03/06/2025 03:15 PM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB43 | |
| HB91 | |
| HB81 | |
| HB119 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 43 | TELECONFERENCED | |
| += | HB 81 | TELECONFERENCED | |
| += | HB 91 | TELECONFERENCED | |
| *+ | HB 119 | TELECONFERENCED | |
| += | HB 30 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 6, 2025
3:19 p.m.
DRAFT
MEMBERS PRESENT
Representative Ashley Carrick, Chair
Representative Andi Story, Vice Chair
Representative Rebecca Himschoot
Representative Ky Holland
Representative Sarah Vance
Representative Kevin McCabe
Representative Elexie Moore
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Carolyn Hall
Representative Jubilee Underwood
COMMITTEE CALENDAR
SENATE BILL NO. 43
"An Act establishing the month of March as Women's History
Month."
- MOVED SB 43 OUT OF COMMITTEE
HOUSE BILL NO. 91
"An Act relating to the lawful operation of retail marijuana
stores; relating to marijuana cultivation; relating to the
registration of marijuana establishments; relating to marijuana
taxes; relating to the duties of the Department of Revenue; and
providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 81
"An Act restricting the release of certain records of
convictions; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 119
"An Act relating to an in-state natural gas pipeline developed
by the Alaska Gasline Development Corporation; and providing for
an effective date."
- HEARD & HELD
HOUSE BILL NO. 30
"An Act establishing the office of entrepreneurship; relating to
new businesses in the state; relating to reports concerning
procurements by agencies; and relating to initial business
license fees for new businesses in the state."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 43
SHORT TITLE: WOMEN'S HISTORY MONTH
SPONSOR(s): SENATOR(s) GRAY-JACKSON
01/22/25 (S) PREFILE RELEASED 1/17/25
01/22/25 (S) READ THE FIRST TIME - REFERRALS
01/22/25 (S) STA
02/18/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg)
02/18/25 (S) Heard & Held
02/18/25 (S) MINUTE(STA)
02/25/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg)
02/25/25 (S) Moved SB 43 Out of Committee
02/25/25 (S) MINUTE(STA)
02/26/25 (S) STA RPT 5DP
02/26/25 (S) DP: KAWASAKI, WIELECHOWSKI, GRAY-
JACKSON, BJORKMAN, YUNDT
03/03/25 (S) TRANSMITTED TO (H)
03/03/25 (S) VERSION: SB 43
03/05/25 (H) READ THE FIRST TIME - REFERRALS
03/05/25 (H) STA
03/06/25 (H) STA AT 3:15 PM GRUENBERG 120
BILL: HB 91
SHORT TITLE: MARIJUANA: TAX/RETAIL STORES/REGISTRATION
SPONSOR(s): REPRESENTATIVE(s) CARRICK
02/10/25 (H) READ THE FIRST TIME - REFERRALS
02/10/25 (H) STA, FIN
02/18/25 (H) STA AT 3:15 PM GRUENBERG 120
02/18/25 (H) Scheduled but Not Heard
02/22/25 (H) STA AT 1:00 PM GRUENBERG 120
02/22/25 (H) Heard & Held
02/22/25 (H) MINUTE(STA)
02/25/25 (H) STA AT 3:15 PM GRUENBERG 120
02/25/25 (H) Heard & Held
02/25/25 (H) MINUTE(STA)
03/06/25 (H) STA AT 3:15 PM GRUENBERG 120
BILL: HB 81
SHORT TITLE: ACCESS TO MARIJUANA CONVICTION RECORDS
SPONSOR(s): REPRESENTATIVE(s) NELSON
02/03/25 (H) READ THE FIRST TIME - REFERRALS
02/03/25 (H) STA, JUD
02/27/25 (H) STA AT 3:15 PM GRUENBERG 120
02/27/25 (H) <Bill Hearing Canceled>
03/06/25 (H) STA AT 3:15 PM GRUENBERG 120
BILL: HB 119
SHORT TITLE: GAS PIPELINE FAIRBANKS SPUR
SPONSOR(s): REPRESENTATIVE(s) STAPP
02/26/25 (H) READ THE FIRST TIME - REFERRALS
02/26/25 (H) STA, RES
03/06/25 (H) STA AT 3:15 PM GRUENBERG 120
WITNESS REGISTER
SENATOR ELVI GRAY-JACKSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, introduced SB 43.
STUART RELAY, Staff
Representative Ashley Carrick
Alaska State Legislature
POSITION STATEMENT: Answered questions pertaining to HB 91 on
behalf of Representative Carrick, prime sponsor.
BRANDON SPANOS, Deputy Director
Tax Division
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Answered questions pertaining to HB 91.
BAILEY STUART, Chair
Alcohol & Marijuana Control Office
Anchorage, Alaska
POSITION STATEMENT: Answered questions pertaining to HB 91.
REPRESENTATIVE DAVID NELSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 81.
