Legislature(2009 - 2010)BARNES 124

02/03/2010 01:00 PM RESOURCES


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01:05:27 PM Start
01:05:48 PM HB312
02:12:13 PM Overview by Tony Palmer, Transcanada Alaska: Agia Update/open Season
02:59:36 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 312 ADVISORY VOTE ON IN-STATE GAS PIPELINE TELECONFERENCED
Moved CSHB 312(RES) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
         HB 312-ADVISORY VOTE ON IN-STATE GAS PIPELINE                                                                      
                                                                                                                                
1:05:48 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  announced that  the first  order of  business is                                                               
HOUSE BILL NO.  312, "An Act authorizing an advisory  vote on use                                                               
of Alaska  permanent fund  earnings for  an in-state  natural gas                                                               
pipeline; and providing for an effective date."                                                                                 
                                                                                                                                
1:06:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MIKE  CHENAULT, Alaska State  Legislature, sponsor                                                               
of HB 312,  said the various options for an  in-state natural gas                                                               
pipeline need to  be looked at and HB 312  would give legislators                                                               
the opportunity to  hear the voices of Alaskans when  it comes to                                                               
the energy needs  of the state.  The bill  would provide that the                                                               
following question  appear on the  ballot [of the  next statewide                                                               
primary or general election]:                                                                                                   
                                                                                                                                
     After   paying  annual   dividends  to   residents  and                                                                    
     inflation-proofing  the Alaska  permanent fund,  should                                                                    
     permanent fund  investment earnings be  appropriated to                                                                    
     help pay the costs  of constructing an in-state natural                                                                    
     gas pipeline?                                                                                                              
                                                                                                                                
1:08:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT  noted that the  issue of routes  is kept                                                               
out of  the question  because this  is about  Alaska and  not any                                                               
specific  region.   He  said  [the  sponsors] are  interested  in                                                               
having  conversations  with  Alaskans  on what  is  seen  as  the                                                               
biggest problem and  how to address it.  This  bill would not pay                                                               
for an  in-state gasline,  but it  would be  one of  many options                                                               
that are out  there.  With the energy crisis  that is looming for                                                               
Alaska in  the forthcoming years,  HB 312 would  provide Alaskans                                                               
an  opportunity to  say whether  they think  the State  of Alaska                                                               
should be involved in the in-state energy needs of the state.                                                                   
                                                                                                                                
1:10:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN said  he  has  heard loud  and  clear from  many                                                               
people that they  want an in-state gasline and he  thinks it is a                                                               
good  idea to  ask Alaskans  what they  want to  do.   While this                                                               
would be advisory,  legislators work for the people  and it would                                                               
be  a directive.    Given there  are laws  regarding  use of  the                                                               
permanent fund, HB 312 would be  part of the process in following                                                               
those  rules.   It has  always  been a  concern that  politicians                                                               
would spend the Alaska Permanent  Fund [earnings] on pet projects                                                               
and  other things.   Because  it  asks for  authorization to  use                                                               
permanent fund [earnings], HB 312 is  part of a process that asks                                                               
Alaskans what they want done with their money.                                                                                  
                                                                                                                                
REPRESENTATIVE  CHENAULT replied  that  legislators cannot  spend                                                               
the corpus of the Alaska Permanent  Fund, and he thinks that most                                                               
Alaskans know that.   However, the legislature could  at any time                                                               
spend all  of the  fund's earnings, but  the legislature  has not                                                               
"cracked that egg"  because it would be political  suicide.  This                                                               
bill is asking  whether Alaskans are interested  in forwarding an                                                               
in-state  gasline  if  money is  available  after  dividends  and                                                               
inflation-proofing.  Excess  earnings are put back  into the fund                                                               
to  determine what  the next  [dividend] will  be, so  this would                                                               
have a minimal effect, although he does not know the number.                                                                    
                                                                                                                                
1:12:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON,  in reference to the  chart of earnings                                                               
in the  committee's packet, noted  that since the  permanent fund                                                               
has been  in effect, the  earnings have dropped eight  times from                                                               
one year to  the next.  This represents money  that was just lost                                                               
when it  could have been  used to the  benefit of the  state, and                                                               
this is something that needs to be thought about.                                                                               
                                                                                                                                
