Legislature(2023 - 2024)ADAMS 519
02/19/2024 08:30 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB50 | |
| HB126 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 50 | TELECONFERENCED | |
| += | HB 126 | TELECONFERENCED | |
| + | HB 115 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 19, 2024
8:34 a.m.
8:34:58 AM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 8:34 a.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, 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
MEMBERS ABSENT
Representative Frank Tomaszewski
ALSO PRESENT
John Crowther, Deputy Commissioner, Department of Natural
Resources; Kayla Harmon, Mental Health Counselor,
Representing Self; Representative Stanley Wright, Sponsor;
Rachael Gunn, Staff, Representative Stanley Wright.
PRESENT VIA TELECONFERENCE
Brett Huber, Chairman, Alaska Oil and Gas Conservation
Commission, Anchorage; Marwan Wartes, Geologist, Division
of Geologic and Geophysical Surveys, Fairbanks; Dan
Stickel, Chief Economist, Department of Revenue, Tax
Division, Juneau; Rachel Buddin-Young, Professional
Counselors Board, Eagle River; Dorene Hagen, Chair, Alaska
Board of Professional Counseling, Homer; Teri Forst,
Licensed Professional Counselor, Juneau; Elaine Border,
Owner, Border Counseling Services, Anchorage; Sammie
O'Neil, Alaska Board of Professional Counselors, Eagle
River; Rebecca Sheeran, Internship Program in Counseling,
Juneau; Piper Thaller, Self, Juneau; Mary Fitzgerald,
Deeper Light Psychotherapy, Juneau.
SUMMARY
HB 50 CARBON STORAGE
HB 50 was HEARD and HELD in committee for further
consideration.
HB 126 ASSOCIATE AND PROFESSIONAL COUNSELORS
HB 126 was HEARD and HELD in committee for
further consideration.
HB 115 NATUROPATHS: LICENSING; PRACTICE
HB 115 was SCHEDULED but not HEARD.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 50
"An Act relating to the geologic storage of carbon
dioxide; and providing for an effective date."
8:37:23 AM
Co-Chair Foster listed the invited testifiers.
8:38:15 AM
JOHN CROWTHER, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, relayed that the committee received the
memorandum response provided by the Department of Natural
Resources (DNR) (copy on file) that answered members
questions regarding the bill. He offered that the first
question was by Representative Josephson regarding enhanced
oil recovery and taxes. He summarized that in the House
Resources Committee an amendment was adopted that removed
the reference to the state corporate income tax and
maintained the federal tax that prevented the recipient
from receiving a credit toward both federal and state
corporate income tax structures. He did not anticipate a
significant impact on the bill regarding taxes paid by the
industry. He cited the question asked about Cook Inlet
seismicity and its impact on carbon sequestration. He
reported that DNR's answer included a discussion on the
history and nature of seismic activity in the region and
how the department anticipated the impacts. The Class VI
injection well program required extensive evaluation of
seismicity and monitoring.
Co-Chair Foster asked for a refresher of the fiscal notes.
Mr. Crowther summarized that there were four fiscal notes
in the bill packet. The fiscal note from DNR (FN 11 (DNR)
anticipated that the department had the existing capacity
to cover the program with no additional operating costs.
The revenue was indeterminate. He noted the Department of
Revenue (DOR) fiscal note (FN 10 (REV) was the same with no
fiscal impact and indeterminate revenues. He indicated that
the fiscal note for the Department of Environmental
Conservation (DEC) (FN 9 (DEC)) had zero fiscal impact and
no revenue impact. He deferred to the Alaska Oil And Gas
Conservation Commission (AOGCC) (FN 12 (CED)) to speak to
its fiscal note.
8:41:41 AM
BRETT HUBER, CHAIRMAN, ALASKA OIL AND GAS CONSERVATION
COMMISSION, ANCHORAGE (via teleconference), relayed that
the fiscal note showed the appropriation request for FY 25
for two positions; one fully exempt Senior Carbon Engineer
(Range 26) and one fully exempt Carbon Assistant (R18). In
addition, the commission requested $350 thousand in
services that included contracted expertise for project
development legal costs for the primacy process. He
commented that in the outyears, FY 26, FY 27, and FY 28
only estimates were provided due to many unknowns. He
communicated that it was the intent of the legislation that
the industry would fund the regulatory process.