BOGDAN GILMUTDINOV, Staff
Representative David Nelson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of the prime sponsor,
Representative Nelson, offered the sectional analysis for HB 81.
LISA PURINTON, Director
Division of Statewide Services
Department of Public Safety
Anchorage, Alaska
POSITION STATEMENT: Answered questions pertaining to HB 81.
DAVID MORGAN, Legislative Affairs
Reason Foundation
Atlanta, Georgia
POSITION STATEMENT: Gave invited testimony in support of HB 81.
REPRESENTATIVE WILL STAPP
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 119.
BERNARD AOTO, Staff
Representative William Stapp
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of prime sponsor, Representative
Stapp, answered questions about HB 119.
FRANK RICHARDS, President
Alaska Gasline Development Corporation
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to HB 119.
ACTION NARRATIVE
3:19:04 PM
CHAIR ASHLEY CARRICK called the House State Affairs Standing
Committee meeting to order at 3:19 p.m. Representatives
Carrick, Story, Himschoot, Holland, Vance, and Moore were
present at the call to order. Representative McCabe arrived as
the meeting was in progress.
SB 43-WOMEN'S HISTORY MONTH
3:19:51 PM
CHAIR CARRICK announced that the first order of business would
be SENATE BILL NO. 43, "An Act establishing the month of March
as Women's History Month."
3:20:35 PM
SENATOR ELVI GRAY-JACKSON, Alaska State Legislature, as prime
sponsor, introduced SB 43. She thanked committee members for
hearing the bill and stated that it is important to formerly
recognize this important observance in state statute. With more
women serving in the legislature that ever before, there is a
responsibility to uphold and expand this representation. By
making this month formalized the legislature can ensure that its
daughters and grand-daughters can see themselves as vital
contributors to Alaska's future. Honoring Women's History Month
would reaffirm the states commitment to equality, empowerment,
and the enduring impact of women in our state.
3:21:48 PM
CHAIR CARRICK opened public testimony on SB 43. After
ascertaining that there was no one who wished to testify, she
closed public testimony.
3:23:00 PM
REPRESENTATIVE STORY moved to report SB 43 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, SB 43 was reported out of the House
State Affairs Standing Committee.
3:23:28 PM
The committee took an at-ease from 3:23 p.m. to 3:26 p.m.
HB 91-MARIJUANA: TAX/RETAIL STORES/REGISTRATION
[Includes discussion of HB 113]
3:26:09 PM
CHAIR CARRICK announced that the next order of business would be
HOUSE BILL NO. 91, "An Act relating to the lawful operation of
retail marijuana stores; relating to marijuana cultivation;
relating to the registration of marijuana establishments;
relating to marijuana taxes; relating to the duties of the
Department of Revenue; and providing for an effective date."
CHAIR CARRICK, as prime sponsor of HB 91, noted that her staff
had uploaded various documents pertaining to the bill onto the
legislature's Bill Action Status Inquiry System (BASIS) [copies
in the committee file]. These include a list from the
Department of Health (DOH) that includes the grant recipients
that receive money from the recidivism reduction fund (RRF) and
the marijuana education and treatment fund (METF).
Additionally, fiscal modeling was provided to illustrate
projected revenue from a 6 percent sales tax, and this was
created by the House Majority counsel staff following bill
concept discussions during the Thirty-Third Alaska State
Legislature.
3:27:41 PM
REPRESENTATIVE VANCE asked about the current number of growers
and retailers and whether it was the right capacity to sustain a
tax since they were carrying a heavy burden currently. She also
asked how HB 91 came to be.
STUART RELAY, Staff, Representative Ashley Carrick, on behalf of
Representative Carrick, prime sponsor of HB 91, offered his
understanding that the modeling was based off the industry and
the number of members in the industry. It also details the
amount of products sold when the industry was originally created
which was around one year prior. He opined that the information
was still good regarding current tax structure discussions.
CHAIR CARRICK added the Brandon Spanos could speak to potential
revenue from the tax, even if not related to the document.
3:30:30 PM
BRANDON SPANOS, Deputy Director, Tax Division, Department of
Revenue (DOR), to Representative Vance's previous question
focusing on the proposed tax change and the state's capacity and
potential capacity, spoke to the modeling completed by the
Department of Revenue and the modeling provided to the committee
from the last legislative session, from Cody Rice. He said he
did not agree with the fiscal modeling and said there were
differences. He said that DOR presented those differences to
the House Finance Committee last year and would be happy to do
so again. He suggested inviting Dan Stickell to explain those
differences since he had done the department's modeling and had
spoken in depth with Cody Rice to understand the other modeling.
He recollected that there had been around 150 cultivators and
there currently were approximately 130. He said while he
couldn't perfectly recall the numbers, they are published on the
Alcohol & Marijuana Control Office (AMCO) website for public
viewing.
REPRESENTATIVE VANCE said that any information Mr. Spanos could
provide for the committee would be good. She said she was
looking for some broad information regarding switching an excise
tax type to a sales tax type. She remarked that the sales tax
would "hit" the purchasers more. She asked Mr. Spanos whether
he could foresee this type of change when looking at this
modeling.