REPRESENTATIVE CHENAULT responded that  every person wishes he or                                                               
she was smart enough  to get in on the lull and  out on the high,                                                               
but there  has been a good  return to the permanent  fund overall                                                               
since it was enacted, despite the ups and downs of the market.                                                                  
                                                                                                                                
1:15:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON,  in regard to the  ballot question itself,                                                               
surmised  that the  earnings  could  be used  for  any number  of                                                               
options, such as  a loan that is repaid, investment  in an equity                                                               
share,  or  a subsidy  for  construction  where no  repayment  is                                                               
received so that the tariff could be lowered.                                                                                   
                                                                                                                                
REPRESENTATIVE CHENAULT answered he  thinks all options should be                                                               
on the table, but these  discussions cannot occur without knowing                                                               
how Alaskans  think about it  and is  why this question  is being                                                               
put  forward.   It  is  probably  more  about the  future  needs;                                                               
Alaskans are  looking for  a long-term  energy supply  that grows                                                               
Alaska, not something that just gets the state by year to year.                                                                 
                                                                                                                                
1:17:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  inquired how much  money has been put  into the                                                               
Alaska Permanent  Fund as opposed to  how much has been  paid out                                                               
in dividends.                                                                                                                   
                                                                                                                                
LAURA ACHEE,  Director of  Communications, Alaska  Permanent Fund                                                               
Corporation, responded  that $14  billion has  been put  into the                                                               
permanent fund over  its 30 years of existence;  these funds have                                                               
come from the mineral royalties  required by the constitution and                                                               
additional appropriations  from the general  fund.  In  that same                                                               
time period, about $17.5 billion  has been paid out in dividends.                                                               
Today, the fund is worth just  under $34 billion.  Thus, more has                                                               
been  paid out  than taken  in and  there is  still $34  billion.                                                               
This  is  an  amazing  conversion   of  a  non-renewable  natural                                                               
resource into a  renewable financial resource, and  it shows what                                                               
a success the fund has been.                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON said  his point  is that  Alaska has  a healthy                                                               
fund and he would like to hear  what the people have to say about                                                               
putting more of it to use in the state.                                                                                         
                                                                                                                                
MS.  ACHEE,   at  the  request   of  Representative   P.  Wilson,                                                               
reiterated that $14 billion has been  put into the fund and $17.5                                                               
billion has been paid out.                                                                                                      
                                                                                                                                
1:20:54 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN opened public testimony.                                                                                        
                                                                                                                                
MERRICK PEIRCE  noted that he serves  on the board of  the Alaska                                                               
Gasline Port Authority, but that he  is offering his own point of                                                               
view  in opposing  HB 312.   He  said the  voters of  Alaska have                                                               
already  weighed in  on  what  they would  like  to  do with  the                                                               
gasline.   In the 2002  election, voters overwhelmingly  voted to                                                               
build the all-Alaska gasline from the  North Slope to Valdez.  If                                                               
the legislature  had funded the  law passed  by the voters  - the                                                               
same voters  who had the  wisdom to  create the permanent  fund -                                                               
the state  would now have  a gasline providing  affordable energy                                                               
for Alaska and  a new source of state revenue,  as well as bigger                                                               
dividends.   Instead,  today there  are  certain legislators  who                                                               
have  expressed   contempt  for   the  voters'   wishes  suddenly                                                               
pretending that they care what the voters think.                                                                                
                                                                                                                                
MR.  PEIRCE maintained  that  a "bullet  line"  does not  provide                                                               
affordable energy  because it does  not have an economy  of scale                                                               
and would therefore have high tariffs  and a high cost of gas for                                                               
Alaskans.  A "bullet line" would  not provide new revenue for the                                                               
state, and  it would  undermine the  voter's preferred  option by                                                               
attempting to siphon gas away from that project.                                                                                
                                                                                                                                