8:43:28 AM
Representative Josephson referenced the issue that the
owner of the carbon dioxide must remain entitled for 50
years via the Environmental Protection Agency (EPA). He
wondered how the "critical" oversight would happen. Mr.
Crowther answered that the Class VI program for carbon
sequestration had to be developed by the state and approved
by a federal partner. There was a general requirement that
the requirements be as stringent as the federal program.
There was often discretion in how the federal agency
implemented the mandate. The EPA promulgated a Class VI
rule with the 50 year period. He thought that if the state
could design a program that included liability, title
ownership, and implemented costs and structure charges that
protected the requirements for monitoring and was as
restrictive, stringent, and functionally achieved the same
ends, the federal government was likely to view it as an
equally extensive regulatory program by the state. He
mentioned the state of Louisiana and specifically, how the
EPA had interpreted regulations, it appeared that flexible
or adaptive approaches were unacceptable. He deduced that
the issue was understanding how the federal regulators were
performing its discretionary role. Representative Josephson
asked why the state would ever want to have title to the
carbon and what would that mean for revenue generation and
liability. Mr. Crowther replied that the original structure
of the legislation anticipated amendments responding to the
EPA requirements. He relayed that the concept of the state
assuming the title, transfer of the facilities, and
monitoring was to help induce the development of projects
with industry. He indicated that the regulatory environment
was recently established, therefore, the state was not able
to offer such direct inducements.
8:48:22 AM
Representative Hannan mentioned that eligible lease
expenditures for enhanced oil recovery when using carbon
injection could still be deducted against oil production
taxes. She inquired about the potential impacts of the
credits and the amount of lost revenue. Mr. Crowther wanted
to defer the answer to someone from DOR.
Co-Chair Foster indicated that there was not an invited
testifier from DOR available.
Mr. Crowther summarized the framework of how the
administration and DNR viewed the issue. He answered that
in the current environment of enhanced oil recovery, the
cost associated with it was a lease expenditure under
existing provisions. He viewed it as a "good outcome" under
the statutory and constitutional obligations to maximize
resource recovery and development. In the event that there
was increased enhanced oil recovery associated with the
carbon programs the department regarded it as a good thing
in terms of ultimate recovery, both from a royalty and
economic perspective." In addition, he felt that the
states interest was the commodity would become more
competitive while reducing the environmental footprint. He
offered to work with DOR to model hypothetical situations.
Representative Hannan commented that the bill was presented
as a significant revenue producer when it was first
introduced. However, after further inquiry she understood
that there was as much risk for loss of revenue. She wanted
to see more modeling and noted that the fiscal note had
predicted that the bill was a revenue generator. The
capital investment over the 10-year span showed reduced
revenue for the state.
8:52:29 AM
Co-Chair Foster requested reaching out to DOR to obtain an
answer in writing.
Representative Galvin recalled the initial excitement
regarding the carbon capture and sequestration programs for
significant revenue generation. She cited the fiscal note
with a decrement of $738 thousand. She understood and was
empathetic with the need for environmental responsibility,
particularly for industry to develop projects that
attracted investors. However, she also, wanted to be
cautious about what the state was gaining and losing in the
process. She wondered whether the state could gain revenue
from carbon sequestration. Mr. Crowther replied that there
were 4 revenue generation scenarios with a positive impact
for the state. In the order of revenue magnitude, the first
and second were the use of carbon capture on state lands
that could generate fees for the state via in-state power
generation and adoption on the North Slope for existing
operations. The third scenario that had significant revenue
generation potential but needed international development
was the importation of carbon dioxide into the state. He
deduced that the framework in the legislation needed to be
in place to investigate the potential. He discussed the
fourth scenario and believed that entities like mines and
North Slope oil producers wanting to respond to the
increasing pressure for carbon capture and carbon
management would generate significant indirect benefits to
the state. If carbon capture was part of any energetic
development activity, the state could offer the opportunity
while preserving the value of its other commodity
resources. He exemplified that if some North Slope
operators transitioned to carbon neutrality and new
investors developed billions of dollars of hydrocarbon
resources because of the carbon capture program it was "a
huge value preservation and generation" for the state.