MR. SPANOS replied that DOR's modeling is based off numbers that
were received from AMCO as far as retail sales year after year
and currently the modeling was being updated, and the spring
forecast was going to come out soon, as well as the fiscal notes
pertaining to marijuana, once released. He said that newer data
from AMCO on the retail and cultivation side was available as
well. He reiterated that information was in the process of
being updated and the department's Economic Research Group (ERG)
was currently occupied with other projects. He noted that the
information comes from AMCO and there was no direct interaction
with industry members.
REPRESENTATIVE VANCE noted that she pulled up a fiscal note that
estimates a reduction of $9.9 million for 2026. She asked what
this number was based on and whether it was AMCO and whether it
was consistent with what AMCO is seeing.
MR. SPANOS responded that he did not believe AMCO had done any
modeling regarding tax changes and DOR's ERG typically do these
models. He said that AMCO provides retail sales data to allow
ERG to complete economic modeling. He said the fiscal year 2026
(FY 26) impact is a combination of moving to the $12.50 an ounce
excise tax and a later change to sales tax. He said 2027 would
be the first year of just the retail sales impact for these
changes.
REPRESENTATIVE VANCE noted that based on the fiscal modeling,
the revenue would continue to go down in later years.
3:36:19 PM
REPRESENTATIVE HOLLAND asked what the speculated change may be
for consumer pricing following the excise tax to sales tax
change. He asked whether it would change and if any consumer-
based data was available that suggests a return in demand. He
said it seems as if the change was "who pays the tax when." He
said that when the consumer gets the wallet out and the price
doesn't change, it may not disincentivize black market purchases
and still maintain a loss in state revenue. He asked who was
testing the demand side of this fiscal modeling and studying
consumer behavior to understand whether demand would change.
CHAIR CARRICK responded that this question could potentially be
for Bailey Stuart with AMCO. She noted that the marijuana
industry has been divided regarding tax structures, even with
bill discussions in the previous legislature. She said that she
has heard similar concerns from industry members but opined that
the excise tax is unequivocally burdensome to cultivators.
3:39:04 PM
BAILEY STUART, Chair, Alcohol & Marijuana Control Office,
responded to Representative Holland that there have not been any
studies done specific to the consumer but there was some
anecdotal evidence that can be determined from the Alaska State
Troopers Annual Drug Report that shows black market growth and
the increase in consumer demand. She said that in 2023 there
were about 180 pounds of marijuana seized whereas last year in
2024 there were about 316 pounds seized. She noted that
cannabis prices per ounce in legitimate businesses can range
from $250 to $450 whereas black market prices are often $100 an
ounce which renders the black market difficult to compete with.
She said there needs to be a reduction in taxation to help the
industry be sustainable. She said that there are very few
unregulated industries in Alaska that pull consumers in the same
fashion. She opined that these industry members want to be
taxpayers, create jobs, and have sustainable businesses but the
current tax structure is making it impossible.
REPRESENTATIVE HOLLAND asked Ms. Stuart what she thought the
price per ounce may be with the current tax structure and
following tax changes.
MS. STUART responded that the current average is about $300 per
ounce in a retail setting and given the proposed tax changes the
price could be reduced between $30 to $40 an ounce. She said
despite this, unregulated and untaxed markets would still be in
competition.
CHAIR CARRICK added that HB 91 would not layer an excise tax and
a sales tax on top of one another and the proposed bill would
phase out current excise taxes to zero dollars per ounce with a
later addition of a sales tax.
REPRESENTATIVE HOLLAND noted that he may not have the most
recent paperwork in front of him. He said what he is reading
proposed that it moves an excise tax to $12.50 an ounce.
MR. RELAY added that the proposed bill would move the excise tax
down from $50 an ounce to $12.50 an ounce effective July 1,
2025. January 1, 2026, the excise tax would be repealed. He
noted that after excise tax changes would be later repealed with
the implementation of a sales tax.
3:44:00 PM
REPRESENTATIVE MCCABE said that what he has heard from industry
affiliates is that the necessary goal is to limit the amount of
money that the black market will make to drive the industry back
into the legal framework. He noted that Ms. Stuart said exactly
what he had heard, which is that frustrated growers are having
to shoulder the burden while the black market harms them. He
said that it is one big pie and the black market has a large
slice that needs to go back into retail.
3:45:18 PM
REPRESENTATIVE HOLLAND said that he was looking for any data
that would suggest that supply and demand would change given the
tax adjustments. He said that it appears that the taxes would
get moved from the producers to the consumers. He said that the
consumer price probably would not change much, and this would
suggest that the black market would still be strong. He raised
concerns about the supply and demand curve.
CHAIR CARRICK responded to Representative Holland that this
sentiment echoes part of what Ms. Stuart was getting at, that
the legislation is trying to address several issues happening in
the marijuana industry. This includes black market demand and
the current volatility of the industry given the current excise
tax structure for cultivators.