1:22:33 PM                                                                                                                    
                                                                                                                                
MR. PIERCE related  that last week Tony Palmer and  Paul Pike [of                                                               
the Alaska  Pipeline Project]  stated that,  best case,  the line                                                               
into Canada would not be delivering  gas until 2020.  It was also                                                               
heard that the  high cost of the line into  Canada has raised the                                                               
tariffs to Alberta  to around $3.50 [per  million British thermal                                                               
units (MMBtu)].  "We" can project  that tariffs may be as high as                                                               
$6.00 to  get gas to Chicago.   Meanwhile, the massive  amount of                                                               
shale gas  in the Lower 48  has caused the Lower  48 gas industry                                                               
to proclaim that there is a  100-year gas supply in the Lower 48.                                                               
At year-end 2009, "ConocoPhillips"  applied to the Federal Energy                                                               
Regulatory Commission (FERC) to export  this excess gas from what                                                               
was to  have been a  liquefied natural gas (LNG)  import facility                                                               
in  Texas.   In  Kitimat, British  Columbia,  another LNG  import                                                               
terminal  is   now  preparing  to  export   LNG.    Additionally,                                                               
"ExxonMobil"  just invested  $31 billion  in XTO  Energy Inc.,  a                                                               
shale gas company that has over  11 trillion cubic feet in proven                                                               
reserves and another 50-60 trillion  in estimated reserves.  This                                                               
answers  the question  of where  U.S. consumers  will be  getting                                                               
their gas  - it  will be  from shale deposits  and not  a gasline                                                               
from Alaska with high risk and high tariff.                                                                                     
                                                                                                                                
1:24:13 PM                                                                                                                    
                                                                                                                                
MR. PEIRCE pointed out that  in about five years the Trans-Alaska                                                               
Pipeline  System (TAPS)  throughput  is projected  to be  500,000                                                               
barrels  per day  or less,  and the  consequences for  Alaska are                                                               
dire.   Only been the  high price of  oil that resulted  from the                                                               
Iraqi oil  production going offline  in 2003 as the  U.S. invaded                                                               
that country  has sheltered Alaska.   Iraq oil production  is now                                                               
going back online  from the second largest reserves  in the world                                                               
and  that  could result  in  significant  declines in  world  oil                                                               
prices, which  would have significant  impacts on  Alaska revenue                                                               
as TAPS throughput continues to decline.                                                                                        
                                                                                                                                
MR. PEIRCE  said Alaska must get  to work on the  only viable gas                                                               
project and  that is  the all-Alaska gasline  to Valdez.   Alaska                                                               
needs  the  affordable  energy, particularly  the  Interior,  and                                                               
Alaska must have a new source  of revenue.  Alaska cannot wait 10                                                               
years.  He  disagreed that a "bullet line"  would expand Alaska's                                                               
options and said it actually reduces the options.                                                                               
                                                                                                                                
1:25:43 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN  commented that  HB  312  only asks  the  people                                                               
whether they  would like to  be involved.   He agreed there  is a                                                               
lot of  gas in  the Lower 48,  and that TAPS  is going  down, the                                                               
cost of government  is going up, and everything that  can be done                                                               
must be done to create an in-state gas pipeline.                                                                                
                                                                                                                                
1:26:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KAWASAKI  referenced  an amendment  that  may  be                                                               
proposed that  would put this  question to the voters  during the                                                               
next primary election.  He asked  what happens if the voters pass                                                               
the proposition and what happens if they deny it.                                                                               
                                                                                                                                
REPRESENTATIVE CHENAULT responded that no  one has a crystal ball                                                               
as to what  would happen for either  a yes or no vote.   It would                                                               
allow  legislators to  have  the  option to  look  at the  excess                                                               
earnings  of the  Alaska Permanent  Fund for  funding a  project.                                                               
The bill does  not stipulate either a "bullet line"  or the "all-                                                               
Alaska line;"  it only talks about  a gasline in Alaska.   If the                                                               
people  say  no, then  legislators  would  know that  under  this                                                               
scenario the people do not want to invest that particular fund.                                                                 
                                                                                                                                
1:28:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI  noted that the sponsor  earlier said the                                                               
legislature  can  already  use  the  permanent  fund's  earnings.                                                               
Therefore, he inquired, is this off  the table if the people vote                                                               
no, and this legislature will never approach that issue again.                                                                  
                                                                                                                                
REPRESENTATIVE   CHENAULT  said   he  cannot   say  whether   the                                                               
legislature  would approach  the issue  again.   However, if  the                                                               
vote is no,  he would suggest there are very  few legislators who                                                               
would have the  ambition to utilize that fund  over the objection                                                               
of the citizens of Alaska.                                                                                                      
                                                                                                                                
REPRESENTATIVE  KAWASAKI   said  he  would  like   to  lodge  his                                                               
complaint against HB 312.                                                                                                       
                                                                                                                                
