05/14/2003 09:40 AM Senate FIN

                                                                                                                                
     CS FOR HOUSE BILL NO. 57(FIN)                                                                                              
     "An Act amending the manner of determining the royalty                                                                     
     received by the state on gas production as it relates to the                                                               
     manufacture of certain value-added products."                                                                              
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  stated that this bill, sponsored  by Representative                                                            
Chenault, "allows the Department  of Natural Resources to adjust the                                                            
value  of State  royalty  share for  gas  used by  manufacturers  of                                                            
agriculture  chemicals."   He  noted  the  bill  had  been  held  in                                                            
Committee for  the purpose of reviewing the fiscal  note. He assured                                                            
that the co-chairs were  "comfortable" with the indeterminate fiscal                                                            
note, understanding that future implications would occur.                                                                       
                                                                                                                                
Co-Chair Wilken also reminded  of earlier concerns with this bill in                                                            
that  the  commissioner  would  operate  as  "the  single  point  of                                                            
influence"  as to  determining  the royalty  rate  between the  best                                                            
value and the value offered  to Agrium, the manufacturer affected by                                                            
this legislation. He indicated  that after consultation and meetings                                                            
with  several  parties,  including   Mark  Myers,  Director  of  the                                                            
Division  of Oil and  Gas, Co-Chair  Wilken learned  this method  is                                                            
currently employed in Alaska  and elsewhere in the nation. He opined                                                            
this  method  "serves  the  best interests   of the  State  and  the                                                            
industry".                                                                                                                      
                                                                                                                                
Co-Chair Wilken  directed attention to an updated  sponsor statement                                                            
[copy on file].                                                                                                                 
                                                                                                                                
Senator Taylor  offered a motion to adopt CS HB 57,  23-LS0303\C, as                                                            
a working draft.                                                                                                                
                                                                                                                                
There was  no objection  and the committee  substitute, Version  "C"                                                            
was ADOPTED as a working draft.                                                                                                 
                                                                                                                                
Senator Taylor  offered a motion to report the committee  substitute                                                            
from Committee with individual  recommendations and new fiscal note.                                                            
                                                                                                                                
There was no objection  and SCS CS HB 57 (FIN) MOVED  from Committee                                                            
with a zero fiscal  note dated 5/5/03 for the Department  of Natural                                                            
Resources.