REPRESENTATIVE HOLLAND said that he has concerns about adding
more sales taxes into retail markets that already have local
sales taxes. He said that he has a bias for allowing local
jurisdictions to have sales taxes managed to their own accord.
CHAIR CARRICK said that she did not love sales taxes either but
the proposed legislation was about attempting to stabilize the
industry.
3:49:13 PM
REPRESENTATIVE MCCABE said that it seems to him that every
single department in the state has managed to generate a fiscal
note for the bill and everyone was getting on board. He asked
whether there was a better way to solve the payment issue rather
than creating a new office in four districts. He said that at
some point lots of people were flying with cash. He asked if
there was a better way than four new offices priced at $1
million each.
3:50:04 PM
The committee took a brief at-ease at 3:50 p.m.
3:50:54 PM
MR. RELAY proffered that the initial start-up costs per fiscal
note would be about $1 million, after which the cost would be
about $500,000 "for operations." He noted that in Anchorage
there would be no cost since collections already occur there.
3:51:28 PM
REPRESENTATIVE VANCE said that it appears as if the legislation
would create larger profit margins for growers and handing costs
to the retailers. She asked whether AMCO has had a conversation
regarding motivation for the growers to reduce their cost to the
retailers so overall they can support one another. She said the
growers are trying to maintain a profit margin. She said the
needed result is the lower cost so people will choose the safer
retail markets as opposed to the black market. She asked
whether conversations had occurred regarding this; she said that
it could be perceived as unfair.
MR. RELAY responded that this kind of structure of the reduction
of the excise tax and then the implementation of the sale tax
was the recommendation of the Governor's Advisory Taskforce on
Recreational Marijuana, and this is where the original version
of the bill came from. The current bill builds off those
conversations from the previous bill concept.
CHAIR CARRICK added that the current excise tax structure
creates a tight ceiling on how much manufacturers and retailers
can purchase. She said that alleviating this challenge is
significant for all parts of the industry. She said this may be
the reason there was minimal pushback from the retail side of
the industry during the previous legislature's hearing of the
bill concept, during the Thirty-Third Alaska State Legislature.
She stated that the ceiling on cultivated products is partially
due to the excise tax structure and relief would have bigger
downstream impacts. She noted that the recommendation from the
aforementioned taskforce was 3 percent.
3:55:18 PM
REPRESENTATIVE HIMSCHOOT commented that she reached out to a
marijuana industry affiliate in Sitka who has worked at the
statewide level. The affiliate was in strong support of the
proposed bill's shift from an excise to a sales tax. Traveling
to Juneau for deposits would be considerably easier than going
all the way to Anchorage. She said that she supports HB 91.
3:56:26 PM
REPRESENTATIVE HOLLAND noted that HB 113, which is not directly
related to this proposed bill but the primary beneficiary of the
tax reduction bill was marijuana businesses. He said that half
of the qualified small business taxes were from marijuana
retailers. He asked whether, in the analysis of this market
segment, consideration of HB 113 had been given during
discussions on HB 91.
CHAIR CARRICK noted that the current legislation, HB 91, was
modeled after legislation that passed through the committee in
the Thirty-Third Alaska State Legislature, and it was the
current starting point for bill discussions. She said that it
is something that the industry has advocated for and what most
members in the current body had previously supported.
3:58:28 PM
CHAIR CARRICK set an amendment deadline for HB 91 and, after
ascertaining that there were no additional questions, announced
that HB 91 was held over.
3:58:52 PM
The committee took an at-ease from 3:58 p.m. to 3:59 p.m.
HB 81-ACCESS TO MARIJUANA CONVICTION RECORDS
3:59:22 PM
CHAIR CARRICK announced that the next order of business would be
HOUSE BILL NO. 81, "An Act restricting the release of certain
records of convictions; and providing for an effective date."
4:02:27 PM
REPRESENTATIVE DAVID NELSON, Alaska State Legislature, as prime
sponsor, presented HB 81. He said the proposed bill is an
important step in providing an opportunity for people with low-
level misdemeanor marijuana possession convictions on their
record to make more significant economic impact to their state.
He remarked that hardworking Alaskans face barriers to
employment, housing, license acquisition, and even volunteering
opportunities, leaving them to be unable to make full
contributions to the communities. According to a National
Conference of State Legislators (NCSL) report, as of 2023, 28
states have produced legislation that applies specifically to
the confidentiality of records pertaining to certain marijuana-
related offenses. He said that at a time when Alaska is
struggling to find qualified workers to fill job openings, the
state should not be excluding individuals based on these
criteria. He said that HB 81 would make certain marijuana
possession convictions confidential on basic background checks
while keeping those convictions available. He noted that
qualified individuals who are 21 or older at the time of the
crime, possess one ounce of cannabis or less, and have not been
convicted of another crime would be able to contact the
Department of Public Safety (DPS) to make those crimes on their
record confidential. He clarified that this would not expunge
or remove the crimes from their record. He said that the
proposed bill would give DPS until January 1, 2028, to edit its
database and amend its records in accordance with the proposed
bill. He noted that this would require hiring a contractor to
make programming changes as well as a criminal justice
technician to investigate and amend the records.