1:29:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GUTTENBERG  stated that  while he likes  where the                                                               
sponsor is  going as far  as providing more options,  his concern                                                               
is that  it would be an  advisory vote in a  primary election and                                                               
primaries can have low voter  turnout.  Additionally, given there                                                               
are so many  [pipeline] options, he thinks this  nebulous part of                                                               
the  question will  lead  to lots  of  misinformation within  the                                                               
public  and  people  will  be  arguing  about  what  legislators'                                                               
motives  are and  whether the  purpose is  to get  more money  to                                                               
TransCanada or a  "bullet line."  This dialogue will  get lost in                                                               
all the rhetoric and will make  the issue harder because there is                                                               
no focus  to it.   Thus, there  will be an  answer to  a question                                                               
that is  not specific  enough in  asking something.   He  said he                                                               
thinks  legislators should  be involved  with the  people of  the                                                               
state  and  that there  is  an  inherent  interest in  the  state                                                               
participating  in, and  building,  some  structure that  provides                                                               
long-term,  reliable,   and  affordable   energy  -  even   at  a                                                               
subsidized  rate  for  the  people -  because  building  out  the                                                               
state's  economy is  probably one  of the  most important  things                                                               
legislators can do.                                                                                                             
                                                                                                                                
REPRESENTATIVE  CHENAULT agreed  that  discussion  is out  there.                                                               
However, if the  question is not asked, the answer  will never be                                                               
known.  Numerous  people in his district are  saying in-state gas                                                               
is  needed  and  it  is  needed  now.    This  bill  would  allow                                                               
legislators to  ask the question,  see what the response  is, and                                                               
decide  whether that  is a  viable option  that can  be utilized;                                                               
but, if it is an option  that Alaskans do not want legislators to                                                               
use, then legislators will need to  look at other ways to finance                                                               
a project if the state gets to that  point in time.  If the state                                                               
runs out of  energy by not trying to push  something forward, "it                                                               
is shame on every one of us."                                                                                                   
                                                                                                                                
1:33:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK said he is  trying to imagine what the voters                                                               
are going to want to know.  One  thing they might want to know is                                                               
whether it  would be  a percentage  of the  earnings, all  of the                                                               
earnings,  or  up  to  the  legislature  to  decide,  should  the                                                               
advisory vote pass.                                                                                                             
                                                                                                                                
REPRESENTATIVE  CHENAULT explained  that  it is  not  all of  the                                                               
earnings,  it is  the excess  earnings.   To answer  the advisory                                                               
question, citizens  need to understand  that it would be  after a                                                               
permanent fund  dividend is  paid, after  the fund  is inflation-                                                               
proofed, and  if there are  any excess  earnings.  If  the people                                                               
approve  the proposition,  it would  have to  be looked  at on  a                                                               
year-to-year  basis   to  determine  whether  there   are  excess                                                               
earnings and whether there is a project to use them on.                                                                         
                                                                                                                                
REPRESENTATIVE  TUCK  clarified  that  he was  referring  to  the                                                               
excess earnings, and reiterated his question.                                                                                   
                                                                                                                                
REPRESENTATIVE CHENAULT  said how  much would  be utilized  is an                                                               
issue that  would be looked at  in the future and  would be based                                                               
upon other funding sources and the type and size of the project.                                                                
                                                                                                                                
1:36:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK, in regard to  Alaskans having a need for gas                                                               
right  now, inquired  whether Representative  Chenault sees  that                                                               
need as  gas for export  for the revenue  or as the  provision of                                                               
low-cost natural gas to Alaskans.                                                                                               
                                                                                                                                
REPRESENTATIVE  CHENAULT responded  that  he does  not know  what                                                               
opportunities  lay ahead  and  gas  export may  be  one of  those                                                               
opportunities.   However,  if an  in-state gasline  is not  built                                                               
there will be no opportunities.                                                                                                 
                                                                                                                                
1:38:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GUTTENBERG commented  that past  experience shows                                                               
the public  will not limit its  dialog to just what  the question                                                               
says.   Once the  ballot proposition  leaves the  legislature and                                                               
gets to  the public, there  will be  no restrictions on  what the                                                               
dialog is.   He said  he will support  the bill, but  fears there                                                               
will be a loss of focus because it is not specific enough.                                                                      
                                                                                                                                