Representative Galvin relayed that some oil companies were
already reinjecting and had been for some time, to help
them continue their production of enhanced oil and gas. She
asked if a price structure was discussed once the injection
went beyond the need for enhancement. Mr. Crowther answered
that the bill provided for the commissioner of DNR to
establish commercial terms for access to state subsurface
resources. The value would be derived from things like
injection fees and lease rental fees. He guessed that if
there was increased use of the 45Q tax credit, the state
could increase fees, etc. He believed the legislation
offered the "flexibility" to change the terms.
8:59:45 AM
Representative Galvin appreciated Mr. Crowther's comments
on seismicity. She referenced page 2 of the bill that
predicted reasonable confidence in the long-term integrity
of the potential sequestration sites. She was attempting to
comprehend reasonable confidence and wondered what
reasonable confidence implied. Mr. Crowther deferred the
answer to a DNR expert. He cited the third paragraph of the
memorandum that referred to the state's 1964 earthquake
that was the largest in human recorded history. The
department noted the earthquakes lack of impact on the
different reservoirs holding hydrocarbons. He reasoned that
was the impetus for the reasonable confidence for the lack
of associated issues.
9:02:00 AM
MARWAN WARTES, GEOLOGIST, DIVISION OF GEOLOGIC AND
GEOPHYSICAL SURVEYS, FAIRBANKS (via teleconference),
answered that Deputy Commissioner Crowther accurately
pointed out that reasonable confidence was intended to
capture the statistical uncertainty. He explained that it
was impossible to accurately predict a given earthquake;
all the characterizations of seismic hazards were
probabilistic. He acknowledged that Cook Inlet had a long
history of earthquakes, but the infrastructure and
regulatory structures were built around the known risk. The
evaluation for any development considered the known seismic
risk.
Representative Galvin asked if the same information fitted
for the North Slope region. Mr. Wartes responded that the
North Slope was recognized as having a much lower seismic
risk and was quite stable. Representative Galvin asked if
there was more than CO2being sequestered and asked for
clarification.
Mr. Crowther replied that the intent of the legislation was
to inject pure and highly compressed CO2 underground. Any
given waste stream had other constituent parts and would
need to be managed appropriately. He stressed that the
focus of the program was pure CO2. Representative Galvin
appreciated the description of essential CO2. She asked
what other elements could be expected. Mr. Crowther
responded that his scientific experience prevented him from
confidently proving a definitive answer. He surmised that
flammable hydrocarbons needed to be removed and things like
water and other gases like nitrogen that may persist
because they could not be filtered from the waste stream.
He offered to follow up in writing.
9:07:15 AM
Co-Chair Foster indicated that DOR was available. He
requested that Representative Hannan restate her question.
Representative Hannan reiterated her question regarding
credits against enhanced oil recovery efforts as carbon
sequestration expanded, and how it would impact the oil
production tax revenue.
DAN STICKEL, CHIEF ECONOMIST, DEPARTMENT OF REVENUE, TAX
DIVISION, JUNEAU (via teleconference), apologized that he
had not been following the beginning of the hearing. He
answered that the extent that allowable lease expenditures
on enhanced oil recovery depended on who was making the
expenditure and whether it was on leases for enhanced oil
recovery versus another storage option. He deduced that the
division would need to see the bill after it was amended to
provide a final commentary. Representative Hannan voiced
that initially the bill's fiscal notes anticipated
substantial income over 10 years. She noted that the fiscal
notes had changed. She wondered if there was no longer an
expectation of large revenue production due to the bill's
effect on oil and production tax. Mr. Stickel replied that
her concern was valid. He reiterated that he wanted to
review the bill after the amendment process to provide
final commentary.