4:04:57 PM
BOGDAN GILMUTDINOV, Staff, Representative David Nelson, Alaska
State Legislature, on behalf of the prime sponsor,
Representative Nelson, offered the sectional analysis for HB 81
[copy available in committee file], which read as follows
[original punctuation provided]:
Section 1: Amends AS 12.62.160(b)(8) to include
reference to the added subsection (f) in paragraph (8)
to read "or criminal justice information as described
in (f) of this section." Subsection (b) describes
conditions around which an individuals (sic) criminal
record may be released.
Section 2: Amends AS 12.62.160 by adding a new
subsection (f). Subsection (f) describes the
conditions under which information on an individuals
(sic) record cannot be released. Paragraph (4)
requires the individual to submit a request to the
agency not to release portions of their record.
Section 3: Repeals AS 12.62.160(f)(4) on January 1,
2028.
Section 4: Establishes an effective date of January 1,
2026.
REPRESENTATIVE NELSON added that David Morgan with the Reason
Foundation and Lisa Purinton with the Department of Public
Safety were available to answer any questions.
4:06:39 PM
REPRESENTATIVE MCCABE said that he was curious about the fiscal
note associated with the bill. He asked Ms. Purinton if a
contractor was going to be used, he noted that the fiscal note
mentioned 400 hours of work associated with a contractor. He
said that contractors often work at their own places. He said
that looking close at the fiscal notes, he was wondering why the
state would need to buy contractor office materials such as a
desk and computer.
4:07:52 PM
LISA PURINTON, Director, Division of Statewide Services,
Department of Public Safety, clarified that there are two parts
to the fiscal note associated with HB 81. One part is for the
contractor, paid at $140 an hour for 400 hours to reprogram the
mainframe criminal history repository to prevent the records
from being displayed, as proposed under HB 81. The second piece
is for a temporary staff position for two years. The new staff
would work with DPS to research records pertaining to
individuals that request that their records not be displayed as
outlined in the bill. The bill would require this work be
completed by 2028.
REPRESENTATIVE MCCABE noted that 8,500 people would potentially
be impacted and it's going to take two years to pull them from
the system. He asked whether this was an accurate assessment.
REPRESENTATIVE NELSON confirmed that's correct.
4:09:58 PM
REPRESENTATIVE MOORE asked whether a minor marijuana conviction
still would show up on a federal court record despite being
pulled from the Alaska record.
REPRESENTATIVE NELSON asked whether she was referring to a
background check or something like court view.
REPRESENTATIVE MOORE responded on court view additionally, so
both.
REPRESENTATIVE NELSON responded that the court view system
maintains its own website and the Alaska Court System amended
its website to amend records from public view.
REPRESENTATIVE MOORE asked whether they would be hidden on just
court view.
REPRESENTATIVE NELSON said that currently, the bill would not
touch the court view system.
REPRESENTATIVE MOORE asked whether the information would still
show up on federal systems.
REPRESENTATIVE NELSON responded that yes, HB 81 would cover only
low-level background checks, high-level security clearances and
such would not be excluded.
4:11:28 PM
REPRESENTATIVE VANCE asked Representative Nelson why the age of
21 was selected as opposed to 18.
REPRESENTATIVE NELSON responded that this question may be best
answered by Ms. Purinton.
MS. PURINTON answered that she would need to look at the statute
and may need to "phone a friend" but 21 is the legal age to
purchase and use marijuana.
4:12:45 PM
REPRESENTATIVE STORY commented that the current employment
vacancies were high at the department. She then remarked that
given the 8,500 people that would be affected, the proposed
legislation could be beneficial.
4:13:31 PM
CHAIR CARRICK asked whether it would be warranted to take it a
step further and expunge the records for these types of low-
level marijuana convictions.
REPRESENTATIVE NELSON responded that the intent of the bill is
to facilitate access to low-level volunteering positions or even
housing with a change to background check information. He said
that expungement of records is a completely different issue, and
he did not want to work on it at the moment. He also said that
there is no expungement in the State of Alaska.
CHAIR CARRICK noted that Representative Nelson included a really
interesting article about expungement to the committee [copy
available in committee file].
MR. GILMUTDINOV noted that expungement is a nebulous term. He
said that the blanket term is "record clearance," which includes
annulment, erasure, expungement, destruction, dismissal,
sealing, and setting aside. He said the definitions for these
terms vary depending on jurisdiction and state. He said that in
Alaska, there is technically no expungement, but there are
certain things that can be done with regard to sealing certain
documents. He said that the article which Chair Carrick was
referring to draws a correlation between record clearing/record
amending procedure and the outcomes associated with it. He said
the article suggests that by following these procedures,
individuals have greater employment prospects and wage earnings.