CO-CHAIR NEUMAN said he hopes the public talks about it.                                                                        
                                                                                                                                
CO-CHAIR JOHNSON stated he does not  think dialog is a bad thing.                                                               
The  vote  will  give  legislators  guidance  regardless  of  the                                                               
outcome.  He  said he supports getting more  information from his                                                               
constituents and  is not  afraid of the  answer to  the question,                                                               
one  way or  the  other,  because it  would  give him  direction.                                                               
Because this is one of  the biggest decisions legislators will be                                                               
making, he would like some guidance from constituents.                                                                          
                                                                                                                                
1:41:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON noted  that a dividend was  nearly not paid                                                               
out in 2003, and since  then the legislature has not appropriated                                                               
any of  the money from the  earnings back into the  fund's corpus                                                               
as was  previously done.   He is  concerned this could  become an                                                               
issue of reducing  the earnings such that dividends  could not be                                                               
paid the following  year, which could result in a  no vote on the                                                               
ballot  proposition.    He  asked  whether a  no  vote  would  be                                                               
interpreted as  Alaskans not wanting  to invest in a  pipeline or                                                               
as Alaskans not wanting to  use permanent fund earnings to invest                                                               
in a pipeline.                                                                                                                  
                                                                                                                                
REPRESENTATIVE CHENAULT answered that  his interpretation of a no                                                               
vote  would be  that  the people  do not  oppose  investing in  a                                                               
pipeline,  but  rather  they oppose  investing  those  particular                                                               
funds in  a pipeline.  He  added that if constituents  have other                                                               
ideas, legislators will hear them during the process.                                                                           
                                                                                                                                
1:43:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  related that he  is not against the  idea of                                                               
having the  people decide whether they  want to invest in  an in-                                                               
state gasline;  he is only  looking for answers to  the questions                                                               
that have  come to him.   He asked what the  public should expect                                                               
as the rate  of return from this investment  - potential revenues                                                               
to the state from the selling of gas or gas for Alaskans.                                                                       
                                                                                                                                
REPRESENTATIVE CHENAULT  responded there  are many  options, such                                                               
as using the money  to take an equity position or  using it as an                                                               
investment that  subsidizes the  tariffs to  lower them  for that                                                               
particular  project.   He  agreed  that  people will  have  these                                                               
questions and  have already had them,  and he has told  them that                                                               
it is unknown  what position would be taken in  a pipeline if one                                                               
is built - it just gives the option to have that conversation.                                                                  
                                                                                                                                
1:45:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN  moved  the  committee   adopt  Amendment  1  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Page 1, line 6:                                                                                                            
          Delete "or general"                                                                                                   
                                                                                                                                
REPRESENTATIVE  GUTTENBERG objected  for purposes  of discussion.                                                               
He  asked whether  the question  would  still be  on the  primary                                                               
ballot even if the bill is not  passed until the last day of this                                                               
session.                                                                                                                        
                                                                                                                                
CO-CHAIR  NEUMAN said  he supports  Amendment 1  exactly for  the                                                               
reason of the  discussions occurring here today.   There are lots                                                               
of questions  and no time to  waste, so the sooner  the answer to                                                               
this ballot question is known, the better.                                                                                      
                                                                                                                                
1:47:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  inquired whether Amendment 1  is supported                                                               
by the sponsor.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  CHENAULT  replied  he  has no  problem  with  the                                                               
amendment because the [August 2010]  primary election will have a                                                               
number of  issues on  the ballot, which  might bring  more people                                                               
out to vote in the primary.                                                                                                     
                                                                                                                                
1:48:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GUTTENBERG said  he opposes Amendment 1  and if it                                                               
fails he  will offer an  amendment that goes  the other way.   He                                                               
maintained  that,  historically,   contentious  issues  have  not                                                               
increased the  primary turnout in  Alaska, especially at  the end                                                               
of August.   A lot more people participate in  a general election                                                               
and   he   would   support  that   over   a   primary   election.                                                               
Additionally, there will  be a new legislature  and everybody and                                                               
everything will be in play.   The timeline will not change as far                                                               
as the proposition's impact on  the full legislature.  Therefore,                                                               
it is  much more appropriate that  this question be on  a general                                                               
election than a primary.                                                                                                        
                                                                                                                                