9:10:50 AM
Representative Stapp acknowledged the distinction between
Class II and Class VI wells. He understood that the
Inflation Reduction Act (IRA) increased the commodity price
of CO2, officially through the 45Q credits. He was also
aware that depending on whether North Slope companies
capture or sequester carbon the state could gain $60 to
$130 per ton. He did not favor a scenario where the
producers engaged in carbon capture facility production
exclusively for the purpose of the 45Q credit thus,
decreasing revenue the producers would otherwise pay the
state through production tax. He was unsure whether the
bill allowed the scenario or not. He did not want to
incentivize producers to seek federal resources "on the
dime of our state production tax." He favored the bill,
other than the issue he presented. Mr. Crowther restated
the question as whether a project that received the 45Q
tax credit and had a reduction to an otherwise state
obligation if the sum of two things incentivized the
project. Representative Stapp simplified the question. Mr.
Crowther offered to respond in writing. He thought that the
answer was complex.
9:13:40 AM
Representative Josephson shared that he attended a two day
forum on Cook Inlet attended by tribes, the federal
government, nonprofits, etc. and there were great concerns
regarding Cook Inlet water quality. He asked about
exceptions regarding "slurry" that was allowed to be
deposited into the unit. He recalled that it was unique to
Cook Inlet. Mr. Crowther answered that he understood that
he was referring to DEC's discharge authority. He deferred
the answer to DEC and would follow up.
9:15:51 AM
Co-Chair Foster set an amendment deadline for Tuesday
February 27, 2024, at 5pm.
HB 50 was HEARD and HELD for further consideration.
HOUSE BILL NO. 126
"An Act relating to the Board of Professional
Counselors; and relating to licensing of associate
counselors."
9:17:59 AM
Co-Chair Foster OPENED public testimony with a two minute
limit.
9:19:00 AM
KAYLA HARMON, MENTAL HEALTH COUNSELOR, REPRESENTING SELF,
favored the bill. She noted that she was a counselor and
received her master's degree in Clinical Mental Health
Counseling from the University of Alaska Fairbanks. She
shared that she was a pre-licensed counselor working in
private practice in Juneau until she completed the
mandatory hours under supervision for licensure. She had
previously worked as a teacher for 15 years in Juneau. She
indicated that in her current profession there was no such
license from the time that she graduated to the time she
became fully licensed. She believed that the situation
created an ethical grey area for the 2-year licensing
period. She felt that counseling licensure needed to catch
up with other states to national standards. Additionally,
she thought that the licensure would increase access to
affordable mental health care in Alaska. Several large
health insurers allowed associate counselors to directly
bill insurance. She indicated that the bill generated
revenue via licensure fees and increased access to mental
health care.
9:21:38 AM
Co-Chair Foster interrupted public testimony and asked the
bill sponsor to briefly summarized the bill.
9:21:57 AM
REPRESENTATIVE STANLEY WRIGHT, SPONSOR, thanked the
committee for hearing the bill. He explained that HB 126
created and associate professional license designation.
RACHAEL GUNN, STAFF, REPRESENTATIVE STANLEY WRIGHT,
expounded that the bill established and associate counselor
licensure within the counseling profession for behavioral
health post-graduate students. The bill facilitated
professional growth and the ability to serve the state's
mental health needs more effectively by streamlining the
process. The legislation's provisions aligned with the high
training standards on the national level and enhanced the
reporting during the supervisory stage.
9:23:08 AM
Co-Chair Foster resumed hearing public testimony.
9:23:30 AM
RACHEL BUDDIN-YOUNG, PROFESSIONAL COUNSELORS BOARD, EAGLE
RIVER (via teleconference), was online for questions. She
spoke in favor of the bill. She added that she was an
active advocate for the bill and believed it created more
structure for both supervisors and pre-licensed counselors.
9:24:43 AM
DORENE HAGEN, CHAIR, ALASKA BOARD OF PROFESSIONAL
COUNSELING, HOMER (via teleconference), provided testimony
in support of the bill. She shared that she was a board
approved supervisor. She appreciated what was stated
earlier about ethical grey areas in the pursuit of
licensure. She highly favored the structure the bill
provided and the provisions regarding supervision to
promote best practices and catching up with national
standards.
9:25:56 AM
TERI FORST, LICENSED PROFESSIONAL COUNSELOR, JUNEAU (via
teleconference), shared that she was in private practice in
Juneau. She worked exclusively with first responders and
was working to train more counselors in the field with only
a dozen first responder specialist in the state. She
stressed that more counselors trained to work with the
first responder population was necessary. She believed that
the lack of the associate licensure exacerbated the issue.