4:16:49 PM
REPRESENTATIVE HOLLAND asked about court view and federal
searches. He asked whether the impact of the bill would be
significant enough to withhold information from background
checks. He asked whether backgrounds checks would utilize court
view and federal databases, and he inquired whether not changing
accessibility to these other databases would affect the goal of
the bill.
REPRESENTATIVE NELSON asked Representative Holland to clarify
"other databases."
REPRESENTATIVE HOLLAND asked whether this bill would remove
records from court view or any federal searches. He said that
he understood the answer as no, it would not, and the
information would still be available in other databases. He
raised concerns whether this would serve Alaskans.
REPRESENTATIVE NELSON responded that right now, court view
systems have been covered; the proposed bill would cover only
records on the state level. He reiterated that higher-level
background checks could access information. He said that for a
low-level, quick search of DPS, the information would not show
up.
4:19:47 PM
CHAIR CARRICK, after ascertaining that there were no additional
questions, announced that the committee would hear invited
testimony.
4:20:05 PM
DAVID MORGAN, Legislative Affairs, Reason Foundation, began his
invited testimony in support of HB 81. He said that too often,
low-level offenses come with lifelong punishment. He said that
penalties should be proportional to the severity of an offense,
especially considering that recreational use of marijuana has
been legal since 2014. He remarked that individuals with
criminal records face difficulty in engaging in productive
activities; this includes finding a job, securing housing,
obtaining occupational licenses, and accessing financial
services. He said that HB 81 is a necessary step towards
fairness in Alaska. This legislation would prohibit agencies
from releasing criminal records related to cases where a
defendant was convicted of possessing less than one ounce of
marijuana. Before January 2028, people must request to have the
conviction records withheld; after January 2028, all conviction
records would be withheld. He said that without an automatic
process, data from other states showed, less than 10 percent of
eligible individuals take action to have their records sealed.
He said that HB 81 would provide much needed relief for many
Alaskans.
4:21:59 PM
CHAIR CARRICK announced that HB 81 was held over.
HB 119-GAS PIPELINE FAIRBANKS SPUR
4:22:11 PM
CHAIR CARRICK announced that the final order of business would
be HOUSE BILL NO. 119, "An Act relating to an in-state natural
gas pipeline developed by the Alaska Gasline Development
Corporation; and providing for an effective date."
4:22:35 PM
REPRESENTATIVE WILL STAPP, Alaska State Legislature, As prime
sponsor, presented HB 119. He said the proposed bill is
relatively simple on the surface, but it is not a simple
concept. He said that as many committee members knew, the
Alaska Gasline Development Corporation's (AGDC's) project has
been the source of "lots of news," especially at a federal
level. He opined that members from Interior Alaska have always
felt that if any gasline infrastructure were developed, the
project - if funded with state money - should not skip interior
communities in the project's vicinity. He pointed to a map
[copy available in committee file] that highlights the Alaska
liquified natural gas (LNG) projects area of operation and
relative location to Interior communities. He said that the
pipeline would run through most major communities in Alaska;
however, it bypasses Fairbanks and is positioned to the east of
the community. He remarked that every time he has spoken with
Frank Richards with AGDC and asked whether Fairbanks would get
gas, the answer has almost always been that there would not be a
gasline built in the state in the event it skips Fairbanks. He
said that he has not had any definitive assurances that a
project would not, in fact, skip the Fairbanks North Star
Borough
REPRESENTATIVE STAPP said that the purpose of HB 119 is
assurance to the 100,000 people that a project would not skip
the Fairbanks North Star Borough. He noted that a spur line
would connect Alaska LNG with Fairbanks. He noted there had not
been any meaningful progression in terms of permits or rights of
way.
REPRESENTATIVE STAPP noted that HB 119 would add a requirement
to the list of things that AGDC must do for the State of Alaska.
This additional requirement appears on page 2, lines 9-11, and
read as follows [original punctuation provided]:
an in-state natural gas pipeline advanced under this
paragraph must include a direct spur line to the City
of Fairbanks and the Fairbanks North Star Borough;
REPRESENTATIVE STAPP explained that if there is going to be a
gasline developed in Alaska with state resources, it should not
skip the second largest town in the state. He welcomed
questions from the committee.
4:26:40 PM
REPRESENTATIVE MCCABE asked what the distance was between the
proposed Alaska LNG gasline and Fairbanks.
BERNARD AOTO, Staff, Representative William Stapp, Alaska State
Legislature, on behalf of Representative Stapp, prime sponsor of
HB 119, responded that the proposed gasline would be
approximately 40 miles from Fairbanks.
REPRESENTATIVE MCCABE commented that he has always found it
ridiculous that Fairbanks is 475 miles from the largest gas
field on the planet but burns heating oil that originates from
Alaska and is sent down to Washington refineries before being
imported once again. He said that it can cost $600 to $900 a
month for heating oil costs in Fairbanks.