1:49:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  asked if the  decision on whether it  is the                                                               
primary  or  general election  was  a  decision the  sponsor  had                                                               
expected  this committee  to make  or a  decision to  be made  in                                                               
another way.                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT  answered he thinks  that is part  of the                                                               
legislative   process  and   the   legislature   will  make   the                                                               
determination as to which election dates it supports.                                                                           
                                                                                                                                
1:50:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GUTTENBERG   maintained  his  objection   to  the                                                               
amendment.                                                                                                                      
                                                                                                                                
A roll  call vote was  taken.  Representatives Olson,  Seaton, P.                                                               
Wilson,  Neuman,  and Johnson  voted  in  favor of  Amendment  1.                                                               
Representatives Guttenberg, Kawasaki, and  Tuck voted against it.                                                               
Therefore, Amendment 1 passed by a vote of 5-3.                                                                                 
                                                                                                                                
CO-CHAIR  NEUMAN closed  public  testimony  and opened  committee                                                               
discussion.                                                                                                                     
                                                                                                                                
1:52:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI  outlined the reasons why  he will object                                                               
to reporting HB  312 from committee.  He said  no new options are                                                               
actually  placed on  the table  as  far as  using permanent  fund                                                               
earnings and the bill could result  in the opposite.  It will not                                                               
take long  for some folks  to start the  rally cry that  the bill                                                               
raids  the  Alaska  Permanent  Fund, which  means  there  may  be                                                               
negative  and  untrue  attacks on  this  particular  legislation.                                                               
Bringing  the proposition  up on  the primary  ballot sets  a bad                                                               
precedent  for future  elections.   Additionally, it  is easy  to                                                               
vote yes  or no,  but knowing  the substance  behind the  bill is                                                               
what is important  and hard to do.   Representative Kawasaki said                                                               
he does  not like advisory votes  in general because they  can be                                                               
used as a way for the  legislature to shirk its responsibility of                                                               
leading.   He feared that if  the answer in the  primary election                                                               
is that the public does not  want to use permanent fund earnings,                                                               
this   legislature  will   have   bound  the   hands  of   future                                                               
legislators, which  he does  not think  is a  good thing.   Fewer                                                               
people vote  in the  primary, he continued,  and even  fewer will                                                               
take the time  to learn what this advisory vote  will or will not                                                               
do.   Given that few people  vote in the primary,  this is advice                                                               
that is unacceptable to him.   Legislators conduct polls and have                                                               
regular contact with their constituents  to learn what people are                                                               
thinking, and this advisory vote  gains nothing but the potential                                                               
for a lot of dissent.                                                                                                           
                                                                                                                                
1:57:10 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON  stated  he  is in  regular  contact  with  his                                                               
constituents,  but  this  is  a   statewide  issue.    There  are                                                               
legislators  whose  constituents  may   not  receive  any  direct                                                               
benefit from  this and  he would  like to  know how  those people                                                               
feel.  When spending other people's  money, he wants to know what                                                               
everyone in the state thinks.                                                                                                   
                                                                                                                                
REPRESENTATIVE  OLSON understood  Representative  Kawasaki to  be                                                               
saying that his no vote on HB  312 is to represent all the people                                                               
who will not be voting in the primary.                                                                                          
                                                                                                                                
REPRESENTATIVE  KAWASAKI responded  that he  does not  track what                                                               
Representative Olson is saying.                                                                                                 
                                                                                                                                
1:59:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GUTTENBERG  reiterated that a vote  in the primary                                                               
means the  sampling will  not be  as large  as it  would be  in a                                                               
general election,  and a large  sampling is  what is wanted  in a                                                               
polling.   The nebulous aspect of  the question will mean  to him                                                               
that  people are  voting  yes or  no for  a  variety of  reasons.                                                               
Every  legislator knows  that the  Alaska Permanent  Fund is  the                                                               
third rail  and a legislator  does not get  near it unless  he or                                                               
she is  specific and knows  exactly what he  or she wants  to do.                                                               
People  will not  read past  permanent fund,  they will  not read                                                               
investment  earnings, some  will  understand  the difference  and                                                               
some will not,  legislators' motives will not  be understood, and                                                               
consequently  some people  will  challenge  what legislators  are                                                               
doing.   However, his biggest concern  is that the answer  to the                                                               
ballot  proposition  will  be  interpreted  differently  by  each                                                               
legislator.    The ballot  question  is  not focused  enough  and                                                               
confusion  on a  ballot initiative  results in  a no  vote.   The                                                               
state  is not  close enough  to a  clear description  of what  it                                                               
wants  to  do;  for  example,   TransCanada  is  not  before  the                                                               
legislature with a  specific project nor is  an in-state sponsor.                                                               
This  question does  not get  legislators  to an  answer that  is                                                               
politically useable or even useable for political cover.                                                                        
                                                                                                                                