It was difficult on the bottom line of private practices
and supervisors to be able to train new clinicians. The
bill would allow billing for the associate's services and
enable more training in specialty areas.
9:27:14 AM
ELAINE BORDER, OWNER, BORDER COUNSELING SERVICES, ANCHORAGE
(via teleconference), supported the bill. She shared that
she had a private practice and was also a supervisor. She
previously owned an insurance billing business for 14
years. She indicated that licensure would stop a rash of
fraudulent billing and it would also enable billing for
associate services to Blue Cross who was the prominent
insurance provider in the state. She voiced that recent
graduates were very inexperienced and often not getting
their 3000 hours in the area of expertise they wanted. The
bill would facilitate supervisors to create standards and
better supervise and help associates work in their
specialty areas pre-licensure.
9:29:16 AM
SAMMIE O'NEIL, ALASKA BOARD OF PROFESSIONAL COUNSELORS,
EAGLE RIVER (via teleconference), spoke in favor of the
legislation. He relayed that he was a licensed professional
counselor and supervisor and Vice-Chair for the board. He
agreed with all of the prior testimony and added that the
supervisory support would benefit the military people
moving into the state with associate licenses. He wanted
the state's standards enhanced to national standards.
9:30:34 AM
REBECCA SHEERAN, INTERNSHIP PROGRAM IN COUNSELING, JUNEAU
(via teleconference), favored the legislation. She echoed
all the prior testimony. She related that she was a pre-
licensed counselor close to finishing her requirements and
was not getting the experience she needed due to the
inability of her program to bill insurance. She emphasized
the importance of passing the legislation.
Representative Stapp appreciated Ms. Sheeran's testimony.
He deduced that he rarely encountered enhancing a
regulatory framework that resulted in increasing the
profession. He asked if the bill would net more counselors,
which he deduced was the goal of the legislation. Ms.
Sheeran responded was unsure whether it would net more
counselors but felt that it could support counselors in
their growth and learning to be competent and likely net
more counselors because there would be less of a barrier
during the pre-counselor period.
9:33:20 AM
PIPER THALLER, SELF, JUNEAU (via teleconference), spoke in
support of the bill. She shared she was a licensed
counselor and supervisor. She had worked with mental health
agencies in Juneau and currently had a private practice.
She had been a clinical director, program manager, and
crisis program manager in behavioral health and was
licensed in three states and had worked in 5 states. She
emphasized that Alaska was unique in what was not offered
and emphasized that the associate licensure was
"imperative." She believed that it was also an issue of
parity and indicated that Licensed Clinical Social Workers
and Licensed Marriage and Family Therapists had an
associate licensure. She did not understand how the
situation arose. She answered Representative Stapp's
question and stressed that it would allow therapists to
remain in the state. She had to turn away 7 clients in the
last 7 days that had Blue Cross/Primera insurance because
she could only give interns self-pay clients. She noted
that 1 in 20 clients were self-pay. She reported that
insurance reimbursed at $170 per session and most clients
were in therapy for one year totaling $63,700 per year, per
week from her practice alone. She indicated that the
federal government considered Juneau rural and an
underserved area and offered payment for service. Two of
her four interns were ready to quit, and she believed the
bill would solve the problem.
9:36:23 AM
MARY FITZGERALD, DEEPER LIGHT PSYCHOTHERAPY, JUNEAU (via
teleconference), favored the bill. She was a licensed
counselor and supervisor and currently had two supervisees.
She had worked in the state for the past 12 years and
echoed the prior testimony and spoke of the frustration
with the supervisees. She emphasized that HB 126 would help
the retention factor, streamline the process, and create
efficiency in delegating the supervisory workload. She
believed the bill would help professionals serve their
communities.
9:37:51 AM
Co-Chair Foster CLOSED public testimony.
9:38:16 AM
AT-EASE
9:38:45 AM
RECONVENED
Co-Chair Foster RECESSED the meeting.
ADJOURNMENT
9:39:40 AM
The meeting was adjourned at 9:39 p.m.
[The meeting was recessed but never reconvened.]