4:27:25 PM
CHAIR CARRICK noted that as someone who pays these high heating
oil costs, Representative McCabe's comment "hit home." She
asked Representative Stapp to elaborate on the current cost of
energy in Fairbanks relative to other communities such as
Anchorage or even other communities along the proposed pipeline.
4:28:08 PM
REPRESENTATIVE STAPP responded that currently the residential
electricity rate in Fairbanks is about 27 cents a kilowatt
whereas Anchorage is lower. He said that he has been in Juneau
during the legislative session and his recent Golden Valley
Electric bill was more than $350 for his home. He said that it
is not currently occupied other than two cats; the fridge is on,
the boiler is running and maybe a light or two is on. He said
this puts Fairbanks energy prices into context for what expected
rates could be.
REPRESENTATIVE STAPP remarked that most of Fairbanks power is
generated from either coal or oil, and oil is substantially more
expensive than natural gas. He said that this impacts every
aspect of the town, including education. He said that for every
dollar invested into education, more of it would go to energy
costs in Interior communities with high energy costs. He said
that Fairbanks sees outmigration that is more intense than other
parts of the state due to these high energy costs. He said that
the state has put a lot of economic resources into Cook Inlet
gas development over the years to ensure that the state's
population has affordable gas prices; however, Fairbanks has
never had access to a stable supply of natural gas. He said
that a few years ago, in anticipation of getting gas off the
North Slope, Fairbanks formed its own public utility called
"Interior Gas Utility" to build domestic gaslines. He said this
service via the Alaska Industrial Development and Export
Authority (AIDEA) was being paid by Fairbanks residents. He
said that he was unaware who made and paid for the gas
connections in Interior.
4:31:06 PM
REPRESENTATIVE HOLLAND said that he read through the fiscal note
and analysis, and he asked if Representative Stapp could
elaborate on it.
REPRESENTATIVE STAPP responded that all the proposed bill would
do is insert language into a portion of the project that is not
current pursued by AGDC.
REPRESENTATIVE HOLLAND said that he is guessing the obvious
question is why this is not already being done.
REPRESENTATIVE STAPP responded there could be multiple proposed
committee substitutes "until the mood improves."
4:33:08 PM
REPRESENTATIVE MOORE asked whether there has been any opposition
to the proposed bill.
REPRESENTATIVE STAPP responded that most of the feedback has
been fairly positive. He said most people concur that gas
should be available to Fairbanks if a gasline is developed. He
reiterated that the response from AGDC has been vague. He
commented on the uncertain nature of who pays the costs and said
that these questions are the most important ones as the project
progresses.
4:35:00 PM
REPRESENTATIVE MCCABE asked whether Representative Stapp has
inquired whether building a spur at the same time as the main
pipeline was discussed or even whether to place the gasline
closer to Fairbanks would make sense.
REPRESENTATIVE STAPP responded that in theory there was supposed
to be an off-take valve made near Fairbanks during construction.
He noted that it does not make a lot of sense to build a $50
billion project but then assume that in the uncertain future and
with an uncertain cost that a $150-200 million spur line will
get constructed. He said that this reminds him of when Senator
Ted Stevens got gas infrastructure developed in Prudhoe Bay.
Ted Stevens felt that since he failed to get the Arctic National
Wildlife Refuge (ANWR) included on the deal then it probably
wouldn't be part of the deal in the future. He said that today
this remains the case. He spoke about GRIP funding in the past
and the failure for previous projects to materialize. He said
that often it is heard that if you wait your turn you will be
next in line and then next in line never happens.
4:37:37 PM
REPRESENTATIVE HIMSCHOOT noted that her district was looking
forward to getting natural gas to Alaskans and asked what form
of energy Fairbanks currently used.
REPRESENTATIVE STAPP replied that the town primarily runs off
oil fire heat; he has oil boilers at home for instance. He said
that lots of money has been invested to accommodate natural gas
heating, which is both less expensive and burns cleaner than oil
fired sources.
REPRESENTATIVE HIMSCHOOT asked whether the goal was to convert
the Fairbanks power plant to natural gas but not necessarily
homes to natural gas. She also asked what the extent of energy
transition was for Fairbanks.
REPRESENTATIVE STAPP responded that Fairbanks goals regarding
energy improvements is multi-pronged. He said Golden Valley
Utility has pursued a diversified strategy regarding energy
production, including the state's largest wind farm. He said
that the city is also converting residential homes to gas. He
said that Fort Wainwright has an antiquated coal plant that it
is looking to replace; it is the second largest military base in
Alaska. He said "gassifying" Fort Wainwright is an objective
shared by federal partners, as well. He said that until a
reliable and stable source of gas is available, these
conversions cannot commence.
REPRESENTATIVE HIMSCHOOT asked, if a spur that connects
Fairbanks to the pipeline were built, who would maintain it and
who would own it.