2:02:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  urged that members  talk to bill  sponsors prior                                                               
to committee hearings to better get their questions answered.                                                                   
                                                                                                                                
REPRESENTATIVE TUCK pointed out that  some questions do not occur                                                               
to him  until he  hears someone else  speak.  He  said he  is not                                                               
opposed to  the idea of  using the permanent fund  [earnings] and                                                               
having  a ballot  vote in  this  regard.   His earlier  questions                                                               
about the intent  were to lay it  out tighter so it  does not get                                                               
convoluted.    He is  concerned  it  could  become a  big  public                                                               
messaging  battle, and  the battle  can be  reduced by  answering                                                               
these questions  up front.   His support for keeping  the general                                                               
election in  the body of the  bill is because it  would provide a                                                               
better representation  of those  turning out to  vote and  thus a                                                               
better idea of the people's overall  intent.  A survey he sent to                                                               
his  constituents  is  now  coming back  and  many  Alaskans  are                                                               
confused on the  gasline issue.  Therefore, he  thinks people may                                                               
have  some  insecurities  about  making a  decision  to  make  an                                                               
investment.   People are expecting their  elected representatives                                                               
to know, and while he is  not claiming he knows everything, he is                                                               
trying  his hardest  to learn  the issues  and as  he does  he is                                                               
communicating  back to  his constituents  so that  as he  learns,                                                               
they learn.  He  is bringing all of this forward  so the bill can                                                               
be improved, if needed, before it goes on to the advisory vote.                                                                 
                                                                                                                                
2:05:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN agreed  that legislators'  work is  cut out  for                                                               
them to get out and talk to people.                                                                                             
                                                                                                                                
REPRESENTATIVE TUCK  added that  the sponsor's statement  says it                                                               
is  perceived that  Alaska  is  taking a  shotgun  approach to  a                                                               
gasline, and this is adding to the confusion for constituents.                                                                  
                                                                                                                                
2:06:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  noted he  is pleased it  is being  said on                                                               
the record that if the proposition  fails it does not mean people                                                               
do  not want  to invest  in a  pipeline, but  rather they  do not                                                               
specifically  want to  use this  mechanism.   If people  in other                                                               
parts of the  state do not agree  to this, it does  not mean they                                                               
do not  care about the  economics of Southcentral  Alaska because                                                               
that is  not the  question on  the ballot.   The question  on the                                                               
ballot is  whether to  use the earnings  of the  Alaska Permanent                                                               
Fund, which  is a different question.   He fears there  will be a                                                               
lot of confusion  in messages.  An advisory vote  does not bother                                                               
him, but he is concerned that  mistaken use of the term permanent                                                               
fund dividend [rather  than permanent fund earnings]  will add to                                                               
the confusion and get a different  result.  As this goes forward,                                                               
it  will  be   imperative  for  legislators  to   be  clear  with                                                               
constituents about exactly what is on the ballot.                                                                               
                                                                                                                                
2:08:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON moved  to report  HB  312, as  amended, out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There  being  no  objection, CSHB  312(RES)  was                                                               
reported from the House Resources Standing Committee.                                                                           

Document Name Date/Time Subjects
HB 312.pdf HRES 2/3/2010 1:00:00 PM
HB 312
HB 312.Sponsor Statement.pdf HRES 2/3/2010 1:00:00 PM
HB 312
HB 312.ERA Balance.pdf HRES 2/3/2010 1:00:00 PM
HB 312
HB 312.Perm Fund Balances.jpg HRES 2/3/2010 1:00:00 PM
HB 312
HB312.REV-TAX-02-02-10.pdf HRES 2/3/2010 1:00:00 PM
HB 312
HB 312.REV-APFC-02-01-10.pdf HRES 2/3/2010 1:00:00 PM
HB 312