concerns they heard
from out of state investors was that the legislature could
change the law. He remarked that if a company put $500
million into a project and the royalty relief was changed
the following year - it was risky.
Representative Josephson wondered whether the reserve base
loan program from AIDEA would be of interest.
Mr. Johnson would be happy to work with AIDEA, but he could
not speak for its board.
Representative Josephson asked for the company's production
capacity at the Cosmopolitan well.
Mr. Johnson answered about 50 million cubic feet per day up
to 65 if there was pipeline capacity.
Representative Hannan asked for the current royalties on
Cosmopolitan.
Mr. Johnson answered there was a 12.5 state royalty. There
was an additional royalty resulting in just under 20
percent royalty.
Representative Hannan asked if Mr. Johnson had talked with
the others about reducing their royalty.
Mr. Johnson answered in the negative and noted they had not
heard anyone interested in doing so.
11:11:56 AM
Co-Chair Edgmon OPENED public testimony.
Co-Chair Edgmon CLOSED public testimony.
Co-Chair Edgmon set an amendment deadline of Friday, April
26 at 5:00 p.m. He recognized Representative George
Rauscher in the room.
HB 223 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 202
"An Act relating to the availability and
administration of opioid overdose drugs in public
schools."
11:13:17 AM
REPRESENTATIVE DELENA JOHNSON, SPONSOR, introduced the bill
with prepared remarks. She asked her staff to review the
sectional analysis.
SAVAYA BIEBER, STAFF, REPRESENTATIVE DELENA JOHNSON,
reviewed the sectional analysis (copy on file):
Section 1 amends AS 14.30 by adding a new section:
AS 14.30.145(a) requires each school district to
ensure a person who is trained to administer an opioid
overdose drug is on site when the main school building
is open to the public before and after school, during
each school-sponsored event, and weekend activities
that are conducted on school grounds. This section
also requires each main school building to keep at
least two doses of an opioid overdose drug on site and
at least one dose available during school sponsored
events on school grounds.
AS 14.30.145(b) would require the Department of Health
to provide each school district with the opioid
overdose drug and requires the Commissioner of Health
to develop and provide a training video to each school
district.
AS 14.30.145(c) adds language protecting schools from
civil damages for an injury resulting from failure to
possess or maintain an opioid overdose drug.
AS 14.30.145(d) defines the terms "main school
building", "opioid overdose drug", "school district",
and "school grounds".
Section 2 amends AS 17.20.085 by adding a new
paragraph:
AS 17.20.085(e)(5) defines the term "school district"
Section 3 amends AS 17.20.085 by adding new
subsections:
Notwithstanding a provision or rule of law to the
contrary, AS 17.20.085(f) allows a school district, if
acting under a standing order or protocol under (a) or
(c) of this section, may receive a supply of opioid
overdose drugs from the department and may possess
opioid overdose drugs for the purposes of AS
14.30.145.
Notwithstanding a provision or rule of law to the
contrary, AS 17.20.085(g) allows a school district
acting under (a) or (c) of this section to administer
an opioid overdose drug under AS 14.30.145 to a person
at risk of experiencing an opioid overdose.
11:17:52 AM
Co-Chair Edgmon OPENED public testimony.
Co-Chair Edgmon CLOSED public testimony.
Representative Coulombe asked about the liability.
Co-Chair Johnson responded that if someone was dying it was
not consent, it fell under the Good Samaritan Act.
LINDSEY KATO, DIRECTOR, DIVISION OF PUBLIC HEALTH,
DEPARTMENT OF HEALTH, introduced herself.
Representative Coulombe repeated her question.
Ms. Kato answered that it would be covered under the Good
Samaritan law.
Representative Coulombe asked even if it was a minor.
Ms. Kato replied affirmatively.
Representative Ortiz asked whether they kept opioid
overdose kits in schools.
Co-Chair Johnson answered that the discussion had been had
in the House Education committee, and there had been an
amendment made to go through the Department of Health
(DOH). She stated that there were numerous videos and it
was a nasal spray that was easy to administer. There was a
potential 15 minute one time training for teachers and
staff.
11:23:43 AM
Representative Ortiz asked about rural areas without school
nurses. He asked if there would be a way to cover the
scenario.
Co-Chair Johnson replied that it was one of the things she
had not initially thought of, but she believed it was a
reason for the importance of the bill.
Ms. Bieber replied that they talked about the issue in the
Education Committee. She stated that there were 16 public
health centers and 15 of those were staffed with public
health nurses.
Co-Chair Edgmon relayed that the bill would come before the
committee again. He set an amendment deadline for Friday,
April 26 at 5:00 p.m.
HB 202 was HEARD and HELD in committee for further
consideration.
Co-Chair Edgmon reviewed the schedule for the afternoon
meeting.
ADJOURNMENT
11:26:47 AM
The meeting was adjourned at 11:26 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 202 Research - DOH Opioid Data Dashboard 09.22-08.23.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 202 |
| HB 202 Research - ASD Overdose Kits in Schools 3.28.24.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 202 |
| HB 202 AMHB.ABADA Letter of support 4.15.24.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 202 |
| HB 202 Research - CDC Naloxone Info 3.21.24.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 202 |
| HB 202 Sectional Analysis Ver U 4.18.24.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 202 |
| HB 202 Sponsor Statement Ver U 4.18.24.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 202 |
| HB 202 Summary of Changes from S to U 4.18.24.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 202 |
| HB 223 Legal Opinion 042224.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 223 |
| HB 223 Testimony Marathon Petroleum 042224.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 223 |
| HB 223 CS Workdraft FIN v.D 042224.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 223 |
| HB 202 Public Testimony Rec'd by 042424.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 202 |
| HB 223 Public Testimony Rec'd by 042424.pdf |
HFIN 4/23/2024 10:00:00 AM |
HB 223 |