REPRESENTATIVE STAPP said that this is the purpose of HB 119.
He said that he would like to know this as well. He said that
management for this section of energy infrastructure is somewhat
vague. He said that Frank Richards with AGDC was online and
could speak to this.
4:40:46 PM
CHAIR CARRICK commented that Fairbanks was unique in that it
already has an "all of the above" approach to energy and there
was little consistency amongst the municipality. She said that
the municipality had a new coal plant on the University of
Fairbanks campus capable of burning natural gas for fuel, they
don't because it is not currently cost effective. She said that
many homes still heat with wood due to its low cost, but it
adversely impacts air quality. She said that Frank Richards
could speak to operation and maintenance of any spur line
connection.
4:41:44 PM
FRANK RICHARDS, President, Alaska Gasline Development
Corporation, answered that that Section of AS 31.25.005,
regarding the purpose of the corporation, addresses advancing an
in-state natural gas pipeline, and it was the original language
that was provided to AGDC when looking at opportunities to
develop an in-state line to provide natural gas to Fairbanks and
to the south. He said this is referred to as the "in-state
project," and the legislature provided funding not only for
permitting but also for design work on the project. He noted
the design work includes a lateral spur into Fairbanks. He
pointed out the map that was provided to committee members [copy
available in committee file] and noted that a connection point
would allow for a lateral spur leading into Fairbanks before the
pipeline would continue south and connect with pre-existing
Enstar natural gas system in Southcentral Alaska. He said that
this design work was conducted from 2012 to 2015 and AGDC had
completed what is known as the "front-end engineering and
design". He said that AGDC was granted the "right of way" for
both the mainline and the lateral line into Fairbanks. He said
that the work on the lateral line was been advanced in 2015 with
what is called the "class 3 cost estimate." Additionally, the
legislature gave AGDC the responsibility in 2014 to represent
the state for the Alaska LNG project. He said ultimately in the
2016 and 2017 timeframe, the legislature redirected all the
funds available for advancing the "in-state project" and it was
put on the shelf. However, AGDC still owns the designs and the
permits that were granted for the 32 miles for the lateral line
connection into Fairbanks, also known as the Spur. He said that
plenty of work has been done advancing the lateral line project.
Currently, AGDC has been waiting for stakeholders to come
together and finalize something that is economically and
commercially viable, and Glenfarne Group was a part of this
process.
MR. RICHARDS noted that there has been keen interest from Alaska
Pipeline developers to come in and take responsibility for
connecting the Fairbanks spur line with the main line of the
Alaska LNG project. He said that information would continue to
come forward as discussions take place. This developer would
likely update the "front end engineering design" and run this
effort in parallel with work completed on the Alaska LNG
project. He said that those entities that develop this project
would have the commercial arrangement regarding gas offtake for
Fairbanks.
4:47:05 PM
REPRESENTATIVE STAPP said that he appreciated the history and
how AGDC looked at these things. He questioned why, if all
these things have already been completed by AGDC, the
corporation wouldn't roll them in and include the Fairbanks
lateral line into the project.
MR. RICHARDS responded that it had to do with the regulatory
environment. If the in-state natural gas was done by an Army
Corps of Engineers Impact Statement and the Alaska LNG was taken
as an integrated project under the Federal Energy Regulatory
Commission, then two different authorizations are in place. He
said that adding the lateral line to the Alaska LNG project
would cause additional regulatory hurdles. He said that there
are two entities at play.
REPRESENTATIVE STAPP said that this illustrates his point. He
said he understands that there are different permitting
processes, but questioned why AGDC would go through the permit
process for 800 miles of pipeline and not get the additional 32
miles permitted for a spur project.
MR. RICHARDS explained that when AGDC was working with the joint
development partners, the design concept that was put forward
for the permitting process was an integrated project that did
not include any laterals. He said that this was not a choice by
AGDC but the lead developer at the time.
4:50:44 PM
REPRESENTATIVE VANCE said that she appreciates Representative
Stapp asking these questions. She asked how long the permits
are considered valid and whether they could move forward with
current permitting.
MR. RICHARDS responded that he did not have an answer on
duration of permits from the Army Corps of Engineers but could
follow up with an answer.
REPRESENTATIVE VANCE said that pulling up the map of the
proposed pipeline, she shares the frustration that the second
largest city that contains many state expenses was not
integrated into the main project. She said that getting natural
gas to the Kenai Peninsula was transformative for its residents
in a positive way. By including the spur line into Fairbanks,
it would decrease energy costs. She questioned holding back HB
119 because she deemed it to be a straight-forward piece of
legislation. She indicated that now that she has more insight
into what is taking place with the permitting process, she
thinks it is something that warrants further discussion.
4:54:05 PM
CHAIR CARRICK noted that she appreciated the discussions and
concurred that it would be better for the entirety of the state
to have inexpensive energy. After ascertaining that there was
no additional committee questions, she announced that HB 119 was
held over.
4:56:13 PM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 4:56
p.m.